Dismissed

Durga Catering Service Rep by Venkatakrishnan v. Fullerton India Credit Company

DRT9 Dec 2025SA/518/2022

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal dismissed the applicant's Securitization Application challenging the validity of Sec. 13(2) Demand Notice, Sec. 13(4) Possession Notice, and the Sec. 14 order passed by the CJI Magistrate. The court held that the notices were validly issued and the Sec. 14 order was ministerial and non-adjudicatory.

What did the court decide?

The present Securitization Application is dismissed. Interim Order granted, if any stands vacated, pending IAs are disposed of in terms of this final order.

Durga Catering Service Rep by Venkatakrishnan versus Fullerton… — Money Laundering | DRT (2025)

SA No.518/2022

09.12.2025

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 09^th day of December, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SA No. 518 of 2022

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M/s Durga Catering Service, Rep by its Proprietor, Mr. VenkataKrishnan, No.1A, Durga Street, Indra Nagar Main Road, Old Perungalathur, Chennai -600 063. ….Applicant -Vs-

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M/s Authorized Officer, Fullerton India Credit Company Limited, Registered Office: Megh Towers, 3^rd Floor, Old No.307, New No.165, Poonamallee High Road, Maduravoyal, Chennai -600 095. ….Respondent

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Counsels on record / appeared:

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Counsel for Applicant : M/s. RKM Suresh Counsel for respondent : M/s. V. Balasubramani

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ORDER ON SA 518/2022

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The present Securitization Application [SA] is filed on 28.11.2022 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 Sec.14 order dated 22.08.2022 in C.M.P. No.7651 of 2022 passed by Chief Judicial Magistrate, Chengalpet

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and the outstanding amount due as per Sec.14 order is Rs.56,96,326/-

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Pleadings of the applicant:

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The borrower M/s Durga Catering Services, represented by its Proprietor M. Venkatkrishnan are in Catering business had applied for house mortgage loan, and an Rs.42,62,132/- was sanctioned on 29.07.2017 under Loan A/c.No.173101310212358 and deposited the title deed bearing Dco.No.2359/2008 dated 07.05.2008 pertaining to Plot No.28 as mentioned in the schedule of the present SA.

¶21

It is contended that the family of M. Venkatakrishnan, are residing in the schedule property for many years. In the loan sanction order issued by the respondent Durga Catering Service is mentioned as Borrower, M. Venkatakrishnan (Proprietor and tile holder of the property) is mentioned as Co-Borrower-1 and his wife, V. Kalpana is mentioned as Co-Borrower-2.

¶22

The applicant submits that respondent bank instead of paying the sanctioned loan amount of Rs.42,62,132/- had only paid Rs.35,61,428/- to the applicant. The applicant never gave consent for deduction an amount of Rs.7,00,704/- from sanctioned loan amount in spite of several requests mortgage agreement was also not given to the applicant.

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Further, the additional loan of Rs.9,37,213/- was also sanctioned by the respondent on 31.10.2018 to the applicant vide Loan A/c.No.173101310381627. However, only a sum of Rs.8,98,025/- was paid by the respondent towards additional loan. The applicant never gave consent for deducting an amount of Rs.39,188/- from the sanctioned loan amount, the details of which is also not given to the applicant in spite of

SA No.518/2022

09.12.2025

several requests to that effect. The applicant has paid a sum of Rs.18,56,329.19p towards instalments of original loan upto 16.12.2020. The applicant has also paid Rs.2,71,578.75/- towards instalments of additional loan upto 16.12.2020.

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The applicant was repaying both the loans with great hardship as per demand till February 2020, however monthly statements were not sent to the applicant till September 2020. Due to Corona Pandemic, there was no catering business of the applicant from March 2020, but there was harassment from the respondent for repayment of loan.

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The respondent had charged exorbitant interest on the unpaid amount of Rs.7,00,704/- from the original loan and unpaid amount of Rs.39,188/- from additional loan. Hence the applicant wanted to close the loan from other banks who are charging lesser interest and caused legal notice dated 19.10.2020 for furnishing statement of account. Thereafter two statements of account were furnished by the respondent for the period ending 16.12.2020.

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It is contended that as per the statement of accounts, the original loan of Rs.42,62,132/- has to be repaid in 169 monthly instalments at the rate of Rs.63,449/- per month at the rate of interest Rs.15.25% (Retail PLR of 19%) to be payable under RECS, and another additional loan of Rs.9,37,213/- has to be repaid in 157 monthly instalments at the rate of Rs.15,700/- at the floating interest rate of Rs.17.00% (Retail PLR of 19%) to be payable under RECS.

