Dismissed

A Ravichandran v. Indian Bank

DRT10 Dec 2025SA/484/2023

Case brief

AI extract

What is this about?

The applicant challenged a sale notice issued under the SARFAESI Act, alleging violations regarding demand notice service, possession notice affixture, and reserve price fixation. The Tribunal examined the records and held that the bank complied with statutory provisions. Citing Supreme Court rulings on auction sanctity, the Tribunal dismissed the application, noting the sale had already been conf

What did the court decide?

Application for setting aside the sale notice is dismissed; sale confirmed in favour of purchase; no costs awarded to applicant.

A Ravichandran versus Indian Bank — Cheque Dishonour | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL – II AT CHENNAI

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Dated this 10^th day of December, 2025

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PRESENT: SHRI SHARANG DHAR UPADHYAY Presiding Officer

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SA No.484 of 2023

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M/s Sri Venkateswara Textile Proprietor, A. Ravichandran S/o Arunachalam No.2/56, Athiganoor Village Krishnagiri District – 635 203

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… Applicant

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Versus

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The Authorised Officer Indian Bank, Kannandahalli Branch Krishnagiri District – 635 203

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Mrs. Manju Singhai D. No.55/1, KS Govindachetty Street OM Shakti Temple Ward No.8, VTC: Bargur R.F.., Bargur PO, Krishnagiri District (2^nd Respondent impleaded pursuant to Order of this Tribunal in IA No.804/2024 dated 05.03.2025) … Respondents

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Counsel on Record / Appeared

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Applicant by : Ld. Counsel M/s C. Pritheevraj 1^st Respondent by : Ld. Counsel M/s L. Ramkumar : 2^nd Respondent Ex-parte on 05.03.2025

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ORDER

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1.0 This petition is filed under Section 17(1) of the SARFAESI Act

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challenging the sale notice dated 11.10.2023 fixing the sale for 30.10.2023.

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Facts as pleaded in the appllication

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2.0 The applicant contends that Mr. Ravichandran, the Proprietor of M/s Venkateswara Textiles the applicant herein approached the 1^st respondent for grant of credit facility for development of his business during December 2013 and the 1^st respondent sanctioned a sum of Rs.5,00,000/-. It is also contended that the applicant created equitable mortgage over the schedule mentioned property in favour of the 1^st respondent.

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2.1 The applicant was regular in repayment of the said loan and hence the 1^st respondent enhanced the limit from Rs.5,00,000/- to Rs.10,00,000/- during October 2015 and the applicant also executed a supplemental Memorandum of deposit of title deeds to secure the enhanced limits.

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2.2 It is stated that the 1^st respondent again offered and enhanced the limit by Rs.6,00,000/- during November 2018 and the applicant again executed a supplemental Memorandum of deposit of title deeds to secure the enhanced limits.

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2.3 It is also stated that due to COVID-19 pandemic the applicant’s business suffered severe loss and hence the 1^st respondent again sanctioned an enhancement (COVID-Repo Loan) of Rs.5,24,000/-. Despite the same applicant’s business suffered loss and the 1^st

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respondent classified the loan account as NPA. The 1^st respondent without serving the demand notice under Section 13(2) of the SARFAESI Act issued e-auction sale notice dated 2.6.2022 fixing the sale on 7.7.2022. Challenging the same the applicant filed SA No.350/2022 and the same came to be dismissed for non-prosecution.

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2.4 The 1^st respondent thereafter issued the impugned sale notice dated 11.10.2023 fixing the sale on 23.08.2023.

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Grounds urged

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3.0 The grounds urged are:

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(i) The action of the 1^st respondent is against the guidelines of RBI.

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(ii) The demand notice is not served on the applicant and without issuing the demand notice the respondent cannot issue possession notice and sale notice.

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(iii) The 1^st respondent has violated Rule 3 of the Security Interest (Enforcement) Rules, 2002.

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(iv) The possession notice is neither affixed on the secured asset nor published in newspapers.

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(v) The 1^st respondent has not served the sale notice on all the borrowers.

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(vi) Despite the applicant informing the 1^st respondent about the business loss due to COVID-19 pandemic the respondent has proceeded to classify the loan account as NPA, contrary to the guidelines of RBI.

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(vii) The reserve price fixed far too low than the value of the property. The respondent has violated Rule 8(5) of the Security Interest (Enforcement) Rules, 2002.

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(viii) The amount claimed in the sale notice not correct and is highly exorbitant.

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Counter filed by 1^st Respondent

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4.0 The applicant availed OCC Loan facility of Rs.26,00,000/- and IND GECLS COVID-19 Loan of Rs.5,24,000/- from the 1^st respondent. In view of the default committed by the applicant the loan account was classified as NPA on 30.04.2021 and the demand notice was issued on 17.9.2021 followed by possession notice dated 27.12.2021. The SA 350/2022 filed by the applicant challenging the sale notice dated 2.6.2022 is dismissed for default and non-prosecution. As the applicant failed and neglected to clear the outstanding dues the 1^st respondent issued the sale notice dated 11.10.2023 fixing the sale on 30.10.2023. The applicant failed to comply with the interim order of this Tribunal dated 30.10.2023 and hence the sale was confirmed in favour of the

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highest bidder for a sale price of Rs.33,12,100/- and the sale certificate was also issued on 30.01.2024 and the possession of the secured asset

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is also handed over to the auction purchaser.

