The Debts Recovery Tribunal dismissed an application challenging a Chief Judicial Magistrate order under the SARFAESI Act regarding possession of mortgaged property. The court held the applicant was later than the procedure.
The Securitization Application standing dismissed. Interim orders granted stand vacated.
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.192/2022 (C)
1
06.03.2025
IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI
Dated this the 06th day of March, 2025
Present: SMT. S.V. GOWRAMMA Presiding Officer
SA No. 192 of 2022
Mr. S. Soundirardjane Sambath, S/o. Soundirardjane No 83, Bajanaimadam Street, Muthiraipalaym, Puducherry – 605 009. ….Applicant
-Vs-
The Authorized Officer, M/s. State Bank of India, Pondicherry Main Branch, 15, RUE SUFFREN Pondicherry – 605 001. ….Respondent
Counsels on record / appeared:
Counsel for Applicant : M/s. S. Sukumar Counsel for respondent : M/s. S.R. Sumathy
ORDER ON SA 192 /2022
The present Securitization Application [SA] is filed under sub section [1] of S.17 of the Securitization And Reconstruction of Financial Asset and Enforcement of Security Interest Act,2002 (for short the ‘Act’) challenging the action and the measure taken by the secured creditor under the Security Interest Enforcement Rules, 2002 [for short the Rules].
SA No.192/2022 (C)
2
06.03.2025
3. Pleadings of the applicant:
3.1 The case of the Applicant is that he is the borrower and guarantor, who had availed financial assistance in the nature of Housing loan of Rs.38,00,000/-, Cash Credit of Rs.37,00,000/- and Term Loan of Rs.22,00,000/- in the year 2012. However, the Bank disbursed only a sum of Rs.53,00,000/- and after availing the credit facility, the Applicant has repaid a sum of Rs.25,00,000/- into the loan account. However, the Bank has filed OA 134 of 2021, before this Tribunal, which stands posted to 10.05.2022.
3.4 The Respondent Bank without considering the repayments made has deliberately filed an Application under Section 14(2) of the SARFAESI Act before the Hon’ble Chief Judicial Magistrate, Puducherry in Crl.M.P. No.114 of 2022 for appointing an Advocate Commissioner to take the physical possession of the property, which is the residential property. The Applicant and tenants are residing in the said property and the Advocate Commissioner Mrs. A. Ajitha came to the property on 17.04.2022 and affixed the notice and the impugned order intimating to take the physical possession of the property on 18.04.2022 and the Advocate Commissioner has fixed to take the physical possession of the property on 22.04.2022.
SA No.192/2022 (C)
3
06.03.2025
3.6 The Bank as well as the Advocate Commissioner has not served the impugned order dated 05.03.2022 passed in Crl.M.P. No.114 of 2022. Hence, the Applicant undertakes to file the certificate copy of the order. It is settled principle of law that the person, who are in the possession of the property have to be heard before passing any order under Section 14 and agreed by the same the present SA is filed on the grounds that the entire proceedings taken by the Bank under SARFAESI Act is illegal, unjust, arbitrary and violation of principles of natural justice. The order passed by the CJM is contrary to law, vitiated by material irregularities. The order is silent on the aspect of service of Section 13(2) and Section 13(4) notices and the Sale Notice where the Ld. CJM, to see whether all the notices have been duly served.
4. Objections of the respondent bank:
SA No.192/2022 (C)
4
06.03.2025
Credit vide A/c No.36144180265 for Rs.15,00,000/- ; (3) Term Loan vide A/c No.36055807491 for Rs.15,00,000/- and created mortgage by way of deposit of title deeds in favour of the Bank. As the repayment was not made on various account in spite of repeated reminders from the Bank, the Bank classified the Loan Account as NPA on 10.05.2017 and sent Demand Notice under Section 13(2) of SARFAESI Act on 09.08.2017 calling upon the Borrower to discharge the total outstanding (aggregate) amount of Rs.58,22,250/- within 60 days failing which the Bank shall be entitled to exercise all the rights and the measures under Section 13(4) of the Act.
