Dismissed

R Rajalakshmi v. Icici Bank Limited

DRT15 Oct 2025SA/513/2025

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed an application filed by a third party claiming life interest in property. The Tribunal found she lacked locus standi as she voluntary sold the property and failed to challenge the sale. Procedural irregularities alleged by the applicant were held to be minor and did not vitiate the recovery measures.

What did the court decide?

The SARFAESI measures were upheld and the set aside application was dismissed.

R Rajalakshmi versus Icici Bank Limited — Company and Corporate | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL – II AT CHENNAI

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Dated this 15^th day of October, 2025

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PRESENT: SHRI SHARANG DHAR UPADHYAY Presiding Officer

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SA No.513 of 2025

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Mrs. R. Rajalakshmi W/o Late A. Radhakrishnan New No.54, Old No.35 48^th Street, Ashok Nagar Chennai – 600 083

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…Applicant

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Versus

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ICICI Home Finance Chennai Branch No. AB106, Old No.134, 2^nd Floor 4^th Avenue, Shanthi Colony Anna Nagar, Chennai – 600 040 Represented by its Authorized Officer Mr. Kamalesh Kumar …Respondent

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Counsel on Record / Appeared

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Applicant by : Ld. Counsel M/s A. Ramaswamy Respondents by : Ld. Counsel M/s N.S. Sivakumar

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O R D E R

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

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seeking to set aside the measures initiated by the respondent pursuant to the order passed in Crl. M.P. No.3372 of 2025 by the Ld.

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Chief Metropolitan Magistrate, Egmore dated 16.04.2025 under Section 14 of the SARFAESI Act.

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Case of the Applicant

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2.0 The applicant is challenging the measures initiated by the respondent under Section 14(1) of the SARFAESI Act in Crl. M.P. No.3372 of 2025 and the order of the Ld. CMM, Egmore dated 16.04.2025 and further measures initiated by the Authorised Officer on 26.06.2025. Portion of the physical possession of the schedule property was taken by the Advocate Commissioner appointed by the Ld. CMM, Egmore, Chennai and further prayer to redeliver the schedule property to the applicant and the same was numbered as SA No.513 of 2025.

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2.1 The applicant is residing in the schedule property in SA No.513 of 2025 as the “Life interest Holder” vide settlement deed Doc. No.1430 of 2021 registered at SRO, Ashok Nagar, Chennai for the past 60 years. The settlement deed was executed by her husband Mr. A. Radhakrishan, S/o Late M.S. Arunachala Iyer.

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2.2 The applicant is a third party to the proceedings and is neither a borrower nor a guarantor to the loan transaction between the default

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and the respondent. Further, the applicant is not a tenant or lease holder in the schedule property and the applicant did not create any equitable mortgage or executed the MoDT in favour of respondent. The application is maintainable before this Tribunal and the objection of the respondent cannot be taken into consideration and be rejected at the threshold.

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2.3 The present SA has been filed within the limitation period as prescribed under Section 17(1) of the SARFAESI Act. The respondent obtained the impugned order on 16.4.2025. The applicant is not a party to the proceedings. Further, the said order is not an adjudicating order and is only an administrative order, hence, no notice was served on the applicant.

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2.4 The applicant is residing in the property as a life interest holder, but the respondent without impleading the applicant has obtained the order from Ld. CMM, Egmore Chennai in Crl. M.P. No.3372 of 2025 dated 16.04.2025 and violated principles of natural justice without issuing any notice to the applicant, suddenly on 26.6.2025 forcefully threw out the applicant. Immediately on 26.6.2025 the applicant filed a police complaint before R-3 Ashok Nagar Police Station. The applicant filed certified copy application before the Ld. CMM on

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2.7.2025 and the same was obtained on 3.7.2025. Hence the application is within the period of limitation.

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2.5 The Respondent has no locus standi to file application under Section 14(1) of the SARFAESI Act before the Ld. CMM, Egmore, Chennai in Crl. M.P. No.3372 of 2025 for the reasons that Mr. Kamlesh Kumar claiming as an Authorised Officer of the respondent did not have a valid letter of authority in his name as per the letter No. SEC/LOA/539/2023-24 dated 31.07.2023 since the said Letter of Authority is valid only till 30.07.2024. On careful perusal of affidavit filed by Mr. Kamalesh Kumar along with Letter of Authority supra before the Ld. CMM, Egmore, Chennai on 07.03.2025 only.

