Dismissed

Gowri R v. Icici Bank Limited

DRT22 Jul 2025SA/268/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed the Securitization Application filed by a guarantor challenging the bank's Sec.13(2) Demand Notice and Sec.13(4) Possession Notice under the SARFAESI Act. The court held the bank complied with statutory procedures regarding notice service, publication, and objection replies, and found the NPA classification and recovery measures valid.

What did the court decide?

The Securitization Application is stands dismissed upholding the Sec.13(2) demand notice dated 20.12.2022 and Sec.13(4) possession notice dated 29.03.2023 as valid notices.

Gowri R versus Icici Bank Limited — Contract and Commercial Disputes | DRT (2025)

SA No.268/2023

22.07.2025

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 22^nd day of July, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SA No. 268 of 2023

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Mrs. R. Gowri, 2/65, Narasingapuram, Teantantulachillatteri, Thondanthulasi, Vellore, 632 202. ….Applicant

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-Vs-

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The Authorised Officer, ICICI Bank Limited, Arihant Insight, Plot No.24, Block No.1, Ambattur Industrial Estate, Ambattur, Chennai 600 058. ….Respondent

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Counsels on record / appeared:

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Counsel for Applicant : Mrs. L. Sarala Counsel for respondent : M/s. S. Suresh, L.L.M.,

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ORDER ON SA 268/2023

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The present Securitization Application [SA] is filed on 25.04.2023 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 Possession Notice order dated 29.03.2023 and the outstanding amount due as per Possession Notice is Rs.1,17,33,028.50/-

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22.07.2025

Pleadings of the applicant:

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The applicant is the guarantor to the loan availed by her husband for doing business in the name and style of M/s. Ganapati Agencies. He availed a loan of Rs.100 Lakhs to run the business of agency development. The applicant spouse is abroad at present and due to covid substantially higher rate of interest charge including penal charges are charged and issued Sec.13(2) Demand Notice dated 20.12.2022 followed by the possession notice dated 29.03.2023 claiming an amount of Rs.1,17,33,028.50 as “debt due and payable”. The respondent bank as to prove service of the Sec.13(2) as Demand Notice is not available with the applicant.

¶21

Applicant have paid approximately paid more than Rs.1 Crore and interest charged are very high. After the issuance of the Sec.13(2) demand notice dated 20.12.2022, the applicant has made substantial payment of Rs.77,43,550/- which represents 66% of the total debt due and payable.

¶22

The respondent have issued the Sec.13(4) Possession Notice dated 29.03.2023 and affixed it on the property, and published in The New Indian Express newspapers on 02.04.2023, within 7 days of its issuance. But the Sec.13(4) possession notice it posted by speed post on 03.04.2023 or 04.04.2023 which is received by the applicant on 05.04.2023 as per the postal cover enclosed. Tracking report does not give details of when the notice was booked. Hence there is clear violation or Rule 8(1) r/w Rule 8(2).

SA No.268/2023

22.07.2025

It is contented that the service of the notice should be anterior to publishing it in the newspaper. Hence the Illegality apparent on the face of it. Incurable.

¶27

The bank has invoked the measures prior to the date of NPA and as the applicant made substantial payments of 66% and the Hon’ble Supreme Court has clarified that the condition to be imposed is to be related to the claim made in the Sec.13(2) Demand Notice only. The respondent have not taken into account the substantial payment and have claimed the amount in excess in the Sec.13(2) demand notice. The applicant intentions to avail the benefit of Sec.31(j) of the SARFAESI Act and offer to deposit the same with the Registry.

¶28

The applicant sought for copy of the Sec.13(2) demand notice and also statement of the account to which bank vide their reply letter dated 15.04.2023 and submitted “examining the facts of the matter and we shall revert you shortly”.

¶29

In the grounds it is contended “Crystallized debt” claimed in the Sec.13(2) demand notice and the amount mention in the demand notice is not correct for the applicant has also made substantial payment after the issuance of the Sec.13(2) demand notice.

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That the Hon’ble Supreme Court in B.K. Educational Services Private Limited Vs. Parag Gupta and Associates, AIR2018SC5601, differentiated between “payable” and “recoverable” as follows.

SA No.268/2023

22.07.2025

“20. Shri Dholakia went on to cite Bhimsen Gupta V. Bishwanath Prasad Gupta: (2004) 4 SCC 95, and In re Sir Harilal Nemchand Gosalia : AIR 1950 Bom 74 for the proposition that debts “due and payable” must be differentiated from debts “due and recoverable”.

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In re Sir Harilal Nemchand Gosalia: AIR 1950 Bom 74, it was held as follows.

