The Debt Recovery Tribunal dismissed the applicant's security application challenging a property auction. The court held that the applicants lost their right to redemption after the auction notice publication and supported the bank's procedural compliance.
Sale held on 23.08.2023 and Sale Certificate issued are ruled valid; Security Application dismissed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
SA No.517/2023
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15.07.2025
IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI
Dated this the 15th day of July, 2025
Present: SMT. S.V. GOWRAMMA
Presiding Officer
SA No. 517 of 2023
Shruthi Enclave, Ganamoorthy Nagar, Ambattur, Chennai – 600 057. ….Applicants
-Vs-
The Authorized Officer, Indian Bank, (IFSC: IDIB000A01) Alwarpet Branch, No.9, Eldams Road, Alwarpet, Chennai – 600 018.
(Nodal Indian Bank, IFSC – IDIB000C032 Ethiraj Salai Branch) ….Respondent
Counsels on record / appeared:
Counsel for Applicant : M/s. Kavitha Singuluri Counsel for respondent : M/s. P. V. Murlidhar
ORDER ON SA 517/2023
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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3. Pleadings of the applicant:
3.1 The 1st applicant is the borrower and the 2nd applicant is the coborrower and stood as guarantor for the loan availed by them. The applicants availed Home Loan of Rs.30,00,000/-, which was disbursed on 28.11.2019, has deposited his property situated at Flat No.F2, in the First Floor, at “Prasanna Homes”, Plot No.681, Ram Nagar, 6th Main Road, Madipakkam, Chennai vide Sale Deed dated 30.11.2012 registered as Doc.No.5544/2012.
3.2 The mortgaged property was let out for lease to Mr. Samudhram for the last 6 years and the applicants didn’t received any Section 13(2) Demand Notice, Section 13(4) Possession notice nor any affixture of the Possession notice. The Sale notice dated 03.08.2023 and fixing the sale on 23.08.2023 is also not issued by the respondent.
3.3 Applicants were shocked and surprised to hear that the property was sold for the highest bidder through auction dated 23.08.2023 for an amount of Rs.30,10,000/-, applicants got knowledge about the sale only when seeing the Newspaper Publication of Dinamani dated 04.08.2023 and also observed from the statement of accounts dated 20.09.2023 that an amount of Rs.30,10,000/- is credited into the account.
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3.4 The outstanding amount due as per the Sale notice dated 03.08.2023 is Rs.52,11,576/- due as on 27.07.2023 and the reserve price fixed is Rs.30,10,000/- which is very lesser amount when compared to the outstanding amount. In the grounds it is contended that the Section 13(2) Demand Notice is not issued either at schedule property or in their residence.
3.5 It is seen that the Section 13(4) Possession notice is not issued nor affixed on the schedule property. Further the Sale notice dated 03.08.2023 is also not issued by the Respondent bank.
3.6 It is pertinent to note that the applicant has filed a Memo dated 17.10.2023 submitting that the applicants are ready to pay the entire sale consideration of Rs.30,10,000/- by way of DD dated 16.10.2023 bearing No.503778.
3.7 In pursuant to that applicant has filed another Memo dated 19.02.2024 submitting that they are willing to pay the Sale consideration of Rs.30,10,000/- by way of DD dated 16.10.2023 bearing No.503778
and the DD is also received by bank. The applicant also produced the postal track report of consignment which reflects that the item was delivered and also produced a copy of DD. Hence the applicant prays to set aside the Sale held on 23.08.2023 in pursuant to the Sale notice dated 03.08.2023 and thus render justice.
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4. Objections of the respondent bank:
4.1 The Respondent bank has filed a counter inter alia contending that the averments and allegations made by the applicant is baseless and applicant has approached this Tribunal with unclean hands. It is admitted by the applicants they availed a Home loan of Rs.30,00,000/- and the amount was sanctioned on 28.11.2012, which is secured by a Mortgage dated 03.01.2013.
4.2 Since the borrower and co-borrower defaulted and failed to honor in the repayments, the home loan account of the applicants were classified as NPA on 30.04.2018, the Respondent bank has proceeded further and issued Section 13(2) Demand Notice dated 02.05.2018 and the Demand Notice was acknowledged by M/s Neha for the address mentioned in the application.
4.3 The applicants didn’t comply with the notice nor raised any objections to the demand made nor made any representation even after 60 days. The Respondent bank has proceeded further and issued Section 13(4) Possession notice dated 13.07.2018 and the Possession Notice is acknowledged by M/s R.Samuktha.
4.4 Further the Section 13(4) Possession notice is also published in two Newspapers, one in “Indian Express” (English) and another in “Dhina Mani” (Tamil) both dated on 17.07.2018 and the Possession Notice is also affixed on the property. Since the statutory notices was served to applicants and they failed to regularize the account, the Respondent bank
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has issued Sale notice dated 03.08.2023 fixing the sale on 23.08.2023, the Sale notice returned unserved and the applicant failed to collect it from Postal department.Since it is a re-sale, 15 days Sale notice is also issued to the applicants.
