Partly allowed

Bismi Traders v. Perinthalmanna Urban Co. Operative Bank Ltd.

DRT30 Jan 2025SA/189/2022

Case brief

AI extract

What is this about?

The Tribunal stayed a CJM order appointing an Advocate Commissioner due to factual errors regarding loan type and procedural non-compliance. It dismissed requests for regularization or moratoriums under the SARFAESI Act and rejected claims of procedural irregularity in demand and possession notices.

What did the court decide?

Annexure-A6 order and Annexure-A7 notice issued by the Advocate Commissioner were set aside; other reliefs were dismissed.

Bismi Traders versus Perinthalmanna Urban Co. Operative… — Execution and Attachment | DRT (2025)

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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 JANUARY, 2025

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

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S.A No.189 of 2022

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Between

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Bismi Traders rep. by its Proprietor Abdul Latheef, S/o. Hamsa Haji, Cheriyil House, Pandikad Valluvangad South Post, Ernad Taluk, Malappuram.

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--- Applicant

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And

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The Authorized Officer, The Urban Co-op Bank Ltd. Perinthalmanna, Malappuram – 679 322 .

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The Branch Manager The Urban Co-op Bank, Thachinganadam Branch, Perinthalmanna, Malappuram – 679 325.

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--- Defendants

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This Securitization Application coming on 18.11.2024 and 13.12.2024 for final hearing before me in the presence of Mr. K.V.Anil, Counsel appearing for the defendants and argument of Counsel for the applicant not advanced and chance for advancement of argument of the counsel for the applicant closed and upon hearing arguments of learned Counsel for the defendant and upon perusing the material on records, this Tribunal delivered the following:

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SA No.189 of 2022

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O R D E R

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This Securitisation Application was filed on 05.11.2018 seeking to declare that the initiation of the proceedings Annexure-A3 possession notice and Annexure-A4 Sale notice and Annexure-A7 Advocate Commissioner notice as null and void and to direct the defendant to consider the latest restructure measures and the benefit being declared by the RBI as well as the Central Govt. in view of Covid-19 pandemic and to direct the defendant to consider the representation submitted by the applicant seeking installments on overdue amount and regularise the loan account or moratorium for an year shall be considered and to direct the defendant not to include the expenses and the incidental charges on the applicant’s account and to direct the defendant to pay costs of this proceedings to the applicant.

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The applicant has admitted the availment of cash credit loan of Rs.30,00,000/- on 27.03.2020 from the 2^nd defendant bank upon creation of mortgage over his immovable property situated in Sy. No.61/1-3, 61/2-3 of Chembrasseri Village. The applicant has also admitted his default in repayment of the outstanding loan due to the 2^nd defendant bank. Hence the loan account of the applicant came to be classified as Non-performing Asset and demand notice dated 11.10.2021 Annexure-A1 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.

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According to the applicant, he submitted representation Annexure-A2 to the defendants seeking some time to pay the interest and continue the loan facility. But no reply was sent for the representation. The rival contention of the defendants in their written statement is that no such representation was sent by the applicant and that Annexure-A2 is a created document and that it is evident from the fact that the signature of the applicant is not seen in Annexure-A2. The applicant has not produced any proof to show that such representation was sent by him and that it was received by the defendants. Therefore, this Tribunal is unable to accept the averment of the applicant that he submitted Annexure-A2 representation to the defendants.

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Since the applicant failed to respond to the terms of the demand notice, Possession Notice dated 25.02.2022 Annexure-A3 was issued for symbolically taking physical possession of the secured asset. The defendants have produced copies of paper publications as AnnexureD1 and D2 in order to prove their contention that possession notice was published in Mathrubhoomi edition dated 27.02.2022 and Desabhimani edition dated 27.02.2022. The applicant has not

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Page 2 of 5

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SA No.189 of 2022

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pointed out any procedural irregularity in respect of Annexure-A3 possession notice.

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The applicant has produced Annexure-A4 sale notice dated 22.12.2024 contending that it was issued without considering the pendency of the SA before this Tribunal. But he has not put forth any averments in the amended SA in order to show that there was procedural irregularity in respect of issuance of Annexure-A4 sale notice. Both applicant and the defendants have not averred in their respective pleadings as to whether sale was fructified or not.

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Subsequently, the defendants approached the Chief Judicial Magistrate Court, Manjeri and filed Annexure-A5 application and affidavit under Section 14 (1) of the SARFAESI Act, 2002. Order Annexure-A6 came to be passed appointing Advocate Commissioner to take physical possession of the secured asset. The Advocate Commissioner issued Annexure-A7 notice dated 02.05.2024 Annexure-A2 to the applicant informing him that he would take physical possession of the secured asset on 02.05.2024. The applicant having aggrieved against the above measures, filed this SA seeking the reliefs stated supra.

