Dismissed

R Jothi v. Union Bank of India

DRT5 Dec 2025SA/386/2024

Case brief

AI extract

What is this about?

In this Securitization Application under Section 17 of the SARFAESI Act, the applicant challenged the Respondent Bank's demand and possession notices, citing procedural defaults and non-registration of security interests. The Tribunal examined the compliance of notices under Sections 13(2) and 13(4), including acknowledgment, publication, and affixation, affirming that the bank's actions were vali

What did the court decide?

The Present Securitization Application is dismissed. The Section 13(2) Demand Notice dated 30.11.2023 and Section 13(4) Possession Notice dated 12.04.2024 are upheld as valid. No interim order granted

R Jothi versus Union Bank of India — Insurance | DRT (2025)

SA No.386/2024

05.12.2025

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 05^th day of December, 2025

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Present: SMT. S.V. GOWRAMMA

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Presiding Officer

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SA No. 386 of 2024

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Mrs. R. Jothi, W/o Ravichandran, No.40, Sangupani Vinayagar Koil Street, Big Kancheepuram Post, Kancheepuram – 631 502. …Applicant

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-Vs-

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The Authorised Officer, Union Bank of India, Kancheepuram Branch, No.54, Vanigar Street, Kancheepuram – 631 502.

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…Defendant

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Counsels on record / appeared: Counsel for Applicant : Mr. J. Prince Counsel for Respondent : Mr. K. Radhakrishnamurthy

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ORDER ON SA 386 /2024

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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].

SA No.386/2024

05.12.2025

The applicant has filed the present SA challenging the Possession Notice dated 12.04.2024 under SARFAESI Act and the outstanding amount due as per Possession Notice is Rs.21,33,101.99/-

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3. Pleadings of the applicant:

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3.1 Applicant has approached the respondent bank for sanction of Cash Credit facility for Rs.20,00,000/- in the year 2016 and availed the credit facilities by executing all the loan documents in favor of the respondent bank. It is submitted that the applicant was regular in their repayment and due to Covid-19 pandemic situation has defaulted in the repayment of interest portion.

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3.2 The applicant has closed two loan accounts even in spite of the Covid-19 situation. Due to the defaults made, the respondent bank has classified the loan account as NPA. The respondent bank has not registered the security interest in Central Registry which is in violation of circular issued by the Reserve Bank of India and the measures initiated by the respondent bank under SARFAESI Act are null and void.

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3.3 Further, the respondent bank has issued the Section 13(2) Demand Notice dated 30.11.2023 calling upon the applicant to repay the amount of Rs.21,33,101.99/- which is not served to all the parties. Subsequently, the respondent bank has issued Section 13(4) Possession Notice dated 12.04.2024 under the SARFAESI Act which is also not served to all the parties, nor published in two newspapers.

SA No.386/2024

05.12.2025

3.4 The respondent bank has charged heavy interest and also capitalized penal interest on monthly basis which is in violation of Judgments of Apex court and RBI guidelines. The respondent bank has failed to produce statement of accounts even after several demands made by the applicant and applicant is ready and willing to settle the entire liabilities.

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3.5 In the grounds it is contended that the respondent bank has classified the loan account as NPA without complying Section 2(o) of the Act and RBI guidelines. The respondent bank has failed to issue Section 13(2) Demand Notice and Section 13(4) Possession Notice to all the parties.

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3.6 Further the Possession is also not published in two Newspapers, as mandated under the SARFAESI Act. Thus, the respondent bank has also failed to affix the Possession Notice on conspicuous part of the property which is in violation of Rule 8(1) of the SIE Rules. Hence the Possession Notice dated 12.04.2024 issued by the respondent bank is null and prays to set aside the Possession Notice.

