Dismissed

K Vijaya v. State Bank of India

DRT2 Jun 2025SA/383/2024

Case brief

AI extract

What is this about?

In a securitization application, the DRT dismissed the challenge filed by a third-party mortgagor regarding the sale notice issued by a secured creditor. The court held that the statutory notices complied with the Act and the application became infructuous as no sale was held.

What did the court decide?

Sale notice dated 29.05.2024 declared infructuous; the Securities Application dismissed; validity of demand and possession notices upheld.

K Vijaya versus State Bank of India — Company and Corporate | DRT (2025)

SA No.383/2024

02.06.2025

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 2^nd day of June, 2025

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Present: SMT. S.V. GOWRAMMA

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Hon’ble Presiding Officer

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SARFAESI APPLICATION No. 383 of 2024

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Mrs. Vijaya, Wife of Kathiresan, No. 38, Jayankondam, Chidambaram Road, Udayarpalayam Taluk, Jayankondam Ariyalur District - 621 803 ...Applicant

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-Vs-

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The Authorized Officer, State Bank of India, RACPC Vizhupuram, BSNL Building, Hospital Road, Villupuram – 605 602.

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Mr.P. Kaliyaperumal, Son of Ponnussamy, 2/75A2 Main Road, Anikurichan Village, Poovanipuattu Group, Udayarpalayam Taluk, Ariyal;ur District – 621 803.

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.Respondents

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Counsels on record / appeared:

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Counsel for Applicant : Ld. Counsel Mr. K.C. Krishnamoorthy Counsel for Respondent : Ld. Counsel Mr. S. Rajesh

SA No.383/2024

02.06.2025

: - ORDER ON SA.No. 383/2024- :

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1. The present Securitization Application 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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The applicant has impugned the sale notice dated 29.05.2024 scheduling the property to be sold on 03.07.2024. The applicant is the 3^rd party who is neither the borrower nor the guarantor to the loan availed by the second respondent herein and have created equitable mortgage over the schedule mentioned property.

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It is submitted that the applicants sold the property to second respondent on 01.11.2001 which is re-conveyed on 18.07.2016. The second respondent is the borrower who availed the loan and have mortgage the property as collateral security due to default in the repayment the respondent bank have initiated the measures under the SARFAESI Act.

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It is seen from the counter filed by the bank that the second respondent had deposited the title deeds by Memorandum of Deposit of Title Deeds for the Term Loan and also created equitable mortgage on

SA No.383/2024

02.06.2025

26.04.2018. Further, the mortgage so created is also registered before the Central Registry on 29.03.2018 and the security interest favoring the respondent bank. Due to default in the repayment, the bank has initiated the measures under the SAFAESI Act and after issuing the S. 13(2) demand notice dated 17.10.2023 to the second respondent herein.

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The respondent bank have mentioned the details of the loan availed, the discrepancy of the property as collateral security and the outstanding amount of Rs. 19,08,108.00 as on 17.10.2023 along with further interest from 18.10.2023 further S. 13(3) restricting any transfer of the property and also the redemption clause available under S. 13(8) under the SARFAESI Act.

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It is seen that the S. 13(2) demand notice is sent by RPAD which is duly received by the borrower as per the acknowledgement card which reflects at Pg. 27 of the counter. As the borrower did not come and liquidate the liability the bank have proceeded further and issued the S. 13(4) possession notice dated 28.12.2023 which is also sent by RPAD and received as per postal acknowledgement card at Pg. No. 30 and the possession notice affixed on the property at Pg. No. 31&32 published in the two newspapers in English and Tamil which shows the bank has duly

SA No.383/2024

02.06.2025

established the compliance of the measures taken by the bank as prescribed under the Act.

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Thus it is seen that the bank as a secured creditor has initiated the measures and have duly complied with the procedures as mandated under the acts and the Rules. and perused the records of the case.

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The applicant is not the party to the loan transactions or to the measures initiated by the bank. Applicant relies on the sale deed dated 23.04.2008 which is executed by the applicant favoring the second respondent herein for the sale consideration of Rs. 11 Lakhs.

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Based on the sale deed, the second respondent has created mortgage on 26.04.2008 and applicant having reconveyed the property by way of sale deed to the second respondent. The applicant is only a third party who does not have any right to frustrate the measures taken by the bank.

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The prayer as sought for in the SA is to set aside the sale notice dated 29.05.2024 and no sale is held, the prayer is rendered infructuous and nothing survives for further adjudication. As per the objections filed by the respondent bank, they have established the compliance of the measures initiated under S. 13(2) demand notice and S. 13(4) possession notice along with the supporting documents. Hence, the

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02.06.2025

Tribunal under S. 17(4) declares that the statutory demand notice dated 17.10.2023 and the possession notice dated 28.12.2023 are held as valid notices in accordance with the acts and the rules made there under.

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The respondent bank in their counter submits that the sale did not materialized and the prayer as sought for in the SA has become infructuous for want of bidders. The sale notice dated 29.05.2024 is rendered as infructuous.

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From the foregoing reasons the present SA stands dismissed as infructuous upholding the measures taken by the bank and the applicant is only a third party who cannot frustrate the measures taken by the bank in enforcing the measures under the act.

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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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(Dictated to stenographer (MS), after its transcription and necessary corrections, signed and order is passed on this day 02^nd day of June 2025.

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

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SA No.383/2024 6 02.06.2025

K Vijaya v. State Bank of India

Case brief

What is this about?

What did the court decide?

K Vijaya v. State Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

Parties & counsel

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