Dismissed

Monkuttan M M v. Peoples Urban Cooperative bank

DRT4 Jun 2025SA/288/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed the applicant's securitization application challenging a sale process and possession notice under the SARFAESI Act. The Tribunal held the bank complied with statutory notice requirements and valuation standards, finding no procedural irregularities or collusion. The prayer for remittance was rejected as outside the scope of the Act.

What did the court decide?

Securitization application dismissed; no direction to permit remittance of dues.

Monkuttan M M versus Peoples Urban Cooperative bank — Banking and Recovery | 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 4^th DAY OF JUNE, 2025

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

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S.A No. 288 of 2023

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Between

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Monkuttan M.M., S/o. Mohanan, Mangavilchirayil House, Amballoor P.O, Kanjiramattom P.O. Ernakulam District -682 315.

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--- Applicant

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And

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People’s Urban Co-operative Bank Ltd., PB No.1, H.O. Tripunithura, Ernakulam -682 301, Represented by Authorized Officer & Chief Manager.

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Arun, Officer Staff, People’s Urban Co-operative Bank Ltd., PB No.1, H.O. Tripunithura, Ernakulam -682 301.

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Sarath M.S., Mundappillil House, Valayanchirangara P.O.,

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Ernakulam – 683 556.

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--- Defendants

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SA No.288 of 2023

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This Securitization Application coming on 26.03.2025 for final hearing before me in the presence of Mr. A. Abdul Jaleel, Counsel appearing for the Applicant and Ms. Uma G. Krishnan, Counsel appearing for the 1^st defendant and 2^nd defendant set ex-parte and Ms.Thankom Mukundakrishnan, Counsel appearing for the 3^rd defendant and upon hearing arguments of learned Counsels for both the parties and upon perusing the material on records, this Tribunal delivered the following:

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O R D E R

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This Securitisation Application was filed on 25.05.2023 seeking to set aside Annexure-AI notice issued by the Advocate Commissioner, Annexure-A2 application filed by the 1^st defendant, Annexure-A5 sale notice and Annexure-A7 Demand Notice and to direct the 1^st defendant bank to permit the applicant to remit the actual due amount in the loan account.

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There is no dispute with regard to availment of credit facility of Rs.10,00,000/- by applicant from the 1^st defendant bank upon creation of equitable mortgage over his immovable property admeasuring 4.92 Ares comprised in Re.Sy.No.238/2 of Kanjiramattom Village as the collateral security for the availment of the aforesaid credit facility. The applicant has admitted his default in repayment of the outstanding loan due.

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Therefore, the loan account of the applicant was classified as NPA. Annexure-A7 demand notice dated 15.12.2020 (copy of the same has been produced by the 1^st defendant bank as Annexure-B1) 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 has himself produced copy of the acknowledgement card along with Annexure-A7. The applicant neither sent any objection/representation to the demand notice nor did he clear off his liability due to the 1^st defendant bank.

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Hence, possession notice dated 03.03.2021 Annexure-B3 was for symbolically taking physical possession of the secured asset. The 1^st defendant bank has produced Annexure-B4 copies of photographs, Annexure-B5 and B6 copies of paper publications in order to show that Possession Notice was affixed on the conspicuous part of the secured asset and it was published in two leading newspapers one in Kerala Kaumudi edition dated 09.03.2021 and another in The New Indian Express edition dated 09.03.2021.

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Subsequently, the 1^st defendant bank issued sale notice dated 05.10.2021, Annexure-B7 for sale of the secured asset on 12.11.2021. According to the 1^st defendant, the applicant received the sale notice

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SA No.288 of 2023

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and put his signature in Annexure-B7 in token of the sale notice. A perusal of Annexure-B7 shows that the applicant has himself put his signature admitting the receipt of the copy of the sale notice. 1^st defendant has produced Annexure-B8 and B9 copies of paper publications in order to prove his contention that Annexure-B7 sale notice was published in Kerala Kaumudi edition dated 11.10.2021 and another in The New Indian Express edition dated 11.10.2021. According to the 1^st defendant sale was not fructified for want of bidders.

