Dismissed

J Rathiga v. Ms Shriram Transport Finance Co. Ltd.

DRT21 Aug 2025SA/262/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal dismissed the applicant's challenge to a possession notice issued by a secured creditor under Section 13(4) of the SARFAESI Act. The court upheld the notices as validly issued following due process and failed to find any infirmity in the creditor's actions.

What did the court decide?

The Securitization Application is dismissed, and the Section 13(2) Demand Notice and Section 13(4) Possession Notice are upheld as valid.

J Rathiga versus Ms Shriram Transport Finance Co… — Contract and Commercial Disputes | DRT (2025)

SA No.262/2023

21.08.2025

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 21^st day of August, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SA No. 262 of 2023

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Mrs. J. Rathiga, W/o. Late. Veeran No.3/83, Thirumanam, Vayalanallur, Thiruvallur 600 072. …Applicant

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-Vs-

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M/s. Shriram Finance Limited, Rep. by its Authorized Officer, 2^nd Floor, Old No.216, New No.213, C.T.H.Road, Pandiyan Towers, Thiruvallur, Pattabiram – 600 072

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…Defendant

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Counsels on record / appeared:

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Counsel for Applicant : Ms. R. Rajramani Counsel for Respondent : Ms. S. Prabhakaran

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ORDER ON SA 262 /2023

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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

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the action and the measure taken by the secured creditor under the Security Interest Enforcement Rules, 2002 [for short the Rules].

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The applicant has challenged the Possession notice dated 10.04.2023 and the outstanding amount due as per Possession notice is Rs.35,22,367/- as on 05.04.2023.

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21.08.2025

3. Pleadings of the applicant:

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3.1 The Applicant has availed a sum of Rs.50,00,000/- for brick kiln business which has to be repaid within 60 months at the rate of Rs.1,21,590/- per month and created mortgage by way of deposit of title deed dated 09.03.2018 which is registered as Doc.No.3106 of 2018 in S.R.O. Kundrathur.

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3.3 The applicant was regularly repaying the amount and paid a sum of Rs.74,95,400/- which is more than 57 installments, Due to Covid-19 lockdown, applicant defaulted in the repayment from March 2020 to February 2022. In spite of irregular payments, respondent has informed that the outstanding amount is at Rs.35,22,367/- which is highly exorbitant.

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3.4 It is submitted that based on the guideline and circular issued by the Government of India, respondent cannot charge any interest or penal interest for the delayed repayment. The statement of account clearly reflects that the respondent has charged exorbitant charge for the delayed payment. In fact based on the applicant’s statement of account they are liable to pay a sum of Rs.3,64,770/- but the outstanding amount as per respondent is Rs.35,22,376/-

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3.5 The respondent informed that they are going to take necessary measures to recover the said amount but they did not heed to any settlement. Further the applicant has filed a suit before the II Additional Sessions Judge, Poonamallee in O.S.No.153 of 2023 and the same is

SA No.262/2023

21.08.2025

pending. In the grounds it is contended that the payments made by the applicant were not considered by the respondent.

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3.6 Subsequently the respondent has claimed additional interest and penal interest during the period of Covid-19 Lockdown which is in violation of circular issued by the Government of India. The respondent has claimed additional interest which resulted in the outstanding amount of due Rs.35,22,367/-. Though the applicant has not paid three installments which can amount to Rs.3,64,770/- hence the claim of respondent is false.

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3.7 The applicant has issued notice in the injunction application in the suit filed for redemption of mortgage. After the receipt of the notice, respondent has issued the impugned notice. Hence the applicant prays to set aside the Section 13(4) Possession Notice dated 10.04.2023

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4. Objections of the respondent :

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4.1 The respondent has filed a detailed counter inter alia contending that the present SA filed by the applicant is abuse of process of law. The applicant is engaged in the business of brick kiln during the year of 2018 and the applicant along with Mr. Rajan approached the respondent for sanction of Rs.50,00,000/- to develop the business.

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4.2 At the request of the applicant, respondent has sanctioned a Term Loan of Rs.50,00,000/on 13.03.2018 vide Loan Agreement No.PATBMO803120001 and to secure the repayment of the credit facilities availed, applicant has executed various loan documents favoring the

SA No.262/2023

21.08.2025

respondent. In fact, applicant has agreed to repay the entire loan in 60 monthly installments, 1^st installment for Rs.1,36,932/- and last monthly installment for Rs.1,29,009/-.

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4.3 The applicant has also mortgaged the property as security towards the repayment by way of Memorandum of Deposit of Title Deeds in favor of the respondent on 09.03.2018, registered as Doc.No.3106 of 2018 on the file of Sub Registrar Office, Kundrathur. Admittedly the applicant has defaulted in repayment and the loan account were classified as NPA on 19.08.2022 as per the RBI guidelines.

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4.4 The respondent after classifying the account has initiated measures by issuing Section 13(2) Demand Notice dated 14.09.2022 calling upon the applicant to liquidate the outstanding liabilities of Rs.35,29,662/- due as on 14.09.2022 within the period of 60 days. The Demand notice was sent through RPAD and the same was duly served to the applicant.

