Dismissed

Mr J Manoharan v. Gic Housing Finance Ltd.

DRT13 Oct 2025SA/33/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed the securitization application challenging a Section 14 order for taking possession of secured assets. The Tribunal held that the Section 14 power is ministerial and non-adjudicatory, affirmed the validity of prior demand and possession notices despite procedural contentions, and barred the appellant's challenge due to expiry of the limitation period.

What did the court decide?

The Securitization Application challenging the Section 14 order is dismissed; interim orders, if any, stand vacated; no order as to costs.

Mr J Manoharan versus Gic Housing Finance Ltd. — Banking and Recovery | DRT (2025)

SA No.33/2024

13.10.2025

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 13^th day of October, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SA No. 33 of 2024

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M/s. Suyambu Angala Parameswari Stores, Rep. by its Proprietor, Mr. J. Manoharan, (M/54) No.15, Gandhi Main Road, Near Eswaran Temple, Puzhal -600 066. ….Applicant

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-Vs-

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M/s. GIC Housing Finance Ltd., Rep. by it’s, the Authorised Officer, G. Rajasekar, No.2C, Solomon Street, Adhi Nagar, Selaiyur, East Tambaram, Chennai -600 035. ….Respondent

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Counsels on record / appeared:

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Counsel for Applicant : M/s. P. Paul Britto Kumar Counsel for respondent : M/s. R. Krishna Kumar

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ORDER ON SA 33/2024

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The present Securitization Application [SA] is filed on 28.11.2023 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].

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The applicant has challenged Sec.14 order dated 24.07.2023 in Crl.M.P. No.5814 of 2023 passed by Hon’ble Chief Judicial Magistrate,

SA No.33/2024

13.10.2025

Tiruvallur and the outstanding amount due as per Sec.14 order is Rs.42,67,264/-

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The applicant is the borrower who had availed loan of Rs.40 lakhs for his provision store business which was repayable within 180 months for which the property was given as collateral to the bank. It is contented that the applicant was prompt in repaying till March 2016, due to medical expenses from 2016 due to hyperglycemia and related health aliments he was not able to carry out the business.

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Due to pandemic in 2020, applicant’s wife was seriously affected with covid-19 and due to lockdown, there was loss in the business which resulted in the repayment of EMI. However, the applicant was making regular repayment and the bank have issued the under S.13(2) demand notice and also pasted the possession notice under S.13(4) without issuing any proper intimation to the applicant which is in violation of sub rule 7 & 8 of the act.

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It is contented that the classification of the account as NPA is in violation of the RBI guidelines and the issuance of possession notice dated 23.01.2017 claiming an amount of Rs.42,67,264/- due is without following the mandatory provisions and without intimating the applicant and have pasted the possession notice. The applicant intends to settle by an amicable settlement has requested for OTS which if considered the applicant is ready to settle the loan.

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The respondent bank have proceeded U/s.14 and have pasted the intimation under section 14 of the SARFAESI Act to vacate the premises.

SA No.33/2024

13.10.2025

The applicant is seriously searching for a purchaser to sell the property and to clear the loan. However, the applicant to came know about the order of the CJM, Tiruvallur on 01.11.2023, and on verification of the A-dairy of the Hon’ble CJM Court the applicant was shocked and through an applied for the certificate copy under section 14 and approached the bank for an one time settlement.

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It is contended on reading of the petition filed along with the affidavit an order is passed under section 14 and the bank could not have invoked S.14 as the applicant intent to settle the liability. The applicant having their right of redemption until the property is sold and the evicting the applicant a genuine purchaser could not come forward to buy the property.

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In the grounds, it is contended that the bank has filed the Sec.14 application suppressing the fact. The demand notice is illegal, arbitrary and total violation of the natural justice and the account was not declared as NPA and they have not mentioned the date of NPA in the possession notice.

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Without issuing proper demand notice, Sec.13(4) notice could not survive as the notice is without date, no particulars of the nature of loan, the rate of interest, amount disbursed and have failed to specify the schedule property exactly without any ambiguity. On these grounds, the applicant prays to set aside the Sec.14 order dated 24.07.2023 as null and void.

