Dismissed

saminathan v. Bank of Baroda

DRT9 Jul 2025SA/3/2023

Case brief

AI extract

What is this about?

In this Securitization Application, the borrower challenged the bank's sale of mortgaged properties under the SARFAESI Act, alleging procedural violations and undervaluation. The Tribunal found no merit in the challenge as the bank had complied with statutory requirements, the sale price exceeded the reserve price, and the applicant had already surrendered possession and resolved issues with the p

What did the court decide?

The Securitization Application filed to set aside the sale under SARFAESI Act was dismissed.

saminathan versus Bank of Baroda — Company and Corporate | DRT (2025)

SA No.3/2023

09.07.2025

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

¶5

Dated this the 9^th day of July, 2025

¶6

Present: SMT. S.V. GOWRAMMA Presiding Officer

¶7

SA No. 3 of 2023

¶8

Mr. K. Saminathan, No.19, Balavinayagar Koil Street, Vinayagapuram, Chennai -600 099. ….Applicant

¶9

-Vs-

¶10

The Authorised Officer, Bank of Baroda, Regional Stressed Asset Recovery Branch, 1^st Floor, No.10, C.P Ramasamy Road, Alwarpet, Chennai -600 018. ….Respondent

¶11

Counsels on record / appeared:

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Counsel for Applicant : M/s. R.K.M. Suresh & Adhitya.D Counsel for respondent : M/s. S. Pandurangan

¶13

ORDER ON SA 3/2023

¶14

The present Securitization Application [SA] is filed on 29.12.2022 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].

¶15

The applicant has challenged the Sale Held on 06.12.2022 pursuant to Sale Notice dated 18.11.2022 and the outstanding amount due as per Sale Notice is Rs.1,40,75,205.98/-

SA No.3/2023

09.07.2025

Pleadings of the applicant:

¶20

The applicant is the borrower who had availed OD Loan Facility and had mortgaged the property as collateral security toward the credit facility. Applicant submits that the borrower was regularly repaying the loan without any delay or default. However due to their ill health and Covid-19 situated could not repay the interest portion.

¶21

The applicant vide letter dated 18.11.2022 offered to settle for one time settlement for Rs.60,10,000/- which was acknowledged by the respondent bank but sold the property when OTS proposal was pending consideration.

¶22

The bank has sold 2 properties based on the previous sale notice and now the residential property is sold where the applicant and their family are residing.

¶23

The respondent had issued a sale notice dated 18.11.2022 published on 20.11.2022 and sold the property on 06.12.2022 under section 13(4) of the Act. The action of the respondents, being high-handed is also arbitrary has never been fair or reasonable. The applicant also undertakes to settle defaulted dues with the bank within reasonable time. Being aggrieved by the sale held on 06.12.2022 based on Sale notice 18.11.2022 which is published on 20.11.2022 the present SA is preferred on the grounds that the measure initiated are per se illegal, are contrary to the facts and evidence of the case.

SA No.3/2023

09.07.2025

The sale notice dated 18.11.2022 which is polished in Indian express on 20.11.2022 is incorrect and the authorized officer without obtaining fresh valuation as prescribed in the Rule 8(5) has fixed the reserve price which is very lower than the actual market value of the property have issued the sale notice dated 18.11.2022 which liable to be set aside.

¶28

The respondent has failed to give clear 30 day notice has violated the terms of the proviso to sub rule (6) of Rule 8 and sub rule (1) of Rule 9 of the Security Interest (Enforcement) rules. Hence the applicant prays to set aside the sale held on 06.12.2022 between 14.00 PM to 18.00 PM based on the Sale Notice dated 18.11.2022 published on 20.11.2022.

¶29

Objections of the respondent bank:

¶30

The respondent bank in their counter submits that the applicant admits availing of the loan, execution of the security documents and creation of the security documents over the property favoring in the applicant bank. Infact the applicant admits the publication of the impugned sale notice dated 18.11.2022 and do not dispute their liability towards the respondent bank and have taken objections for the enforcement of the liability without any living basis.

