Dismissed

Mumtas v. Can Fin Homes Ltd.

DRT25 Feb 2025SA/143/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed the applicant's application seeking to set aside a demand notice, possession notice, and CJM order, and to direct installment repayment. The Court held that no opportunity of hearing is required before NPA classification, the CJM had the power to order possession regardless of NPA status legality, and the request for installments falls outside Section 13(4) of

What did the court decide?

The Securitization Application stands dismissed; no order as to costs.

Mumtas versus Can Fin Homes Ltd. — Banking and Recovery | DRT (2025)

¶1

Fair Order

¶2

IN THE DEBTS RECOVERY TRIBUNAL - 1 AT ERNAKULAM

¶3

DATED THIS 25^th DAY OF FEBRUARY, 2025

¶4

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

¶5

S.A No. 143 of 2024

¶6

Between

¶7

Mumtas N.A., W/o. Shabin Mohammed Sherif, 18/1433, Maliyekkal House, East Pattalathu Road, Palluruthy, Ernakulam-682 006.

¶8

--- Applicant

¶9

And

¶10

The Authorized Officer, Can Fin Homes Ltd., Cochin Branch, 39/3728, Vishnupriya, Manikkiri Cross Road (Link) Pallimukku, M.G. Road, Pallimukku, Ernakulam-682 016.

¶11

--- Defendant

¶12

This Securitization Application coming on 04.12.2024 and 16.12.2024 for final hearing before me in the presence of Mr.Sajeevan Kurukkuttiyullathil, Counsel appearing for the Applicant and Mr.Rajeevu L.G., Advocate 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:

¶13

SA No.143 of 2024

¶14

O R D E R

¶15

This Securitisation Application was filed on 30.01.2024 seeking to set aside Annexure-A1 Demand Notice, Annexure-A4 possession notice and Annexure-A7 order of Chief Judicial Magistrate Court Ernakulam and to direct the defendant bank to accept the repayment of the loan amount in instalments and to declare the classification of the loan account as NPA, is illegal.

¶16

The applicant has admitted the availment of a sum of Rs.32,00,000/- and another loan of Rs.5,00,000/- from the defendant bank upon creation of mortgage over his immovable property measuring 1.13 Ares comprised in Sy. No.11256 of Palluruthy Village, Ernakulam Village as the collateral security for the above said credit facilities.

¶17

According to the applicant, his account was being maintained as regular and hence declaration of the loan account as NPA on 28.09.2023 is not correct. The contention of the defendant in the written statement is that since the applicant defaulted in repayment of the outstanding loan due, his loan account was classified as NPA on 28.9.2023. The applicant has not produced any material before this Tribunal to prove his contention that his account has being maintained as regular and that he made repayment towards the outstanding loan due without default.

¶18

The provisions of Section 13 (2) of the SARFAESI Act 2002 does not mandate the secured creditor to give an opportunity to the borrower/guarantor prior to classification of the loan account as NPA. Hence the contention of the applicant that failure to afford an opportunity of being heard prior to classification of loan account as NPA is in violation of the natural justice does not hold good.

¶19

Annexure-A1 demand notice dated 05.10.2023 was issued to the applicant calling upon him to repay the outstanding loan due within a period of 60 days from the date of receipt of the demand notice. The applicant sent objection dated 01.12.2023, Annexure-A2 to the defendant. The defendant sent reply dated 15.12.2023 Annexure-A3, to the applicant answering the issues raised by the applicant in Annexure-A2.

¶20

Annexure-A1 demand notice was issued by the Authorized Officer of the defendant bank. Hence the contention of the applicant that demand notice was not issued by the Authorized Officer is absolutely incorrect.

¶21

Page 2 of 5

¶22

SA No.143 of 2024

¶23

Annexure-A4 possession notice dated 30.12.2023 was issued for taking symbolic possession of the secured asset. The defendant has produced Annexure-B1 and B2, copies of paper publications in order to show that, possession notice was published in Deepika edition dated 02.01.2024 and in Business Line edition dated 02.01.2024. Annexure-B4 Security ID based search report produced by the defendant evidences the registration of the security interest with CERSAI.

¶24

The defendant approached the Chief Judicial Magistrate Court Ernakulam and filed Annexure-A5 application and A6 affidavit under Section 14 (1) of the SARFAESI Act, 2002. Annexure-A7 Order dated 04.06.2024 came to be passed appointing Advocate Commissioner for taking physical possession of the secured asset. The Advocate Commissioner issued Annexure-A8 notice dated 03.10.2024 to the applicant and other co-borrowers informing them that he would take physical possession of the secured asset on 17.10.2024.

