Dismissed

Chatakunta Venkata Subbamma v. Canara Bank

DRT4 Apr 2025SA/260/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal disposed of Securitization Application No.260 of 2022 filed by borrowers to quash a possession notice issued by Canara Bank under Section 13(4) of the SARFAESI Act, holding that the application fails due to lack of valid grounds as the district court found the bank actions within permissible limits and the applicants failed to substantiate RBI circular violations.

What did the court decide?

The Securitization Application No.260 of 2022 is dismissed and all pending interlocutory applications stand closed. No order as to costs.

Chatakunta Venkata Subbamma versus Canara Bank — Contract and Commercial Disputes | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL^_ II AT HYDERABAD

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DATED THIS THE O4TH DAY OF APRIL, 2025

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PRES E Nr : s H. RAM ESI'HS,[3.5Ff,8...;,, L. LB.⁽ Hons. ), M.A

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Securitization Application No.260 OF 2022

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Smt. Chatakunta Venkata Subbamma W/o Late Chatakunta Obulaiah 3/23, Bapana Street, Eguva Peta Sidhout, Siddavattam, Kadapa District Andhra Pradesh-516 237

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Chatakunta Venkata Ramana S/o Chatakunta Obula Subbanna

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t3-23- 730 / 237 I F, JanaTiya Soudha Apartments Matha Laxmi Nagar, Near GHMC East Zonal Office Gaddiannaram, Saroornagar, KV Ranga Reddy District Hyderabad, Telangana-500 035

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Chatakunta Laxmi Devi W/o Bangi Vijay Kumar Flat No.402, Dwarakamayi Apartments Maruthi Nagar, 2nd Cross, Ananthapur Andhra Pradesh - 515 001

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Bangi Vijay Kumar S/o Late B. Venkata Swamy Flat No.402, Dwarakamayi Apartments Maruthi Nagar, 2nd Cross, Ananthapur Andhra Pradesh - 515 001

.......Applicants.

VCTSUS

Canara Bank

Specialized Asset Recovery & Management Branch (Specialized ARM Branch) 7 Road Circle, Canara Bank Building znd Floor, Kadapa-S16 002

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Rep by its Authorized Officer AND

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Branch Manager Garladinne Branch Ananthapuramu (Dist)

....Respondent.

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SA No.260/2022

Counsel for the Applicants Counsel for Respondent

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: Mr.K. Kranthi Kumar

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: Mr.S. Sainathan

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-:ORDER:-

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The Applicants filed the^{present Securitisation Applicationu/s} 17 of the Securitization and Reconstruction of^{Financial Assetsand} Enforcement of Security Interest^{Act, 2002(hereinafterreferredto as} "the Act") to set aside the^possession notice dated 30.07.2022^issued by the respondent bank under Sec.13(4)of^{the Act.}

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The case of the applicants, in brief,^{is that the applicants} availed horticulture loan. Bank officials^{obtainedsignatures on blank} printed documents. The respondent bank also failed to follow the Fair Practices Code issued by the Reserve^Bank of^{India vide Circulars} dated 05.05.2003 and 22,08.2007^{and failed to provide copy of the} loan docu ments/ag reement as^per Circulars.^{No acknowledgementis} produced which amounts to withholding vital document and^paying fraud on Court as held by the Hon'ble Supreme Court in Civil^Appeal No.994 of 1972 decided on 27.10.1993. Though the applicants^were regularly paying instalments, due to unfavourable crop conditions^and pandemic, there was delay in repayment. Without considering the situation and substantial repayment, the respondent bank issued demand notice dated 14.02.2022 for Rs.67,49,950/-^under Sec.13(2). However, the contents of the demand notice do^not include segregation of^principle and interest^payable as mandated under Sec.13(3) of the Act, 2002. RBI also issued^guidelines under Circular dated 01.07.2011 to Banks on Income Recognition,^Asset Classification and Provisioning^pertaining to Advances. There should be^proof of^payment in the books of account unless the concerned person accepts the correctness as held in Chandradhar Goswami vs.

