Dismissed

Mahesh K K v. State Bank of India

DRT4 Feb 2025SA/429/2024

Case brief

AI extract

What is this about?

The Tribunal rejected the security application seeking to set aside a demand notice, possession notice, and Sec. 14 order. It held that statutory requirements were complied with, the Chief Manager could act as authorized officer, and the juniors failed to prove their case regarding security creation.

What did the court decide?

The security application seeking to set aside demand notice, possession notice, and Sec. 14 order was dismissed.

Mahesh K K versus State Bank of India — Banking and Recovery | DRT (2025)

¶1

Fair Order

¶2

IN THE DEBTS RECOVERY TRIBUNAL - 1 AT ERNAKULAM

¶3

DATED THIS 4^th DAY OF FEBRUARY, 2025

¶4

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

¶5

S.A No. 429 of 2024

¶6

Between

¶7

Mahesh K.K., S/o. Kunjunni K.S., Proprietor – M/s. Vinayaka Hardwares, Residing at Kizhakkekuttalakkotty, Mulakulam North P.O., Piravom, Ernakulam-686664.

¶8

Manjith K.K., S/o. Kunjunni K.S., Proprietor – M/s. Vinayaka Electricals, Residing at Kizhakkekuttalakkotty, Mulakulam North P.O., Piravom, Ernakulam-686664.

¶9

Nitha V., W/o. Manjith K.K., Residing at Kizhakkekuttalakkotty, Mulakulam North P.O., Piravom, Ernakulam-686664. --- Applicants

¶10

And

¶11

State Bank of India, Piravom Town Branch, P.B. No.1, St. Mary’s Jacobite Syrian Church Building, Piravom, Ernakulam-686664, Represented by its Manager.

¶12

SA No.429 of 2024

¶13

Authorized Officer, State Bank of India RASMEC, Pearl Tower, Velloorkunam, Market P.O. Muvattupuzha, Ernakulam -686 673.

¶14

Authorized Officer, State Bank of India, SARB-I, 32/1747, KI, 7^th Floor, Vankarath Towers, Palarivattom Bypass Junction, Ernakulam – 682 024.

¶15

--- Defendants

¶16

This Securitization Application coming on 07.01.2025 for final hearing before me in the presence of M. Shrihari, Counsel appearing for the Applicants and Mr. Tom K. Thomas, Counsel appearing for the defendants and upon hearing arguments of learned Counsels for both the parties and upon perusing the material on records, this Tribunal delivered the following:

¶17

O R D E R

¶18

This Securitisation Application was filed on 13.06.2024 seeking to set aside Annexure-A1 Demand Notice, Annexure-A3 possession notice, Annexure-A5 Sec.14 order and Annexure-A6 notice issued by the Advocate Commissioner in MC No.495/2024 on the file of Additional Chief Judicial Magistrate (MPs/MLAs) Ernakulam and to direct the defendant to restore the possession of the property described in Annexure-A1 Demand Notice and to pay costs of the proceedings and compensation to the applicants.

¶19

The applicants have admitted the availment of cash credit limit of Rs.1 Crore on 03.05.2014, cash credit limit of Rs.40,00,000/- on 02.01.2015 and Premium Kissan Gold Card (agri loan) of Rs.10,00,000/- on 28.03.2019 from the 1^st defendant bank. But they have not admitted creation of security interest over the immovable property admeasuring 16.89 Ares and 13.31 Ares of land and building situated in Piravom Village owned by the father and mother of the applicants 1 and 2 and an extent of 18.92 Ares owned by mother of the applicants 1 and 2. According to the applicants, the 1^st defendant bank obtained signatures in blank printed documents assuring them that the copies of documents would be given to them and but such documents of copies were not furnished to them.

¶20

Page 2 of 7

¶21

SA No.429 of 2024

¶22

The rival contention of the defendants is that the 1^st defendant bank did not obtain the signatures of the applicants and the mother of the applicants 1 and 2 and that the documents which have been produced in O.A. No.381/2023 before this Tribunal, were furnished to the applicants. In Annexure-A1 Demand Notice sent to the applicants and other co-applicants it is clearly stated that security interest over the immovable property has been created by way of deposit of title deed in favour of the bank. Admittedly, the applicants did not send any objection to the 1^st defendant bank refuting the creation of security interest over the immovable property. Further, the applicants have not given any convincing reason as to why the title deeds pertaining to the secured asset has been deposited with the 1^st defendant bank. Therefore it is evident that security interest over the SA subject matter of the properties has been created as the collateral security for the aforesaid credit facilities availed by the applicants.

