Kerala High Court
Francis Abraham vs State Bank Of India 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. 58 OF 2024
AGAINST THE ORDER DATED 03.01.2024 IN IA.1521/2022 IN
SA NO.342 OF 2022 OF DEBT RECOVERY TRIBUNAL-2, ERNAKULAM
PETITIONER/APPLICANT
FRANCIS ABRAHAM
AGED 60 YEARS
S/O MR. ITTIYAVIRAH POOVATHINGAL HOUSE,
ANJOOTTIMANGALAM P.O,
NEAR NARIYANGANAM PRARTHANA BHAVAN,
KOTTAYAM, PIN - 686579
BY ADVS.
E.A.BIJUMON
ANJALY JOSEPH
RESPONDENTS/DEFENDANT:
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
2 THE DEBTS RECOVERY TRIBUNAL II
ERNAKULAM, 2ND FLOOR, K.S.H.B OFFICE COMPLEX,
PANAMPILLY NAGAR, COCHIN,
REPRESENTED BY ITS REGISTRAR.,
PIN - 682036
BY ADV M.JITHESH MENON
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
:2:
N. NAGARESH, J.
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O.P.(DRT) No.58 of 2024
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Dated this the 20th day of May, 2024
JUDGMENT
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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.
2. 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
having an extent of 10.12 Ares.
3. 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.
4. 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
Article 227 of the Constitution of India seeking to set aside
Ext.P8 order dated 03.01.2024.
5. The 1st respondent resisted the OP(DRT) filing
counter affidavit. The 1st 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.
6. I have heard the learned counsel for the petitioner
and the learned Standing Counsel representing the
respondents.
7. The petitioner has no dispute regarding failure in
repayment of loans. The petitioner would contend that the
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.
8. 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
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.
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.
Sd/-
N. NAGARESH, JUDGE
aks/15.05.2024
APPENDIX OF OP (DRT) 58/2024
PETITIONER'S EXHIBITS
Exhibit P1 TRUE COPY OF THE SA NO. 342/2022 DATED
08.06.2022.
Exhibit P2 TRUE COPY OF THE STAY APPLICATION I A
NO. 1521/2022 DATED 08.06.2022.
Exhibit P3 TRUE COPY OF THE CERTIFICATE ISSUED BY
THE AGRICULTURAL OFFICER DATED
04.06.2022.
Exhibit P4 TRUE COPY OF THE O.A.NO.279/2020 DATED
08.05.2020
Exhibit P5 TRUE COPY OF THE PHOTOGRAPHS OF THE
PROPERTY PRODUCED THROUGH I A NO.
2430/2023 DATED 24.07.2023.
Exhibit P6 TRUE COPY OF THE APPLICATION I A NO.
2320/2023 DATED 17.08.2023 TO GET
APPOINTED AN ADVOCATE COMMISSIONER.
Exhibit P7 TRUE COPY OF THE ORDER IN I A NO.
2320/2023 DATED 17.08.2023.
Exhibit P8 TRUE COPY OF THE ORDER IN I A NO.
1521/2022 DATED 03.01.2024.
Exhibit P9 TRUE COPY OF THE ADVOCATE
COMMISSIONER'S NOTICE DATED
05.08.2022.
Exhibit P10 TRUE COPY OF THE JUDGMENT IN JIMMY
THOMAS VS. INDIAN BANK
MANU/KE/1349/2023.
RESPONDENT'S EXHIBITS
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
Exhibit-R1(E) True copy of the receipt evidencing
payment of land tax which shows the
nature of land as purayidam dated 18-
06-2012
Exhibit-R1(F) True copy of the possession
certificate issued by the Village
Officer Thalappalam Village dated 14-
02-2012
