Dismissed

Raja Insulation and Refractories Pvt. Ltd. v. Indian Bank

DRT2 Jun 2025SA/483/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal-III, Chennai dismissed a Securitization Application challenging a Section 14 order passed by the Chief Judicial Magistrate, Chengalpattu, which granted possession of mortgaged property to the secured creditor. The Tribunal held that Section 14 proceedings are ministerial and non-adjudicatory, and the Magistrate properly verified the compliance of pre-possession requirem

What did the court decide?

The Securitization Application was dismissed, and the Section 14 order passed by the CJM, Chengalpattu dated 10.06.2024 was held to be lawful and final.

Raja Insulation and Refractories Pvt. Ltd. versus Indian Bank — Banking and Recovery | DRT (2025)

SA No.483/2024

02.06.2025

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 02^nd day of June, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SA No. 483 of 2024

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M/s. Raja Insulation & Refractories Pvt Ltd., Rep by its Directors,

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Mr. Murugananda Krishnan & Mr. B. Venkatesan, Plot No.3 & 4, Manikavasagar Street,

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Rakshan B Block, Flat No.S1, IInd Floor,

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G.S. Nagar, Ramapuram, Chennai 600 083.

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Muruganantha Krishnan,

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S/o Bagavathy,

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Gokul Garden, Plot No.3, 1^st Street,

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Arul Murugan Ramamoorthy Nagar,

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Chrompet Chennai 600 044.

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B. Venkatesan,

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S/o Balakrishnan,

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Plot No.171, Co-op Nagar, Kamaraj Road, Madhuravedu, Velappanchavadi,

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Chennai 600 077.

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Mrs. Sudha Mathy, Gokul Garden Plot No.3, 1^st Street, Arul Murugan Ramamoorthy Nagar, Chrompet, Chennai -600 044.

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Mrs. Prabha w/o. Mr.B. Venkatesan, Plot No.171, Co-op Nagar, Kamaraj Road, Madhuravedu, Velappanchavadi, Chennai -600 077. ….Applicants

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-Vs-

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Indian Bank, MGR Nagar Branch, R.K. Shanmugam Salai, K.K. Nagar, Chennai 600 078. Rep by its Authorized officer. ….Respondent

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Counsels on record / appeared:

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Counsel for Applicant : M/s. K. Yuvaraj Counsel for respondent : M/s. C. Ramaiah

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ORDER ON SA 483/2024

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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].

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The applicant has challenged the S.14 Order dated 10.06.2024 in Crl.M.P. No.1663 of 2024 passed by Chief Judicial Magistrate, Chengalpattu to take physical possession of mortgaged property and the outstanding amount due as per Sec.14 order is Rs.6,78,75,655/-

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3. Pleadings of the applicant:

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3.1 The 1^st applicant is a Private Limited company are in business of insulation and refractories; 2^nd and 3^rd applicants are the Directors of the Company; 4^th and 5^th applicants are guarantor. The Respondent bank offered OCC of Rs.3,00,00,000/- limit, SME Small ENT SERV, letter of Credit & Bank Guarantee on 20.03.2018 to 1^st applicant and Applicants and Guarantor Ms.Sudha Mathy W/o Muruganantha Krishnan who have mortgaged their immovable property mentioned in Item Nos.1,2,3 & 4 (Doc.No.12967 of 2018) in Demand Notice and other securities of Book Debts, Plant & Machineries etc.

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3.2Respondent bank provided IND GECL COVID 19 loan during the covid period of Rs.73.49 lakhs, IND MSE COVID EMERGENCY LOAN (Term Loan) of Rs.30 Lakhs and FITL (Covid Moratorium) of Rs.19.45 lakhs on 11.09.2020 as per the request of the 1^st applicant. The Respondent bank restructured the OCC of Rs.2.10 crores, Letter of Credit of Rs.73 lakhs, Bank Guarantee of Rs.1.50 Crores, WCTL of Rs.2.45 Crores and FITL of 67 lakhs on 28.07.2021 by Security of Stock & Book Debts, Plant & Machinery and Counter Guarantee by the company and for collateral Security and mortgaged the immovable property of the Item Nos. 1,2,3 & 4 in favor of the Respondent bank and provided 12 months holiday period.