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2.6 On a careful perusal of the alleged demand notice under Section 13(2) of the SARFAESI Act issued by defendant dated 15.04.2024, the borrower’s account is classified as NPA on 04.04.2024. But in contravention of the demand notice under Section 13(2) of the Act dated 15.04.2024 issued by the respondent, in Section 14(1) application dated 07.03.2025 filed by the respondent before the CMM, Egmore, Chennai, the NPA date is mentioned as 15.05.2024. Further, the schedule of property are not properly mentioned i.e., Survey number, extent of property, title deed document number, date,

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month, year, title holder name and registration office details. The respondent failed to file any document to show as to when and how the demand notice was served on the borrower and guarantor. In the absence of any document to prove the service of demand notice, the alleged demand notice dated 15.04.2024 is questionable and the same was not issued to the borrower and guarantors. Further, the respondent has failed to comply with Rule 3 of the Security Interest (Enforcement) Rules, 2002.

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2.7 The possession notice dated 06.11.2024 under Section 13(4) of the Act was issued to the borrower and guarantors returned to the respondent on 07.01.2025 with endorsement “No such person”. The possession notice has been published in “Financial Express”, is not a newspaper having wide circulation. The description of property is not proper in the possession notice. The service of possession notice is not in accordance with Security Interest (Enforcement) Rules, 2002. The photograph produced by the respondent to prove affixture of possession notice reveals that the photograph was taken on 23.07.2025 and not on 06.11.2024 and hence the respondent committed fraud in affixing the possession notice.

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2.8 The Ld. CMM, Egmore without having territorial jurisdiction has passed the impugned order and the same is liable to be set aside. There are discrepancies in the property mentioned in the demand notice dated 15.04.2024 and the possession notice dated 06.11.2024.

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2.9. The document relied upon by the respondent with regard to civil cases filed by the borrower are in no way connected with this applicant. The notices issued under SARFAESI Act are not served to the applicant in the present SA. There are discrepancies in the order passed by the Ld. CMM, Egmore Chennai dated 16.04.2025.

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2.10. In view of the foregoing the measures initiated by the respondent in pursuance to the order of the Ld. CMM, Egmore, Chennai in Crl. M.P. No.3372 of 2025 dated 16.04.2025 be set aside. Consequently, pass an order of redelivery of schedule property to the applicant and award cost of this SA to the applicant.

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2.11 The applicant filed the following documents: -

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(a) Settlement deed dated 04.05.2021 registered as Doc. No.1438/2021.

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(b) Power of Attorney dated 08.05.2023 registered as Doc. No.1516/2023.

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(d) Memorandum of Deposit of Title deeds dated 19.05.2023 registered as Doc. No.638/2023.

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(e) Demand notice dated 15.04.2024.

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(f) Affidavit and Petition dated 10.12.2024 filed in Crl. M.P. No.3372/2025 before the Ld. CMM, Egmore

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(g) Proof affidavit dated 05.04.2025 filed by the defenedant in Crl.

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M.P. No.3372/2025 before the Ld. CMM, Egmore

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(h) Impugned order of the Ld. CMM, Egmore dated 16.04.2025 in Crl. M.P. No.3372/2025.

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(i) Police complaint dated 26.06.2025 given by the applicant.

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Case of the Respondent Financial Institution

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3.0 The present SA filed by the applicant is wholly misconceived, devoid of merits and maintainable in law or on facts.

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3.1 This Tribunal has no jurisdiction to adjudicate the contentious issued raised by the applicant. The applicant being a third party, no locus standi and has filed the present application solely with the intention to

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frustrate the measures initiated by the respondent under SARFAESI Act and the Rules made thereunder. The application is devoid of bonafides, falls outside the limited jurisdiction conferred upon this Tribunal and deserves to be dismissed in limine.

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3.2 The applicant earlier sought for condonation of delay, represented that she would pursue civil remedies and even secured an order of status quo from this Tribunal on 7.7.2025 made in NDN SA 1171/2025. However, she failed to invoke any civil jurisdiction for remedy and continues to misuse the limited jurisdiction of this Tribunal contrary to the statutory scheme of the SARFAESI Act.

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3.3 The Respondent Financial Institution sanctioned a housing loan of Rs.2,60,00,000/- on 19.04.2023 in favour of borrower Mr. Surender and Co-borrower Mrs. Kousalya, secured by equitable mortgage of the immovable property. Upon default, the account was classified as NPA on 04.04.2024 and demand notice under Section 13(2) was issued on 15.04.2024 which was duly served on the borrower and the co-borrower. However, no reply was received either from the borrower or the co-borrower.

