Dismissed

Mrs Sridevi T v. Union Bank of India

DRT6 May 2025SA/536/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal in Chennai dismissed an application challenging the sale of a mortgaged property by Union Bank of India. The court found that the bank complied with procedural requirements under the SARFAESI Act regarding notices and auctions.

What did the court decide?

Sale held on 12.07.2024 to Mr. Aravind Mohan is confirmed; SA dismissed. Pending interim applications disposed of.

Mrs Sridevi T versus Union Bank of India — Banking and Recovery | DRT (2025)

SA No.536/2024

06.05.2025

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 06^th day of May, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SA No. 536 of 2024

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Mrs. T. Sridevi, W/o. Mr. T. Thandayuthabani Door No.4/516, Cholan Nagar, No.22, Kumarapuram, Mannargudi Taluk, Tiruvarur District – 614 001

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….Applicant

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-Vs-

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The Authorized Officer, M/s. Union Bank of India (Formerly Corporation Bank) Mannargudi Branch, No.32, K.R. Building Rukmanipalayam, Mannargudi, Tiruvarur District – 614 001

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Mr. Aravind Mohan, S/o. Mr. Balachandran No.1/537, Main Road, Kilacherry, Kandamangalam, Adichapuram, Mannargudi, Tiruvarur District – 614 717 ….Respondents

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Counsels on record / appeared:

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Counsel for Applicant : M/s. K. Chandrasekar Counsel for 1^st Respondent : Mr. G.V. Anjaneya Babu Counsel for 2^nd Respondent : Mr. K.P. Santhosh

SA No.536/2024

06.05.2025

:O R D E R:

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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The Applicant is co-borrower has challenged the sale held on 12.07.2014 pursuant to the sale notice dated 07.06.2024 issued by the 1^st Respondent Bank under Section 13(4) Possession Notice dated 02.08.2023 and the total outstanding amount due in the Sale Notice is Rs. 20,59,760.40/-. The 1^st Respondent is the Authorized Officer of the Bank and 2^nd Respondent is the Auction Purchaser

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3. Pleadings of the Applicant

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3.1 The Applicant is the owner of the property in Door No.4/516, Plot No.123, Cholan Nagar, admeasuring 2400 Sq.ft., comprised in Old Survey No.53/2, New Survey No.53/2A2, situated at 22 Kumarapuram Village, Mannargudi Taluk, Thiruvarur District described in the Schedule.

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The Applicant along with her husband availed loan and mortgaged her property as collateral security. The 1^st Respondent Bank sanctioned the loan in the year 2017 and the Applicant was regularly making the repayment towards the loan account. Due to business recession and

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family circumstances, Applicant was unable to repay the loan amount regularly. However, have deposited the money to the account.

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3.2 It is contended that the schedule property is let out on lease and the tenants are residing, who go to their work in the morning and return late in the night. Hence, it is not possible for the 1^st Respondent Bank to serve any notice as contemplated under the Act as no one available in the schedule property. Assuming that the notices were sent by the 1^st Respondent Bank and the same were not received by anyone.

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3.3 The Applicant came to know about the measures when the 1^st Respondent Bank affixed the notice in the property and then the tenant informed the Applicant and on enquiry, the 1^st Respondent Bank informed that they are busy with audit and Applicant sought time to settle the liability.

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3.4 The 1^st Respondent Bank assured that they would not take any action and issued the Section 13(4) Possession Notice taking symbolic possession and also issued the Notice dated 14.11.2023 informing about the sale of the property. The Applicant made a payment of Rs.50,000/towards the loan repayment and even after the payment, the 1^st Respondent Bank stopped the auction and acknowledged receipt.

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3.5 However, the 1^st Respondent Bank has issued another e-Auction notice dated 07.06.2024 fixing the sale on 12.07.2024, which was not

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SA No.536/2024

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4 06.05.2025

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brought to the notice of the Applicant and the 1^st Respondent Bank informed that the e-Auction has been conducted and the 2^nd Respondent / Auction Purchaser is declared as successful bidder.

