Dismissed

Mrs v. Jagatha Wife of Late D Vinayagam v Indian Bank

DRT15 Oct 2025SA/515/2023

Case brief

AI extract

What is this about?

In this Securitization Application, the applicant challenged a Section 14 order of the Chief Judicial Magistrate allowing possession of mortgaged property. The Tribunal held that Section 14 proceedings are ministerial and non-adjudicatory, thus failing to attract the Tribunal's jurisdiction. The application dismissing the challenge was upheld.

What did the court decide?

The Securitization Application was dismissed; the order impugned under Section 14 of the SARFAESI Act was upheld.

Mrs v Jagatha Wife of Late D Vinayagam versus Indian Bank — Banking and Recovery | DRT (2025)

SA No.515/2023

15.10.2025

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 15^th day of October, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SA No. 515 of 2023

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Mrs.V. Jagatha, W/o of Late D. Vinayagam, No.34A, Gandhi Street, Thiruneermalai, Chennai – 600 044. ….Applicant

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-Vs-

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The Authorised Officer, Indian Bank, No.72, Kamarajar Salai,

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Anakaputhur, Chennai – 600 007. ….Respondent

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Counsels on record / appeared:

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Counsel for Applicant : M/s. A. Periyasamy Counsel for respondent : M/s. Hemalatha Suresh & Janani

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ORDER ON SA 515/2023

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The present Securitization Application [SA] is on 06.10.2023 filed

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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 19.09.2023 in Crl.M.P. No.6483 of 2023, CNR No.TNKP030155262022 passed by Chief Judicial Magistrate, Chengalpat and the outstanding amount due as per

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Sec.14 order is Rs.65,60,875/-

SA No.515/2023

15.10.2025

Pleadings of the applicant:

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The applicant is the Guarantor and Mortgagor to the Loan availed by Mr. V. Mohan Proprietor of the M/s. India Leathers who had availed the following credit facilities to which the applicant had mortgaged properties as security:

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i. Open Cash Credit for a sum of Rs.40,00,000/ii. MSME/Term Loan I for a sum of Rs.7,00,000/iii. MSME/Term Loan II for a sum of Rs.9,61,000/iv. MSME/Term Loan III for a sum of Rs.4,00,000/- and v. MSME-GECLS/Term Loan IV for a sum of Rs.9,99,000/-

¶25

It is submitted that the borrower has been making remittances of the dues as per the loan agreement promptly without any delay in default and never allowed loan account to become a NPA. The respondent classified the loan account as NPA on 15.06.2021 which is incorrect, false and in violation of RBI guidelines and against Section 2(o) of the SARFAESI Act.

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Further the respondent issued possession notice in mechanical manner without issuing S.13(2) demand notice and possession notice to all the parties may take forcible possession of the secured assets.

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It is contended that the borrower is seriously and sincerely trying to mobilize funds to settle the account with the respondent and seeks breathing time. The respondent did not properly adjust the amounts paid by the borrower and has charged interest and penal interest against the guidelines of RBI.

SA No.515/2023

15.10.2025

It is contented that the Hon’ble Supreme Court in W.P. No.476/2020 Small Scale Industrial Manufacture Association (Regd.) vs Union of India and other had granted the classification of the loan account as NPA upto 23.03.2021. After the dismissal of SLP by the Hon’ble Supreme Court the RBI has issued a circular regarding the Assets Classification on 07.04.2021. Without following any norms in clear violation of the orders of Hon’ble Supreme Court the respondent classified the account as NPA.

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It is evident from Sec.13(4) possession notice that in spite of substantial payment made , the respondent has not given proper credit and have claimed the amount in the possession notice without deducing the payments after S.13[2] demand notice. However, respondent proceeded hastily filed petition under section 14 before the Hon’ble CJM, Chengalpat.

¶33

The applicant states that the schedule mentioned property is a primary security with regard to loan availed by the applicant and as per RBI circular the secured creditor can invoke the provision for ‘Enforcement of Security Interest’, only after the ‘registration of security interest’ in the Central Registry. Further, registration of security interest to be created over movable and immovable properties and right of enforcement of security interest is available only in cases, and respondent bank has not registered the security interest in Central Registry, the registration of security interest is not created over the secured properties in Central Registry, the respondent has initiated measures under the provisions of the Act are null and void.

SA No.515/2023

15.10.2025

The applicant states that the without proper issuing the demand notice and the possession notice and the possession not published in leading newspapers filed S.14 application and respondent has not affirmed Point No(ix) of S.14 of SARFAESI Act in affidavit being filed by the authorized officer of the secured creditor of the sections of the Act, are mandatorily complied before District Magistrate/Chief Metropolitan Magistrate.

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It is contented the classification of the account as NPA is based on the overdue position of the debt/liability, the bifurcation of debt/ liability as enumerated is very essential to ascertain.

