Allowed

Pmr Construction v. Canara Bank

DRT18 Sept 2025SA/112/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the applicant's Section 17 application challenging possession measures taken under the SARFAESI Act. The court found the bank failed to discharge the burden of proving publication notices bore mandatory details regarding dates and newspapers, violating Rule 8(2). Consequently, the Tribunal set aside the Judicial Magistrate's order appointing an Advocate Commissioner and the bank's possession notice, directing fresh action following strict compliance with the Act.

What did the court decide?

The Impugned Order passed by the Chief Judicial Magistrate and the Possession Notice are set aside. The Applicant is not liable for expenditure incurred in issuance of said notice and order. The Bank is at liberty to initiate fresh action for recovery.

Pmr Construction versus Canara Bank — Banking and Recovery | DRT (2025)

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SA No.112/2023

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI

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DATED THIS 18^th DAY OF SEPTEMBER, 2025

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PRESENT: SEEMA SINHA

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[PR. DISTRICT & SESSIONS JUDGE - Retd] PRESIDING OFFICER

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SA No. 112/2023

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M/s. PMR Construction, Represented by its Prop. R. Arumugam, D/No. 2/291, Perumal Kovil Street, Kulamangalam, Madurai – 625 017. --- Applicant -Vs-

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The Authorized Officer, Canara Bank, P & T Nagar Branch, Having Office at No. 53, Old Natham Road, Viswanathapuram, Madurai – 625 014. --- 1^st Defendant Bank 2. The Chief Judicial Magistrate, Madurai. --- 2^nd Defendant

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Appearance of Advocates: Mr. K. Esakki ---- Counsel for the Applicant

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Mr. P. Madhan Alexandar ---- Counsel for the 1^st Defendant Bank The 2^nd Defendant is none other than the Ld. CJM, Madurai

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This SARFAESI Application was heard in the presence of Counsels for the Applicant and the 1^st Defendant Bank and fixed for passing final order before me and upon hearing the arguments of the Counsels and having stood over for consideration till this day, this Tribunal delivered the following:

Page 1 of 11

SA No.112/2023

O R D E R

1 . This Application has been filed under Sec.17 of the SARFAESI Act, 2002 by the Applicant praying that this Hon'ble Tribunal may be pleased to allow this Application and set aside the Impugned Order passed by the 2^nd Defendant in Cr.MP. No. 1217/2022 dated 03.09.2022 under SARFAESI Act.

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2 . The brief averments of the Application filed by the Applicant are as follows:-

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The Applicant submitted that the Applicant is running a construction company in the name and style of M/s. PMR Construction and he is the sole proprietor. For the development of the Construction Company, the Applicant approached the 1^st Defendant for loan facilities and deposited the title deed and other documents and created mortgage in favour of the 1^st Defendant. The 1^st Defendant Bank also sanctioned the loan facilities on the basis of MOD and supplemental MOD under various heads like OD-General, Working Capital Demand Loan, GECL, Covid FITL and additional assistance for a sum of Rs. 38 Lakhs and odd to the Applicant based on the properties mortgaged by him. The Applicant is a good customer to the 1^st Defendant's branch and the Applicant making payments of EMI promptly after obtaining the loan. In view of COVID-19, the construction works completely stalled and it caused more trouble to increase the accumulation of interest by which the non-payment of dues arises. Hence, the Defendant Bank has classified the loan account as NPA and issued a Demand Notice dated 09.03.2022 to the Applicant claiming Rs. 38,73,904.25p. But without considering earlier repayments, the 1^st Defendant again issued a Possession Notice vide Paper Publication dated 01.06.2022 for a sum of Rs. 40,41,147.61p as on 31.05.2022 and further interest thereon. Subsequently, issued a Sale Notice dated 27.07.2022 and sale fixed on 30.08.2022 claiming an outstanding amount of Rs. 41,12,722.61p as on 27.07.2022. In the above said e-auction one J. Abdul Basith was declared as a successful bidder and that was questioned by this Applicant in Writ Petition vide WP (MD) No. 21935/2022 before the Hon'ble High Court of

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Page 2 of 11

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SA No.112/2023

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Madras (Madurai Bench) and the same was dismissed as infructuous on 23.01.2023 as the sale was cancelled already because the entire sale consideration was not paid by the Auction Purchaser and EMD alone paid.

