Dismissed

K S Kader Pillai v. Peoples Urban Cooperative bank

DRT30 May 2025SA/609/2024

Case brief

AI extract

What is this about?

The Tribunal dismissed a securitization application challenging an order for physical possession under the SARFAESI Act. The court held that omissions regarding NPA dates and minor affidavit errors did not vitiate the order, as these proceedings are administrative.

What did the court decide?

Securitization Application No.609 of 2024 dismissed; no order as to costs.

K S Kader Pillai versus Peoples Urban Cooperative bank — Property and Title | DRT (2025)

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL - 1 AT ERNAKULAM

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DATED THIS 30^th DAY OF MAY, 2025

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PRESENT: Su. WILLYAHM, B.Sc., M.L. [DISTRICT JUDGE - Retd] PRESIDING OFFICER

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S.A No. 609 of 2024

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Between

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K.S. Kadar Pillai, S/o. late K.A. Saidali, Rukiya Bagh, Royal Lane, Kadavanthara, Ernakulam, Kochi-682020.

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Rukhiya Kadar, W/o. K.S. Kadar Pillai, Rukiya Bagh, Royal Lane, Kadavanthara, Ernakulam, Kochi-682020.

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--- Applicants

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And

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The Authorized Officer, People’s Urban Co-operative Bank Ltd. No.51, Head Office, Tripunithura, Ernakulam – 682 301.

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People’s Urban Co-operative Bank Ltd. No.51, Ernakulam Branch, M.G. Road, Ernakulam, Kochi -682 011 Rep. by its Chief Manager. --- Defendants

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SA No.609 of 2024

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This Securitization Application coming on 19.12.2024 for final hearing before me in the presence of Mr. Robin Thomas Philip, Counsel appearing for the Applicants and Ms. Uma G Krishnan, Counsel appearing for the defendants and upon hearing arguments of learned Counsels for both the parties and upon perusing the material on records, this Tribunal delivered the following:

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O R D E R

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This Securitisation Application was filed on 19.08.2024 seeking to set aside Annexur-A17 order passed by the Additional Chief Judicial Magistrate Court (MPs/MLAs) Ernakulam in M.C. No.93 of 2024 and to grant further time to the 1^st applicant to clear the account outstanding and to regularize both the accounts and to permit the applicants to conduct private sale of the secured asset.

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The applicants have admitted availment of two separate loans of Rs.50,00,000/- each from the 2^nd defendant bank on 27.07.2022 upon creation of mortgage over the 1^st applicant’s immovable property by way of Gehan. The applicants have produced copies of deed of loans as Annexure-A1, A3 and copies of declaration of Gehan executed by both applicants as Annexure-A5 and A6 respectively.

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The applicants have admitted in paragraph 5 of the SA that since their loan accounts turned bad, the same was classified as NPA 27.12.2022. The 1^st defendant issued Annexure-A7 demand notice dated 11.8.2023 to the 1^st applicant and A9 demand notice dated 11.08.2023 to the 2^nd applicant calling upon them to repay the outstanding loan due within a period of 60 days from the date of receipt of the demand notice. The receipt of the demand notice is admitted by the applicants. The applicants neither sent any objection/ representation to the demand notice nor did they clear off their liability due to the 2^nd defendant bank.

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Therefore, Possession Notice dated 16.10.2023 Annexure-A11 was issued for symbolically taking physical possession of the secured asset. Subsequently, the 1^st defendant issued Annexure-A13 sale notice dated 14.12.2023 for sale of the secured asset. The applicants filed S.A No.45/2023 challenging the above sale notice. According to the applicants, the above S.A is pending before this Tribunal for consideration.

