Allowed

Sri Laxmi Balaji Enterprise and Two Others v. Indian Overseas Bank

DRT20 Jun 2025SA/319/2025

Case brief

AI extract

What is this about?

Securitization Application challenging partial possession taken by bank and sale after lapse of prior order warrant. Tribunal held possession taken post-expiry was irregular. Relieved applicant of possession pending fresh warrant execution. Sale remains valid.

What did the court decide?

The partial physical possession taken on 03.05.2025 was set aside; applicant to be relieved of possession after proper panchanma and on payment of costs. Respondent permitted to take possession under

Sri Laxmi Balaji Enterprise and Two Others versus Indian… — Company and Corporate | DRT (2025)

SA No.319/2025

20.06.2025

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 20^th day of June, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SA No. 319 of 2025

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M/s. Sri Laxmi Balaji Enterprise,

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No.4/75, 12^th Street, Viduthalai Nagar, Sunnambu Kolathur, Kovilambakkam, Kancheepuram -600 117.

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Mr. V. Ashok,

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No.4/75, 12^th Street, Viduthalai Nagar, Sunnambu Kolathur, Kovilambakkam, Kancheepuram -600 117.

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Also at: Plot No.370, 2/1063, Amar Sangam, Dr. Ambedkar Street, LIC Nagar, S Kulathur, Chennai -600 117.

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Mr. Thanush Venkat, No.4/75, 12^th Street, Viduthalai Nagar, Sunnambu Kolathur, Kovilambakkam, Kancheepuram -600 117. Aslo at: Plot No.370, 2/1063, Amar Sangam, Dr. Ambedkar Street, LIC Nagar, S Kulathur, Chennai -600 117. ….Applicants -VsIndian Overseas Bank, Mount Road Branch, B.No.5224, No.807, Ground Floor, Anna Salai, Chennai -600 002. Represented by its Authorised Officer. ….Respondent Counsels on record / appeared: Counsel for Applicant : M/s. B. Rajesh Khanna Counsel for respondent : Mrs. V. Rajeswari

SA No.319/2025

20.06.2025

ORDER ON SA 319/2025

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The present Securitization Application [SA] is filed on 07.05.2025 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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The applicant has impugned the S.14 Order dated 31.12.2024 passed by Hon’ble Chief Judicial Magistrate, Chengalpet in CMP No.4698/2024 and to revoke the Partial Possession of the property. The outstanding amount due as per Sec.14 order is Rs.2,58,46,357.23/-

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Pleadings of the applicant:

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The applicant borrower is Partnership firm and the 2^nd and 3^rd applicants are its partners had borrowed cash credit facility of Rs.2.50 Crores, to be repaid at 13.15% per annum from April 2023 availed CA-TOD facility to the tune of Rs.4 Lakhs which was to be repaid at 16% PA, and Vehicle Loan of Rs.18.50 Lakhs to be repaid at 9.85% PA.

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The applicant had also availed the insurance policy and paid an amount of Rs.15 Lakhs as a one time premium. The bank has also disbursed the Loan Against the mentioned Policy to the tune of Rs.10 Lakhs at 12.05% PA. The applicant have mortgaged the property as security towards the credit facilities and were paying the payments regularly during the declaration of NPA 13.05.2024.

SA No.319/2025

20.06.2025

The bank has classified the account as NPA in violations of the RBI guidelines and also filed an application under Sec.14 before the Learned CJM, Chengalpattu in CMP.No.4698/2024. The Ld. CJM vide order dated 31.12.2024 has appointed Mr. P. Sampath as Advocate Commissioner and directed to complete the entire proceedings and submit the report within 2 Months from the date of the Order ie., 31.12.2024. However, the bank has now taken the Partial Physical Possession of the property on 03.05.2025 based on the lapsed warrant.

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It seem that the execution of the Order will lapse on or before 28.02.2025 and the advocate commissioner has taken partial possession of the property on 03.05.2025 which is the after the expiry of the warrant issued by Ld. CJM. Hence the applicant has filed the present SA to set aside the Sec.14 order and to revoke the partial possession taken on 03.05.2025.

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Objections of the respondent bank:

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The respondent bank has come on record and filed detailed counter contenting that respondent bank along with the commissioner went for taking Physical Possession on 03.05.2025 and the applicants undertook to vacate the premises within 5 days.

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Though 3^rd applicant gave a letter dated 03.05.2025 undertaking to vacate and give vacate possession of the property within 5 days did not vacate the premises as there were aged people living with him. In the said letter also mentioned that the bank had approached for taking physical possession even two months before which the applicant was aware.