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Therefore, sale notice dated 26.07.2022, Annexure-A5 was issued for sale of the secured asset on 20.08.2022 (copy of the same has been produced as Annexure-B10 by the 1^st defendant bank). According to the 1^st defendant, the applicant received the sale notice and put his signature in Annexure-B10 in token of the sale notice. A perusal of Annexure-B10 shows that the applicant has himself put his signature admitting the receipt of the copy of the sale notice. Annexure-B11 and B12 copies of paper publications evidences the publication of the sale notice in Kerala Kaumudi edition dated 02.08.2022 and another in The New Indian Express edition dated 02.08.2022.

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On 20.08.2022 the secured asset was sold to the successful bidder, who is the 3^rd defendant herein, for a sale consideration of Rs.24,00,500/-.

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The 1^st defendant approached the Chief Judicial Magistrate Court, Ernakulam and filed Annexure-A2 application and affidavit under Section 14 (1) of the SARFAESI Act, 2002 for taking physical possession of the secured asset. The matter was subsequently made over to the Additional Chief Judicial Magistrate Court (MPs/MLAs), Ernakulam for disposal. Annexure-A3 Order dated 28.03.2023 came to be passed appointing Advocate Commissioner for taking physical possession of the secured asset. The Advocate Commissioner issued Annexure-A1 notice dated 06.05.2023 to the applicant informing him that he would take physical possession of the secured asset on 24.5.2023. The applicant having aggrieved against the above measures, filed this S.A seeking for the reliefs stated supra.

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The counsel appearing for the applicant submitted that 1^st sale notice was not served on the applicant and no proof has been produced to prove the same. The handwriting and signature shown in acknowledgment cards and Annexure-B7 and B10 are not the signatures of the applicant. 30 days’ period was not given for sale of the property from the date of issuance of Annexure-A5 sale notice.

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The counsel appearing for the applicant further submitted that there is a building in the secured asset admeasuring 1300 sq. ft. The

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Page 3 of 10

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SA No.288 of 2023

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description of the building has not been mentioned in the sale notices. The secured asset which is more than Rs.80 Lakhs has been undervalued. The building in the secured asset has not been mentioned in Annexure-A5 sale notice, Annexure-A11 Gehan agreement and Annexure-A4 CERSAI report. The 3^rd defendant is none other than the benami of the 2^nd defendant, who is an employee of the 1^st defendant bank and he was dismissed from the 1^st defendant bank after his involvement in this case. Therefore, the sale of the secured asset may be set aside.

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Counsel appearing for the 1^st defendant bank submitted that Annexure-B7 sale notice and Annexure-A5 sale notice was served to the applicant. The existence of the building is mentioned in AnnexureB7 and B10. There is no provision to mention the details of the building in the Gehan which is a registered form of mortgage formulated under the Kerala Co-operative societies Act and Rules, that is why, the details of the building could not be added in the Gahan.

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The counsel appearing for the 1^st defendant bank further submitted that the first sale notice, 30 days’ period was given prior to the sale date. The reserve price fixed for the property is correct based on Annexure-B13 valuation report. No bidders came forward to bid the property pursuant to issuance of Annexure-B7 sale notice, that is why Annexure-B10 sale notice was issued for sale of the property. There was no collusion between the 1^st defendant bank and the 3rd defendant in respect of sale of the property. There is no procedural irregularity in respect of sale of the secured asset.

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A perusal of the signatures found in Annexure-B2 postal acknowledgment card, Annexure-B7 sale notice and Annexure-B10 sale notice (Annexure-A5 sale notice) shows that these signatures are the signatures of the applicant. Hence this Tribunal does not find any merit in the submission of the counsel for the applicant that the signatures found in Annexure-B2 postal acknowledgment card, Annexure-B7 sale notice and Annexure-B10 sale notice (Annexure-A5 sale notice) are not the signatures of the applicant. This Tribunal has already observed in paragraph 5 of the order that Annexure-B7 and B10 sale notices were personally served to the applicant who has put his signature in Annexure-B7 and B10 in token of receipt of the sale notices.

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In Annexure-B7 and B10 sale notices, the existence of the building is clearly mentioned against the description column. The details of the building need not be mentioned in the sale notices, since no bidder would bid the property without personally inspecting the property. Further, the applicant has not pointed out as what was the prejudice caused due to the non-description of the building in detail in the sale notices. Hence this Tribunal does find any force in the

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SA No.288 of 2023

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submission of the counsel for the applicant that the existence of the building has not been mentioned in the sale notices.

