Dismissed

Shoji Paul v. Union Bank of India

DRT29 Jan 2025SA/97/2023

Case brief

AI extract

What is this about?

Debts Recovery Tribunal dismissed the applicant's Securitization Application challenging a bank's possession and sale notices under SARFAESI Act. The court held that statutory requirements were complied with and insufficient proven irregularity existed to intervene.

What did the court decide?

Application dismissed; costs of Rs.10,000 awarded to the defendant.

Shoji Paul versus Union Bank of India — Company and Corporate | 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 29^th day of January, 2025

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SECURITIZATION APPLICATION No.97/2023

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Between

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Shoji Paul, S/o.V.S.Paul, Vadhyamparambil House, Parathode P.O., Konnathady, Idukki District – 685 571. …Applicant

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And

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Authorised Officer, Union Bank of India, 3^rd Floor, Amala Towers, Adichira Junction, Kottayam – 786 630. …Defendant

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This Securitization Application having been heard on 08.01.2025

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in the presence of Advocates M/s.S.Sreekala and S.Shiv Shankar for the applicant and Advocates M/s.A.S.P.Kurup, Sadchith P.Kurup, C.P.Anil Raj, Siva Suresh, Athira Vijayan, B.Sreedevi and Swathy Krishna P.H. for the defendant, and 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 proceeding 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/borrower has filed this SA under S.17(1) of the SARFAESI Act.

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SA 97/2023

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Brief facts of the case :

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In the SA the applicant has pleaded that he availed agricultural cash credit facility from the defendant bank in the year 2017 which was restructured as working capital term loan of Rs.17,82,326.50. As security for the loan, the applicant mortgaged his residential house described in the application. Due to the outbreak of Covid-19 pandemic, all the agricultural activities came to a standstill which resulted in huge financial crisis and the applicant could not pay the instalments promptly. Consequently, the loan was classified as NPA on 29.12.2020 and demand notice under S.13(2) of the SARFAESI Act was issued on 29.06.2022 calling the applicant to pay the outstanding amount of Rs.25,40,417.45. After receipt of the demand notice, the applicant and his sister-in-law approached the Hon'ble High Court of Kerala by filing W.P.(C) No.25352/2022 seeking indulgence to repay the overdue amount of Rs.10.15 lakhs along with interest and costs in 15 equated monthly instalments. But due to financial constraints, the applicant could not comply the order. Thereafter, the defendant issued possession notice under S.13(4) of the SARFAESI Act on 06.12.2022 claiming an amount of Rs.25,83,849.45. Subsequently, the defendant issued sale notice marked Annexure-A4. The reserve price was fixed without considering the market value of the property. All the statutory requirements are not followed in issuing the sale notice. Hence the SA is filed challenging the possession notice as well as sale notice with a prayer to set aside the same.

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SA 97/2023

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The defendant filed written statement denying the averments in the SA and claimed inter alia that due to the default committed by the applicant in repaying the loan, the loan was classified as NPA on 29.12.2020. The demand notice under S.13(2) of the SARFAESI Act was issued on 29.06.2022 calling the applicant to repay the outstanding amount. Even after the order was passed by the Hon'ble High Court of Kerala giving indulgence to the applicant, he did not take any step to redeem the loan. Consequently, notice under S.13(4) of the SARFAESI Act was issued for taking possession of the secured asset. All the statutory measures are duly followed. After obtaining valuation report, sale notice was issued. The contention on this aspect is not correct and has no basis and hence the SA may be dismissed.

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From the respective case of the applicant and defendant, the following points are emerged for adjudication in this case:

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(i) Whether the securitization proceedings suffer from any illegality or defect or irregularity to intervene with the same?

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(ii) Whether the applicant is entitled to get any relief in this case?

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FINDINGS:

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Point Nos.(i) & (ii):

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For the sake of convenience, both the points, being interlinked with each other, are taken up together for adjudication. Admittedly, the applicant availed loan from the defendant and due to default in repayment, securitization measure was initiated for

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SA 97/2023

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realisation of the outstanding dues. Due to non-payment of the amount demanded in the demand notice issued under securitization.13(2) of the SARFAESI act, the defendant issued possession notice under S.13(4) of the SARFAESI Act and relevant documents regarding compliance of the statutory requirements are produced as Annexures-R1A and R1B. The defendant has also produced valuation report marked Annexure-R1C which was obtained before putting the property for sale.

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During arguments, learned counsel for the applicant did not dispute about availing of loan. It is contended that the defendant has not followed the statutory procedures and reserve price was not fixed as per the actual valuation of the property. The defendant has produced all the relevant documents showing compliance of the statutory requirements in issuing possession notice under S.13(4) of the SARFAESI Act which cannot be said as illegal. So far as AnnexureA4 sale notice is concerned, the sale did not fructify due to want of bidders. During pendency of the SA, the defendant issued fresh sale notices marked Annexures-A5 and A6 but the same also did not materialize for want of bidders. Hence there is no necessity to adjudicate about the validity and legality of such notices in this proceeding. The applicant has miserably failed to establish any illegality in the securitization proceedings to intervene with the same and he is not entitled to get any relief. Both the points are answered against him.

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SA 97/2023

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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. Since the applicant has raised vexatious claim causing unnecessary delay in the securitization proceeding, he is liable to pay costs of Rs.10,000/- (Rupees ten thousand only) to the defendant.

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(Dictated to my PA, corrected and pronounced by me in the open Tribunal on this the 29^th day of January, 2025)

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[SOVAN KUMAR DASH] PRESIDING OFFICER

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SA 447/2024

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Documents on the part of the applicant

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Annexures	Date	Partic	ulars	of do	cuments
Annexure-A1	29.06.2022	Copy applic	of ant	dema by the	nd notice issued to defendant.	the
Annexure-A2	17.08.2022	Copy No.25 of Ker	of 352 ala.	the /2022	judgment in W. of the Hon'ble High C	P.(C) ourt
Annexure-A3	06.12.2022	Copy applic	of ant.	posses	sion notice issued to	the
Annexure-A4	06.01.2023	Copy	of sa	le not	ice issued to the applic	ant.
Annexure-A5	31.03.2023	Copy defen	of dant	sale .	notice issued by	the
Annexure-A6	19.05.2023	Copy defen	of dant	sale .	notice issued by	the

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Documents on the part of the defendant

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Annexure-R1A	09.12.2022	Copy of publication of possession notice in Mangalam daily.
Annexure-R1B	09.12.2022	Copy of publication of possession notice in The New Indian Express daily.
Annexure-R1C	07.12.2022	Copy of valuation report in respect of the secured asset.

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PRESIDING OFFICER

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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 the 29^th January, 2025

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SA No.97/2023

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Between

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Shoji Paul, S/o.V.S.Paul, Vadhyamparambil House, Parathode P.O., Konnathady, Idukki District. …Applicant

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And

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Authorised Officer, Union Bank of India, 3^rd Floor, Amala Towers, Adichira Junction, Kottayam – 786 630. …Defendant

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F I N A L O R D E R

Shoji Paul v. Union Bank of India

Case brief

What is this about?

What did the court decide?

Shoji Paul v. Union Bank of India

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

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