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In the above circumstances, the Applicant has made negotiation for repayment with the 1^st Defendant, but all of a sudden the another communication served to the Applicant from Advocate Commissioner dated 25.02.2023 saying that he would take Physical Possession on 10.03.2023 and hand it over to the 1^st Defendant in pursuant to the order passed by the 2^nd Defendant in CR.MP.No. 1217/2022 dated 03.09.2022 for the outstanding amount of Rs. 42,04,239/- as on 12.08.2022 from the Applicant and the same was ordered without any notice. Hence, the Applicant has no knowledge about the 2^nd Defendant's Order till receiving the communication from Advocate Commissioner dated 25.02.2023. As such the proceedings initiated against the Applicant is not valid under law and the same has to be set aside on the following among other grounds:-

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Grounds:-

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The impugned order passed by the 2^nd Defendant in Cr.MP.No. 1217/2022 dated 03.09.2022 without any caution notice to the Applicant and as such the subsequent communication of Advocate Commissioner dated 25.02.2023 directed to hand over the Physical Possession is not in fair.

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The Defendants have not given notice to the Applicant and as such the proceedings initiated by the 1^st Defendant ought to have been quashed at the first instance.

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The Application made before the 2^nd Defendant U/s. 14(1) of the SARFAESI Act seeking appointment of Advocate Commissioner to take Physical Possession of secured asset by the 1^st Defendant, who is the Branch Manager only and not an Authorised Officer as per Section 13 (12) of the Act, as such the Application seeking assistance ought to have been rejected.

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The 2^nd Defendant has failed to issue any notice or notice of hearing to the Applicant before appointing an Advocate Commissioner to secure the

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Page 3 of 11

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SA No.112/2023

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property from the hands of the Applicant, as such the order passed was an erroneous one and the same is not valid under law.

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The Defendants have failed to consider the Applicant's right to livelihood and right to hold the property guaranteed under Constitution of India.

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The Defendants have adopted all the methods in an expedite manner to throw away the Applicant and his family members from their peaceful possession and enjoyment over the property instead of hearing the genuine request of the Applicant, the 1^st Defendant having much interest to deprive the Applicant's property instead of collecting outstanding amount.

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The interest levied by the 1^st Defendant is against the guidelines of Reserve Bank of India and also the judgements of Supreme Court of India. 8. In any other point of view the impugned order dated 03.09.2022 passed by the 2^nd Defendant is liable to be set aside. Therefore, the Applicant challenges the same and filing this Application before this Hon'ble Tribunal.

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Schedule of Property

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Madurai District, Madurai South Registration District, Joint No.4, Sub-Registration District, Madurai North Taluk, Anaiyur 2^nd Bit Village, R.S.No. 1/10, for the extent of 0.17.0 hectare ie., 42 cents land and Northern side corresponding to old S.No. 103/4, bearing old Patta No. 1751 then Patta No. 1757 at present New Patta No. 1761 Corresponding to R.S.No. 3/4B2 for the extent 1.18.50 hectare i.e., 2 acre 93 cents land together divided into various layout plots in the name and style of Sri Varamangala Nagar in that plot no. 45 Eastern side for an extent 628 Sq.ft house site comprised in R.S.No. 1/10 house site and bounded on Boundaries:-

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On the North : 23 ft wide east west Madurai Corporation common road On the East : R.S.No. 4 part house site On the South : Plot No. 1 part house site On the West : Plot No. 45 Western side house site Admeasuring: East West on Northern side 23'1'ft

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East West on Southern side 23'2'ft North South on Eastern side 24'9'ft North South on Western side 29'7'ft

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Measuring for an extent 628 sq.ft.

