M.D Abdulla vs South Indian Bank Limited

Kerala High Court

M.D Abdulla vs South Indian Bank Limited on 20 May, 2024

Author: N. Nagaresh

Bench: N.Nagaresh

        IN THE HIGH COURT OF KERALA AT ERNAKULAM
                          PRESENT
          THE HONOURABLE MR.JUSTICE N.NAGARESH
 MONDAY, THE 20TH DAY OF MAY 2024 / 30TH VAISAKHA, 1946
                 OP (DRT) NO. 88 OF 2024
    ORDER DATED 09.01.2024 IN SA.34/2023 OF THE DEBTS
             RECOVERY TRIBUNAL-1, ERNAKULAM
  ORDER DATED 21.02.2024 IN APPEAL DIARY NO.284/2024
   OF THE DEBTS RECOVERY APPELLATE TRIBUNAL, CHENNAI
PETITIONER/APPLICANT

         M.D ABDULLA
         AGED 75 YEARS
         S/O. IBRAHIM, BERKA HOUSE, BEVINJA,
         CHENGALA P.O, KASARAGOD, PIN - 671541

         BY ADVS.
         V.K.PEERMOHAMED KHAN
         GIRISH KUMAR V.C
         ASNA M.B.
RESPONDENTS/DEFENDANTS:

    1    SOUTH INDIAN BANK LIMITED
         KASARAGOD BRANCH, GOLDEN ARCADE,
         NEAR NEW BUS STAND,
         KASARAGOD
         REPRESENTED BY ITS CHIEF MANAGER, PIN - 671121
    2    THE AUTHORIZED OFFICER/CHIEF MANAGER
         SOUTH INDIAN BANK LIMITED, KASARAGOD BRANCH,
         GOLDEN ARCADE, NEAR NEW BUS STAND,
         KASARAGOD, PIN - 671121

         BY ADVS.
         MOHAN JACOB GEORGE
         P.V.PARVATHY (P-41)(K/000036/1991)
         REENA THOMAS(R-364)
         NIGI GEORGE(K/1169/2012)
         ANANTHU V.LAL(K/001233/2022)
         HARISANKAR S.(K/000702/2023)

     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.88/2024
                                       :2:




                           N. NAGARESH, J.

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                       O.P.(DRT) No.88 of 2024

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                Dated this the 20th day of May, 2024