SA No.319/2025

20.06.2025

It is submitted that bank had sold the property under Sale Notice dated 03.01.2025 fixing the sale for 24.01.2025 and the sale certificate was issued to the purchaser on 07.02.2025 which is challenged by the applicant in TSA 20 of 2025 and the applicant has also filed SA.No.870.2024 the challenging the 1^st Sale Notice dated 07.11.2024.

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It is contented as the borrowers were irregular in the repayment the bank have classified the account as NPA and have issued the possession notice on 13.05.2024. The applicant have acknowledged in person about the receipt of Sec.13(2) demand Notice and the 2^nd applicant has replied to the demand notice to which the bank has also given a reply vide letter dated 25.07.2024 furnishing the statements of Accounts.

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As the applicant continued default, the bank issued the possession Notice on 14.10.2024 which returned with endorsement ‘Left’. Hence the Possession Notice was also sent by the Email to the applicants on 15.10.2024. The possession notice was affixed on the mortgaged property and also published in “Dinamani” & “New Indian Express” on 18.10.2024.

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The respondent also filed a Petition for taking Physical Possession in CMP No.4698 of 2024 which came to be allowed on 31.12.2024 appointing an Advocate Commissioner to take possession.

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It is contented that the Advocate Commissioner and the Authorized Officer went for executing the orders, but the occupants undertook to give vacant possession. Hence the bank took Valuation Report of the property

SA No.319/2025

20.06.2025

on 28.10.2024 and issued 1^st sale notice on 07.11.2024. However the sale did not materialize.

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The 2^nd sale notice dated 03.01.2025 fixing sale for 24.01.2025 is issued to the applicant returned with addressee ‘left’. Hence was sent by email also on 04.01.2025 and also published in two Newspapers, namely Dinamani and The New Indian Express on 05.01.2025.

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The sale is held on 24.01.2025 for a Bid amount of Rs.2,88,10,000/as against the reserve price of Rs.2,78,10,000/- the successful Bidder has remitted 25% of the Bid amount on 27.01.2025 and sale was confirmed in his favour by the bank on 29.01.2025, and payment of the balance sale consideration on 07.02.2025 and sale certificate was issued.

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It is contented that the respondent have obtained extension of warrant from the CJM, vide order dated 02.06.2025 by which the warrant stood extended to 18.06.2025. The respondent submits to have taken the extension of warrant of CJM and the same is produced at pg.48.

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It seen from the proceeding sheet of the CMP No.4698 of 2024, that the petitioners prays for extension of the warrant for two months, and same is extended till 18.06.2025 as per Order dated 02.06.2025. Admittedly the respondent have taken the possession on 03.05.2025, which is before the extension of the warrant issued by the Ld. CJM.

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On perusal of the record of the case, the applicant being the borrowers does not dispute the availing of the credit facilities and the mortgage of the property as collateral security. Infact due to default in the

SA No.319/2025

20.06.2025

repayment the account of the applicants as classified an NPA and the bank had initiated measures of the SARFAESI Act.

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The bank have produced by the documents for due compliance of the measures taken the bank but the applicants have not liquated the liability. Hence the bank has proceeded under sec.13(4) and followed all the measures as mandated under the Act.

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It seen that the bank have approached the Ld. CJM in taking Physical Possession of the property which came to be allowed appointing the Advocate Commissioner to take the possession and report within two months.

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Though the Sec.14 order dated 31.12.2024 and the advocate commissioner to take the possession and submit the reports within two months which admittedly expires of date 02.03.2025.

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However the respondent along with advocate commissioner have executed the warrant after the lapse of warrant issued by the CJM which is admitted by the respondent herein. Infact respondent submits that they have filed for extension of the execution of the warrant vide order dated 02.06.2025.

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As the respondent as a secured creditor have executed the warrant of the advocate commissioner after the expiring period and have taken partial Physical Possession which is an irregularity and the same cannot sustain.

SA No.319/2025

20.06.2025

It also matter of records that secured asset is already sold and sale certificate is already issued and 3^rd party interest ie., Auction Purchaser is created on the property as per the Act. In a hurry to hand over the phsycuacal possession of the property to the auction purchaser, the respondent has exercise its power pursutant ot S.14 order and executed the Order which had lapsed. Hence, the respondent is directed to redeliver the partial possession taken on 03.05.2025 after proper panchanma and in accordance with law. The respondent is at liberty to take physical possession in terms of extended warrant issued by Ld. CJM.

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For the forgoing reasons the SA stands allowed in part only to the extent of setting aside of partial physical possession taken 03.05.2025.

