Dismissed

Krishna Prasad Sudhir Nair v. Kerala Gramin Bank

DRT19 Dec 2024SA/534/2022

Case brief

AI extract

What is this about?

This adjudicating officer dismissed the Securitisation Application filed by loan applicants against the bank. The court held the Applicants failed to challenge the Magistrate's order or prove non-compliance of statutory requirements under Section 14(1). The regarding the possession notice issued by the Advocate Commissioner was also deemed unsustainable.

What did the court decide?

The Securitisation Application (SA No. 534/2022) stands dismissed. No order as to costs.

Krishna Prasad Sudhir Nair versus Kerala Gramin Bank — Company and Corporate | DRT (2024)

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL - 1 AT ERNAKULAM

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DATED THIS 19^th DAY OF DECEMBER, 2024

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PRESENT: Su. WILLYAHM, B.Sc., M.L. [DISTRICT JUDGE - Retd] PRESIDING OFFICER

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S.A No. 534 of 2022

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Between

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Col. Krishna Prasad Sudhir Nair,

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S/o. Aravindakshan Nair,

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Residing at Sai Kripa,

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Payyalore, Kollengode P.O.

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Palakkad District -678 506.

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Mrs. Umaya Nair,

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W/o. Krishna Prasad Sudhir Nair,

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Residing at Sai Kripa,

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Payyalore, Kollengode P.O.

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Palakkad District -678 506.

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--- Applicants

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And

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Kerala Gramin Bank, Koduvayur Branch, Koduvayur P.O., Palakkad – 678 501.

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--- Defendant

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This Securitization Application coming on 09.12.2024 for final hearing before me in the presence of Mr. Arul Muralidharan, Counsel appearing for the Applicants and Mr. Renjith R., Counsel appearing for the defendant and upon hearing arguments of learned Counsels for both the parties and upon perusing the material on records, this Tribunal delivered the following:

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SA No.534 of 2022

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O R D E R

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This Securitisation Application was filed on 03.11.2022 seeking to set aside the possession notice issued by the Advocate Commissioner and to declare that the proceedings initiated against the applicants and the property owned and possessed by the applicants are not in accordance with the provisions of the SARFAESI Act, 2002 and the Security Interest (Enforcement) Rules 2002 and to order compensation and costs from the defendant.

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The applicants have admitted the availment of credit facilities from the defendant bank, but they have denied the creation of security interest in respect of their immovable property. On perusal of the pleadings of both the SA and the written statement filed by both the parties to the SA shows that since the applicants defaulted in repayment of the outstanding loan due their loan accounts came to be classified as Non-performing Asset on 29.03.2021.

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Hence, SARFAESI measures were initiated by the defendant under the SARFAESI Act, 2002 and the rules thereunder with the issuance of demand notice. Since the applicants failed to response to the terms of the demand notice, the defendant approached the Learned Chief Judicial Magistrate Court, Palakkad and filed application Annexure – A2 and affidavit under Section 14(1) of the SARFAESI Act, 2002. Order came to be passed in MC No.10/2022 appointing Advocate Commissioner to take physical possession of the secured asset. Pursuant to the direction given to the Advocate Commissioner by the Learned Chief Judicial Magistrate Court, the Advocate Commissioner issued Annexure – A1 notice informing the applicants that he would take possession of the property within 10 days from the date of issue of the notice. The applicants having aggrieved over the aforesaid measures have filed this SA seeking for the reliefs stated supra.

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The applicants have averred in the SA that they have not created valid and enforceable agreement or security agreement. Though they have admitted receipt of the demand notice, they neither sent any objection/representation to the demand notice refuting the averment of the defendant with regard to execution of loan documents and creation of security interest in respect of the SA subject matter of the property belonging to the applicants. Therefore, this Tribunal does not find any substance in the above contention of the applicants. The applicants have not produced any material before this Tribunal to substantiate their contention that secured asset is agricultural

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Page 2 of 4

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SA No.534 of 2022

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property. The applicants have also not placed any material before this Tribunal to prove their contention only a moratorium period was available to them for the credit facilities availed by them. It is revealed from the written statement of the defendant that subsidy of Rs.16.80 Lakhs available under NLM.EDEG Scheme of NABARD received by the defendant bank had been kept as fixed deposit for 5 years without interest and that the time limit for completion of the project as per NABARD scheme is one year from the date of disbursement of the 1^st instalment and that the applicants failed to complete the above project within the time frame, thereby misusing the loan amount available by them.

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The relief sought for by the applicants in the SA is to restrain the defendant from physically dispossessing them of the secured asset and to stay the execution of Annexure – A1 notice but the applicants have nowhere averred in the SA as to whether the statutory requirements contemplated under Clause (i) to (ix) to the proviso of Section 14(1) of the SARFAESI Act, 2002 was not complied with by the defendant in respect of filing of the affidavit in MC No.10/2022. It is also not the contention of the applicants that the Learned Chief Judicial Magistrate Court, Palakkad passed order without having perused the contents of the affidavit and the documents filed in support of the affidavit and having satisfied over the same.

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The Advocate Commissioner issued Annexure – A1 notice to the applicants for taking physical possession of the secured asset pursuant to the direction given to him by the learned Chief Judicial Magistrate Court, Palakkad in MC No.10/2022. Without challenging the order passed in MC No.10/2022, challenging Annexure – A1 notice issued by the Advocate Commissioner is unsustainable. Since Annexure – A1 is not the measure contemplated under Section 13(4) of the SARFAESI Act, 2002.

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The applicants have failed to establish their case so as to get the reliefs sought for in the SA. Therefore, the Tribunal holds that the applicants are not entitled to get the reliefs sought for in this SA.

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Resultantly, SA No.534/2022 stands dismissed. No order as to costs.

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Dictated to Steno, taken down, transcribed, typed by him, corrected and pronounced by me in the open court on this the 19^th day of December, 2024.

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(Su. WILLYAHM) PRESIDING OFFICER

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Page 3 of 4

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SA No.534 of 2022

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List of documents filed by the Applicants along with the S.A.

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Sl. No.	Date	Particulars
1.	10.10.2022	True copy of the notice issued by the Advocate Commissioner	Annexure-A1
2.	27.11.2021	True copy of the MC No. 10/2022 filed by the defendant bank against the applicants before the Chief Judicial Magistrate CourtPalakkad.	Annexure-A2

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(Su. WILLYAHM) PRESIDING OFFICER

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Mj/

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Page 4 of 4

Krishna Prasad Sudhir Nair v. Kerala Gramin Bank

Case brief

What is this about?

What did the court decide?

Krishna Prasad Sudhir Nair v. Kerala Gramin Bank

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

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