Dismissed

Shinu Jacob v. South Indian Bank

DRT28 Jan 2025SA/93/2024

Case brief

AI extract

What is this about?

Debts Recovery Tribunal dismissed an application seeking to set aside notices under the SARFAESI Act. The Tribunal held the security interest was valid, NPA classification was lawful, and the bank's actions included no procedural illegality, rejecting the applicants' contentions.

What did the court decide?

Security interest over immovable properties held valid; applicant's application to set aside notices and upgrade facility dismissed.

Shinu Jacob versus South Indian Bank — Banking and Recovery | DRT (2025)

¶1

Fair Order

¶2

IN THE DEBTS RECOVERY TRIBUNAL - 1 AT ERNAKULAM

¶3

DATED THIS 28^th DAY OF JANUARY, 2025

¶4

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

¶5

S.A No. 93 of 2024

¶6

Between

¶7

Shinu Jacob, S/o. late C.P. Jacob, Residing at Cheerakathottam, Chathamattom P.O., Kedavoor, Ernakulam-686671.

¶8

Elizabeth Adai @ Elizabeth S. Jacob, W/o. Shinu Jacob, Residing at Cheerakathottam, Chathamattom P.O., Kedavoor, Ernakulam-686671.

¶9

--- Applicants

¶10

And

¶11

The South Indian Bank Ltd., Regional Office, Ernakulam, SIB Building, Infopark Road, Rajagiri Valley P.O., Kakkanad, Kochi – 682 039, Rep. by its Authorized Officer.

¶12

--- Defendant

¶13

This Securitization Application coming on 01.10.2024 for final hearing before me in the presence of Mr. Tony Thomas Inchiparambil, Advocate for the Applicants and Mr. C. Muralikrishnan, Advocate for the defendant and upon hearing arguments of learned Counsel for both the parties and upon perusing the material on records, this Tribunal delivered the following:

¶14

SA No.93 of 2024

¶15

O R D E R

¶16

This Securitisation Application was filed on 31.01.2024 seeking to set aside Annexure-A1 demand notice and Annexure-A2 possession notice, Annexure-A6 application, Annexure-A7 order and AnnexureA9 notice issued by the Advocate Commissioner and to allow the applicants to upgrade the overdraft facility by paying the defaulted interest and also to permit the applicants to regularize the term loan after paying the present arrears.

¶17

The applicants have admitted the availment of credit facilities from the defendant bank. In Annexure-A1 and A3 Demand Notices sent to the applicant, it is specifically stated that applicants have created security interest in respect of the immovable properties more fully shown in Schedule–II of Demand Notices belonging to them. The applicants did not send any objection to the defendant bank denying the creation of security interest over the aforesaid properties. The applicants have also not given any convincing reason in the SA as to why they deposited the title deeds pertaining to their immovable properties with the defendant bank. Therefore, the contention of the applicants that there is no valid and enforceable mortgage by deposit of title deeds is absolutely incorrect.

¶18

It cannot be disputed that the 1^st applicant who is the proprietor of M/s. Matha Latex availed credit facilities from Muvattupuzha branch of the defendant bank and that the 2^nd applicant availed credit facilities from Pattimattom branch of the defendant bank. Since the 1^st applicant defaulted in repayment of the outstanding loan due, his loan account was classified as NPA and Demand Notice Annexure-A1 dated 11.06.2021 was issued. Since he failed to clear off his liability due to the defendant bank, Annexure-A2 possession notice dated 10.09.2021 was issued. Since the 2^nd applicant defaulted in repayment of the outstanding loan due, her loan account was classified as NPA on 03.05.2022. Hence Annexure-A3 Demand Notice dated 04.08.2022 was issued to her. Since she failed to discharge her liability due to the defendant bank, Annexure-A4 possession notice dated 08.11.2022 was issued.

¶19

The applicants have admitted the receipt of the Demand Notices. Admittedly, the applicants neither sent any objection/ representation to the demand notices nor did they clear off their liability due to the defendant bank.