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3.6 In the grounds of the SA, it is contended that the impugned e-Auction notice and subsequent auction dated 12.07.2024 is bad in law, as the Applicant has made the payment subsequent to the earlier sale notices and without considering the same, the Bank have proceeded further. As there are tenants residing and the lease is subsisting it is not possible to vacate them immediately.

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3.7 The Applicant made part payment and now the outstanding amount is Rs.18,53,262/-, as per the Bank statement dated 16.07.2024 and the Applicant are ready to settle the entire loan amount of Rs.18,53,262/-, if the 1^st Respondent Bank give them time.

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3.8 It is contended that the publication of possession notice has not been effected in the Newspaper, which has sufficient circulation as mandated under Rule 8(2) of the Security Interest (Enforcement) Rules and there is no notice of eviction is given within the 3 months and hence the present auction is bad.

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3.9 The 1^st Respondent Bank without giving sufficient opportunity to redeem the property and without considering the OTS on waiver of

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interest proceeded under Section 14 of SARFAESI Act, which is against the principals of natural justice.

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3.10 The 1^st Respondent Bank have erred in following due process in taking possession of the property, though the Applicant have paid the amount regularly. However, due to unavoidable circumstances they defaulted in the loan. The 1^st Respondent Bank have acted mechanically and converting the loan into NPA and issued Section 13(2) Demand Notice followed by the Section 13(4) Possession Notice. On these grounds, the Applicant prays to set aside the Sale held on 12.07.2024 pursutant to e-Auction sale notice dated 07.06.2024.

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3.11 The 1^st Respondent Bank have come on record and have filed a detailed counter along with supporting documents inter-alia contending that the Applicant is a co-borrower along with her husband availed a housing loan for purchasing a house from the then Corporation Bank, which is now amalgamated into Union Bank of India (the present 1^st Respondent Bank herein), as per Government of India Gazette Notification dated 04.03.2020 vide G.S.R 154 (E) constituted under the Banking Companies (Acquisition and Transfer of undertakings) Act, 1970.

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3.12 The co-borrower was irregular in repaying the loan despite several reminders and opportunities as she failed to repay the loan, the loan account has been classified as NPA, as per the RBI guidelines.

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3.13 The 1^st Respondent Bank has duly served the 13(2) Demand Notice dated 16.12.2022 and the Applicant has failed to comply with the demand made and she also received possession notice dated 02.08.2023 issued under Section 13(4) of the Act.

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3.14 The Applicant has received the Sale Notice dated 07.06.2024 issued under Rule 8 of Security Interest Enforcement Rules, 2002. The copies of the Notice of Demand with Postal acknowledgements, Possession Notice, Postal acknowledgement and photos of affixture of the possession notice and publication of possession notice in two Newspapers and also the copies of the sale notice and postal acknowledgement cards and publication of sale notice in two Newspapers are filed, as produced along with the counter.

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4. Pleadings of the Respondent bank

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4.1 The 1^st Respondent Bank denies all the allegations made by the Applicant and they have followed all the Rules under SARFAESI Act. The payments made by the Applicant is given due credit to the loan account and Applicant was given sufficient opportunity to repay the loan, which she willfully failed to do so and now has filed the present SA only to prolong the matter endlessly. As there is no illegality of serving the notices or the proceedings taken by the Bank under the Act, the 1^st Respondent Bank prays for dismissal of the SA.

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SA No.536/2024

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7 06.05.2025

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4.2 The 1^st Respondent Bank have sold the secured asset on

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12.07.2024 in a public e-Auction to the highest bidder viz., Mr. Aravind Mohan, the 2^nd Respondent herein and after the confirmation of sale, Sale Certificate dated 29.07.2024 is also issued favoring the Auction Purchaser

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4.3 The 2nd Respondent, who is the auction purchaser through e-Auction conducted on 12.07.2024 has filed the counter submitting that after the payment of entire bid amount of Rs.28,95,000/-, the 1^st Respondent Bank has executed the sale certificate in favour of the Auction Purchaser, which is registered as Document No.4839/2024 in the SubRegistrar Office, Mannargudi. The 2^nd Respondent denies all the allegations made by the Applicant and so far as the irregularities in the e-auction, as the allegations are neither maintainable in law or on facts.

