Allowed

Manikandan v. PNB Housing Finance Ltd.

DRT24 Dec 2025SA/146/2024

Case brief

AI extract

What is this about?

The Tribunal allowed an application under Section 17(1) of the SARFAESI Act to set aside a Sale Notice dated 14.02.2024. The Tribunal held that the Bank failed to comply with mandatory procedural rules, specifically lacking a valuation report and failing to provide evidence of proper newspaper publication and affixation of the sale notice as per Security Interest (Enforcement) Rules 2002.

What did the court decide?

SA No. 146 of 2024 allowed; sale notice set aside; expenditures for failed sale not to be added to loan; Bank directed to provide account details and Lok Adalat opportunity.

Manikandan versus PNB Housing Finance Ltd. — Banking and Recovery | DRT (2025)

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SA No.146/2024

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI

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DATED THIS 24^th DAY OF DECEMBER, 2025

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PRESENT: SEEMA SINHA

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[PR. DISTRICT & SESSIONS JUDGE - Retd]

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PRESIDING OFFICER

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SA No. 146/2024

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Manikandan, S/o. Tharmalingam, No. 86, 7^th New Mettu Street, Pykara, Madurai – 4. --- Petitioner/Applicant

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-Vs-

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The Authorized Officer, PNB Housing Finance Ltd., No. 48, Nandhini Building, 3^rd Floor, Bye pass road, Madurai – 625 010.

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--- Defendant FI

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Appearance of Advocates: Mr. Manikandan (Party in Person) ---- Counsel for the Applicant M/s. I. Suthakaran ---- Counsel for the Defendant FI

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This SARFAESI Application was heard in the presence of the Applicant party in person & Counsel for the Defendant FI and fixed for passing final order before me and upon hearing the arguments of the Counsel and having stood over for consideration till this day, this Tribunal delivered the following:

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O R D E R

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1. This application has been filed under Sec.17(1) of the SARFAESI Act 2002 by the Applicant praying that this Hon'ble Tribunal may be pleased to set aside the Sale Notice dated 14.02.2024 scheduled to be held on 29.02.24

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SA No.146/2024

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under the SARFAESI Act, 2002 issued by the Defendant Bank in respect of the Schedule Mentioned Property.

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

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The Counsel for the Applicant submitted that the Schedule Mentioned Property situated in Madurai is belong to the Applicant. The Applicant was running Appalam factory and for the development of Appalam factory the Applicant approached the Defendant Bank and availed a loan of Rs. 26,25,000/- on 23.01.2018 as per the sanction letter. The Applicant paid the EMI regularly upto April 2019 and he met with an accident, therefore he was unable to run the factory and he recovered from the accident and corona period had started, therefore the Applicant unable to run his factory and failed to pay the EMI. The Defendant Bank issued the Demand Notice on 17.09.2019.

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It is further submitted that subsequently, the Possession Notice issued and the Defendant obtained an Order from the Ld. CJM, Madurai in Cr.M.P.No. 401/2020 dated 31.12.2020. Immediately the Applicant filed an SA No. 62/2021 along with IA No. 254/2021 before this Hon'ble Tribunal and this Hon'ble Tribunal passed a conditional Order to pay Rs. 3,99,000/-. The Applicant has paid the 1^st Instalment and failed to pay the 2^nd Installment due to corona pandemic. On 18.01.22, Sale Notice was issued and auction scheduled on 25.02.22. Thereafter, the Applicant rushed and filed SA No. 81/2022 and obtained a conditional stay order and paid Rs. 10,00,000/(Rupees Ten Lakhs only).

¶23

The Applicant earlier filed an Application before the Hon'ble High Court of Madras (Madurai Bench) in WP(MD)No. 22737/2021 to de seal the premises and the High Court directed the Defendant for OTS and disposed on 14.09.2022. Then again the Applicant filed a WP(MD)No. 6843/2023 and the Hon'ble High Court ordered for the Applicant to deposit Rs. 2,00,000/- within two months from 28.06.23 and the remaining amount of Rs. 2,50,000/within 3 months from the date of possession by the Applicant. The Applicant put in possession and the Applicant had taken possession and found that the machineries which all are not in use for months together completely spoiled and the renovation for the machinery prevented him to pay the remaining amount and not able to continue the EMI. Now, the Applicant spent a huge amount to the repairing of machinery. And found a paper inside of his premises on 24.02.24 about the 15 days notice of sale and auction date on 29.02.24. Due to corona pandemic and other reasons prevented his payment regularity as well as the Defendant sealed the factory caused as heavy damage

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SA No.146/2024

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to the machinery. The Defendant issued Demand Notice during 2019 for a sum of Rs. 26,71,561/- and the Applicant paid EMI Rs. 18.00 Lakhs but still the Defendant Bank claimed Rs. 26,71,561/- without deducting the payment in the overall debt.

