Dismissed

Mr S Velmurugan v. Repco Home Finance Limited

DRT22 Jul 2025SA/524/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed an application challenging a possession notice issued by REPCO Home Finance Ltd under Section 13(4) of the SARFAESI Act. The tribunal held that the bank followed statutory procedures, including notice service and publication, and found no illegality in the measures taken due to loan default.

What did the court decide?

The Securitization Application was dismissed; the possession notice dated 05.11.2022 was upheld as valid.

Mr S Velmurugan versus Repco Home Finance Limited — Contract and Commercial Disputes | DRT (2025)

SA No.524/2022

22.07.2025

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 22^nd day of July, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SA No. 524 of 2022

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Mr. S. Velmurugan, S/o Shanmugam, No.2/63C, East Street, Kolappadi Village, Periyavenmani (Post) Kunnam Taluk

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Perambalur District-621704. ….Applicant

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-Vs-

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REPCO Home Finance Ltd, Represented by its Chief Manager/Authorized Officer, Ariyalur Branch, No.17C, MVM Complex, Ponnusamy Aranmanai Street, Ariyalur – 621704. ….Respondent

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Counsels on record / appeared:

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Counsel for Applicant : M/s. R. Rajasekar Counsel for respondent : M/s. A. Ilangovan

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ORDER ON SA 524/2022

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The present Securitization Application [SA] is filed on 02.12.2022 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 Possession notice dated 05.11.2022 and the outstanding amount due as per Possession Notice is Rs.18,15,261/-

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22.07.2025

Pleadings of the applicant:

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The Applicant is the borrower who had availed a Housing Loan of Rs.20 Lakhs vide account No.2161860000001 which was sanction on 30.06.2015 and another Housing Loan in account No.2161860000075 and had created an equitable mortgage of the property in Perembalur District, In Ariyalur Registration District, Ariyalur Joint Sub Registration District, In Ariyalur Taluk, In Kolapadi Village Old S.F. No.175/2A –comprised in Hect 1.44.0 ares, New S.F.No:175/2A1 comprised in 0.96.0 ares, part of, land property is in the name of Mr.S. Velmurugan within the following boundaries on the North by Vacant land of Thamizharasi, East by land of Dhanapal land, west 16 feet length north-south road, South by East-West Raod and mortgage favoring in the respondent.

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It is contended that Applicant was regular in repayment and made a payment of Rs.15,85,033/- and Rs.2,30,228/- totally to Rs.18,15,261 despite the difficulties /-. However due to Covid-19 he could not pay the interest portion alone and the respondent have classified the loan account as NPA and issued the sec.13(2) notice dated 05.08.2022, to which the applicant vide reply dated 16.08.2022 explained the reason for default and sort time to regularize the loan amount by accepting a part payment.

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The respondent had issued the notice dated 02.09.2022 intimating that they have initiated legal proceedings against the applicant and the loan account was transfer to Asset Reconstruction Company. The applicant vide reply dated 16.08.2022 and again vide letter dated 03.10.2023 explained their difficulties and their readiness to repay the remaining loan amounts

SA No.524/2022

22.07.2025

after the personal enquiry. However the respondent without giving an opportunity to regularize the loan account issued the possession notice dated 05.11.2022 under section 13(4) of the Act, calling upon the applicant to pay sum of Rs.15,85,033/- and Rs.2,30,228/- totally Rs.18,15,261/-.

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Further the respondent demanded to pay Rs.20 Lakhs in a single payment and threatened to thrown the applicant out of the property. The applicant was not given with an opportunity of hearing and respondents by way of suppression had issued the present possession notice, which is against law and principles of nature justice.

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The auction taken by the bank is high handed and arbitrary. Hence the present SA is filed challenging the possession notice dated 05.11.2022 on the grounds that the proceedings initiated by the bank are per se illegal contrary to the facts. Without considering the objections raised by the applicant and without publishing the possession notice has violated the provision of the Act, hence prays to set aside the possession notice.

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Objections of the respondent bank:

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The respondent bank in the counter denies all the averments and have produced supporting documents in support of the measures taken by the respondent. It is case of the respondent that the applicant (i) Mr. S. Velumurugan as borrow and his wife (ii) Mrs. Santhosam as co-borrowerI and his father (iii) Mr. Shanmugam as Co-borrower-II and his Mother (iv) Mrs. Palaniyammal as Co-borrower-III had availed a Housing Loan of Rs.20,00,000/(Rupees Twenty Lakhs Only) Vide Loan A/c.

