Dismissed

Rajan C P v. Urban Co. operative Bnak Ltd.

DRT30 Jul 2024SA/781/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal dismissed a securitization application filed by borrowers and guarantors. The court rejected pleas to set aside possession and sale notices, noting lack of objection to the demand notice and absence of material proving assets were agricultural. The request for an instalment facility was also denied as it does not fall under Section 13(4).

What did the court decide?

Sale notices and proceedings under SARFAESI Act upheld; prayer for instalment facility rejected.

Rajan C P versus Urban Co. operative Bnak Ltd. — Insolvency and Bankruptcy | 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 30^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. 781 of 2023

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Between

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Rajan C.P., S/o. Raghavan, Residing at Cheruparambath House, Kariparambu, Thrikkulam, Tirurangadi P.O., Malappuram -676 306.

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Jayaprakasan, S/o. Perayan, Residing at Palassery House, Chelembra P.O., Malappuram – 673 631.

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Rijin C.P., S/o. Rajan, Residing at Cheruparambath House, Kariparambu, Thrikkulam, Tirurangadi P.O., Malappuram -676 306.

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--- Applicants

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And

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Authorized Officer The Urban Co-operative Bank Limited, Perinthalmanna, Number – M – 1758, Head Office, Urban Bank Building, Pattambi Road, Perinthalmanna P.O. Malappuram – 679 322.

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--- Defendant

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SA No.781 of 2023

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This Securitization Application coming on 26.06.2024 for final hearing before me in the presence of Ms. Krishnapriya R., Advocate for the Applicants and Mr. K.V. Anil, 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 21.12.2023 seeking to set aside all proceedings initiated under Section 13(4) of the SARFAESI Act, 2002 and set aside Annexure-A1 sale notice and Annexure-A2 notice issued by the Advocate Commissioner and direct the defendant to grant instalment facility to the applicants to clear the outstanding amount stated in Annexure-A1 and direct the defendant to pay the cost of this proceedings to the applicants.

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The availment of cash credit facility to a tune of Rs.1.40 Crores by the 1^st applicant in the defendant bank upon creation of security interest over the immovable properties belonging to the 2^nd and 3^rd applicants who stood as guarantors for the above said credit facility and default in repayment of the outstanding loan due is fairly conceded by the applicants in the SA.

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Therefore, the loan account of the applicants came to be classified as NPA on 30.06.2019 and Demand Notice was issued to the applicants calling upon them to repay the outstanding loan due within 60 days from the date of receipt of the notice. The receipt of the Demand Notice is admitted by the applicants. Indisputably, the applicants neither sent any objection/representation to the Demand Notice nor did they discharge their liability due to the defendant bank.

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Therefore, Possession Notice dated 09.01.2021 was issued for symbolically taking physical possession of the secured assets. The defendant has produced Annexures-D1 and D2, copies of paper publications to prove his contention that Possession Notice was published in two leading newspapers.

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Subsequently, the defendant filed application and affidavit under Section 14 of the SARFAESI Act, 2002 before the Chief Judicial Magistrate Court, Manjeri. Order came to be passed appointing Advocate Commissioner in MC No.382/2023 to take physical possession of the secured assets. The Advocate Commissioner issued

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Page 2 of 6

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SA No.781 of 2023

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Annexure- A2 notice dated 18.2.2023 to the applicants informing that he would take possession of the scheduled properties on 26.12.2023.

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The applicants have not produced the copy of the petition and affidavit filed in MC No. 382/2023 filed by the defendant before the Chief Judicial Magistrate Court, Manjeri and also the copy of the order passed in MC No. 382/2023. It is also not the contention of the applicant that 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. 382/2023. It is also not the contention of the applicant that the Chief Judicial Magistrate Court, Manjeri passed order without having perused the contention of the affidavit and the documents filed in support of the affidavit and having satisfied over the same. Without challenging the aforesaid measures, challenging Annexure-A2 notice issued by the Advocate Commissioner is unsustainable, since this notice is not the measure contemplated under Section 14 of the SARFAESI Act, 2002

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The applicants have averred in the S.A that rubber trees and other crops are planted in the secured assets and that it is agricultural properties. The applicants have not produced any material before this Tribunal to substantiate their contention that secured assets was agricultural properties on the date of creation of security interest over the same. Therefore the contention of the applicants does not deserve for consideration by this Tribunal.