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3.3 For the Restructure Sanction the 1^st applicant executed Supplemental Memorandum of Deposit of Title Deeds on 26.08.2020 (Doc.No.6714 of 2020 and Supplemental Memorandum of Deposit of Title Deeds in favor of Respondent bank on 08.04.2021 (Doc.No.5954 of 2021). The 1^st applicant received Rs.10 Lakhs as Vehicle loan from the Respondent bank on 25.05.2022

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3.4 The 1^st applicant paid Rs.69.36 lakhs Bank guarantee to the respondent bank Vide Letter Nos: RIR/IB/2023-24/115, RIR/IB/202324/116, RIR/IB/2023-24/139 & RIR/IB/2024-25/025 dated 16.12.2023, 16.12.2023, 27.01.2024 & 20.05.2024 value of Rs.12.07 lakhs, Rs.4.92 lakhs, Rs.22.60 lakhs & Rs.29.77 lakhs respectively.

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3.5 It is submitted that the applicants were regularly repaid the EMI’s and over dues without any default from the initial stage, but the respondent bank exercised the bankers lien during the year 2022 & 2023, so the 1^st applicant faced many difficulty to run the business.

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31. Provisions of this Act not to apply in certain cases. The provisions of this Act shall not apply to—

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(a) a lien on any goods, money or security given by or under the Indian Contract Act, 1872 (9 of 1872; or the Sale of Goods Act, 1930 (3 of 1930) or any other law for the time being in force;

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3.6 Thought applicant executed a Supplemental Memorandum of Deposit of Title Deeds , 2^nd , 3^rd applicant were not involved in the registration of Supplemental Memorandum of Deposit of Title Deeds which is registered as Doc.No.6714 of 2020 & 5954 of 2021. The Housing Loan is added in the Supplemental Memorandum of Deposit of Title Deeds and didn’t registered the securities before the central registry.

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3.7 The bank have issued Section 13(2) Demand Notice dated 29.09.2023 and declared the 14 loan account as NPA on 13.09.2023 where in the applicants were repaying the payments and overdue continuously. Hence the classification of the account as NPA is bad in law.

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3.8 Further the un-utilized Bank Guarantee and LC accounts were declared as NPA and issued the Section 13(2) Demand Notice which is against the RBI Guidelines. The Section 13(2) Demand Notice is not served on all the borrowers and the bank have charged excess interest

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and penal charge to show the outstanding amount due is higher in the loan accounts.

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3.9 It is further contended that the letter of credit limit is Rs.73 lakhs on 28.07.2021 and in the Section 13(2) Demand Notice dated 29.09.2023 credit balance is Rs.72,584/- which is lesser than the 1% as per the Section 31(j) of the Act. Hence the account cannot be classified as NPA and measures could not be taken by the Respondent bank.

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3.10 Further the bank have issued Section 13(4) Possession notice dated 22.01.2024 without mentioning the Hypothecation goods of Vehicle Loan and description of the property is not correct and have not affixed the Section 13(4) Possession notice on the property, nor initiated the paper publication in English and Vernacular language, the bank has holding bank guarantee of Rs.69.3 lakhs and failed to release the amount within stipulated period, hence the outstanding liability in possession notice of Rs.6,78,75,655/- as on 21.04.2024

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3.11 The first applicant sent a Section 13(8) letter dated 24.01.2024 requesting 21 days to pay the overdue amount, which the bank has not given reply for Section 13(8) letter, yet again applicant sent a letter that is also not replied, further applicant sent request letter on 14.02.2024, 19.02.2024 & 20.02.2024 to release the documents in respect to the account which were settled and the bank does not confirmed or replied to the requisition letters. Subsequently bank have issued Sale notice dated

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20.03.2024 and have also failed to mention the details of the

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Hypothecation goods of Vehicle loan and the bank has not affixed Section

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13(4) Possession notice in the property.

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3.12 The bank has issued Sale notice dated 20.03.2024 and fixing the sale on 24.04.2024 and the claim amount is Rs.6,11,83,754 due as on 20.03.2024. This Tribunal had granted an Interim Order of Status Quo by conditional payment of Rs.62,00,000/on 23.04.2024 another Rs.62,00,000/- within 4 weeks, thus applicant have made a payment of Rs.62,00,000/- on 23.04.2024 to the previous Sale notice initiated.

