Dismissed

Y Dennison v. Tamilnad Mercantile Bank Limited

DRT10 Jun 2025SA/532/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed an application filed under Section 17 of the SARFAESI Act challenging an order for physical possession. The Tribunal held that the bank followed statutory procedures and the applicant failed to prove meritorious grounds regarding NPA classification or interest rates.

What did the court decide?

SA No. 532/2023 dismissed with no costs; all pending IAs disposed of.

Y Dennison versus Tamilnad Mercantile Bank Limited — Banking and Recovery | DRT (2025)

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SA No.532/2023

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI

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DATED THIS 10^th DAY OF JUNE, 2025

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PRESENT: SEEMA SINHA

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[PR. DISTRICT & SESSIONS JUDGE - Retd]

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PRESIDING OFFICER

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SA No. 532/2023

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Y. Dennison, S/o. Mr. N. Yovan, 25-58/1, John Nivas, Kalpagavilai, Opp. CSI Mission Hospital, Marthandam, Kanyakumari District – 629 165. …. Applicant

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The Authorized Officer, Tamilnad Mercantile Bank Ltd., Marthandam Branch, No. 2/24-2, Floor,

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Anex vin Complex, Post Box No. 16, TVM Main Road, Marthandam, Kanyakumari District – 629 161. …. 1^st Defendant Bank

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The Chief Judicial Magistrate, Nagercoil, Kanyakumari District …. 2^nd Defendant

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Appearance of Advocates:

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M/s. C.R.Nimal ---- Counsel for the Applicant M/s. N. Dilip Kumar ---- Counsel for the 1^st Defendant Bank 2^nd Defendant is none other than the Ld. CJM, Kanyakumari District at Nagercoil

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This SARFAESI Application was heard in the presence of Counsels for the Applicant and the Defendant Bank and fixed for passing final order before me and upon hearing the arguments of the Counsels and having

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Page 1 of 10

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SA No.532/2023

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stood over for consideration till this day, this Tribunal delivered the following:

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O R D E R

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1 . This Application has been filed u/s. 17 of the SARFAESI Act, 2002 by the Applicant praying that this Hon'ble Tribunal may be pleased to set aside the Order dated 19.09.2023 passed by the 2^nd Defendant in Crl.M.P.No. 11612 of 2023.

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2 . The brief averments of the Application filed by the Applicant are as follows:-

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The Counsel for the Applicant submitted that the Applicant is the owner of the Schedule mentioned properties. One Paramasekar son of A.P. Appavoo Nadar availed a Cash Credit Loan before the Defendant Bank on executing Deposit of Title Deed in respect of the Property of the Applicant. The Applicant created a mortgage in favour of the Defendant Bank. The Principal Debtor Paramasekar was regular in repayment of the loan and kept the account intact. Surprisingly on 26.06.2018 the Defendant published a notice in the Thina Thanthi Nagercoil edition informing that the property of the Applicant was taken symbolic possession by the Defendant Bank on 20.06.2018. Immediately, the Applicant approached the principal debtor and demanded to redeem the property of the Applicant from the Bank. The Applicant was in confident on the principal debtor that who was in regular of repayment of the loan and never allowed the account to be classified as NPA. The Defendant Bank issued Demand Notice dated 09.04.2018 & Possession Notice dated 20.06.2018 for a sum of Rs. 54,51,454.18p and interest thereon.

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It is further submitted that on 17.12.2018, the Defendant Bank issued Sale Notice fixed the date of auction on 28.01.2019 fixing the Reserve price as Rs. 1,44,48,000/-. Hence, the Applicant filed SA No. 404 of 2018 by challenging the Possession Notice & the Sale Notice dated 17.12.2018. Since, the Sale was not successful due to want of bidders the SA No. 404 of 2018 was dismissed as infructuous. The Defendant Bank further

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Page 2 of 10

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SA No.532/2023

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approached Ld. CJM, Kanyakumari District at Nagercoil and obtained the impugned order dated 19.09.2023 for taking Physical Possession of the property, which is illegal and erroneous and liable to be set aside on the following among other

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Main Grounds:

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The Borrowers were regular in payment of EMI's and there is no occasion to classify the account into NPA.