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The defendants approached the Chief Judicial Magistrate Court, Ernakulam and filed Annexure-A18 affidavit and Annexure-A19 petition under Section 14 (1) of the SARFAESI Act, 2002. The matter was made over to the Additional Chief Judicial Magistrate Court

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Page 2 of 8

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SA No.609 of 2024

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(MPs/MLAs), Ernakulam. Annexure-A17 Order dated 29.06.2024 was passed appointing Advocate Commissioner for taking physical possession of the secured asset. The Advocate Commissioner issued Annexure-A16 notice dated 29.07.2024 to the applicants informing them that he would take physical possession of the secured asset within 14 days from the date of receipt of the notice. The applicants having aggrieved against the above measures filed this S.A seeking for the reliefs stated supra.

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The counsel appearing for the applicants submitted that the date of classification of loan account is not stated in Annexure-A7 and A9 demand notices and that hence further measures pursuant to Annexure-A7 and A9 is liable to be set aside. There is material illegalities in Annexure-A18 affidavit. The date of availment of loan is incorrectly stated in Annexure-A18 affidavit. Annexure-A17 order passed in MC No.93/2024 is incorrect and legally unsustainable. The date of availment of loan has been incorrectly stated in Annexure-A18 affidavit. Annexure-A18 affidavit and A19 petition does not mention the issuance of Annexure-A11 possession notice and it amounts to suppression of material facts. There are seven tenants occupying and carrying on business in the secured asset. The above tenancy right has not been disclosed in Annexure-A18 affidavit.

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The counsel appearing for the applicants further submitted that granting permission by the Additional Chief Judicial Magistrate Court (MPs/MLAs), Ernakulam to the counsel for the petitioner to carry out correction in the affidavit filed by him without filing an affidavit accompanying the petition is legally unsustainable. After taking possession of the very same secured asset as per Annexure-A11 possession notice, obtaining Annexure-A17 order for taking physical possession of the secured asset again is legally unsustainable. The rate of interest charged in the loan accounts is excessive. Therefore, S.A may be allowed as prayed for.

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The counsel appearing for the defendants submitted that the cause of action assailed in SA No.45/2024 is not open for challenge in the present SA as it is barred by constructive resjudicata as well as by law of limitation. The secured asset is a shopping complex with tenants who are not legal tenants and the tenancy right was created after service of demand notice or renewed. There is no legal infirmity in the order passed in MC No.93/2024.

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The counsel appearing for the defendants further submitted that correction was permitted to be carried out in Annexure-A4 affidavit only in respect of minor mistake as to the area of the land and that such mistake can be permitted to be carried out in the affidavit, since proceedings u/s. 14 of the SARFAESI Act 2002 is not a judicial proceeding and it is only an administrative proceeding.

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Page 3 of 8

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SA No.609 of 2024

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Though symbolic possession of the secured asset was taken, there is no bar for the defendants to approach the Chief Judicial Magistrate Court, for taking physical possession of the secured asset. The interest has been charged as per the terms of the loan agreement and prevailing banking practices. Therefore, S.A may be dismissed with costs to the defendants.

¶31

The provisions of Sec.13 (2) of the SARFAESI Act 2002 neither mandates nor does contemplate the mentioning of date of classification of loan account as NPA in the demand notice. Hence this Tribunal does not find any force in the submission of the counsel for the applicants that due to non-mentioning of date of classification of loan account as NPA in Annexure-A7 and A9 demand notices, further measures is liable to be set aside.

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It is not in dispute that both the applicants availed loan on 27.07.2022. Admittedly, in Annexure-A18 affidavit it is stated that, the date of loan is 20.07.2021. Clause (i) to the proviso of Sec.14 (1) of the SARFAESI Act 2002 mandates the Authorized Officer to declare the aggregate amount of financial assistance granted, in the affidavit. Hence it goes without saying that the date of granting financial assistance need not be stated in the affidavit. Be that as it may, the mere wrongly mentioning of date of loan in the affidavit due to mistake or typographical error could not have caused any prejudice to the learned Additional Chief Judicial Magistrate (MPs/MLAs), Ernakulam for passing an order to take physical possession of the secured asset. Therefore, the argument advanced by the counsel for the applicants in this regard does not hold good.