¶31

The applicant has filed the present SA on 03.01.2023 after the conclusion of sale on 06.12.2022 and after issue of Sale Certificate dated 27.12.2022 to the successful bidder. The sale held on 06.12.2022 and the Schedule properties were sold for Rs.65,60,000/- in favour of the Highest Bidder Mr. Rajesh Kumar, resident of F-2, First Floor, Lakshmi Nilayam,

SA No.3/2023

09.07.2025

No.9/5, Somasundaram 5^th Street, Ayanavaram, Chennai 600 023 and on payment of the sale consideration the Sale Certificate is issued on 27.12.2022 and the 3^rd party interests was created on the property.

¶36

Therefore the applicant has lost the Right of Redemption as well as the right of appeal under the amended provision of the Sec.13 (8) of the SARFAESI Act. The sale was successfully held in respect of Item No. I and II of the property and the applicant has lost the Right of Redemption as filed the present SA which is liable to be dismissed in limine.

¶37

The applicant is a Proprietary Concern represented by Mr. K. Saminathan as its proprietor, is carrying on business of Trading of Glasses, Plywood, Aluminium and Hardwares under the name and style “M/s. Tamilnadu Glass Traders” which was subsequently changed as “M/s. Tamilnadu Glass Corporation.” The applicant availed Overdraft Facility Limit of Rs.94 Lakhs which was enhanced upto Rs.140 Lakhs. And the Restructured the above loan account on 31.03.2020 as under along with FITL COVID Limit or Rs.7,42,644/-.

¶38

The Loan is secured by the equitable mortgage over the immovable properties belonging to the applicant, which was duly registered before the Central Registry. Due to continuous default in the repayment, despite several reminders the applicant did not pay the amount. Hence the bank was constrained to declare the loan accounts as NPA 31.03.2021 as per the RBI guidelines and had issued Demand Notice dated 12.07.2021 under Section 13(2) of the SARFAESI Act.

SA No.3/2023

09.07.2025

The demand notice dated 12.07.2021 were not duly served on the applicant, hence the bank effected the paper publications of the demand notice in Tamil Daily, Dinakaran dated 19.07.2021 and in Business Standard, English Daily dated 19.07.2021. Further the demand notice was also affixed on the property. However, the applicants did not raise any objection to the demand and also failed to repay amount demanded within 60 days.

¶43

The demand notice is accepted by the applicant now cannot challenge the claims made in Sec.13(2). The respondent was constrained to take symbolic possession of the secured assets by serving a copy of the possession notice dated 29.10.2021 which was sent by Registered Post, affixed of the property and published in The New Indian Express and Dinamani.

¶44

Since the applicant failed to repay the dues, the respondent issued the e-Auction sale notice dated 29.12.2021 fixing the date of e-auction on 07.02.2022 after obtaining valuation report from Registered Valuer approved by the Board of Directors of the bank. The sale notice was affixed on the property and published in the Time of India dated 29.12.2021 and in Dinakaran dated 29.12.2021.

¶45

It submitted that the earlier sale notice dated 29.12.2021 was duly uploaded in the Website of the bank and the respondent has duly complied with the provisions of the SARFAESI Act while issuing the sale notice dated 29.12.2021 fixing the sale on 07.02.2022.

SA No.3/2023

09.07.2025

The Item No. II property was sold in the earlier sale notice dated 29.12.2021 on the E-Auction conducted on 07.02.2022 to the highest/successful bidders. The applicant had challenged the sale held on 07.02.2022 by filing SA.No.274 of 2022 and after due consideration the Hon’ble Tribunal dismissed the above the SA.274 of 2022 vide order dated 27.01.2023 holding that the measures taken by the bank are in accordance with law and up held the sale of the part of the security on 07.02.2022.

¶50

As the applicant continued defaults in repaying the remaining dues, the bank issued another E-Auction sale notice dated 18.11.2022 fixing the date of E-Auction on 06.12.2022 after obtaining valuation report, fixing the reserve price in consultation with the secured creditor and have duly complying with the provision of the SARFAESI Act.