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2… It is significant to note also that the Legislature has advisedly not used the expression “recoverable” but “payable.” The difference between the two expressions “payable” and “recoverable” is fundamental, because in the case of the expression “recoverable” what is emphasized is the remedy; in the case of the expression “payable” what is emphasized is the right of the person paying to pay under the law.

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The Hon’ble Supreme Court in Transcore also has referred to crystallized debt 5 times in the famous judgment. The 2^nd proviso to sub section 1 of Section 18 of the SARFAESI Act is also a clear indicator that the maximum amount to be recovered is to that claimed in the Sec.13(2) Demand Notice or determined by the Hon’ble Tribunal, whichever is less. Hence an OA itself cannot be filed for an amount larger than that claimed in the Sec.13(2) Demand Notice.

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As per definition of “debt” claimed is by adding of interest upto date to the issuance of the demand notice is violation. It is contented that the Sec.13(4) Possession Notice dated 29.03.2023 is served to the applicant

SA No.268/2023

22.07.2025

affixed it was published on 29.03.2023 and published in the two newspapers on 02.04.2023. The serving should be anterior to affixing the same. On this Grounds the applicant prays to set aside the Sec.13(4) Possession Notice.

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Objections of the respondent bank:

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The respondent as filed the detail counter inter aliea contenting that Mr. V. Ramesh who is a proprietor for Ganapati Agencies (Borrower) approached the respondent during month of June 2020 seeking for Working Capital Loan and over draft facility loan which was provided to the tune of Rs.1,15,00,000/- (Rupees One Crore Fifteen Lakhs only) vide its intimation letter dated 22.06.2020.

¶45

Mrs. V. Ramesh stood as guarantor to the loan facility availed by the borrower and also executed the loan documents. The applicant have deposited of title deeds relating of the property and created registered equitable mortgage in favour of the respondent bank vide Memorandum of Deposit of Title Deeds dated 17.07.2020 and registered as Document No.2805 of 2020 in the officer of SRO, Madhavaram.

¶46

The mortgage was also registered with the Central Registry (CERSAI) as mandated under the Act. The respondent at the request of the borrower extended the loan facility vide letter dated 13.07.2021 for a period of 12 months. The applicant had undertaken to pay the principal and interest as stipulated therein on the dues without fail and default or breach of the

SA No.268/2023

22.07.2025

terms of the contract the respondent was entitle to charge additional rate of interest as specified in the sanction letter.

¶51

As per clause ‘Default interest Terms & Condition (i) Non submission or delayed submission of stock statement; (ii) Non-submission or delayed submission of OFI or equivalent reports (iii) Non-submission or delayed submission of financial statement (include provisional, Audited and Renewal data); (iv) Irregular due to drawings beyond DP/Limit; (v) Noncompliance of sanction terms. The Respondent bank submits that in the case on hand the applicants are made default in adhering above the terms and conditions.

¶52

The borrower/guarantor were highly irregular and defaulted in the repayment. Hence the loan was classified as NPA on 12.10.2022 and bank also issued Loan Recall Notice on 08.12.2022, which did not evoked any response and also the applicant did not adhere to the undertakings.

¶53

The applicant utilized the loan account and payments became due and outstanding for over a period of 90 days in the loan account was classified as NPA on 12.10.2022. The bank issued demand notice dated 20.12.2022 to all the parties calling upon them to pay the outstanding amount within 60 days. The demand notice was served which the applicant was full knowledge but failed to discharge their liabilities.

¶54

The applicant vide letter dated 01.04.2023 raised an untenable contentions and the bank in compliance of Section 13-3A at the first stage an interim reply vide letter dated 15.04.2023 which sent RPAD and also

SA No.268/2023

22.07.2025

followed a detailed reply letter dated 27.04.2023 was sent RPAD rejecting the objections raised by the applicant.

¶59

As the applicant did not comply with the demand made, the bank have issued the symbolic possession notice on 29.03.2023 under Sec.13(4) of the Act and also sold the property. The notice are duly served, published in the two newspapers in The New Indian Express and Dinamani both dated 02.04.2023 in compliance of Rule 8(1) of the security interest (Enforcement) Rules, 2002.

¶60

As on 11.07.2023 an outstanding amount of Rs.34,97,818/- is due. The respondent have counted the contentions raised by the applicant para wise contenting the loan account was classified as NPA on 27.09.2022 and not on 02.12.2022. The applicant have sent a representation under section 13(3-A) dated 04.03.2023 for the above said Section 13(2) notice dated 27.12.2022 with untenable contentions. The objection reply letter dated 04.03.2023 which the bank given suitable reply letter dated 15.03.2023 explaining the reasons for non-acceptance of the objections.

¶61

As the applicant failed to repay, bank have issued the possession notice dated 29.03.2023 by following the procedures as per the SARFAESI Act. The respondent bank have issued the symbolic possession notice dated 16.03.2023 requested to applicants vacate and handover the physical possession and also intimating the sale of the secured asset.