¶23

The applicant have admitted their default in repayment of the outstanding loan due. Therefore, their loan came to be classified as Non-performing Asset on 29.06.2022 and demand notice dated 12.07.2022 Annexure-A1 was issued to the applicants and AnnexureA1(A) Demand Notice was issued to the father and mother of the applicants 1 and 2 calling upon them to repay the outstanding loan due within a period of 60 days from the date of receipt of the demand notice. Indisputably, the applicants and the parents of the applicants 1 and 2 neither sent any objection/representation to the demand notice nor did they clear off their liability due to the 1^st defendant bank.

¶24

The applicants having failed to avail the statutory remedy under Sec.13 (3A) of the Security Interest (Enforcement) Rules 2002 and also having their default to repay the debt, are not entitled to raise the issue now that classification of their loan accounts as NPA is against the guidelines issued by the RBI.

¶25

The object of issuance of the Demand Notice to the borrows/ guarantor is to put him on notice with regard to his default committed in repayment of the outstanding loan due and to call upon him to pay the outstanding loan due within the stipulated period and in case of his failure, to respond to the terms of the Demand Notice, the property over which he has created security interest will be brought for sale. It is not the contention of the applicants in the SA that the property mortgaged with the 1^st defendant bank is not their property. In Annexure-A1 and A1(A) Demand Notices, the description of the property is clearly mentioned with boundaries. Therefore, this Tribunal does not find any valid force in the submission of the counsel for the applicants that the description of the property in the Demand Notice is incorrect.

¶26

Page 3 of 7

¶27

SA No.429 of 2024

¶28

Issuance of possession notice dated 26.09.2022 Annexure-A3 is admitted by the applicants. The defendants have produced AnnexureB1 copies of photographs, B2 and B3 copies of paper publications in order to prove their contention that, possession notice was conspicuously affixed on the secured assets and that it was published in Mangalam edition dated 02.10.2022 and The Hindu edition dated 02.10.2022.

¶29

The defendants approached the Additional Chief Judicial Magistrate (MPs/MLAs) Ernakulam and filed Annexure-A4 application and affidavit under Section 14 (1) of the SARFAESI Act, 2002. Order dated 06.05.2024, Annexure-A5 came to be passed appointing Advocate Commissioner for taking physical possession of the secured assets. The Advocate Commissioner issued notice dated 25.05.2024 Annexure-A6 to the applicants and other co-obligants informing them that he would take physical possession of the secured asset on 10.06.2024. The applicants having aggrieved against the above measures filed this SA seeking the reliefs stated supra.

¶30

On perusal of Annexure-A4 application and affidavit filed in MC No.495/24 before the Additional Chief Judicial Magistrate (MPs/MLAs) Court, Ernakulam shows that application was filed by the Chief Manager on behalf of the 1^st defendant which is the secured creditor and that the affidavit was filed by the Authorised Officer of the 1^st defendant. When the Chief Manager of the secured creditor is authorized and designated as the Authorised Officer of the secured creditor, he can alone file the application and affidavit. The provisions of the SARFAESI Act, 2002 does not specifically prohibit the Chief Manager of the secured creditor from acting as the Authorised Officer. Therefore, this Tribunal does not find any considerable force in the submission of the counsel for the applicants that the Authorised Officer cannot act as the secured creditor and that an application under Sec.14 of the SARFAESI Act, 2002 filed by a person representing the secured creditor shall not file the affidavit.

¶31

It Annexure-A4 affidavit, the availment of cash credit facility by the applicants on different dates and different loan accounts is stated. Therefore, it is not necessary or mandatory for the defendants to state aggregate amount of financial assistance in the affidavit as submitted by the counsel for the applicants. However, the aggregate outstanding as on the date of filing of the affidavit is clearly mentioned in para 9 of the affidavit.

