The DRT dismissed the Securitization Application challenging a Section 14 order for possession of secured assets. The Tribunal held that Section 14 powers are ministerial and non-adjudicatory, rendering challenge to the order meritless for further interference.
Proceedings before the Tribunal dismissed and the impugned Section 14 order upholds.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
SA No.113/2025
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23.06.2025
IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI
Dated this the 23rd day of June, 2025
Present: SMT. S.V. GOWRAMMA Presiding Officer
SA No. 113 of 2025
-Vs-
The Authorised Officer, Indian Bank, Mudaliarpet Branch, No.70, Cuddalore Main Road, Mudaliarpet, Puducherry -605 004. ….Respondent
Counsels on record / appeared:
Counsel for Applicant : M/s. J. Prince Counsel for respondent : M/s. R. Jagadeesan
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ORDER ON SA 113/2025
Pleadings of the applicant:
3.1 The case of the applicant is that the applicant firm during the course of business availed the Overdraft facility for a sum of Rs.24 Lakhs and Term Loan a sum of Rs.9.90 Lakhs in the year of 2015. The 3rd and 4th applicant stood as the Guarantors and the 3rd applicant Mr. K. Sekar along with his wife late S. Kala offered the Item No.1 of the Schedule Mentioned Property as collateral security and the 4th applicant offered the Item No.2 of the Schedule Mentioned Property as collateral security.
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3.2 It is contented that the applicant were making the remittances towards the loan account as agreed upon and as per the schedule as provided for in the agreement and there is no default to classify the account as NPA. However the respondent bank has classified the account as NPA in Violation of the RBI guidelines. The bank has issued the possession notice claiming to have issued Demand Notice dated 29.02.2024 and called upon to pay the due amount within the 60 days and the demand notice has not been served to all the Parties to the Loan. Without proper demand notice to the applicants the bank have proceeded the possession notice which is not published in the leading Newspapers and violated of the statutory compliances and have wrongly invoked the Sec.14 application.
3.3 The 1st applicant approached the bank and availed the OTS scheme on 31.12.2024 for Rs.36.43 Lakhs to be paid on or before 31.01.2025, and had paid of upfront amount of Rs.4 Lakhs on 21.12.2024 and the balance amount of Rs.32.43 Lakhs was agreed to be paid on or before 31.01.2025.
3.4 However due to sudden demise of the investor and other financial constraint the applicant could not make the payment on 31.01.2025, hence sought extension of time for making the balance amount.
3.5 The respondent bank have proceed further and had served the intimation letter to take the physical possession of the Schedule Mention Property through the Advocate Commissioner vide its letter dated 30.01.2025 and hence the applicant challenging the Sec.14 Order in the present SA.
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3.6 The applicant Apprehends dispossession from the secured assets and seriously and sincerely trying to mobilize funds to settle the account and the respondent have not properly adjust the amounts paid by the borrower and had charged interest and penal interest against the guidelines of RBI.
3.7 It is evident from the possession notice that the Applicants made substantial payments even after the alleged demand notice dated 29.02.2024, and without giving proper credit the bank have proceeded and have approached the CJM, Pondicherry.
3.8 The property mentioned is the primary security with regard to the loan availed and the respondent have proceeded under the Act without registering the charge Central Registry, hence the bank cannot proceed under the SARFAESI Act.
of the property after taking the inventory if necessary with the assistance of the police. And said order has been misused by the respondent without the knowledge of the CMM/CJM.
3.10 The affidavit filed by the Authorized Officer does not comply to Point No.9 of the Sec.14 application, which is not duly verified by the Ld. CJM. There is no bifurcation of the total charges, Overdue interest and penal charges and overdue penal interest as per RBI Norms and definition of the NPA as per the Prudential Norms and places reliance on the judgment of High court of Judicature at Madras in the WP No.29962 of 2013 and MP No.1 of 2013 dated 06.11.2013 which gave directions to CMM/CJM and
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other authorities. The CJM has failed to verify affidavit filed is in due confirmation declaring the aggregate amount of financial assistance have pass the order.
