Dismissed

M/S. Yenfor Ventures Pvt. Ltd. v. State Bank of India

Kerala HC13 Mar 2024OP (DRT)/1/2024

Case brief

AI extract

What is this about?

Borrowers challenged DRT orders declining stay and a bank sale notice in an OP(DRT). The High Court held efficacious alternate remedies exist before the DRAT under Sections 17 and 18 of the SARFAESI Act, found no arbitrariness warranting Article 227 interference, and dismissed the petition with liberty.

What did the court decide?

None granted; liberty given to petitioners to approach DRT/DRAT if so advised.

M/S. Yenfor Ventures Pvt. Ltd. Vs State Bank of India — Banking and Recovery | Kerala HC (2024)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR.JUSTICE N.NAGARESH

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WEDNESDAY, THE 13^TH DAY OF MARCH 2024/23RD PHALGUNA, 1945

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OP (DRT) NO. 1 OF 2024

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SA NO.363/2023 OF THE DEBTS RECOVERY TRIBUNAL-I, ERNAKULAM

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PETITIONERS/APPELLANTS/APPLICANTS:

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1 M/S.YENFOR VENTURES PVT. LTD. REPRESENTED BY ITS MANAGING DIRECTOR MUHAMMAD NAJAD, AGED 38 YEARS,

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S/O. KUNHAMMAD KUTTY, DOOR NO.4/224C,

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KAM TOWER, KADEKKA CHALIL, KUTTIADY P.O, KOZHIKODE, PIN - 673508

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2 MUHAMMAD NAJAD AGED 38 YEARS

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S/O. KUNJAHAMMED KUTTY, ADEKKACHALIL HOUSE, KUTTIADI P.O, KOZHIKODE, PIN - 673508

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3 K.C. KUNJAHAMMED KUTTY AGED 66 YEARS

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S/O.AMMAD, KADEKKACHALIL HOUSE, KUTTIADI P.O, KOZHIKODE, PIN - 673508

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4 MOHAMMED NAJMAL AGED 41 YEARS S/O. KUNJAHAMMED KUTTY, KADEKKACHALIL HOUSE, KUTTIADI P.O, KOZHIKODE, PIN - 673508

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5 NAJMUDHEEN M.K AGED 47 YEARS S/O.MOIDU, MALAYANA KANDU HOUSE, KUTTIADY P.O, VADAKARA, KOZHIKODE, PIN - 673508

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6 MOHAMMED NAJEEL AGED 36 YEARS S/O. KUNJAHAMMED KUTTY, KADEKKACHALIL HOUSE, KUTTIADI P.O, KOZHIKODE, PIN – 673508

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O.P.(DRT) No.1/2024

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: 2 :

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BY ADVS. V.K.PEERMOHAMED KHAN P.B.KRISHNAN GIRISH KUMAR V.C ASNA M.B. M.S.ANEER

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RESPONDENTS:

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1 STATE BANK OF INDIA REP. BY ITS BRANCH MANAGER, KUTTIADI BRANCH, KUTTIADI, KOZHIKODE, PIN – 673508

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2 THE AUTHORIZED OFFICER STATE BANK OF INDIA, STRESSED ASSETS MANAGEMENT BRANCH, COIMBATORE, RAJA PLAZA, FIRST FLOOR, NO.1112, AVINASHI ROAD, COIMBATORE, PIN – 641037

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BY ADV TOM K.THOMAS

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THIS OP (DEBT RECOVERY TRIBUNAL) HAVING COME UP FOR ADMISSION ON 13.03.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

O.P.(DRT) No.1/2024

: 3 :

N. NAGARESH, J.

Dated this the 13^th day of March, 2024

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J U D G M E N T

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~ ~ ~ ~ ~ ~ ~ ~ ~

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Aggrieved by the proceedings of the Debts

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Recovery Tribunal-I, Ernakulam in SA No.363/2023, the petitioners are before this Court seeking to quash Exts.P2, P3 and P6 sale notices or in the alternative to direct the DRT-I, Ernakulam to reconsider the petition for stay and pass orders afresh.

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The petitioners state that the 3^rd petitioner, who is holding 32 cents of land, leased out a portion of the property to the 4^th petitioner. The 3^rd petitioner entered into a lease agreement with the 1^st petitioner-Company in order to enable the 1^st petitioner to construct/develop the property.

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O.P.(DRT) No.1/2024

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: 4 :

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The 1^st petitioner availed a term loan of ₹25 Crores

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in the year 2019. The 1^st petitioner started to construct a shopping mall in the land. In the meanwhile, due to Covid-19 pandemic, there occurred delay in completion of the construction work. When the 1^st petitioner failed to maintain the loan account, the respondents declared the loan account as NPA and proceedings were initiated under the SARFAESI Act.

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The respondents moved the Chief Judicial Magistrate under Section 14. The petitioners approached the DRT-I, Ernakulam filing SA No.363/2023. IA No.2600/2023 was filed seeking stay. The petitioners state that the Tribunal has not given any interim order in favour of the petitioners. Finally, the stay petition was dismissed on 30.08.2023 as per Ext.P3.

