Dismissed

Smt Pmanjula and Manjula Perumal Naidu v. Indian Bank

DRT24 Apr 2025SA/134/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed a securitization application challenging a sale notice issued by Indian Bank. The applicants argued defective service of notices and an existing tenancy. The Tribunal held that due compliance with the SARFAESI Act was established and the tenancy claim was irrelevant to the sale's legality.

What did the court decide?

The Securitization Application was dismissed, the SA stands dismissed, and interim orders granted are vacated.

Smt Pmanjula and Manjula Perumal Naidu versus Indian Bank — Banking and Recovery | DRT (2025)

¶1

IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA

¶2

AT BENGALURU

¶3

Dated this the 24^th day of April 2025

¶4

Present: Sri. T. RAJESH Presiding Officer

¶5

Securitization Application No.134/2024

¶6

BETWEEN

¶7

Smt. P. Manjula @ Manjula Perumal Naidu Aged About 57 Years W/O Shri. S. Dhananjaya Naidu

¶8

Shri. S. Dhananjaya Naidu Aged About 59 Years S/O Shri S. Venkatarama Naidu

¶9

Both Are Residing At No 100/101 "Manasa Residency" 1^st Floor, 3rd Main Road, Bob Colony, J.P.Nagar, Bengaluru-560078

¶10

… APPLICANTS

¶11

AND

¶12

The Authorized Officer Now Indian Bank (Earlier Allahabad Bank) Basavanagudi D.V.G Road Branch Rathnamurthy Complex, No.121, DVG Road Basavanagudi, Bengaluru-560004

¶13

M/S Shine Life Hospitality Services A Proprietorship Concern of Shri.Arun Kumar M.S. Having Its Office At No 2528, 9th A Cross 13^th Main Road, E Block, Sahakaranagar, Bengaluru-560092

¶14

Mr.Mohammed Riyaz Ahmed Major S/o. Late Baba Saheb Residing At No.22, Hutchins Road, Cooke Town, Bengaluru North, Bengaluru-560005

¶15

…RESPONDENTS

¶16

2 SA/134/2024

¶17

Counsels on record/appeared for:

¶18

Applicant : Sri. S.R. Harish Kumar Respondent No.1 : Sri. K.R. Parashuram Respondent No.2 : Sri. Satish K.V. Respondent No.3 : Sri. Puttaraju

¶19

::ORDER ON SA::

¶20

This Securitization Application in short (SA) has filed with a prayer to set aside the notice of intended sale dated 09.05.2024 issued by the respondent bank in respect of schedule property. The applicant had filed this SA, under S.17 of the Securitization And Reconstruction of Financial Assets & Enforcement of Security Interest Act 2002 herein after being referred to as the Act.

¶21

The case of the applicant in nut shell is as follows:

¶22

The applicants are the borrowers and guarantor respectively and the availment of credit facility against the rental income receivables as admitted by the applicant. The creation of security interest is also admitted, however, the applicant contends that, the 2^nd respondent is a registered tenant in respect of the schedule property and tenancy is created prior to the creation of security in favour of the erstwhile Allahabad Bank, which in turn got amalgamated with the respondent bank. It is further contended by the applicant that after the creation of the registered lease deed 01.08.2019 in favour of the 2^nd respondent, the bank has released the loan amount to the applicant against the rent receivables.

¶23

3 SA/134/2024

¶24

In respect of the measures, it is the case of the applicant that despite the Covid-19 pandemic the payments were regular and the bank had willfully classified the account as NPA. In respect of the intended sale notice, it is stated that, the same is issued without following the mandatory requirement of issuance and proper service of Demand notice and Possession Notice. In respect of the sale notice also, it is stated that, the applicant had preferred Writ Petition before the Hon’ble High Court of Karnataka challenging the notice of the intended sale and Writ Petition was posted on 03.07.2024 for consideration. The Hon’ble High Court had after hearing the parties relegated the parties to this Tribunal and hence according to the applicant no auction sale could have been conducted in view of the Orders passed by the Hon’ble High Court of Karnataka. The sale notice is also impugned contending that, there is no proper description of the schedule property in the sale notice.