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4.1 The 1^st respondent has scrupulously followed the provisions of the SARFAESI Act and the Rules made thereunder while bringing the secured asset for sale after obtaining valuation report dated 02.06.2023 from the approved valuer.

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4.2 The sale notice was duly served on the applicant, affixed on the secured asset and published in newspapers on 14.10.2023. The sale is confirmed in favour of 2^nd respondent, sale certificate is already issued and the possession of the property is also handed over to the 2^nd respondent.

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4.3 The SA is liable to be dismissed with exemplary costs.

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4.4 Documents filed by the 1^st Respondent

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(i) Agreement of Open Cash Credit dated 19.11.2018.

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(ii) Memorandum of Deposit of Title deeds dated 6.9.2013 registered as Doc. No.2130 of 2013 executed by Mr. A. Ravichandran in favour of 1^st respondent.

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(iii) Demand notice dated 17.09.2021 along with acknowledgement of applicant.

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(iv) Possession Notice dated 27.12.2021.

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(v) Photograph evidencing affixture of possession notice on 27.12.2021.

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(vi) Paper publication of possession notice in English and Tamil daily dated 30.12.2021.

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(vii) Valuation report dated 2.6.2023.

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(viii) Sale notice dated 11.10.2023.

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(ix) Paper publication of sale notice both in English and Tamil daily dated 14.10.2023.

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(x) Sale certificate dated 23.11.2023 issued in favour of auction purchaser, the 2^nd respondent herein.

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5.0 The 2^nd Respondent remained ex-parte and did not choose to contest the case.

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6.0 After going through the contentions of the parties in pleadings and

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after hearing the parties, the following point arises for determination in these proceedings: -

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Whether the sale notice dated 11.10.2023 is in accordance with the provisions of SARFAESI Act and the Rules framed thereunder and what order?

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Answers to point for consideration

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7.0 In for as the ground relating to non-service of demand notice and non-compliance of Rule 3 of the Security Interest (Enforcement) Rules, 2002, is concerned, the respondent has produced the copy of the demand notice dated 17.09.2021 at Page 27 of the typed set of documents filed by the 1^st respondent. A perusal of the same reveals that the applicant-borrower and the guarantor have affixed their signatures on the notice (at last page) for having received the same and hence this ground raised by the applicant fails.

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7.1 In so far as the grounds relating to non-affixture and nonpublication of the possession notice is concerned, it is to be stated that the 1^st respondent bank has produced the possession notice dated 27.12.2021, photograph evidencing affixture of possession notice on the

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secured asst and the publication of the same in Tamil daily “Dinamani” dated 30.12.2021 and English daily “The New Indian Express” dated 30.12.2021 and pages 31 to 34 of the typed set of papers and hence these grounds raised by the applicant also fails.

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7.2 In so far as non-compliance of Rule 8(5) and the reserve price fixed is far too low than the value of the property is concerned, the 1^st respondent has produced the valuation report 2.6.2023 (at Page 35 to

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obtained from the approved value disproving these claims of the applicant. Therefore, these grounds raised by the applicant also fail.

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7.3 In so far as the other grounds regarding the non-service of sale notice is concerned, it is to be stated that the applicant itself has filed the original sale notice affixed on the secured asset in the SA paper book and hence this ground also fails.

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7.4 In so far as the ground that the classification of NPA is bad, it is to

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be noted that the demand notice was issued as far back as 17.09.2021. When the demand notice is issued, the same is issued after classifying the account as NPA. The grievance, if any, regarding the classification of NPA should have been protested under Section 13(3) of the Act. The applicant has not furnished the copy of any such protest letter or reply to

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the demand notice. Therefore, the applicant has not availed the opportunity of answering the demand notice and to protest the further measures.

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8.0 Suffice it to say in several rulings of the Hon'ble Supreme Court and especially in ValjiKhimji& Co. vs. Official Liquidator of Hindustan Nitro Product (Gujarat) Ltd. 2008(9) SCC 299 it is held:-

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“ If it is held that every confirmed sale can be set aside the result would be that no auction sale will ever be complete because always somebody can come after the auction or its confirmation offering a higher amount.”

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9.0 It is to be mentioned that the SA is filed for the relief of setting aside the impugned sale notice. The sale has already taken place and sale certificate is also issued in favour of the 2^nd respondent. The observation of the Hon'ble Supreme Court in “CELIR LLP Vs. M/s Bafna Motors (Mumbai) Pvt. Ltd., reported in 2023 SCC Online SC

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Page 838” is worth quoting here: -

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“ It is the duty of the courts to zealously protect the sanctity of any auction conducted. The courts ought to be loath in interfering with auctions; otherwise it would frustrate the very object and purpose behind auctions and deter public confidence and participation in the same. Any other interpretation of the amended Section 13(8) will lead to a situation where multiple redemption offers would be encouraged by a mischievous borrower, the members of the public would be dissuaded and discouraged from in participating in the auction process and the overall sanctity of the auction process would be frustrated thereby defeating the very purpose of the SARFAESI Act. This, it is in the larger public interest to maintain the sanctity of the auction process under the SARFAESI Act.”

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10.0. In view of the foregoing, this Tribunal is of the view that the 1^st Respondent has complied with the provisions of the SARFAESI Act and the Security Interest (Enforcement) Rules, 2002, and also does not find merit in the contentions of the applicant. Hence the following

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ORDER

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The SA No.484 of 2023 stands dismissed. All the other pending

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IAs thus stand disposed of. Parties to bear their own costs.

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A copy of this order be communicated to the parties concerned.

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Sd/-

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