Dismissed

Abdul Razak Shiekh v. Jammu and Kashmir Bank Limited

DRT8 May 2025SA/331/2023

Case brief

AI extract

What is this about?

Debt Recovery Tribunal I, Chandigarh dismissed a Securitization Application filed by borrowers challenging SARFAESI action taken by Jammu and Kashmir Bank. The court rejected claims that the security asset was agricultural land unregistered, noting filed documents described it as prime property and proof of CERSAI registration existed. Applications were dismissed pending internal objections.

What did the court decide?

The Securitization Application and all pending Internal Applications, if any, are dismissed and disposed of.

Abdul Razak Shiekh versus Jammu and Kashmir Bank Limited — Banking and Recovery | DRT (2025)

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SA No.331/2023

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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SA/331/2023 ABDUL RAZAK SHIEKH AND ANR. Vs

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AUTHORIZED OFFICER JAMMU AND KASHMIR BANK LTD.

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08.05.2025

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Item No.111 (S-1)

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Argued by: Mr. Sukhvinder Singh Chaudhary, Counsel for the Applicants. Mr. Vivek Verma and Mr. Sanjay Sagar, Counsel for respondent Bank.

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Abdul Razak Shiekh and another (Applicants) have filed this Securitization Application under Section 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), against the Authorized Officer, Jammu and Kashmir Bank Ltd. (Respondent).

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Admittedly, Applicant No.1 is the proprietor of M/s Talabgar Traders, a firm dealing in retail trade of building material and hardware. Applicant No.1 availed the following credit facilities from the respondent:

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r No		SanctM imit	Date of Sanction
	WorkingCapital	68.46t.acs	01.12.2015
2	REHWC Facility	61.44LHc	17.03,2015
3	DBCM	7.38Laos	28.02.2017
4	DBWTLFacility	15.68Laos	28.02.2017
Btal	loanamountmi	152.96 Crore

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2-A. To secure the same, Applicants had hypothecated the stocks and machinery and applicant No.2 had created security interest in respect of

SA No.331/2023

land measuring 5 Kanals situated at Mouza Sheikhzoo, Tehsil Lar, District Ganderbal, Kashmir.

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Admittedly, the account of the Applicants came under stress in the year 2019, On 30.05.2019. Bank declared the account NPA. On 12.05.2021 Bank issued the notice under Section 13(2) demanding a sum of Rs.1,49,44,250.62p due as on 31.03.2021. However, Applicants did not make the repayment and on 07.03.2022, Bank obtained the order from D.M. Ganderbal, for possession (Annexure R/2). On 03.03.2022, Applicants approached the Bank for settlement. Applicants also deposited Rs.5.oo Laos. They promised to pay Rs.15.00 Lacs at the time of sanction of OTS and the remaining sum within six months (Annexure R/3). Accordingly, the Bank did not enforce the possession order. The Bank also sanctioned the OTS on 25.08.2022. Applicants deposited postdated cheques which were returned with the remarks that the 'payment stopped by drawer’. Bank also issued the notice under Section 138 of the Nl Act. The Bank also wrote the letter dated 14.03.2023 (Armexure R/6) to the Applicants to avail OTS. Since, the payment was not made, Bank approached the C. J.M, Ganderbal and obtained the order dated 11.10.2023. Bank also published the possession notice in two local newspapers on 14.11.2023 and also served the same to the Applicants.

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Applicants challenged the SARFAESI action by filing the present SA on 25.10.2023. It is stated that the secured asset is agricultural land. Further, the security interest was not registered with the CERS AI. The notice has not been issued by the authorized officer. The Chief Judicial Magistrate has passed the status quo order as some proceedings were pending. Accordingly, it is stated that the SARFAESI action be set aside.

SA No.331/2023

Bank in reply to the SA has denied the case of the Applicants. It is denied that the secured asset is agricultural land and that the security interest was not registered with the CERSAI.

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Mr. Sukhvinder Singh Chaudhary, counsel for the Applicants has argued that the Bank had not served the notices under Section 13(2) and 13(4) of the SARFAESI Act. The secured asset is agricultural land. Accordingly, Bank cannot take any action in the matter and the SARFAESI action be set aside.

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Per contra, Mr. Verma, counsel for the Bank has argued that the secured asset is not agricultural land. He has also argued that notices were duly served upon the Applicants. Applicants had in fact, made a request for OTS. They had also deposited postdated cheques, which were presented by the Bank. However, they were returned with the remarks that 'payment stopped by drawer’. Accordingly, it is stated that no ground is made out to set aside the SARFAESI action

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1 have considered the rival contentions.

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A perusal of the file would show that the Applicants had written a letter to the Bank which was received by the Bank on 01.07.2021. In the said letter, Applicants never claimed that the secured asset is agricultural land. In fact, they mentioned that it is a prime property. Applicants themselves had submitted an OTS proposal. They had deposited just Rs.5.00 1,acs. They did not deposit the remaining sum, despite the undertaking given by them. The Bank has produced on the record CERSAI registration. Bank has also produced on the record letter, dated 20.06.2020 written by the Applicant No.1 stating that his account has turned NPA. I

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SA No.33 1/2023

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am of the considered view that there is no merit in the present SA and the same is hereby dismissed. All the pending IAs, if any are also stand disposed of accordingly.

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Registrar is directed to send a copy of this order to all the parties, as per rule. File be consigned to record room after due complia4'e.

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Dtiii,tha-ride–aHl

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Pronounced in open court Dated: 08.05.2025 PANKAJ

Abdul Razak Shiekh v. Jammu and Kashmir Bank Limited

Case brief

What is this about?

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Abdul Razak Shiekh v. Jammu and Kashmir Bank Limited

Case brief

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What did the court decide?

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