SA No.518/2022

09.12.2025

Due to Pandemic, the applicant could not pay instalments regularly from March, 2020 since there was heavy loss in the applicant business. Even during moratorium period from March 2020 to August 2020, there was severe harassment from the respondent for payment of instalments. The respondent sent Legal Notice dated 25.11.2020 under Sec.25 of the Payment and Settlement System Act, for payment dues including interest, for which, the applicant sent legal notice dated 26.12.2020 to respondent a copy of mortgage deed, printed receipts for the amount collected and the copy of insurance policy and for calculation of interest on the actual amount disbursed. But the required particulars were not furnished by respondent company in their reply notice dated 05.01.2021.

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Hence, the applicant sent complaint to Ombudsman for Non-Banking Financial Corporations at RBI, Chennai but no enquiry was conducted but the complaint was closed. Hence, the applicant sent petitions dated 25.03.2021 to the Ministry of Finance, New Delhi requesting them to direct the respondent company to collect interest on the actual amount of loan disbursed to the applicant, for which a reply was received stating that they have forwarded the applicant’s representation to Nodal Office of DFS, New Delhi.

¶36

The respondent did not property adjust the amounts paid by the borrower, have charged interest and penal interest against the RBI guidelines. The classification of loan account as NPA by respondent is incorrect. The respondent has issued Sec.13(4) Possession Notice calling upon the applicant to pay an amount of Rs.56,96,326/- by stating that they

SA No.518/2022

09.12.2025

have taken Possession on 31.08.2021. On receipt of Possession Notice, applicant had challenged the same before this Tribunal in SA No.202 of 2021, which came to be dismissed vide order dated 09.03.2022. Thereafter, respondent had issued another Possession Notice dated 16.11.2022, received by applicant on 17.11.2022.

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It is submitted that all of a sudden the respondent had approached Ld. CJM, Chengelpet and obtained order in Crl.M.P.No.7651 of 2022 by Ld. CJM at chengelpet, dated 22.08.2022 executed the warrant on 16.11.2022. The Advocate Commissioner appointed by the CJM in Crl.M.P.No.7651 of 2022 on 16.11.2022 informed the applicant to vacate the property as they were going to take physical possession of the property without any further time and informed that that they have affixed many notices.

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In the grounds it is contended that the Authorized Officer of the Bank had not stated that he had apprehended obstruction to taking physical possession of the property. The Authorized Officer had claimed high interest in the Demand Notice which is exorbitant and untenable and the Demand Notice is not served to the borrower.

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It is contented that the house constructed on the secured asset has not been mentioned in the Possession Notice dated 31.08.2021 which is contrary to the provisions of law. The applicant prays to set aside the order passed by the Hon’ble CJM, Chengelpet in Crl.M.P.No.7651 of 2022 dated 22.08.2022.

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09.12.2025

Objections of the respondent bank:

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The respondent has filed the counter inter alia contending that the applicant had approached the respondent for availing home loan by mortgage of property vide an application dated 16.09.2017. The respondent considered their request and thus a sum of Rs.42,62,132/- was disbursed and borrower had executed loan agreement vide A/c.No.173101310212358 dated 29.09.2017 agreeing to repay the loan in 169 EMI’s of Rs.63,449/- per month. The applicant had also availed additional loan for an amount of Rs.9,37,213/- and executed a Loan Agreement vide Loan A/c.No.173101310381627 dated 31.10.2018, agreeing to repay the loan in 157 EMI’s of Rs.15,700/- per month and also executed other relevant documents in favour of respondent.

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Further, the applicant have also executed MODT dated 05.10.2017 vide Doc.No.5490/2017 in respect of Loan No.173101310212358 and subsequently on 12.11.2018, vide document No.6539/2018 in respect of loan A/c.No.173101310381627.

¶50

The applicant failed to adhere to the terms of the loan agreement and defaulted in payments of monthly installments. Since, the applicant committed default in payment of installments the respondent had classified the loan accounts as NPA on 31.12.2020 under section 2(o) of the Act and issued Sec.13(2) Demand Notice issued 07.06.2021 calling upon the applicant to discharge their liabilities within 60 days from the date of notice and same was also published in “Trinity Mirror” English and “Makkal Kural”

SA No.518/2022

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Tamil both dated 29.06.2021. The notice sent to the applicant was delivered and postal track consignment is enclosed. Hence, the notice was duly served on the applicant.