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The defendant issued sale notice dated 30.11.2023 to auction the secured assets on 02.01.2024. The receipt of the sale notice is admitted by the applicants but their contention is that the reserve price fixed at Rs.1,64,00,000/- is very lower than the market value of the properties and that proper valuation of the properties was not done. The rival contention of the defendant is that the reserve price for the properties was fixed based upon the valuation report, AnnexureD3 submitted by the approved Valuer who inspected the properties on 04.09.2023. A perusal of Annexure-D3 shows that the approved Valuer after having considered the nature and location of the properties fixed the value at Rs.1,64,00,000/-. This price is fixed as the reserve price for both items of the properties. Though the applicants have averred in the SA that the reserve price fixed for the properties are very lower than the prevailing market value, they have not produced any material before this Tribunal to prove their contention. Admittedly, sale was not fructified for want of bidders.

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The one of the reliefs sought for by the applicants in the SA is to direct the defendant to grant instalment facility to the applicants to

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Page 3 of 6

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SA No.781 of 2023

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clear the outstanding amount mentioned in Annexure-A1. The relief sought for by the applicants does not fall under any category of the measures referred to under Section 13(4) of the SARFAESI Act, 2002. It is for the applicants to approach the defendant and work out their remedy for such relief.

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In view of the foregoing reasons and discussions, this Tribunal holds that the applicants are not entitled to get the reliefs sought for in this SA. In the result, S.A No.781 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 30^th day of July, 2024.

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(Su. WILLYAHM) PRESIDING OFFICER

Mj/

Page 4 of 6

SA No.781 of 2023

S C H E D U L E

District : Malappuram Taluk : Areekode Village : Vettilappara Sy. No. : 2 Extent : 2 Acres

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Description

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Property No. 1 – Land having an extent of 2 Acres 20 cent owned by Jayaprakasan, S/o. Perayan in Sy. No.2 in part in Vettilapara Village, Areekode Taluk, Malappuram District (Document No.4182/13).

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Boundaries

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East : Property assigned by Deepak North : Property in possession of Seth Muhammed, Kakkadampoyil – Cheenkannypali Road. West : Property in possession of Seth Muhammed, Kakkadampoyil – Cheenkannypali Road. South : Property purchased by Rijin.

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Property No. 2 – Land having an extent of 2 Acres 20 cent owned by Jayaprakasan, S/o. Perayan in Sy. No.2 in part in Vettilapara Village, Areekode Taluk, Malappuram District (Document No.4183/13).

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Boundaries

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East : Property assigned by Deepak North : Property assigned to Jayaprakasan. West : Property in possession of Seth Muhammed. South : Property in possession of children of Varky.

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Page 5 of 6

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SA No.781 of 2023

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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.	30.11.2023	True copy of the notice of sale issued by the Authorized Officer, defendant to the borrowers and guarantors along with translationoftherelevant portion.	Annexure-A1
2.	18.12.2023	True copy of the notice issued by the Advocate Commissioner appointed by Chief Judicial Magistrate Court, Manjeri in M.C. 382/2023.	Annexure-A2

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

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Sl.	Date	Particulars
No.
1.	09.01.2021	True copy of the Possession Notice published in Deshabimani Malappuram edition along with its English translation.	Annexure-D1
2.	09.01.2021	True copy of the Possession Notice published in Mathrubhumi Malappuram edition along with its Englishtranslation.	Annexure-D2
3.	----	True copy of valuation report.	Annexure-D3

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(Su. WILLYAHM) PRESIDING OFFICER

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Mj/

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Page 6 of 6

Rajan C P v. Urban Co. operative Bnak Ltd.

Case brief

What is this about?

What did the court decide?

Rajan C P v. Urban Co. operative Bnak Ltd.

Case brief

What is this about?

What did the court decide?

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