Dismissed

Mrs B Bhuvana and R Guru Abishek v. Punjab National Bank

DRT20 Feb 2025SA/456/2024

Case brief

AI extract

What is this about?

The Tribunal dismissed the Securitization Application questioning the possession order passed under Section 14. The court found the bank duly served mandatory notices under Sections 13(2) and 13(4) and followed procedural rules, validating the impugned order. It held no interference was required.

What did the court decide?

The SARFAESI Application No. 456 of 2024 is dismissed; the Section 14 order dated 15.06.2024 is held valid; no interference granted.

Mrs B Bhuvana and R Guru Abishek versus Punjab National Bank — Banking and Recovery | DRT (2025)

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SA No.456 of 2024 (C)

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20.02.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 20^th day of February, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SARFAESI APPLICATION No. 456 of 2024

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Mrs. G. Bhuvana W/o Mr. R. Guru Abishek No.10B, 1^st Cross Street, Alaggappa Nagar Oggiyam, Thoraipakkam Chennai – 600 097

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Mr. R. Guru Abishek No.10B, 1^st Cross Street, Alaggappa Nagar Oggiyam, Thoraipakkam Chennai – 600 097 ….Applicant

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-Vs-

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The Authorized Officer, Punjab National Bank CANFIN Homes Ltd., Puducherry Branch, No.115, 1^st Floor, Vaisyal Street, Puducherry - 605 001 ….Respondent

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Counsels on record / appeared:

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Counsel for Applicant : Mr. D. Durairaj Counsel for Respondent : M/s Rahul Jain

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ORDER ON SA No. 456 of 2024

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The present Securitization Application [SA] is filed on 22.07.2024 under sub section [1] of S.17 of the Securitization And Reconstruction of Financial Asset and Enforcement of Security Interest Act,2002 (for short the ‘Act’) challenging the action and the measure taken by the secured creditor under the Security Interest Enforcement Rules, 2002 [for short the Rules].

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SA No.456 of 2024 (C)

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20.02.2025

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The applicants are borrowers, have filed the present S.A impugning to set aside the measures taken by respondent bank under Section 14 of the Act dated 15.06.2024 in CMP No.1726 of 2024 passed by Ld. CJM, Chengalpet, for recovery of a sum of Rs.66,49,338/-

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Pleadings of the applicant:

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3.1 The case as put forth by the applicants in the present SA is that first and second applicants had availed financial assistance for the purchase of a house. Respondent bank had sanctioned the Housing Loan of Rs.17,10,000/-, Rs.2,85,000/-, Rs.5,90,000/and Rs.12,00,000/- on 24.06.2020, 23.12.2020, 12.01.2022, 09.02.2019 respectively, which are repayable in 358 Equated Monthly Installments of Rs.36,953/- @ 8.5% p.a. and the property was offered as security by way of equitable mortgage in favour of the respondent bank.

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3.2 It is contended that the applicant has repaid the loan as per loan agreement till September, 2023, totalling to a sum of Rs.15 lakhs. However, the applicant was unable to pay the said EMIs within the stipulated time due to sudden business loss. Hence there was non-repayment of the loan, which was also informed to the respondent bank. Hence the applicant had approached the bank for reschedulement of loans, which was not considered and left with no other alternative, applicant has approached this Tribunal.

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3.3 It is contended that the respondent bank has added interest to interest and penal interest, which is unwarranted and the respondent bank without following the procedures as contemplated under SARFAESI Act has proceeded illegally and committed irregularity. The bank has not followed the mandatory Rules and guidelines

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SA No.456 of 2024 (C)

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20.02.2025

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and have not followed the constitutional validity of right under Article 300A, which will attract the property rights vested with the applicants. The respondent bank without application of mind has acted unlawfully misusing the power under SARFAESI Act and hence applicant has approached this Tribunal with an intention to settle the loan account and offers to pay the dues.

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3.4 In the grounds, it is contended that the bank has not followed the Rules in bringing the applicant’s residential property, which is illegal, the bank has to classify the loan account as NPA as per Section 2(o) in accordance with the directions of RBI guidelines, the bank has not followed the procedure as there is no affixture of the notice on the property, Section 13(2) Demand Notice is not served as per Rule 3(4) of Security Interest Enforcement Rules, 2002 and the bank without considering the reply of the applicant to the Demand Notice have proceeded further which is illegal. The bank has not followed the Rule 8(1) and (2) in accordance with SIE Rules, which is against the actual market price. Hence on these grounds, applicant prays to set aside the order passed by the Ld. CJM, Chengalpet in CMP No.1726 of 2024 dated 15.06.2024.

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4. Objections of the respondent bank.

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4.1 Per contra, the respondent bank has filed a detailed counter and countered all the contentions of the applicant in the SA, along with supporting documents. It is the case of respondent bank that applicants have availed one Housing Loan facility of Rs.36.54 lahs, GECL Term Loan of Rs.90,000/-, Cash Credit facility of Rs.12 lakhs, GECL Term Loan of Rs.5.90 lakhs and Term Loan of Rs.17.10 lakhs, totaling to Rs.72.44 lakhs from the respondent bank.