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4.4 It is further submitted that the 1^st Respondent Bank has followed all the procedures under the Acts and Rules and conducted the public e- Auction for sale of the secured asset and as the 2^nd Respondent is declared as the highest bidder, he has paid the entire bid amount within the stipulated time and on confirmation of sale, subsequently Sale Certificate is also issued, which is registered as Document No.4839/2024. As a bono fide purchaser his rights be protected and prays for dismissal of the SA.

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5. Heard the submissions of both the Counsels and perused the records of the case.

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5.1 It is manifest from the records that the Applicant is the coborrower, who along with her husband Mr. T. Thandayuthabani have availed the loan amount of Rs.19,60,000/vide loan account No.560631000318710 with Union Bank of India (erstwhile Corporation Bank).

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5.2 It is seen from the Section 13(2) Demand Notice dated 16.12.2022 that the Applicant had availed the loan and had mortgaged her property at Door No.4/516, Plot No.123, Cholan Nagar, admeasuring 2400 Sq.ft., comprised in Old Survey No.53/2 (Old), New Survey No.53/2A2 (New), situated at 22 Kumarapuram Village, Mannargudi Taluk, Thiruvarur District, as collateral security towards the credit facility availed. In fact, there is no dispute with regard to availing of credit facility, mortgage of the property. 5.3 Admittedly, default is acknowledged by the Applicant in Para V (2) of the SA. Since the Applicant was irregular in the repayment, the loan account of the Applicant was classified as NPA on 28.10.2022 and the Respondent issued the Demand Notice under Section 13(2) on 16.12.2022 demanding the Applicant to repay an amount of Rs.17,94,926/- along with interest due as on 30.11.2022.

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5.4 On perusal of Section 13(2) Demand Notice, it is seen that there is described the loan availed details of the mortgaged property, date of NPA is clearly mentioned. Further, the Respondent have demanded to repay the entire outstanding amount within a period of 60 days and has also brought

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to the notice of the Applicant the redemption clause available to her under Section 13(8) of the Act.

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5.5 Further, the notice clearly reflects the intimation restraining the Application from disposing or dealing with the property, as per Section 13 of the Act. It is seen that the Section 13(2) Demand Notice was sent by RPAD to the Applicant and the borrower and to the Guarantor and the postal acknowledgement card produced at Page No.3 – 8 clearly reflects that the borrower and guarantor have received the Section 13(2) Demand Notice.

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5.6 In spite of receipt of the Section 13(2) Demand Notice, the Applicant did not raise any objections nor repaid the amount within a period of 60 days, as required. Hence, the Respondent have proceeded further and issued the Section 13(4) Possession Notice dated 02.08.2023, which is also sent by RPAD, which is duly received by the Applicant herein, as per the postal acknowledgement card document produced from Page No.10-15. The Possession Notice is affixed on the secured asset and is also published on the two Newspapers one in Tamil Daily and another one in English Daily dated 02.08.2023, as evident from documents produced from Page No.1719.

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5.7 As the Applicant did not liquidated the liability in spite of the receipt of the statutory notices, the Bank has issued the sale notice giving 30 days

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sale notice dated 07.06.2024. The Sale notice is also published and affixed on the secured asset. The sale notice is duly received by the Applicant, as per the Postal acknowledgement card, as evident from documents produced from Page No.28 & 29.

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5.8 As the successful bidder made payment, as per the terms of the sale, the 1^st Respondent Bank have issued the Sale Certificate dated 02.09.2024. Thus, it is evident that the Respondent Bank, as Secured Creditor have initiated measures after classifying the account as NPA and have issued Section 13(2) Demand Notice and Section 13(4) Possession Notice by following the procedures, which is also supported by the documents.

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5.9 The contention of the Applicant that they had made payment, which has not been credited and in spite of receipt of payment, the Bank has proceeded further would not sustain, as the statement of account produced by the Bank at Page No.34-40 clearly reflects the irregularity in the Loan Account. Hence, they rightly classified the Account as NPA.