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It is further submitted that the Applicant is now residing in the schedule property and the two sons are studying in the nearby school. If the house stripped from Applicant certainly the Applicant’s family totally thrown into streets with school going children. This will certainly cause an irreparable loss to the Applicant. Therefore, the Sale Notice dated 14.02.24 by the Defendant otherwise the Applicant may put to irreparable loss. The Defendant illegally not deducted the amount paid by the Applicant so far. The entire proceedings being perused by the Defendants are illegal. Hence, the Possession u/s. 13(4) of SARFAESI Act is liable to be set aside.

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It is therefore prayed that this Hon'ble Tribunal may be pleased to set aside the Sale Notice dated 14.02.24 and allow the Application and thus render justice.

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SCHEDULE OF PROPERTY

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All that piece and parcel of housing building to an extend of 2319 sq.ft comprised in Survey No. 482 (part), situated at Madakulam Village, bearing corporation Ward No. 100, Town survey Ward XXII, Survey Block 22, Survey field No. 86, pykara, Muthuramalingapuram 7^th Street, within the jurisdiction Joint No. IV, Madurai South Sub Registration District, Madurai South Taluk, Madurai Sub Registration District and bounded on the

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North by : house belongs to Manikandan and Koil Rajappa South by: Common road, East by : Common road, West by: house belongs to Kasi

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The Applicant has submitted the following List of documents in support

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of his claim in the SA, which are as follows:

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S.No.	Date	Particulars
1.	23.01.18	Loansanction letter
2.	17.09.19	DemandNotice
3.	03.01.20	Possession Notice
4.	31.12.20	CJMOrder
5.	15.02.21	SA62/2021ordercopy
6.	18.02.22	SA81/22 ordercopy
7.	14.02.23	SaleNotice

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SA No.146/2024

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8.	22.02.23	SaleNotice
9.	28.06.23	WP(MD)No.6843 ordercopy
10	08.11.23	SA No.81/22 ordercopy
11	14.02.24	Impugned Sale Notice

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List of Documents filed by the Applicant

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S.No.	Document Name
1.	Written Argument
2.	Paymentproof
3	PNB BankSoldNotice
4	Lok AdalatMadurai DRT Notice
5	Lok Adalat CoimbatoreDRT Notice
6	DwarkaCourtDelhiOrder
7	PNB BankStatement of Account
8	SA62/21 Madurai DRTOrder
9	SA81/22 CoimbatoreDRTOrder
10	SA 146/24 Madurai DRTOrder
11	CJMCourtMaduraiOrder
12	HighCourtMaduraiOrder
13	HighCourtMaduraiOTS Order
14	MSMECertificate copy

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3. On the other hand, the Counsel for the Defendant FI appeared before this Tribunal and filed Vakalat, Reply Statement & Typed set of papers in which they have submitted that at the first hearing i.e. on 29.02.24 itself, it was intimated before the Hon'ble Tribunal that the sale was not held as no bid took place and prayed for dismissal of the said SA as infructuous. However, the Tribunal has granted a conditional stay order which was not complied by the Applicant. The Applicant has paid Rs. 2,00,000/- only and he has not regularized the EMI and till now no EMI has been paid by the Applicant to the Defendant Bank.

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It is further submitted that the Applicant Mr. Manikandan as borrower along with wife Ms. Sukumari as co-borrower had availed financial assistance for a sum of Rs. 26,25,000/- from Defendant FI and mortgaged their property. Further it is submitted that from the very beginning of the loan tenure the Applicant has not paid the said installments properly and hence, the loan account has been classified by the Defendant FI as NPA on 13.09.2019 and thereafter Demand Notice dated 17.09.2019 for a sum of Rs. 26,57,543.92p was issued on 03.01.2020. Thereafter Possession Notice dated 03.01.2020 U/s. 13(4) was also issued. Further, the Defendant FI has obtained an Order dated 31.12.2020 in Cr.M.P.No. 401 of 2020 before the Ld. CJM, Madurai. Challenging the same, the Applicant filed SA No. 62 of 2021 before this Hon'ble Tribunal and also obtained a conditional stay order which was not

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SA No.146/2024

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complied and only one instalment of Rs. 4,00,000/- towards the 1^st installment on 23.02.21 was paid.