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The respondent bank has filed detailed counter inter alia contenting that the applicant approached the respondent finance company for a grant

SA No.33/2024

13.10.2025

of Mortgage loan in the year 2015, accordingly a sum of Rs.40 lakhs was sanctioned on 26.03.2015, repayable in 180 EMIs of Rs.54,621/-. The applicant being a borrower had executed necessary loan documents and also created equitable mortgage in respect of her property situated at Plot No.9, Bagavath Sigh Nagar, and 1st Street, Madhavaram, Ambattur Taluk, Tamil Nadu -690 060, measuring an extent of 1,539 sq.ft., The second applicant is the personal guarantor to the loan availed by the 1^st applicant.

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The applicant admits the repayment of the loan promptly initially, however due to financial instability the applicants could not repay the loan instalments which resulted in the classification of the loan account as NPA on 30.04.2016 and alleged have issued the Sec.13(2) demand notice dated 17.08.2016 which is followed by the possession notice dated 23.01.2017 and the same was served.

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The applicant have challenged the Sec.14 order dated 24.07.2023. Pursuance to the order dated 24.07.2023 the officials of the respondent visited the secured property during the second week of October 2024 intimating the applicant to vacate the premises about the Sec.14 order. Immediately the applicants have contacted their advocate to cause verification of the order and on verification it was found that the respondent have obtained an order U/s 14 of SARFAESI Act in Crl.M.P.No.5814/2023 on 24.07.2023.

SA No.33/2024

13.10.2025

The applicants had challenged the Sec.14 order before this Tribunal on 25.11.2023 seeking to nullify the order passed and the applicants do not have any intention to pay the amount.

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The Hon’ble Apex Court in the case of Balkrishna Rama Tarle Dead Thr LRS & Anr. Vs. Phoenix ARC Private Limited & Ors. Order dated 26.09.2022, has held that the step to be taken by the CMM under Section 14 of the SARFAESI Act, is a ministerial step. While disposing of the application under section 14 of the SARFAESI Act, no element of quasijudicial function or application of mind would require. The Magistrate has to adjudicate and decide the correctness of the information given in the application and nothing more. Therefore, Section 14 does not involve an adjudicatory process qua points raised by the borrower against the secured creditor taking possession of secured assets.

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In the case of Shipra Hotels Limited And Anther v. State of U.P. And 3 Others and connected matters order dated 25.11.2022, the Hon’ble Apex Court held that the CMM/DM acting under Section 14 of the SARFAESI Act, 2002 is not required to give notice to the borrower at the stage of the decision or passing order as no hearing can be demanded by the borrower at this stage. However, it is clarified that the order passed by such Magistrate has to be duly served upon the borrower before taking any steps for his forcible dispossession by such steps of use of force, as may be necessary in the opinion of the Magistrate, and the date fixed for such forcible action shall be duly intimated to such borrower in advance giving

SA No.33/2024

13.10.2025

him sufficient time to remove his belongings, or to make alternative arrangement. Hence the respondent bank prays for 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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The applicant are the borrowers who had availed a mortgage loan of Rs.40 Lakhs vide sanction letter dated 26.03.2015 and have executed all the loan documents including the mortgage by deposit of title deeds dated 20.04.2015 which is produced by the respondent at pg. 58-66. In fact the applicant does not dispute the availing of the credit facilities and the mortgage of the property including the default in the repayment. Due to continuous default in the repayment, the loan account of the applicant was classified as NPA on 30.04.2016 as per the directions relating to assets classification issued by National Housing Bank.

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The respondent have issued the Sec.13(2) Demand Notice claiming an amount of Rs.42,67,264/- due as on 31.07.2016 along with other charges. Even after the receipt of Sec.13(2) demand notice the borrower and the guarantor did not liquated the liability, hence the respondent have issued the Sec.13(4) possession notice on 23.01.2017.

