Allowed

Mrs v. Prasannakumari v Punjab National Bank

DRT7 Apr 2025SA/46/2023

Case brief

AI extract

What is this about?

In this securitization application, the Debt Recovery Tribunal held that the bank's issuance of a Demand Notice and Possession Notice was a patent irregularity because the notices erroneously included a Cash Credit limit which the applicants had not availed. Consequently, the Tribunal quashed the impugned notices, allowing the bank to initiate fresh measures.

What did the court decide?

Quashing of Section 13(2) Demand Notice dated 10.10.2022 and Section 13(4) Possession Notice dated 09.01.2023; liberty to initiate fresh measures.

Mrs v Prasannakumari versus Punjab National Bank — Banking and Recovery | DRT (2025)

SA No.46/2023 (C)

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 Presiding Officer

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SA No. 46 of 2023

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Mrs. V. Prasannakumari, W/o. B.N. Vijayakumar, Old No.61, New No. 103, 2^nd Floor, Angalamman Koil Street,

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Choolai, Chennai – 600 112.

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PAN No. APCPP2872A

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Mr. B.N. Vijayakumar, S/o. B.R. Narasimhulu, Old No.61, New No.103, 2^nd Floor, Angalamman Koil Street, Choolai, Chennai – 600 112. PAN No. AEHPV9590B ….Applicants

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-Vs-

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The Authorized Officer, M/s. Punjab National Bank, Circle Sastra Centre, Spencer Plaza, 2^nd Floor, No.769, Anna Salai, Chennai – 600 002. ….Respondent

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Counsels on record / appeared:

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Counsel for Applicant : M/s. K.A. Ramakrishnan Counsel for respondent : M/s. S.R. Rajeni Ramadass

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ORDER ON SA No. 46 /2023

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The present Securitization Application [SA] is filed 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

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07.04.2025

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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The applicant had challenged the Possession Notice dated 09.01.2023 issued by the Respondent Bank under Section 13(4) of the Act and the outstanding amount due as per the notice is Rs.40,14,870.74/-

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The Applicant along with Mr. B.N. Vijayakumar and Mrs. V. Prasanna kumari had availed the credit facilities from the Respondent Bank, a housing loan for a sum of Rs.19.85 Lakhs on 28.02.2018 which was repayable in 240 Equated Monthly Instalments and the Over Draft Facility for Rs.17.03. Lakhs and Covid-19 Restructuring Loan for Rs.2.80 Lakhs.

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It is the contentions of the Applicant, that the Applicant had availed the housing loan and Over Draft facility and had executed loan documents in favour of the Respondent Bank, further applicant has created equitable mortgage of the property by deposit of title deeds in respect of their residential property in favour of the respondent bank.

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The bank without considering the repayments made by the applicants classified the Loan Account as NPA on 29.06.2022 and issued the Demand Notice dated 10.10.2022 calling upon the Applicants to repay the sum of Rs.40,14,870.74.

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After the Receipt of Demand Notice, the Applicant has sent a detailed reply to the Respondent Bank on 30.11.2022 by RPAD and have

SA No.46/2023 (C)

07.04.2025

produced the postal receipt for having sent the objections to the Section 13(2) Demand Notice

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The Applicant submits that revolving loan (RF LOAN) facility provided by the respondent is with a great deal of flexibility in terms of repayment and re-borrowing. During the period of Covid-19 (2^nd Wave) on 29.06.2021 the respondent instructed not to pay the loans for the period of Twelve Months as mentioned in the 13(2) SARFAESI Act Demand Notice.

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In the year of 2022 Mr. Sudish C.V.S. Chief Manager of the bank had called the applicants and extended the R.F. Loan for period of 12 months and also obtained additional supplemental documents, but it was not properly disbursed to the Housing Loan account, however it was disbursed properly to the Over Draft account till 30.04.2022

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The applicant submits that if respondent bank have disbursed the above loan properly, the account never falls into N.P.A and the Applicant made some payment on Housing Loan and Over Draft Loan account which was provided during the First wave of Covid-19 and Restructure Loan during the Second wave of Covid-19 and as per the restructure of the loans, Twelve Months of time initially given and was extended to further Six months of time

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Even though the EMIs were paid to the Over Draft Loan and Housing Loan, the bank had issued the S.13(2) Demand Notice, calling upon them and asked to pay the entire liability within 60 days of time to which the

SA No.46/2023 (C)

07.04.2025

applicant has sent a detailed objections to the demand notice on 30.11.2022, to which the bank has not replied. Hence the measures initiated by the bank is clearly seen as violation of the Section 13(3A) Provisions of the SARFAESI Act

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The respondent bank has filed detailed counter along with supporting documents in respect to the measures taken under the Act. The specific contention of the applicant is that the borrower has only availed the Housing Loan and Over Draft Loan and not the Cash Credit, hence the Possession Notice dated 09.01.2023 issued under the Section 13(4) of the SARFAESI Act is not maintainable.