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i) Total principal amount outstanding

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ii) Overdue principal amount

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iii) Total interest due

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iv) Overdue interest due.

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v) Total other charges due. vi) Overdue other charges. vii) Total penal interest due.

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viii) Overdue penal interest.

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It is seen that the judgment of High Court of Judicature at Madras in W.P.No.29962 of 2013 and MP No.1 of 2013 dated 06.11.2013 give directions to CJM and other authorities. The Hon’ble CJM is to verify that an application filed by secured creditor shall be accompanied by an affidavit duly affirmed by authorized officer of the secured creditor.

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In the grounds it is contented that the respondent has not issued S.13(2) demand notice dated 15.11.2021 to all the parties prior to S.13(4)

SA No.515/2023

15.10.2025

notice and did not comply with Rule 3A of Act. The respondent has not issued possession notice to all the parties. Hence the classification of the account as NPA is not as per the RBI guidelines and contrary to interim relief granted by Hon’ble Supreme Court of India.

¶51

The demand notice and all necessary statutory details are not available in the demand notice. The bank has not followed the judgment of the supreme court in W.P.No.476/2020 (Small Scale Industrial Manufacture Association (Regd.) -Vs.-–Union of India and others and hence, the classified the loan account as NPA when the stay was in force tile 23.03.2021 is not valid in eye of law. The bank has failed to follow the RBI guidelines issued during pandemic situation and restructuring of the accounts and moratorium to be granted, and hence the loan account was classified as NPA on 15.06.2021.

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It is contented that the Authorized Officer of the respondent has not served or affixed the possession notice. The possession notice has not been published the notice in two leading newspapers has mandated under the Act and Rule 8(2) of security interest rules. The possession notice is against the settled legal principles laid down by Hon’ble Supreme Court. The amount were not crystallized before issuance of notice under S.13(4) of Act.

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The applicant prays to set aside the order passed by Hon’ble CJM, Chengalpattu in Crl.M.P.No.6483 of 2023 dated 19.09.2023.

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Objections of the respondent bank:

SA No.515/2023

15.10.2025

The Respondent bank in their counter submits that the applicant herein is the Guarantor/Mortgagor of the loan facilities in Account Nos.928932587, 6166798653, 6823440603, 6877860964 and 6884654307 availed by M/s. India Leathers rep by its Proprietor Mr. V. Mohan. The repayment were irregular and loan account was classified as NPA on 15.06.2021. The applicant made payments by the applicant are as under and the did not make any payment after the account was classified as NPA.

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Sl.No	. A/c. No.	Book Balance	MOI	MLE/MOX Total
1.	928932587	Rs.22,10,896	Rs.14,22,931	Rs.81,485 Rs.37,15,312
2.	6166798653	ZERO
3.	6823440603	Rs.7,33,387	Rs.2,55,138	- Rs.9,88,525
4.	6877860964	ZERO
5.	6884654307	Rs.7,20,557	Rs.2,72,012	- Rs.9,92,569

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(A/c No.6166798653 closed on 25.02.2022, A/c. No.6877860964 closed on 09.11.2023) in a total a sum of Rs.56,96,406/- and hence the respondent had proceeded under the SARFAESI Act for taking physical possession of the secured asset mortgaged by the applicant herein.

¶61

The applicant has executed Supplemental Memorandum of Deposit of Title Deeds dated 19.08.2019 registered as Doc.No.6820/2019 with SRO, Pammal. After classifying the account as NPA, bank issued demand notice dated 15.11.2021 under sec.13(2) of the SARFAESI Act, and applicant received on 17.11.2021. The demand notice with postal track report of the borrower, guarantor and mortgagor including the applicant are produced.

SA No.515/2023

15.10.2025

The applicant neither taken any steps to regularize the loan accounts nor made any payment for repayment of the dues and the respondent left with no other option except to issued possession notice under S.13(4) of the Act on 05.02.2022 and the applicant had received the possession notice on 08.02.2022. The respondent affixed the possession notice on the secured asset and served the notice on the applicant. The possession notice was also published in the newspapers having vide circulation. The possession notice with acknowledgement cards of the borrower, guarantor and mortgagor including the applicant, affixing the possession notice is produced.

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It is seen that the borrower is India Leathers rep by its Prop Mr. V. Mohan had given a request to the respondent dated 25.02.2022 acknowledged the liability and sought denies time for making payment. The respondent has issued the Sale Notice dated 11.11.2022 fixing the sale on 14.12.2022 and applicant received the same on 12.11.2022. The sale notice was also affixed on the secured asset and served the notice on the applicant.

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The sale notice was also published in newspapers having vide circulation. Acknowledgement cards of the sale notice borrower, guarantor and mortgagor including the applicant, and is affixed on the sale notice, photo showing the personal service on the applicant is produced.