4.4 The Applicant received the demand notice and has not made any payment nor raised any objection nor forwarded any representation in response to the demand notice. Hence, the Bank has taken the possession of the property by issuing possession notice dated 13.10.2017 in due compliance of the provision of SARFAESI Act.
4.5 The Applicant did not choose to challenge the measures initiated by the Authorized Officer. The Authorized Officer thereafter issued sale notices fixing the e-Auction on 23.02.2018, 10.04.2019, 01.07.2019, on 26.02.2020 as is what is basis on 25.10.2021 and no bids were received, the sale could not be held.
4.6 Thereafter, another sale notice dated 18.12.2021 was issued fixing the e-Auction on 20.01.2022 and the sale was concluded and sale confirmation advice dated 20.01.2022 as well sale certificate was also issued. The reserve price was fixed based upon the valuation report dated 14.12.2021.
4.7 The Bank has received the entire e-Auction amount of Rs.65,13,000/certificate of sale under Rule 9(6) of Securitization Act, 2002 was issued on
SA No.192/2022 (C)
06.03.2025
5
31.01.2022, which was communicated to the Applicant vide Bank’s letter dated 18.02.2022.
4.9 The Bank has approached the Chief Judicial Magistrate, Puducherry seeking assistance to take physical possession of the secured asset under Section 14 of SARFAESI Act. The Hon’ble Chief Judicial Magistrate, Puducherry ordered on 05.03.2022 to appoint an Advocate Commissioner to take physical possession of the secured asset and then entrust the possession to the Authorized Officer of the Bank.
4.10 The Applicant has challenged the order dated 05.03.2022 passed by Chief Judicial Magistrate, Puducherry in the present SA. The Bank has denied all the averments of the SA and the averments made in the ground is denied as incorrect.
4.11 The Bank has filed a detailed Affidavit duly sworn by the Authorised Officer to the satisfaction of the Chief Judicial Magistrate, Puducherry, as required under the Act and the Rules made thereunder. The Bank has followed the mandatory procedure in issuing the procedure Section 13(2) and Section 13(4) notice which is duly served and acknowledged. However, the Applicant did not challenge the measures under Section 17 of the SARFAESI Act. The Bank has contended that they had followed all the measures initiated by them under the Act. Hence, prayer for the dismissal of the SA.
Heard both sides of the Counsels and perused the records of the case.
SA No.192/2022 (C)
6
06.03.2025
and also creation of the mortgage by deposit of title deeds favouring the Bank as collateral security to the credit facilities. In fact, the Applicant is also aware of filing OA 134 of 2021 due to the default in the repayment towards the credit facilities. Though the Applicant has challenged the Section 14 order has failed to point out any illegalities in the measures taken by the Respondent Bank. Due to the default in the repayment, the Bank has initiated measures under Section 13(4) after classifying the Account as NPA. Subsequently, the Bank has issued 13(2) demand notice demanding to discharge the liability of Rs.58,22,250/- in which the Respondent, as secured creditor proceeded under Section 13(4) of the SARFAESI Act.
5.2 In spite of receipt of the demand notice, as the Applicant did not raise any objection or repaid the entire loan amount, the Bank has issued the possession notice dated 13.10.2017, which was duly served on the Applicant. Despite service of the notices, the Applicant has not chosen to challenge any measure and hence the Bank has issued the sale notice fixing the e-Action on 23.02.2018, 10.04.2019, 01.07.2019, 26.02.2020 and on 25.10.2021. However, it is seen from the records that there were no bidders for the schedule sales. Hence, the Bank has issued another sale notice dated 18.12.2021 fixing the e-Auction sale on 20.01.2022 and the sale was conducted successfully and the sale certificate was also issued.
5.3 The Respondent Bank has filed the typed set of documents on 10.06.2023 by producing the sale certificate dated 04.02.2022 issued to the successful bidder Smt. R. Lakshmi, which is registered in the Office of the SRO, Oulgaret Registered as Document No.2910 of 2022.
