Allowed

Lakshmi Balaji Reality Private Limited v. City Union Bank Limited

DRT7 Apr 2025SA/436/2024

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed an application challenging a Section 14 order passed by the CJM. The bank admitted inadvertent errors in notice dates. The Tribunal set aside the order, restored possession, and permitted the bank to initiate fresh measures after charging the borrower's loan account.

What did the court decide?

The impugned Section 14 order dated 15.06.2024 is set aside and possession restored. The bank is directed to recover expenses from the borrower and file a memo before the Registrar Court.

Lakshmi Balaji Reality Private Limited versus City Union Bank… — Banking and Recovery | DRT (2025)

SA No.436/2024

07.04.2025

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 7^th day of April, 2025

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Present: SMT. S.V. GOWRAMMA

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Hon’ble Pres i ding Officer

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SARFAESI APPLICATION No. 436 of 2024

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M/s. Lakshmi Balaji Realty Private limited Represented by its Director Mr. S. Balaji, 54, G 1 sarvalakshmi Homes, Srinivasa Nagar, 3^rd Cross Street, Hasthinapuram, Chrompet, Chennai – 600 044.

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…Applicant

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-Vs-

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City Union Bank Ltd, Chromepet Branch, Represented by its Authorized Officer, Door No. 57, Rajendra Prasad Road, Hasthinapuram, Chromepet, Chennai – 600 044. …Respondent

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Counsels on record / appeared:

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Counsel for Applicant : Ld. Counsel Mr. Aditya Counsel for respondent : Ld. Counsel Ms. Anuradha Balaji

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: - F I N A L O R D E R - :

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The present Securitization [SA] is filed on 06.07.2024 under Sub Section [1] of S. 17 of the Securitization And Reconstruction of Financial Asset

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and Enforcement of Security Interest Act, 2002 (for short the ‘Act’) challenging the action and the measure taken by the secured creditor

SA No.436/2024

07.04.2025

under the Security Interest Enforcement Rules,2002 [for short the Rules].

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The applicant has filed the present SA challenging the S.14 order in CMP.No. 1753/2024 dated 15.06.2024 passed by the Hon’ble CJM, Chengalpattu.

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It is the case of the applicant that he has availed a housing loan of a sum of Rs. 28,00,000/- and also availed secured OD credit facility for a sum of Rs. 20,00,000/- on 05.03.2016 from the respondent bank and further a Term Loan (OSL Special) of sum of Rs. 10,00,000/- on 09.05.2018.

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It is submitted that the applicants has mortgaged the immovable property by executing the memorandum of deposit of title deeds in favour of the Respondent bank dated 04.03.2016 (Doc. No. 1923/2016), 19.10.2016(Doc. No. 8999/2016) and 27.06.2017 (Doc. No. 4956/2017).

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Due to default in the repayment, bank has classified the account as NPA on 15.01.2019 and have issued the demand notice dated 23.04.2019 followed by the possession notice dated 03.07.2019.

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Further, the bank has filed OA. No. 215/2020 before the Hon’ble DRT-3 Chennai, claiming a sum of Rs. 10,13,398.88 towards OSL Special Loan A/c. No. 501812080038795, a sum of Rs. 26,82,190.39 towards Housing Loan A/c. No. 501312030006550 and a sum of Rs. 24,61,434.36 towards Overdraft facility A/c. No. 512120020007749.

SA No.436/2024

07.04.2025

On 15.06.2022 the respondent bank and the applicant filed a joint compromise memo before the Hon’ble DRT III, Chennai stating that “ in the view of above payments made by the applicant OSL special Loan was closed and the housing loan and the secured overdraft facility was regularized and upgraded as a performing asset.

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On 06.12.2022, the bank made misrepresentation before the Tribunal that the applicant has not complied with the conditions and the negotiation in the joint compromise memo dated 15.06.2022 and withdraw the joint compromise memo which is recorded by the DRT-3, Chennai and the memo was returned to the respondent bank.

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Further, the applicant has also filed written statement and counter proof affidavit in OA.No. 215/2020 which is pending before this Tribunal. After the receipt of the demand notice S.13(2) the applicant sent objections dated 14.01.2023 to which the bank has replied on 25.01.2023 giving some vague reply.