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3.13 However, bank has filed Section 14 application before the Hon’ble CJM, Chengalpattu which is the extension of the defected Section 13(2) Demand Notice and Section 13(4) Possession notice and the order does not speak about the outstanding liability, which is wrongly mentioned and had only 10 loan accounts excluding the Bank Guarantee, LC and 2^nd & 3^rd Applicants IND Mortgage loans from the previous loans. The applicants made a payment of Rs.62,00,000/- on 23.04.2024 to the outstanding amount of Rs.4.00 crores

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3.14 The bank has given the application of the MGR Nagar Branch where the loan was availed and operating in Anna Nagar Branch, the loans were transferred to the SAM Branch, respondent have not given branch name in cause title of the Section 14 application, and in the Section 14 application it is mentioned as MGR Nagar Branch and the Mortgaged loan is not connected to the MGR Nagar Branch.

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3.15 The respondent have failed to comply to Section 14(ii) of SARFAESI Act and have shown only Section 13(4) Possession notice claim, in the grounds it is contended that the bank has not registered the schedule mentioned property in the Central Registry by invoking the SARFAESI Measures and the bank has also exercised over the operating account, they have enforced Bank Guarantee and LC is not liability or asset of the company and the bank cannot add Un-utilized Bank Guarantee and LC as liability.

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3.16 The bank has declared the applicant’s loan account as NPA on 13.09.2023 is against RBI norms as per the RBI guidelines vide RBI/2021-2022/117; DOR.No.STR.REC.64/21.04.048/2021-22, dated 01.11.2021. The bank has failed to show the crystalized debts of the applicants as the loans were restructured and granted moratorium period after the loan account were classified as NPA is against the RBI Guidelines. The bank has not issued Section 13(4) Possession notice dated 22.01.2024 to all the borrower nor affixed on the property nor published in two Newspapers and the Section 13(2) Demand Notice is not issued by the Authorized Officer.

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3.17 Further the Demand Notice and Possession Notice has not prescribed the hypothecation of the vehicle and have not replied to Section 13(8) letter and on these grounds the applicants prays to set aside the order dated 10.06.2024 in Crl.M.P. No.1663 of 2024 by CJM Chengalpet.

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4. Objections of the respondent bank:

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4.1 The respondent bank denies all the contentions or averments made by the applicants in the SA and submits that the applicants had availed following loans, Loan Account No.6617852840 – OCC for Rs.210 lakhs, 6618425307 – SME SMALL ENT SERV for Rs.40 lakhs, 6883094536 – Covid Emergency Loan-for Rs.30 lakhs, 6887520175 – GECLS Covid for Rs.73.49 lakhs,7056831713 – WCTL for Rs.245 lakhs, 7056833890 – FITL for Rs.67 lakhs, 7216290897 – IBVL for Rs.10 lakhs, in the name of M/s. Raja Insulation and Refractories Pvt. Ltd., Rep. by its Directors: Mr. Muruganantha Krishnan & Mr.B. Venkatesan (and) Loan Account Nos.6618359524 – IBHL for to B.Muruganantha Krishnan, Rs.13.32 lakhs, 6618382917, IBHL – B. Venkatesan – Rs.12.02 lakhs and 6358556820 to B.Venkatesan, Rs.22.48 lakhs in the name of Mr.Muruganantha Krishanan & Mr. B. Venkatesan with Indian Bank, Anna Salai Branch (now transferred to Indian Bank, SAM branch, Chennai)

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4.2 As the applicants become chronic defaulters, failed to repay the loan as per the sanction and loan agreements, the loan account of the applicant was classified as NPA on 13.09.2023. The Respondent bank demanded the applicant to settle the loan amicably, but the applicant didn’t heed to the demand made by the respondent. Hence the bank was forced to take action under the SARFAESI Act.

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4.3 It is submitted that M/s. Raja Insulation and Refractories Pvt. Ltd., represented by its Directors Mr. Muruganantha Krishnan & Mr. B.

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Venkatesan, failed to repay the outstanding, and bank have proceeded further and issued Section 13(2) Demand Notice dated 29.09.2023 which is issued by the Authorized Officer, calling upon the applicant to make a payment of Rs.6,66,36,813/- together with further interest, cost and other charges, and applicant failed to make the payment demanded as per the Section 13(2) Demand Notice dated 29.09.2023

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4.4 Hence the Authorized Officer took the possession of the schedule mentioned property under Section 13(4) of the Act on 22.01.2024 after complying all the legal formalities. Applicant didn’t preferred to pay the amount due even after taking symbolic possession of the property. Hence the bank proceeded under the SARFAESI Act and issued Sale notice dated 20.03.2024 fixing the sale on 24.04.2024 for recovery of the total amount due of Rs.6,11,83,754/- with further interest, costs, other charges and expenses as on 21.03.2024

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4.5 The applicant has filed SA No.215/2024 challenging the Sale notice dated 20.03.2024 which was moved on 22.04.2024 and issued status quo against the sale notice dated 20.03.2024 directing the applicants to deposit a sum of Rs.62,00,000/- on or before 23.04.2024 and another 10% of claim amount within a period of 4 weeks, but the applicant paid only 1^st part of the conditional order, hence Status quo become vacated and the SA No.215/2024 was pending before this Hon’ble Tribunal.