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The petitioners filed Ext.P4 appeal before the DRAT. Ext.P5 stay petition was also filed in the DRAT.

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In the meanwhile, the respondent-Bank issued

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another sale notice. The petitioners therefore filed Ext.P7 IA

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O.P.(DRT) No.1/2024

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: 5 :

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for amendment of SA.363/2023. The petitioners state that the DRT committed a grave error in not passing interim orders in the stay petition filed by the petitioners.

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The petitioners would contend that the description of properties made by the Bank varies considerably and is contradictory to each other. The rate of interest claimed is highly inflated. The Bank has failed to view necessary details of the property in question. Section 14 application is unsustainable. Reserve price has been fixed in Ext.P6 without following the provisions in Rule 8(5) of the Security Interest (Enforcement) Rules.

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I have heard the learned counsel for the petitioners and the learned Standing Counsel representing the 2^nd respondent.

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The petitioners are challenging Exts.P2 and P3 orders and P6 sale notice. Ext.P2 is proceedings dated 10.08.2023 of DRT-I, Ernakulam, declining to grant status quo order. Ext.P3 is an order passed by the DRT-I, Ernakulam rejecting IA No.2600/2023 in SA.363/2023 seeking

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O.P.(DRT) No.1/2024

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: 6 :

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stay of recovery proceedings. Ext.P6 is a sale notice published by the 1^st respondent-Bank.

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All these proceedings under challenge relate to the proceedings issued by the Bank under the SARFAESI Act. As far as Exts.P2 and P3 are concerned, if the petitioners are aggrieved by those orders, the petitioners have efficacious alternate remedy before the DRAT under Section 18 of the SARFAESI Act. As against Ext.P6 sale notice, the petitioner has remedy under Section 17. Therefore, reliefs prayed for by he petitioner cannot be granted in OP(DRT). The orders of the Tribunal at Exts.P2 and P3 give cogent reasons for the decision. Exts.P2 and P3 cannot be said to be arbitrary or perverse warranting exercise of jurisdiction under Article 227 of the Constitution of India.

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In the circumstances, the OP(DRT) is dismissed granting liberty to the petitioners to approach DRT/DRAT, if the petitioners are so advised.

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Sd/-

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aks/19.04.2024

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N. NAGARESH, JUDGE

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O.P.(DRT) No.1/2024

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: 7 :

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APPENDIX OF OP (DRT) 1/2024

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PETITIONER'S EXHIBITS

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Exhibit P1	TRUE COPY OF THE A	MENDED
	SECURITIZATION APPLICATION FILE	D BY
	THE PETITIONER AS SA NO.36 BEFORE THE DEBT RECOVERY TRIBU ERNAKULAM ALONG WITH ANNEXURES	3/2023 NAL-I,
Exhibit P2	TRUE COPY OF THE PROCEEDINGS	DATED
	10.08.2023 OF THE DRT-I, ERNAKUL SA NO.363/2023 DOWNLOADED FROM SI	AM IN TE
Exhibit P3	TRUE COPY OF THE ORDER 30.08.2023 IN I.A NO. 2600 OF 20 SA NO: 363/2023 ON THE FILE OF ERNAKULAM	DATED 23 IN DRT-I
Exhibit P4	TRUE COPY OF THE APPEAL MEMO FILED BEFORE THE DRAT, CHENNAI BE	RANDUM NCH
Exhibit P5	TRUE COPY OF THE STAY PETITION BEFORE THE DRAT CHENNAI BENCH WITH THE RECEIPT FROM E-DRT PORTA	FILED ALONG L
Exhibit P6	TRUE COPY OF THE SALE NOTICE 11.12.2023 ISSUED BY THE DEFENDAN	DATED T
Exhibit P7	TRUE COPY OF THE AMENDMENT PE FILED BY THE PETITIONERS BEFORE ERNAKULAM	TITION DRT-I
Exhibit P8	TRUE COPY OF THE STAY PETITION BY THE PETITIONERS BEFORE ERNAKULAM	FILED DRT-I
Exhibit P9	TRUE COPY OF THE SALE NOTICE 10.01.2024 ISSUED BY THE RESP BANK	DATED ONDENT
Exhibit P10	TRUE COPY OF THE AMENDMENT PE DATED 17.01.2024 FILED BEFORE THE I ERNAKULAM AS PER DIARY NO: 258/	TITION DRT- 2024
Exhibit P11	TRUE COPY OF THE STAY PETITION	DATED
	17.01.2024 FILED BEFORE THE ERNAKULAM AS PER DIARY NO: 247/ 2	DRT-I 024

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O.P.(DRT) No.1/2024

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: 8 :

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RESPONDENT'S EXHIBITS

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EXHIBIT R1(A) TRUE COPY OF THE JUDGMENT IN W.P. (C).NO.15142 OF 2022 DATED 18.10.2022

M/S. Yenfor Ventures Pvt. Ltd. v. State Bank of India

Case brief

What is this about?

What did the court decide?

M/S. Yenfor Ventures Pvt. Ltd. v. State 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

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