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Annexure-A11 Gehan is the form formulated under Rule 51 (a) of Kerala Co-operative Societies Act and Rules. In the schedule of the form, there is no provision to mention the existence of the building specifically. Further, the applicant is quite aware of the nature of his property which was offered as the collateral security for availment of the credit facility. Hence, no prejudice would have caused to him due to the non-mentioning of the building specifically in Annexure-A11.

¶42

Annexure-B7 is the first sale notice which was issued on 05.10.2021. The date of sale of the property is 12.11.2021. The applicant personally received the sale notice on 05.10.2021 as evidenced from the endorsement made by him in Annexure-B7. Hence it is evident that 30 days period had been granted for the sale of the secured asset after the issuance of Annexure-B7. Therefore, the contention of the applicant that 30 day’s period was not given for the 1^st sale notice is absolutely incorrect.

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It is noticed from the perusal of Annexure-B13 valuation report that the approved valuer after having considered the market value and guideline value, realizable value and forced value and having considered the age of the building fixed the market value for both the land and building at Rs.24.07 Lakhs. Though the applicant has contended that the value of the property is more than Rs.80,00,000/-, no material has been produced to substantiate the above contention. Hence this Tribunal does not find any merit in the submission of the counsel for the applicant that secured asset has undervalued.

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Though the applicant has alleged in the S.A that the 3^rd defendant is the benami of the 2^nd defendant who was the employee of the 1^st defendant bank, no proof has been produced before this Tribunal to prove the above allegation. This Tribunal does not find any procedural irregularity in respect of issuance of Annexure-B7 and B10 sale notices, fixation of the reserve price for the secured asset and sale of the same.

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It is the submission of the counsel for the applicant that there is no proper description of the secured asset in Annexure-A2 application and affidavit and that the learned Additional Chief Judicial Magistrate (MPs/MLAs), Ernakulam without looking into the documents produced by the 1^st defendant bank simply passed order for taking physical possession of the secured asset.

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In the schedule to Annexure-A2 application the secured asset is described as “all that piece and parcel of the property having an extent of 3.2 Ares situated in R.S. No.238/2 and 1.72 Ares situated in R.S.

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SA No.288 of 2023

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No.238/2 in Block No.22 both in Amballur village, Kanayannoor Taluk, Ernakulam District, with all rights, improvements and other structures and easements contained therein”. The words “all that piece and parcel of the properties and other structures” implies the existence of the building in the land. Hence the submission of the counsel for the applicant that existence of the building is not stated in Annexure-A2 does not hold good.

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In Annexure-A2 application and affidavit the details such as availment of credit facility by the applicant from the 1^st defendant bank upon creation of security interest over his immovable property, default in repayment of the outstanding loan due, classification of loan account as NPA on 26.02.2020, issuance of demand notice and service of the same on the applicant, non-submission of objection/ representation to the demand notice, issuance of possession notice and its publication, issuance of sale notices, sale of the secured asset to the 3^rd defendant, the outstanding amount as on the date of filing of the application and affidavit, secured asset being free of any tenancy right, are furnished. Hence it is evident that the 1^st defendant bank has complied with the statutory requirements contemplated under Clause (i) to (ix) to the provisions of Section 14 (1) of the SARFAESI Act 2002.

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A perusal of Annexure-A3 order passed in MC No.963/2022 shows that the learned Additional Chief Judicial Magistrate (MPs/MLAs), Ernakulam after having perused the contents of the affidavit and the documents produced along with the affidavit and after having satisfied over the same, appointed Advocate Commissioner to take physical possession of the secured asset. This Tribunal does not find any infirmity or illegality in the above order.

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One of the reliefs sought for by the applicant in the SA is to issue direction to the 1^st defendant bank to permit him to remit the actual due amount in the loan account. The above relief does not fall under the category of the measures referred to u/s 13 (4) of the SARFAESI Act 2002. It is for the applicant to approach the 1^st defendant bank to get the above relief.

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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.

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SA No.288 of 2023

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Resultantly, S.A No.288 of 2023 stands dismissed. However, there shall be no order as to costs.