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4.6 Further respondent proceeded under the SARFAESI Act and issued second Sale notice dated 02.07.2024 fixing the sale on 09.08.2024 for

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recovery of total amount due of Rs.6,10,36,985/- with further interest, costs, other charges and expenses as on 02.07.2024. Challenging the same applicant filed another SA No.474/2024 challenging the 2^nd sale notice dated 02.07.2024 and the same is pending before this Hon’ble Tribunal.

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4.7 The respondent bank has sold the schedule properties mentioned in the 2^nd sale notice dated 02.07.2024 under SARFAESI Act, and the property was sold for a sum of Rs.6,15,50,000/- and the sale certificate is also issued on 12.08.2024 to the purchasers and handed over the physical possession of the property to the purchaser. The respondent filed Section 14 application before the Hon’ble CJM Chengalpattu numbered as Crl Mp.No.1663 of 2024 by appointing Advocate Commissioner to take the Physical Possession of the property, vide order dated 10.06.2024

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4.8 It is submitted that the applicant had filed 3^rd SA, challenging the Order dated 10.06.2024 in Crl.MP.No.1663 of 2024 passed by Hon’ble CJM Chengalpattu. It is submitted that the bank has issued Section 13(2) Demand Notice dated 29.09.2023 demanding an amount of Rs.6,66,36,813/- to be repaid within 60 days, which the applicant received and endorsed the receipt of same and signed in the postal Acknowledgement cards

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4.9 Since, the applicant failed to pay the due as demanded in the Section 13(2) Demand Notice dated 22.09.2023, bank has issued Section 13(4) Possession notice dated 22.01.2024, which is received by the

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applicant on 24.01.2024, affixed on the conspicuous part of the property on 24.01.2024, paper publication of Section 13(4) Possession notice is done in two Newspapers, one in “Indian Express” (English) and another in “Dinamani” (Tamil) both dated on 24.01.2024 as per the procedure. Further applicant has not preferred to challenge the Section 13(4) Possession notice and the proof of service of the Section 13(2) Demand Notice and Section 13(4) Possession notice is enclosed. The Respondent bank has followed all the procedures and Rules under the Act, and as per the Guidelines of the RBI.

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4.10 The amount mentioned in the notices are correct and there is no mistake in the statement of account and interest have been calculated properly as per the loan agreements and as per the directive and guidelines of the RBI

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4.11 The applicant ignored the bank request and demand to pay the huge outstanding amount and the property is already sold for the recovery the outstanding amount. The applicant has filed the SA only to trouble respondent in rightful recovery of the amount. The respondent have followed Rule 8(2) of the Act as contemplated and applicant cannot dictate terms to the respondent that how to proceed with the Act, bank has followed all the procedures in compliance of the Acts and Rules, in the grounds has no substance and hence prays for the dismissal of the SA.

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Heard the Learned Counsels appearing for the respective parties and perused the records of the case.

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5.1 It is manifest from the records that the applicant is Private Company represented by its Directors, the 2^nd and 3^rd applicant herein. The applicants have availed credit facilities to which the 4^th and 5^th applicants are guarantors and mortgagors have mortgaged the properties as secured towards the credit facilities availed. In fact there is no dispute with regard to creation of Supplemental Memorandum of Deposit of Title Deeds favoring the Respondent bank dated 08.04.2021.

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5.2 In fact applicant do not dispute the availing of credit facilities, mortgage of the properties as security and also default in the repayment resulting in the classification of the account as NPA on 13.09.2023. Subsequent to classification of the account as NPA, the respondent bank as secured creditor has initiated measures under the Act and issued Section 13(2) Demand Notice dated 29.09.2023, calling upon the applicants to make a total outstanding amount of Rs.6,66,36,813.68p due as on 28.09.2023 within a period of 60 days.