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The applicants have not produced any material before this Tribunal to prove their contention that rate of interest charged is excessive.

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Clause (i) to (ix) to the provisions of Section 14 (1) of the SARFAESI Act 2002 does not mandate the Authorized Officer to mention the issuance of possession notice u/s 13 (4) of the SARFAESI Act 2002 in the affidavit. Therefore, the submission of the counsel for the applicants that omission to mention the issuance of possession notice in the affidavit amounts to suppression of material fact does not hold good.

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The applicants have not produced any valid lease agreement to show that the persons occupying as tenants in the secured assets are legal or statutory tenants as contended by the defendants. Further, the applicants have not specifically averred in the SA as to whether tenancy was created prior to issuance of Annexure-A7 and A9 demand notices. Therefore, non-disclosure of tenancy right in the secured asset in Annexure-A18 does not render the affidavit invalid.

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Page 4 of 8

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SA No.609 of 2024

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In paragraph 2 of Annexure-A18 affidavit, the extent of the property, 2.38 Ares comprised in Sy. No.695/1-2 has been corrected as 2.83 Ares by the counsel for the petitioner (1^st defendant herein), pursuant to the order passed by the learned Additional Chief Judicial Magistrate (MPs/MLAs), Ernakulam in CMP No.4299/2024. The above said correction had to be carried out on account of minor mistake in mentioning the extent of land as 2.38 Ares instead of 2.83 Ares. There is no dispute with regard to the extent of the secured asset. Hence, no prejudice could have been caused to the applicants in any manner due to the aforesaid correction over the extent of the property. Further, the order passed in MC No.93/2024 is an administrative order and not a judicial order. Hence, this Tribunal does not find any merit in the contention of the applicants that permitting the counsel for the petitioner to correct the extent of the property in the affidavit without filing an affidavit accompanying the petition is not legally sustainable.

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Annexure-A11 possession notice was issued for symbolically taking the possession of the secured asset. Annexure-A18 affidavit and A19 petition was filed for the purpose of getting an order to take physical possession of the secured asset u/s 14 (1) of the SARFAESI Act 2002. Therefore, the mere issuance of possession notice u/s 13 (4) of the SARFAESI Act 2002 does not disentitle the Authorized Officer to approach the Chief Judicial Magistrate Court, for taking physical possession of the secured asset. Hence, this Tribunal does not find any merit in the submission of the counsel for the applicants that after taking possession of the secured asset as per Annexure-A11 possession notice, taking physical possession of the very same secured asset by filing application and affidavit u/s. 14 (1) of the SARFAESI Act 2002 is legally unsustainable.

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A perusal of Annexure-A18 affidavit shows that all the statutory requirements contemplated under Clause (i) to (ix) to the proviso of Section 14(1) of the SARFAESI Act, 2002 has been complied with. A perusal of Annexure-A17 order passed in MC No.93/2024 that the Additional Chief Judicial Magistrate Court (MPs/MLAs), Ernakulam after having perused the contention of the affidavit and the documents filed in support of the affidavit and having satisfied over the same appointed Advocate Commissioner to take physical possession of the secured asset. This Tribunal does not find any infirmity or procedural irregularity in the above order.

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One of the reliefs sought for by the applicants in the SA is to grant further time to the 1^st applicant to clear the outstanding and regularize both the loan accounts and to permit the applicants to conduct private sale of the secured asset to clear the dues of the 2^nd defendant bank. The above relief sought for by the applicants does

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Page 5 of 8

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SA No.609 of 2024

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not fall under any of the measures referred to u/s 13 (4) of the SARFAESI Act 2002. It is for the applicants to approach the 2^nd defendant bank for getting the aforesaid relief.