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5.10 On examination of the facts, pleadings and the documents produced by the respective parties, it is evident that the Applicant has failed to make out the case to set aside the sale notice. The availment of loan, creation of mortgage and the default in the repayment is not denied. In fact, the Applicant does not raise any averments or allegations in respect of the measures taken by the 1^st Respondent Bank. However, the Bank has produced the service of the Section 13(2) Demand Notice and service of

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the Section 13(4) Possession Notice, the service of the sale notice, which admittedly is not disputed by the Applicant.

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5.11 In fact, the Applicant has not made out any case of any irregularity /

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violation of the measures taken by the 1^st Respondent Bank under the Act more so in putting the property to auction and in conducting the auction.

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5.12 For the foregoing reasons, the present SA stands dismissed, Interim

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Order granted, if any stands vacated, pending IAs are disposed of in terms of this final order. No order as to cost.

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

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(Dictated to Steno (Sudhakar), transcribed by him, corrected, signed and pronounced by me on this the 06^th day of May, 2025)

SA No.536/2024

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ANNEXURES

INDEX TO TYPED SET OF DOCUMENTS FILED BY THE APPLICANT

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Exhibits on the part of the Applicant:

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Sl. No.	Description of Documents	Exhibit No.
1.	Application U/s 17(1) of the SARFAESI Act dated 26.07.2024	A-1
2.	Sale Deed in the name of the Applicant (with Translated clean copy) dated 10.05.2016	A-2
3.	Sale Notice issued by the Defendant No.1 dated 14.11.2023	A-3
4.	Bank Statement dated 10.02.2016 to 16.07.2024	A-4
5.	Impugned Notice issued by the Defendant No.1 dated 07.06.2024	A-5
6.	Intimation Notice issued by the Defendant No.1 dated 15.07.2024	A-6

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Exhibits on the part of the 1^st Respondent Bank:

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INDEX TO TYPED SET OF DOCUMENTS FILED BY THE 1^st

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RESPONDENT BANK ALONG WITH COUNTER STATEMENT

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Sl.	Description of Documents	Exhibit
No.		No.
1.	Demand Notice dated 16.12.2022	R1-1
2.	Copy of Acknowledgment Cards	R1-2
3.	Possession Notice dated 02.08.2023	R1-3
4.	Copy of Acknowledgment Cards	R1-4
5.	Possession Notice Photo Affixture	R1-5
6.	Newspaper Publication	R1-6
7.	Sale Notice dated 07.06.2024	R1-7
8.	Copy of Newspaper Publication	R1-8
9.	Copy of Acknowledgment Cards	R1-9
10.	Sale Certificate dated 29.07.2024	R1-10
11.	Copy of Returned Cover and Acknowledgment Card	R1-11
12.	Statement of Accounts dated 20.09.2024	R1-12

SA No.536/2024

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Exhibits on the part of the 2^nd Respondent / Auction Purchaser :

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TYPED SET OF DOCUMENT FILED BY THE 2^nd RESPONDENT ALONG

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WITH COUNTER STATEMENT

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Sl.	Description of Documents	Exhibit
No.		No.
1.	Copy of Sale Certificate Doc. No.4839/2025	R2-1
	dated 02.09.2024

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SCHEDULE OF PROPERTY

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DESCRIPTION OF THE IMMOVABLE PROPERTY

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All that piece and parcel of property in land and building at Door No.4/516, admeasuring 733 Sq.ft., Plot No.123, Cholan Nagar, admeasuring 2400 Sq.ft., comprised in Old Survey No.53/2, New Survey No.53/2A2, situated

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at 22 Kumarapuram Village, Mannargudi Taluk, Thiruvarur District and the property bounded

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On the North by	:	Plot No.122
On the South by	:	Plot No.124
On the East by	:	Plot No.114 & 115
One the West by	:	Panchayath Road

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Situated within the jurisdiction of the Registration District of Nagapattinam and Sub-Registration District of Mannargudi.

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

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SA No.536/2024 14 06.05.2025

Mrs Sridevi T v. Union Bank of India

Case brief

What is this about?

What did the court decide?

Mrs Sridevi T v. Union Bank of India

Case brief

What is this about?

What did the court decide?

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