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Page 4 of 11

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SA No.112/2023

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The Applicant has submitted the following List of documents in support of his claim in the SA, which are as follows:

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S.No.	Date	Particulars
1.	20.03.2023	Application filed U/s. 17 of the SARFAESI Act, 2002
2.	09.03.2022	DemandNotice
3.	01.06.2022	Paper Publication of Possession Notice
4	27.07.2022	SaleNotice
5	03.09.2022	Impugned Order passed by 2^ndDefendant in CRMP.No. 1217/2022
6	23.01.2023	Orderpassedin W.P.(MD)No. 21935/2022
7	25.02.2023	Communication from the Advocate Commissioner
8	20.03.2023	Vakalath
9	20.03.2023	Proofofservice

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3 . On the other hand, the Counsel for the 1^st Defendant Bank appeared before this Tribunal and filed Vakalat, Reply Statement and Typeset in which he has submitted that the Defendant Bank denies all the allegations and averments made in the above appeal that the claim of the Applicant is false & frivolous & baseless and she is not entitled to any relief as claimed in the SARFAESI Application. Hence, the SARFAESI Application has to be dismissed inlimine. Save those that are here-in-after expressly admitted all other allegations mentioned in the SARFAESI Application are denied as absolutely false & totally misleading and the Applicant is put to strict proof of every one of the said allegations.

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The 1^st Defendant Bank submitted that the Applicant, under the heading "Facts of the Case" has categorically admitted the borrowal of loan & execution of loan documents & creation of mortgage & default in payment & receipt of the SARFAESI Notices in his SARFAESI Application. The 1^st Defendant Bank do not admit all the allegations under the heading "Facts of the Case" as true & correct. The Applicant is put to strict proof of every one of the said allegations with valid & acceptable evidence. Most of the allegations are unwarranted so far as the matter-in-issue is concerned.

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It is further submitted that the Order passed by the 2^nd Defendant without any notice to the Applicant & subsequent receipt of Advocate

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Page 5 of 11

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SA No.112/2023

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Commissioner's notice to the Applicant was not fair and that the Defendants failed to follow the basic principles, hence the proceedings initiated by the 1^st Defendant along with the order passed by the 2^nd Defendant ought to have been quashed as absolutely false, totally misleading & highly unsustainable, whereas the facts remains that as per section 14 of SARFAESI Act & various judgements of Apex Court, it is not being mandatory, to issue notice to the Respondents in the Section 14 Application and that the 1^st Respondent initiated the recovery measures & obtained the Order in Section 14 Application from the 2^nd Respondent by following all the measures as contemplated under the Act & Rules.

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The 1^st Defendant Bank further submitted that they filed the Section 14 Application & obtained the Order from the 2^nd Defendant Bank through its Authorised Officer and that with regard to the livelihood & constitutional right of the Applicant and to throw the Applicant along with his family members from the secured asset were unwarranted so far as the matter-inissue is concerned. Further, the Defendant Bank charged interest as per the agreed contractual terms in accordance with guidelines of RBI. The Bank has issued Demand Notice and the same was also duly served on the Applicant. The Bank has taken symbolic possession of the property & issued Possession Notice and the Possession Notice was duly served on the Applicant and affixed the Possession Notice on the conspicuous part of the property and the Possession Notice was also published both in Tamil & English dailies. Thereafter, the Bank filed the section 14 Application and obtained Order on 01.09.2022. Further, the Bank obtained Valuation Report from the approved valuer for the property who has assessed the value of the property and that the Defendant Bank has properly & rightly fixed the value of the property & reserve price. Further, the Bank has issued two Sale Notices and the sale was conducted in both the Sale Notices and the same were cancelled by the Auction Purchaser, merely because that the Applicant used to approach the High Court or DRT after completion of the sale and used to inform the Auction Purchaser that the Applicant had obtained the stay with regard to the auctioned property. Despite of the pending stay, the Auction Purchaser not interested to pay the balance amount & compelled

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Page 6 of 11

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SA No.112/2023

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the Bank to refund 25% bid amount. The Applicant used to make this habit to threaten the Auction Purchaser which ultimately affects the recovery of the Defendant Bank. Further, the Applicant has challenged the 1^st Sale Notice dated 12.09.2022 in WP No. 21935/22 and the same was dismissed for non-completion of the sale for the reason stated above.

