Securitization Application filed by a borrower alleging false liability as guarantor for her deceased son's business loans. The Tribunal found the applicant was a valid guarantor and mortgagor based on documents. It held the bank followed statutory procedure for notice issuance and dismissed the challenge.
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.278/2022
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06.10.2025
IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI
Dated this the 06th day of October, 2025
Present: SMT. S.V. GOWRAMMA Presiding Officer
SA No. 278 of 2022
S. Alamelu, W/o Sundararajan, No.16, Angalamman Koil Street, Periakalapet, Puducherry – 605 014. …Applicant
-Vs-
The Authorised Officer, UCO Bank, Bazaar Branch, Rep. by its Chief Manager, Periakalapet Branch, No.1, Bungalow Street, Periakalapet, Puducherry – 605 014. …Respondent
Counsels on record / appeared:
Counsel for Applicant : M/s. C. Jayachithra Counsel for Respondent : Mr. M. Muthukumaran
ORDER ON SA 278/2022
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].
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3. Pleadings of the applicant:
3.1 The applicant and her daughter M/s. S. Prabhavathi had availed a loan of Rs.10,50,000/- vide loan Account No.13180610076125 and mortgaged the property as collateral security. It is contended that the manager insisted to mortgage the property and deposited the title deeds and executed the Memorandum of Deposit of Title Deeds on 17.12.2012 in favor of the respondent bank for a sum of Rs.10,50,000/- which is registered in the Sub-Registrar Office of Oulgaret on 18.12.2012 vide Doc.No.5665/2012.
3.2 In spite of financial crisis, the applicant and daughter had settled the entire outstanding due on 16.12.2019 and respondent have issued “No Due Certificate” on 27.12.2019. Though the applicant had approached respondent for return of Original Title Deeds, the respondent bank has failed to do so and the senior manager has dodged to return the title deeds. It is contended that she is neither the guarantor nor extended the mortgage at any point of time and have created equitable mortgage only to Home Loan which was settled as early as on 16.12.2019 and the respondent also issued No Due Certificate to applicant on 21.12.2019.
3.3 The applicant’s son late S. Vijayan had obtained loan from the respondent bank for his proprietorship concern M/s Vishnuraj Traders for Rs.7.50 lakhs in the year 2014 vide Loan Account No.13180510000601 and also sanctioned Rs.4.50 lakhs and in total executed a loan of Rs.12.00 lakhs to late S. Vijayan Prop. of M/s. Vishnuraj Traders.
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3.4 The applicant is the guarantor to her son’s loan and her son informed that the loans have been settled in the year 2020 and there are no dues with respect to the Account No.13180510000601 of S. Vijayan Prop. of M/s. Vishnuraj Traders. Though the applicant had requested for return of title deeds bank had given evasive reply and has proceeded to issue Demand Notice dated 17.06.2021 under Section 13(2) of SARFAESI Act, demanding to repay sum of Rs.10,74,650/- as on 31.06.2021 for an amount of Rs.9,90,000/- availed by S. Vijayan, Prop. of M/s. Vishnuraj Traders.
3.5 The Demand notice is issued without mentioning the date of sanction and loan account number. On receipt of the Demand notice on 19.06.2021 applicant was shocked to see her name as guarantor for the loan of Rs.9,90,000/-. The applicant vide reply letter dated 07.07.2021 submitted that her son S. Vijayan Prop. of M/s. Vishnuraj Traders has died on 08.10.2020 and there is no secured asset with them to initiate measures under the Act and sought for return of title deeds, loan documents, discharge of MOTD.
3.6 However, on 09.11.2021 applicant had received the legal notice dated 08.11.2021 stating that S. Vijayan had approached the respondent for sanction of Term Loan under UCO – MSME scheme for the purpose of developing his business in M/s. Vishnuraj Traders. Though the bank had sanctioned Rs.9,90,000/- as Term Loan vide A/c No.13180610200650 on 17.02.2020 and the loan account became NPA on 31.03.2021 due to nonrepayment of monthly instalment
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3.7 The applicant was called upon by the respondent bank to pay a sum of Rs.11,06,827/- as on 31.10.2021 and the applicant once again vide reply letter dated 15.12.2021 reiterated that she was not aware of the transactions and she neither stood as guarantor nor extended the mortgage for a sum of Rs.9,90,000/- which was borrowed on 17.02.2020 and also informed that her son S. Vijayan has died on 08.10.2020 due to cancer and had not left any estate to his legal heirs. The respondent bank had issued legal notice dated 08.11.2021 and again issued Demand Notice under Section 13(2) by mentioning earlier dated 06.11.2021 which is posted on 09.11.2021 and the same is received by the applicant on 10.11.2021 which clearly shows the foul play of the respondent bank.