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4. Objections of the respondent bank:

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4.1 The respondent bank has filed a detailed counter, inter alia contending that the present SA is not maintainable and to be dismissed in limine. It is submitted that Mr. Sivaramakrishnan has availed a Cash Credit facility under Union Trade Plus Scheme of Rs.20.00 lakhs for his business purpose which was sanctioned to him and also executed necessary loan documents on 08.06.2017. To secure the credit facilities availed, Mr. Sivaramakrishnan has mortgaged his property by way of Memorandum of

SA No.386/2024

05.12.2025

Deposit of Title Deeds dated 01.09.2009 which is registered as Doc.No.1869 of 2009 for various loan accounts.

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4.2 Further Mr. Sivaramakrishnan has availed another loan of Rs.20.00 lakhs on 12.12.2018 and also executed Extension of Equitable Mortgage on 12.12.2018 and Supplemental MoD was registered on 28.03.2019 to secure the credit facilities availed. The borrower has defaulted in the repayment scheduled as agreed upon them which resulted in classification of loan account as NPA on 25.01.2023 as per the RBI guidelines.

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4.3 The respondent bank, after classifying the loan account as NPA has initiated measures and issued Section 13(2) Demand Notice dated 30.11.2023 to the borrower and mortgagor which has been received and also acknowledged in the Demand notice. Even after the receipt of the Demand Notice, borrower and mortgagor has failed to discharge their entire liabilities nor made any representation.

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4.4 Subsequently, the respondent bank has proceeded further and issued Possession Notice dated 12.04.2024 which is also served to the borrower and mortgagor which has been affixed on the conspicuous part of the property. The Possession Notice is also published in English and Tamil leading Newspapers as per the SARFAESI Act and symbolic possession of the property was taken on 12.04.2024.

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4.5 The respondent bank denied all the allegations made by the applicant as the classification of the loan account as NPA is in accordance

SA No.386/2024

05.12.2025

with the RBI guidelines. The security interest created by the applicant is also duly registered in CERSAI.

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4.6 In fact, the Demand notice dated 30.11.2023 and Possession 12.04.2024 is duly acknowledged by the parties. The respondent bank has charged interest as per the RBI guidelines and the statement of account is also sent to the applicant. The applicant failed to comply with the conditional order passed by this Tribunal on 05.07.2024.

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4.7 Further the respondent bank as a secured creditor has classified the loan account as NPA and issued statutory notices which is duly published and affixed on the property. Hence prays to dismiss the present SA with exemplary cost.

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

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5.1 It is discernible of the records, it is seen that Mr. R.

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Sivaramakrishnan had availed a Cash Credit Facility for an amount of Rs.20,00,000/- in the year 2016 and also executed several loan documents in favor of the respondent bank. It is also pertinent to note that the applicant has mortgaged her property by way of Memorandum of Deposit of Title Deeds on 01.09.2009 as security to the credit facilities availed, further the applicant had extended their Equitable Mortgage on 12.12.2018 and Supplemental Memorandum of Deposit of Title Deeds was registered

SA No.386/2024

05.12.2025

on 28.03.2019 which were evident from the documents produced by the respondent bank at Page No.11 to 26 of their typed set.

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5.2 Admittedly the applicant has defaulted in the repayment which resulted in classification of the loan account as NPA on 25.01.2023. Subsequently, the respondent bank has issued Section 13(2) Demand Notice dated 30.11.2023 calling upon the borrower and mortgagor to discharge their entire liabilities within the period of 60 days from the date of receipt of the notice. In the Demand Notice dated 30.11.2023 produced by the respondent bank at Page No.1 of their typed set, clearly reflects the; details of the borrower and mortgagor, amount due in the loan account, date of classification of the loan account as NPA, description of the schedule property.

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5.3 Further the Demand Notice dated 30.11.2023 is duly received and acknowledged by the borrower and mortgagor which is evident from the acknowledgements produced at Page No.1 to 2 of respondent’s typed set. The Demand Notice is also published in two Newspapers, one in “The New Indian Express” (English) and another in “Dhinamani” (Tamil) both dated on 30.11.2023 as evident from the Paper publications produced at Page No. 3 and 4 of the respondent’s typed set.