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It is further submitted that that secured creditor upon default by the borrower after statutory notice under Sec.13(2) of the Act are entitled to proceed against the borrower under Sec.13(4) of the Act. The respondent issued Sec.13(4) Possession Notice dated 31.08.2021 which is also published in “Trinity Mirror” English and “Makkal Kural” Tamil both dated 02.09.2021.

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It is submitted that the applicant has entered into the loan agreement and agreed to the terms and conditions and the respondent have acted as per the loan agreement. The applicants had failed to pay the defaulted loan amount in spite of several requests and repeated reminder. Hence, the loan account has become NPA on 31.12.2020.

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It is submitted that the applicant has obtained two loans from the respondent and before obtaining the loan all terms and condition were explained in Tamil (Vernacular Language) and in English to the applicant. The applicant had approached the Tribunal with unclean hand with all these false allegations. The respondent holds MOTD over the Schedule property as such and are entitled to proceed further. There are no infirmities in the procedure adopted by the respondent bank and hence the respondent bank prays for dismissal of the SA.

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09.12.2025

Heard both sides of the Counsels and perused the records of

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the case

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On perusal of records, the applicant is the borrower has availed a Loan for a sum of Rs.42,62,132/- vide A/c.No.173101310212358 Sanction on 29.09.2017 agreeing to repay the loan in 169 EMI’s of Rs.63,449/- and another loan for a sum of Rs.9,37,213/- vide A/c.No.173101310381627 sanctioned on 31.10.2018 in agreeing to repay the loan in 157 EMI’s of Rs.15,700/-. To secure the credit facilities availed, applicant has executed the Memorandum of Deposit of Title Deeds dated 05.10.2017 vide Doc.No.5490/2017 which is produced at Pg.7-12 of counter. Subsequently applicant executed another Memorandum of Deposit of Title Deeds dated 12.11.2018 vide Doc.No.6539/2018 which is registered in the office of the Sub Registrar Padappai in favoring the respondent bank.

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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 repayment, the loan account of the applicant was classified as NPA on 31.12.2020.

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The respondent had issued the Sec.13(2) Demand Notice dated 07.06.2021 claiming an amount of Rs.56,96,326/- due as on 08.05.2021 along with other charges. The respondent have sent the demand notice by RPAD as per the Postal Receipts produced at Pg.28 of counter and Postal Tracking report and Acknowledgement not filed. However, the Demand Notice is published in two newspapers one in English “Trinity Mirror” and

SA No.518/2022

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another one in Tamil “Makkal Kural” both dated 29.06.2021, and the affixture of Demand Notice is produced at pg.31 and 32, it is evident that the applicant have not received the demand notice, hence the notice is affixed and published in two newspaper as required under Rule 3 of the SI Rules. Thus the issuance of Sec.13(2) demand notice to the borrower and the guarantor are compiled as per the procedures under the Act and Rules made thereunder.

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The respondent issued the Sec.13(4) Possession Notice on 31.08.2021, sent the by RPAD as per the Postal Receipts produced at Pg.35 of counter and Postal Tracking Report and Acknowledgement not filed. The Possession Notice is published in two newspapers one in English “Trinity Mirror” and another one in Tamil “Makkal Kural” both dated 02.09.2021 and affixture of Possession Notice produced at pg.38 evidences due service of Possession Notice.

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It is an admitted fact that applicant has not challenged the Sec.13(4) Possession notice dated 31.08.2021 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 paper publication and affixtures 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, Chengelpat in u/s 14 of the SARFAESI Act. The Ld. CJM after perusal of the application and the loan documents produced by the respondent bank respondent have allowed the S.14 application on 22.08.2022.

SA No.518/2022

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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. S. Robert, 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 same to the petitioner/bank. Ld. Advocate Commissioner the Tahsildar Tambaram directed to assist the Ld. Advocate Commissioner to identify the petition mentioned property by deputing competent revenue and survey officials.

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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 22.08.2022 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 22.08.2022 passed by Ld. CJM, Chengelpat has not pointed out any illegality in the measures taken by the respondent herein.

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On the other hand, the statutory notices, the Demand Notice dated 07.06.2021 and Possession Notice dated 31.08.2021 are issued to the applicant are in accordance to law. Hence demand notice under S.13[2] and possession notice under S.13[4] are held as valid notices.