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3.4 The present SA is filed by a third party with an avowed object plead ignorance of proceedings and allegation of fraud are wholly groundless, false and concocted and cannot be a ground to upset the actions initiated by the respondent under SARFAESI Act. The applicant for the purpose of this SA as an afterthought asserts that her family was coerced into executing a GPA but the records shows that she, her late husband and grandson had voluntarily executed the General Power of Attorney vide Doc. No.1516 of 2023 on 08.05.2023, after which the property was conveyed by registered Sale deed Doc. No.1637 of 2023 dated 19.05.2023 in favour of the borrower. The applicant deliberately suppressed the withdrawal of the entire sale consideration of Rs.2.60 crores which was disbursed by demand drafts in favour of her grandson, and the same was duly recorded in the disbursement documents.

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3.5 The borrower Mr. Surender created equitable mortgage by executing Memorandum of Deposit of Title deeds registered as Doc. No.1638 of 2023. The applicant having executed the documents, received consideration and acquiesced to the mortgage now turn around and contend that she was ignorant of the loan transaction and also raised

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an incongruent plea of coercion and fraud for the purpose of the case in order to thwart the SARFAESI measures.

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3.6 As regards the claim of the applicant of life interest under a 2021 settlement deed, such rights stand extinguished by her own act and conduct in joining execution of the GPA and consenting to alienation. If any dispute subsists, it is purely a triable civil issue requiring evidence and cannot be agitated before this Tribunal. This Tribunal in exercise of Section 17 jurisdiction, cannot adjudicate the mutually conflicting and complex questions of fraud, coercion or validity of settlement deeds as it requires evidence and strict burden of proof in the full-fledged trial by examining parties and tender documentary and other evidence to substantiate such pleas.

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3.7 The Respondent has scrupulously followed the statutory measures. The Possession Notice dated 10.07.2024was duly served on the borrower and co-borrower, affixed on the secured asset and published in “Dinakaran” and “Financial Express”. The proceedings under Section 14 before the Ld. CMM, Egmore in Crl. M.P. No.3372/2025 culminated in an order dated 16.4.2025 appointing an Advocate Commissioner, who took possession of the secured asset

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on 26.06.2025 and handed it over to the Respondent, except small portion (stilt area and servant quarters) still occupied by the applicant.

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3.8 The plea questioning the authorization of the Authorised Officer in verifying the petition in Crl. M.P. No.3372 of 2025 at the time of advancing oral arguments on the hearing is inconsequential. The said plea is not raised or urged in the application or show her prejudice and the applicant has not demonstrated the prejudice purportedly caused to the applicant as to the Authorisation letter issued to the Authorised Officer. Moreover, the Authorisation Officer is still continuing in service and the Respondent Financial institution has also issued a fresh authorization letter. More so, it is a curable error and the applicant cannot attack the Authorisation Officer when the contentious issues canvassed in the present application is directed to set aside the order passed by the Ld. CMM, Egmore on various other factors vitiating the loan transaction, which is purely triable issued requires to be agitated before the competent forum but not availed yet having undertook to question the same in the civil court, the applicant has no legs to stand on technicality.

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3.9 The applicant’s allegation of continuous residence of 60 years is untenable and introduced only to defeat the respondent’s lawful rights. The malafide are writ large; the borrower himself offered a OTS for Rs.2.35 crores by letter dated 01.04.2025, which was declined as the dues had escalated to Rs.2.98 crores. Having failed, the borrower has now set up the applicant to stall recovery process. It will be pertinent to point out that neither the borrower nor the coborrower challenged the possession notice dated 06.11.2024 having complied with the order of this Tribunal on liberty.

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3.10 The applicant is none other than the grandmother of the vendor to the borrower. The family itself executed the GPA and facilitated the sale. The disbursement of Rs.1.95 crores and Rs.65 lakhs directly to her grandson clearly proves their knowledge and acquiescence. Thus the plea of the applicant of fraud is fictitious and afterthought. No police complaint was ever lodged against the alleged power agent Mr. Raja, which further undermines credibility.

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3.11 The applicant’s reliance on clerical errors in notices, survey numbers or addresses is equally baseless. Such omissions are at best minor irregularities which do not vitiate proceedings particularly when the

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property is otherwise fully identifiable under the MoDT and loan records. Courts have consistently held that hyper technical objections cannot defeat substantive rights of a secured creditor.