¶51

The respondent served the above sale notice to the borrowers in persons when they visited the office on 18.11.2022. The sale notice is affixed on the property and published in the New Indian Express dated 20.11.2022 and in Dinamani dated 20.11.2022.

¶52

The applicant vide letter dated 18.11.2022 requested to stop the e- auction fixed on 06.12.2022 by undertaking to pay a sum of Rs.7 Lakhs on 19.11.2022 to clear the balance on or before 30.11.2022. However the applicant failed to deposit the sum of Rs.7 Lakhs on 19.11.2022 and has failed to keep up his promises in discharging the above loan.

¶53

The respondent have duly uploaded the sale notice in the website of the bank and had compiled with the provisions of SARFAESI Act. While

SA No.3/2023

09.07.2025

issuing the impugned sale notice dated 18.11.2022 fixing the sale on 06.12.2022.

¶58

The Schedule properties were sold in the e-auction conducted on 06.12.2022, which is challenged in the present SA and the Hon’ble Tribunal vide proceeding dated 06.01.2023 ordered notice by E-mail and to filing AOS despite the applicant his undertaking in the Memo dated 03.01.2023. The applicant has failed and neglected to deposit the entire sale consideration within a week’s time and also failed to repay due in order to settle the liability.

¶59

Applicant has not pointed out any infraction in the measures and also challenged the earlier Sale Notice in SA.No.274/2022, now cannot be reagitated the same before the Hon’ble Tribunal in the present proceedings.

¶60

The reserve price is fixed on the basis of the Valuation Report received from the Board Approved Valuer and in consultation with the secured creditor. Hence the reserve price is not below the market value of the property. The 15 days Sale Notice was issued, affixed on the mortgage property and there is no violation of the SARFAESI Act and its Rules.

¶61

Though the applicant offered to settle have failed to pay and now cannot claim the settlement as a matter of Right. Hence the respondent bank prays to dismiss the SA.

SA No.3/2023

09.07.2025

Heard both sides of the Counsels and perused the records of the

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case

¶67

It seen from the record of the case, that the applicant is the proprietor of M/s. Tamilnadu Glass Corporation who had availed Over Draft Facility Rs.1,26,60,000/- and Working Capital Term Loan of Rs.13,40,000/- and Funded interest term loan Rs.4,27,000/- and Demand Loan-FITL Covid Rs.7,42,644/- the said credit facilities were secured by the mortgage of the property by executing the MOTD of the residential building favoring the respondent bank.

¶68

Due to default in the repayment the respondent have classified the loan account as NPA on 31.03.2021 as per the RBI guidelines. Consequent to classification of Account NPA, the respondent have issued the Sec.13(2) demand notice dated 12.07.2021 demanding the repayment of the total outstanding amount due from all the loan accounts to be paid within a period of 60 days.

¶69

It seen that the demand notice were not duly served, hence the demand notice is affixed on the property on 19.07.2021 and published in the English and Tamil Newspapers as mandated under the Act and Rules. After the expiry of 60 days, as the applicant did not repay the outstanding amount due as demanded in the Sec.13(2) demand notice, the bank has proceeded further and issued the Sec.13(4) Possession notice dated 29.10.2021 which is also sent by RPID and the returned postal covers reflect that it was not served. Hence the possession notice is also affixed

SA No.3/2023

09.07.2025

on the property published in the two newspapers as per the documents produced by the respondent bank from pg.23 to 42 of the typeset.

¶74

Inspite of the services of the statutory notices, the applicant did not liquated the liability. Hence bank have issued the sale notices datead 29.12.2021, sale notice dated 16.06.2022 and third sale notice dated 21.10.2022, the applicant challenged the sale notice dated 29.12.2021 in SA. 274 of 2022 and the Tribunal after considering the case on merits have disposed of the SA. The applicant has challenged the 4^th sale notice dated 18.11.2022 in the present SA, contenting the very same contentions as raised in SA.274 of 2022 in respect of non-service of the notices and the valuation of the property.