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It is further submitted that thereafter the Applicant filed another SA No. 81 of 22 before this Hon'ble Tribunal challenging the Sale Notice dated 18.01.2022 issued by the Defendant and the sale scheduled to be held on 25.02.2022. Thereafter, the Applicants failed to maintain the subject loan account in live status and hence the loan account has been declared as NPA. Then, the Defendant Bank issued Sale Notice dated 22.02.23 which was challenged by the Applicant in WP (MD) No. 6843 of 2023 before the Hon'ble High Court of Madras (Madurai Bench). Since, the Applicant paid the conditional amount, the Hon'ble High Court directed to de-seal the premises. Thereafter, the Applicant had not paid regular EMIs as directed by the Order of Hon'ble High Court. Hence, the Defendant FI issued Sale Notice dated 14.02.24 and auction schedule to be held on 29.02.24. Challenging the same, the present SA No. 146 of 2024 is filed by the Applicant before this Hon'ble Tribunal.

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It is further submitted that the Applicant is a willful defaulter and has failed to prove his bonafide before this Hon'ble Tribunal every now and then. As on 29.10.24, the Applicant is liable to pay a total outstanding due of Rs. 27,12,617.71p to this Defendant FI.

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Therefore, it is 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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Type set filed by the Defendants Bank

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S.No.	Date	Description of Documents
1	28.06.2023	Order passed in WP(MD)No. 6843 of 2023 by Hon'ble High Court
2	29.02.24	Order passed in SA No. 146 of 2024 by Hon'ble Tribunal, Madurai
3	26.04.24	Diary proceedings in SA No. 146 of2024
4	08.05.24	Diary proceedings in SA No. 146 of2024
5	15.05.24	Diary proceedings in SA No. 146 of2024
6	06.09.24	Diary proceedings in SA No. 146 of2024
7	29.10.24	Diary proceedings in SA No. 146 of2024
8	28.01.25	E-Auction Sale Notice issued by the Defendant along with postal receipt and AD Card
9	22.02.25	Notice sent byDefendant
10	03.03.25	Applicant Counsel notice sent to Defendant
11	12.03.2025	Defendant Counsel reply notice along with postal receipt and AD card
12	---	Statement of Account for Applicant’s loan account as on 30.06.25

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SA No.146/2024

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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 records, this Tribunal find that the Applicant has availed credit facilities from the 2^nd Defendant Bank for a sum of Rs. 26,25,000/- (Rupees Twenty Six Lakhs Twenty Five Thousand only) on 23.01.2018 in order to develop his appalam factory. It is further case of the Applicant that he was very prompt in repaying the loan amount upto April 2019. Since he met with an accident and due to covid -19 pandemic, the Applicant unable to run his factory and failed to pay the EMI. Hence, the loan account has been classified by the Defendant FI as NPA on 13.09.2019.

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Thereafter, the Defendant FI has issued Demand Notice dated 17.09.2019 for a sum of Rs. 26,57,543.92p (Rupees Twenty Six Lakhs Fifty Seven Thousand Five Hundred and Forty Three and paise Ninety Two only) u/s. 13(2) of the SARFAESI Act. Thereafter Possession Notice dated 03.01.2020 U/s. 13(4) was also issued. Further, the Defendant FI has obtained an Order dated 31.12.2020 in Cr.M.P.No. 401 of 2020 before the Ld. CJM, Madurai. Challenging the same, the Applicant filed SA No. 62 of 2021 before this Hon'ble Tribunal and also obtained a conditional stay order which was not complied and only one instalment of Rs. 4,00,000/- towards the 1^st installment on 23.02.21 was paid, thereafter the case was dismissed on 26.08.2024 for non-prosecution.

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It is further submitted that thereafter the Applicant filed another SA No. 81 of 22 before this Hon'ble Tribunal challenging the Sale Notice dated 18.01.2022 issued by the Defendant and the sale scheduled to be held on 25.02.2022. But the SA No. 81 of 22 was disposed off as closed on 08.11.2023. Thereafter, the Applicant failed to maintain the subject loan account in live status and hence the loan account has been declared as NPA. Then, the Defendant Bank issued Sale Notice dated 22.02.23 which was challenged by

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SA No.146/2024

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the Applicant in WP (MD) No. 6843 of 2023 before the Hon'ble High Court of Madras (Madurai Bench). Since, the Applicant paid the conditional amount, the Hon'ble High Court directed to de-seal the premises. Thereafter, the Applicant had not paid regular EMIs as directed by the Order of Hon'ble High Court. Hence, the Defendant FI issued Sale Notice dated 14.02.24 and auction schedule to be held on 29.02.24. Challenging the same, the present SA No. 146 of 2024 is filed by the Applicant before this Hon'ble Tribunal.