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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 4^th day of June, 2025.

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(Su. WILLYAHM) PRESIDING OFFICER

Mj/

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SA No.288 of 2023

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

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Sl. No.	Date	Particulars
1.	06.05.2023	Copy of the notice issued by the Advocate Commissioner in MC No.963 of2022.	Annexure-A1
2.	---	Copy of the application, MC No.963 of 2022 together with accompanying affidavit on the file of Additional Chief Judicial Magistrate Court (MPs/MLAs) Ernakulam.	Annexure-A2
3.	28.03.2023	Copy of the order passed by the learned Additional Chief Judicial Magistrate (MPs/MLAs) Ernakulam in MC No.963 of2022.	Annexure-A3
4.	---	True copy of CERSAI report for security interest registration produced by the 1^st inthe application.	Annexure-A4
5.	26.07.2022	Copy of sale notice and English translation.	Annexure-A5
6.	22.03.2022	Copy of the encumbrance certificate of the subject property and English translation.	Annexure-A6
7.	15.12.2020	Copy of Demand Notice together with Acknowledgment card and English translation.	Annexure-A7
8.	10.03.2021	Copy of receipt evidencing the payment made by the applicant	Annexure-A8
9.	10.04.2023	Copy of the representation sent by the applicant to theReserveBankof India	Annexure-A9
10.	---	Copy of the receipt showing the payment of building tax in the name of applicant.	Annexure-A10
11.	---	Copy of the Gahan agreement between the applicant and the 1^stdefendant bank.	Annexure-A11
12.	02.08.2022	Copy of the paper publication of sale noticein TheNew Indian Express daily	Annexure-A12

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SA No.288 of 2023

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List of documents filed by the 1^st defendant along with the written statement

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Sl. No.	Date	Particulars
1.	15.12.2020	Copy of the Demand Notice	Annexure-B1
2.	---	True English translation of Annexure- B1	Annexure- B1(A)
3.	---	Copy of the postal Ad for Demand Notice	Annexure-B2
4.	03.03.2021	Copy of the Possession Notice	Annexure-B3
5.	---	True English translation of Annexure- B3	Annexure- B3(A)
6.	---	Copy of photographs showing the affixture of Possession Notice	Annexure-B4
7.	09.03.2021	Copy of relevant page of ‘Kerala Kaumudi’ news daily having the advertisement of Possession Notice.	Annexure-B5
8.	---	True English translation of Annexure- B5	Annexure- B5(A)
9.	09.03.2021	Copy of relevant page of ‘The New Indian Express’ news daily having the advertisement of Possession Notice.	Annexure-B6
10.	05.10.2021	Copy of the sale notice with endorsement ofthe applicant.	Annexure-B7
11.	---	Copy of true English translation of Annexure-B7	Annexure- B7(A)
12.	11.10.2021	Copy of relevant page of ‘Kerala Kaumudi’ news daily having the advertisement ofthe salenotice.	Annexure-B8
13.	--	True English translation of Annexure- B8	Annexure- B8(A)
14.	11.10.2021	Copy of relevant page of ‘The New Indian Express’ news daily having the advertisement ofsalenotice.	Annexure-B9
15.	26.07.2022	Copy of the sale notice with endorsement oftheapplicant	Annexure-B10
16.	---	True English translation of Annexure- B10	Annexure- B10(A)
17.	02.08.2022	Copy of relevant page of ‘Kerala Kaumudi’ news daily having the advertisement ofthe salenotice.	Annexure-B11

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SA No.288 of 2023

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18.	---	True English translation of Annexure-	Annexure-
		B11	B11(A)
19.	02.08.2022	Copy of relevant page of ‘The New Indian Express’ news daily having the advertisement ofsalenotice.	Annexure-B12
20.	07.08.2021	True copy of the valuation report	Annexure-B13

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(Su. WILLYAHM) PRESIDING OFFICER

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Mj/

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Page 10 of 10

Monkuttan M M v. Peoples Urban Cooperative bank

Case brief

What is this about?

What did the court decide?

Monkuttan M M v. Peoples Urban Cooperative bank

Case brief

What is this about?

What did the court decide?

What the court decided

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