Allowed

Beena v. Kerala State Co-Operative Bank Ltd.

DRT12 Mar 2025SA/48/2024

Case brief

AI extract

What is this about?

CIT allowed a securitization application challenging the bank-initiated recovery proceedings. The tribunal held that due to the non-service of demand and possession notices, the securitization process was illegal, and set aside the proceedings before the Chief Judicial Magistrate.

What did the court decide?

The order passed by the Chief Judicial Magistrate under Section 14 of the SARFAESI Act and the notice issued by the Advocate Commissioner are set aside.

Beena versus Kerala State Co-Operative Bank Ltd. — Banking and Recovery | DRT (2025)

¶1

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

¶2

PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

¶3

Dated this the 12^th day of March, 2025

¶4

SECURITIZATION APPLICATION No.48/2024

¶5

Between

¶6

Beena, Aged 56 Years, W/o.Jose, Vazhappilly House, Velur Desom, Velur Village, Velur P.O., Kunnamkulam Taluk, Thrissur District – 680 601. 2. John Paul, Aged 37 Years, S/o.Jose, Vazhappilly House, Velur Desom, Velur Village, Velur P.O., Kunnamkulam Taluk, Thrissur District – 680 601. 3. John, Aged 35 Years, S/o.Jose, Vazhappilly House, Velur Desom, Velur Village, Velur P.O., Kunnamkulam Taluk, Thrissur District – 680 601. …Applicants

¶7

And

¶8

The Authorised Officer/ The Kerala State Co-operative Bank Ltd., Kochery Branch, (Thrissur District Co-Operative Bank Limited), Kochery, Thrissur District – 680 501 . …Defendant

¶9

This Securitization Application having been heard on 17.02.2025 in the presence of Advocates M/s.Aju Mathew and Shani K.Krishnan for the applicants and the defendant being absent and stood over to this day for consideration, the Tribunal delivered the following:

¶10

SA 48/2024

¶11

¶12

F I N A L O R D E R

¶13

Challenging the securitization proceedings initiated by the defendant under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘the SARFAESI Act’), the applicants/borrowers have filed this SA under S.17(1) of the SARFAESI Act.

¶14

Brief facts of the case :

¶15

In the SA it is pleaded that the applicants availed a business loan of Rs.30,00,000/- from the defendant bank in the year 2016 by mortgaging the subject matter property described in the schedule of the application. After availing the loan, the applicants were repaying the loan regularly. Due to demonetization, they sustained huge loss and also due to covid-19 the business of the applicants also sustained huge loss. Due to business crisis, the loan could not be repaid in time. Though the applicants approached the defendant to give the benefit of the instalments to regularize the loan, the same is not considered. The defendant proceeded under the securitization proceeding and filed case before the Chief Judicial Magistrate Court, Thrissur as Crl.M.P. No.10430/2023 seeking appointment of Advocate Commissioner to take possession of the secured asset. Accordingly, an Advocate Commissioner, being appointed by the Chief Judicial Magistrate, issued notice to the applicants to take possession of the secured asset, which is impugned in this SA. It is further claimed by the applicants that the demand notice and possession notice were not served on them by the defendant and also there are procedural

¶16

SA 48/2024

¶17

¶18

defects in the application under Section 14 of the SARFAESI Act. Hence the applicants seek the relief in setting aside the proceeding initiated before the Chief Judicial Magistrate including the notice issued by the Advocate Commissioner.

¶19

The defendant appeared through Advocates but no vakalath or written statement is filed to contest the case.

¶20

The sole question arises for adjudication in this case whether the securitization proceeding initiated by the defendant suffers from any illegality due to non-compliance of the statutory provision.

¶21

The applicants claim in the SA that the demand notice and possession notice were not served on them. The defendant ought to have produced material to establish the service of the demand notice on the applicants. In the absence of any challenge, the contentions raised in the SA by the applicants cannot be disbelieved. Due to nonservice of demand notice and possession notice on the applicant, securitization proceeding suffers from illegality. Consequently, the proceeding initiated before the Chief Judicial Magistrate is not legally valid

¶22

In view of the forgoing reasons, the SA is allowed. The order passed by the Chief Judicial Magistrate under Section 14 of the SARFAESI Act and the notice issued by the Advocate Commissioner are hereby set aside.

¶23

(Dictated to my PA, corrected and pronounced by me in the open Tribunal on this the 12^th day of March, 2025)

¶24

[SOVAN KUMAR DASH] PRESIDING OFFICER

¶25

SA 48/2024

¶26

¶27

Documents on the part of the applicants

¶28

Annexures	Date	Particulars of documents
Annexure-A1	……..……	Copy of petition filed by the defendant as Crl.M.P. No.10430 of 2023 on the file of the Chief Judicial Magistrate Court, Thrissur.
Annexure-A2	……….…	Copy of affidavit filed by the defendant along with Annexure A1 petition before the Chief Judicial Magistrate Court, Thrissur.
Annexure-A3	……………	Copy of the order dated 21.11.2023 passed in Crl.M.P. No.10430 of 2023 on the file of the Chief Judicial Magistrate Court, Thrissur.
Annexure-A4	02.12.2023	Original commission notice issued by the Advocate Commissioner.
Annexure- A4(a)		English translation of Annexure A4
Do	cuments on t	he part of the defendant .. Nil.

¶29

PRESIDING OFFICER

¶30

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

¶31

PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

¶32

Dated the 12^th March, 2025

¶33

SA No.48/2024

¶34

Between

¶35

Beena, Aged 56 Years, W/o.Jose, Vazhappilly House, Velur Desom, Velur Village, Velur P.O., Kunnamkulam Taluk, Thrissur District PIN – 680 601 and Ors. …Applicants

¶36

And

¶37

The Authorised Officer/ The Kerala State Co-operative Bank Ltd., Kochery Branch, (Thrissur District Co-Operative Bank Limited), Kochery, Thrissur District – 680 501 …Defendants

¶38

F I N A L O R D E R

Beena v. Kerala State Co-Operative Bank Ltd.

Case brief

What is this about?

What did the court decide?

Beena v. Kerala State Co-Operative Bank Ltd.

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

Rathi Agencies versus Kotak Mahindra Bank Limited

Punjab National Bank versus Mangal Singh

Punjab Gramin Bank versus Dalbir Singh (Since Deceased through Lrs)

Sarju Shamsudeen versus Catholic Syrian Bank Limited

Mr S Padmanabha Rao and Other versus Sir M Visvesvaraya Co. Operative Bank Ltd.

State Bank of India versus Shri Manjit Singh