MUTHUMARIYAMMAL GRANITES Vs. SOUTH INDIAN BANK LIMITED

JUDGEMENT

(1.) The petitioners are defaulting borrowers, who failed to comply with the conditional order of the Debts Recovery Tribunal-III, Chennai in S.A.No.11 of 2021, dated January 28, 2021.

(2.) The admitted position is that the petitioners availed of loan facilities from the respondent bank and created an equitable mortgage in respect of the petitioners' property as security for such loan. Upon the account being declared NPA, the secured creditor issued a demand under Sec. 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short, "the Act of 2002") on January 2, 2018. In view of the failure of the borrowers to discharge the debt in response to such notice, further action was taken under Sec. 13(4) of the Act of 2002. In fact, in response to a request for executive assistance under Sec. 14 of the said Act, an order was passed on November 24, 2020 to hand over physical possession of the secured asset to the secured creditor. It appears that the borrowers filed proceedings under Sec. 17 of the Act of 2002 before the Debts Recovery Tribunal and an order dated March 29, 2021 was passed by such Tribunal. The said order was a conditional order directing the borrower to pay a sum of Rs.20.00 lakh by way of a first tranche and to discharge a debt of about Rs.32.00 lakh on or before May 7, 2021. The borrowers failed to pay either installment referred to above.

(3.) The borrower contends that the Debts Recovery Tribunal had directed the secured creditor to hand over permissive possession of the property and on account of the failure of the secured creditor to do so, the borrowers have been unable to undertake business activities and pay the secured creditor from and out of revenues realised from such business.