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Though the Applicant regular in payment of EMI's, the 1^st Defendant abruptly fixed balance outstanding as Rs. 53,25,558.18p by adopting the unfair banking practices and arrived at the excessive balance outstanding figure.

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The Possession Notice was not affixed in the conspicuous part of the property and was not published in two leading Newspapers.

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The Defendant Bank has charged interest and penal interest contrary to Reserve Bank of India norms and rules.

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The 1^st Defendant failed to furnish the correct Statement of Account.

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Schedule of Property

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Description of Immovable Properties

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Item No. 1

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All the parts and parcel of land to an extent of 9 cents thereat in Re-survey No. C5/90, Corresponds to Old Survey No. 2277/1 and building bearing Door No. 25/59, 25/58 situated in Kuzhithurai Municipality, Nalloor Village, Vilavancode Taluk, Marthandam Joint-I Sub Registry, Marthandam Register District, Kanyakumari District standing in the name of Mr. Dennison.

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Boundaries: West : Re.Sy.C5/91 East : Re.Sy.C5/38

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SA No.532/2023

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North : Re.Sy.C5/92 South : Re.Sy.C5/89

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Item No. 2

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All the parts and parcel of land to an extent of 4 cents 750 Sq.Links thereat in Re-survey No. C5/92, Corresponds to Old Survey No. 2277/1, Nalloor Village, Vilavancode Taluk, Marthandam Joint-I Sub Registry, Marthandam Register District, Kanyakumari District standing in the name of Mr. Dennison.

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Boundaries: West : Re.Sy.C5/91 East : Re.Sy.C5/93 North : Main Road South : Re.Sy.C5/90

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The Applicant has submitted the following List of documents in support of his claim in the SA, which are as follows:

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S.No.	Date	Description of Documents
1.	09.04.2018	Demand Notice
2.	20.06.2018	Possession Notice
3.		Payment Receipts
4.	26.10.2022	Affidavit and Petition in Crl MP No. 11612 of 2023
5.	19.09.2023	Order in Crl MP No. 11612 of 2023

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3 . On the other hand, the Counsel for the 1^st Defendant Bank appeared before this Tribunal and filed Vakalat, Counter & Typed set of papers in which they submitted that Mr. A. Paramasekar is the Proprietor of M/s. R.R. Mart a super market functioning at Marthandam, Kanyakumari District. Being the Proprietor he had approached the Defendant Bank seeking a Cash Credit Facility on 20.01.2017 for a sum of Rs. 50,00,000/- (Rupees Fifty Lakhs only) as working capital for his business needs, which was sanctioned and he had executed Demand Promissory Note for Rs. 50,00,000/- and agreed to repay the loan amount with a interest of 18.05% per annum. The Applicant herein and five others stood as the guarantors. The Applicant deposited his title deeds and Memorandum of Deposit of Title Deeds was executed in favour of the Defendant Bank on 27.03.2012 and Supplemental Memorandum of Deposit of Title Deeds was executed in favour of the

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SA No.532/2023

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Defendant Bank on 07.10.2013 and subsequently mortgage extension letter was executed by the Applicant in favour of the Defendant Bank. The Applicant had executed Hypothecation Agreement and thereby he had hypothecated all the stocks and goods in favour of the Defendant Bank with regard to the credit facility availed by him.

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It is further submitted that the Borrower failed to operate the loan account as agreed and promised. He had sold out the goods which are hypothecated with the Defendant Bank. The act of the borrower amounts to criminal offence. The borrower had bifurcated the money availed from the Defendant Bank and he involves in other business activities without the concern of the Defendant Bank. He had defaulted to maintain the Cash Credit Facility availed from the Defendant Bank. Despite sufficient opportunity borrower failed to regularize the loan account and with no other alternative the Cash Credit loan account was classified as NPA on 31.01.2018.