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5.4 Even after the receipt of the Demand Notice, the borrower and mortgagor have failed to discharge their liabilities within 60 days nor made any representation. Further, the respondent bank has proceeded further and issued Section 13(4) Possession Notice dated 12.04.2024 which is duly

SA No.386/2024

05.12.2025

received and acknowledged by the borrower and mortgagor as evident from the acknowledgements produced at Page No.5 and acknowledgement card at Page No.6 of respondent’s typed set.

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5.5 The Possession notice is duly affixed on the conspicuous part of the property as reflected from the photograph of affixture produced at Page No.7 and 8 of respondent’s typed set and the same is published in two Newspapers, one in “New Indian Express” (English) and another in “Dhinamani” (Tamil) both dated on 18.04.2024 as evident from the paper publications produced at Page No.9 and 10 of respondent’s typed set.

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5.6 Though a specific contention is raised by the applicants in the present SA that the respondent company has not registered the charge before the Central Registry and CERSAI report has not been produced as contemplated under Section 26D of the Act. It is apt to extract Section 26D which reads as under:

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26D: Right of enforcement of securities:

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Notwithstanding anything contained in any other law for the time being in force, from the date of commencement of the provisions of this Chapter, no secured creditor shall be entitled to exercise the rights of enforcement of securities under Chapter III unless the security interest created in its favour by the borrower has been registered with the Central Registry.

SA No.386/2024

05.12.2025

5.7 However, the respondent bank has produced the Memorandum of Deposit of Title Deeds dated 01.09.2009 establishing the charge on the property as a mortgagee. Even otherwise Section 26D came to be effective on 24.01.2020 followed by a notification dated 26.12.2019. Evidently the simple mortgage is dated 01.09.2009 which is produced at Page No.13-17 and Supplemental MOD dated 28.03.2019 is produced at Page No.18-26 of the respondent’s typed set clearly establishes the mortgage created favoring the respondent bank. It is seen that the applicants have created the mortgage for the loan availed, deposited the title deeds, extended the mortgage and there is no dispute about the mortgage of the property as security towards the credit facility availed which constitutes a secured asset.

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5.8 The registration of charge of any type on the secured asset or on the property is to ascertain the priority of charge, as per Section 26 E - After the registration of security interest with CERSAI, the debts of the secured creditor i.e., banks, FIs, NBFCs, ARCs, etc. shall be paid in priority over all other debts and all revenue, taxes, cesses and other rates payable to Central Government or State Government or Local Authority.

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5.9 Default in filing the charge as required under Section 23 would attract punishment with fine, but not invalidated the mortgage or charge on the property. Thus, it is evident that the bank or any NBFC who have mortgage of the property favoring them is a secured creditor and the mortgage of the property is a secured asset and registration of such charge

SA No.386/2024

05.12.2025

is to ascertain the priority of charge. Further it is submitted that the respondent bank has registered the security interest before the CERSAI.

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5.10 The another contention as raised by the applicant is that the Demand Notice and Possession Notice is not served on all the parties which does not sustain as the borrower and mortgagor has duly acknowledged and signed in the statutory notices itself and the same is evident from the Demand Notice dated 30.11.2023 and Possession Notice dated 12.04.2024 which were produced at Page No.1-6 of respondent’s typed set.

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5.11 The applicant has contended that the Possession notice dated 12.02.2024 is neither published in two Newspapers, nor affixed on the property is not sustainable as the respondent bank has duly published in two Newspapers, one in “New Indian Express” (English) and another in “Dhinamani” (Tamil) both dated on 18.04.2024 as evident from the paper publications produced at Page No.9 and 10 of respondent’s counter. The Possession Notice dated 12.02.2024 is also affixed on the conspicuous part of the property as reflected from the photograph of affixture produced at Page No.7 and 8 of respondent’s typed set.

