M Arulmurugan versus 151

SA No.354/2023

1

03.09.2025

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

¶5

Dated this the 3^rd day of September, 2025

¶6

Present: SMT. S.V. GOWRAMMA Presiding Officer

¶7

SA No. 354 of 2023

¶8

Mr. M. Arulmurugan, S/o. Mariappan, No.19, KMG Nagar, Thalatheru, Karaikal -609 605. ….Applicant -Vs-

¶9

State Bank of India, Karaikal Branch, Rep. by its Authorized Officer, No.72, Bharathiyar Road, Karaikal -609 602 Puducherry U.T. ….Respondent

¶10

Counsels on record / appeared:

¶11

Counsel for Applicant : M/s. T. Sai Krishnan Counsel for respondent : M/s. S. Ambalvannan

¶12

ORDER ON SA 354/2023

¶13

The present Securitization Application [SA] is filed on 30.06.2023 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].

¶14

The applicant has challenged the Possession Notice dated 08.06.2023 and the outstanding amount due as per Possession Notice is Rs.21,15,053/-

SA No.354/2023

2

03.09.2025

Pleadings of the applicant:

¶19

The applicant is a partner in the partnership firm in the name and style of M/s. Hi Tech Builders. The applicant is a Professional Engineer and an empaneled engineer for SBI and several other banks and also been a non-official, independent director in Engineers India Limited.

¶20

The applicant had approached the respondent bank and had availed a loan of Rs.20 Lakhs by way of overdraft facility and there is no valid mortgage has been created. However the bank is claiming a mortgage by taking advantage of the documents of title with respect to his residential land measuring 5334 sq.ft., upon which there exists a RCC house with buildup area of 4400 Sq.ft., (ground and first floor) situated at Door No.19, 1^st cross street, KMG Nagar, Thalatheru, Karaikal -609605. And the value of the residential house is Rs.2 Crores.

¶21

Thought the applicant was regular in servicing due to Covid, he defaulted in the repayment and sought time to regularize the loan account which the respondent did not entertain his request and demanded the repayment. The Bank without considering the request has issued the impugned possession notice dated 08.06.2023 for recovery a sum of Rs.21,15,053/-.

¶22

In the grounds, it is contented that possession notice dated 08.06.2023 is in complete violation of law and violation of the SARFAESI and the alleged demand notice dated 04.04.2023 was not at all issued to the applicant and to the guarantors nor the applicant have received any

SA No.354/2023

3

03.09.2025

Sec.13(2) demand notice. There is no valid mortgage and the bank has classified the account as NPA against the RBI guidelines not in spirit of section 2(0) of the SARFAESI Act.

¶27

Hence the amount is not crystallized and the alleged notice issued under section 13(2) is liable to be set aside. The authorized officer has not followed the rules as laid down under Rule 8(2) and the possession notice is not published within 7 days in one English and in one Vernacular Language.

¶28

The debt narrated by the respondent is not a secured debt and the entire proceeding under the Act is not legal one. Further there is no registration of the charge under section 26(D) of the Act. On this grounds that the applicant prays to set aside the possession notice dated 08.06.2023.

¶29

Objections of the respondent bank:

¶30

The respondent bank has filed detailed counter inter alia contenting that the applicant Mr. M. Arulmurugan representing as a partner of Hi-Tech Builders had approached the bank and had availed Cash Credit of Rs.20 Lakhs vide arrangement letter dated 29.10.2015 to Hi-Tech Builders. Applicant and his wife being the partners of the firm had executed the loan and the hypothecation agreement dated 29.10.2015.

¶31

Applicant and his wife stood as guarantors to the loan to be repaid along with @ 12.80% p.a., and the present rate of interest is @ 13.90% p.a., the loan was secured by the hypothecation of the stocks and

SA No.354/2023

03.09.2025

4

receivables apart from the mortgage by deposited of title deeds dated 06.11.2015 in favour of the respondent bank.

¶36

The applicant mortgaged the residential land measuring an extent of 04 Are 95.74 Ca or 495.74 Sq. Meters or 5334 Sq.ft., comprised in T.S.No.50/1/8, R.S. No.86 pt., O.S. No.406 bis pt, situated at Ward No. A, Block No.6, Door No.19, 1^st Cross Street, K.M.G. Nagar, Thalatheru Revenue Village, Bharathiar Road, Karaikal Municipality, Registered as Document No.23064 of 2015 on the file of the Sub-Registrar office of Karaikal.

