Dismissed

Ms Universal Packaging and Ors. v. Indian Overseas Bank

DRT29 Jan 2025SA/127/2023

Case brief

AI extract

What is this about?

A Debt Recovery Tribunal dismissed an application under Section 17 of the SARFAESI Act filed by loan defaulters seeking to quash a possession notice. The tribunal held that the bank complied with statutory requirements for notice service, the threat mentioned in the demand notice did not affect proceedings, and objections regarding loan sanction amounts were not valid grounds for interference.

What did the court decide?

The application under Section 17 of the SARFAESI Act to quash the possession notice action was dismissed with all pending interim applications.

Ms Universal Packaging and Ors. versus Indian Overseas Bank — Banking and Recovery | DRT (2025)

DRT,PATNA

SA127 of 2023 [JI

DEBTS RECOVERY TRIBUNAL PATNA

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Presiding Officer :Shri KaushalendraYadav

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SA- 127 of 2023

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1. MIs Universal Packaging,at Anantbagh, Pahalwan Gate, Opposite Railway Coach Complex, Rajendra Nagar, Kankarbagh Main Road, Patna 800020 through its Proprietor, Mohammad SaleemRaza.·

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Mohammad Saleem Raza, Sio - Mohammad NaseemAhmad,

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Mohammad RameezRaza, Sio Mohammad NaseemAhmad,

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--- Both Rio - Bari Path, Opposite PanchayatShiv Mandir, Dariyapur, P.O.Bankipore, Patna, Bihar- 800004.

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Mohammad Attiuliah, Sio Mohammad Habibullah, at Muradpur Lane,Darji Tola, Patna Bihar - 800004..

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.........Applicants

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Versus

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The Authorized Officer - cum - Chief Manager, Indian Overseas Bank, Exhibition RoadBranch,SabooComplex, Exhibition RoadPatna800001.

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The Chief Regional Manager, Regional Office, Indian Overseas Bank, Nasima Bhawan, Beside Biscomaun Building, Wlo Gandhi Maidan, Patna - 800001.

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-----respondents

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Present:

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For the Applicant : Sh.Dr. Binay Kr.Singh,Advocate For the respondent Bank : Sh.SanjaySinghThakur, Advocate

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Dated: 29.01.2025

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JUDGMENT

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Present application uls 17 of SARFAESIAct has been filed with a prayer to quash entire SARFAESIaction taken against the properties of applicant alongwith the possessionnotice.

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The brief fact of the case is that the applicants availed credit facilities to the tune of Rs.2,88,80,000/-from the respondent bank. On default in repayment of the dues of the bank, the account of the applicant was declared as NPA on

SA127of 2023IJ)

DRT,PATNA

10.12.2022. Subsequently, the bank initiated SARFAESIAction against the borrower and issued demand notice u/s 13(2) dated 30.12.2022 calling upon the applicant to make the payment of Rs.3,95,97,329.39. Thereafter, possession notice dated 24.03.2023 u/s 13(4) of the SARFAESIAct was issued. Aggrieved from the possessionnotice, this SAhas been filed by the applicants.

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It is submitted by the Id. Counsel of applicants that due to Covid-19 the business of the applicant was badly affected. The applicant made several requests to the bank to sanction an eligible amount of Rs.40lacs under ECLGS Scheme but the bank has sanctioned only Rs.29,74,000/-. Therefore, the businessof the applicant could not run properly. Further, the bank respondent declared the account as NPAon 10.12.2022 and issued Demand Notice dated 30.12.2022 threatening the applicants with the publication of their photograph in News Papers. There is no provision under SARFAESIact which authorizes the secured creditor to publish photographs of defaulting borrowers. However, on receipt of demand notice, the applicants made a representation u/s 13(3-A) dated 20.02.2023 which was replied by the bank vide letter dated 07.03.2023 but it was half baked reply asthe issue raised therein was not fully addressed. Further, the bank instead of individual service of possession notice dated 24.04.20236, sent it by post which was received on 24.03.2023. The possession notice was not affixed on both the properties as there were two properties mortgaged with the bank. The possessionnotice was also not published in two leading newspapers. Whether the mortgaged properties have been registered with Central Registryor not, not known to the applicants.

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It is further submitted that the respondent bank in its counter affidavit referred regarding RepublicOffseters casefiled before Patna High Court against State Bank of India. The Republic Offseters is separate firm banking with SBI since 2017 and a citizen can borrow loans based on his eligibility from different banks and therefore to refer this account to which only Ld. Counsel of respondent bank is privy and who is also on the panel of SBI and has been engaged by SBI,is outrageous breach of confidentiality of the applicants. The respondent counsel has unethically injected his personal knowledge into the counter affidavit breaking the confidentiality of borrowers by sharing it with an

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SA 127 of 2023 [J)

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ORT, PATNA

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all together different bank and has got it affidavited by gullible Prashant Kumar Sinha, Authorized Officer-cum-Chief Manager. If a banker breaches the secrecy, he/she is liable to face the legal consequences.

