Allowed

I Robinson Britto v. Indusind Bank Limited

DRT11 Mar 2025SA/583/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the Applicant's Securitization Application challenging the Bank's Possession Notice issued under the SARFAESI Act. The court set aside the notice due to the Bank's failure to produce supporting documents proving compliance with procedural requirements regarding service and registration.

What did the court decide?

The Possession Notice dated 18.07.2023 is set aside. Standing interim orders are vacated and pending interim applications are closed.

I Robinson Britto versus Indusind Bank Limited — Banking and Recovery | DRT (2025)

SA No.583/2023

11.03.2025

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 11^th day of March, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SA No. 583 of 2023

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Mr. I. Robinson Britto, S/o. Mr. P. Issac Villa No.15, Jones Sigiriya Vilas, No.190, West Anna Nagar, Pallikaranai, Chennai – 600 100

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….Applicant

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-Vs-

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The Authorized Officer, Indusind Bank Limited FRR Group Indusind Bank, No.25, Steepla Reach, A Block, 3^rd Floor, Cathedral Road, Gopalapuram, Chennai – 600 086

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….Respondent

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Counsels on record / appeared:

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Counsel for Applicant : Mr. J. Prince Counsel for Respondent : M/s. Ramalingam & Associates, Advocates

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:O R D E R:

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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 the action and the measure taken by the secured creditor under the Security Interest Enforcement Rules, 2002 [for short the Rules].

SA No.583/2023

11.03.2025

The Applicant is a borrower has challenged the Possession Notice dated 18.07.2023 published in The New Sunday Indian Express on 23.07.2023, and the outstanding amount due, as per the Possession Notice is Rs.1,44,46,137.79 as on 16.07.2023.

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Pleadings of the Applicant:

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3.1 The Applicant is the borrower, who had availed facility a Cash Credit of Rs.72,00,000/- for their business requirement.

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3.2 After availing the loan, the Applicant has executed all documents in favour of the Respondent Bank.

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3.3 It is contended that the Applicant was repaying the loan without any default or delay and due to the impact of COVID-19 Pandemic, the business of the Applicant was not doing well and hence they were unable to pay the interest portion alone. However, due to some irregular repayment the Account has been classified as NPA, as per the RBI guidelines and as secured creditor, Bank has invoked the provision of the SARFAESI Act without the Registration of the Security Interest in the Central Registry. The Bank without registering the Security Interest, which has not created over the secured property, the Respondent Bank cannot initiate the measures under SARFAESI Act.

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3.4 The Bank has invoked the provision of the SARFAESI Act and in the Possession Notice, it is mentioned that the Demand Notice dated 09.05.2023 is issued under Section 13(2) calling upon the Applicant to pay a sum of Rs.1,41,40,859.40/-, which is not served on all the parties, as required under the Law.

SA No.583/2023

11.03.2025

Further, the Bank has not affixed the demand notice on the schedule mentioned property and have issued the Possession Notice on 18.07.2023 under Section 13(4) of the Act. The Possession Notice is not served on all the parties and the Bank has charged heavy interest apart from the agreed interest and have capitalized the penal interest, which is in contravention of the established legal pronouncement of the Apex Court.

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3.5 It is contended that the Bank has not produced the comprehensive bank statement of accounts in spite of the Applicant making repeated request for the Statement of Accounts. In the grounds of the SA, it is urged that the date of classification is not mentioned in the Section 13(2) Demand Notice and the Bank has not issued any notice classifying the account as NPA and without service of notice, the Bank cannot initiate measure under SARFAESI Act. No Section 13(2) Demand Notice is served nor affixed on the property. Hence, the Section 13(4) Possession Notice suffers from errors.

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Further, the Possession Notice is not delivered on all the parties and the notice is not in the prescribed format, as per the Appendix IV, as mentioned in Rule 8(1) of the Security Interest and Enforcement Rules. On these grounds, the Applicant prays to set aside the Possession Notice dated 18.07.2023.

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4. Objections of the Respondent Bank:

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4.1 The Respondent Bank in their Counter submits that the averments made in the SA are misleading facts and the Applicant have not approached with clean hand seeking to set aside the possession notice.