SA No.524/2022

22.07.2025

No.2161860000001 on 30.06.2015 from the respondent branch at Ariyalur. The applicant had agreed to repay the said loan amount in 120 equated monthly instalments or Rs.27,834/-. The applicant executed an Agreement Relating to Deposit of Title Deeds dated 10.07.2015 registered as Document No.1104 of 2015 in favour of the Respondent.

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The applicant and Co-borrowers also availed another loan of Rs.3,00,000/- (Three Lakhs Rupees) vide loan A/c.No.2161860000075 on 22.01.2016 agreeing to repay the said loan amount in 120 equated monthly installments of Rs.4,175/-. Subsequently a Supplemental memorandum of Deposit of Title Deed dated 27.01.2016 was executed by the Applicant registered as Document No.75/2016. The security interest in respect of is also registered with CERSAI on 07.01.2016 in respect of the said two loan accounts. The 1^st loan and 2^nd loan are guaranteed by Mr. Sadaiappan and Mr. Anbarasan respectively.

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Applicant had availed the loan accepting the sanction terms and conditions, failed miserably to adhere the same, and despite repeated assurances from the applicant and Co-borrower, the loan account remained irregular owing to non-payment of the dues. The loan account slipped down to NPA status on 30.01.2022. As the applicant failed and ignored either to regularize the account or to repay the dues in full forcing this respondent bank to initiate action under SARFAESI Act.

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The applicant was continuously giving empty promises and requested not to initiate any proceedings which delayed the recovery proceedings

SA No.524/2022

22.07.2025

under the SARFAESI Act. As the applicant was promising to be regularized the account or to be closed in a short span of time. The bank had issued a demand notice dated 05.08.2022, which is duly served on the applicant and the co-borrowers and guarantor.

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Inspite of receipt of the demand notice as the borrowers were evading the payment, the bank issued the S.13(4) possession notice on 05.11.2022, by taking the symbolic possession of the property and the acknowledgement cards are produced for due service of the S.13(4). In terms of the S.13(4) possession notice, the borrowers have to pay a sum of Rs.15,85,033/- & Rs.2,30,228/- vide loan account Nos.2161860000001 & 2161860000075 together with further interest from 04.11.2022.

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The possession notice is affixed on the property and the photograph is produced, published in the two newspapers The New India Express and Dhinamani on 09.11.2022. The applicant had obtained an interim order had complied with the first part of the conditional order and did not comply with the second part of the conditional order. Hence the respondent bank also issued an E-Auction Sale Notice dated 14.12.2022 fixing the sale of secured assets on 24.01.2023. However the sale does not take place for want of bidders.

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The respondent as countered the contentions as raised by the applicant in the SA para wise contenting that as loan account was irregular the bank as initiated after classifying the loan account as NPA on the receipt of the 13(2) demand notice the applicant raised objections dated

SA No.524/2022

22.07.2025

16.08.2022 which was sent through RPAD only on 24.08.2022. The objection was duly considered by application of mind by the Authorized Officer and the same was stand rejected vide reply dated 20.09.2022. The applicant contention that the letter dated 21.09.2022/31.10.2022 allegedly sent by the applicant in response to the letter transfer of loan account to ARB branch is put to strict proof. The applicant as sent another reply dated 01.10.2022/31.10.2022 is of no consequences as the bank already replied to the objections raised by the applicant herein.

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The applicant had never did not approach for any OTS settlement was not interested in the regularized in the loan account and denies that the payment of the Rs.20 Lakhs in a single payment is also false. The respondent bank initiated the measures under the SARFAESI Act and the authorized officer is followed all the provisions in issuing the 13(4). As the bank as followed all the procedures 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 borrower along with the Velmurugan. S, Santhosam, Shanmugam, Palaniyammal availed the Housing Loan of Rs.20 Lakhs vide A/c. No.2161860000001. The applicant also mortgaged the property as collateral security towards the said credit facility by deposite of title deed on 10.07.2015 which is registered in the officer of the Sub Registrar. Subsequently the applicant along Borrower: Velmurugan.S, Santhosam, Shanmugam, Palaniyammal availed loan vide

SA No.524/2022

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A/c.No.2161860000075 and further had mortgaged the property as collateral security by way of Supplemental Memorandum of Deposit of Title Deed.

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The mortgages are registered in the central registry and the respondent bank have produced the Central Registry of Securitization Asset (CERSAI) report at pg.35 which clearly reflects the mortgage of the property towards the loan accounts and mortgage is secured assert favoring the 1^st respondent.