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4.5 Even after the receipt of the notice, applicant neither repaid the entire liability nor made any representation within 60 days. Hence the respondent has initiated measures and issued Section 13(4) Possession Notice dated 10.04.2023 which is duly served to the applicant and Mr. J.Rajan. The Possession Notice is also published in two Newspapers, one in “Dinamani” (Tamil) and another in “The Indian Express” both dated on 16.04.2023, in fact the Possession Notice is also affixed on the outer door of the property. Though the symbolic possession of the property is taken on 10.04.2023 by the Authorized Officer of the respondent

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4.6 The respondent denies each and every averment, allegations made by the applicant as baseless and frivolous. In fact, the applicant has admitted the default committed and the applicant is irregular in repayment even before the Covid-19 pandemic. Though the amounts paid by the applicant is properly credited into the applicant loan account. Respondent has never charged Rs.35,73,003/- as delayed payment interest and the applicant is put to strict proof of the same.

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4.7 The interest charged by the respondent is as per the Terms and Conditions of the Loan agreement, classification of loan account as NPA is also based on the RBI guidelines. Further the respondent has complied with Rule 8 of the SARFAESI Act in issuing the statutory notices to the applicant.

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4.8 The applicant after the creation of mortgage by deposit of original title deeds in favor of the respondent has filed an application under Section 34 of SARFAESI Act before the II Additional sessions Judge, Poonamalle in O.S.No.153 of 2023 against the respondent which is not maintainable in Law.

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4.9 It is submitted by the respondent that applicant has remitted 20% of the amount as per the conditional order of the Hon’ble Court. The secured asset is the only security available with respondent and hence prays for dismissal of the present SA.

SA No.262/2023

21.08.2025

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

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5.1 The records of the case reflects that the applicant is the borrower has availed a sum of Rs.50,00,000/- and as security for the repayments, applicant has created mortgage of the scheduled property by way of Deposit of Original Title Deeds dated 09.03.2018 which is registered as Doc.No.3106 of 2018 at Sub Registrar Officer, Kundrathur which is not in dispute with the applicant here in.

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5.2 Admittedly applicant defaulted in the repayment due to Covid-19 pandemic, resulting in classification of loan account as NPA on 19.08.2022. After classifying the loan account as NPA, respondent has initiated measures and issued Section 13(2) Demand Notice dated 14.09.2022. The said Demand Notice is duly received by the applicant and the same is evident from the postal tracking report produced by the respondent at Page No. 24 to 27 of their typed set.

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5.3 After the receipt of the Demand Notice dated 14.09.2022, applicant neither liquidated the entire liability nor made any objection to the demand made in the Demand Notice. Hence the respondent has initiated measures and issued Section 13(4) Possession Notice dated 10.04.2023 and took symbolic possession of the property on 10.04.2023 after affixing it on the property. The impugned Possession Notice is also sent through RPAD which is duly received by the borrower and guarantor as per the Acknowledgement card produced at Page No.32 and 33.

SA No.262/2023

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5.4 The Possession Notice is also published in two Newspapers, one in “Dinamani” (Tamil) and another in “The New Indian Express” (English) both dated on 16.04.2023 which is evident from the paper publications produced by the respondent at Page No. 35 and 36 of their typed set. Further the Possession is also affixed on the conspicuous part of the property and respondent has produced the photograph of affixture at Page No.34.

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5.5 The main contention as raised by the applicant is that the respondent has charged high interest which is duly countered by the respondent that the interest is charged as per the Terms and Conditions of the Loan agreement. Another contention is that the outstanding amount as claimed by the respondent is as per the agreed terms and conditions and the statement of account produced by the applicant clearly reflects that the outstanding amount is Rs.35,22,367/-. Hence the contentions as raised by the applicant cannot sustain.

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5.6 Thus it is evident that the respondent bank as a secured creditor has initiated measures after classifying the account as NPA on 19.08.2022 followed by the issuance of 13(2) demand notice dated 14.09.2022. The applicant did not liquidate the entire outstanding amount due within the period of 60 days as required under Section 13(2) nor raised any objections. Hence the bank has proceeded in issuing the Section 13(4) Possession notice dated 10.04.2023.

SA No.262/2023

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5.7 The Possession Notice is sent to applicant through RPAD and the same is received by the applicant, which is evident from the Acknowledgement cards produced by the respondent at Page No.32 and 33 of their typed. Though the Possession Notice is; published in two Newspapers, one in “Dinamani” (Tamil) and another in “The New Indian Express” (English) both dated on 16.04.2023, affixed on the conspicuous part of the property, symbolic possession of the property is taken on 10.04.2023 by Authorized officer on affixing the Possession Notice on the property which is evident from Photographs produced at Page No.34 of their typed set.