SA No.583/2023

11.03.2025

4.2 It is the case of the Bank that the Applicant has availed various credit facilities in his individual name and his wife‟s name and also in their Partnership firm M/s. Reeve Enviro Systems totalling to Rs.4,13,60,000/-. M/s. Reeve Enviro Systems is a partnership firm wherein the Applicant and his wife Mrs. Jaba Robinson Brito are the partners.

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4.3 As security towards the credit facilities availed, the Applicant has extended mortgage over the schedule property and also have executed supplementary Memorandum of Deposit of Title Deeds dated 09.09.2020 favouring the Respondent Bank, which is Registered as Document No. 3513/2020 in the Office of the Sub-Registrar, Velachery.

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4.4 The Applicant have extended the mortgage over Schedule A & B mentioned property by executing the supplementary Memorandum of Deposit of Title Deeds dated 09.09.2020 favouring the Respondent Bank, which is Registered as Document No.4637/2020 on the file of the SRO, Pallavaram.

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4.5 The Possession Notice dated 09.05.2023 is issued in respect of the default committed in the Term Loan, which was sanctioned on 02.11.2017 for an amount of Rs.165 Lakhs. In fact, the Applicant concedes to the availing of the credit facility and also the default in the repayment. The contention of the Applicant that the security interest is not registered with the Central Registry is denied and the CERSAI registration is filed along with the Reply Statement.

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4.6 Over the period of time of year 2017 to 2021, the Applicant in his individual name along with his wife and also in name of the said firm M/s. Reeve Enviro had availed various facilities as hereunder: -

SA No.583/2023

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S. No.	Sanction Letter date	Sanction in the name of	Amount	Current Status
1.	02.11.2017	i. M/s. Reeve Enviro ii. Mr. Robinson Britto iii. Mrs. Jaba Robinson Britto	i. Overdraft (I) – Rs.55 Lakhs ii. Bank Guarantee – Rs.1,56,60,000/- Total:Rs.2,11,60,000/-	i.Overdraft(1)- Default, NPA on 02.10.2022 ii. Bank Guarantee
2.	19.06.2018	i. M/s. Reeve Enviro ii. Mr. Robinson Britto iii. Mrs. Jaba Robinson Britto	i. Overdraft (I) – Rs.55 Lakhs (Renewed) ii. Bank Guarantee – Rs.1,76,60,000/- (Enhanced and renewed) Total:Rs.2,31,60,000/-	i.Overdraft(1)- Default, NPA on 02.10.2022 ii. Bank Guarantee
3.	04.01.2019	i. M/s. Reeve Enviro ii. Mr. Robinson Britto iii. Mrs. Jaba Robinson Britto	i. Overdraft (I) – Rs.72 Lakhs (Enhanced & Renewed) ii. Bank Guarantee – Rs.1,76,60,000/- (Renewed) Total:Rs.2,48,66,000/-	i.Overdraft(1)- Default, NPA on 02.10.2022 ii. Bank Guarantee
4.	28.02.2019	i. M/s. Reeve Enviro ii. Mr. Robinson Britto iii. Mrs. Jaba Robinson Britto	Business Loan – Rs.25,00,000/- Lakhs
5.	28.02.2019	i. M/s. Reeve Enviro ii. Mr. Robinson Britto iii. Mrs. Jaba Robinson Britto	Overdraft Facility – (2) Rs.1,00,00,000/-	Default, NPA on 02.10.2022
6.	13.03.2020	i. M/s. Reeve Enviro ii. Mr. Robinson Britto	i. Overdraft (I) – Rs.72 Lakhs (Renewed)	i.Overdraft(1)- Default, NPA

SA No.583/2023

11.03.2025

		iii. Mrs. Jaba	ii. Bank Guarantee –	on 02.10.2022
		Robinson Britto	Rs.1,76,60,000/- (Renewed) iii. Bill Discounting facility – Rs.1 Crore	ii. Bank Guarantee iii. Bill Discounting
7.	07.07.2021	i. M/s. Reeve Enviro ii. Mr. Robinson Britto iii. Mrs. Jaba Robinson Britto	GECL Facility – Rs.14,22,000/-	Default, NPA on 02.10.2022
8.	02.11.2017	i. Mr. Robinson Britto ii. Mrs. Jaba Robinson Britto	Term Loan – Rs.165 Lakhs	Default, NPA on 31.10.2022