3.11 In the grounds of the SA, it is contented deceased mortgagor is not a party in the S.14 application as the legal heirs of the deceased mortgagor viz., Kala, the bank did not issue S.13(2) demand notice to all the parties and have not comply with rule 3 A, demand notice nor affixed on the residential property prays farce the set aside the Sec.14 order passed by the Hon’ble CJM, Pondicherry in Cr.M.P.No.4402 of 2024 dated 10.10.2024.
Objections of the respondent bank:
4.2 The respondent in compliance issued sec.13(2) demand notice on 01.03.2024 which is duly served and have produced acknowledgment card with endorsement ‘Left’. As the applicant did not liquated the liability the bank have issued the 13(4) possession notice on 09.05.2024 and have produced by the acknowledgement for service of the S. 13(4). The
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publication the possession notice is published English in New Indian Express and Tamil in Dinathanthi on 11.05.2024, the notice is also affixed on the property and have column, all the measures under the Act.
4.3 The applicant does not deny having received the demand notice and duly produced. The classification of the account as NPA is in accordance with RBI guidelines, the interest charged is as per the interest rate relevant from time to time the bank and the bank has followed all the procedures, provisions and rules has contemplated.
4.4 The present SA is filed against the sec.14 Order under the SARFAESI Act. The Applicant complied the 1st part of the conditional order dated 10.02.2025, the 2nd part of the order was to be complied within 30 days, which was compiled after 10 days of the due date stipulated by this Hon’ble Tribunal. Hence the respondent prays to set aside the present SA.
Heard both sides of the Counsels and perused the records of the case
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Mr. K. Sekar, legal Mrs. S. Kala is contrary to 13(2) demand notice which clearly reflects that late the deceased Mrs. S. Kala is the wife of Mr. K. Sekar who is a party in S.13(2) demand notice and Manikandan S/o. Sekar, and Mahalakshmi D/o K. Sekar the other legal heirs of Mrs. S. Kala along with Mr. Sekar name is mentioned in the 13(2) demand notice.
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the notice, the 3rd applicant and also received the 13(2) demand notice on behalf of the deceased Mrs. S. Kala and the 5th party in the 13(2) demand notice is also received the 13(2) demand notice.
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consideration of the affidavit and the documents in support of the measures have allowed the 14 application. Infact the applicant does not dispute the availing of the credit facilities mortgage of the property as collateral security and the default in the repayment.
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Ltd. Vs. The State of Maharashtra has held that Court is only required to verify the affidavit of Secured Creditor filed in pursuance of the proviso to Section 14 and nothing more. The above Bombay High Court judgment has since been confirmed by the Hon’ble Supreme Court by its judgment
dated 26.09.2022 in the matter of Balakrishna Ram Tarle v. Phoenix
ARC (P) Ltd. as under:
“Thus, the powers exercisable by CMM/DM Under Section 14 of the SARFAESI Act are ministerial step and Section 14 does not involve any adjudicatory process qua points raised by the borrowers against the secured creditor taking possession of the secured assets. In that view of the matter once all the requirements Under Section 14 of the SARFAESI Act are complied with/satisfied by the secured creditor, it is the duty cast upon the CMM/DM to assist the secured creditor in obtaining the possession as well as the documents related to the secured assets even with the help of any officer subordinate to him and/or with the help of an advocate appointed as Advocate Commissioner. At that stage, the CMM/DM is not required to adjudicate the dispute between the borrower and the secured creditor and/or between any other third party and the secured creditor with respect to the secured assets and the aggrieved party to be relegated to raise objections in the proceedings Under Section 17 of the SARFAESI Act, before Debts Recovery Tribunal”.
any officer authorized by them) under S.14 can be challenged in court or before any other authority. This provision ensures that the authority of these officials in enforcing security interests is final and not subject to further review.
20. T hus, the Sec.14 order passed by the Ld. Section 14 order dated 10.10.2024 in Cr.M.P. No.4402/2024 passed by CJM, Pondicherry after due consideration and is only an execution order where no adjudication is
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required. The Order is passed considering the compliance of the provisions of the S. 14 [i-ix].
21. The applicant has filed the present SA the challenging the sec.14 Order dated 10.10.2024 when the Tribunal, Vide the proceeding dated 10.02.2025 had granted an interim order of the Stay on conditions to deposit 20% of the amount mentioned in the order in Two Installments. However, the applicant submit that the 1st part of the Conditional order 10% of amount within one week i.e. 15.02.2025. However, due to their financial constraint they could not unable to mobilize the fund within the stipulated time, and had complied the second installment of condition only on 25.03.2025 with the delay of 7 days.