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Since, the payment has not been made in the loan accounts the respondent had filed C.M.P.No.6483/2023 (CNR No.TNKP030155262022)

SA No.515/2023

15.10.2025

before special Judge/Chief Judicial Magistrate, Chengalpat and order dated 19.09.2023 appointed Mr. C. Krishnachander as Advocate commissioner to take physical possession to hand over the respondent.

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Further, bank denies the allegation that the secured asset was not registered with the Central Registry and it was registered as 06.08.2013 with asset Id is 200005482364 and security interest id is 490005489708, respondent has followed the rules laid down under the Act and had not deviated any rules.

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The applicant has not made out any prima facie case to get an order of stay granted by this Hon’ble Tribunal. However, the demand notice was issued on 15.11.2021 and possession notice was issued on 05.02.2022. The applicant had not taken any initiative to settle the loan dues and in indulging in adopting the grabbing time. Hence the respondent bank prays for dismissal of the SA.

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

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case

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The applicant is the Guarantor/Mortgagor to the loan availed by M/s. Indian Leathers represented by its Mr. V. Mohan Proprietor. The applicant has deposited the title deeds of the property on 19.08.2019 as security and the mortgage is registered before the central registry dated 06.08.2013 which is produced by the respondent at pg.4. In fact the applicant does not dispute the availing of the facilities and the mortgage of the property including the default in the repayment. Due to continuous default in the

SA No.515/2023

15.10.2025

repayment, the loan account of the applicant was classified as NPA on 15.06.2021.

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The specific contention raised is that account could not be classified as NPA on 15.06.2021 in view of the judgment of the Hon’ble Supreme Court in Small Scale Industrial Manufacture Association (Regd.) –Vs.- Union of India. In this case the association sought a complete weaver of interest, extension of moratorium period and other sector specific reliefs which the Supreme Court declined to extend the moratorium period beyond 31.08.2020.

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Admittedly the classification of the account as NPA is on 15.06.2021 where the period of moratorium had lapsed on 31.08.2020. Hence the contention that the classification of the account as NPA is against the Judgement of Hon’ble Supreme Court during pandemic does not sustain.

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The respondent have issued the Sec.13(2) Demand Notice claiming an amount of Rs.65,60,875/- due as on 14.11.2021 along with other charges. The applicant have received the demand notice as per the Acknowledgement card and Postal Track Record produced at Pg.26-30 In spite of receipt of Sec.13(2) demand notice as the borrower and the guarantor did not liquated the liability, the respondent issued the Sec.13(4) possession notice on 05.02.2022 and Acknowledgement Cards produced at pg.33-37, and affixture of possession notice produced at pg.38 and 39 evidences due service of possession notice and possession notice is also

SA No.515/2023

15.10.2025

published in two newspapers one in Tamil Dhinamai and another one in The New Indian Express dated 07.02.2022.

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It is an admitted fact that applicant has not challenged the Sec.13(4) possession notice dated 05.02.2022 within the period of 45 days as required under section 17(1) of the SARFAESI Act. It seen that the respondent has produced the copies of the S.13(2) demand notice and S.13(4) possession notice and its acknowledgement cards for due compliance of the measures taken. As the applicants failed to repay the entire outstanding amount the bank has proceeded and approached the CJM, Chengalpat in u/s 14 of the SARFAESI Act. The Hon’ble CJM after perusal of the application and the loan documents produced by the respondent bank respondent have allowed the S.14 application on 19.09.2023.

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It seen that sale notice dated 11.11.2022 and the acknowledgement cards produced at pg.45-50 and photographs are produced at pg.51 and 52, and paper publication of the sale notice published in two newspapers.

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The Ld. Magistrate after due verification of the documents and the pleadings in Sec.14 application have allowed the S.14 petition filed by the secured creditor by directing the advocate Mr. C. Krishnachander, En. No.878/2013, has the advocate commissioner to inspect the petition mentioned property, take inventories if necessary and thereafter take possession of the petition mentioned property and hand over the property to the petitioner/bank. Ld. Advocate commissioner the Tahsildar

SA No.515/2023

15.10.2025

pallavaram directed to assist the Ld. Advocate commissioner to identify the petition mentioned property by deputing competent revenue and survey officials.

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The Inspect of police, Sankar Nagar P.S is directed to accord necessary police protection for taking possession of the petition mentioned property. The remuneration of the advocate commissioner is fixed at Rs.20,000/- to be credited in to bank A/c of advocate commissioner in A/c. No.30690970137 by the petitioner within one week excluding the date of this order.

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Thus it is evident that the Ld. Magistrate on examination of the pleadings in the S.14 application which is supported by the documents have passed an order dated 19.09.2023 directing the advocate commissioner to take the possession of the property. Though the applicant have filed the present SA impugning the Sec.14 order dated 19.09.2023 passed by Ld. CJM, Chengalpat has not pointed out any illegality in the measures taken by the respondent herein.