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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 20^th day of June, 2025)

SA No.319/2025

20.06.2025

ANNEXURES

LIST OF DOCUMENTS PRODUCED BY THE APPLICANT

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Sl. No.	Description of Documents	Documents No.
1.	Settlement Deed Executed by G. Vivekanantham to in Favour of V. Ashok Vide Doc No.2119 of 2023 dated 03.03.2023.	A-1
2.	Settlement Deed Execute by G. Vivekanantham to in Favour of A. Thanush Venkat Vide Doc.No.2120 of 2023 dated 03.03.2023.	A-2
3.	Loan Sanction Letter dated 26.04.2023.	A-3
4.	MODT in the name of Indian Overseas Bank Vide Document No.4134/2023 dated 26.04.2023.	A-4
5.	Demand Notice 13(2) dated 31.05.2024.	A-5
6.	Possession Notice 13(4) dated 15.10.2024.	A-6
7.	CJM Order and Warrant dated 31.12.2024.	A-7
8.	Symbolic Photo.	A-8
9.	Company Pan Card.	A-9
10.	Aadhaar Card of Applicants.

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LIST OF DOCUMENTS PRODUCED BY THE RESPONDNET

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Sl. No.	Description of Documents	Documents No.
1.	Demand Notice issued to the Applicants along with copies acknowledged by 1^st& 2^ndApplicant in person and 3^rdApplicant by post dated 31.05.2024.	R-1
2.	Possession Notice issued by the Respondent Bank to the Applicants dated 14.10.2024.	R-2
3.	Photo showing affixture of Possession Notice on the property mortgaged dated 14.10.2024.	R-3
4.	Intimation letter of the Respondent Bank enclosing Possession Notice sent to the Applicants dated 15.10.2024.	R-4
5.	Email sent by the Respondent Bank to Applicants attaching Possession Notice dated 14.10.2024 dated 15.10.2024.	R-5
6.	Newspaper publication of Possession Notice in Dinamani & New Indian Express dated 18.10.2024.	R-6
7.	Sale Certificate issued to the purchaser dated 07.02.2025.	R-7

SA No.319/2025

20.06.2025

8.	CJM orders for Physical Possession dated 31.12.2024.	R-8
9.	Affixture of Physical Possession issued to the Applicants dated 15.02.2025.	R-9
10.	Undertaking letter of the 3^rdApplicant to the Commissioner of police dated 03.05.2025.	R-10
11.	Extension order of CJM dated 02.06.2025.	R-11
12.	Statement of account of CC account of the 1^st Applicant from 26.04.2023 till 28.03.2025.	R-12
13.	Statement of loan account of TOD account from 28.11.2022 till 12.02.2025.	R-13

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SCHEDULE OF PROPERTY

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All that piece and parcel of Land with building bearing plot no.309 Part measuring 1800 sq.ft., Eastern portion of 3600 Sq.ft., bearing plot no.309 and 308 Part, situated at Door No.4/75, viduthalai Nagar, 12^th Street, approved layout bearing LPDM/DTCP No.10/74, comprised in old survey No.309/1J, as per Patta No.764, Survey No.390/1J4 of S. Kolathur Village, Madipakkam B Revenue Village, Sholinganallur Taluk, Chennai district in the name of Mr. V. Ashok and Mr. A. Thanush Venkat and bounded on the

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North By : Plot No.324 and 325 Part South By : 30 Feet Road (Viduthalai Nagar 12^th Street) East By : Plot No.310 Part West By : Western Side of Plot No.309 Part and 308 Part Measuring:

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East to West on the Northern Side : 30 Feet East to West on the Southern Side : 30 Feet North to South on the Eastern Side : 60 Feet North to South on the Western Side: 60 Feet

SA No.319/2025

20.06.2025

Item No.2

All the piece of parcel of land with building bearing plot no.309 Part and 308 part measuring 1800 sq.ft., western portion of 3600 Sq.ft., bearing plot no.309 and 308 Part, situated at Door No.4/75, Viduthalai Nagar, 12^th Street, approved layout bearing LPDM/DTCP No.10/74, comprised in old survey No.309/1J, as per Patta No.764, Survey No.390/1J4 of S. Kolathur Village, Madipakkam B Revenue Village, Sholinganallur Taluk, Chennai district in the name of Mr. V. Ashok and Mr. A. Thanush Venkat and bounded on the

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North By : Plot No.324 and 325 Part South By : 30 Feet Road (Viduthalai Nagar 12^th Street) East By : Plot No.309 Eastern side West By : Plot No.308 Part

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Measuring:

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East to West on the Northern Side : 30 Feet East to West on the Southern Side : 30 Feet North to South on the Eastern Side : 60 Feet North to South on the Western Side: 60 Feet

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

Sri Laxmi Balaji Enterprise and Two Others v. Indian Overseas Bank

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Sri Laxmi Balaji Enterprise and Two Others v. Indian Overseas Bank

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