3.8 The Demand notice was issued to the wife of deceased S. Vijayan and directed to pay a sum of Rs.11,06,827/- as on 06.11.2021. In the said notice, it is mentioned that the applicant has created Memorandum of Deposit of Title Deeds on 18.12.2012 for sum of Rs.10,50,000/- and the bank also withdrawn the Demand Notice dated 17.06.2021. The applicant has replied to the legal notices vide letter dated 21.12.2021 and categorically held that she neither stood as Guarantor nor extended the equitable mortgage to the loan of Rs.9,90,000/- sanctioned on 17.02.2020, hence the bank has initiated the measures under the SARFAESI Act is not maintainable.
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neither stood as guarantor nor extended the mortgage towards the loan of Rs.9,90,000/-. The respondent bank vide its reply letter dated 12.04.2022 stated that the applicant has executed relevant documents for extension of mortgage towards M/s. Vishnuraj Traders for an amount of Rs.12.00 lakhs on 27.05.2019 and also provided guarantee to the limit enjoyed by M/s. Vishnuraj Traders which the applicant categorically denies the executing of documents nor mortgaged the property nor stood as guarantor.
3.10 Further the applicant has executed equitable mortgage by way of Memorandum of Deposit of Title Deeds dated 17.12.2012 in favor of respondent bank on 18.12.2012 only for a sum of Rs.10,50,000/-. Though the bank has also issued “No due Certificate” and the applicant has not executed any other documents pursuant to the loan account of M/s. Vishnuraj Traders. The applicant submits that her son S. Vijayan has deceased without leaving any estate to the legal heirs, hence the applicant is not liable to pay the due amount.
3.11 In the grounds it is contended that the measures initiated by the respondent bank in issuing the Demand notice and Possession notice is without jurisdiction and contended that she is not a guarantor as described by the respondent. Further the applicant has created equitable mortgage for home loan and the same was discharged as early on 16.12.2019 and has not stood as guarantor and mortgagee to the loan availed by her deceased son S. Vijayan on 17.02.2020. Hence on these grounds, applicant prays to set aside the Possession Notice dated 13.05.2022 issued by the respondent bank.
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4. Objections of the respondent bank:
4.1 The respondent bank has filed a detailed counter, inter alia contending that the applicant had availed Housing Loan of Rs.10,50,000/and executed necessary loan documents and also executed Memorandum of Deposit of Title Deeds registered as Doc.No.5665/2012 favoring the respondent on 17.12.2012. Further the applicant has extended the mortgage for Cash Credit facility of Rs.7,50,000/- availed by M/s. Vishnuraj Traders by its proprietor Mr. Vijayan and executed letter of extension on 26.03.2014.
4.2 The applicant on 11.05.2018 has extended security for the enhanced cash credit facility from Rs.7,50,000/- to Rs.12,00,000/- totaling to Rs.22,50,000/-. Further the applicant has renewed the Cash Credit facility of M/s. Vishnuraj Traders on 27.05.2019 and closed the Home Loan account on 16.12.2019 hence the guarantee of the applicant and said property extended only for Cash Credit facility.
4.3 The cash credit facility of M/s Vishnuraj Traders on 27.05.2019 was rephased into Term Loan of Rs.9,90,000/- and collateral security of the applicant was continued as on 17.02.2020. Though Mr. Vijayan was died on 08.10.2020 leaving behind his wife Mrs. V. Nandhini and two minor children Master V. Vishnuraj and Master V. Chezhians as his legal heirs.
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on 16.04.2021. The applicant has executed loan documents and have mortgaged the property and stood as guarantor for the loan availed by M/s Vishnuraj Traders.
4.5 The respondent bank has issued Demand Notice dated 01.02.2022 was sent by RPAD to the applicant and Legal heirs of Mr. Vijayan, further issued Possession Notice dated 13.05.2022 which is affixed on the property and the same was published in two Newspapers, one in “Dinamani” (Tamil) and another in “Indian Express” (English) both dated on 17.05.2022.
4.6 Subsequently the Demand Notice dated 01.02.2022 was withdrawn by respondent bank. Therefore, the symbolic possession of the property was taken on 13.05.2022 and the Possession notice was served to the applicant which is evident from the Acknowledgement card produced by the bank. The Possession notice was affixed on the property and have been published in two Newspapers. The respondent bank has followed all the procedures and all documents were produced; hence the respondent prays for dismissal of the present SA.
Heard both sides of the Counsels and perused the records of the case.
5.1 Admittedly the applicant is the mother and the Legal heir of the deceased Mr. S. Vijayan who is the proprietor of M/s. Vishnuraj traders. Though S. Vijayan is the son of Alamelu and it is an admitted fact that the applicant has mortgaged the property to Housing Loan availed by her and it is contended that the loan of the applicant is closed, even closure of
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housing loan dated 21.12.2019 is issued to the applicant which is produced by the bank at Page No.20 of their typed set.