¶25

In the grounds to the SA, the applicant had reiterated the contention as to the alleged non service of the demand notice, possession notice and mis-description of the property in the sale deed. Another contention is taken that, despite the existence of the valid legal tenancy in the property, the sale certificate describe the property as “free from Encumbrance”. It is also contended that the sale notice is not affixed and published as mandated under the statute. Along with the SA, the following documents were produced by the applicant: Sanction Order dated 29.08.2019 from 1^st respondent bank, Registered Lease Deed dated 01.08.2019 entered into between 1^st applicant herein and 2^nd respondent

¶26

4 SA/134/2024

¶27

herein, notice of intended sale dated 09.05.2024 issued by the 1^st respondent bank, copy of the Discharge Summary issued by Aster RV Hospital, J.P. Nagar, Bengaluru to 1^st applicant herein, Statement of Account relating to the Term loan account of the 1^st applicant.

¶28

The respondent bank has filed objections, stating that the SA is not maintainable in view of the fact that, the property is already sold, according to the respondent the right of redemption is no more applicable to the applicant the and the property when put to auction on 12.06.2024, the highest bidder has bid the property for Rs.3,23,70,000/- and pursuant to the completion of the sale the sale certificate dated 01.07.2024 was issued and registered. In respect of the credit facility, the respondent had detailed the facilities extended and security interest created in lien of the same. According to the respondent they had scrupulously followed the procedures as required under the law, including the issuance, service and publication of the sale notice and had also obtained valuation from the approved valuer as mandated under the statue. Along the objections the respondent bank has produced the following documents: CIRCULAR dated 26.08.2020- issued by the Reserve Bank of India with regard to amalgamation of Allahabad Bank to the Indian Bank from 01.04.2020, SANCTION LETTER dated 22.06.2016 issued by respondent bank for Term Loan of 93.50 lacs, EQUITABLE MORTGAGE BY WAY OF DEPOSIT OF TITLE DEEDS dated 29.06.2016 executed by applicant in favour of respondent bank registered as document no 2334/2016-17, LOAN SACTION LETTER dated 29.08.2019 issued by respondent bank for ₹ 145 lakh, EXTENSION

¶29

5 SA/134/2024

¶30

OF MORTGAGE dated 31.03.2018 executed by the applicant in favour of respondent bank, registered as document no 12123/2017-18, EXTENSION OF MORTGAGE dated 05.09.2019 executed by the applicant in favour of respondent bank, registered as document no 4947/2019-20, CERSAI REPORT, DEMAND NOTICE dated 16.12.2023 issued u/s 13(2) of the SARFAESI Act, Postal receipt and postal returned cover dated 18.12.2023, Paper publication of the demand notice in The South India Times dated 22.12.2023, Paper publication of the demand notice in kannada newspaper dated 22.12.2023, Possession notice dated 26.02.2024 issued u/s 13(4) of the SARFAESI Act, Postal receipt and RPAD returned cover which was returned on 01/03/2024, Paper publication of the possession notice in The South India Times dated 29.02.2024, Paper publication of the possession notice in Kannada newspaper dated 29.02.2024, Photograph for having affixed the possession notice on the schedule property, VALUATION REPORT dated 09.03.2024 submitted by Sri N Venkatesh and others, SALE NOTICE dated 09.05.2024 under rule 8(6) of the Security Interest (enforcement) rules 2002, Postal receipt and RPAD returned cover, Paper publication of sale notice in The South India Times dated 22.12.2023, Paper publication of sale notice in Kannada Newspaper dated 22.12.2023, Photograph of having affixed the sale notice on schedule property, Order passed by the 30th ACMM, Bangalore in Crl Misc No 6197 of 2024, Bid History dated 12.06.2024, SALE CERTIFICATE dated 01.07.2024 issued in favour of Mr Mohammad Riyaz Ahmed and statement of account.

¶31

6 SA/134/2024

¶32

Heard the submissions of Ld.counsels for the respective parties and perused the available records.

¶33

The only issued arise for consideration is as to the legality of the measures initiated and continued by the respondent leading to the issuance of impugned sale notice.

¶34

The applicant is challenging the measures contending that the measures are initiated without proper service of demand notice, possession notice and sale notice. The applicant is admitting the defaults occurred in the account. However, contends that the benefits of the Covid-19 was not considered by the respondent before classifying the account as NPA, in this regard it is to be noted that the applicant had not put forward any specific government or RBI circulars which entitles him to have a waiver of the repayment. In absence of any specific averment as to the existence of any benevolent statutory circulars which entitles the applicant to seek any moratorium as to the repayment, this Tribunal is not inclined to accept the contention of the applicant in that regard.