4.5 As the applicants didn’t regularize the loan account, even after the issuance of the statutory notices, the Respondent bank has initiated the procedures and sold the property to the Successful bidder Mr. Thinakaran K S/o Mr. Kalathi Nadar, who paid an amount of Rs.30,00,000/- and Sale Certificate is also issued to the Auction purchaser.
4.6 The respondent bank denies the allegation made by the applicants, that they only came to know about Auction on 20.09.2023 and a sum of Rs.30,10,000/- was credited, further the statement of account clearly reflects that the amount was credited on 08.09.2023. Hence the allegation that applicant came to know about Auction on 20.09.2023 and filed the present SA on 25.09.2023 cannot sustainable.
4.7 The respondent bank has followed all the procedures for recovery of public money and the present SA is filed only with the intention to drag on the proceedings and the present SA has no legs to stand, hence the respondent bank prays for dismissal of the present S.A
Heard both sides of the Counsels and perused the records of the case.
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5.1 It is an admitted fact by the both the applicants and Respondent bank that the 1st applicant is the borrower and the 2nd applicant is the coborrower, both the applicants have approached the Respondent bank and had availed a Home Loan of Rs.30,00,000/- and the amount was sanctioned on 28.11.2012. In fact there is no dispute about the creation of Mortgage of the property as security towards the Home loan availed by the applicant vide mortgage deed dated 03.01.2013.
5.2 Since the applicants failed to honor the terms and conditions of the Loan agreement and defaulted in repayment, the loan account of the applicants were classified as NPA on 30.04.2018. After classifying the account as NPA, the Respondent bank has proceeded under the Act and issued Section 13(2) Demand Notice dated 02.05.2018, calling upon the borrower and co-borrower to pay an outstanding amount of Rs.31,22,660/- due as on 01.05.2018. The Section 13(2) Demand Notice contains the clear description of the Mortgaged property and intimated about Section 13(13) and the Loan amount availed by the applicants.
5.3 The Section 13(2) Demand Notice was sent through RPAD to the Borrower and Co-borrower which is Acknowledged by M/s Neha for the address mentioned in present Application, which is evident from the Acknowledgement cards produced by the bank at page No.8 and the Demand Notice is also sent to M/s Prasanna Homes which returned with endorsement “No such person”.
5.4 It is evident from records that Section 13(2) Demand Notice is received by M/s Neha and applicants failed to comply with the Demand
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made nor raised any objections, representation with regard to the demand made by the Respondent bank. The Respondent bank as a secured creditor after 60 days, issued Section 13(4) Possession notice dated 13.07.2018 and the Possession notice is also sent through RPAD to the Borrower and Co-borrower, which is received by M/s R. Samuktha and the Possession is also sent to M/s Prasanna which came unserved with postal endorsement as “left” as per postal acknowledgement produced at page 13 of the bank typeset.
5.5 Further as per the procedures, the Respondent bank has published the Possession Notice in two Newspapers, one in “Indian Express” (English) and another in “Dhina Mani” (Tamil) both dated on 17.07.2018. The Possession Notice is also affixed on the property, paper publications and Photograph of affixture is evident from the documents produced by the bank at page No.16 to 18.
5.6 The Respondent bank has proceeded further and issued Sale notice dated 03.08.2023 fixing the sale on 23.08.2023, the Sale notice is also sent through RPAD to the applicants which returned unserved with an endorsement ‘unclaimed returned to sender”. The applicant have refused to receive the notices which is deemed service. The applicant has not bothered to check or collect the Sale notice from the postal department though the bank had intimated about the Sale notice dated 03.08.2023.
5.7 The records of the case reflects that the Respondent bank as a secured creditor has classified the account as NPA due to default in repayments dated 30.04.2018. After classifying the account as NPA,
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Respondent bank has issued Section 13(2) Demand Notice dated 02.05.2018 and it is duly received by M/s Neha. As the applicant failed to comply with demand made nor raised any objection, Respondent bank has proceeded further and issued Section 13(4) Possession notice dated 13.07.2018 and the same is also received by M/s R. Samuktha. The Possession notice is also published in two Newspapers, one in “Indian Express” (English) and another in “DhinaMani” (Tamil) both dated on 17.07.2018. Further, the Respondent bank has issued Sale notice dated 03.08.2023 fixing the sale on 23.08.2023 and have established due compliances of the procedures in issuing the statutory notices as prescribed under the Act and the Rules.
5.8 The property was purchased by the Successful bidder Mr. Thinakaran K S/o Mr. Kalanithi Nadar, for an amount of Rs.30,10,000/and the Sale Certificate is also issued to the Auction Purchaser.
5.9 It is pertinent to mention though the Applicants has filed two Memo‘s dated 19.02.2024 and 17.10.2024 expressing their willingness to redeem the property by paying the entire sale consideration. The applicant had produced the DD dated 16.10.2023 for an amount of Rs.30,10,000/- towards sale consideration. The respondent bank has clarified that DD produced by the application had expired and the same was received on 12.01.2024 which is after the sale was held on 23.08.2023.
