Dismissed

Classic Steel Traders v. Indian Overseas Bank

DRT14 May 2025SA/670/2023

Case brief

AI extract

What is this about?

This Securitization Application was filed by loan accounts to set aside demand notice and possession proceedings. The Debts Recovery Tribunal held that the statutory steps under the SARFAESI Act were followed and the applicants failed to prove misconduct.

What did the court decide?

The Securitization Application stands dismissed with no order as to costs.

Classic Steel Traders versus Indian Overseas Bank — Company and Corporate | 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 14^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. 670 of 2023

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Between

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M/s. Classic Steel Traders, 33/2074M, N.H Bye Pass,

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Labour Colony Road,

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Thammanam P.O.,

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Kochi – 682 032,

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Represented by its

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Managing partner Ameer P.A.

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Ameer P.A. Puthedath House, Keerthi Nagar Road, Edappally P.O., Elamakkara, Ernakulam -682 024.

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Jaseela Ameer, W/o. Ameer, Puthedath House, Keerthi Nagar Road, Edappally P.O., Elamakkara, Ernakulam -682 024. --- Applicants

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And

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Indian Overseas Bank Represented by its Branch Manager, Palarivattom Branch, Chakos Chambers, Bye Pass Junction, Palarivattom, Ernakulam -682 025.

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SA No.670 of 2023

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The Authorized Officer, Indian Overseas Bank Regional Office, 5^th Floor Vettukattil Building, M.G. Road, Ernakulam-682016.

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--- Defendants

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This Securitization Application coming on 28.02.2025 for final hearing before me in the presence of Mr. Peer Mohamed Khan, Counsel appearing for the Applicants and Mr. Jaykar K.S. Advocate appearing for the defendants and upon hearing arguments of learned Counsels for all 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 07.11.2023 seeking to set aside Annexure-I demand notice, Annexure-IV application filed before CJM Court, Annexure-V order and Annexure-VI notice issued by the Advocate Commissioner and all proceedings taking possession of the properties and to order restricting the defendant bank from evicting the applicants from the properties and to declare that the defendant bank is not entitled to proceed under SARFAESI Act 2002 against the applicants and its properties and allow the cost of this proceeding from the defendants.

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The 1^st applicant is a partnership Firm in which 2^nd applicant is the Managing Partner and the 3^rd applicant is a Partner. There is no dispute with regard to availment of cash credit limit facilities by the applicants from the 1^st defendant bank. There is also no dispute with regard to the rescheduling of the above credit facilities on 26.03.2018, 27.01.2020 and 28.05.2021.

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There is no averment in the SA as to whether the aforesaid credit facility has been secured by creation of equitable mortgage over the immovable property belonging to the 2^nd applicant. But the defendants have averred in their written statement that the above said credit facility was inter-alia was secured by the Equitable mortgage over an extent of 4.14 Ares and building in Sy. No.109/3 of Edappally North Village, Kanayannoor Taluk, belonging to the 2^nd applicant. The above averment of the defendants is neither challenged nor refuted by the applicants by filing any rejoinder to the written statement.

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There is also no specific averment or admission as to whether the applicants were prompt in repayment of the outstanding loan due. However, the defendants have specifically stated in the written statement that due to default in repayment of the outstanding loan

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Page 2 of 5

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SA No.670 of 2023

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due, the loan account of the applicants was classified as NPA on 28.5.2021.

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Annexure-I demand notice dated 03.03.2023 was issued to the applicants calling upon them to repay the outstanding loan due within a period of 60 days from the date of receipt of the demand notice. It is the contention of the applicants that demand notice was not served to all the parties to the loan. But they have not specifically averred in the SA as to which of the applicant the demand notice was not served. The contention of the defendants in the written statement that demand notice was served on all the parties is neither challenged nor refuted by the applicants. It is pertinent to mention herein that copy of the demand notice has been produced by the applicants as Annexure-I. Therefore, this Tribunal does not find any force in the contention of the applicants that demand notice was not served to all the parties to the loan transaction.