¶75

Per contra, the respondent bank have obtained valuation report from an Approved Valuer on 01.09.2022 before issuing the sale notice dated 18.11.2022 and valuation report is produced at pg.50 to 55 of the typeset where it seen that the approved valuer as valued the property considering the guidance value, fair market value and also considered all the parameters while assessing the property in fixing the value of the property. Infact it is also seen that the valuer have considered the building structure on the property for the ground floor and the head room sheds and the 1^st floor A/c sheet.

¶76

It is also seen that the valuator have considered the valuation of the entire property which includes that land building and has considered the present market value. Based on the parameters he has fixed the Present

SA No.3/2023

09.07.2025

Market Value at Rs.85,21,622/- or Rs.85,00,000/- and Realizable value at Rs.72,25,000/- and the Distress Sale Value at Rs.68,00,000/- the respondent after obtaining the valuation from the approval valuer has fixed the reserve price and there is no ambiguity or irregularity in the valuation of the secured asset.

¶81

On the other hand the applicant has not produced any documents to contend that the valuation of the property fixed is low or there is discrepancies in obtaining the valuation Hence the contention of the applicant that the reserve price fixed at Rs.65,10,000/- is lesser than the Distress Sale value and sold at lower price cannot sustain as the bank have produced valuation report which clearly reflects the assessment made and the distress sale value at Rs.68 Lakhs.

¶82

Further it is seen from the sale notice that the Reserve Price is fixed for the schedule property at Rs.65,10,000/- and the respondent have sold the property for an amount of Rs.65,60,000/- which is more than reserve price. Hence there cannot be any disagreement with regard to the sale of the property which is more than reserve price. The contention that the respondent has undervalued and in absence of any counter valuation report obtained by another independent valuer would not come to the help of the applicant.

¶83

The respondent bank have issued the sale notice dated 18.11.2022 affixed the sale notice on the property, published in the English and Tamil Newspapers on 20.11.2022. On payment of the entire sale consideration

SA No.3/2023

09.07.2025

sale certificate came to be issued on 27.12.2022 to the successful bidder and after sale certificate is issued the respondent bank have intimated the applicant vide letter dated 27.12.2022 about the issuance of the sale notice and the conduct of the E-Auction on 06.12.2022 for the Item No.I property and sold for a total sum of Rs.65,60,000/- in the E-Auction conducted on 06.12.2022.

¶88

It seen that the mortgage charge created is registered before the central registry which is produced by the bank it pg.76. The contention that the 30 days sale notice does not arise, as it is the second sale notice which only requires 15 days’ notice and admittedly the applicant has received the sale notice personally and have affixed signature on the sale notice as evident from pg.62 of the typeset.

¶89

It seen from the records that the respondent bank has filed the memo submitting that the present SA is filed on 03.01.2023 after the conclusion of sale on 06.12.2022 and after issue of sale certificate dated 27.12.2022. The applicant pursuant to order dated 11.12.2024 is SA.766 of 2024 as vacated the property and has handed over the Vacant Physical possession on 06.02.2025 on receipt of the sum of Rs.2 lakhs from the auction purchaser and contented that he has no claims regarding the above SA Schedule property and also undertook that he will not maintain any legal action against the property.

¶90

The bank has also produced the letter dated 06.02.2025 and it seen that the applicant submitted that he was previous owners of the property

SA No.3/2023

09.07.2025

which the bank has auctioned and is purchased by Mr. Rajesh Kumar K. through an online auction on 06.12.2022 and following the applicant has filed the SA.03.2023 before DRT-III Chennai Challenging the Auction due to unavoidable circumstances the applicant was unable to vacate the premises within the agreed timeline and requested Rs.2 Lakhs from Mr. Rajesh Kumar K. the Auction Purchaser towards the shifting expenses. Accordingly Mr. Rajesh Kumar K. on humanitarian grounds has made a payment of Rs.2 Lakhs via Demand Draft No.057470 in favour on 6^th February 2025, for the applicant has also contented that he will not initiate any further legal appeal, claims, or additional demands in the future regarding the auctioned property.