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SA No.456 of 2024 (C)

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20.02.2025

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4.2 After availing the loan, the applicant failed to serve the principal and interest as per the terms of sanction, resulting in account slipped into NPA on 28.09.2023. Hence bank has initiated measure under SARFAESI Act by issuing Demand Notice under Section 13(2) of the Act dated 17.10.2023, for recovery of the outstanding dues of Rs.66,49,338.09p.

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4.3 As the applicant did not pay the amount, bank had issued Possession Notice under Section 13(4) dated 03.01.2024 by following Rule 8(1) and 8(2) of SIE Rules, has affixed the Possession Notice at the conspicuous place on 03.01.2024. Further, Possession Notice is also published in one English newspaper, namely The New Indian Express and one Tamil newspaper, ‘Dinamani’ on 07.01.2024.

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4.4 Further the bank has also issued Sale Notice on 25.06.2024 scheduling the property to public sale on 19.05.2024, to which one successful bidder has participated in the proceedings.

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4.5 In the parawise reply, the respondent bank submits that the account is classified as NPA on 28.09.2023 as per the RBI guidelines and has issued the Section 13(2) Demand Notice, which is followed by the Possession Notice and the bank has followed all the procedures as mandated under Rule 8(1) and 8(2) of the SARFAESI Act. The bank has provided proper statement of account in relation to the loan accounts while the applicants have alleged that the bank has not rendered the statement of accounts.

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4.6 The bank has obtained the valuation report from the approved valuer by fixing the reserve private before putting the property to sale. The bank had issued earlier notice on 12.03.2024, as there were no bidders, the sale did not materialize. Despite giving sufficient opportunities, applicant has not come forward to settle the loan account

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SA No.456 of 2024 (C)

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20.02.2025

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and hence the bank was constrained to issue Sale Notice dated 25.06.2024. The sale was successfully conducted on 19.07.2024 and sale confirmation is also issued to the auction purchaser.

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4.7 It is contended by the respondent bank that they have followed the measures under SARFAESI Act and prays for dismissal of SA with exemplary costs.

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Heard the submission of both the counsels and Perused the records of the case.

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The first and the second applicants are the borrower and co-borrower who have availed Housing Loan facility of Rs.36.54 lahs, GECL Term Loan of Rs.90,000/-, Second applicant (the proprietor of Kariakali Amman Foods) had availed Cash Credit facility of Rs.12 lakhs, GECL Term Loan of Rs.5.90 lakhs and Term Loan of Rs.17.10 lakhs, totaling to Rs.72.44 lakhs, as per the Demand Notice under Section 13(2) produced by respondent bank at page 1 of their typed set. The applicants have created the mortgage of the schedule A and B property as collateral security towards the credit facilities availed. In fact, the applicant does not dispute the availing of the Housing Loan and the default in the repayment, as seen in para V(1) and V(2) of the SA pleadings.

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5.1 It is also a matter of record that due to the default, the account has been classified as NPA on 28.09.2023.

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5.2 Subsequent to classification of account as NPA as per the RBI guidelines, the respondent bank has issued Demand Notice under Section 13(2) dated 17.10.2023, which is sent by RPAD and the postal track report are produced at Page 1 to 10 of the typed set of documents. The contentions of the applicant that no Section 13(2) notice is served on him is countered by the respondent bank which stands established that the

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SA No.456 of 2024 (C)

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20.02.2025

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Section 13(2) Demand Notice is duly served on the applicant herein. On receipt of the Section 13(2) Demand Notice, the applicant has neither liquidated the liability within 60 days nor raised any objections to the Demand Notice. Though applicant contends that bank has not replied to objection raised to Section 13(2), is not supported by any documents. Applicant has not produced the copy of the reply statement as raised to Section 13(2) notice and it is a mere allegation which is not supported by any document. Hence the allegation fails.

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5.3 After completion of 60 days, respondent bank have proceeded further and issued the Possession Notice under Section 13(4) dated 03.01.2024 which was sent to applicants by RPAD and the first applicant has received the Possession Notice on 09.01.2024 and second applicant has received the notice on 09.01.2024 as per the postal acknowledgment cards produced by the respondent bank from pages 13 to 17 of the typed set of documents. Further the unclaimed RPAD covers are also produced by the respondent bank. However, the postal track reports produced from pages 30 to 35 reflects that the Section 13(4) notice was delivered. Respondent bank in compliance of the procedures have also affixed the Section 13(4) Possession Notice on the secured asset as evident from pages 36 of the typed set of documents. In compliance of the measures, the respondent bank has published the Possession Notice in two dailies viz., ‘The New Indian Express’ and ‘Dinamani’ on 07.01.2024, as seen at page 37 and 38.

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5.4 Thus the bank has established the due compliance of the issuance of Section 13(2) Demand Notice dated 17.10.2023 and Section 13(4) Possession Notice dated 03.01.2024 as provided under the Act and the same is supported by the documents produced by the respondent bank. Hence it is concluded that the bank has issued the

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SA No.456 of 2024 (C)

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20.02.2025

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statutory Demand Notice dated 17.10.2023 and Possession Notice dated 03.01.2024 in accordance with the Act and Rules. Hence Section 13(2) and Section 13(4) are valid notices issued under the Act.

