Dismissed

Francis Abraham v. State Bank of India

Kerala HC20 May 2024OP (DRT)/58/2024

Case brief

AI extract

What is this about?

A borrower challenged the DRT's refusal to stay SARFAESI proceedings against his mortgaged properties, claiming agricultural-land exemption under Section 31(i) of the SARFAESI Act. The High Court found no illegality in the Tribunal's order, noting loans were also for non-agricultural purposes and revenue records classified the land as 'purayidom', and dismissed the petition.

What the court decided

AI extract

Francis Abraham 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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MONDAY, THE 20^TH DAY OF MAY 2024 / 30TH VAISAKHA, 1946

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OP (DRT) NO. 58 OF 2024

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AGAINST THE ORDER DATED 03.01.2024 IN IA.1521/2022 IN SA NO.342 OF 2022 OF DEBT RECOVERY TRIBUNAL-2, ERNAKULAM

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PETITIONER/APPLICANT

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FRANCIS ABRAHAM AGED 60 YEARS S/O MR. ITTIYAVIRAH POOVATHINGAL HOUSE, ANJOOTTIMANGALAM P.O, NEAR NARIYANGANAM PRARTHANA BHAVAN, KOTTAYAM, PIN - 686579

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BY ADVS. E.A.BIJUMON ANJALY JOSEPH

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RESPONDENTS/DEFENDANT:

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1 STATE BANK OF INDIA STRESSED ASSETS RECOVERY BRANCH 7TH FLOOR, VANKARATH TOWERS, PALARIVATTOM BYE PASS JUNCTION, ERNAKULAM, REPRESENTED BY THE AUTHORIZED OFFICER, PIN - 682024

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2 THE DEBTS RECOVERY TRIBUNAL II ERNAKULAM, 2ND FLOOR, K.S.H.B OFFICE COMPLEX, PANAMPILLY NAGAR, COCHIN, REPRESENTED BY ITS REGISTRAR., PIN – 682036

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BY ADV M.JITHESH MENON

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THIS OP (DEBT RECOVERY TRIBUNAL) HAVING COME UP FOR ADMISSION ON 20.05.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

O.P.(DRT) No.58/2024

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N. NAGARESH, J.

O.P.(DRT) No.58 of 2024

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Dated this the 20^th day of May, 2024

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J U D G M E N T

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~ ~ ~ ~ ~ ~ ~ ~ ~

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The petitioner is the applicant in SA No.342/2022 of the Debts Recovery Tribunal-II, Ernakulam. The petitioner is challenging Ext.P8 order in stay application IA No.1521/2022 dated 03.01.2024. The petitioner also seeks to get appointed an Advocate Commissioner to verify the nature of the property.

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The petitioner availed loans from the 1^st respondent-Bank. ₹7,80,000/- was availed as KCC Loan on 03.02.2015, ₹50,000/- as Agricultural Term Loan on 03.02.2015 and ₹4 lakhs as Car Loan on 15.03.2012. The petitioner along with guarantors had mortgaged two properties, one having an extent of 149.32 Ares and another

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O.P.(DRT) No.58/2024

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: 3 :

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having an extent of 10.12 Ares.

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The loan repayment fell into arrears during the Covid-19 pandemic and the respondents initiated proceedings under the SARFAESI Act. The petitioner states that the proceedings of the Bank were without following the provisions of law. The loan was availed for agricultural purpose. The Bank proceeded against agricultural land.

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The petitioner submits that in OA No.279/2020 filed by the respondents, the respondents have admitted that the loan was granted for agricultural purpose. The petitioner filed SA No.342/2022 and Ext.P5 IA No.2430/2023 producing photographs to show that the property is agricultural land. The petitioner filed Ext.P6 IA No.2320/2023 seeking to appoint an Advocate Commissioner. The Debts Recovery Tribunal, however, dismissed the application as per Ext.P7 order dated 17.03.2023. The petitioner's Ext.P2 stay application IA No.1521/2022 was also dismissed as per Ext.P8 order dated 03.01.2024. The petitioner, under the threat of dispossession, has approached this Court invoking

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O.P.(DRT) No.58/2024

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: 4 :

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Article 227 of the Constitution of India seeking to set aside Ext.P8 order dated 03.01.2024.