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4.7 M/s. Reeve Enviro through the Applicant and his wife as partners availed Cash Credit facility to the tune of Rs.55 Lakhs and Bank Guarantee to the tune of Rs.1,56,60,000/- for taking over the earlier facility availed by them from Kotak Mahindra Bank. They proposed to create mortgage over the credit facility to the total sum of Rs.2,11,60,000/-, which was sanctioned vide letter dated 02.11.2017, followed by an addendum dated 09.11.2017. The Applicant as absolute owner of the property have deposited the original Title Deeds and have confirmed the creation of mortgage by Memorandum of Deposit of Title Deeds on 01.12.2017.

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4.8 The said partnership firm sought for renewal of facility availed by them and also enhancement of Bank Guarantee, considering their request the Respondent Bank enhanced the Bank Guarantee to Rs.1,76,60,000/- and renewed the overdraft facility vide sanction letter dated 19.06.2018. Subsequently, again the Applicant requested for renewal cum enhancement of the existing credit facility, which was sanctioned by the Respondent Bank vide sanction letter dated

SA No.583/2023

11.03.2025

04.01.2019, followed by supplementary Memorandum of Entry for extension of Mortgage favouring the Bank.

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4.9 The Applicant along with the Partner sought for a business loan to the tune of Rs.25,00,000/- Lakhs in February 2019 for their Leather business and have executed the Loan documents. The Applicant have been availing the credit facilities, which has been sanctioned by the Respondent Bank and have also confirmed the creation of the mortgage mentioned here under:

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i. Memorandum of Deposit of Title Deeds dated 05.12.2017, Registered as Document No.9766 of 2017, on the file of the Sub-Registrar of Pallavaram. (Schedule mentioned property)

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ii. Memorandum of Deposit of Title Deeds dated 15.05.2018, Registered as Document No.2701 of 2018, on the file of the Sub-Registrar of Velachery. (Schedule A & B mentioned property)

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iii. Supplemental Memorandum of Equitable Mortgage by Deposit of Title Deeds dated 07.07.2018, Registered on the file of the SubRegistrar of Pallavaram. (Schedule mentioned property)

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iv. Supplemental Memorandum of Equitable Mortgage by Deposit of Title Deeds dated 29.10.2018, Registered as Document No.6343 of 2018, on the file of the Sub-Registrar of Velachery. (Schedule A & B mentioned property)

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v. Supplemental Memorandum of Equitable Mortgage by Deposit of Title Deeds dated 08.02.2019, Registered as Document No.737 of 2019, on the file of the Sub-Registrar of Velachery. (Schedule A & B mentioned property)

SA No.583/2023

11.03.2025

vi.Supplemental Memorandum of Equitable Mortgage by deposit of Title Deeds dated 09.02.2019, Registered as Document No.1182 of 2019, on the file of the Sub-Registrar of Pallavaram. (Schedule mentioned property)

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vii.Supplemental Memorandum of Equitable Mortgage by Deposit of Title Deeds dated 09.09.2019, Registered as Document No.3513 of 2020, on the file of the Sub-Registrar of Velachery. (Schedule A & B mentioned property)

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viii.Supplemental Memorandum of Equitable Mortgage by Deposit of Title Deeds dated 09.09.2019, Registered as Document No.4637 of 2020, on the file of the Sub-Registrar of Velachery. (Schedule mentioned property)

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4.10 As the Applicant did not service the interest portion nor repaid the loan amount, the account was classified as NPA on 31.10.2022 and the overdraft facility accounts and GECL account were classified as NPA on 02.10.2022. Subsequently, the Bank has initiated measures under SARFAESI Act and have issued Demand Notice dated 09.05.2023 and have issued separate Demand Notice dated 09.05.2023 to the Applicant and his wife Mrs. Jabba Robinson Brito. The demand notices have been served on the Applicant and his wife and also on the partnership firm.