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The applicants did not send any objection/representation to the demand notice. But the 1^st applicant sent Annexure-II letter dated 04.07.2023 to the 1^st defendant bank requesting to permit him to pay off the entire debt under OTS scheme. The above letter was not sent within a period of 60 days from the date of receipt of the demand notice. Further, on perusal of the contents of Annexure-II letter shows that is not an objection/representation submitted by the 1^st applicant to the demand notice Annexure-I.

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The applicants have not pointed out in the SA as to how the amount demanded in the demand notice is incorrect and that various hidden charges and costs has been added.

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Since the applicants failed to respond to the demand notice Annexure-I, the defendant approached the Chief Judicial Magistrate Court, Ernakulam and filed Annexure-IV application and affidavit (Annexure-D1) under Section 14 (1) of the SARFAESI Act, 2002. (Certified copies of the application and the affidavit has been produced separately by the defendants along with memo in ID No.3086/2025) Order dated 30.9.2023 Annexure-V in MC No.674/23 came to be passed appointing Advocate Commissioner for taking physical possession of the secured asset. The Advocate Commissioner issued notice dated 26.10.2023 Annexure-VI to the applicants informing them that he would take physical possession of the secured asset after expiry of 14 days from the receipt of the demand notice. The applicants having aggrieved against the above measures, filed this S.A seeking the reliefs stated supra.

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Though the applicants have not filed copy of the affidavit filed by the defendants in MC No.674/23, the copy of the same has been produced by the defendants as Annexure-D1. Certified copy of the

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Page 3 of 5

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SA No.670 of 2023

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same also has been produced along with memo in ID No.3086/2025 by the defendants. A perusal of Annexure-D1 affidavit shows that all the details such as availment of aggregate amount of financial assistance by the applicants from the 1^st defendant bank, upon execution of letter of hypothecation and creation of Equitable mortgage over the immovable property belonging to the 2^nd applicant by way of deposit of title deed, default in repayment of the financial assistance, classification of loan account as NPA, issuance and service of demand notice to the applicants, non-submission of any objection to the demand notice, issuance of possession notice u/s 13 (4) of the SARFAESI Act 2002, affixture and publication of possession notice, non-occupation of the secured asset by any tenant, the total outstanding amount as on 11.07.2023, are furnished. Therefore, it is evident that Annexure-D1 affidavit is in absolute compliance with the statutory requirements contemplated under Clause (i) to (ix) to the provisions of Section 14 (1) of the SARFAESI Act 2002.

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A perusal of Annexure-V order shows that the learned Chief Judicial Magistrate, Ernakulam after having perused the contents of the affidavit and the documents produced along with the affidavit and after having satisfied over the same, passed order appointing Advocate Commissioner to take physical possession of the secured asset. This Tribunal does not find any illegality or infirmity in the above order.

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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.670 of 2023 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 14^th day of May 2025.

(Su. WILLYAHM)

PRESIDING OFFICER

Mj/

Page 4 of 5

SA No.670 of 2023

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

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Sl. No.	Date	Particulars
1.	03.03.2023	True copy of the demand notice issued by the defendant bank.	Annexure-I
2.	04.07.2023	True copy of the request submitted by the1^st applicant.	Annexure-II
3.	31.07.2023	True copy of the judgment in W.P (C) No.24787/2023 by the Hon'ble High Court of Kerala.	Annexure-III
4.	---	True copy of the application in MC NO.674/2023 on the files of CJM Court, Ernakulam.	Annexure-IV
5.	30.09.2023	True copy of the order in MC No.674/2023 on the files of CJM Court, Ernakulam.	Annexure-V
6.	26.10.2023	True copy of the notice issued by the Advocate Commissioner.	Annexure-VI

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List of document filed by the defendants

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Sl.	Date	Particulars
No.
1.	---	True copy of the affidavit filed by the	Annexure-D1
		defendant bank in Crl.MC No.674/2023
		onthefile ofCJMCourt,Ernakulam.

(Su. WILLYAHM)

PRESIDING OFFICER

Mj/

Page 5 of 5

Classic Steel Traders v. Indian Overseas Bank

Case brief

What is this about?

What did the court decide?

Classic Steel Traders v. Indian Overseas Bank

Case brief

What is this about?

What did the court decide?

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