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3.12 The schedule of properties described in the schedule appended in Crl. M.P. No.3372/2025 is clear and there is some typo error in the affidavit filed in support of the petition at Para No.11 at Page No.104 in the applicant’s typed set of papers, will not alone cast aspersion on the invalidating the proceedings. The said typo error insignificant and immaterial for the purpose of the proceedings.

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3.13 The present SA is a collusive and vexatious proceeding, intended to misuse the Tribunal’s jurisdiction and hence as per the judgment of the Hon’ble Supreme Court in “ S.P. Chengalvaraya Naidu vs. Jagannath” ; 1994 (1) SCC 1; the application deserves no consideration whatsoever and is liable to be rejected at the very threshold.

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3.14 The applicant has demonstrably failed to establish locus standi, bonafides or any legal ground to question the measures adopted under SARFAESI Act. The present SA is frivolous, vexatious and filed only to stall the lawful recovery process of the public dues.

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

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3.16 The respondent filed the following documents: -

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(a) Memorandum of Deposit of Title deeds dated 19.05.2023 registered as Doc. No.1638/2023.

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(b) Disbursement of Sale consideration to Mr. Ramnath.

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(d) Demand notice dated 15.04.2024 issued under Section 13(2) of the SARFAESI Act.

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(e) Letter of settlement of dues dated 09.05.2024 issued by the respondent to the borrower Mr. Surender.

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(f) First Possession Notice dated 10.07.2024.

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(g) Photos showing affixture of first possession notice on the secured asset.

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(h) Postal track receipts.

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(i) Paper publication of possession notice in “The New Indian

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Express and Thinakaran”

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(j) Order dated 23.9.2024 passed by DRT-III Chennai in SA

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No.562 of 2024.

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(k) Possession notice dated 06.11.2024 with postal receipts.

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(l) Photos showing affixture of 2^nd possession notice on the secured asset.

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(m) Paper publication of the second possession notice in Financial Express and Dinakaran

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(n) Settlement proposal letter issued by the borrower Mr. Surender.

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(o) Mail correspondence between borrower Mr. Surender and the respondent financial institution.

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(p) Case status of OS No.1236 of 2024 pending on the file of VI Assistant City Civil Court, Chennai

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(q) Authorisation letter.

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4.0 Both the parties filed their written submissions. Heard the Ld. Counsel appearing on behalf of both parties. Perused the records.

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Points for consideration

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5.0 Upon hearing the parties and perusing the pleadings and documents,

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the following issues arise for determination:

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(i) Whether the applicant has locus standi to maintain the present SA under Section 17 of the SARFAESI Act?

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(ii) Whether the measures taken by the Respondent under SARFAESI Act are vitiated due to procedural irregularities or violation of principles of natural justice?

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(iii) Whether the applicant is entitled to any relief in the present application?

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Issue No. (i)

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Whether the applicant has locus standi to maintain the present SA under Section 17 of the SARFAESI Act?

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6.0 It is well settled principle of law that an application under Section 17

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of the SARFAESI Act is maintainable by an “aggrieved person” against any of the measures referred to in Section 13(4) of the SARFAESI Act. Further, it has been held by various courts that such person must establish a legal right in the secured asset.

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6.1 It is admitted that the applicant is neither a borrower nor a coborrower nor a guarantor in respect of the housing loan obtained by Mr. Surender and Mrs. Kousalya from the respondent financial institution. The applicant, however, claims that she is a life interest holder under a registered settlement deed dated 04.05.2021 (Doc. No.1438/2021), executed by her late husband, and asserts that she had been residing in the property for more than 60 years. The applicant alleges that she was in lawful possession of the property on the date of eviction and was dispossessed without any notice or hearing, and therefore qualifies as an “aggrieved person” entitled to invoke the jurisdiction of this Tribunal under Section 17 of the Act.

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6.2 The applicant’s claim of locus is seriously contested by the respondent, who contends that the applicant herself had executed a registered General Power of Attorney dated 08.05.2023 (Doc. No.1516/2023) along with her grandson, empowering the attorney to sell the very same property. Pursuant to the GPA, the property was sold under a registered sale deed dated 19.05.2023 (Doc. No.1637/2023) to the borrower, who then created an equitable mortgage by executing a Memorandum of Deposit of Title Deeds dated 19.05.2023 (Doc. No.1638/2023). The sale consideration of Rs.