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has considered and allowed the application which does not requires any intervention from this Tribunal. Accordingly, present SA is dismissed.
(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI
( Dictated to Steno (Suriya), transcribed by him, corrected, signed and pronounced by me on this the 23rd day of June, 2025)
LIST OF DOCUMENTS PRODUCED BY THE APPLICANT
| Sl. No. |
Description of Documents | Documents No. |
|---|---|---|
| 1. | Memorandum of Appeal dated 31.01.2025. | A-1 |
| 2. | OTS remittance letter 21.12.2024. | A-2 |
| 3. | Copy of impugned Order passed in Cr.M.P.No.4402 of 2024 by Hon’ble Chief Judicial Magistrate, Pondicherry dated 10.10.2024. |
A-3 |
| 4. | Notice issued by the Advocate Commissioner dated 30.01.2025. |
A-4 |
LIST OF DOCUMENTS PRODUCED BY THE RESPONDNET
| Sl. No. |
Description of Documents | Documents No. |
|---|---|---|
| 1. | Notice Under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 along with copy of the Acknowledgment slips dated 01.03.2024. |
R-1 |
| 2. | Possession Notice (For immovable property) along with acknowledgments dated 09.05.2024. |
R-2 |
| 3. | Paper Publication published both in Vernacular Language and English paper (English in New Indian Express and Tamil in Dinathanthi) dated 11.05.2024. |
R-3 |
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| 4. | Photograph of the property with Possession | R-4 |
|---|---|---|
| Notice affixed. | ||
| 5. | Order passed by the Hon’ble CJM Puducherry in | R-5 |
| Cr.M.P. No.4402 of 2024 dated 10.10.2024. |
SCHEDULE OF IMMOVABLE PROPERTY
All that piece and parcel of property of a single storeyed building bearing R.S. No.96 Pt, T.S.No.48/3, Block No.3, Ward J, Plot No.59 Pt, Door No.6, 2nd Cross Street, Pattammal Nagar, Mudaliarpet, Olandai Revenue Village, Mudaliarpet Commune & Municipality, within Puducherry Registration Sub-District and Puducherry Registration District.
Boundaries: North to a Plot No.58 owned by Velayutham
South to Murthy and Ramachandiran’s House
East to Plot No.34 owned by Janarthanan
West to a feet land owned by Chidambaram
Item II: All that part and parcel of the property bearing R.S.No.10, Block L.R.S No.88/3pt, Cad No.176 pt, Ward J, Block No.11, T.S.No.11 Pt, Viduthalai Nagar, Housing Scheme, Mudaliarpet, Olandai Revenue Village, within Puducherry Registration Sub District and Puducherry Registration District with Plinth area measuring 29.29 sq.ft., together with 6.29% of undivided interest in the plot area of 234.32 sq.mts.,
Boundaries:
North by side set back area
South by side set back area and LIG Flat No.11 of L Block East by rear set back area
West by LIG flat No.9 of 1 Block.
(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI
2 issues framed by the court
Whether the Debts Recovery Tribunal has jurisdiction to interfere with the impugned Section 14 order passed by the Chief Metropolitan Magistrate.
Whether the secured creditor complied with the procedural requirements under the SARFAESI Act before proceeding for possession.
Colour shows how this judgement treated each authority
Kotak Mahindra Bank vs Girnar Corrugators Pvt. Ltd.Referred¶17
Kotak Mahindra Bank vs Girnar Corrugators Pvt. Ltd. & Others
Phoenix ARC Pvt. Ltd. Vs. The State of MaharashtraRelied on¶18
Phoenix ARC Pvt. Ltd. Vs. The State of Maharashtra
Balakrishna Ram Tarle v. Phoenix ARC (P) Ltd.Relied on¶90
Balakrishna Ram Tarle v. Phoenix ARC (P) Ltd.
2 provisions across 2 enactments
M/s. Jaya Brothers Interial Decorators
Mr. S. Japragason
Mr. K. Sekar
Mr. S. Jayakumar
The Authorised Officer, Indian Bank
S.V. Gowramma
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