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5.3 The contention of the applicant is that in the Section 13(2) Demand Notice dated 29.09.2023 the respondent have classified all the 14 accounts as NPA, in spite of applicant making payments regularly and there is no overdue is an categorical admission that the applicant had availed various facilities vide loan Account No.6617852840 – OCC for Rs.210 lakhs, 6618425307 – SME SMALL ENT SERV for Rs.40 lakhs, 6883094536 – Covid Emergency Loan-for Rs.30 lakhs, 6887520175 – GECLS Covid for Rs.73.49 lakhs,7056831713 – WCTL for Rs.245 lakhs, 7056833890 – FITL for Rs.67 lakhs, 7216290897 – IBVL for Rs.10 lakhs,

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SA No.483/2024

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in the name of M/s. Raja Insulation and Refractories Pvt. Ltd., Rep. by its Directors: Mr. Muruganantha Krishnan & Mr.B. Venkatesan (and) Loan Account Nos.6618359524 – IBHL for to B.Muruganantha Krishnan, Rs.13.32 lakhs, 6618382917, IBHL – B. Venkatesan – Rs.12.02 lakhs and 6358556820 to B.Venkatesan, Rs.22.48 lakhs in the name of Mr.Muruganantha Krishanan & Mr. B. Venkatesan with Indian Bank, Anna Salai Branch (now transferred to Indian Bank, SAM branch, Chennai)

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5.4 The Section 13(2) Demand Notice dated 29.09.2023 produced by the bank at page No.8 of their typed sets clears reflects the demand notice is issued to the applicants M/s. Raja Insulation, Mr. Muruganantha Krishnan, Mr. B. Venkatesan, Mrs. Sudha Mathy, Mrs.Prabha w/o B. Venkatesan. Hence the contention that demand notice is not issued to all is unsustainable. It is also seen that the respondent have issued the notice with regard to the 14 loan accounts which is not disputed by the applicants herein. It is from the Section 13(2) Demand Notice dated 29.09.2023 that the respondent as a secured creditor have produced the details about the loan availed by the applicant and the details of the borrower and mortgagor and all the loan documents executed in respect of the credit facilities availed by them including bank guarantee.

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5.5 Further, the Respondent bank also mentioned about the Vehicle Loan, Hypothecation of goods and Bank Guarantee in the said notice, further it is seen that the respondent have given details of the mortgage property of 4 items, which was secured as mortgage towards the credit facilities. Further the Respondent bank have also intimated the applicant

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about the Section 13(13) of the Act restraining the Borrower, Guarantor, Mortgagor, no transfer of the secured assets by way of sale, lease or otherwise.

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5.6 It is also brought to the notice of the Borrowers, Guarantor, Mortgagor, about the rights of redemption over the securities under the Section 13(8) of the SARFAESI Act. It is seen that the Section 13(2) Demand Notice is sent by RPAD, which is duly received by the applicants as per the Postal Acknowledgement Cards produced by the bank at page No.20 to 23, received by Mrs. Prabha w/o Mr.B. Venkatesan. In spite of receipt of Section 13(2) Demand Notice dated 29.09.2023, applicants didn’t raised any contention in respect of the demand made nor filed any objections as required under the Section 13(3A) of the Act. Instead application contends to have issued S.13[8] notice which the respondent has not considered is misunderstanding of the provision. S.13[8] is an redemption clause available to the borrower to redeem the property before the respondent puts the secured asset for sale.

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5.7 Yet another contention raised that the Bank Guarantee is also included in the Section 13[2] notice is a correct procedure, as the respondent has to honor the bank guarantee when demanded by the beneficiary. There is no illegality in inclusion of the BG in the demand notice.

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5.8 As the applicants didn’t liquidate the liabilities within a period of 60 days, bank has proceeded further and issued Section 13(4) Possession

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notice dated 22.01.2024 which is sent by RPAD, it is evident from the Postal receipt and Postal Acknowledgement cards produced by the Respondent bank at page No.29 to 33. The Section 13(4) Possession notice is also published in the two Newspapers, one in “New Indian Express” (English) and another in “Dinamani” (Tamil), both dated 24.01.2024 as required and affixed on the property which is also produced by the respondent bank, produced at page No.38 to 41 of their typed sets.

