Dismissed

Mr Pavan N v. Tumkur Grain Merchants Cooperative Bank Limited

DRT29 Aug 2025SA/257/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed a Securitization Application challenging an Asset Reconstruction Company Manager & Manager order. The Tribunal found no procedural flaws in the execution measures, held the omission of the claim amount in the S.14 affidavit as a non-prejudicial technical mistake, and rejected contested defaults and registration claims due to lack of evidence.

What did the court decide?

The Securitization Application (S.A. 257/2024) was dismissed; interim orders were vacated; pending I.A's disposed of.

Mr Pavan N versus Tumkur Grain Merchants Cooperative Bank… — Company and Corporate | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

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Dated this 29^th Day of August, 2025

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Present: Sri. T. RAJESH Presiding Officer SA.No.257/2024

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BETWEEN:

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Sri. Pavan. N, S/o Late. Nagaraj Rao M, Aged about 51 years, DOB: 22-11-1973, Chairman of M/s. I S E R T Academy.

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Mrs. N. Vijaya Rao, W/o. Late. Nagaraj Rao M, Aged about 81 years, DOB: 03-04-1943, Secretary of M/s. I S E R T Academy.

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Both are R/a. No. 366, Manjunatha Temple Road, 2^nd Main Road, SBM Colony, Banashankari 1^st Stage, Bengaluru- 560 050. …APPLICANTS

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AND:

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The Authorised Officer, Tumkur Grain Merchants Co-operative Bank Ltd., Admin. Office: B.H. Road, Tumkur- 572 103, Karnataka. ...RESPONDENT

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Counsel on record/appeared for:

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Applicants : Sri. Garud Kumar Respondent : M/s. Law Vibes

SA 257/2024

FINAL ORDER

This Securitization Application, in short S.A is filed under sub section [1] of S.17 of the Securitization And Reconstruction of Financial Asset and Enforcement of Security Interest Act, 2002, herein after referred to as “SARFEASI Act” or “The ACT” with a prayer to set aside/ quash the ACMM order dated 22.11.2024 in Crl.Misc No. 4019/2020 passed by the 37^th SCMM, Bengaluru.

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The 1^st applicant availed Mortgage loan of Rs. 50 lakhs, the 2^nd applicant is the mortgager to the aforesaid loan. It is stated that inspite of substantial repayments the respondent has not properly deducted the repayments. It is also stated that without issuing any notice to the applicant the respondent bank has obtained the impugned order. The applicant states that the demand notice was issued on 21.12.2019 and the 1^st applicant has replied to the same on 15.02.2020, the respondent bank without proper reasons and without withdrawing the demand notice have rejected and stated that the respondent bank has issued the possession notice on 27.02.2020.

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It is the case of the applicant that the claim amount in not mentioned in the Crl.Misc petition and proper affidavit is not filed before the 37^th ACMM, Bengaluru. It is also submitted that the applicants business is restarted and they need some breathing time

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SA 257/2024

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to repay the dues under OTS within 4 months from the date of the order. In the grounds to the SA the applicants apart from reiterating the contentions also has taken another contention as to the alleged non registration of security interest with central registry. The non-service of the possession is also raised by the applicant.

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Along with the S.A the applicants has produced the following documents:-

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a) Certified copy of the ACMM Order dated 22.11.2021 ANNEXURE A-1

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b) Certified copy of the petition in Crl.Misc No. 4019/2020 ANNEXURE A-2

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c) Certified copy of the evidence Affidavit ANNEXURE A-3

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d) Copy of discharge summary ANNEXURE A-4

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e) Copy of the payment receipt ANNEXURE A-5

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The respondent filed their objections denying the contentions of the applicants, the respondents submits that the applicant has filed another SA No. 95/2020 challenging the demand notice dated 27.02.2020 and possession notice dated 27.02.2020 which is already dismissed by this Tribunal. The respondent states that the applicants upon availing the mortgage loan defaulted in the repayment of the loans and the account was classified as NPA, demand notice dated 21.12.2019 was issued, the loan defaulter gave untenable reply to the demand notice 15.02.2020 and

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SA 257/2024

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respondent bank also replied to the demand notice on 28.02.2020. The demand notice is also published in two newspapers, after that the bank issued the possession notice on 27.02.2020 and published the same in newspapers. The contention of the applicant as to the alleged non registration with the central registry is also denied specifically by the respondent. The respondent had filed an S.14 application before the Magistrate and obtained an order to take physical possession by appointing a court commissioner. The bank also denies the other issued raised in the grounds by the applicants.

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Along with the objections the respondent has filed the following documents:-

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a) “ R-1 Copy of Final order passed in SA No. 95/2020 & b) R-2 CERSAI Report c) R3- Copies of Encumbrance Certificates”

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Heard the counsels for both the sides.

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There is no dispute as to the disbursement of the amount also as

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to the defaults committed in the account. The contention of the applicant that the amount remitted by them were not properly given credit is taken without producing even a scrap of paper to prove the so-called remittances. Despite the specific denial by the respondent in their objection no evidence as to the so-called

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SA 257/2024

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remittance is forth-coming which leads this Tribunal to reject the above contention.

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Defaults committed by the applicants led to the classification of the loan account as NPA, the respondent issued the demand notice and possession notice. The only issues arising for consideration is legality of the measures initiated and continued by the respondent leading to the procurement of the impugned order. The measures initiated i.e, the demand notice and the possession notice were challenged in SA 95/2020 by the applicants which was dismissed by this Tribunal Vide order dated 05.08.2023.

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The next contention of the applicant as to the noncompliance of S.26D is also disproved by the production of the registration particulars with the central registry which evidences the due compliance of S.26D of the Act.

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The contention of the applicants regarding the claim amount which is not mentioned in the S.14 application. S.14 (b) (i) of the Securitization and Reconstruction of Financial Assets & Enforcement of Security Interest Act which reads in respect of contents of the affidavit to be filed in support of Section 14 application as:- “the aggregate amount of financial assistance and the total claim of the bank as on the date of filing the application”- Even Though no proof as to the compliance of the above mandate is forth-coming, Tribunal feels that the mistake crept in not

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SA 257/2024

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mentioning the claim amount in the S.14 application is only technical and such technical mistake does not prejudice the applicants in any manner.

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It is to be noted that this Tribunal is not sitting in appeal over the order of the Magistrate and can only interfere with the legality of measures leading to the procurement of S.14 Orders from the Ld. Magistrate. In view of the findings as afore mentioned which concludes that there is no procedural flaws in measures leading to procurement of S. 14 orders. This Tribunal is of the view that this SA is devoid of merits and is to be dismissed.

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In the result,

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S.A 257/2024 stands dismissed.

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Interim order, if any granted and subsisting till this day stands vacated.

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Pending I.A’s if any are all disposed of in terms of this Order.

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No order as to cost.

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Issue copy to all parties concerned.

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[Dictated to the Stenographer (AJ), transcribed by her, corrected and signed and pronounced by me in the Open Court, this the 29^th Day of August, 2025].

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Sd/- (T. RAJESH)

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PRESIDING OFFICER

Mr Pavan N v. Tumkur Grain Merchants Cooperative Bank Limited

Case brief

What is this about?

What did the court decide?

Mr Pavan N v. Tumkur Grain Merchants Cooperative Bank Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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