Debts Recovery Tribunal dismissed the applicant's securitization application challenging issuance of demand notice and order for possession. Tribunal held insurance dispute is for consumer forum and CJM's role under Section 14 is administrative.
SA No.849/2024 dismissed without costs.
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IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM
PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER
Dated this the 07th day of February, 2025
SECURITIZATION APPLICATION No.849/2024
Between
Sosamma Varghese, W/o.late Varghese, Thekkevila Veedu, Pooyappally P.O., Kollam – 691 537. …Applicant
And
Opp. Museum West Gate, Vikas Bhavan P.O., Thiruvananthapuram - 695 033. …Defendants
This Securitization Application having been heard on 08.01.2025
in the presence of Advocates M/s.P.Shrihari and Mary Nithiya.K.J. for the applicant and Advocates M/s.Tom K.Thomas and Bini Das for the defendants and stood over to this day for consideration, the Tribunal delivered the following:
F I N A L O R D E R
Challenging the securitization proceeding initiated by the defendants under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security
SA 849/2024
2
Interest Act, 2002 (hereinafter referred to as ‘the SARFAESI Act’), the applicant/borrower has filed this SA under S.17(1) of the SARFAESI Act.
Brief facts of the case :
SA 849/2024
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notice, objection was raised by the applicant which was replied mechanically by the defendants. Subsequently, the defendants filed application under S.14 of the SARFAESI Act before the CJM, Kollam to take physical possession of the secured asset which is not in accordance with the statutory requirements. Hence the SA is filed challenging the entire securitization measures starting from the stage of issuance of demand notice and notice issued by the Advocate Commissioner to take possession of the secured asset, with further prayer to set aside the same.
FINDINGS:
Point Nos.(i) & (ii):
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is not disputed in the SA that the applicant and her son Mr.Praveen Varghese availed a home loan from the 1st defendant. The contention raised by the applicant is that the loan was insured with SBI life insurance and Rs.30,000/- was sanctioned towards premium for insurance policy but no material is filed in support of the same. Besides the same, the matter was challenged before the Kerala State Consumer Disputes Redressal Commission which was dismissed on 26.07.2024 vide Annexure-B1 order produced by the defendants. The applicant claims that she filed an appeal against the same. Whether there was insurance policy or not, it is a matter to be adjudicated by competent forum and the securitization measures cannot be obstructed due to the dispute of Insurance of the home loan availed by the applicant.
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S.14 of the SARFAESI Act. It is further claimed that the CJM has not recorded his satisfaction while passing the order and hence the same is vitiated. R.2(a) of the Security Interest (Enforcement) Rules, 2002 defines the term ‘authorised officer’ which reads as follows:-
“authorised officer” means an officer not less than a chief manager of a public sector bank or equivalent, as specified by the Board of Directors or Board of Trustees of the secured creditor or any other person or authority exercising powers of superintendence, direction and control of the business or affairs of the secured creditor, as the case may be, to exercise the rights of a secured creditor under the Act;
In view of this statutory provision, the Authorised Officer is entrusted with all powers of the secured creditor and he has competency to file application under S.14 of the SARFAESI Act and engage a counsel to present the same. Merely because the application is signed by an Advocate being engaged by the Authorised Officer, it cannot be said that the order passed by the Chief Judicial Magistrate is illegal. The learned CJM has considered all the materials in the order dated 21.11.2023 marked Annexure-A6 and thereafter passed the order in appointing an Advocate Commissioner to take possession of the secured asset which amounts to satisfaction on the part of the Chief Judicial Magistrate. Merely because the word satisfaction is not mentioned in the order, it cannot be said that the order is vitiated and the defendants cannot proceed with the same.
“8.1 ……………. Thus, we reiterate that the step to be taken by the CMM/DM under Section 14 of the SARFAESI Act, is a ministerial step.
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While disposing of the application under Section 14 of the SARFAESI Act, no element of quasi-judicial function or application of mind would require. The Magistrate has to adjudicate and decide the correctness of the information given in the application and nothing more. Therefore, Section 14 does not involve an adjudicatory process qua points raised by the borrower against the secured creditor taking possession of secured assets.”
In view of this ratio, the CJM has no power to adjudicate any controversy and his function is administrative in nature and to assist the secured creditor in taking possession of the secured asset. Even if there is any defect in such order, in absence of substantial prejudice being caused to the applicant, securitization proceeding cannot be said as illegal. The applicant has failed to establish any illegality in the securitization proceeding to intervene with the same. In such premises, the applicant is not entitled to get any relief in this case. Hence both the points are answered against the applicant.
Hence it is ordered:-
ORDER
(Dictated to my PA, corrected and pronounced by me in the open Tribunal on this the 7th day of February, 2025)
[SOVAN KUMAR DASH] PRESIDING OFFICER
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Documents on the part of the applicant
| Annexures | Date | Particulars of documents |
|---|---|---|
| Annexure-A1 | 07.03.2018 | Copy of C.C.No.24/2018 filed by the applicant before the Kerala State Consumer |
| Disputes Redressal Commission, Thiruvananthapuram. |
||
| Annexure-A2 | 25.06.2018 | Copy of demand notice under S.13(2) of the SARFAESI Act issued to the applicant. |
| Annexure-A3 | 23.07.2020 | Copy of demand notice under S.13(2) of the SARFAESI Act issued to the applicant. |
| Annexure-A4 | 17.08.2020 | Copy of reply given to the applicant by the AGM of the defendant bank. |
| Annexure-A5 | 10.10.2023 | Copy of S.14 application filed by the defendant bank before the CJM, Kollam. |
| Annexure-A6 | 21.11.2023 | Copy of order in MC No.773/2023 of the CJM, Kollam. |
| Annexure-A7 | 16.11.2024 | Copy of notice issued by the Advocate Commissioner in MC No.773/2023. |
| D Annexure-B1 |
ocuments on 26.07.2024 |
the part of the defendants Copy of order in C.C.No.24/2018 passed by |
| the Consumer Redressal Commission, Thiruvananthapuram. |
PRESIDING OFFICER
IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM
PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER
Dated the 7th February, 2025
SA No.849/2024
Between
Sosamma Varghese, W/o.late Varghese, Thekkevila Veedu, Pooyappally P.O., Kollam – 691 537.
…Applicant
And
State Bank of India, Pooyapally Branch, P.B.No.1, ChamaviladubyAuditorium Building, Pooyapally P.O. - 691 537, Represented by its Manager & another.
…Defendants
F I N A L O R D E R
2 issues framed by the court
Whether the securitization proceedings initiated by the defendants suffer from any illegality, defect, or irregularity to be interdicted?
Whether the applicant is entitled to any relief in this case?
Colour shows how this judgement treated each authority
M/s.R.D.Jain and Co. vs. Capital First Ltd. & othersApplied¶42
M/s.R.D.Jain and Co. vs. Capital First Ltd. & others (judgment dated 27.07.2022 in Civil Appeal No.175/2022)
5 provisions across 3 enactments
Sosamma Varghese
State Bank of India
Sovan Kumar Dash
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