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On perusal of Annexure-A6 order manifestly shows that the learned Chief Judicial Magistrate, Manjeri mechanically passed order without application of judicial mind. The order appears to have been prepared in a printed format and with blanks which were filled up subsequently with pen. Further the order says that the respondents/ borrowers have availed a term loan from the applicants/bank. But the admitted case of the applicant as well as the defendants is that the applicant availed cash credit facility and not term loan as mentioned in Annexure-A6 order. Further, the defendants have clearly averred in Annexure-A5 application and affidavit that the applicant availed cash credit facility. Therefore, it is evident that Annexure-A6 order was passed without considering Annexure-A5 affidavit and application. In the above said circumstance, this Tribunal is constrained to stay Annexure-A6 order passed by the learned Chief Judicial Magistrate, Manjeri passed to take physical possession of the secured asset.

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The other reliefs sought for by the applicant in the SA are as follows : To direct the defendants to consider the representation submitted by him seeking to pay installments on overdue amount and to regularize the loan account or to grant a moratorium for an year, to direct the respondents to call for the records pertaining to initiation of sale proceedings. This Tribunal has already held that no representation was submitted by the applicant to the defendants. Further, seeking reliefs from this Tribunal to regularize the loan account by permitting the applicant to pay the loan due in

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Page 3 of 5

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SA No.189 of 2022

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installments is not a measure contemplated under Section 13 (4) of the SARFAESI Act, 2002. Further, granting moratorium to the borrower is also not a measure under Section 13(4) of the SARFAESI Act, 2002. Therefore, the aforesaid reliefs sought for by the applicant is unsustainable and as such, such reliefs cannot be granted.

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This Tribunal has already observed in para 5 of the order that the applicant has failed to prove that there was procedural irregularity in respect of issuance of Annexure-A4 sale notice. Therefore, the relief sought for by the applicant to call for the entire records pertaining to the sale proceedings cannot be granted.

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This Tribunal does not find any procedural irregularity on the part of the defendants in respect of issuance of Annexure-A1 Demand Notice and Annexure-A3 possession notice. However, Annexure-A6 order passed in MC No.369/2023 by the learned Chief Judicial Magistrate, Manjeri is not sustainable for the reasons stated supra. Therefore Annexure-A6 order and Annexure-A7 notice issued by the Advocate Commissioner are liable to be set aside.

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In view of the foregoing reasons, this Tribunal holds that the SA stands partly dismissed with regard to reliefs sought for in respect of Annexure-A3 possession notice and the SA stands partly allowed with regard to relief sought for in respect of Annexure-A6 order and Annexure-A7 notice issued by the Advocate Commissioner for taking physical possession of the secured asset.

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There shall be no order as to costs. However, it is made clear that the defendants are at liberty to file fresh application and affidavit under Section 14 (1) of the SARFAESI Act, 2002 before the Chief Judicial Magistrate Court, Manjeri for appropriate relief.

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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 January, 2025.

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(Su. WILLYAHM) PRESIDING OFFICER

Mj/

Page 4 of 5

SA No.189 of 2022

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

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Sl. No.	Date	Particulars
1.	11.10.2021	Copy of Demand Notice issued to the applicant and translationofSchedule-2	Annexure-A1
2.	07.12.2021	Copy of the representation submitted to theManager.	Annexure-A2
3.	25.02.2022	Copy of the possession notice issued to the applicant and translation of schedule-3.	Annexure-A3
4.	22.12.2024	Copy of sale notice issued by the defendants.	Annexure-A4
5.	26.02.2024	Copy of affidavit and petition filed by the bank before the CJM Court, Manjeri in MCNo.369/2024.	Annexure-A5
6.	18.03.2024	Copy of the order of the CJM Court, Manjeri in MCNo.369/2024.	Annexure-A6
7.	02.05.2024	Copy of notice of the Advocate Commissioner.	Annexure-A7
8.	---	Copies of the payment receipts	Annexure-A8 series

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

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Sl. No.	Date	Particulars
1.	27.02.2022	Copy of the paper publication made in Mathrubhumi daily along with its Englishtranslation.	Annexure-D1
2.	27.02.2022	Copy of the paper publication made in Desabhimani daily along with its Englishtranslation.	Annexure-D2
3.	---	Copy of the relevant page of the valuation report submitted at the time of availing theloan.	Annexure-D3

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(Su. WILLYAHM) PRESIDING OFFICER

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Mj/

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Page 5 of 5

Bismi Traders v. Perinthalmanna Urban Co. Operative Bank Ltd.

Case brief

What is this about?

What did the court decide?

Bismi Traders v. Perinthalmanna Urban Co. Operative Bank Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

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