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The contention that the respondent has not disbursed full sanctioned amount and harassed the applicant for payment of instalments and issued. Legal Notice dated 25.11.2020 under Sec.25 of the Payment and

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Settlement System Act, for payment dues including interest, to which the applicant sent legal notice dated 26.12.2020 and further sent complaint to Ombudsman for Non-Banking Financial Corporations at RBI, Chennai petitions dated 25.03.2021 to the Ministry of Finance, New Delhi requesting them to direct the respondent company to collect interest on the actual amount of loan disbursed to the applicant, for which a reply was received stating that they have forwarded the applicant’s representation to Nodal Office of DFS, New Delhi.

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It is matter of record and admitted fact that the applicant availed loan and executed loan documents agreeing to repay as per the sanctioned terms and at the agreed rate of interest. The loan is secured by mortgage which constitute a secured asset under the Act. Due to default in repayment, the respondent has enforced the security available to them under the Act and have issued the statutory notices as required under the Act. After availing the loan without any grievances, the applicant cannot contend that the full loan was not disbursed, even the availed loan amount is to be repaid as per the terms of the loan documents. Hence the contention fails.

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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 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

SA No.518/2022

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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

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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

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raise objections in the proceedings Under Section 17 of the SARFAESI Act, before Debts Recovery Tribunal”.

¶98

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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36. T hus, the Sec.14 order passed by the Ld. Section 14 order dated 22.08.2022 in C.M.P. No.7651/2022 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].

¶100

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.

¶101

Consequent to classification of account as NPA has issued S.13[2] Demand notice followed by Possession notice and have complied all the procedures as contemplated under the Act and the Rules with supporting documents. Thus it is held that the demand notice u/s S.13[2] Demand Notice dated 07.06.2021 and S.13[4] Possession Notice dated 31.08.2021 are held as valid notices issued under the Act.

SA No.518/2022

09.12.2025

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

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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 09^th day of December, 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	Documents No.
1.	Sanction Letter dated 29.09.2017.	A-1
2.	Legal Notice issued to respondent for statement of Accounts dated 19.10.2020.	A-2
3.	Reply from the respondent bank legal notice dated 25.11.2020.	A-3
4.	Possession Notice dated 31.08.2021.	A-4
5.	Possession Notice dated 16.11.2022.	A-5
6.	Impugned order passed by the Chief Judicial Magistrate in Crl.M.P.No.7651 of 2022 dated 22.08.2022.	A-6

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LIST OF DOCUMENTS PRODUCED BY THE RESPONDNET

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Sl. No.	Description of Documents	Documents No.
1.	Copy of MODT vide Doc.No.5490/2017 in respect of loan No.173101310212358 dated 05.10.2017.	R-1
2.	Copy of MODT, Vide Document No.6539/2018 in respect of loan account No.173101310381627 dated 12.11.2018.	R-2
3.	Copy of Demand Notice with Postal Receipts, online India Postal Track consignments dated 07.06.2021.	R-3
4.	Copy of Paper Publication of Demand Notice dated 29.06.2021.	R-4
5.	Copy of affixture of Demand Notice.	R-5
6.	Copy of Possession Notice under Sec.13(4) with postal receipts and acknowledgement cards dated 31.08.2021.	R-6

SA No.518/2022

09.12.2025

7.	Copy of Paper Publication of Possession Notice (English-Trinity Minor) dated 02.09.2021.	R-7
8.	Copy of Paper Publication of Possession Notice (Tamil-Makkal Kural) dated 02.09.2021.	R-8
9.	Copy of Affixture photos of Possession Notice.	R-9
10.	Statement of Account.	R-10
11.	Copy of Authorization Letter.	R-11

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SCHEDULE OF PROPERTY

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All that peace and parcel of land measuring 7 cents or 3052 Sq.ft., and building thereon, comprised in Survey No.229/1B (Comprised in Old Survey No.229/1B, as per Patta No.10306, as per Patta New survey No.229/1BIA2) of Perungalathutr Village, Tambaram Taluk, Kancheepuram District, Being bounded on the: North by: Sammandan Share of property, South By: Velayudam Share of Property, East by : Land of Ramadoss Reddy, West by : 10 Feet Common Passage, situated within the registration District of South Chennai and Sub Registration District of Padappai. Sd/-

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

Durga Catering Service Rep by Venkatakrishnan v. Fullerton India Credit Company

Case brief

What is this about?

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Durga Catering Service Rep by Venkatakrishnan v. Fullerton India Credit Company

Case brief

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