5.10 The applicant has not redeemed the property before the auction sale in spite of receipt of sale notice. It is apt to mention that the
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redemption clause is mentioned in S.13[4] possession notice and the applicant filed to redeem the property after the issuance of possession notice. Further the right of redemption is available till the publication of sale notice in the newspaper. The applicant after waived his right of redemption has presented the DD which would not sustain.
5.11 The Tribunal places reliance on the judgment of the Hon’ble Supreme Court in case titled “Celir LLP versus Bafna Motors (Mumbai) (P) Ltd.” considered the right of redemption under S.13[8] after the amendment has held that borrower's right of redemption of mortgage under the SARFAESI Act will get extinguished once the bank publishes an auction notice for the sale of the secured asset and further held that t he failure on the part of the borrower in tendering the entire dues before the publication of the auction notice as per Section 13(8) of the SARFAESI Act constituted an "extinguishment of right of redemption of mortgage.
5.12 The applicant having lost right of the redemption have frustrated the matter without any bonfires which is highly depreciated. Accordingly, the Tribunal concludes the measure taken by the secured creditor are in accordance in issuing Section 13(2) Demand Notice dated 02.05.2018 and Section 13(4) Possession notice dated 13.07.2018; sale notice dated 03.08.2023; sale held on 20.09.2023;and sale certificate issued re valid notices and procedures are held as valid as contemplated under the Act and Rules made there under.
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15.07.2025
Sd/- (S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI
(Dictated to Steno (Mogesh), transcribed by him, corrected, signed and pronounced by me on this the 15th day of July, 2025)
ANNEXURES
LIST OF DOCUMENTS PRODUCED BY THE APPLICANT
| Sl. No. |
Description of Documents | Page No. |
|---|---|---|
| 1. | Application filed under Section 17(1) of Securitisation and Reconstruction Financial Assets and Enforcement of Security Interest Act. 25.09.2023 |
A-1 |
| 2. | Statement of Accounts 20.09.2023 | A-2 |
| 3. | Caveat filed by Respondent 09.08.2023 | A-3 |
| 4. | Sale Notice downloaded from website 03.08.2023 |
A-4 |
| 5. | Photo of the schedule property | A-5 |
| 6. | Paper publication of Sale notice under SARFAESI Act in Tamil daily Newspaper Dinamani 04.08.2023. |
A-6 |
| 7. | Vakalat | A-7 |
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LIST OF DOCUMENTS PRODUCED BY THE RESPONDNET
| Sl. No. |
Description of Documents | Page No. |
|---|---|---|
| 1. | Counter filed by the Respondent bank | R-1 |
| 2. | Section 13(2) Demand Notice 02.05.2018 | R-2 |
| 3. | Acknowledgement Card and Returned Cover | R-3 |
| 4. | Section 13(4) Possession Notice 13.07.2018 | R-4 |
| 5. | Acknowledgement Cards and Returned Cover 25.09.2018 |
R-5 |
| 6. | Paper Publication in English New Indian Express 17.07.2018 |
R-6 |
| 7. | Paper Publication in Tamil Dhina Mani 17.07.2018 |
R-7 |
| 8. | Affixture of 13(4) Possession Notice | R-8 |
| 9. | Sale Notice 03.08.2023 | R-9 |
| 10. | Returned cover | R-10 |
| 11. | Paper Publication English New Indian Express 04.08.2023 |
R-11 |
| 12. | Paper Publication Tamil in Dhina Mani 04.08.2023 |
R-12 |
| 13. | Affixture of Photos. | R-13 |
SCHEDULE OF PROPERTY
All that piece and parcel of land with building bearing Plot No.681, measuring an extent of 576 sq.ft undivided share of land out of 4608 sq.ft., together with flat measuring an extent of 1080 sq.ft., built up area (including of all common areas) in the building complex known as “Prasanna Homes” bearing Flat No.F2, in the 1st Floor, Plot No.681, Ram Nagar, 6th Main Road, Madipakkam, Chennai – 600 091 comprised in Survey No.11. Paimash No.1274, Approved layout No.L.P.D.M/D.D.T.P. No.329/73, situated at Madipakkam Village, Tambaram Taluk, presently Sholinganallur Taluk, Kancheepuram District, with all the fixturres and fittings, electrical installations, TNEB Service Connections along with its security deposits and service connections charges and all the common
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amenties provided thereon and all other appurtenances whatsoever appertaining thereto. Bounded on the:
North by: Plot No.680,
South by: 6th Main Road,
East by : Plot No.683,
West by : Plot No.679.
Situated within Registration District of Chennai south and sub registration district of velachery.
Sd/(S.V.GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI
3 issues framed by the court
Whether the applicants satisfied their right of redemption before the publication of the auction notice under the SARFAESI Act.
Whether the statutory notices issued by the secured creditor were valid and complied with the provisions of the Act.
Whether the Sale held and Sale Certificate issued by the Respondent Bank should be set aside.
Colour shows how this judgement treated each authority
Celir LLP versus Bafna Motors (Mumbai) (P) Ltd.Relied on¶76
Celir LLP versus Bafna Motors (Mumbai) (P) Ltd.
3 provisions across 1 enactments
K. Murali
M. Indumathi
The Authorized Officer, Indian Bank
S.V. Gowramma
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