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The Tribunal without going into the contentions and counter contentions of both the parties proceed to consider the preliminary issue whether the applicant has availed cash credit of Rs.19.85 lakhs which is mentioned in the S.13[2] demand notice and S.13[4] possession notice.

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The Respondent Bank fairly admits that the applicant had availed only Housing Loan and the Over Draft facility and not the Cash Credit of Rs.19.85 Lakhs which is seen mentioned in the S.13[2] Demand Notice dated 10/10/2022 and in S.13[4] possession notice dated 09.01.2023.

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As it is an admitted and confirmed by the respondent bank that the applicant has not availed Cash Credit limit of Rs.19.85 which is seen mentioned in the notices is patent irregularity in the measure initiated by the bank which is highly depreciated.

SA No.46/2023 (C)

07.04.2025

As the applicant has challenged the issuance of Section 13(4) Possession Notice 09.01.2023 which is based on the Section 13(2) Demand Notice dated 10.10.2022, the entire measures taken after classification of the account as NPA, the issuance of the Section 13(2) Demand Notice dated 10.10.2022 and Section 13(4) Possession Notice dated 09.01.2023 is here by squashed, giving liberty to Respondent Bank to initiate fresh measures as required under the Law.

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Further, the Respondent Bank shall debit the cost incurred in initiating the measures, incidental charges, legal fees charges towards incurred in taking the measures and the application fee paid by the applicant in preferring the present SA to be debited first to the loan account before initiating fresh measures.

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Accordingly, the S.A. stands allowed, setting aside the S.13(2) Demand Notice dated10.10.2022 and S.13(4) Possession Notice dated 09.01.2023. Interim Order granted, if any stands vacated, pending IAs are disposed of in terms of this final order. No order as to cost.

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

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(Dictated to Steno (Mogesh), transcribed by him, corrected, signed and pronounced by me on this the 07^th day of April, 2025)

SA No.46/2023 (C)

07.04.2025

ANNEXURES

LIST OF DOCUMENTS PRODUCED BY THE APPLICANT

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Sl. No.	Description of Documents	Page No.
1.	Application filed under Section 17(1) of the Act 23.01.2023	A-1
2.	Demand Notice issued U/s 13 (2) of the SARFAESI Act 10.10.2022	A-2
3.	Reply to the Demand Notice 30.11.2022	A-3
4.	Statement of Accounts furnished by the Applicants
5.	Impugned Possession Notice 09.01.2023

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LIST OF DOCUMENTS PRODUCED BY THE RESPONDNET

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Sl. No.	Description of Documents	Page No.
1.	Demand Notice 10.10.2022	R-1
2.	Acknowledgement cards of demand notice 13.10.2022	R-2
3.	Reply issued by the Respondent Bank 09.12.2023	R-3
4.	Possession Notice 09.01.2023	R-4
5.	Affixing possession notice at conspicuous area 09.01.2023	R-5
6.	Paper Publication of Possession notice in the “New Indian Express” and in vernacular language“Dinamani”11.01.2023	R-6
7.	Acknowledgement cards of possession notice 11.012023	R-7
8.	Statement of accounts	R-8

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SCHEDULE OF PROPERTY

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Residential Flat at No.K105, 1^st Floor with undivided area of 521.78 sq.ft and plinth area of 986 sq.ft. Kamarajar Salai, Ayanabakkam Village, Ambattur Taluk, Thiruvallur District Chennai – 95 belongs to BN Vijayakumar and V.Prasannakumar being bounded on the.

SA No.46/2023 (C)

07.04.2025

North by: S.No.378 and 381

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South by: S.No.331, 332/ 1A, 332/2, 329/2

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East by: S.No.380,326,329/1B and 33 Ft. Road

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West by: S.No.338, 340/3, 355/1, 357

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Sd/PRESIDING OFFICER, DRT-III, CHENNAI

Mrs v. Prasannakumari v Punjab National Bank

Case brief

What is this about?

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Mrs v. Prasannakumari v Punjab National Bank

Case brief

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