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5.5 On the other hand, applicant had raised untenable contentions with regard to issuance of Section 13(2) and 13(4), have failed to establish any infirmity in the issuance of the statutory notices. Even otherwise, challenge to Section 13(4) Possession Notice is not within the period of 45 days as required under Section 17(1) of the SARFAESI Act.

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5.6 It is manifest from the records that the respondent bank had also issued the Sale Notices and the Sale Notice dated 25.06.2024 is produced by the respondent bank at page 39 to 41. The Sale Notice was sent by RPAD and the postal acknowledgment cards reveal that the Sale Notice was received, which is also supported by the postal track report. The bank has also published the Sale Notice in two newspapers as required under the Act.

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5.7 It is pertinent to note that the present SA is filed challenging the Section 14 order dated 15.06.2024 in CMP No.1726 of 2024 passed by Ld. CJM, Chengalpet. However, the applicant has not made out a case for interference of this Tribunal nor has established any illegalities in the measures taken by the respondent bank nor any violation of the clause under Section 14 application. Thus the Tribunal concludes that the Section 13(4) order is a valid one, which does not require any interference from this Tribunal.

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SA No.456 of 2024 (C)

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20.02.2025

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5.8 Even otherwise as per S.14(3) - No act of the Chief Metropolitan Magistrate or the District Magistrate done in pursuance of this section shall be called in question in any court or before any authority.

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For the forgoing reasons, the present SA No. 456 of 2024 is only to be dismissed.

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Accordingly, S.A No.456 of 2024 stands dismissed. The S.14 Order dated 15.06.2024 in CMP No.1726 of 2024 passed by Ld. CJM, Chengalpet, does not require any interference from this Tribunal and hence the same is held as valid.

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Interim Order granted if any stands vacated. Pending IA/s if any are disposed of in terms of this Order. No order as to cost.

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Sd/-

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(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI

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(Dictated to PS, transcribed by her, corrected, signed and pronounced by me on this the 19^th day of February, 2025)

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APPENDIX

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LIST OF DOCUMENTS PRODUCED BY THE APPLICANTS

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SI.No	Date	Particulars	Annexure
1.	03.01.2024	Possession Notice	A1
2.	15.06.2024	Order passed by Ld. CJM in Crl.MP No.	A2
		CMP No.1726 of 2024
3.	11.07.2024	Advocate Commissioner Notice	A3

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SA No.456 of 2024 (C)

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20.02.2025

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LIST OF DOCUMENTS PRODUCED BY THE RESPONDENT BANK

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SI.No	Date	Particulars	Annexure
1.	17.10.2023	DemandNotice	R1
2.		Postal Track Receipts	R2
3.	03.01.2024	Possession Notice	R3
4.		Acknowledgment cards, returned covers &postaltrack receipts	R4
5.	03.01.2024	Proofofaffixture of Possession Notice	R5
6.	07.01.2024	Paper publication of Possession Notice in TheNewSundayExpress	R6
7.	07.01.2024	Paper publication of Possession Notice in Dinamani	R6
8.	25.06.2024	SaleNotice	R7
9.		Acknowledgment cards, returned covers &postal track receipts	R8
10.		Proof of affixture of Sale Notice	R5
11.	26.06.2024	Paper publication of Possession Notice in TheNew Indian Express	R6
12.	26.06.2024	Paper publication of Possession Notice in Dinamani	R6

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SCHEDULE OF PROPERTY

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All that piece and parcel of the land admeasuring 71091 Sq. feet comprised in S.No.416/4A, 415/1A1A, 415/1A2A, 415/1A/2B, 415/3A, 415/4, 415/4, 415/5 & 415/6 of Perumbakkam Village, Sholinganallur Taluk in Kancheepuram District, Tamil Nadu bounded on the

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North by : 30 feet Road in S.no. 415/4A & remaining properties in S.No.415/1A1A

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South by : Arasankalani Village

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East by : Lands in S.No.415/1A1B & 415/1A3

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West by : Lands in S.No.416/4A & 416/8 & 416/9

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And lying within the sub registration district of selaiyur in the Registration Disctrict of Chennai South

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SA No.456 of 2024 (C)

20.02.2025

Schedule B:

All that piece and parcel of two flats in the third floor of Block No.ED in the building complex known as Bollineni Hillside Phase II constructed vide planning permit No.9215 & Building permit No.64/2016-2007 in the Schedule A property together with 579.69 sq.ft. undivided share in the Schedule A property comprised in the following flat numbers carpet area super built area and their corresponding undivided share of land (UDS)

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S.No.	Flat No.	Carpet Area	Super area	UDS (in Sq. ft.)
1.	303 A	376.52	517.50	289.845
2.	303 B	376.52	517.50	289.845
Total		753.04	1035.00	579.69

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Sd/-

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(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI

Mrs B Bhuvana and R Guru Abishek v. Punjab National Bank

Case brief

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Mrs B Bhuvana and R Guru Abishek v. Punjab National Bank

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