Dismissed

Baby John v. Union Bank of India

DRT27 May 2025SA/614/2023

Case brief

AI extract

What is this about?

The DRT dismissed a Securitization Application challenging proceedings under the SARFAESI Act. The court rejected the applicants' claim that the demand notice was unserved, noting postal receipts and legal presumptions of service. Consequently, no illegality was found, and the application was dismissed.

What did the court decide?

The Securitization Application was dismissed; applicants ordered to pay costs of Rs.10,000/- to the defendant.

Baby John versus Union Bank of India — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

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PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

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Dated this the 27th day of May, 2025

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SECURITISATION APPLICATION NO.614/2023

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Between

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M/s. Baby John, Aged 52 years, S/o. Jain, Residing at Puthuvel, Puthenveedu, Kallayam P.O., Nedumangad, Thiruvananthapuram – 695 043.

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Mercy, Aged 47 years, W/o. Baby John, Residing at Puthuvel, Puthenveedu, Kallayam P.O., Nedumangad, Thiruvananthapuram – 695 043.

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Stanley Josen, Aged 52 years, S/o. Nesan, Charis Villa, Kallayam P.O., Thiruvananthapuram – 695 043. …Applicants

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And

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Union Bank of India, Represented by its Authorized Officer, Peroorkada Branch, Thiruvananthapuram – 695 005. …Defendant

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SA 614/2023

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This Securitization Application having been heard on 24.04.2025 in the presence of Advocates M/s. Dipu James, Ajesh M.A. & Abhishek for the applicants and Advocates M/s. A.S.P. Kurup, Sadchith P.Kurup, C.P. Anil Raj, Siva Suresh & Reshma Raj for the defendant stood over to this day for consideration, the Tribunal delivered the following:

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F I N A L O R D E R

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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 applicant/guarantor has filed this SA under S.17(1) of the SARFAESI Act seeking relief to set aside all securitization proceedings pursuant to issuance of demand notice including the notice issued by the Advocate Commissioner to take physical possession of the secured asset.

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Brief facts of the case :

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2.1 In the SA, the applicants claimed that they availed 2 housing loans, in total 35 lakhs from the defendant bank agreeing to pay monthly instalments of Rs.52,000/-. After availing the loan, they were repaying the same regularly till January, 2023. The first applicant was working outside the country up to June, 2022. As he

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SA 614/2023

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lost his job he returned to India and faced financial difficulty in repaying the loan. The applicants approached the defendant bank to restructure the loan by enhancing the tenure of repayment. But the bank did not listen and issued a demand notice under Section 13(2) of the SARFAESI Act after classifying the loan as ‘NPA’.

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2.2 The applicants approached the Hon’ble High Court of Kerala in W.P.(C) No.19393/2023 for regularization of the account. But the Writ application was dismissed giving option to the applicants to raise the issue in proper Forum.

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2.3 The defendant bank approached the Chief Judicial Magistrate Court, Thiruvananthapuram in M.C. No.775/2023 in a proceeding under Section 14 of the SARFAESI Act. An Advocate Commissioner was appointed to take physical possession of the secured asset.

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2.4. Even after repayment of the major part of the loan the defendant proceeded illegally against the applicants and hence this SA is filed with a prayer to set aside the entire proceeding including the notice issued by the Advocate Commissioner.

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3.1. The defendant filed written statement denying all averments in the SA and claimed interalia that, security interest over subject matter property of an extent of 05.46 Ares with a double storied residential building owned by the 3^rd applicant

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SA 614/2023

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Ms. Mercy was created to secure the loan availed by the applicant Nos.1 and 2.

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3.2. Due to default committed by the applicants in repaying the loan, the securitization proceeding was initiated after classifying the loan as NPA on 21.02.2023 and issued a demand notice under Section 13(2) of the SARFAESI Act. All the statutory measures are duly complied in the securitization proceeding. The defendant approached Hon’ble High Court of Kerala several times and they were permitted to remit the outstanding instalments but they failed to comply the same. In absence of any illegality, the SA is liable to be dismissed.

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From the respective case of both the parties, the following points are emerged for adjudication in this case:

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(i) Whether the securitization proceeding initiated by the defendant suffers from any illegality?

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(ii) Whether the applicants are entitled to get any relief in this case?

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FINDINGS:

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Point No.(i) & (ii):

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Both the points, being interlinked with each other, are taken up together for adjudication. During course of argument, the learned counsel for the applicants did not raise any serious objection against the securitization measure. It is only contended

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SA 614/2023

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that the demand notice was not served on the 3^rd applicant. In absence of service of demand notice, the securitization proceeding is not maintainable and the defendant cannot proceed with the securitization measure and hence the SA may be allowed in setting aside all the proceedings.