SA No.192/2022 (C)
06.03.2025
7
the Section 14 Application vide order dated 05.03.2022. In fact, the Applicant has not made out any case or any violation in the Section 14 Application. However, the only contention taken by the Applicant is that there is no aggregate amount mentioned in the Section 14 Application. It is seen that the Respondent Bank have mentioned the outstanding amount due under the loan account and have complied to Section 14(i) to (ix). The Respondent Bank has filed the Section 13 (2) Demand Notice, Section 13 (4) Possession Notice and its Newspaper Publication along with the valuation report dated 14.12.2021.
The Respondent Bank in their typed set have filed the Affidavit before the Hon’ble CJM, Puducherry along with the Petition from Page 43 and it is seen in the Affidavit that the Respondent Bank, as secured creditor has complied with 14(i) to 14 (ix) and have given all the details, as required under Section 14(1) of the SARFAESI Act.
5.5 Further, the Petition, which is produced at Page No.45 to 47 clearly reflects the facilities availed by the Applicants herein and the classification of the Account as NPA and the issuance of the Section 13(2) demand notice dated 09.08.2017. Further, as the Applicant has not complied with the demand made, the Bank has issued the possession notice dated 13.10.2017, which is published in the two Newspapers, English Daily ‘The Hindu’ and the Tamil Newspaper dated 20.10.2017. As the Applicant did not come forward to liquidate the liability, the Bank has moved forward in issuing the sale notices, which has materialized.
In fact, the Bank has also produced the copy of the sale notice dated 18.12.2021 at Page No.35 and its Newspaper Publication at Page No.36 and sale confirmation dated 20.01.2022 and Sale Certificate dated 31.01.2022 is also produced by the Respondent Bank at Page No.41 & 42 of the typed set. Further vide
SA No.192/2022 (C)
8
06.03.2025
letter dated 08.02.2022, which is produced at Page No.42, the Respondent Bank has intimated about the Sale of the Property on 20.01.2022 pursuant to sale notice dated 18.12.2021 to the highest bidder for an amount of Rs.65,13,000/-. Further, it is also intimated that the sale certificate is issued to the bidder after remitting the entire amount and the Bank has intimated the Applicant to vacate and hand over the possession to the Bank within 15 days from the date of the letter.
Evidently, the Applicant has filed the present SA on 21.04.2022 after the property is sold vide sale notice dated 18.12.2021 and the sale confirmation dated 20.01.2022 and Sale Certificate dated 31.01.2022. Records of the case clearly reflects that the Bank had intimated to the borrower about the sale of the property vide letter dated 18.02.2022 and admittedly the present SA is filed on 21.04.2022 subsequent to the issuance of the Sale Certificate.
5.6 Thus, it is evident that the Applicant has filed the present SA only after the Auction sale was conducted and confirmed favoring the Auction Purchaser. Even otherwise, the Applicant has not pointed out any illegalities in the Section 14 order, as the same is challenged in the present SA. On the other hand, the Respondent Bank have initiated the measures in accordance with law and have produced all supporting documents for due service of Section 13(2) demand notice dated 09.08.2017, Section 13(4) Possession Notice dated 13.10.2017 and Sale Notice dated 18.12.2021 and have duly established the compliance of the procedures, as mandated under the Acts and the Rules made there under.
5.7 Even otherwise, the order of the Magistrate cannot be challenged in any Court of Law, as per Section 14(3), of the Act and Section 14(3) is reproduced, as under: -
“No act of the Chief Metropolitan Magistrate or the District Magistrate [any officer authorised by the Chief Metropolitan Magistrate or District
SA No.192/2022 (C)
9
06.03.2025
Magistrate] done in pursuance of this section shall be called in question in any court or before any authority”.
5.8 As the Applicant has failed to make out a case, in pointing out the illegalities in Section 14 order, though having knowledge that the property is sold has challenged the Section 14 order dated 05.03.2022 passed by the Hon’ble CJM, Puducherry belatedly taking the contention that the Advocate Notice was served to vacate the premises.
