Allowed

Mr Mohammad Hanif v. Canara Bank

DRT24 Oct 2025SA/62/2024

Case brief

AI extract

What is this about?

Mr. Mohammad Hanif challenged a possession notice issued by Canara Bank under Section 13(4) of the SARFAESI Act. The applicant contended non-service of the notice as required by Rule 8(1) of the Security Interest Enforcement Rules. The Tribunal found lack of proof regarding dispatch or service of the possession notice, setting it aside despite the bank's Section 14 order, but directed no redelivery.

What did the court decide?

The impugned possession notice dated 14.03.2024 is set aside and the Respondent is directed not to mutter cost for publication/issuance of the notice.

Mr Mohammad Hanif versus Canara Bank — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

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Dated this 24^th Day of October, 2025

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Present: Sri. T. RAJESH Presiding Officer

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SA.No.62/2024

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BETWEEN:

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Mr. Mohammad Hanif, S/o Mr. Gulvadi Hasnar, Aged about 48 years, DOB: 01-08-1984, R/a Sabina Manzil, Kallukamba Kanyana Village, Kundapur, Udupi Dist- 576 230.

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…APPLICANT

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AND:

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The Authorised officer, Canara Bank, Kundapur Vaderahobli Branch, Bhandarkars Arts and Science College Campus, Vaderahobli, Kundapura Taluk, Udupi District- 576 201.

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...RESPONDENT

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Counsel on record/appeared for:

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Applicant : Sri. Puttaraju Respondent : Sri. Vijay S

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FINAL ORDER

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The possession notice dated 14.03.2024 issued u/s 13(4) of the SARFEASI Act is challenged in this Securitization Application, in short S.A is filed under sub section [1] of S.17 of the Securitization And Reconstruction of Financial Asset and Enforcement of Security Interest

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SA 62/2024

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Act,2002, herein after referred to as “SARFEASI Act” or “The ACT” by the borrower.

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The borrower admits to have availed a housing loan and an over draft facility. The applicant is not disputing the disbursement of loan amounts but contends that the repayments made by him are not properly given credit to. It is the case of the applicant that the impugned possession notice is not served on the borrowers as mandated under 8(1) of Security Interest Enforcement Rules. The applicant is also putting forth his contentions as to the loss of his business due to Covid-19. In the grounds to the SA the applicant apart from reiterating the above contentions is also putting forth their case that security interest is not registered with central registry and also reiterating the non-compliance of Rule 3, 8(1) & 8 (2) of Security Interest Enforcement Rules.

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Along with the SA the applicant has produced the following document: ANNEXURE A-1:- Possession notice dated 14.03.2024.

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The respondent had filed their objections contending that the borrower had availed four credit facilities which includes housing loan, cash credit facility, overdraft renewal and additional housing loan. It is stated that because of the default committed in repayment the account was classified as NPA on 29.11.2023 and demand notice was issued on 14.12.2023. It is also contended that since the acknowledgement card of demand notice of all the borrowers were not returned the demand notice is published in two dailies. It is further case of the respondent

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SA 62/2024

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that since no repayment was forthcoming, the possession notice was issued, affixed and published as required under the statute. It is also pointed by the respondent that they have obtained the S.14 Order from the Ld. Magistrate.

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Along with the objections the respondent had produced the following

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documents:-

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1. 22.08.2015 Loan sanction letter	10. 14.12.2023Demand notice issued to the legal heirs of Mr. Gulawadi Hasanar
2. 04.01.2017 Loan sanction letter	11. Paper publication of demand notice
3. 08.03.2021 Loan sanction letter	12. 14.03.2024 Possession notice issued by the respondent bank to the appellant
4. 02.06.2022 Loan sanction letter	13. Photograph of the possession affixed on the schedule property
5.21.08.2015 Simple mortgage deed executed by Mr. Gulawadi Hasanar in favour of the applicant bank	14. paper publication of the possession notice affixed on the schedule property
6. 22.12.2015 Simple mortgage deed executed by Mr. Gulwadi Hasanar in favour of the applicant bank	15. 01.04.2025 Order passed by CJM, Udupi in C.Misc No. 67/2025
7. CERSAI registration certificate	16. Statement of account in respect of housing loan
8. 14.12.2023 Demand notice issued by the respondent bank to the appellant	17. Statement of account in respect of overdraft facility
9. Served acknowledgement	18. Statement of account in respect of OCC facility

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Heard the counsel for both sides and considered rival contentions, pleadings and documents

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In view of the fact that the applicant is not disputing the disbursement of loan, creation of security interest. The only question that is to be gone into is the legality of the procedure initiated and the measures taken leading to the issuance of the impugned possession notice.

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SA 62/2024

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The first and foremost contention of the applicant regarding the nonservice of the notices is tried to be rebutted by producing the copy of the demand notice and paper publication of the demand notice. Going by the pleadings in the SA the applicant is not having any serious dispute as to the service of the demand notice. Though a specific contention is raised as to mode of service of the impugned possession notice, the respondent has put forth the proof as to the publication and affixture of the same and no proof as to the dispatch of the possession notice is forthcoming along with the objections filed by the respondent. Even though the copy of possession notice is produced along with the SA, this Tribunal is of the view that the same will be preclude the applicant from taking contention as to the deficiency in the service of the same.

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The respondent had produced the order procured from the Ld. Magistrate the same is not a subject matter of the SA and this Tribunal is not adverting to the same. The respondent had successfully rebutted the next contention of the applicant as to the alleged non registration of the security interest with the central registry as the proof as to the compliance of S.26D is produced by the respondent along with their objections.

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Taking note of the discussions as held above it is to be concluded that the respondent has not managed to rebutt the specific contention of the applicant as to the alleged non- compliance of Rule 8(1) of Security Interest Enforcement Rules as no proof as to dispatch/ service of the

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SA 62/2024

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possession notice is produced along with the objections.

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In view of the above this Tribunal is of the view that even though

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there is proof of compliance of Rule 3, the contention of the applicant that measures are liable to be struck down for the reason of noncompliance of Rule 8(1) of Security Interest Enforcement Rules. In view of the fact that S.14 Order is procured by the respondent this Tribunal deems it fit not to direct redeliver of the property if the possession is taken. This Tribunal is not going into legality of the procurement of S.14 Order as the same is not subject matter of the SA.

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In the result,

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SA 62/2024 stands allowed,

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The impugned possession notice issued by the respondent dated 14.03.2024 is set aside,

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The respondent is directed not to mut the cost of publication and issuance of the impugned possession notice on the applicant if any, if any debit is made necessary revisals are to be made.

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In the facts and circumstance no order as to cost.

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Interim order, if any granted and subsisting till this day stands vacated.

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Pending I.A’s if any are all disposed of in terms of this Order.

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No order as to cost.

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Issue copy to all parties concerned.

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[Dictated to the Stenographer (AJ), transcribed by her, corrected and signed and pronounced by me in the

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Open Court, this the 24^th Day of October, 2025].

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PRESIDING OFFICER

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Sd/- (T. RAJESH)

Mr Mohammad Hanif v. Canara Bank

Case brief

What is this about?

What did the court decide?

Mr Mohammad Hanif v. Canara Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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