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It is further submitted that the Demand Notice was issued on 09.04.2018 to the borrower and guarantors and the same is delivered to them. The said notice is sent through Registered Post to the address of the borrower. The borrower had not replied to the notice and had not repaid the loan account within 60 days. Thereafter, the Defendant Bank issued Possession Notice on 20.06.2018 and the same was published in two Newspapers both in English and Tamil. The same was also delivered upon the borrower and guarantors and it is also affixed in the property.

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It is further submitted that the Applicant had filed SA 404 of 2018, challenging the Possession Notice issued by the Defendant Bank. Since there was no stay for the proceedings the Bank had issued Sale Notice dated 17.12.2018 and the same was also delivered to the borrowers, published in two newspapers. The Applicant obtained a conditional order and after that he had not paid any amount in his loan account. Hence, the Defendant Bank obtained an Order from the 2^nd Defendant Bank for taking the Physical Possession of the property, which is challenged by the Applicant in this SARFAESI Application.

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It is further submitted that the Defendant Bank denied all the grounds that are raised by the Applicant. The borrower had failed to operate the loan account as agreed and promised. The Defendant Bank had produced all the SARFAESI documents before the 2^nd Defendant and upon that the Order is passed which is perfectly valid. The Defendant Bank had not charged any interest against the guidelines of RBI and never charged interest which are not accepted in the agreement by the borrower. The

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SA No.532/2023

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Applicant had not approached the Defendant Bank seeking Statement of Account. The statement is system generated and it can be downloaded across any format. The Applicant had never made any reply and nor visited the Bank to settle out the loan account. The borrower had not raised any substantial plea before this Hon'ble Tribunal for consideration and their only intention seems to delay the proceedings and avoid paying the loan amount to the Bank.

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Therefore, it is prayed that this Hon'ble Tribunal may be pleased to dismiss the above SARFAESI Application with cost and thus render justice.

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TYPED SET OF DOCUMENTS FILED BY THE 1^st DEFENDANT BANK

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S.No.	DATE	Events
1	09.04.2018	Demand Notice issued to the Borrower with AD Cards
2	20.06.2018	Possession Notice issued to the Borrower with AD Cards
3	26.06.2018	Paper Publication of Possession Notice
4	20.06.2018	Photographs for symbolicpossession
5	19.09.2023	Order in Crl MP 11612 of 2023

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4. ON THE BASIS OF ABOVE PLEADINGS THE POINT WHICH ARISES FOR CONSIDERATION IS:-

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WHETHER THE APPLICANT IS ENTITLED TO GET THE RELIEFS AS PRAYED FOR?

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5 . Having heard the parties and after going through the entire documents available on the records, this Tribunal find that there is no dispute between the parties with regard to the availment of loan facilities by creating equitable mortgage on their property. In this case, the Applicant is one of the mortgagors for the loan account availed by Mr. A. Paramasekar, Proprietor of M/s. R.R. Mart, who has obtained the loan facility from the 1^st Defendant Bank for his business needs. The Applicant contended that the borrower repaid the monthly installments regularly. The borrower was regular in payment of EMI's and there was no occasion to classify the account into NPA. But surprisingly on 26.06.2018, the Defendant Bank published a notice in the Thinathanthi Nagercoil edition informing that the property was taken symbolic possession by the Defendant Bank on 20.06.2018. In reply the Defendant Bank submitted that Mr. A.