5.9 Upon examination of the facts, documents produced by both the parties, the Applicant has failed to point out any illegalities in the Section 14 order, on the other hand, the Bank has established with supporting documents that they had followed the procedures in initiating the measures right from issuance of Section 13(2) Demand Notice to the issuance of the Sale Notice conducting the Auction and issuing the Sale Certificate.
Sd/- (S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI
(Dictated to Steno (Sudhakar), transcribed by him, corrected, signed and pronounced by me on this the 06th day of March, 2025)
SA No.192/2022 (C)
10
06.03.2025
ANNEXURES
LIST OF DOCUMENTS PRODUCED BY THE APPLICANT
| **Sl. No. ** | Description of Documents | **Page No. ** |
|---|---|---|
| 1. | Impugned order passed in Crl.M.P.No.114 of 2022 with cleancopy dated 05.03.2022 |
A-1 |
| 2. | Noticefrom Advocate Commissionerdated 31.03.2022 | A-2 |
| 3. | ApolloHospital Documents dated 07.04.2022 | A-3 |
LIST OF DOCUMENTS PRODUCED BY THE RESPONDNET
| **Sl. No. ** | Description of Documents | **Page No. ** |
|---|---|---|
| 1. | LoanSanction Letterdated 06.06.2009 | R-1 |
| 2. | 13(2) notice dated 09.08.2017 | R-2 |
| 3. | 13(4)notice dated13.10.2017 | R-3 |
| 4. | Paperpublications dated20.10.2017 | R-4 |
| 5. | Affixture of Possession Notice | R-5 |
| 6. | Valuation Report dated14.12.2021 | R-6 |
| 7. | Proposal for fixingReservePrice dated16.12.2021 | R-7 |
| 8. | Sale Notice dated 18.12.2021 | R-8 |
| 9. | Paperpublication | R-9 |
| 10. | Sale Confirmation | R-10 |
| 11. | Certificate ofSale dated 31.01.2022 | R-11 |
| 12. | Letteraddressed to borrowerabout sale18.02.2022 | R-12 |
| 13. | Affidavitfiled before CJM Puducherry | R-13 |
| 14. | Petitionto assistintaking physicalpossession | R-14 |
| 15. | Asset based search report–CERSAI | R-15 |
| Additional typed set of documents filed by respondent bank |
||
| 16. | Order passed in Crl.M.P. No.114/2022 on the file of Chief Judicial Magistrate, Pondicherry dated 05.03.2022 |
R-16 |
| 17. | Registered Sale Certificate Doc. No.2910/2022 dated 04.02.2022 |
R-17 |
| 18. | Sale Certificateissued by SBI in favourof R. Lakshmi | R-18 |
SCHEDULE OF PROPERTY
All that piece and parcel of the land and building in Puducherry R.D. Oulgaret R.D., in the jurisdiction of Oulgaret Municipality, Thattanchavady Revenue Village, No. 34, Muthiraipalayam Bajanai Madam Street, comprised in Re Survey No. 135/12, Cadaster No. 2504/2/2 the extent of East West 46 Feet, South North Western side 36 feet, Eastern side 33.3 Feet, Area 1592.75 Sq.ft or 148.02 Sq.mt.
SA No.192/2022 (C)
11
06.03.2025
Boundaries:
| East | : | Manjini Gounder House |
|---|---|---|
| West | : | Sivapragasam House |
| South | : | Road |
| North | : | Vanathaiyammal Post |
Shri. S. Soundiraradjane S/o.S. Sambath is the owner of the property. Together with land building and all other appurtenances.
Sd/(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI
2 issues framed by the court
Whether the Securitization Application filed to set aside the order of seizure and appointment of Advocate Commissioner under Section 14 of the SARFAESI Act is maintainable after the issuance of the s
Whether the Authorized Officer strictly followed the provisions of the SARFAESI Act including notice requirements and compliance of hearsay rules.
2 provisions across 1 enactments
Mr. S. Soundirardjane Sambath
The Authorized Officer, M/s. State Bank of India, Pondicherry Main Branch
S.V. Gowramma
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