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2.60 crores was disbursed by the respondent and accepted by the family, including the applicant’s grandson, without any contemporaneous objection, or legal challenge to the transaction. There is no material on record to show that the applicant challenged the sale or the GPA in a civil court or filed any police complaint alleging coercion or fraud either before or immediately after the transaction. In the absence of any such steps, the applicant’s claim of life interest appears to be legally extinguished by her own act of consenting to the sale through execution of the GPA and thereafter failing to initiate any legal proceedings against the sale for more than two years. Even the allegations of coercion or fraud appear to be an afterthought and remain wholly unsubstantiated by any documentary or contemporaneous evidence.

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6.3 While Section 17 of the SARFAESI Act does permit a “person aggrieved” to approach the Tribunal, it is now well-settled through judicial precedents that the applicant must show a subsisting legal interest or right in the secured asset. It has been held by various courts that mere possession is not sufficient; the interest in possession must be legally protectable. In this case, the applicant, having voluntarily authorized the sale, and not having taken any

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timely steps to protect her interest, cannot now claim to be an aggrieved person in law. Therefore, it is concluded that the applicant does not have the necessary locus standi to maintain the present application under Section 17 of the SARFAESI Act. This point is answered accordingly.

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Point No. (ii)

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Whether the measures taken by the Respondent under SARFAESI Act are vitiated due to procedural irregularities or violation of principles of natural justice?

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7.0 The applicant alleges discrepancies in the NPA date, absence of territorial jurisdiction, defective service of demand and possession notices and improper authorization of the Authrised Officer.

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7.1 The applicant has alleged various defects in the SARFAESI process, including a discrepancy in the Non-Performing Asset (NPA) date mentioned in the respondent’s affidavit before the learned CMM, improper or non-service of the demand and possession notices, defective description of the property in notices, and the lack of personal notice to her before the proceedings under Section 14 of the Act.

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7.2 The Tribunal finds that while it is true that there is a typographical error in the NPA date as reflected in the Section 14 application (where it is mentioned as 15.05.2024 instead of 04.04.2024), this error does not, by itself, vitiate the proceedings. The respondent has placed on record the demand notice dated 15.04.2024 issued under Section 13(2) and the possession notices dated 10.07.2024 and 06.11.2024, with proof of postal service, affixation, and publication in newspapers including “Dinakaran” and “Financial Express.”

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7.3 The applicant has contended that the newspaper used for publication is not widely circulated, and that the photograph produced to establish affixation was taken months later. However, the Tribunal notes that the statutory requirement under Rule 8 of the Security Interest (Enforcement) Rules, 2002, is that the possession notice be served on the borrower and co-borrower, affixed on the property, and published in two newspapers (one in vernacular language), which appears to have been substantially complied with by the respondent. The alleged delay in photographing affixation or errors in the newspaper’s popularity do not amount to such gross procedural violations as to render the proceedings invalid.

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7.4 The contention regarding lack of notice to the applicant under Section 14 also lacks merit, as the proceedings before the Chief Metropolitan Magistrate are administrative in nature and do not contemplate notice to third-party occupants who are not borrowers or title holders. Thus, the Tribunal finds no procedural infirmity or violation of natural justice that would justify setting aside the SARFAESI measures undertaken by the respondent.

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Point No. (iii)

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Whether the applicant is entitled to any relief in the present application?

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8.0 This Tribunal finds that the applicant, having failed to establish either locus standi or procedural impropriety, is not entitled to any relief. The proceedings appear to be initiated belatedly and only after SARFAESI action reached the stage of taking physical possession. The plea of fraud and coercion is bald and unsupported by any contemporaneous complaint, evidence, or legal challenge. Furthermore, the disbursement records produced by the respondent clearly show that the sale consideration was received by the

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applicant’s family, further reinforcing the conclusion that the transaction was voluntarily entered into.

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8.1 The Tribunal also finds merit in the respondent’s contention that the present application has been filed in a collusive and vexatious manner to delay the lawful recovery process. The borrower and coborrower themselves have not challenged the SARFAESI action or the issuance possession notice and the action initiated by the respondent under Section 14 of the SARFAESI Act. The applicant, having once stated before this Tribunal that she would pursue civil remedies, has not filed any civil suit to challenge the sale or the GPA. Her continued reliance on technicalities and inconsistent claims further weaken the case. In view of the above, the applicant is not entitled to any relief whatsoever under Section 17 of the SARFAESI Act.

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