5.2 On perusal of the Section 13(2) Demand Notice dated 01.02.2022 produced by the respondent bank at Page No.21 to 26 of their typed set, it is seen that the applicant has stood as guarantor to the loan availed by M/s. Vishnuraj Traders represented by its proprietor S. Vijayan. It is also evident from the Demand notice that the applicant executed Demand Promissory Note and secured an amount Rs.9,90,000/-, executed Term Loan agreement and secured an amount of Rs.9,90,000/-, executed Guarantor’s agreement and secured an amount of Rs.9,90,000/-.
5.3 Thus the records reflects that the applicant stood as guarantor to the loan facilities availed and also extended the equitable mortgage created in favor of the bank on 14.07.2017. It is seen that M/s. Vishnuraj Traders represented by its proprietor S. Vijayan had availed an amount of Rs.22,50,000/- and the applicant is the mortgagor who stood as guarantor to repay the total outstanding amount due in the loan account of M/s. Vishnuraj Traders. However, the applicant disputes the creation of mortgage and the deposit of Title Deeds on 17.12,2012 favoring the respondent bank as security towards the credit facilities availed by M/s. Vishnuraj Traders which is registered as Doc.No.5665 of 2012.
5.4 Further it is also seen that the applicant has confirmed the deposit of Title Deeds on 27.06.2013 for the Cash Credit facility of Rs.10.50 lakhs and have executed loan documents as mortgagor and extended equitable
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mortgage on 11.05.2018 towards the loan availed by M/s. Vishnuraj Traders for an amount of Rs.7.50 lakhs and sanctioned Rs.4.50 lakhs, totaling to a sum of Rs.12.00 lakhs which the respondent bank has produced at Page No.17 of their typed set.
5.5 Further it is also seen that the Equitable Mortgage is also extended on 27.05.2019 by the applicant to the home loan for extension of Rs.7.50 lakhs and also sanctioned Rs.4.50 lakhs, totaling to a sum of Rs.22.50 lakhs. Since the applicant has confirmed the extension of the Mortgage on 27.05.2019 towards the loan availed M/s. Vishnuraj Traders. Though the applicant’s Housing Loan account was closed and respondent bank has produced closure certificate, submitting that the Housing loan availed by the applicant vide loan Account No.13180610076125 which was closed on 16.12.2019 by way of Full Settlement and there is no due with the bank.
5.6 Thus, the respondent bank had clarified that Housing loan account of the applicant was closed and there is no due with the respondent bank. However, the applicant has stood as guarantor to two loans availed by M/s. Vishnuraj Traders and the documents produced by the respondent bank clearly reflects that the applicant has extended the mortgage towards the loan availed by her son Ms. S. Vijayan who is the proprietary firm of M/s. Vishnuraj Traders.
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No.17 and 18 clearly evidences the extension of mortgage by the applicant to the loan availed M/s. Vishnuraj Traders. Thus, the only contention as raised by the applicant is that she has not mortgaged the property fails.
5.8 Further the applicant also admits that Ms. S. Vijayan is the son of the applicant which is also admitted by the applicant at Para No.2 of their SA and Legal heirs were also included in the measures taken by the respondent bank. The applicant does not dispute the classification of the account as NPA, issuance of Demand Notice dated 01.02.2022, issuance of Possession Notice dated 13.05.2022. The Demand Notice is also issued to the legal heirs of Ms. S. Vijayan.
5.9 In fact, there is no dispute with regard to the issuance of the Demand Notice or to the legal heirship of Ms. S. Vijayan. The applicant did not liquidate the liability on receipt of the Demand Notice nor the Legal heir of the borrower Ms. S. Vijayan come forward to clear the entire liability within 60 days. Hence, the respondent bank has proceeded further and issued Possession Notice dated 13.05.2022 which is received by all the legal heirs as per the Acknowledgement cards produced by the bank at Page No.28 to 33 of their typed set.
5.10 As per the procedure the respondent bank has published the Possession Notice in two Newspapers, one in “Dinamani” (Tamil) and another in “Indian Express” (English) both dated on 17.05.2022 and the same is also affixed on the secured asset. Thus, the respondent have established the due compliance of the measures taken by the them under
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the Act as required and also countered the contentions as raised by the applicant which only pertains to not extension of the mortgage nor stood as guarantor which is duly countered by the respondent bank by producing valid documents at Page No.17 and 18 of their typed set.