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5.9 The bank have proceeded further and issued Sale notice dated 20.03.2024, fixing the sale on 24.04.2024, which the applicant themselves produced at page No.57 to 60. The applicants after the receipt of the Sale notice, filed an SA No.215/2024 challenging the Sale notice dated 20.03.2024. The Tribunal granted interim order of Status Quo of sale notice on conditional payment of Rs.62 lakhs on or before 23.04.2024 and another 10% within 4 weeks. However applicant only paid Rs.62 lakhs on 23.04.2024 and failed to comply with second tranche of payment which is pending before this Tribunal.

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5.10 The Respondent bank as a secured creditor issued another Sale notice dated 02.07.2024 fixing the sale on 09.08.2024, the said notice is challenged by the applicants in SA No.474/2024 which is pending before this Tribunal. However the secured asset is sold for a sum of Rs.6,16,50,000/- and Sale Certificate is also given. It is also matter of record that the Respondent bank vide letter dated 12.08.2024 intimated the bidders M/s. Sumathi Boopathy, Mr.S. Khajamohideen, Mr. Uthirakodi

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Dhinakaran to remit balance 75% of the bid amount within 15 days on or before 27.08.2024.

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5.11 As the applicant already challenged two sale notices dated 20.03.2024 and 02.07.2024 in SA No.215/2024 and SA No.474/2024 respectively, the contention in respect of the two sale notices is not considered in the present SA, confining the contentions raised to Section 14 order dated 10.06.2024. The contentions raised by the applicant that the Section 13(2) Demand Notice dated 29.09.2023 is not served is countered by the Respondent bank by producing the proof of service of the Demand Notice, and also the contention of the Section 13(4) Possession notice dated 22.01.2024 is also countered by the Respondent bank with supporting documents.

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5.12 The applicant raised the contention under the Section 14 application is filed from the MGR Nagar Branch, it is admitted by the applicant that the loan was availed and documents were executed at MGR Nagar Branch and it was operated in Anna Nagar Branch and the loans were transferred to the SAM (Stressed Assets Management) branch, since the loan account of the applicant was stressed, so it was transferred to SAM branch. However applicant has not clarified the nature of prejudiced caused in the respondent filing S.14 application and there is no substantial prejudiced in the respondent filing S.14 application from their SAM branch.

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5.13 The applicants after availing colossal amount, having defaulted in repayments have raised unsustainable contentions without any force on facts or on law. The applicant has not pointed any irregularity in the measures taken by the bank and raised contention projecting it as technical where there is no prejudiced caused to the applicant in the measures taken by the bank which does not require any consideration from this Tribunal, as technical issues cannot come in the way of SARFAESI measures.

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5.14 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 non- adjudicatory 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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5.15 The Hon’ble Bombay High Court in the matter of Phoenix ARC Pvt. Ltd. Vs. The State of Maharashtra , 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 Bombay High Court judgement is confirmed by the Hon’ble Supreme Court by its judgement dated 26.09.2022 in the matter of Balakrishna Ram Tarle v. Phoenix ARC (P) 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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5.16 Furthermore, the Hon’ble Supreme Court in the matter of Kotak

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Mahindra Bank vs Girnar Corrugators Pvt. Ltd. & Ors. , 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.”

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5.17 In the instant matter, it is seen from the S.14 application filed by

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the secured creditor along with the affidavit confirming the due compliance of S.14[1] to [ix] by rendering all the details as required

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under the proviso and on examination of the same the Hon’ble CJM has allowed the petition.

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5.18 Additionally, Section 14(3) of the SARFAESI Act states that no action taken by the Chief Metropolitan Magistrate or District Magistrate (or any officer authorized by them) under S.14 can be challenged in court or before any other authority. Thus the provision ensures that the action taken under S.14 is final and not subject to further review. Therefore, it is held that the S. 14 order passed by the Ld. CJM is after due consideration the compliance of the provisions of the S. 14 [i-ix] is only an execution order where no adjudication is required.

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5.19 The applicant has relied on the judgment of the Andhra Pradesh High Court in case of M/s Magalgiri Textile Mills Private Limited Vs

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The State Bank of India , wherein it is held that the Advocate Commissioner has to take the possession in a within a time frame and has relied on para 23 of the said order, where in it is held that a succinct exposition on Section 14 of the Act in Standard Chartered Bank Vs. V. Noble Kumar , (2013) 9 SCC 620 and held that the order obtained by SBI is not in controversy.

