Dismissed

Dominic K J v. Punjab National Bank

DRT18 Jul 2024SA/590/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed the applicant's securitization application challenging the bank's possession of secured assets. The court held that the Demand Notice was duly served, the applicant failed to object within the stipulated time, and the bank strictly complied with Section 14 requirements.

What did the court decide?

The application challenging the possession notice and the Chief Judicial Magistrate order under Section 14 of the SARFAESI Act was dismissed.

Dominic K J versus Punjab National Bank — Banking and Recovery | 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 18^th DAY OF JULY, 2024

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

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S.A No. 590 of 2023

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Between

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Dominic K.J., House No.15/1428 D, Joslena Dale, Kozhiparambil House, Nazareth, Kochi -682 002.

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--- Applicant

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And

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Punjab National Bank, Circle SASTRA Centre, Vaishnavi Towers, Kumarichantha, Ambalathara P.O., Thiruvananthapuram -695 026.

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--- Defendant

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This Securitization Application coming on 25.06.2024 for final hearing before me in the presence of Mr. Jithendran, Advocate for the Applicant and Mr. C. Ajith Kumar Advocate 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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O R D E R

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This Securitisation Application was filed on 27.09.2023 seeking to hold that the possession of secured assets of the applicant by the Defendant Bank is illegal and to set aside all the steps taken by the Defendant Bank under the SARFAESI Act, 2002 and order payment of compensation to the applicant for the loss sustained by the illegal act

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SA No.590 of 2023

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of the defendant and to declare Annexure-A4 CJM Order is illegal and is liable to be set aside.

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Availment of credit facilities from the defendant bank upon creation of security interest in respect of 2.20 Ares of land along with building thereon comprised in Re. Sy. No.2113/1 of Rameswaram village, Kochi Taluk and default in repayment of the outstanding loan due is admitted by the applicant in the SA. Due to default in repayment of the outstanding loan due, the loan accounts of the applicant came to be classified as NPA on 30.04.2023. The provisions of the SARFAESI Act, 2002 and the Rules made thereunder does not contemplate issuance of prior notice with regard to the classification of the loan account as NPA. Hence this Tribunal does not find any force in the averment of the applicant that no intimation was sent as to when the loan accounts of the applicant was classified as NPA.

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Demand Notice dated 24.05.2023, Annexure-B1 was issued to the applicant calling upon him to pay the outstanding loan due within a period of 60 days from the date of receipt of the notice. In Annexure-B1 the dates of classification of loan accounts as NPA is clearly mentioned. Indisputably, the applicant neither sent any objection/representation to the Demand Notice nor did he clear off the liability due to the defendant bank. Hence Possession Notice dated 09.08.2023, Annexure-A1 was issued for taking symbolic possession of the secured asset.

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Thereafter, the defendant filed petition, Annexure-A2 and affidavit Annexure-A3 in MC No.887/2023 before the Chief Judicial Magistrate Court, Ernakulam under Section 14 of the SARFAESI Act, 2002 for taking physical possession of the secured asset. Order dated 22.12.2023, Annexure-A4 came to be passed appointing Advocate Commissioner to take physical possession of the secured asset.

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The Counsel appearing for the applicant submitted that Demand Notice was not received by the applicant and that the signature affixed in Annexure-B2, copy of postal Acknowledgment card is different from the signature of the applicant affixed in the S.A and that bifurcation of the principle and the interest is not mentioned in the Demand Notice and that the boundaries of the secured asset is not mentioned in the Demand Notice and that date of classification of the loan account as NPA is not mentioned in Annexure-A1 Possession Notice and that in Annexure-B8 CERSAI report, the existence of the building is not mentioned and that the Possession Notice was not published within the period of seven days from the date of its issuance and that the details of the secured asset is not furnished in AnnexureA2 application and that therefore Annexure-A1 Possession Notice and Annexure-A4 order passed in MC No.887/2023 are liable to be set aside.

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Page 2 of 5

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SA No.590 of 2023

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Per contra , the counsel appearing for the defendant submitted that Annexure-B2 postal Acknowledgment card and Annexure-B4 letter issued by the postal department confirms the receipt of the Demand Notice by the applicant and that Possession Notice was published in newspapers on 15.08.2023 and that it was affixed on the conspicuous part of the secured asset and that secured asset is described as residential in Annexure-B8 Asset ID based search report and that in Annexure-A1 Possession Notice, the immovable property is described as “A ll that part and parcel of 5 cents of the property with building ” and that there is no necessity to mention the date of classification of the loan account as NPA in the Possession Notice and to furnish bifurcation of the principle and interest in the Demand Notice and that all the requirements contemplated under Section 14 of the SARFAESI Act, 2002 were furnished in Annexure-A3 affidavit and that thereafter Chief Judicial Magistrate Court Ernakulam after having satisfied over the contents of the affidavit, passed order for taking physical possession of the secured asset and that therefore the SA is liable to be dismissed with cost to the defendant.