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In this case, I find that the Applicant had approached several courts by challenging the earlier Sale Notice and Order of the Ld. CJM. I have perused the present Sale Notice dated 14.02.24 scheduled to be held on 29.02.24 and I find that the Defendant FI has already filed a memo dated 06.09.2024 and informed that no sale was held as there was no bidders and prayed for dismissal of the said SA as infructuous. However, the Applicant had also filed an Objection Memorandum dated 29.10.2024 stating that the Applicant is ready to settle the total amount, but he account details was not furnished to him so far. The total amount due for the Applicant has to be given to the Applicant by the Defendant FI, but they have not provided so far. The Applicant ready to settle through OTS, but the bank dragging on this issue. In the meantime, the case was referred for Lok Adalat on 30.09.24. The communication from the Lok Adalat reached him belatedly, therefore unable to attend the Lokadalat. The Applicant ready to attend the Lok Adalat to settle the loan amount. Therefore, it is requested to direct the Defendant FI to provide the account pending and to provide an opportunity to appear in Lok adalat forthcoming.

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I also find that in the typed set of papers the Defendant FI has not filed the copies of AD Cards as a proof for having sent the Impugned Sale Notice dated 14.02.24 and auction schedule to be held on 29.02.24. Further, the Original Paper Publication copies published in both English and Tamil dailies and the photos as a proof for having affixed the impugned Sale Notice dated 14.02.24 on the conspicuous part of the property had also not been filed. Thus, I find that the Defendant Bank have not followed the Rule 8(6) & (7) &

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SA No.146/2024

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Rule 9(1) of the Security Interest (Enforcement) Rules 2002, which clearly says that,

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"( 6 ) The authorized officer shall serve to the borrower a notice of thirty days for sale of the immovable secured assets, under sub-rule (5):

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[Provided that if the sale of such secured asset is being effected by either inviting tenders from the public or by holding public auction, the secured creditor shall cause a public notice in the Form given in Appendix IV-A to be published in two leading newspapers including one in vernacular language having wide circulation in the locality.]"

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"( 7 ) [Every notice of sale shall be affixed on the conspicuous part of the immovable property

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and the authorised officer shall upload the detailed terms and conditions of the sale”

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“9. Time of sale, issue of sale certificate and delivery of possession, etc.

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- [(1) No sale of immovable property under these rules, in first instance shall take place before the expiry of thirty days from the date on which the public notice of sale is published in newspapers as referred to in the proviso to sub-rule (6) of rule 8 or notice of sale has been served to the borrower :

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Provided further that if sale of immovable property by any one of the methods specified by sub rule (5) of rule 8 fails and sale is required to be conducted again, the authorized officer shall serve, affix and publish notice of sale of not less than fifteen days to the borrower, for any subsequent sale.]”

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I also perused the documents and I find that the Defendant Bank has failed to file a Valuation Report which is obtained before issuance of the Impugned Sale Notice dated 14.02.24 as per Rule 8 (5) of Security Interest (Enforcement) Rules 2002, which clearly says:-

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"(5) Before effecting sale of the immovable property referred to in sub-rule (1) of rule 9, the authorized officer shall obtain valuation of the property from an approved valuer and in consultation with the secured creditor , fix the reserve price of the property and may sell the whole or any part of such immovable secured asset by any of the methods provided therein" .

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The Applicant has no doubt being defaulter is liable to pay the loan amount to the Defendant Bank and the Bank has been given ample power to recover the outstanding loan amount from the borrowers by invoking the SARFAESI Act and without the intervention of any Court. But it shall not

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SA No.146/2024

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allow the Bank to sell the property of the Applicant without following the due process of law strictly.

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In view of the above discussions, I find that the Defendant FI has proceeded under the SARFAESI Act and rules for recovery of money from the Applicant but they have not followed the procedure as mentioned in the SARFAESI Act & Rules strictly and failed to produce the substantial evidences and failed to rebut successfully the allegations made by the Applicant. Therefore, this Tribunal holds that the Applicant is entitled to get the reliefs as prayed for in SA No. 146 of 2024 .

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In the result ,

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(a) SA No. 146 of 2024 is allowed.

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(b) Since the Sale did not hold for want of bidders, the Defendant FI is directed that all the expenditures incurred in respect of the Impugned Sale Notice dated 14.02.24 and auction scheduled to be held on 29.02.24 shall not be included in the loan account of the Applicant.

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(c) Further the Defendant FI is directed to provide the pending account details and to provide an opportunity to the Applicant to appear in Lok adalat forthcoming for settlement.

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(d) And if the matter is not settled, the Defendant FI 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 24^th December 2025.

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sd/-

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(SEEMA SINHA) PRESIDING OFFICER

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Dictated & corrected by me sd/-

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(SEEMA SINHA) PRESIDING OFFICER Typed by me

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(D. Krishnaveni, PA)

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uploaded on 02.01.2026

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Manikandan v. PNB Housing Finance Ltd.

Case brief

What is this about?

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Manikandan v. PNB Housing Finance Ltd.

Case brief

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