¶35

In respect of the contention as to the want of service of demand notice, the respondent bank has produced the proof of service of demand notice dated 06.12.2023 and postal receipts evidencing the issuance of the same. The demand notices so issued were returned as unserved as evident from the returned covers produced by the respondent bank as AnneuxreR10. In view of the compliance of mandate of Rule 3 the respondent had published the demand notice in two dailies one in vernacular language and

¶36

7 SA/134/2024

¶37

another in English. Though the proof as to the issuance and publication of demand notices were produced no proof as to the affixture of the same is produced along with the objections. In respect of the possession notice also respondent had produced proof of issuance of possession notice and as evidence from the postal receipts and returned covers. The S.13(4) notice was also duly published in two dailies one in vernacular language and another in English, the respondent bank had also produced the proof as to the affixture of the possession notice.

¶38

The valuation procured by the approved valuer is also produced at Annexure R8. Even otherwise, the applicant had no case that, the respondent failed in procuring the valuation of the property without selling the same for sale.

¶39

In respect of the sale notice also, the proof as to the issuance of the same through registered post is produced as Annexure-20. The respondent had published the sale notice in two dailies dated 22.12.2023 and also produced the photograph evidencing the affixture of the sale notice. The production of the above documents by the respondent bank leads this Tribunal to enter into a finding that, there is a due compliance of the provisions of SIE Rules. Though there is no evidence as to the affixture of the demand notice is produced, the same does not entice this Tribunal to hold that the procedure is flawed especially as the applicant is not able to establish any injury caused to them for the failure if any in affixture of the demand notice.

¶40

8 SA/134/2024

¶41

The applicant had set up a case as to the existence of a valid tenancy in the premises and contends that, a lease deed is in existence in favour of the 2^nd respondent prior to the creation of security interest. If, at all a valid tenancy is there, the same is no relevant in the challenge as to the validity of sale of the property is concerned. The right of the tenancy, if any, the same is only limited to the right of the tenant to be possession of the property which is not an issue in this SA, the only challenging the SA in respect of the impugned sale notice. Even though the applicant had taken a contention that the property cannot be sold as there exists a valid tenancy, this Tribunal is not inclined to accept the same as the existence of tenancy if any will not stand in the way of secured creditor establishing their right and proceeding with the measures. The only right the tenant can claim is to remain in possession of the property and to get an order against forceful eviction either through SARFAESI measures or otherwise. The present case does not relates to the possession of the property and only the question is to be decided herein is as to the legality of the impugned sale notice. The existence of tenancy, if any, have nothing to do with the legality of the sale notice which is under challenge.

¶42

In view of the findings as entered above, on the basis of the discussions therein, this Tribunal is of the considered opinion there is no merits in the SA. Hence, the SA is liable to be dismissed.

¶43

9 SA/134/2024

¶44

Accordingly, SA.No.134/2024 stands dismissed. Interim order

¶45

granted if any stands vacated. Pending IA/s if any are disposed of. No

¶46

order as to cost.

¶47

Copy of this Order be communicated to the parties concerned.

¶48

[Dictated to the Stenographer (PR), transcribed by her, corrected and signed and pronounced by me in the Open Court, this the 24^th Day of April 2025].

¶49

Sd/-

¶50

(T. RAJESH) PRESIDING OFFICER

Smt Pmanjula and Manjula Perumal Naidu v. Indian Bank

Case brief

What is this about?

What did the court decide?

Smt Pmanjula and Manjula Perumal Naidu v. Indian Bank

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Sheela Ps alias Sheela Ravi versus Federal Bank

M/s S.S Constructions Through its Proprietor Shri Sameer Sheikh Shafi Sheikh versus Capri Global Capital Limited

Sri Mahendra Pradhan And Ors. versus Punjab and Sind Bank

Sh Hem Chand versus Jogindra Central Cooperative Bank Ltd.

Bank of India versus Ms. Bhagyesh Sale, [a Proprietorship Concern]

Canara Bank versus Sri. Lokanath Naidu.K