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Due to default in the repayment by the borrowers and guarantors the respondent have classified the loan account as NPA on 30.01.2022. Consequent to classification of account as NPA, the respondent issued the Sec.13(2) demand notice on 05.08.2022 calling upon the borrower and guarantor and mortgager to clear entire outstanding liability due in both accounts within a period of 60 days. It is also seen from the Sec.13(2) demand notice that the respondent have clearly explained the nature of the loan availed by the applicants and outstanding amount due, the details of the secured assert. The respondent have also brought to the notice of the applicant the redemption available under sec.13[8] of the SARFAESI Act

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Evidently the applicants along with the other Co-borrowers and mortgagers have received the Sec.13(2) demand notice as per the acknowledgement cards produced by the respondent from pg.42 to 44. The applicant raised this objection to the Sec.13(2) demand notice on 16.08.2022 which was received by the respondent on 05.08.2022.

SA No.524/2022

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The respondent have replied to the objection in compliance with the Acts and rules. Thought the applicant contents that he approached the bank for regularization which was considered by the bank. As the applicant did not regularize the loan account nor approached the bank for any settlement under the OTS, bank have proceeded in issuing the sec.13(4) possession notice.

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The contention that the applicant made substantial payments is a matter of record and whatever the payments made by the borrower is al reflected in the statement of account. As the borrower and guarantor did not liquated the liability inspite of the sufficient opportunities bank have proceeded in issuing the sec.13(4) possession notice. Infact the receipt of the Sec.13(4) notice is not disputed and acknowledgement cards of the receipt of the Sec.13(4) notices are from pg.47 to 49 of the typeset.

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Further it seen that the possession notice is affixed on the secured assert as per the affixture photograph at pg.50 evidencing affixture of the possession notice and the publication of the possession notice in New Indian Express on 09.11.2022 and Dinamani on 09.11.2022 is also produced pg.51 to 52. Thus the respondent bank as secured creditor have initiated the measures after classifying the account as NPA; have issued the statuary notices which is duly received and acknowledged by the applicant. On the other hand the applicant has not made out any case of any illegality or irregularity in the measures taken by the respondent bank resulting in upholding the Sec.13[2] demand notice dated 05.08.2022 and Sec.13[4]

SA No.524/2022

22.07.2025

possession notice dated 05.11.2022 as valid notices issued in accordance with the Act and Rules made thereunder.

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Resultantly the present SA 524/2022 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 22^nd day of July, 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.	Demand Notice dated 05.08.2022.	A-1
2.	Reply sent by the Applicant dated 16.08.2022.	A-2
3.	Notice sent by the Respondent dated 02.09.2022.	A-3
4.	Reply sent by the Respondent dated 20.09.2022.	A-4
5.	Reply sent by the Applicant dated 03.10.2022.	A-5
6.	Possession notice issued by the Respondent dated 05.11.2022.	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.	Loan Sanction Letter in A/C No.21618600000001 dated 30.05.2015.	R-1
2.	Agreement relating to deposit of Title deeds dated 10.07.2015.	R-2
3.	Loan Sanction Letter in A/C. No.2161860000075 dated 22.01.2016.	R-3
4.	Agreement relating to deposit of Title deeds dated 27.01.2016.	R-4
5.	CERSAI Report.	R-5
6.	13(2) Demand Notice with Acknowledgment dated 05.08.2022.	R-6

SA No.524/2022

22.07.2025

7.	13(4) Possession Notice with Acknowledgment dated 05.11.2022.	R-7
8.	Affixture photograph of 13(4) Possession notice.	R-8
9.	13(4) possession notice published in English daily“New Indian Express”dated 09.11.2022.	R-9
10.	13(4) Possession notice published in Tamil daily “Dinamani”dated 09.11.2022.	R-10
11.	E-Auction sale notice dated 14.12.2022.	R-11
12.	Statements of Accounts.	R-12

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SCHEDULE OF PROPERTY

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All the piece of portion of Land and building to be constructed thereon Perembalur District, in Ariyalur Registration District, Ariyalur Joint Sub Registration District, In Ariyalur Taluk, In Kolapadi Village Old. S.F. No:175/2A-comprised in Hect 1.44.0 ares, New S.F.No:175/2A1 comprised in 0.96.0 ares, part of, and property in the name of Mr. S. Velmurugan within the following boundaries on the North by Vacant land of Thamizharasi, East by land of Dhanapal, West 16 feet length northsouth Road, South by East-West Road.

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Sd/-

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

Mr S Velmurugan v. Repco Home Finance Limited

Case brief

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Mr S Velmurugan v. Repco Home Finance Limited

Case brief

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