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5.12 Further contention as raised by the applicant is that the respondent bank has failed to produce statement of accounts which does not sustain as the respondent bank has produced the statement of accounts at Page No.27-28 of their typed set. It is also submitted that the respondent bank has sent the statement of accounts to the applicant and they failed to come forward with the One Time Settlement Proposal.

SA No.386/2024

05.12.2025

5.13 On perusal of the records it is seen that the respondent bank as a secured creditor has classified the loan accounts as NPA on 25.01.2023 and proceeded to issue Demand Notice 30.11.2023 which is received by the applicant. In spite of receipt of Section 13(2) Demand notice, the applicant failed to liquidate the liability within 60 days and failed to raise any objections to demand notice under Section 13(3A) of the Act.

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5.14 The respondent bank proceeded further in issuing the Possession notice dated 12.04.2024 which is duly served to the applicants herein as per the acknowledgements produced by the respondent, affixed on the conspicuous part of the property, published in two Newspapers as mandated under the Act. Thus, the respondent bank has established the compliance of procedures in initiating the measure under the Act.

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5.15 For the forgoing reasons, the present SA is only to be dismissed upholding the Section 13(2) Demand notice dated 30.11.2023 and Section 13(4) possession notice dated 12.04.2024 as valid notices.

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Resultantly the present SA dismissed. 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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Sd/(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI

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(Dictated to Steno (Mogesh), transcribed by him, corrected, signed and pronounced by me on this the 05^th day of December, 2025)

SA No.386/2024

05.12.2025

ANNEXURES

LIST OF DOCUMENTS PRODUCED BY THE APPLICANT

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Sl. No.	Description of Documents	Document No.
1.	SARFAESI Application dated 24.04.2024	A-1
2.	Impugned Possession Notice dated (Affixture) dated 12.04.2024	A-2
3.	Vakalat dated 20.04.2024	A-3

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LIST OF DOCUMENTS PRODUCED BY THE RESPONDENTS

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Sl. No.	Description of Documents	Document No.
1.	Section 13(2) Demand Notice with acknowledgement cards and paper publication dated 30.11.2023	R-1
2.	Section 13(4) Possession Notice with acknowledgement cards dated 12.04.2024	R-2
3.	Photo affixture dated 12.04.2024	R-3
4.	Publication in New Indian Express (English) dated 18.04.2024	R-4
5.	Publication in Dinamani (Tamil) dated 18.04.2024	R-5
6.	Extension of EM by R. Jothi dated 12.12.2018	R-6
7.	MOD dated 01.09.2009	R-7
8.	Supplemental MOD dated 28.03.2019	R-8
9.	Statement of accounts	R-9

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SCHEDULE OF PROPERTY

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Kancheepuram District, Kanchipuram Town, 4^th division within the jurisdiction of Joint-1 Sub Registrar Office, in Parameswara Vinnagaram Village, the punja Survey No.844 & 848 the total extent of Ac.9.09 Cents the house site layout formed as Vaigunda Perumal Koil Extension, and the in total site bounded East to West of Street, West of Property of Bharathi Roadways house site, North of Nagarathinammal, Natarajan and Sivarajan and lion club’s house site, and South of Rathina Naicker Vagiyara House

SA No.386/2024

05.12.2025

site in between North to South 50 feet on Western side, and 46 feet on Eastern side and length is as much as in that Northern side 25 feet on Western side 23 feet on Eastern side and East to West 88 feet on northern side and 92 feet on Southern side, excluding the Ravichandran portion the house measuring North to South 25 feet and East to West 60 feet, the house including concrete structure building with Electricity Board Service connection and Tap connection. The door no is 73 Bhagadurkhanpet and Plot No.4, the Town Survey No.844, present and as per Sub Division the Survey No.844/10A.

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

R Jothi v. Union Bank of India

Case brief

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R Jothi v. Union Bank of India

Case brief

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