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Page 6 of 10

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SA No.532/2023

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Paramasekar, Proprietor of M/s. R.R. Mart has obtained Cash Credit Facility on 20.01.2017 for a sum of Rs. 50,00,000/- (Rupees Fifty Lakhs only). Since the borrower failed to repay the interest towards the loan account as agreed and promised and despite sufficient opportunities, he failed to regularize the loan account, the loan account has been classified as Non Performing Asset on 31.01.2018. I also find that both the parties have not submitted Statement of Accounts in respect of the loan account. Hence the allegation of the Applicant, cannot be decided that NPA has been wrongly classified.

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Thereafter, the Defendant Bank had issued Demand Notice U/s. 13(2) of SARFAESI Act on 09.04.2018 to the Borrower and guarantors through Registered Post. I also perused the documents filed by the Defendant Bank, the Bank has submitted copy of Demand Notice & AD cards, attached at page nos. 1 to 14 of Bank's typed set of papers. However, I find that the Applicant has not filed any documents for having sent a reply/ representation to Demand Notice dated 09.04.2018 U/s. 13(3-A) of SARFAESI Act to the 2^nd Defendant Bank though he has received the Demand Notice.

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Further I perused the documents and I find that at page nos. 15 to 23 of Bank's typed set of papers, Bank has filed a copy of Possession Notice dated 20.06.2018 issued U/s. 13(4) of SARFAESI Act for a sum of Rs. 54,51,454.18p (Rupees Fifty Four Lakhs Fifty One Thousand Four Hundred Fifty Four and Paise Eighteen only) and copies of AD Cards as a proof for having served upon the borrowers/guarantors. I also find that the Bank has produced the xerox copies of Paper Publication of Possession Notice in two newspapers one in English and another in Tamil (Bank's Typed set of papers at page nos. 24 & 25). The Bank has also filed photos at page nos. 26 to 47 of Bank's typed set of papers as evidence for having affixed the Possession Notice on the conspicuous part of the property. Thus, I find that the 1^st Defendant Bank has strictly followed the SARFAESI procedures, while issuing Possession Notice to the Applicant.

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Page 7 of 10

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SA No.532/2023

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I also find that the Applicant had already filed SA No. 404 of 2018, challenging the Possession Notice dated 20.06.2018, during adjudication of the case, the Defendant Bank had issued Sale Notice dated 17.12.2018, but sale was not successful on 28.01.2019 due to want of bidders and based on the memo filed by the Defendant Bank in SR No. 6196/23 to this effect, the SA No. 404 of 2018 was dismissed as infructuous on 28.08.2023 by this Tribunal.

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Thereafter, the Defendant Bank on seeing nonpayment of loan amount by the Applicant after obtaining the Conditional Order in SA No. 404 of 2018 had obtained the Impugned Order dated 19.09.2023 passed by the 2^nd Defendant for taking Physical Possession of the property in Crl.MP.No.11612 of 2023. Challenging the same, the Applicant filed this SARFAESI Application. I perused the Order of the Ld. CJM dated 19.09.2023 and I find that in the Impugned Order dated 25.03.2023, there is no mention about the Demand Notice & Possession Notice and the outstanding amount for which the Physical Possession has to be taken as contemplated U/s. 14(1) of the SARFAESI Act. However, the Applicant has filed the Affidavit in his SARFAESI Application at page nos. 14 to 19, which was filed by the Defendant Bank before the Ld. CJM, in C.M.P.No. 11612/2023. Section 14 of SARFAESI Act clearly says that:-

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"Section 14 in The Securitisation And Reconstruction Of Financial Assets And Enforcement Of Security Interest Act, 2002

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14. Chief Metropolitan Magistrate or District Magistrate to assist secured creditor in taking possession of secured asset.