¶37

The applicant failed to repay the loan amount and the account become an NPA on 31.03.2023, bank issued the demand notice under Sec.13(2) on 04.04.2023 which is served on the applicant on 06.04.2023. There was no letter has been submitted by the applicant under section 13(3) of the SARFAESI Act and an completion of the statutory period of 60 days, the respondent has taken symbolic possession of the property under section 13(4) of the Act on 08.06.2023. The possession notice is affixed on the property on 08.06.2023 and the notice is received by the applicant on 10.06.2023 which is sent by post. The possession noticed has been effected in Tamil “Daily Thanthi” and in English “The Hindu” on 12.06.2023.

¶38

The applicant has challenged the said possession notice and has preferred the SA contenting that is a partnership firm and he is one of the panel engineer for several banks. Despite receiving huge turn over, the applicant has failed to make the payment.

SA No.354/2023

03.09.2025

5

The respondent bank has countered all the contentions as raised in the grounds contenting that the demand notice and possession notice were issued by the competent person as per the SARFAESI Rules and served in accordance with law at the given address of the applicant. The bank has followed all the formalities in issuing the Sec.13(4) possession notice and has also complied with under rule 8 of the security interest (enforcement) rules,2002 is complied before proceeding with the auction sale.

¶43

It is contented the Tribunal while dealing with the application under section 17 is only having its scope to analyze whether the procedural aspect under section 13(4) is complied by the secured creditor. In case if it is found that the proceedings initiated under section 13(4) act is not in law the Tribunal interfered in the interest of justice to protect the interest of the borrower. And in case if the Tribunal finds that the auction is in under accordance with law the same cannot be restricted or interfered.

¶44

As the proceedings under section 17 is summary in nature this Tribunal being constituted under the act is to render its justice at the earliest point, even there is no provision available under RDB act to stay the proceedings under section 13(4) and its consequent proceedings. Appreciation of respondent bank has relied on under section 17(1) and same is extracted.

¶45

Further it is contented that the object of the SARFAESI Act is to have a simplified procedure enabling the secured creditor to take possession. As

SA No.354/2023

6

03.09.2025

it is the proceedings under this special law is summary in nature it has to be disposed within the time.

¶50

The applicant has divested the amount and defaulted in the repayment. The Tribunal vide order dated 18.07.2023 directed the applicant to deposit 10% of the outstanding amount within one week from today 18.07.2023 and another 10% within four weeks. The applicant has deposited a sum of Rs.2,08,000/- after the order of this Hon’ble Tribunal dated 18.07.2023, and deposited an amount of Rs.3,60,000/- by check on 05.07.2023 that is also prior to the date of order. Hence, the amount paid by the applicant before the date of order cannot be treated as compliance of the interim order dated 18.07.2023 and prays to dismiss the SA for noncompliance of the order dated 18.07.2023.

¶51

The applicant is totally due an amount of Rs.16,68,843/- due as on 19.10.2023 and bank has followed all the measures prays for the dismissal of the SA.

¶52

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

¶53

The records of the case clearly reflects that the applicant is a partner of the partnership firm M/s. Hi Tech Builders and his wife Mrs. A. Sumathi the partner of the firm. There is no dispute with regard to availing of the credit facility from the respondent bank a cash credit facility Rs.20,42,672/The applicant has executed all the loan documents and his wife has executed the guarantee agreement and have mortgaged the residential

SA No.354/2023

03.09.2025

7

property measuring 495.74 sq. meters or 5334 sq.ft or 04 Are 95.74 Ca at T.S. No.50/1/8, R.S.No.86 pt, O.S.No.406bis pt Ward No. A, Block No.6, Door No.19, 1^st cross street, K.M.G Nagar, Thalatheru Revenue Village, Karaikal Sub-District & commune within Karaikal Municipal Limits Puducherry Registration District with building thereon, situated within the following boundaries favoring the respondent bank by memorandum of deposit of title deeds which has registered as Dco.No.23064 of 2015 on 06.11.2015.

¶58

As the applicant defaulted in the repayments, the account of the applicant is classified as NPA on 31.03.2023. Subsequent to the classification of the account as NPA, bank has issued the Sec.13(2) demand notice dated 04.04.2023. Thought the applicant denies having received the Sec.13(2) demand notice, it is seen that the notice sent to M/s. Hi Tech Builders addressed to the applicant has returned and the notice sent to his wife the guarantor is received as per the postal acknowledgement card produced at page.51 of the typeset. As per the Act, the term borrower includes guarantor also. In the instant matter the applicant borrower and the guarantor is the wife of applicant as partner of the partnership firm have received the notice.