¶62

There is no violation in requesting the applicant to vacate and handover the physical possession as the applicant did not settle the loan

SA No.268/2023

22.07.2025

account within the stipulated period and as per the default in Interest Terms the despondence have charged the enforced.

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The applicant had utilized the entire credit facilities and have defaulted which resulted in the bank initiated measures under the SARFAESI Act. The bank has followed all the measures and hence prays for the dismissal of the SA.

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

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It is an admitted fact that the applicant has offered the property as mortgaged towards the credit facility availed by M/s. Ganapati Agencies represented by its proprietor Mr. V. Ramesh. The borrower and guarantor and executed all the loan documents admitting to adhere to terms and conditions of the sanction.

¶70

Due to default in the repayment, the account of the borrower is classified as NPA on 12.10.2022 as the applicant made sum payments the account was regularized. However the borrow and guarantor defaulted again in the repayment resulting in the classification of account as NPA on 27.09.2022 the contention of the applicant the account was classified as NPA on 27.09.2022 and the condition of the applicant the account was classified as NPA on 02.12.2022 is not correct infact the account was classified as NPA on 27.09.2022 which is clear from the claim of total outstanding due as on 0.12.2022.

SA No.268/2023

22.07.2025

The Sec.13(2) demand notice is sent by RPID and it seen the respondent have produced the dispatch proof and the acknowledgement card which is produced from pg.7 to 22, which clearly reflects that Sec.13(2) demand notice is duly received to the borrower and the mortgagor. In fact the applicant also raised an objection.

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The applicant raised objections to the Sec.13(2) demand notice and it seen from the records that the respondent bank had issued notice recalling the loan vide loan recall notice dated 08.12.2022. The bank have issued the loan recall notice dated 08.12.2022 intimating the applicant the outstanding amount of Rs.11733029.00 is due in the loan account and demanded to clear the entire liability along with interest and other charges within the 7 days of receipt of the notice which the applicant themselves have produced at pg.16 of the SA.

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It is also not disputed by the applicant that the respondent have also issued the vacation notice dated 01.04.2023 intimating about the outstanding the liability to be paid which was also demanded in sec.13(2) demand notice dated 20.12.2022. As the borrowers failed to repay the amount within the statuary period the authorised officer has proceeded in taking the symbolic possession of the property under sec.13(4) of the Act.

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Hence the contention that the respondent has served the S.13[4] notice on 1.04.2023 after issuing the possession notice dated 29.03.2023 does not sustain. The respondent have issued the vacation notice dated 01.04.2023 further sale notice is also issued intimating about the issuance

SA No.268/2023

22.07.2025

of the Sec.13(2) demand notice dated 20.12.2022 symbolic possession notice dated 29.03.2023 further intimated that the as the applicant as neglected to pay the outstanding within the 30 days the bank would be proceeding for realising the outstanding amount from the applicant. It is also seen that the respondent have issued the post symbolic intimation letter to the borrower under rule 8(1) which is also on 01.04.2023 intimating about the symbolic possession on 29.03.2023.

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Infact the applicant themselves have produced all the notices dated 01.04.2023 which is not disputed by the applicant herein. Hence the contention of the applicant that the notice which is symbolic possession notice is dated 29.03.2023 and the notice of the symbolic possession is served only on 01.04.2023 and its publication on 02.04.2023 is misinterpreted as the bank have also published and affixed on the possession notice is secured assert as required under rule 8(1) and rule 8(2) of the security interest rules.

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The respondent bank have produced the affixture photograph of Sec.13(4) notice on the secured assert which is produced at pg.33 and the possession notice is also published English and Tamil Newspapers. The applicant have raised their objections on 01.04.2023 to which the bank as replied initially replied as preliminary reply contenting that examine the fact. However subsequently by letter dated 27.04.2023 the respondent have replied to the objections made in the notice and also clarified the availing of the credit facility for the business purpose which was secured by mortgaged of the property. Inspite of representation and assurances the

SA No.268/2023

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applicant failed to repay the loan, hence the bank have issued the demand notice on 20.12.2022 after classifying the account as NPA on 12.10.2022.

¶88

The respondent countered and clarified all the contentions as raised in the SA and have complied with the procedure of issuing the replying the objections raised under sec.13(3A). The bank have also produced the statement of account which clearly reflects the irregularity in the repayment which has resulted in the classification of account as NPA.

¶89

On examination of the fact, pleadings and the document relied on the parties it is an admitted fact that the applicant is the guarantor to the loan availed by her husband Mr. V. Ramesh who is the proprietor of M/s Ganapati Agencies.