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5.8 On careful examination of the pleadings, documents produced by both the parties, it is an admitted fact that the applicant has borrowed the credit facilities and defaulted in repayment, the respondent had initiated the measures under the Act after classifying the loan account as NPA on 19.08.2022 and issued Section 13(2) Demand Notice dated 14.09.2022 and applicant has also made an application before Hon’ble II Additional Sessions Judge, Poonamallee in O.S.No.153 of 2023 which is subsequent to mortgage of the property favouring the bank and the same is pending.

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5.9 The bank has issued Demand Notice in compliance of the procedures and on failure to liquidate has proceeded further in issuing Section 13(4) Possession Notice dated 10.04.2023 and have followed due procedures as prescribed under the Acts and Rules along with supporting documents. On the other hand, applicant had not made out a case to point out any irregularities in the measures taken by the bank and have

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21.08.2025

failed to establish any infirmity in the procedures initiated by the respondent bank.

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For the foregoing reasons the present SA stands dismissed, upholding the Section 13[2] demand notice dated 14.09.2022 and Section 13(4) Possession Notice dated 10.04.2023 as valid notices issued under the Act. Interim Order granted, if any stands vacated, pending IAs are disposed of in terms of this final order. No order as to cost.

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

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(Dictated to Steno (Mogesh), transcribed by him, corrected, signed and pronounced by me on this the 21^st day of August, 2025)

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ANNEXURES

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LIST OF DOCUMENTS PRODUCED BY THE APPLICANT

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Sl. No.	Description of Documents	Document No.
1.	Memorandum of Appeal 02.05.2023	A-1
2.	Sale Deed in favour of appellant in DOC.No.10070/2013 dated 15.07.2013	A-2
3.	Memorandum of Deposit of Title Deed in Doc.No.3106/2018 dated 09.03.2018	A-3
4.	Statement of accounts by the respondent from 2018 to 2022	A-4
5.	Copy of plaint in O.S.No.153 of 2023 on the file of II Addl. Sessions Judge Poonamallee dated April 2023	A-5
6.	Impugned Possession Notice under Section 13(4)	A-6

SA No.262/2023

21.08.2025

dated 10.04.2023 7. Vakalat dated 02.05.2023 A-7

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LIST OF DOCUMENTS PRODUCED BY THE RESPONDENTS

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Sl. No.	Description of Documents	Document No.
1.	Term Loan agreement dated 13.03.2018	R-1
2.	Letter of Guarantee dated 13.03.2018	R-2
3.	Demand Notice under Section 13(2) of SARFAESI Act with postal receipts dated 14.09.2022	R-3
4.	Complaint given by the respondent to post office dated 30.09.2022	R-4
5.	Delivery status report given by post office dated 07.10.2022	R-5
6.	Possession Notice under Section 13(4) of SARFAESI Act with acknowledgement card and return cover dated 10.04.2023	R-6
7.	Photographs for Affixture of Possession Notice dated 10.04.2023	R-7
8.	Paper publication for Possession Notice dated 16.04.2023	R-8
9.	Statement of Accounts	R-9

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SCHEDULE OF PROPERTY (Belongs to Mrs. J. Rathiga)

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Item No.I

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All that piece and parcel of land measuring an extent of 694 sq.ft. being north east side and 648 sq.ft. being north west side totally measuring 1342 sq.ft. comprised in Old S.No.93/2A, 93/2B and 93/2C, New S.No.93/2A1B, Patta No.4725 as per patta New S.No.93/58 situated at Snnerkuppam Village, Poonamallee Taluk and Thiruvallur District bounded on the

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North by : Property belongs to Gurumoorthy South by : Property belongs to Annpoorani

SA No.262/2023

21.08.2025

East by : Property belongs to Ramallingam

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West by : 20 feet common passage

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Measuring

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East to west on the northern side 80 feet and 6 inches

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East to west on the southern side 68 feet and 8 inches

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North to south on the eastern side 18 feet

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North to south on the western side 18 feet

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Item No.II

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All that piece and parcel of land measuring an extent of 1154 sq.ft. being southern side out of 2496 sq.ft. comprised in Old S.No.93/2A, 93/2B, and 93/2C, New S.No.93/21AB, Patta No.4725 as per Patta New S.No.93/58 situated at Sennerkuppam Village Poonamallee Taluk and Thiruvallur District bounded on the:

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North by : Item I and II property South by : Plot No.24

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East by : Property belongs to Ramalingam West by : 20 feet wide common passage

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Measuring

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East to west on the northern side 68 feet and 8 inches

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East to west on the southern side 56 feet and 3 inches

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North to south on the eastern side 12 feet

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North to south on the western side 25 feet

SA No.262/2023

21.08.2025

Item I and II totalling measuring 2496 sq.ft.

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Situated within the registration district of Chennai south and sub registration district of kunrathur.

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Sd/PRESIDING OFFICER, DRT-III, CHENNAI

J Rathiga v. Ms Shriram Transport Finance Co. Ltd.

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J Rathiga v. Ms Shriram Transport Finance Co. Ltd.

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