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On the other hand, the learned counsel for the defendant submitted that all the relevant documents are produced in this case showing compliance of all the statutory requirements. The applicants filed various cases before the Hon’ble High Court of Kerala. The applicants were permitted to repay the loan in suitable instalments but they did not comply with the same. There is no pleading about non-service of demand notice on the 3^rd applicant. The defendant produced postal receipts in sending the demand notice to all the applicants and the same was received by the first applicant on behalf of applicant Nos.2 and 3. Hence the contention raised by the applicants is not sustainable and the SA, being devoid of any merit, may be dismissed.

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Availing of the loan by the applicant Nos.1 and 2 from the defendant by creating security interest over the property of the 3^rd applicant is not disputed in this case. No material illegality or

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SA 614/2023

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irregularity is pointed out by the applicants in non-compliance of the statutory provisions. The defendant produced all documents showing compliance of the statutory requirements including the postal receipts in sending the demand notice. The postal acknowledgement card produced by the defendant clearly indicates that the applicant No.1 received the demand notice on behalf of applicant Nos.2 and 3 by putting his signature. If in fact the applicant Nos.2 and 3 did not receive such notice, they could have raised the issue with the postal authorities. No such contention or objection was raised earlier in any forum. Under the law if the postal notice is sent by registered post at the correct address of the addressee, it is presumed to have been duly served. The applicants have not adduced any evidence in denying such legal presumption. So also there is no pleading in disputing non-receipt of the demand notice. Hence the contention raised by the applicants in this SA is not acceptable. All the statutory measures, having duly complied and the applicants, having not complied with the direction of the Hon’ble High Court, they are not entitled to get any relief in absence of any illegality in the securitization proceeding. Hence both the points are answered against the applicants.

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SA 614/2023

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Hence it is ordered:-

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ORDER

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In view of the foregoing reasons, this SA, being devoid of any merit, is hereby dismissed with cost. The applicants are liable to pay cost of Rs.10,000/- (Rupees ten thousand only) to the defendant, due to unnecessary delay caused in the securitization proceeding.

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(Dictated to my PA, corrected and pronounced by me in the open Tribunal on this the 27^th day of May, 2025).

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[SOVAN KUMAR DASH] PRESIDING OFFICER

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SA 614/2023

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Documents on the part of the applicants

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Annexures	Date	Particulars of documents
Annexure-A1	24.02.2023	Demand Notice
Annexure-A2	11.08.2023	True copy of the Order in W.P.(C) No.19393 of 2023 of Hon’ble High Court of Kerala.
Annexure-A3		Original copy of section 14 petition numbered as MC No.775/2023 before the Chief Judicial Magistrate Court, Trivandrum.
Annexure-A4	20.10.2023	True copy of Advocate Commissioner’s notice with translation.
Annexure-A5	18.12.2014	Original of the Sale Notice.
Annexure-A6		Original of the postal cover.
Annexure-A7		Track record of Annexure A5 sale notice.
Do Annexures	cuments on t Date	he part of the defendant Particulars of documents
Annexure-R1A		Copy of postal acknowledgement cards evidencing the service of demand notice.
Annexure-R1B		True copy of the Possession Notice issued
		to the applicants containing
		acknowledgement of the same by applicants.
Annexure-R1C		True copy of the photograph showing affixture of the possession notice.
Annexure-R1D	23.08.2023	True copy of paper publication of Possession Notice in Deepika daily.

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SA 614/2023

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Annexure-R1E	23.08.2023	True copy of paper publication of R1B in Business Line English Daily.
Annexure-R1F	15.01.2024	True copy of the Judgment in OP (DRT) 18 of 2024.
Annexure-R1G	05.03.2024	True copy of the Judgment in WP(C) No.7285/2024.
Annexure-R1H		True copy of the postal receipts evidencing the issuance of 13(2) notice to the applicants.

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PRESIDING OFFICER

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IN THE DEBTS RECOVERY TRIBUNAL2, KERALA AT ERNAKULAM

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PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

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Dated this the 27^th day of May, 2025

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S A No.614/2023

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Between

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M/s. Baby John, Aged 52 years, S/o. Jain, Residing at Puthuvel, Puthenveedu, Kallayam P.O., Nedumangad, Thiruvananthapuram–695 043 and Ors. ... Applicants

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And

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Union Bank of India, Represented by its Authorized Officer, Peroorkada Branch, Thiruvananthapuram …Defendant

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F I N A L O R D E R

Baby John v. Union Bank of India

Case brief

What is this about?

What did the court decide?

Baby John v. Union Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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