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On the contrary, Ld. Counsel for the respondent bank submits that the amounts were sanctioned to the borrower and the same was utilized by them. After availing the same one cannot talk of delay in sanction. If there was a meager amount, they should refuse to utilize the same at that point of time. The applicants allegations are baseless and misconceived and fact is that the applicants are defaulters and also borrowed huge amounts from other financial institutions, ignoring the RBI guidelines. The respondent bank came to know about applicant nO.3 having borrowed a huge amount in the name of a separate firm namely, Republic Offseters from State Bank of India in the year 2017. The demand notice dated 30.12.2022 was sent to the applicants as admitted in its application. Against the demand notice, the applicants have sent representation dated 20.02.2023 before the bank through post on 28.02.2023 and the same was received by the bank on 01.03.2023. Accordingly, the respondent bank duly replied the same and sent to the applicants on 07.03.2023 through post. Further, the respondent bank issued a possession notice dated 24.03.2023. Since the applicants refused to acknowledge the possession notice, therefore the bank sent it through post to the applicants on 24.03.2023 itself. The possession notice was also affixed on both the secured assets. The possession notice was also published in Times of India and Dainik Jagran on 28.03.2023. The secured assets are duly registered with CERSAIvide Security ID 400038133718 and Asset ID is 200038067563 of property 1 in the name of Md. Atiullah and Security ID 400038133407 and Asset ID is 200038067253 of property 2 in the name of Saleem Razaand Rameez Raza.

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I have heard Ld. Counsel for the applicant and have gone through the record.

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It is alleged that the Demand Notice dated 30.12.2022 issued by the bank threatened the applicants with the publication of their photograph in News Papers which is against the provision of SARFAESIact. Against the demand notice, the applicants made a representation u/s 13(3-A) dated 20.02.2023 but the same was not properly replied by the bank. The possession notice was not 0/'V~,c>,'./

SA127of 2023IJ]

ORT,PATNA

affixed on both the properties as there were two properties that had been mortgaged with the bank. The possessionnotice was also not published in two leading newspapers.

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On perusal of records it appears that there is no denial of service of Demand Notice issued on 30.12.2022. The applicants are aggrieved from the para 11 of Demand Notice which stated that "if the account is not regularized/repaid within the stipulated time and in case of the Bank classifying you as a willful defaulter as per RBI Guidelines, the Bank reserves its rights to publish your photograph in newspaper(s) with your name, address, details of default, dues etc.". Although it has not been mentioned that the Bank has published the photographs as threatened in the notice, it will not affect the measures under The Securitisation and Reconstruction Of Financial Assets And Enforcement of Security Interest Act, 2002.

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So far as possession notice is concerned, the possession notice was issued on 24.03.2023 and the same was sent to the applicant on the same day i.e. on 24.03.2023 through post as evident from annexure - 6/D. page 36 of the counter affidavit.

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Section 13(4)(a) provides for mode of taking possession of secured assets in accordance with Rule8 of the Rules,which stipulates that the authorised officer shall take or cause to be taken possessionof the secured asset by delivering a possessionnotice prepared in accordance with the form provided in Appendix IV of the Rules and affixing such possession notice to the door or other conspicuous place of the property. There is no bar to deliver the possession notice through post. Hence, the allegation of applicant regarding service of possessionnotice is not valid ground.

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The possessionnotice was also affixed on both the secured assetsand also got published in Times of India and Dainik Jagran on 28.03.2023. The secured assetsare also registered with CERSAIvide Security ID 400038133718 and Asset ID is 200038067563 of property 1 in the name of Md. Atiullah and Security ID 400038133407 and Asset ID is 200038067253 of property 2 in the name of SaleemRazaand RameezRazaon.

•

DRT, PATNA

SA127 of 2023 IJI

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So far the objection of applicants regarding non disbursement of the amount as additional packagewill not affect validity of the action by the Bank to recoverthe amount utilized bythe borrower.

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In view of the above there appears no valid point to interfere in the measuresinitiated bythe Bank.

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ORDER

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The application under Section 17 of the SARFAESIAct filed by MIs Universal Packaging & Drs. (SA 127 of 2023) is dismissed with all pending, IA if any.

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PresidingOfficer

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DebtsRecoveryTribunal,Patna

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Judgment signed, sealed,dated and pronounced in the open court on this ~ 29TH Dayof January,2025.

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~,ol)"0

[KaushalendraYadav]

PresidingOfficer

DebtsRecoveryTribunal,Patna

Ms Universal Packaging and Ors. v. Indian Overseas Bank

Case brief

What is this about?

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Ms Universal Packaging and Ors. v. Indian Overseas Bank

Case brief

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