¶20

Page 2 of 6

¶21

SA No.93 of 2024

¶22

Hence the defendant bank issued possession notice dated 10.09.2021 Annexure-A2 and Annexure-A4 possession notice dated 08.11.2022 for symbolically taking physical possession of the secured assets. Therefore, it is clear that Annexure-A1 and A3 Demand Notices are pertaining to different credit facilities availed by the different borrowers from different branches. Similarly, two different possession notices were issued to the applicants separately for symbolically taking their mortgaged properties. Hence the contention of the applicants that two separate proceedings in respect of same properties has been initiated and that the defendant bank ought to have declared all accounts of the applicants as NPA and to have proceeded against the properties in a single proceeding is absolutely misconceived.

¶23

It is submitted by the counsel appearing for the applicants that Item No.1 in the schedule to Annexure-A2 possession notice is agricultural property. The counsel appearing for the defendant bank countered the above submission of the counsel for the applicants contending that there is a residential building in the above said property and that the property is classified as Purayidom/dry land in revenue records.

¶24

Annexure-A5 is the certificate issued by the Agricultural Officer, Paingottoor wherein it is stated that Shinu Jacob (1^st applicant herein) is a bonafide farmer cultivating various crops like, coconut, areacanut, pepper, banana, tubers and turmeric in Sy.Nos.1084/1-6, and 1084/1-11-3 of Paingottoor Grama Panchayath. There is no specific mention in Annexure-A5 as to whether the Agricultural Officer inspected the aforesaid properties and ascertained the nature of the properties. Hence it appears that the above said Agricultural officer issued Annexure-A5 without ascertaining the nature of the lands. Further the applicants have not produced any material before this Tribunal to show that the secured assets were the agricultural properties on the date of creation of security interest over the same. Therefore, this Tribunal is unable to accept the contention of the applicants that item No.1 in the schedule to Annexure-A2 possession notice is agricultural land.

¶25

Thereafter the defendant bank approached the Chief Judicial Magistrate Court Ernakulam and filed application and affidavit Annexure-A6 under Section 14 (1) of the SARFAESI Act 2002. The matter was made over to the Additional Chief Judicial Magistrate (MPs/MLAs) Ernakulam for disposal. Order came to be passed appointing Advocate Commissioner for taking physical possession of the secured asset. The Advocate Commissioner issued notice dated 23.12.2023, Annexure-A8 to the applicants informing them that he

¶26

Page 3 of 6

¶27

SA No.93 of 2024

¶28

would take physical possession of the secured asset. The applicants having aggrieved against the aforesaid measures have filed this S.A seeking for the reliefs sought for supra.

¶29

It is the contention of the applicants that when the Advocate Commissioner went to the secured assets, in order to defer taking physical possession of the secured assets, the applicants transferred an amount of Rs.5,00,000/- to the defendant bank through the account of the prospective purchaser who intended to purchase item No.2 of the properties and that with the consent of the Branch Manager of the defendant bank, an agreement as Annexure-A9 was executed between the applicants and the prospective purchaser on 23.11.2022 and that possession of the 2^nd item of the properties was handed over to the prospective purchaser and that the purchaser is still ready to pay the amount stipulated in Annexure-A9 agreement, if the property is released to him.

¶30

The defendant bank has refuted the above averments of the applicants in its written statement. It is contended that it had no information regarding the existence of any such agreement. The averment of the applicants with regard to handing over of ten cheques by the prospective purchaser to the Branch Manager of the Muvattupuzha is specifically denied in the written statement of the defendant bank. According to the defendant bank, neither the bank nor its officials received the aforesaid cheques and the Branch Manager never agreed to close the loan account and the averment that Advocate Commissioner was present at the time of handing over of the cheques by the prospective purchaser, is false. The applicants have not produced any proof of document to substantiate the aforesaid averments and also transfer of an amount of Rs.5,00,000/ to the defendant bank through the account of the prospective purchaser, who intended to purchase the item No.2 of the properties. AnnexureA9 sale agreement appears to be a self-serving document created by the applicants for the purpose of this case. Therefore, this Tribunal is not inclined to accept the above averment of the applicants.