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It is further submitted that the Applicant has not sent any reply to the 13(2) Demand Notice. Non sending reply to 13(2) Demand Notice is fatal to his case. The Applicant has also not challenged the Possession Notice in DRT, Not challenging of Possession Notice is fatal to his case. The Bank further submitted that there is no procedural irregularity on the part of the Defendant Bank in issuing the Demand Notice & taking possession & issuing Possession Notice & issuing Sale Notice & bringing the property for sale under the SARFAESI Act

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& Rules and that the alleged procedural irregularity mentioned in the SARFAESI Application are not factually & legally correct and that the Defendant Bank has issued the Demand Notice & Possession Notice & Sale Notice only as per the provisions & procedures of the SARFAESI Act & Rules. Hence, if the Sale Notice & Sale Certificate is set-aside, the Defendant Bank will be put to untold hardships and irreparable loss & injury; on the other hand no prejudice will be caused to the Applicant. The balance of convenience is only in favour of the Defendant Bank.

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It is further submitted that the Applicant is a willful & Chronic Defaulter. He willfully, wantonly & deliberately not repaying the loan amount despite his sufficient means to repay the loan and that the main intention of the Applicant is only to drag on the proceedings and to defeat & delay & defraud the valuable rights of the Defendant Bank. And, that the only remedy available to the Applicant is to re-pay the entire dues to the Defendant Bank in order to stop the sale as per section 13(8) of the SARFAESI Act.

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It is therefore prayed that this Hon'ble Tribunal may be pleased to dismiss the above SARFAESI Application with cost and thus render justice.

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Typed set of Papers filed by the Defendant Bank

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Page 7 of 11

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SA No.112/2023

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S.No.	Date	Particulars
1	09.03.22	DemandNoticewith ReturnCover
2	11.03.22	Paper Publication of Demand Notice in English daily
3	11.03.22	Paper Publicationof DemandNoticein Tamildaily
4	01.06.22	Possession Noticewith ReturnCover
5	03.06.22	Paper Publication of Possession Notice in English daily
6	03.06.22	Paper Publication of Possession Notice in Tamil daily
7	****	Photograph showing affixture of Possession Notice
8	03.09.22	CJM Order

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4. ON THE BASIS OF ABOVE PLEADINGS THE POINT WHICH ARISES FOR CONSIDERATION IS:-

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WHETHER THE APPLICANT IS ENTITLED TO GET THE RELIEFS AS PRAYED FOR?

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5 . Having heard the parties and after going through the entire documents available on the records, this Tribunal find that there is no dispute with regard to the availment of loan facilities by creating equitable mortgage on his property. Since, the borrower failed to repay the loan amount that made the loan account as NPA on 02.03.2022. It is the contention of the counsel for the Defendant Bank that the Applicant after availing the above said loan facilities, failed to repay the outstanding loan dues regularly. The Applicant himself has admitted the fact that he could not made payments regularly in view of COVID-19, the construction works completely stalled and it caused more trouble to increase the accumulation of interest by which the non-payment of dues arises and that he committed default in payment of the outstanding dues. The averments narrated in the SA would strengthen the contention of the Defendant Bank and due to the failure of the Applicant to repay the outstanding dues, his loan account has been classified as Non Performing Asset. Therefore, the Defendant Bank was constrained to issue Demand Notice dated 09.03.2022 U/s. 13(2) of SARFAESI Act. I also perused the documents filed by both the parties and I find that in the typed set of papers at page nos. 1 to 7, the Bank has produced the copy of Demand Notice & the returned cover. Though the returned cover is not legible enough to verify the genuineness, the Defendant Bank has submitted the copies of Paper Publication of Demand

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Page 8 of 11

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SA No.112/2023

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Notice made in both Tamil & English dailies. However, the Bank does not make it clear that on which date, locality and on which Newspaper it was published. The Bank has only produced the Xerox copies of Paper Publication made in both languages, which do not bear the mandatory details required as per the SARFAESI Act. The Defendant Bank has not filed original documents in spite of giving opportunities rather they have replied that they have no original documents. Hence, this issue is decided in favour of the Applicant.