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5.20 Further applicant also relied on judgment of Shriram Housing

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Finance limited Vs. State of Haryana to contend that the District Magistrate becomes functus officio and he cannot recall his own order and modify the same. Further it is seen that the applicant has approached the

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20 02.06.2025

¶153

Hon’ble High Court of Madras in W.P. Nos.39960 and 39963 of 2024 and WMP Nos.43270, 43268, 43266, 43269, 43271, 43273 of 2024, impugning the amended order in Crl.M.P.No.1663 and 1664 of 2024 order passed by learned Chief Judicial Magistrate, Chengalpattu on 08.11.2024, where in the applicant also relied on the judgment of the Asset Reconstruction Company (India) Ltd Vs. State of Haryana contending that the Magistrate has no power to review, recall or modify his order and considering the judgments relied upon and the facts of the case. The Hon’ble High Court has held that it is a settled law that steps to be taken under Section 14 of the Act of the secured creditor in taking physical possession of the asset, if all other conditions are fulfilled and there is no adjudication process.

¶154

5.21 The Hon’ble High Court of Madras observed that “by changing the names of the Police Stations, in our view, the Magistrate has neither reviewed or recalled or modified his order, nor adjudicated any dispute and there is no likelihood of rights of any parties being affected. It is also not possible to suggest that petitioners are rendered remediless in law. Accordingly, the Writ petition came to be dismissed”. The main contention raised by the applicant that the Section 14 order cannot be reviewed once passed or agitated by High court, which the High court dismissed, the contentions as raised also stands dismissed.

SA No.483/2024

02.06.2025

5.22 Therefore the Tribunal is not persuaded to interfere in the S.14 Order dated 10.06.2024 passed by the Hon’ble CJM, Chengalpattu in CMP

¶159

No. 1663/2024 and the same is held as lawful order.

¶160

For the foregoing reasons, the present SA is dismissed. Interim Order granted if any stands vacated. Pending IA/s are disposed of in terms of this Order.

¶161

(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 02^nd day of June, 2025)

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ANNEXURES

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LIST OF DOCUMENTS PRODUCED BY THE APPLICANT

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Sl. No.	Description of Documents	Page No.
1.	Application dated 20.07.2024.	A-1
2.	Impugned Order with Petition & Affidavit dated 10.06.2024.	A-2
3.	Sanction Letter dated 28.07.2021.	A-3
4.	Demand Notice issued by the Respondent dated 29.09.2023.	A-4
5.	Possession Notice issued by the Respondent dated 22.01.2024.	A-5
6.	Sale Notice issued by the Respondent Bank dated 20.03.2024.	A-6
7.	DD on the favour of the Respondent Bank dated 17.04.2024.	A-7
8.	DD deposited to the Respondent Bank dated 23.04.2024.	A-8
9.	Vakalath dated 20.07.2024.	A-9

SA No.483/2024

02.06.2025

LIST OF DOCUMENTS PRODUCED BY THE RESPONDNET

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Sl. No.	Description of Documents	Page No.
1.	Counter Statement	R-1
2.	Demand Notice dated 29.09.2023.	R-2
3.	Acknowledgement Cards.	R-3
4.	Possession Notice dated 22.01.2023.	R-4
5.	Acknowledgement Cards.	R-5
6.	Publication of Possession Notice – English dated 24.01.2023.	R-6
7.	Publication of Possession Notice – Tamil dated 24.01.2024.	R-7
8.	Affixture of Possession Notice – Photo dated 22.01.2024.	R-8
9.	Sale Confirmation Letters dated 12.08.2024.	R-9

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SCHEDULE OF PROPERTY

¶172

All that piece and parcel of landed property at Nemilichery Village, Tambaram Taluk, Kancheepuram District comprised in S.No.119/1B part measuring 1848 Sq.ft bearing Plot No.3.

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Bounded on the -

¶174

North by	:	Existing 22 feet Road
South by	:	Vacant land
East by	:	Plot No.2
West by	:	Plot No.4

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Measuring:

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North to South on the Eastern Side : 52 feet North to South on the Western Side: 60 feet East to West on the Northern Side : 33 feet East to West on the Southern Side : 33 feet

SA No.483/2024

02.06.2025

In all measuring 1848 Sq.ft. situated within the limits of SubRegistration District of Pallavaram.

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

Raja Insulation and Refractories Pvt. Ltd. v. Indian Bank

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Raja Insulation and Refractories Pvt. Ltd. v. Indian Bank

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