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(1) Where the possession of any secured asset is required to be taken by the secured creditor or if any of the secured asset is required to be sold or transferred by the secured creditor under the provisions of this Act, the secured creditor may, for the purpose of taking possession or control of any such secured asset, request, in writing, the Chief Metropolitan Magistrate or the District Magistrate within whose jurisdiction any such secured asset or other documents relating thereto may be situated or found, to take possession thereof, and the Chief Metropolitan Magistrate or, as the case may be, the District Magistrate shall, on such request being made to him

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(a) take possession of such asset and documents relating thereto; and

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SA No.532/2023

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(b) forward such asset and documents to the secured creditor.[Provided that any application by the secured creditor shall be accompanied by an affidavit duly affirmed by the authorised officer of the secured creditor, declaring that-

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(i) the aggregate amount of financial assistance granted and the total claim of the Bank as on the date of filing the application;

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(ii) the borrower has created security interest over various properties and that the Bank or Financial Institution is holding a valid and subsisting security interest over such properties and the claim of the Bank or Financial Institution is within the limitation period;

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(iii) the borrower has created security interest over various properties giving the details of properties referred to in sub-clause (ii) above.

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(iv) the borrower has committed default in repayment of the financial assistance granted aggregating the specified amount;

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(v) consequent upon such default in repayment of the financial assistance the account of the borrower has been classified as a nonperforming asset;

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(vi) affirming that the period of sixty days notice as required by the provisions of subsection (2) of section 13, demanding payment of the defaulted financial assistance has been served on the borrower;

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(vii) the objection or representation in reply to the notice received from the borrower has been considered by the secured creditor and reasons for non-acceptance of such objection or representation had been communicated to the borrower;

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(viii) the borrower has not made any repayment of the financial assistance in spite of the above notice and the Authorised Officer is, therefore, entitled to take possession of the secl1red assets under the provisions of sub-section (4) of section 13 read with section 14 of the principal Act;

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(ix) that the provisions of this Act and the rules made there under had been complied with: Provided further that on receipt of the affidavit from the Authorised Officer, the District Magistrate or the Chief Metropolitan Magistrate, as the case may be, shall after satisfying the contents of the affidavit pass suitable orders for the purpose of taking possession of the secured assets [within a period of thirty days from the date of application]

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Provided also that the requirement of filing affidavit stated in the first proviso shall not apply to proceeding pending before any District Magistrate or the Chief Metropolitan Magistrate, as the case may be, on the date of commencement of this Act.]

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[Provided further that if no order is passed by the Chief Metropolitan Magistrate or District Magistrate within the said period of thirty days for reasons beyond his control, he may, after recording reasons in writing for the same, pass the order within such further period but not exceeding in aggregate sixty days."

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Page 9 of 10

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SA No.532/2023

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So, I find that Defendant Bank has fully complied the provisions mentioned U/s. 14 of the SARFAESI Act.

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Further, the Applicant has not placed any material evidence before this Tribunal to substantiate his claim that rate of interest has been charged excessively against the guidelines of RBI. Further, the Applicant has not produced any proof of document that they made representations to the Defendant Bank to furnish the copy of Statement of Accounts.

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I also find that during the pendency of the case, this Tribunal has granted a conditional stay order dated 10.10.2023 for a sum of Rs. 19,08,000/- (Rupees Nineteen Lakhs Eight Thousand only) to be paid in two installments by the Applicant, the Applicant has also complied with the conditional order and proved his bona-fide.

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Under the above facts and circumstances of the case, this Tribunal is of the considered view that Applicant has failed to prove his case and on the other hand, I find that the 1^st Defendant Bank has followed the procedures for recovery of loan amount under SARFAESI Act as such I do not find any merit in the above SARFAESI Application.

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In the result, SA No. 532/2023 stands dismissed with no costs. Consequently, all pending IAs (if any) are also disposed of. No costs.

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Dictated to PA (DK), taken down, transcribed, typed by her, corrected and pronounced by me in the Open Court in this the 10^th June, 2025.

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sd/- (SEEMA SINHA) PRESIDING OFFICER

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Uploaded on 19.06.2025

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Y Dennison v. Tamilnad Mercantile Bank Limited

Case brief

What is this about?

What did the court decide?

Y Dennison v. Tamilnad Mercantile Bank Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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