J U D G M E N T

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The petitioner is Managing Director of a Private Limited Company. The Company availed Overdraft facility of ₹5 Crores on 28.04.2015 from the respondent-Bank. Three pieces of immovable property were mortgaged by way of security.

2. When repayment of loan defaulted, the Bank declared the Company account as NPA and invoked proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. Ext.P1 Section 13(4) possession notice was issued. The Bank also filed arbitration case invoking Section 69 of the Kerala Co-operative Societies Act for recovery of ₹7,68,13,635/-. The respondent approached the Chief Judicial Magistrate's Court, Thrissur under Section 14 of the Act, 2002. The CJM passed Ext.P3 order appointing an Advocate Commissioner to take over physical possession of the secured asset. The petitioner is challenging Ext.P1 notice and Ext.P3 order.

3. The petitioner states that the proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 is without jurisdiction as proceedings were initiated before declaring the loan account as NPA. Ext.P4 Section 14 notice indicated that the initial notice under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 was issued on 31.12.2016. Ext.P2 ARC filed by the respondent would state that the account was declared as Non Performing Asset on 01.05.2018. The securitisation proceedings were therefore obviously initiated before declaring the account as Non Performing Asset. Exts.P1 and P3 are therefore liable to be set aside, contended the counsel for the petitioner.

4. The counsel for the petitioner further argued that item No.3 property mentioned in Ext.P1 notice is an agricultural property, which is evidenced by Ext.P4 photograph. There is a residential building also in the property. Item No.1 property is also a residential plot. Ext.P1 notice does not disclose existence of a residential building. A tenant is residing in item No.1 property. This fact was suppressed while filing affidavit in Chief Judicial Magistrate's Court under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

5. On behalf of the petitioner, it is further alleged that possession notice was not affixed on the secured asset nor was it published in newspapers. The security interest is not registered at the Central Registry as contemplated under Section 26B of the Act, 2002. The entire proceedings are therefore illegal and arbitrary and are liable to be quashed.

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

7. The prime argument of the petitioner is based on Exts.P1 and P2. Ext.P1 indicates that notice under the Act, 2002 was issued on 31.12.2016 and the loan account was declared NPA on 01.05.2018 subsequently. I find that based on Exts.P1 and P2 alone, it cannot be concluded that proceedings under the Act, 2002 were initiated before declaring the loan account as NPA. It is possible that the account was declared as Non Performing Asset even prior to

31.12.2016. These are matters of evidence.

8. The further allegation of the petitioner is that one of the properties sought to be proceeded against is an agricultural property and hence the said property cannot be proceeded against under the Act, 2002. The petitioner would further allege that possession notice had not been affixed on the secured asset and was not published in newspapers. These are also questions of fact. The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 provides for an appellate remedy under Section 18 which states that any person aggrieved by any order made by the Debts Recovery Tribunal may prefer an appeal to the Appellate Tribunal. The petitioner therefore has an effective