¶95

The contents of the letter dated 06.02.2025 is extracted as under:

¶96

From,

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Mr. Saminathan K No. 19, Balavinayagar Koil Street, Vinayagapuram, Chennai – 600 099.

¶98

To, Mr. Rajesh Kumar K (Auction Purchaser) Ayanavaram, Chennai.

¶99

And

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The Chief Manager Bank of Baroda Regional Office – Stressed Assets Recovery Branch Alwarpet, Chennai – 600 018.

¶101

Subject : Confirmation of Receipt of Rs.2,00,000/- and No further Claims Dear Sir/Madam,

SA No.3/2023

09.07.2025

I, Mr. Saminathan K, was the previous owner of the property that was auctioned by Bank of Baroda and purchased by Mr. Rajesh Kumar K through an online auction on 6^th December 2022. Following the auction, I had filed SA No. 3 of 2023 before DRT-III, Chennai, challenging the auction.

¶106

As per the undertaking submitted before the Hon’ble Tribunal on 11^th December 2024, I had agreed to hand over the physical possession of the property within 45 days, i.e., by 30^th January 2025. However, due to unavoidable circumstances, I was unable to vacate the premises within the agreed timeline and requested Rs.2,00,000/- from Mr. Rajesh Kumar K, the auction purchaser, towards my shifting expenses.

¶107

On humanitarian grounds, Mr. Rajesh Kumar has agreed to my request and is making a payment of Rs.2,00,000/- via Demand Draft No :.057470 in my favour on 6^th February 2025, in the presence of the Authorized Officer of Bank of Baroda and other council members.

¶108

I confirm that by accepting this amount, I will not initiate any further legal appeals, claims, or additional demands in the future regarding the auctioned property. This letter serves as my acknowledgement of receipt of the said amount and my commitment to vacate the premises without any further disputes.

¶109

Yours Sincerely Sd/(SAMINATHAN K) Date: 06.02.2025 Place: Chennai 1. Witness 2.Witness Sd/- Sd/Sd/-

¶110

In fact there is no dispute about service of sale notice, admittedly there is no disputation of the fact about availing loan, mortgage of property

SA No.3/2023

09.07.2025

as collateral security and the default in repayment. Though the applicant has made efforts to settle the liability under OTS has failed to comply the terms of settlement. The respondent bank has auctioned the secured asset and the successful purchaser is also issued with sale certificate. Further the applicant vide letter dated 06.02.2025 have settled the matter with the purchaser and also handed over physical possession and has consented not take any legal action.

¶115

Thus it is evident that nothing survives for any further adjudication in the matter. For the foregoing reasons, the present SA fails and accordingly SA stands dismissed. Interim Order granted, if any stands vacated, pending IAs are disposed of in terms of this final order. No order as to cost.

¶116

Sd/- PRESIDING OFFICER, DRT-III, CHENNAI

¶117

(S.V. GOWRAMMA)

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( Dictated to Steno (Suriya), transcribed by him, corrected, signed and pronounced by me on this the 9^th day of July, 2025)

¶119

ANNEXURES

¶120

LIST OF DOCUMENTS PRODUCED BY THE APPLICANT

¶121

Sl.	Description of Documents	Documents
No.		No.
1.	OTS Letter dated 18.11.2022.	A-1
2.	Publication of the Impugned Sale Notice dated	A-2
	18.11.2022, and 20.11.2022.