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The applicants have failed to prove their case so as to get the reliefs sought for in the SA. In view of the foregoing reasons, this Tribunal holds that the applicants are not entitled to get the reliefs sought for in this SA.

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Resultantly, S.A No.609 of 2024 stands dismissed. However, there shall be no order as to costs.

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Dictated to Steno, taken down, transcribed, typed by him, corrected and pronounced by me in the open court on this the 30^th day of May, 2025.

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(Su. WILLYAHM) PRESIDING OFFICER

Mj/

Page 6 of 8

SA No.609 of 2024

List of documents filed by the Applicants along with the S.A.

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Sl. No.	Date	Particulars
1.	20.07.2021	True copy of the deed of loan executed by the1^stapplicant.	Annexure-A1
2.	---	True English translation of Annexure- A1deed of loan.	Annexure-A2
3.	20.07.2021	True copy of the deed of loan executed by the 2^nd applicant.	Annexure-A3
4.	---	True English translation of Annexure- A2 deed of loan.	Annexure-A4
5.	---	True copy of the declaration of Gehan in respect oftheloanofthe1^st applicant.	Annexure-A5
6.	---	True copy of the declaration of Gehan in respect oftheloanofthe 2^nd applicant.	Annexure-A6
7.	11.08.2023	True copy of the Demand Notice issued to the1^st applicant	Annexure-A7
8.	---	True English translation of Annexure- A7 DemandNotice	Annexure-A8
9.	11.08.2023	True copy of the Demand Notice issued to the 2^nd applicant	Annexure-A9
10.	---	True English translation of Annexure- A9DemandNotice	Annexure-A10
11.	16.10.2023	True copy of the Possession Notice issued by the1^st defendant.	Annexure-A11
12.	--	True English translation of Annexure- A11 Possession Notice.	Annexure-A12
13.	14.12.2023	True copy of the sale notice issued by the1^st defendant	Annexure-A13
14.	---	True English translation of Annexure- A13 salenotice.	Annexure-A14
15.	---	True copy of S.A. No.45 of 2024 (withoutAnnexures)	Annexure-A15
16.	29.07.2024	True copy of the notice issued by the Advocate Commissioner.	Annexure-A16
17.	29.06.2024	True copy of the order of the Special Additional Chief Judicial Magistrate Court (MPs/MLAs) Ernakulam in M.C. No.93 of2024	Annexure-A17
18.	22.12.2023	True copy of the affidavit filed by the 1^st defendantin MCNo.No.93 of2024.	Annexure-A18

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Page 7 of 8

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SA No.609 of 2024

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19.	22.12.2023	True copy of the petition filed by the 1^st defendantin MCNo.No.93 of2024.	Annexure-A19
20.	20.04.2024	True copy of the correction petition filed by the counsel for the 1^stdefendant in M.C.No.93 of2024.	Annexure-A20
21.	24.10.2024	True scanned copy of the notice issued by the Advocate Commissioner and affixed on the building of the 1^st applicant.	Annexure-A21
22.	---	True copy of the amendment petition (without Annexures) bearing I.A. No.4016 of2024 inS.A.No.609/2024	Annexure-A22
23.	---	True copy of the petition for stay (without Annexures) bearing I.A. No.4017of2024 inS.A. No.609/2024	Annexure-A23
24.	---	True copy of the urgent petition (without Annexures) bearing I.A. No.4015 of2024 inS.A.No.609/2024	Annexure-A24
25.	---	True copy of advance petition bearing ID No. 17271/2024	Annexure-A25
26.	06.11.2024	True scanned copy of the notice issued by the Advocate Commissioner and affixed on the building of the 1^st applicant.	Annexure-A26

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(Su. WILLYAHM) PRESIDING OFFICER

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Mj/

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Page 8 of 8

K S Kader Pillai v. Peoples Urban Cooperative bank

Case brief

What is this about?

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K S Kader Pillai v. Peoples Urban Cooperative bank

Case brief

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