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4.11 As the Applicant and others did not take steps to repay the amount, as claimed in the 13(2) Demand Notice, however, preferred to give an Advocate Notice dated 29.05.2023 denying the liability as claimed in the Demand Notice.

SA No.583/2023

11.03.2025

4.12 Considering the objections raised by the Applicant, the Respondent Bank issued an appropriate reply on 13.06.2023 and proceeded further under the measure. It is contended that the Possession Notice dated 18.07.2023, which is issued to the Applicant and his wife and their firm is served and is also published in the English Daily “The New Sunday Express” dated 23.07.2023 and in Tamil Daily “Dinamani” dated 23.07.2023. Further, it is submitted that the Possession Notice is affixed in the conspicuous place of the secured asset and have filed along with the Counter.

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4.13 The Respondent Bank denies allegations made by the Applicant in their SA and contends that the entire world had come out of the effect of COVID-19 but the Applicant still wants to take shelter under the old story. It is contended that the copies of the documents filed by the Bank before the Tribunal would prove the allegations of the Applicant as wrong. The notices have been duly served and the interest charged by the Respondent Bank is as per the agreed terms and as per the RBI guidelines. The total outstanding as on 29.02.2024 is an amount of Rs.3,78,07,069.80/-. As the Bank has followed all the measures under SARFAESI Act prays for dismissal of the SA.

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5. Heard the arguments of the Learned Counsels appearing for the respective parties.

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5.1 It is manifest from the records of the case that the Applicant and his wife has filed the present SA challenging Section 13(4) Possession Notice published in the Newspapers dated 23.07.2023.

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5.2 It is an admitted fact by the Applicants that they had availed credit facilities from the Respondent Bank. The publication of the 13(4)

SA No.583/2023

11.03.2025

Possession Notice, which is produced by the Applicant (at Page No.8) clearly reflects that the Applicant Mr. Robinson Brito is the proprietor and had mortgaged Schedule A&B property towards the credit facility.

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5.3 It is an admitted fact by the Applicants that there occurred default in the repayment of the loan and the Bank has classified the account as NPA. It is also the case of the Bank that due to the default in the repayment, the Bank has classified the Account as NPA towards the Term Loan Account on 31.10.2022 and the Overdraft facilities accounts and GECL Account were classified as NPA on 02.10.2022.

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5.4 After classifying the Account as NPA, the Bank has issued Section 13(2) Demand Notice dated 09.05.2023. As the Applicant did not comply with the demand made within 60 days, the Bank has issued Possession Notice under Section 13(4) dated 18.07.2023.

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5.5 The Respondent Bank in their Counter at Page No.2, has Countered the allegation of the Applicant contending that the Security Interest is Registered with the CERSAI and the CERSAI Registration is filed along with the Reply Statement. It is also contended that the acknowledgement cards evidencing the service of the demand notice and affixture of the possession notice on the property along with the Newspaper publication in the vernacular language is filed along with the Reply Statement.

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However, the records of the case reflects that the Bank has only filed the Reply Statement countering the contention of the Applicant for having complied the procedures in issuing the Section 13(2) Demand Notice dated 09.05.2023 and Section 13(4) Possession Notice dated 18.07.2023 has not filed the supporting documents in support of the

SA No.583/2023

11.03.2025

measures taken by the Bank, as required under the Act . In fact, no documents are produced by the Bank to substantiate their due compliance.

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5.6 It is pertinent to note that the Applicant has taken specific contentions in respect of the non-registration of the Security Interest before the Central Registry, non-service of 13(2) demand notice to all the parties, who had availed the loan and the affixture of the possession notice on the secured asset. In spite of the categoric allegation, the Respondent Bank, as secured creditor has not filed any document countering the said contentions of the Applicant nor has produced the supporting documents to establish that the Respondent Bank, as secured creditor has followed all the measures, as per the procedures required under the Act.

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5.7 In absence of any supporting documents, to substantiate the due compliance of the measures taken by the Respondent Bank, the present SA is only to be allowed, as Bank has not countered all the contention raised in SA in respect of measures taken by the Secured Creditor under the Act.