¶122

LIST OF DOCUMENTS PRODUCED BY THE RESPONDNET

¶123

Sl.	Description of Documents	Documents
No.		No.
1.	Demand Notice under Section 13(2) dated 12.07.2021.	R-1
2.	Returned Postal Cover.	R-2

SA No.3/2023

09.07.2025

3.	Postal Receipts for having sent the Demand Notice.	R-3
4.	Photos showing affixture of Demand Notices dated 19.07.2021.	R-4
5.	Paper Publication of Demand Notice in English Newspaper dated 19.07.2021.	R-5
6.	Paper Publication of demand Notice in Tamil Newspaper dated 19.07.2021.	R-6
7.	Possession Notice dated 29.10.2021.	R-7
8.	Postal Receipts/Returned Covers containing Possession Notice.	R-8
9.	Photos showing Affixture of Possession Notices dated 29.10.2021.	R-9
10.	Paper Publication of the Possession Notice in English Daily dated 02.11.2021.	R-10
11.	Paper Publication of the Possession Notice in Tamil Daily dated 02.11.2021.	R-11
12.	Sale Notice dated 29.12.2021.	R-12
13.	Sale Notice dated 16.06.2022.	R-13
14.	Sale Notice dated 21.10.2022.	R-14
15.	Valuation Report dated 01.09.2022.	R-15
16.	Impugned Sale Notice containing the acknowledgment by the applicant dated 18.11.2022.	R-16
17.	Photos showing Affixture of Sale Notice dated 18.11.2022.	R-17
18.	Paper Publication of Sale Notice in English Daily dated 20.11.2022.	R-18
19.	Paper Publication of Sale Notice in Tamil Daily dated 20.11.2022.	R-19
20.	Sale Certificate issued to the Auction purchaser dated 27.12.2022.	R-20
21.	Letter issued to the Auction Purchaser dated 27.12.2022.	R-21
22.	Letter sent to the Applicant/Borrower on completion of the sale dated 27.12.2022.	R-22
23.	Acknowledgement of Liability dated 31.03.2020.	R-23
24.	Registration Charge with Central Registry.	R-24
25.	SA.274/2022 filed by Applicant dated 19.03.2022.	R-25
26. 27.	Final Orders passed by the Hon’ble Tribunal dated 27.01.2023. Statement of Account.	R-26 R-27

¶128

SCHEDULE OF PROPERTY

ITEM-1

SA No.3/2023

09.07.2025

All that piece and parcel of Land and building bearing Plot No.7 admeasuring an extent of 996 Sq.ft., Land and Building Thereon Comprised in Survey Nos.1471/Part,1478/Part & 1480/Part and New Survey No.1480/2 Situated at Bharathi Nagar, Madhavaram Village Madhavaram Taluk Thiruvallur District and Bounded on North By: Saraswathy Nagar Plots, South By: Part of Plot No.7 of T Pitchaikaran, East By: Plot No.8. West By: 10 Feet Common Passage. In the middle of this Northern Side: 30 Feet, Southern Side: 29 Feet 6 Inches, Eastern Side: 37 Feet and Western Side: 30 Feet.

¶134

ITEM-II

¶135

All that piece and parcel of land and Building Bearing Plot No.10 Admeasuring an extent of 1,015 Sq.ft., Comprised in Survey No.1479 as per patta No.359 Situated at Saraswathy Nagar Madhavaram Village, Madhavaram Taluk, Thiruvallur District and Bounded on: North By: L 16 Feet Road South By: Land Belong to Patchayappa Naicker. East By: Plot No.9 in Saraswathi Nagar Layout West By: Part Plot No.10 of Selvaraj P. In the Middle Of this Northern Side:22 Feet 6 Inches, Southern Side:22 Feet 6 Inches, Eastern Side:43 Feet 0 Inches, Western Side:44 Feet 3 Inches. Together Measuring 2011 Sq.ft and within the Registration District of Chennai North and Sub-Registration District of Madhavaram, More fully described in the Sale Deed date 09.08.2018 Bearing Doc.4976 of 2018 and the Properties Belonging to Mr. Saminathan.

¶136

Sd/-

¶137

(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI

saminathan v. Bank of Baroda

Case brief

What is this about?

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saminathan v. Bank of Baroda

Case brief

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