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It is an admitted fact that applicants have not challenged the Sec.13(4) possession notice dated 23.01.2017 within the period of 45 days as required under section 17(1) of the SARFAESI Act. It seen that the respondent have produced the copy of the S.13(2) demand notice and S.13(4) possession notice for due compliance of the measures taken. As

SA No.33/2024

13.10.2025

the applicants failed to repay the entire outstanding amount, the bank has proceeded further and have approached the CJM, Tiruvallur in u/s 14 of the SARFAESI Act. The Hon’ble CJM after perusal of the application and the loan documents produced by the respondent allowed the S.14 application on 24.07.2023.

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It seen in the Section 14 order that the Ld. Magistrate has verified the documents the sanction letter dated 26.03.2015; loan agreements dated 27.03.2015’ the sale deed dated 13.10.2000 and the memorandum of deposit of title deeds dated 20.04.2015 which as marked has Exhibit P.3 to P.6 as detailed in the order at pg.31 of the SA. Further, the demand notice is produced by the respondent has Exhibit P.7 and the acknowledgement card proof of service of Sec.13(2) at Exhibit P.8. Further, the possession notice dated 23.01.2017 and its acknowledgement cards are produced at Exhibit P.9 and the paper publication at Ex. P.10 along with the statement of account of the loan account at Ex. P.12.

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The Ld. Magistrate after due verification of the documents and the pleadings in Sec.14 application allowed the 14 petition filed by the secured creditor directing the advocate Mr. D. Loganathan as the advocate commissioner to take the physical possession of the property and also directed to take the assistant if necessary from the M-1, Madhavaram Police Station and Revenue Officials in executing the warrant.

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Thus it is evident that the Ld. Magistrate on examination of the pleadings in the 14 application which is supported by the documents have

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13.10.2025

passed an order dated 24.07.2023 directing the advocate commissioner to take the possession of the property. Though the applicant have filed the present SA impugning the Sec.14 order dated 24.07.2023 passed by Ld. CJM, Tiruvallur has not made out any case of illegality in the measures taken by the respondent herein.

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On the other hand, though the statuary notices, the demand notice dated 17.08.2016 and possession notice dated 23.01.2017 is issued, the applicant has waived his right to raise any contentions with regard to Sec.13(4) possession notice within the period of 45 days. Hence any contentions to Sec.13(4) is barred by limitation.

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Now considering the challenge to S.14 Order, it is appropriate to mention the declaration of The Hon’ble Supreme Court and various Hon’ble High Courts in various judgments has held that the power of Designated Court under Section 14 SARFAESI Act, 2002 is ministerial and nonadjudicatory in nature and the process to be followed under Section 14 does not involve any element of quasi-judicial function nor it requires any application of mind.

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Furthermore, the Hon’ble Supreme Court in the matter of Kotak Mahindra Bank vs Girnar Corrugators Pvt. Ltd. & Others , held that while exercising power under Section 14 of the SARFAESI Act, even the District Magistrate has no jurisdiction and/or District Magistrate and/or even the Chief Metropolitan Magistrate has no jurisdiction to adjudicate the dispute between secured creditor and debtor.”

SA No.33/2024

13.10.2025

The Hon’ble Bombay High Court in the matter of Phoenix ARC Pvt. Ltd. Vs. The State of Maharashtra has held that Court is only required to verify the affidavit of Secured Creditor filed in pursuance of the proviso to Section 14 and nothing more. The above Bombay High Court judgment has since been confirmed by the Hon’ble Supreme Court by its judgment dated 26.09.2022 in the matter of Balakrishna Ram Tarle v. Phoenix ARC (P)

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Ltd. as under:

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“Thus, the powers exercisable by CMM/DM Under Section 14 of the SARFAESI Act are ministerial step and Section 14 does not involve any adjudicatory process qua points raised by the borrowers against the secured creditor taking possession of the secured assets. In that view of the matter once all the requirements Under Section 14 of the SARFAESI Act are complied with/satisfied by the secured creditor, it is the duty cast upon the CMM/DM to assist the secured creditor in obtaining the possession as well as the documents related to the secured assets even with the help of any officer subordinate to him and/or with the help of an advocate appointed as Advocate Commissioner. At that stage, the CMM/DM is not required to adjudicate the dispute between the borrower and the secured creditor and/or between any other third party and the secured creditor with respect to the secured assets and the aggrieved party to be relegated to raise objections in the proceedings Under Section 17 of the SARFAESI Act, before Debts Recovery Tribunal”.