5.11 On the other hand the applicant has failed to make out a case of any illegality or irregularity in the measures taken by the secured creditor in enforcing the security available to them. The respondent bank has taken the measures under the Act and has produced documents in support of the procedures in issuing Demand Notice dated 01.02.2022 and Possession Notice dated 13.05.2022 as prescribed under the Act. Thus, the Tribunal concludes that the secured creditor has issued the statutory notices under S.13[2] demand notice dated 01.02.2022 and S.13[4] possession notice dated 13.05.2022 as valid notices issued under the Act.
Sd/(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI
(Dictated to Steno (Mogesh), transcribed by him, corrected, signed and pronounced by me on this the 06th day of October, 2025)
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ANNEXURES
LIST OF DOCUMENTS PRODUCED BY THE APPLICANT
| Sl. | Description of Documents | Document |
|---|---|---|
| No. | No. | |
| 1. | Memorandum of Appeal 08.06.2022 | A-1 |
| 2. | Demand Notice dated 01.02.2022 | A-2 |
| 3. | Possession Notice dated 13.05.2022 | A-3 |
| 4. | Vakalat dated 08.06.2022 | A-4 |
LIST OF DOCUMENTS PRODUCED BY THE RESPONDENTS
| Sl. | Description of Documents | Document |
|---|---|---|
| No. | No. | |
| 1. | Memorandum of Deposit of Title Deeds – applicant to respondent – Doc.No.5665/2012 dated 17.12.2012 |
R-1 |
| 2. | Form – D-letter evidencing deposit of title deeds- applicant to respondent dated 27.06.2013 |
R-2 |
| 3. | Letter of lodgement of applicant’s Rs.10.50 lakhs dated 28.06.2013 |
R-3 |
| 4. | Draft of letter – applicant to respondent 26.03.2014 |
R-4 |
| 5. | Draft of letter – applicant to respondent – Rs.18 lakhs dated 26.03.2014 |
R-5 |
| 6. | Draft of Entry of Applicant’s–Rs.8 lakhs | R-6 |
| 7. | Form – F-letter evidencing deposit of Title Deeds – applicant to Respondent – Rs.22.50 lakhs dated 14.07.2017 |
R-7 |
| 8. | Form – E-letter evidencing deposit of Title Deeds – applicant to Respondent – Rs.22.50 lakhs dated 11.05.2018 |
R-8 |
| 9. | Form – E-letter evidencing deposit of Title Deeds – applicant to Respondent – Rs.22.50 lakhs dated 27.05.2019 |
R-9 |
| 10. | Letter to Respondent from Pondicherry Main dated 27.05.2019 |
R-10 |
| 11. | Letter certifying closure of Housing Loan – Respondent to applicant dated 21.12.2019 |
R-11 |
| 12. | Statutory Demand Notice under Sec.13(2) of the SARFAESI Act by Respondent to Applicant dated 01.02.2022 |
R-12 |
| 13. | Statutory Demand Notice under Sec.13(2) of the SARFAESI Act by Respondent to Applicant and |
R-13 |
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| others (Legal heirs of Mr. S. Vijayan) dated 01.02.2022 |
||
|---|---|---|
| 14. | Possession Notice of Respondent with postal receipts dated 13.05.2022 |
R-14 |
| 15. | Postal Acknowledgement cards–5 Nos. | R-15 |
| 16. | Paper Publication of Possession Notice in Tamil daily Dinamani Newspaper dated 17.05.2022 |
R-16 |
| 17. | Paper publication of Possession Notice in English daily Indian Express Newspaper dated 17.05.2022 |
R-17 |
| 18. | Photograph of affixture of Possession Notice dated 13.05.2022 |
R-18 |
SCHEDULE OF PROPERTY
Puducherry District Puducherry R.D, Oulgaret Sub-R.D, within the Oulgaret Sub-R.D, within the Oulgaret Municipality limits situated in Kalapet Revenue Village, in Angalaman Kovil Street (formerly Kannadasan Street) a Plot with a residential house bearing Door No.16, Measuring East to West 27 feet and North to South 62 feet total extent:1674 sq.ft.(out of plot measuring EW-33 feet and NS-74 feet bearing Patta No.631, comprised in cad No.742/1 pt and 741 bis, corresponding Resurvey No.218/9B including municipal water connection and electricity connection polity consumer code No.24-75-05-0372. The boundaries are East to 6th ft width walk path west to Shanmugam house, south to government odai, north to street. Property stands in the name of Smt. Alamelu, W/o Sundararajan as per SRO Oulgarpet.
Sd/(S.V.GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI
2 issues framed by the court
Whether the applicant was liable to repay the loan amount as a guarantor given the evidence of her executing Guarantee and mortgage documents.
Whether the bank complied with the statutory requirements under Section 13 of the SARFAESI Act for issuing Demand and Possession Notices.
3 provisions across 1 enactments
S. Alamelu
The Authorised Officer, UCO Bank
SMT. S.V. GOWRAMMA
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