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sA No.260l2022

has not produced the Certificate as to authenticity. The respondent bank failed to follow consolidated instructions on customer service vide RBI Circular dated 02.07.2012. RBI Circular dated 12.09.2002 on guidelines for NPA and containing'early alert system'has not been followed. The possession notice dated 30.07.2022 was neither affixed on schedule property nor published in two leading newspapers, The respondent bank has failed to follow Secs.13(2), l3(4), 13(B) of the Act and Rules B(1) and B(2) thereunder. Hence this SA.

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The respondent bank filed reply statement along with documents. It is averred that after availing horticulture loan of Rs.40 lakhs on 22.07.2016 repayable in five yearly instalments. They acknowledged the llability from time to time and also legal notice and recall notice. The repayable amount has been mentioned in the demand notice as per Sec.13(3). Copies of all the documents have been handed over to the counsel for these applicants who are defendants in OA No.177/2022 tiled by the bank before the Tribunal even prior to filing this SA. The applicants have not filed the RBI Circulars. The possession notices served on applicants, published in two newspapers and affixed on secured asset as per Rules. Thereafter Sec.f3(B) redemption notice was issued. The notice was issued by the authorized person of the bank. The SA is liable to be dismissed with exem pla ry costs.

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Learned counsel for applicants reported orders may be^passed on merits.

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During the course of arguments, learned counsel for^respondent bank reiterated his version as in the reply stalement.-While^referring N*o

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sA No.250/2022

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to the proof documents annexed^{to the reply statement, learned} counsel sought for dismissal^{of the SA with exemplarycosts.}

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Now, the^points that arise for consideration^are: -

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i) Whether the applicants made out any^{valid groundto} quash the possession notice dated 30.07.2022 issued^by the respondent under Sec.13(4)^{of the Act, 2002against} the SA schedule Pro7ertY?

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ii) To what relief?

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Point No.(i):

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It is an admitted fact that the^{applicantavailed loan facillty} from the respondent bank and committed^{default. Though the} applicants referred to a number of^{RBI Circulars, not even a single} Circular has been filed to substantiate^{their averments.Even} otherwise, it does not appear^{from the face of recordthat the} applicants ever made any effort to^{submit their grlevanceseitherto} the respondent bank officials or made use of^{the redressal} mechanism set up by the Reserve Bank of India if the^respondent bank failed to follow the Circulars. Thus, the^{applicants cannotbe} permitted to question in this SA the action of the respondent in classification of loan account as NPA due to admitted default.

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B. The respondent bank filed copies of^postal acknowledgement cards as proof of service of demand notice and^possession notice. From the perusal of demand notice dated 14.02.2022 I do not find any insufficiency of information that caused prejudice to the applicants. It does not also appear that the applicants raised any objections to the demand notice when they found some deficiency in providing details therein. The possession notice daled 30.07.2022 was published in'Sakshi'and'The Hindul newspapers and affixed on

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SANo.26O/2022

secured asset as per copies of newspaper clippings and photograph placed on record vide pages 18, 19 and 39 annexed to the reply statement. Redemption notice was also received by the applicants vide postal acknowledgements. The fact of providing copies of documents to the applicants by the respondent bank herein in OA, is not disputed by the applicants. There is no valid reason to doubt the authority of the officer of the bank who signed the Securitization notices. In fact, there are no arguments offered at all.

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Under the aforesaid circumstances, I have no hesitation to Find that the applicants have utterly failed to make out any valid ground to set aside any of the measures of the respondent bank including the possession notice dated 30.07.2022 and accordingly SA is liable to be dismissed.

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Point No.(ii):

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In the result, the Securitization Application Fails and is hereby dismissed.

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Consequently, Interlocutory Applications pending, if any, shall stand closed. No order as to costs.

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Communicate a copy oF this order to the parties concerned and upload in the official website.

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(Typed to my dictotion by the PS, corrected, signed and pronounced by me in the open court on this the 04th doy of April, 2025).

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K.rvu' ESHWAR KOTHE) PRESIDING OFFICER

Chatakunta Venkata Subbamma v. Canara Bank

Case brief

What is this about?

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Chatakunta Venkata Subbamma v. Canara Bank

Case brief

What is this about?

What did the court decide?

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Issues for consideration

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