¶90

Infact there is no dispute with regard to availing of the credit facility mortgage of the property and the default in the repayment. After the account was classified as NPA on 12.10.2022 bank have issued the Sec.13(2) demand notice which is admittedly received by the applicant and have also raised objections as required under sec.13-3A. The respondent as secured creditor have considered their objections and have suitable reply to the objections raised.

¶91

The borrower and the guarantor did not liquated the entire outstanding liability as demanded in the Sec.13(2) nor kept their assurances and promises to clear the liability respondent have proceeded for the in issuing the Sec.13(4) possession notice dated 29.03.2023. The possession notice is duly served by RPID, affixed on the property and also

SA No.268/2023

22.07.2025

published in the two newspapers as mandated under the Act. For the respondent have also intimated vide letter dated 01.04.2023 intimating about the issuance of the Sec.13(4) possession notice, and also direct them to vacate the premises which the applicant themselves have produced.

¶96

Thus it seen that the respondent bank as secured creditor have followed all the producers in issuing the Sec.13(2) demand notice dated 20.12.2022 and Sec.13(4) possession notice dated 29.03.2023 and have established the due compliance of the procedures as mandated under the Act.

¶97

For the foregoing reasons the present SA is stands dismissed upholding the Sec.13(2) demand notice dated 20.12.2022 and Sec.13(4) possession notice dated 29.03.2023 has valid notices.

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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 (Suriya), transcribed by him, corrected, signed and pronounced by me on this the 22^nd day of July, 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	Documents No.
1.	Loan Recall Notice dated 08.12.2022.	A-1
2.	Vacation Notice dated 01.04.2023.	A-2
3.	Pre-Sale Notice dated 01.04.2023.	A-3
4.	Sec 8(1) Post Symbolic Intimation to Borrower dated 01.04.2023.	A-4

SA No.268/2023

22.07.2025

5.	Recd Symbolic	Possession Notice dated	A-5
	29.03.2023 along 02.04.2023.	with paper publication dated
6.	Postal cover of	Possession Notice dated	A-6
	05.04.2023.
7.	Letter from Defend	ant Bank dated 15.04.2023.	A-7

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LIST OF DOCUMENTS PRODUCED BY THE RESPONDNET

¶109

Sl. No.	Description of Documents	Documents No.
1.	Loan Recall Notice dated 08.12.2022.	R-1
2.	Notice issued under section 13(2) of the SARFAESI Act, 2002 with dispatch proof and Acknowledgement cards dated 27.12.2022	R-2
3.	Symbolic Possession Notice with dispatch proof- postal tract consignment report dated 29.03.2023.	R-3
4.	Possession Notice affixture photograph.	R-4
5.	Paper Publication in Tamil Daily News Paper Dhinamani.	R-5
6.	Paper publication in English daily newspaper The New Indian Express.	R-6
7.	Reply from the Applicant for possession notice by the Respondent bank dated 01.04.2023.	R-7
8.	Interim Reply by the Respondent bank dated 15.04.2023.	R-8
9.	Reply under section 13-3A by the Respondent bank with dispatch proof dated 27.04.2023.	R-9
10.	Statement of Accounts.	R-10

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SCHEDULE OF PROPERTY

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Description of immovable property.

¶112

All that piece and parcel of residential site and building, Thiruvallur District, Madavaram Taluk, Chennai Municipality Limits, Madavaram Village, Survey No.1174/3B, Town Survey as per patta Old Survey No.1174/3B, T.S. No.65/1, Block No.78, Ward No.D, D.T.P. No.9/1975 Govt. Approved Plot, Chennai 600 110, Ponniammanmedu, Swamy Ramalinga Colony, B-Block, 3^rd Cross Street, Plot No.240-B (Plot No.239 Part and Western Side of Plot No.240) Door No.240-B.

Boundaries

North : 20 ft Road

SA No.268/2023

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South : Property belongs to Sarangapani and Vagaiyara’s and Plot Nos.253, 254

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West : Property belongs to Sarangapani and Vagaiyara’s

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East : Plot No.240-A

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Amidst these boundaries measuring

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East West in the Northern side : 20 ft 0 inches East West in the Southern side : 20 ft 0 inches North-South Eastern side : 60 ft 0 inches North-South Western side : 60 ft 0 inches

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Totally to an extent of 1200 Sq.ft., plot and Chennai Municipality Building Plan Approval No. B.A. No.676/11 and B.L. No.669/11 and a house in it. Electricity Connection (including Deposit).

¶124

Together with all the buildings structures thereon, rights, fixtures, fittings, and all plant and machinery attached to the earth or permanently fastened to anything attached to the earth both present and future.

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Sd/-

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

Gowri R v. Icici Bank Limited

Case brief

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Gowri R v. Icici Bank Limited

Case brief

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