¶32

The creation of security interest over the immovable properties as set out in the schedule to the affidavit and description of the properties is clearly mentioned in Annexure-A4 affidavit. It is also mentioned in Annexure-A4 affidavit that the respondents have not made any repayment of financial assistance inspite of the above notice

¶33

Page 4 of 7

¶34

SA No.429 of 2024

¶35

(Demand Notice). Hence the submission of the counsel for the applicants that the mandatory requirements in adherence to Clauses (i), (ii), (iii) and (viii) of the first proviso to Section 14 (1) of the SARFAESI Act, 2002 was not complied with, is incorrect. On perusal of Annexure-A4 affidavit shows that all the statutory requirements contemplated under Clause (i) to (ix) to the proviso of Section 14 (1) of the SARFAESI Act, 2002 was complied with by the defendants in respect of filing of Annexure-A4 affidavit.

¶36

A perusal of Annexure-A5 order passed in MC No. 495/24 shows that the learned Additional Chief Judicial Magistrate (MPs/MLAs) Ernakulam after having perused the contents of the affidavit and documents filed in support of the affidavit and having satisfied over the same, passed order appointing Advocate Commissioner to take physical possession of the secured asset. The Advocate Commissioner issued Annexure-A6 notice to the applicants for taking physical possession of the secured asset, pursuant to the direction given to him by the learned Additional Chief Judicial Magistrate (MPs/MLAs) Ernakulam. Hence the submission of the counsel for the applicants that Annexure-A5 order and Annexure-A6 notice per se illegal, is not tenable.

¶37

The applicants have failed to prove their case so as to get the reliefs sought for in the SA. In view of the foregoing reasons, this Tribunal holds that the applicants are not entitled to get the reliefs sought for in this SA.

¶38

Resultantly, S.A No.429 of 2024 stands dismissed. However, there shall be no order as to costs.

¶39

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 February, 2025.

¶40

(Su. WILLYAHM) PRESIDING OFFICER

Mj/

Page 5 of 7

SA No.429 of 2024

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

¶45

Sl.	Date	Particulars
No.
1.	12.07.2022	True copy of Demand Notice issued by the 2^nd defendantAuthorised Officer.	Annexure-A1
2.	12.07.2022	True copy of Demand Notice issued by the 2^nddefendant Authorised Officer.	Annexure- A1(A)
3.	---	True copy of page Nos.8 and 9 (para No.13 to 15) in OA No.381/2023 on the file ofthisTribunal.	Annexure-A2
4.	26.09.2022	True copy of possession notice issued by the 2^nd defendant	Annexure-A3
5.	---	True copy of application and affidavit in MC No.495/2024 on the file of Additional Chief Judicial Magistrate (MPs/MLAs) Ernakulam filed by 3^rd defendant.	Annexure-A4
6.	06.05.2024	True copy of order in MC No. 495/2024 on the file of Additional Chief Judicial Magistrate (MPs/MLAs)Ernakulam.	Annexure-A5
7.	25.05.2024	True copy of notice issued by the Advocate Commissioner in MC No. 495/2024 on the file of Additional Chief Judicial Magistrate (MPs/MLAs) Ernakulam.	Annexure-A6
8.	12.03.2020	True copy of revival letters to be executed by 2^nd applicant.	Annexure-A7
9.	30.12.2021	True copy of revival letter stated to be executed by 3^rd applicant.	Annexure- A7(A)

¶46

Page 6 of 7

¶47

SA No.429 of 2024

¶48

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

¶49

Sl. No.	Date	Particulars
1.	---	Photocopy of photograp affixture of Annexure-A3 n securedasset on26.09.202	hs showing otice on the 2	Annexure-B1
2.	02.10.2022	True copy of paper publishedin Mangalam.	publication	Annexure-B2
3.	02.10.2022	True copy of paper publishedin TheHindu.	publication	Annexure-B3

¶50

(Su. WILLYAHM) PRESIDING OFFICER

¶51

Mj/

¶52

Page 7 of 7

Mahesh K K v. State Bank of India

Case brief

What is this about?

What did the court decide?

Mahesh K K v. State Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Union Bank of India versus Bhikhabhai

State Bank of India versus M/S.Giant Agro

State Bank of India versus Sh. Mahinder Kumar @ Mahinder Singh

Mahendra S Kanchan versus Can Fin Homes Ltd.

Hdfc Bank versus M/s Maa Kali Construction and Others

Axis Bank versus M/s Ankush Developers and others