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On the other hand, though the statuary notices, the demand notice dated 15.11.2021 and possession notice dated 05.02.2022 is issued the applicant and has waived right to raise any contentions with regard to sec.13(4) possession notice within the period of 45 days. Hence any contentions to sec.13(4) was barred by limitation.

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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

SA No.515/2023

15.10.2025

High Courts in various judgments has held that the power of Designated Court under Section 14 SARFAESI Act, 2002 is ministerial and nonadjudicatory 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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Furthermore, the Hon’ble Supreme Court in the matter of Kotak Mahindra Bank vs Girnar Corrugators Pvt. Ltd. & Others , 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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The Hon’ble Bombay High Court in the matter of Phoenix ARC Pvt.

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Ltd. Vs. The State of Maharashtra has 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 above Bombay High Court judgment has since been confirmed by the Hon’ble Supreme Court by its judgment 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

SA No.515/2023

15.10.2025

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”.

¶112

Additionally, Section 14(3) of the SARFAESI Act statuses 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. This provision ensures that the authority of these officials in enforcing security interests is final and not subject to further review.

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39. T hus, the Sec.14 order passed by the Ld. Section 14 order dated 19.09.2023 in Crl.M.P. No.6483/2023 passed by CJM, Chengalpat is after due consideration of the application, affidavit in support of compliance of procedures along with documents is an execution Order issued where no adjudication is required. The Order is passed considering the due compliance of the provisions of the S. 14 [i-ix].

¶114

On examination of pleadings and documents produced by respective parties, the Tribunal comes to conclusion that the respondent bank as secured creditor has initiated measures under the Act after classifying the account as NPA.

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Consequent to classification of account as NPA has issued S.13[2]

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demand notice followed by possession notice and have complied all the procedures as contemplated under the Act and the Rules with supporting

SA No.515/2023

15.10.2025

documents. Thus it is held that the demand notice u/s S.13[2] demand notice dated 15.11.2021 and S.13[4] possession notice dated 05.02.2022 are held as valid notices issued under the Act.

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For the foregoing reasons, the present SA is dismissed. Interim Order granted, if any stands vacated, pending IAs are disposed of in terms of this final order. No order as to cost. Sd/-

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

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( Dictated to Steno (Suriya), transcribed by him, corrected, signed and pronounced by me on this the 15^th day of October, 2025)

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ANNEXURES

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LIST OF DOCUMENTS PRODUCED BY THE APPLICANT

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Sl.	Description of Documents	Documents
No.		No.
1.	Statement of Accounts.	A-1
2.	Advocate Commissioner Notice 03.10.2023.	A-2
3.	Copy of impugned Order passed in	A-3
	Crl.M.P.No.6483 of 2023 by Hon’ble Chief
	Judicial Magistrate, Chengalpat 19.09.2023.

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LIST OF DOCUMENTS PRODUCED BY THE RESPONDNET

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Sl. No.	Description of Documents	Documents No.
1.	Authorisation letter 22.10.2022.	R-1
2.	Registration of secured Asset with Central Registry 06.08.2013.	R-2
3.	Supplemental Memorandum of Deposit of Title Deeds 19.08.2019.	R-3
4.	Notice under Section 13(2) with Ack. Card/ Ack card and Postal Track Record 15.11.2021/17.11.2021.	R-4
5.	Notice U/s.13(4) with Acknowledgement Cards 05.02.2022/08.02.2022.	R-5
6.	Photographs	R-6
7.	Paper Publication of Possession Notice	R-7
8.	Sale Notice 11.11.2022.	R-8
9.	Acknowledgement Cards 12.11.2022.	R-9

SA No.515/2023

15.10.2025

10.	Photographs	R-10
11.	Paper Publication	R-11
12.	Order in C.M.P.No.6483/2023 dated 19.09.2023.	R-12
13.	Certified Statement of Account 27.11.2023.	R-13

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SCHEDULE OF PROPERTY

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All that piece and parcel of land and building, measuring Acre 0.03 Cents(1308 Sq.ft.) in Gandhi Street, Comprised in Survey No.290/3, situated of old Village Nos.163, 130, New Village No.24, Thiruneermalai Village in Pallavaram Taluk, Chengalpattu District.

¶135

Bounded on the:

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North By : Property belonging to Mr. Kuppan., South By : Property belonging to Mr. Seit., East By : Street

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West By : Property belonging to Mr. Krishnasamy

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Within the Registration District of Chennai – South and Sub – Registration District of Pammal.

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This Property lies within the Town Panchayat of Thiruneermalai.

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

Mrs v. Jagatha Wife of Late D Vinayagam v Indian Bank

Case brief

What is this about?

What did the court decide?

Mrs v. Jagatha Wife of Late D Vinayagam v Indian Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

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