Dismissed

A Subramanyan and Anr. v. a O Indian Bank and Ors.

DRAT4 Aug 2025REGULAR APPEAL/77/2019

Case brief

AI extract

What is this about?

The Debts Recovery Appellate Tribunal dismissed an appeal challenging a securitisation application under the SARFAESI Act. The court held that purchasers who bought properties after an equitable mortgage was created were bound by the mortgage.

What did the court decide?

Interest and costs to be borne by both parties.

What the court decided

A Subramanyan and Anr. versus a O Indian Bank and Ors. — Banking and Recovery | DRAT (2025)

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IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT CHENNAI

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Dated the 04^th of August, 2025

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PRESENT: Hon’ble Mr. Justice G. Chandrasekharan CHAIRPERSON

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RA (SA) 77/2019

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(TSA 332/2016 (SA 382/2012 before DRT -II, Ernakulam

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Between

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Mr.A.Subramaniyan S/o Appu Chettiyar, Mohana Vilasam, Ayathil P.O., Kollam, 691 021.

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Mr.K.Anilkumar S/o Krishnankuty Chettiar, Velizhepedathu Veedu, Pattathanam, Kollam 691 021. Rep. by Power of Attorney Holder, 1^st Appellant, A. Subramanyan.

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…Appellants

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And

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The Authorized Officer, Indian Bank, Kollam Branch, Indian Bank Towers, Main Road, Kollam- 691 001.

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The Branch Manager, Kollam Branch, Indian Bank Towers, Main Road, Kollam- 691 001. Rep. by its Manager.

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Mrs.Vijayalakshmi D/o N. Sundareswaran, Sundara havan, Asramam, Kollam – 691 001.

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Counsel for Appellants : M/s. Ashok B. Shenoy Counsel for Respondents 1 and 2 : M/s. P. V. Muralidhar

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ORDER

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This Appeal is filed against the order of Learned Presiding Officer, DRT-II, Ernakulam passed in TSA No.332/2016 (SA No.382/2012) on 04.05.2018.

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The Appellants have filed the aforesaid SA, claiming that they are neither borrowers nor guarantors. First Appellant is the owner in possession of 8 cents of land and the second Appellant is the owner in possession of 11.065 cents, as detailed in the SA. First Appellant purchased this property through a registered sale deed No.1366/2003 from the 3^rd Respondent and her children (Jagadev and Lakshmi), second Appellant purchased through registered sale deed No.5169/0023 dated 10.11.2003 from 3^rd Respondent and her children (Jagadev and

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Lakshmi). Against these properties, first Respondent initiated proceedings under SARFAESI Act, 2002, especially

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filed Petition under Section 14 of the SARFAESI Act in CMP

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No.902/2012 before the Learned CJM, Kollam. Learned CJM appointed advocate commissioner to take physical possession of the property. In this background SA was filed.

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Learned Presiding Officer, taking into consideration all the submissions made by Learned Counsel for parties and records produced, dismissed the aforesaid TSA, necessitating filing of this Appeal.

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Learned Counsel for Appellants submitted that the Appellants are the bonafide purchasers of the property on which the Bank alleges the security interest was created by borrowers. No such security interest was created. Without considering this vital aspect, the Securitisation Application TSA 332/2016 was dismissed by Learned Presiding Officer,

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DRT –II, Ernakulam.

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Learned Counsel for Respondent Bank strongly opposes

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this Appeal on the ground the security interest was created

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in respect of this property with large extent by one Late

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Sundareswaran on behalf of M/s. N. Sundareswaran firm for availing various credit facilities by deposit of original title deeds on 12.12.1969. When mortgage was in subsistence, it appears that the said Sundareswaran has transferred the title and interest over the property in favour of third Respondent. Taking advantage of that, third Respondent and her children sold some portion of the property Appellants are not bonafide purchasers. In confirmation of the equitable mortgage and subsequent enhancement of the credit facilities, Mr. Sundareswaran and third Respondent executed a letter of confirmation. In the said circumstances, Learned Presiding Officer rightly dismissed the TSA.

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Due to pendency of this TSA, first Respondent Bank is not able to take possession, sell the property and realize the debt due. Learned Counsel prayed for confirming the order of Learned Presiding Officer and dismisses this Appeal. Section 13(2) Notice was issued, demanding a sum of Rs.112,04,05,628.14p, due as on 31.7.2007.

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It is further submitted that the submission of Learned Counsel for Appellants that original title deed was not deposited by the mortgagor is not correct. It was, in fact, deposited, perused by Learned Presiding Officer and observed that original title deed deposited by the mortgagor is available in the case records in TA No.1281/2016.

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Considered the rival submissions and perused the records.

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As submitted by Learned Counsel appearing for the parties that TSA 332/2016 (SA No. 382/2012 was filed with the following prayers:-

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(A) Declare that recourse and measures as also steps initiated by 1^st defendant to take possession of the ‘said 8 cent of property’ and ‘said 11.065 cents of property’ belonging to 1^st and 2^nd applicants respectively, is illegal, fraudulent, invalid and void;

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(B) Set aside all steps and measures taken/initiated by 1^st defendant as against the ‘said 8 cents of property’ and ‘said 11.065 cents of property’ belonging to 1^st and 2^nd applicants respectively; and

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(C) Grant such other and further reliefs as are deemed just and necessary in the facts and circumstances of the case including costs of this proceeding. ”

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The main ground of challenge by the Appellants to the Securitisaton Application proceedings is that, the Appellants are the bonafide purchasers for value and they are neither borrowers nor guarantors. There is no security interest

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created over the property purchased by the Appellants. No other grounds are raised with regard to non compliance of conditions required for passing order under Section 14 of the SARFAESI Act, 2002.

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Since the very challenge was made against the security interest, this Tribunal summoned the documents from DRT. As seen from the documents, it is clearly established that the father of Defendant No.3, S. Vijayalakshmi, namely N. Sundareswaran, the borrower had deposited the document of title deeds for creation of equitable mortgage. The date of mortgage was 12.12.1969. On the basis of this mortgage, the loan facilities had been sanctioned. The sale in favour of

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Appellants was only in 2003, long subsequent to the creation

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of mortgage on the basis of a gift deed dated 28.12.1975. Even this Gift Deed came into existence subsequent to mortgage. Therefore, it is quite obvious and clear that the Appellants purchased the property during subsistence of mortgage. Their purchase is only subject to the mortgage. As already stated, there is nothing to indicate that the order passed under Section 14 was illegal or irregular.

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In this view of matter, this Tribunal is of the view that Learned Presiding Officer, DRT-II, Ernakulam, rightly dismissed the Securitisation Application, and therefore, this Appeal in RA (SA) 77/2019 is dismissed as devoid of merits. Both the parties shall bear their own costs. All pending IAs, if any, stand closed.

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[Dictated to Athistamani, PS, in open court, transcribed by her, corrected and signed by me this 04^th of August, 2025]

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[ Justice G. Chandrasekharan] CHAIRPERSON

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A Subramanyan and Anr. v. a O Indian Bank and Ors.

Case brief

What is this about?

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What the court decided

A Subramanyan and Anr. v. a O Indian Bank and Ors.

Case brief

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What did the court decide?

What the court decided

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