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5.8 Upon examination of the facts, the averments and the documents produced by the Applicant, the Respondent Bank has failed to establish the due compliance of the measures taken under the Act resulting in non-adherence of the procedures, as prescribed under Act. Thus, the Tribunal comes to inevitable conclusion that the Respondent Bank has not initiated the measures under the SARFAESI Act, as prescribed in issuing the 13(2) Demand Notice dated 09.05.2023 and Section 13(4) Possession Notice dated 18.07.2023.

SA No.583/2023

11.03.2025

For the foregoing reasons, the present SA is allowed setting aside the Possession Notice dated 18.07.2023.

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Interim order granted, if any stands vacated and the pending IAs are closed in terms of this 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 (Sudhakar), transcribed by him, corrected, signed and pronounced by me on this the 11^th day of March, 2025)

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ANNEXURES

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INDEX TO THE LIST OF DOCUMENTS FILED BY THE APPLICANT

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Exhibits on the part of the Applicant:

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Sl. No.	Description of Documents	Exhibit No.
1.	SARFAESI Applicationdated 01.08.2023	A-1
2.	Impugned publication of possession notice dated 23.07.2023 on 18.07.2023	A-2
3.	Vakalat dated 01.08.2023	A-3

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Exhibits on the part of the Respondent:

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NIL

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SCHEDULE OF PROPERTY

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DESCRIPTION OF THE IMMOVABLE PROPERTY

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Property of Mr. I. Robinson Britto, S/o. Mr. P. Issac, Sale Deed Doc. No.10294/2016

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dated 05.12.2016. All that house Ground and Premises bearing Plot No.26, Manikandan Street, Madipakkam, Chennai – 600 091 comprised in Paimash No.370/3, Old Survey No.251/3 Part, Subsequently Survey No.251/3E, New Survey

SA No.583/2023

11.03.2025

No.251/3F6, TS No.105, Block No.24, Ward H of Keezhkattalai Village, within the Limit of Pallavaram Municipality, Pallavaram Taluk, Kancheerpuram District measuring an extent of 1 Ground 470 Sq.ft., of land building thereon measuring about 1200 Sq.ft., and bounded on the North by : 30 Feet Road (Manikandan Street) South by: Property belonging to Mr. Kannika Pillai and others East by : Plot No.25, West by: Plot No.27, Admeasuring East to west on the Northern Side: 40 Feet 00 Inches; East to West on the Southern Side : 40 Feed 00 Inches; North to South on the Eastern Side : 71 Feet 00 Inches North to South on the Western Side : 72 Feet 06 Inches. And lying within the Registration District of Chennai-South and Sub-Registration District of Pallavaram, Pallavaram Municipality Tax Assessment No.15120, TNEB No.264-670-766.

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Property of Mr. I. Robinson Britto, S/o. Mr. P. Issac, Sale Deed Doc. No.1914/2012 dated 09.04.2012.

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Schedule “A” Property

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All that piece and parcel of the vacant land bearing Plot No. 30, measuring 2887 Sq.ft., and comprised in Survey No.39/2, 39/3, and 39/4 of No.123, Puzhuthivakkam Hamlet of Madipakkam Village, Now Sholinganallur Taluk, Kancheerpuram District and as in the CMDA approved Layout PPD/LO No.36/95 and named Annai Terasa Nagar Phase – II and bounded on the North by : Space provided for Park, South by : 30 Feet Road, East by: Plot No.29, West by : Plot No.31, and more particularly measuring, on the Northern Side: 47 feet; On the Southern Side : 30 Feet; on the Eastern Side : 75 Feet; On the Western Side : 78 Feet; and in all measuring 2887 Sq.ft., of Vacant Land only.

SA No.583/2023

11.03.2025

The above property is within the Registration District of Chennai-South and SubRegistration District of Valacherry.

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Schedule “B” Property

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One Flat bearing No.S-2 in Second Floor measuring 903 Sq.ft., of Plinth Area inclusive of common area and with One Car Parking with 460 Sq.ft., of Undivided Share of Land in the above referred „A‟ Schedule property and in the building complex “Malar” Car Parking allotted CS-2.

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

I Robinson Britto v. Indusind Bank Limited

Case brief

What is this about?

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I Robinson Britto v. Indusind Bank Limited

Case brief

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