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Further, the bank has issued the possession notice dated 24.02.2023 and has also filed an application under S.14 to take the physical possession of the property. The Hon’ble CJM in CMP.No. 1753/2024 vide order dated 15.06.2024 has allowed the Bank to take the physical possession of the property.

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The Tribunal vide proceedings dated 18.07.2024 directed the respondent bank to maintain Status-Quo on conditional payment of Rs.

SA No.436/2024

07.04.2025

10% of the outstanding due within one week and further equal sum be deposited within 30 days thereafter.

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Mrs. S. Anuradha Balaji filed vakalat for the Respondent bank on 06.08.2024 and the matter stood posted for filing of counter from 06.09.2024 to 06.11.2024, it is seen from the proceedings that the case stood adjourned for filing of counter from 06.11.2024 to 27.12.2024 and to 04.03.2025.

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On 04.03.2025 counsel for respondent bank submitting that he intends to withdraw the measures sought time for filing necessary affidavit. Accordingly, Respondent bank has filed an affidavit on 27.03.2025.

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The Authorized Officer of the respondent bank has filed an affidavit submitting that the present SA is filed challenging the S. 14 order dated 15.06.2024 passed by the Hon’ble CJM, Chengalpattu, in CMP.No. 1753 of 2024. The Tribunal vide order dated 18.07.2024 directing the respondent to maintain Status-Quo subject to conditions imposed.

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It is submitted that on verification of the records, it is found that due to inadvertence, there has crept in errors with regard to date of demand notice and the possession notice in the affidavit filed before the Chief Judicial Magistrate, Chengalpattu pursuant to which the impugned order dated 15.06.2024 is passed in CMP. No. 1753 of 2024. Hence, the Respondent bank intends to withdraw the measures pursuant to the Order dated 15.06.2024 passed by the Hon’ble CJM. The Respondent bank has

SA No.436/2024

07.04.2025

further sought liberty to initiate afresh in the interest of justice and equity. Affidavit filed by the Authorized officer is taken on record.

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As the Authorised Officer acknowledges the inadverted error in mentioning the dates of S.13(2) and S. 13(4) notice based on which the Magistrate has alleged the S. 14 application.

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Heard and perused the records of the case.

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In view of the fact that the bank has withdrawn the measures taken under S. 14 order. The present SA has become infructuous and is only to be allowed setting aside the impugned notice dated 15.06.2024.

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Though an inadverted error has crept in mentioning the date of S. 13(2) demand notice and S. 13(4) possession notice pursuant to which the S. 14 application came to be allowed directing the respondent bank to take the physical possession through the Advocate Commissioner.

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In view of the fact that the mistake of the bank occurred while initiating the measures could not be cast upon the borrower who filed the present SA by paying requisite court fee, the legal charges and costs and other charges to the measure filing of the S.14 application payment of the Advocate Commissioner’s fees and also the payment of court fees in the instant matter.

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The Tribunal feels it apt giving liberty to the respondent bank to initiate fresh measures.

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07.04.2025

It is further clarified that the bank could not file the present SA without adopting the charges to the borrowers loan account before initiating fresh S.14 application.

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Accordingly, SA is allowed setting aside the S.14 order dated 15.06.2024. The possession if taken pursuant to S. 14 order is restored with the mortgagor. Respondent bank is directed not to debit any of the SARFAESI expenses to the borrowers loan account including the legal expenses incurred for this SA and file a memo to that effect before the Registrar Court within a week from the date of receipt of this order. Thereafter, Respondent bank will be at liberty to proceed further with their SARFAESI measures in accordance with law.

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Both the counsels have endorsed the same in the proceeding sheet.

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(Dictated to the Stenographer(MS), transcribed by her, corrected, signed and pronounced by me in Open Court, on this the 7^th day of April, 2025)

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Sd/-

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S.V. GOWRAMMA PRESIDING OFFICER-DRT III

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SA No.436/2024 7 07.04.2025

Lakshmi Balaji Reality Private Limited v. City Union Bank Limited

Case brief

What is this about?

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Lakshmi Balaji Reality Private Limited v. City Union Bank Limited

Case brief

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