¶25

The only contention raised by the applicant in the SA with regard to the measures under Section 14 (1) of the SARFAESI Act 2002 is that without considering the illegal classification of the loan account as NPA, the learned Chief Judicial Magistrate Ernakulam passed order appointing Advocate Commissioner to take physical possession of the secured asset. He has not averred in the SA as to whether the mandatory requirements contemplated under Clause (i) to (ix) to the provisions of Section 14 (1) of the SARFAESI Act 2002 was not complied with in respect of filing of Annexure-A6 affidavit.

¶26

A perusal of Annexure-A6 affidavit shows that all the details contemplated under Clause (i) to (ix) to the provisions of Section 14 (1) of the SARFAESI Act 2002 were furnished. A perusal of Annexure-A7 order shows that the learned Chief Judicial Magistrate Ernakulam after having perused the contents of the affidavit and the documents filed in support of the affidavit and after having satisfied over the same, passed order to take physical possession of the secured asset. The power exercised by the Chief Judicial Magistrate is an administrative function. Hence he is not required to look into the issue as to whether classification of loan account of the borrower as legal or illegal. Therefore, the contention of the applicant that the learned Chief Judicial Magistrate Ernakulam passed order without considering the illegal classification of loan account as NPA is untenable.

¶27

One of the reliefs sought for by the applicant in the SA is to direct the defendant to accept the repayment of the loan amount in installments. The above relief sought for by the applicant does not fall under any of the measures of the provision u/s 13 (4) of the

¶28

Page 3 of 5

¶29

SA No.143 of 2024

¶30

SARFAESI Act 2002. It is for the applicant to approach the defendant to get the aforesaid relief.

¶31

The applicant has failed to prove his case so as to get the reliefs sought for in the SA. In view of the foregoing reasons, this Tribunal holds that the applicant is not entitled to get the reliefs sought for in this SA.

¶32

Resultantly, S.A No.143 of 2024 stands dismissed. However, there shall be no order as to costs.

¶33

Dictated to Steno, taken down, transcribed, typed by him, corrected and pronounced by me in the open court on this the 25^th day of February, 2025.

¶34

(Su. WILLYAHM) PRESIDING OFFICER

Mj/

Page 4 of 5

SA No.143 of 2024

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

¶39

Sl. No.	Date	Particulars
1.	05.10.2023	True copy of the Demand Notice	Annexure-A1
2.	01.12.2023	True copy of the written objection submitted by the applicant to the defendant.	Annexure-A2
3.	15.12.2023	True copy of the reply sent by the defendant bank.	Annexure-A3
4.	30.12.2023	True copy of the possession notice issued by the defendant.	Annexure-A4
5.	---	True copy of the application in MC No. 371 of 2024 on the files of Chief Judicial Magistrate CourtErnakulam.	Annexure-A5
6.	---	True copy of the affidavit in MC No. 371 of 2024 on the files of Chief Judicial Magistrate CourtErnakulam	Annexure-A6
7.	04.06.2024	True copy of the order in MC No. 371/2024 issued by the Chief Judicial Magistrate CourtErnakulam.	Annexure-A7
8.	03.10.2024	True copy of the possession notice issued by the Advocate Commissioner SouravShaji.	Annexure-A8

¶40

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

¶41

Sl. No.	Date	Particulars
1.	02.01.2024	Photocopy of the paper publication effected in Deepika daily along with readable copy.	Annexure-B1
2.	02.01.2024	Photocopy of the paper publication effectedin Businessline daily.	Annexure-B2
3.	25.03.2024	True copy of the valuation report obtained by the defendant from their approvedvaluer.	Annexure-B3
4.	---	True copy of the CERSAI registration of the secured asset.	Annexure-B4

¶42

(Su. WILLYAHM) PRESIDING OFFICER

¶43

Mj/

¶44

Page 5 of 5

Mumtas v. Can Fin Homes Ltd.

Case brief

What is this about?

What did the court decide?

Mumtas v. Can Fin Homes Ltd.

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

Pratheesh Krishna versus Hinduja Leyland Finance Limited

M/s. Sanjeevani Life Care Village versus The Hinduja Leyland Finance Ltd. represented by its Branch Manager

Punjab National Bank versus Sh. Anurag Jain

Mrs Lata Gajanan Khandare and one versus Equitas Small Finance Bank Limited

1.Smt Manpreet Walia versus Punjab National Bank

M/S Toplon Industries Private Limited versus Punjab National Bank