¶59

Hence the contention that the respondent bank have not served the copy of the S.13(2) demand notice does not sustain. Inspite of service of the S.13(2) demand notice, the borrower and the guarantor did not liquated the liability within the period of 60 days nor raised any objections to the demand made, hence the bank has proceeded further in issuing the S.13(4)

SA No.354/2023

8

03.09.2025

Possession notice dated 08.06.2023. It seen that the respondent bank have sent letter of the intimation dated 08.06.2023 confirming the issuance of the demand notice and had also enclosed the copy of the possession notice along with the letter which is produced at Pg.53 of the typeset.

¶64

The respondent bank have sent the S.13(4) possession notice by RPAD and admittedly it is received by the applicant and the guarantor has evidenced from pg.55. The possession notice is affixed on the two newspapers and the copy of the paper publication of the S.13(4) notice is also file from pg.57 to 60. The affixture of the possession notice is at pg.58 of the typeset.

¶65

The only contention raised by the applicant is that the charge is not registered with the central registry which is counted by the respondent bank by producing the CERSAI Report at pg.61 which clearly reflects the charge is created as required under section 26(D) of the SARFAESI Act. Thus the respondent bank as a secured creditor have followed all the measures in issuing the S.13(2) demand notice and S.13(4) possession notice and the possession notice is duly served, affixed on the property and published in the newspapers as required under the Act.

¶66

Thus the bank have established the due compliance of the procedures in initiating the measures under the Act, on the other hand the applicant has failed to make out a case for interference of this Tribunal in the present SA. Resultantly the present SA stands dismissed. Interim Order granted,

SA No.354/2023

9

03.09.2025

if any stands vacated, pending IAs are disposed of in terms of this final

¶71

order. No order as to cost. Sd/-

¶72

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

¶73

( Dictated to Steno (Suriya), transcribed by him, corrected, signed and pronounced by me on this the 3^rd day of September, 2025)

¶74

ANNEXURES

¶75

LIST OF DOCUMENTS PRODUCED BY THE APPLICANT

¶76

Sl.	Description of Documents	Documents
No.		No.
1.	Impugned Possession Notice dated 08.06.2023.	A-1

¶77

LIST OF DOCUMENTS PRODUCED BY THE RESPONDNET

¶78

Sl. No.	Description of Documents	Documents No.
1.	Written Statement filed by the defendant dated 20.10.2023.	R-1
2.	Arrangement Letter dated 29.10.2015.	R-2
3.	Agreement of Loan Cum Hypothecation dated 29.10.2015.	R-3
4.	Guarantee Agreement dated 29.10.2015.	R-4
5.	Sale Deed bearing Document No.646 of 1995 dated 12.05.1995.	R-5
6.	Memorandum of Deposit of Title Deeds bearing Document No.23064 of 2015 dated 06.11.2015.	R-6
7.	Demand Notice issued under section 13(2) of SARFAESI Act along with Acknowledgement Cards dated 04.04.2023.	R-7
8.	Possession Notice issued under Section 13(4) of	R-8
	the SARFAESI Act r/w Rule 8(1) with Acknowledgement Cards and Photo dated 08.06.2023.
9.	Paper publication in respect of possession notice in Daily Thanthi and The Hindu. Dated 12.06.2023.	R-9
10.	CERSAI Registration.	R-10
11.	Statement of Accounts dated 19.10.2023.	R-11

¶79

SCHEDULE OF PROPERTY

¶80

(As contained in the possession notice)

SA No.354/2023

10

03.09.2025

Residential land measuring 495.74 Sq meters or 5334 sq.ft., or 04 Are 95.74 Ca at T.S. No.50/1/8, R.S. No.86 pt., O.S. No.406 bis pt., Ward No. A, Block No.6, Door No.19, 1^st cross street, K.M.G Nagar, Thalatheru Revenue Village, Karaikal Sub-District & Commune within Karaikal Municipal limits, Puducherry Registration District with building thereon, situated within the following boundaries;

¶85

West of T.S. No.50/1, East of T.S. No.50/1, North of Fire Service Station, South of Road. Sd/-

¶86

PRESIDING OFFICER, DRT-III, CHENNAI

M Arulmurugan v. 151

Case brief

What is this about?

What did the court decide?

M Arulmurugan v. 151

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Canara Bank versus Janani Agencies

Hdfc Bank versus M s Crimson Foods

Bank of Maharashtra versus Janarthanam

Mr Anbil Saravanan versus Indian Bank

Thilagam versus Canara Bank

Nathiya versus Indian Bank