Dismissed

Ms Ganapathi Granites v. State Bank of India

DRT17 Apr 2025SA/43/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal-II, Bangalore, dismissed the applicant's Section 17 petition challenging a possession notice under the SARFAESI Act. The court held that its inquiry under Section 17 is limited to the legality of the recovery measure and does not extend to adjudicating the claimed refund of excess interest or determining the merits of the closed loan account.

What did the court decide?

The Section 56 form petition challenging the possession notice was dismissed, and no order was passed regarding costs.

Ms Ganapathi Granites versus State Bank of India — Execution and Attachment | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL-II, BANGALORE

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Dated the 17th day of April 2025

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PRESENT: SHRI T. RAJESH PRESIDING OFFICER

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SA No.43 of 2023

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M/s. Ganapathi Granites, Nakre Road, Nitte Village, Karkala, Karnataka 574 104. Through Shri Subhash Kamath … Applicant

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Versus

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State Bank of India, Salmara, Karkala Branch, 120/1, Main Road, Karkala, PIN:574 104. … Respondent

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Ld. Counsels on record / appeared:

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Counsel for Applicant : Shri Ramesh Kumar Mahaliyan Counsel for Respondent : Smt P. Chithra Nirmala …….

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ORDER

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The possession Notice issued by the Respondent u/s 13(4) of

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the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act,2002 ( hereinafter referred

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to as the ‘Act’) is assailed in the present SA filed under Section 17 of the Act.

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The applicant approached this Tribunal contending as follows:-

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2.1 The Applicant, a proprietary concern had been sanctioned Working Capital by way of Cash Credit Limit to the tune of Rs. 25,00,000/- (Rupees Twenty Five Lakh only) and a Term loan of Rs. 20,00,000/- (Rupees twenty lakh only). It is admitted that the said facilities were disbursed pursuant to the personal guarantee and mortgage of immovable property. It is also admitted that, due to reasons beyond the control of applicant, the repayment could not be made as agreed upon.

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2.2 It is stated that the loan accounts were classified on NPA on

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03.12.2018 and a demand notice was issued on 14.12.2018. It is also stated that the Applicant had brought additional capital and sought withdrawal of the Demand notice. In respect of the measures, the Applicant contends that the respondent had charged penal interest. It is also stated that pursuant to the assurance about further funding, the applicant deposited an

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amount of Rs. 35 Lakh, which according to the applicant had been misappropriated the said deposit.

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2.3It is also stated that the respondent had issued another Demand notice date 29.10.2020 stating the NPA date as 05.02.2020. The impugned possession notice was also issued, which the applicant contends as illegal. The applicant further contends that the respondent had excessively charged interest and the applicant in entitled for a refund of Rs. 23,54,749/-.

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2.4 In respect of the measures, it is the case of the applicant that the respondent had not complied with the Reserve Bank of India mandates in the classification of account as NPA. It is also stated that there is no provision under the Act enabling the respondent to issue multiple demand notices.

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2.5 In the SA, the applicant had produced the following documents:

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Possession Notice

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Sanction Letter

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Demand Notices dated 14.12.2018 and 29.10.2018

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Calculation made on behalf of applicant.

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Statement of accounts.

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The Respondent had filed their counter repudiating the contentions taken in the SA. It is stated that the appellant had closed the loan accounts and the matter had become infructuous. All the other contentions made by the applicant are also denied specifically by the Respondent.

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Along with the counter, the respondent had produced the copy of letter of arrangement, Memorandum relating to Deposit of Title Deeds, letter forwarded by the applicant, reply by the bank and copy of the statement of interest rates. Further, the respondent bank reiterated that with the payment of entire liability and closure of the loan account, all the notices issued and the actions taken by the Creditor Bank under the SARFAESI Act has become infructuous and the question of quashing the Possession Notice does not arise.

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The Ld. Counsel for the applicant contends that even when the loan account is closed, the applicant is entitled for an order directing refund of the excess amount. This Tribunal, on considering the scope of adjudication u/s 17 of the Act, is of view

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that the enquiry cannot be extended to ascertain the charging of

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excess interest due and can only be limited to the legality of measures u/s 13(4) of the Act.

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In view of the above, SA No.43 of 2023 is dismissed. No order as

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to cost.

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Copy of this order be communicated to the parties concerned.

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(Dictated to my PS directly on the Computer, corrected and pronounced by me in the open Court on this the 17th day of April 2025)

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Sd/- (T. RAJESH) PRESIDING OFFICER

Ms Ganapathi Granites v. State Bank of India

Case brief

What is this about?

What did the court decide?

Ms Ganapathi Granites v. State Bank of India

Case brief

What is this about?

What did the court decide?

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