¶31

It is further submitted by the counsel for the applicant that the total outstanding amount as on the date of filing of the affidavit is not mentioned in Annexure-A6 affidavit. Apart from the aforesaid contention, there are no other averments in the SA with regard to Annexure-A6 application and affidavit. In Annexure-A6 application and affidavit, the total outstanding amount as on 15.01.2022 is mentioned as Rs.1,43,23,822.55. 15.01.2022 is the date on which application and affidavit were filed in MC No.126/2022 before the Chief Judicial Magistrate Court, Ernakulam. Therefore the above submission of the counsel for the applicants is incorrect.

¶32

Page 4 of 6

¶33

SA No.93 of 2024

¶34

Since both applicants have created security interest over their immovable properties, the defendant bank is entitled to proceed either against the property of the 1^st applicant or the property of the 2^nd applicant or both the properties. Therefore, the contention of the applicants that though there are other properties mortgaged with the defendant bank, it has chosen to proceed against the residential property of the applicants in order to trouble him does not hold good.

¶35

The defendant bank has produced copy of asset ID Based Report as Annexure-B1 in order to prove its contention that security interest over the secured asset had been registered with the Central Registry.

¶36

This Tribunal does not find any procedural irregularity or illegality in the measures initiated by the defendant bank in respect of the secured asset. The applicants have also failed to establish their case so as to get the reliefs sought for in the SA. Therefore, this Tribunal holds that that the applicants are not entitled to get the reliefs sought for in the SA.

¶37

Resultantly, S.A No.93 of 2024 stands dismissed. However, there shall be no order as to costs.

¶38

Dictated to Steno, taken down, transcribed, typed by him, corrected and pronounced by me in the open court on this the 28^th day of January, 2025.

¶39

(Su. WILLYAHM) PRESIDING OFFICER

Mj/

Page 5 of 6

SA No.93 of 2024

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

¶44

Sl. No.	Date	Particulars
1.	11.06.2021	Copy of Demand notice issued by the defendant bank.	Annexure-A1
2.	10.09.2021	Copy of possession notice issued by the defendant bank.	Annexure-A2
3.	04.08.2022	Copy of Demand notice issued by the defendant bank.	Annexure-A3
4.	08.11.2022	Copy of possession notice issued by the defendant bank.	Annexure-A4
5.	13.06.2022	Copy of certificate issued by the Agricultural Officer, Krishi Bhavan, Paingottoor P.O.	Annexure-A5
6.	15.01.2022	Copy of application and affidavit filed by the defendant before the Chief Judicial Magistrate CourtErnakulam.	Annexure-A6
7.	04.12.2023	Copy of the daily status published in e- court of the Additional Chief Judicial Magistrate Court Ernakulam in MC No.126/2022.	Annexure-A7
8.	23.12.2023	Copy of the notice of the Advocate Commissioner.	Annexure-A8
9.	23.11.2022	Copy of the sale agreement by the 2^nd applicant.	Annexure-A9

¶45

List of documents filed by the defendant along with the written statement

¶46

Sl.	Date		P	articulars
No.
1.	---	True copy	of	the receipt for	the	Annexure-D1
		registration central regis	of try.	security interest	with

(Su. WILLYAHM)

PRESIDING OFFICER

Mj/

Page 6 of 6

Shinu Jacob v. South Indian Bank

Case brief

What is this about?

What did the court decide?

Shinu Jacob v. South Indian Bank

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Punjab National Bank versus Anil Kumar Singh and others

Bank of Baroda versus M/S S S Infra

Punjab National Bank versus Kavya Udyog

Mahadev Telecom versus Au Small Finance Bank Limited

Amarjeet Kaur versus Punjab National Bank

Uco Bank versus Sh. Ajay Sharma (Deceased)