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Additionally, Section 14(3) of the SARFAESI Act statuses that no action taken by the Chief Metropolitan Magistrate or District Magistrate (or

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any officer authorized by them) under S.14 can be challenged in court or before any other authority. This provision ensures that the authority of these officials in enforcing security interests is final and not subject to further review.

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27. T hus, the Sec.14 order passed by the Ld. Section 14 order dated

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24.07.2023 in Crl.M.P. No.5814/2023 passed by CJM, Tiruvallur is after due

SA No.33/2024

13.10.2025

consideration of the application, affidavit in support of compliance of procedures along with documents is an execution Order issued where no adjudication is required. The Order is passed considering the due compliance of the provisions of the S. 14 [i-ix].

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On examination of pleadings and documents produced by respective parties, the Tribunal comes to conclusion that the respondent bank as secured creditor has initiated measures under the Act after classifying the account as NPA.

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Consequent to classification of account as NPA has issued S.13[2] demand notice followed by possession notice and have complied all the procedures as contemplated under the Act and the Rules with supporting documents. Thus it is held that the demand notice u/s S.13[2] dated 17.08.2016 and S.13[4] possession notice dated 23.01.2017 are held as valid notices issued under the Act.

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For the foregoing reasons, the present SA is dismissed. Interim Order granted, if any stands vacated, pending IAs are disposed of in terms of this final order. No order as to cost. Sd/-

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(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 13^th day of October, 2025)

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ANNEXURES

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LIST OF DOCUMENTS PRODUCED BY THE APPLICANT

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Sl. Description of Documents	Documents
No.	No.

SA No.33/2024

13.10.2025

1.	Sanction Letter dated 26.03.2015.	A-1
2.	Demand Notice U/S 13(2) SARFAESI Act dated 17.08.2016.	A-2
3.	Possession Notice U/S 13(4) SARFAESI Act dated 23.01.2017.	A-3
4.	Order Passed by Hon’ble CJM, Tiruvallur CRL.M.P. No.5814 of 2023 on 24.07.2023 dated 24.07.2023.	A-4
5.	Photo Copy of Advocate Commissioner’s Notice dated 01.11.2023	A-5

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LIST OF DOCUMENTS PRODUCED BY THE RESPONDNET

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Sl. No.	Description of Documents	Documents No.
1.	Sanction Letter dated 26.03.2015.	R-1
2.	Loan Agreement dated 27.03.2015.	R-2
3.	Sale Deed dated 13.10.2000.	R-3
4.	Memorandum of Deposit of Title Deed dated 20.04.2015.	R-4
5.	Notice U/s. 13(2) of SARFAESI Act dated 17.08.2016.	R-5
6.	Possession Notice dated 23.01.2017.	R-6
7.	Encumbrance Certificate dated 22.04.2015.	R-7
8.	Statement of Accounts dated 01.01.2014 to 02.11.2022.	R-8
9.	Order in Crl.MP.No.5814/2023 dated 24.07.2023.	R-9

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SCHEDULE OF PROPERTY

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SCHEDULE A

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All that piece and parcel of land with building in Plot No.9, Comprised in Survey No.934/4, Patta No.534, situated at “Bhagavathisingh Nagar” No.50, Madhavaram Village, Ambattur Taluk, Tiruvallur District, within the limits of Madhavaram Municipality, forming part of the approved layout in PPD/Lo. No.29/97, within Registration District of Chennai Madhavaram and Sub-Registration District of Madhavaram.

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Sd/-

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

Mr J Manoharan v. Gic Housing Finance Ltd.

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Mr J Manoharan v. Gic Housing Finance Ltd.

Case brief

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