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Thereafter, the Defendant Bank issued Possession Notice U/s. 13(4) of SARFAESI Act on 01.06.2022. I perused the documents filed by the Defendant Bank and at page nos. 10 to 12 of the typed set of papers, the Bank has produced the copy of Possession Notice & the returned cover. The returned cover is not legible enough to verify the genuineness and the Defendant Bank has submitted the copies of Paper Publication made in both Tamil & English dailies. However, the Bank does not make it clear that on which date, locality and on which Newspaper it was published. The Bank has only produced the Xerox copies of Paper Publication of Possession Notice in the Newspapers as well as xerox copies of photos on affixture of Possession Notice on the conspicuous part of the property. Since the copies furnished by the Defendant Bank do not bear the mandatory details such as on which date & on which Newspapers the Paper Publication has been made, and the photos produced by the Defendant Bank also does not bear the mandatory details, such as date of affixture & place of affixture, etc. as mandated in Rule 8(2) of Security Interest (Enforcement) Rules, 2002, which clearly says that,

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"The Possession Notice as referred to in sub-rule (1) shall also be published, as soon as possible but in any case not later than seven days from the date of taking possession, in two leading newspapers], one in vernacular language having sufficient circulation in that locality, by the Authorized Officer."

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Hence, the Defendant Bank has failed to rebut the allegation of the Applicant. Therefore, this issue is decided in favour of the Applicant.

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Page 9 of 11

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SA No.112/2023

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Thereafter, the Defendant Bank had approached the 2^nd Defendant and obtained the impugned Order dated 03.09.2022 vide Cr.M.P.No. 1217/2022 and the 2^nd Defendant had appointed an Advocate Commissioner to take Physical Possession of the Schedule mentioned property. Moreover, the Defendant Bank has already issued two Sale Notices, which were also cancelled, since the Applicant approached the Hon'ble High Court and Hon'ble DRT and obtained the stay Order with regard to the auctioned property.

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The Applicant has no doubt being a defaulter is liable to pay the loan amount to the 1^st Defendant Bank and the Bank has been given ample power to recover the outstanding loan amount from the borrower by invoking the SARFAESI Act and without the intervention of any Court. But, it shall not allow the Bank to take the Physical Possession of the property of the Applicant without following the due process of law. I also find that the Applicant has failed to comply the conditional stay Order dated 01.08.2023 passed by this Tribunal. Thus, he has failed to show his bona-fide before the Court.

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Under the above facts and circumstances of the case, this Tribunal is of the considered view to allow the SARFAESI Application.

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In the result,

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SA No.112/2023 is allowed. No costs.

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The Possession Notice dated 01.06.2022 passed by the 1^st Defendant Bank is hereby set aside.

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The Impugned Order passed by the Ld. Chief Judicial Magistrate, Madurai dated 03.09.2022 in Cr.MP.No. 1217/2022 is also hereby set aside.

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All the expenditures incurred in issuance of Impugned Possession Notice dated 01.06.2022 & Order passed by the Ld. Chief Judicial Magistrate, Madurai dated 03.09.2022 in Cr.MP.No. 1217/2022 shall not be included in the loan account of the Applicant.

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Page 10 of 11

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SA No.112/2023

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The 1^st Defendant Bank is at liberty to initiate fresh action against the Applicant for recovery of loan amount following strictly the SARFAESI Acts & Rules.

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Consequently, all pending IAs (if any) are also disposed of. No costs.

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Dictated to PA (DK), taken down, transcribed, typed by her, corrected and pronounced by me in the Open Court in this the 18^th September, 2025.

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sd/- (SEEMA SINHA) PRESIDING OFFICER

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Uploaded on 24.09.2025

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Pmr Construction v. Canara Bank

Case brief

What is this about?

What did the court decide?

Pmr Construction v. Canara Bank

Case brief

What is this about?

What did the court decide?

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