                            JUDGMENT

~~~~~~~~~ The petitioner, who is a Contractor and who has availed various financial assistances from the 1 st respondent- Bank, is seeking to direct the respondent-Bank to keep in abeyance proceedings for dispossession of the petitioner as per Ext.P7, until Ext.P5 appeal filed before the Debts Recovery Appellate Tribunal, Chennai get listed and orders passed in Ext.P6 stay petition.

2. The petitioner states that the 1 st respondent-Bank sanctioned an overdraft facility of ₹2,15,00,000/- on 23.01.2014 to the petitioner. The overdraft limit was later reduced to ₹98,00,000/-. The 1st respondent also sanctioned a loan of ₹21,31,000/- on 08.09.2020. The petitioner was a O.P.(DRT) No.88/2024 :3: guarantor for a loan of ₹4.5 Crores availed on 17.01.2020 and another loan of ₹88,26,000/- availed on 27.08.2020.

3. When the borrowers failed to maintain the loan account, the 1st respondent-Bank approached the Chief Judicial Magistrate's Court filing application under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. Symbolic possession of the property of the petitioner having an extent of 65 Cents in re-survey No.123/2.pt situated in Chengala Village was taken possession of on 05.03.2022. On 30.12.2022, the Advocate Commissioner appointed by the Chief Judicial Magistrate's Court informed the petitioner that physical possession of the property will be taken over on 16.01.2023.

4. The petitioner approached the Debts Recovery Tribunal-I, Ernakulam filing SA No.34/2023. IA No.187/2023 was filed by the petitioner for stay was allowed as per Ext.P3 on condition that the petitioner remits an amount of ₹14,53,095/- each in three instalments. Subsequently, the O.P.(DRT) No.88/2024 :4: Debts Recovery Tribunal-I, Ernakulam dismissed the SA as per Ext.P4 order dated 09.01.2024.

5. The petitioner states that the petitioner had preferred Ext.P5 appeal against Ext.P4 order. Ext.P6 stay petition has also been filed by the petitioner. The petitioner states that the petitioner has a fair chance to win in the appeal preferred before the Debts Recovery Appellate Tribunal and if the Advocate Commissioner takes over physical possession of the property in the meanwhile, the petitioner will be put to untold hardship and loss.

6. I have heard the learned counsel for the petitioner and the learned Standing Counsel representing respondents 1 and 2.

7. The petitioner admits the financial assistance extended by the 1st respondent-Bank. It is seen from Ext.P1 order of the Chief Judicial Magistrate's Court, Kasaragod that the outstanding dues in four loan accounts of the petitioner would come to ₹1,45,30,955.12 as on 22.06.2022. The petitioner approached the Debts Recovery Tribunal invoking O.P.(DRT) No.88/2024 :5: Section 17 of the SARFAESI Act. The SA was filed seeking to declare that the classification of the loan account of the petitioner as NPA and all further proceedings under the SARFAESI Act are illegal and unsustainable. The Debts Recovery Tribunal found that the applicant has not proved the procedural irregularity alleged. The Tribunal consequently dismissed SA No.34/2023 as per Ext.P4 order.

8. Aggrieved by Ext.P4 order, the petitioner has filed Ext.P5 appeal invoking Section 18 of the SARFAESI Act. According to the petitioner, Diary number has been assigned to the appeal and stay petition. If in the meanwhile, pending consideration of the statutory appeal by the Appellate Tribunal, further coercive proceedings are taken against the petitioner, the petitioner will be put to hardship. In the circumstances, it would be only just and proper that the OP(DRT) is disposed of with appropriate directions.

The OP(DRT) is disposed of directing the Debts Recovery Appellate Tribunal, Chennai to consider and pass appropriate orders on Ext.P6 IA filed by the petitioner O.P.(DRT) No.88/2024 :6: seeking stay of all further proceedings against the petitioner under the SARFAESI Act. In the meanwhile, if the petitioner remits an amount of ₹50 lakhs within a period of one month, coercive proceedings against the petitioner shall stand deferred till the Appellate Tribunal passes final orders on Ext.P6 stay petition.

Sd/-

                                      N. NAGARESH, JUDGE
aks/15.05.2024
 O.P.(DRT) No.88/2024
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                 APPENDIX OF OP (DRT) 88/2024

PETITIONER'S EXHIBITS

Exhibit P1             TRUE    COPY  OF    THE   ORDER  DATED
                       16.07.2022 IN CMP NO.1589 OF 2022 ON
                       THE FILE OF THE LEARNED CHIEF JUDICIAL
                       MAGISTRATE COURT KASARAGOD
Exhibit P2             TRUE COPY OF THE JUDGEMENT DATED
                       15.09.2022 IN WP (C). NO. 29334 OF
                       2022 ON THE FILE OF THE HON'BLE HIGH
                       COURT OF KERALA
Exhibit P3             TRUE    COPY  OF    THE   ORDER  DATED
                       25.01.2023 IN IA 187 OF 2023 IN SA 34
                       OF 2023
Exhibit P4             TRUE COPY OF THE FINAL ORDER DATED
                       09.01.2024 IN SA 34/2023
Exhibit P5             TRUE COPY OF THE APPEAL FILED BEFORE
                       THE DEBT RECOVERY APPELLATE TRIBUNAL
                       VIDE DIARY NO. 284/2024 ON 21.02.2024
Exhibit P6             TRUE COPY OF THE STAY PETITION FILED
                       BEFORE THE DEBT RECOVERY APPELLATE
                       TRIBUNAL 21.02.2024
Exhibit P7             TRUE   COPY   OF   THE   NOTICE  DATED
                       07.02.2024 ISSUED BY THE ADVOCATE
                       COMMISSIONER APPOINTED BY THE CJM
                       COURT KASARGODE.