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It cannot be disputed that the signature affixed in the postal Acknowledgment card, Annexure-B2 and the signature affixed in the S.A is different as submitted by the Counsel appearing for the applicant. However, it is not the contention of the applicant that the address mentioned in Annexure-B2 is not the residential address of the applicant. Hence it is established that Demand Notice sent to the residential address of the applicant was received by someone on his behalf. Therefore, the Demand Notice is deemed to have been duly served upon the applicant. In any event, the defendant has produced Annexure-B3 copy of letter sent to the postal department and Annexure-B4 reply sent by the postal department to the defendant. In Annexure-B4 it is stated that the registered letter under reference was delivered to the addressee on 26.05.2023. Therefore, the contention of the applicant that Demand Notice was not received by him is absolutely incorrect. The object of serving notice to the borrower/ guarantor is to inform him of his default in repayment of the outstanding loan due and classification of loan account as NPA and call upon him to pay the outstanding loan within the stipulated period, failing which the secured asset will be sold. It is also not the case of the applicant that the property referred to in Annexure-B1 Demand Notice is not the secured asset. Therefore, the mere omission of the defendant to mention the boundaries for the secured asset in the Demand Notice could not have caused any prejudice to the applicant. Hence this Tribunal does not find any substance in the submission of the counsel for the applicant that boundaries for the secured asset is not mentioned in the Demand Notice. Be that, it may so, the applicant having failed to send any objection/representation to

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Page 3 of 5

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SA No.590 of 2023

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the Demand Notice raising the aforesaid issues, is not entitled to raise the aforesaid issues now.

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In Annexure-A1 Possession Notice in the schedule to the description of the immovable property, the existence of the building is mentioned. The Appendix-IV appended to the Security Interest (Enforcement) Rules, 2002 does not mandate the Authorized Officer to mention the date of classification of loan account as NPA. In Annexure-B8 Asset ID based search report, the secured asset is described as residential. The defendant has produced copies of paper publications as Annexure-B6 and B7. A perusal of the same shows that Annexure-A1 Possession Notice was published in two newspapers one in Business Line daily dated 15.08.2023 and Mangalam Daily dated 15.08.2023 within the period of seven days from the date of issuance of Annexure-A2 Possession Notice. The defendant has also produced Annexure-B5, copy of photograph to disprove the contention of the applicant that Possession Notice was not affixed in the conspicuous part of the secured asset.

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It is not the contention of the applicant that the details contemplated under Clause (i) to (ix) to the provisions of Section 14(1) of the SARFAESI Act, 2002 were not furnished in Annexure-A3 affidavit and that the learned Additional Chief Judicial Magistrate, Ernakulam mechanically passed order Annexure-A4. A perusal of Annexure-A3 affidavit filed in MC No.887/2023 on the file of the Additional Chief Judicial Magistrate Court, Ernakulam shows that all the details mandated under Clause (i) to (ix) to the provisions of Section 14(1) of the SARFAESI Act, 2002 has been furnished in Annexure-A3 affidavit. It is seen from the perusal of Annexure-A4 order that the Additional Chief Judicial Magistrate Court (MPs/MLAs) Ernakulam after having satisfied over the compliance of the statutory requirements in the affidavit and perused the documents produced in support of the affidavit and having satisfied over the same, passed order appointing Advocate Commissioner to take physical possession of the secured asset. Hence this Tribunal does not find any procedural irregularity either in Annexure-A3 affidavit or in Annexure- A4 order passed in MC No.887/2023. Therefore, this Tribunal holds that the applicant has miserably failed to establish the case so as to get the relief sought for in the SA.

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Resultantly, this S.A No.590 of 2023 stands dismissed. No 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 18^th day of July, 2024.

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(Su. WILLYAHM) PRESIDING OFFICER

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Page 4 of 5

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SA No.590 of 2023

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

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Sl. No.	Date	Particulars
1.	09.08.2023	True copy of Possession Notice.	Annexure-A1
2.	11.09.2023	True copy of petition in MC No.887/2023	Annexure-A2
3.	11.09.2023	True copy of affidavit in MC No.887/2023	Annexure-A3
4.	22.12.2023	True copy of order in MC No.887/2023	Annexure-A4

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List of documents filed by the defendant along with the written statement

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Sl. No.	Date	Particulars
1.	24.05.2023	True copy of the notice issued by applicant under Sec.13(2) of SARFAESI Act, 2002.	Annexure-B1
2.	---	True copy of postal acknowledgment of Annexure-B1by the applicant.	Annexure-B2
3.	08.09.2023	True copy of letter given by defendant to the postmastergeneral.	Annexure-B3
4.	16.09.2023	True copy of the reply given by department ofpost.	Annexure-B4
5.	----	True copy of the affixture of Annexure- A1 inthe securedasset.	Annexure-B5
6.	15.08.2023	True copy of the paper publication of Annexure-A1 in BusinessLine daily.	Annexure-B6
7.	15.08.2023	True copy of the paper publication of Annexure-A1 in Mangalamdaily.	Annexure-B7
8.	----	True copy of the CERSAI registration of the securedasset oftheapplicant.	Annexure-B8

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(Su. WILLYAHM) PRESIDING OFFICER

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Mj/

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Page 5 of 5

Dominic K J v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

Dominic K J v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

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