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The 1^st respondent resisted the OP(DRT) filing counter affidavit. The 1^st respondent pointed out that the Cash Credit facility and Kisan Gold Card was sanctioned to the petitioner for maintaining rubber, coconut and manuring banana, etc. Property was mortgaged as collateral security. The loans were also sanctioned for land development and personal needs. The property mortgaged was not agricultural property. The petitioner had availed housing loan also for building construction. The properties are classified as 'purayidom' in revenue records In the circumstances, the petitioner has no right to get the SARFAESI proceedings stayed.

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I have heard the learned counsel for the petitioner and the learned Standing Counsel representing the respondents.

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The petitioner has no dispute regarding failure in repayment of loans. The petitioner would contend that the

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O.P.(DRT) No.58/2024

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: 5 :

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SARFAESI proceedings initiated by the Bank are in violation of statutory rules. The argument of the petitioner is that the loan sanctioned was agricultural loan and the property sought to be taken over and sold is agricultural property. As per Section 31(i) of the SARFAESI Act, there cannot be any securitisation proceedings against an agricultural property.

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Ext.R1(b) letter of arrangement produced by the Bank would indicate that the loans sanctioned to the petitioner were for land development and personal needs also. The Debts Recovery Tribunal has considered the stay petition filed by the petitioner. The Tribunal noted that there is no dispute regarding creation of equitable mortgage. The Agricultural Officer has given a certificate on 04.06.2022. The certificate does not state the existence of a building in the property. The certificate does not indicate what was the status of the land at the time of availing the loan. The Tribunal noted that the Agricultural Officer has suppressed the existence of residential house on item No.1 property and failed to describe how item No.2 property was used. The

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O.P.(DRT) No.58/2024

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: 6 :

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Tribunal further found that mere existence of rubber trees in the secured asset would not confer any right on the petitioner to claim exemption under Section 31(i). On these grounds, IA No.1521/2022 was dismissed declining stay of securitisation measures.

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I find no illegality or irregularity in Ext.P8 warranting interference under Article 227 of the Constitution of India. The OP(DRT) is therefore dismissed.

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Sd/-

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N. NAGARESH, JUDGE

aks/15.05.2024

O.P.(DRT) No.58/2024

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APPENDIX OF OP (DRT) 58/2024

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PETITIONER'S EXHIBITS

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Exhibit P1	TRUE COPY OF THE SA NO. 342/2 08.06.2022.	022 D	ATED
Exhibit P2	TRUE COPY OF THE STAY APPLIC NO. 1521/2022 DATED 08.06.202	ATION 2.	I A
Exhibit P3	TRUE COPY OF THE CERTIFICATE	ISSUE	D BY
	THE AGRICULTURAL OFFICER 04.06.2022.	D	ATED
Exhibit P4	TRUE COPY OF THE O.A.NO.279/2 08.05.2020	020 D	ATED
Exhibit P5	TRUE COPY OF THE PHOTOGRAPH PROPERTY PRODUCED THROUGH 2430/2023 DATED 24.07.2023.	S OF I A	THE NO.
Exhibit P6	TRUE COPY OF THE APPLICATION 2320/2023 DATED 17.08.2023 APPOINTED AN ADVOCATE COMMISS	I A TO IONER.	NO. GET
Exhibit P7	TRUE COPY OF THE ORDER IN 2320/2023 DATED 17.08.2023.	I A	NO.
Exhibit P8	TRUE COPY OF THE ORDER IN 1521/2022 DATED 03.01.2024.	I A	NO.
Exhibit P9	TRUE COPY OF THE COMMISSIONER'S NOTICE 05.08.2022.	ADVO D	CATE ATED
Exhibit P10	TRUE COPY OF THE JUDGMENT THOMAS VS. INDIAN MANU/KE/1349/2023.	IN J	IMMY BANK

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RESPONDENT'S EXHIBITS

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Exhibit-R1(A)	True copy of the sanction letter dated 20-01-2006
Exhibit-R1(B)	True copy of the arrangement letter dated 03-02-2015
Exhibit-R1(C)	True copy of the receipt dated 18-06-
	2012 in respect of Re.Sy.No.253/1
Exhibit-R1(D)	True copy of the possession certificate dated 22-03-2012

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O.P.(DRT) No.58/2024

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Exhibit-R1(E) True copy of the receipt evidencing payment of land tax which shows the nature of land as purayidam dated 1806-2012 Exhibit-R1(F) True copy of the possession certificate issued by the Village Officer Thalappalam Village dated 1402-2012

Francis Abraham v. State Bank of India

Case brief

What is this about?

What the court decided

Francis Abraham v. State Bank of India

Case brief

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What the court decided

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