Dismissed

A Sudha v. City Union Bank Limited

DRT9 Dec 2025SA/540/2023

Case brief

AI extract

What is this about?

The DRT-III, Chennai dismissed a Securitization Application challenging a Section 14 order for possession. Upholding the ministerial nature of Section 14, the Tribunal confirmed the bank's compliance with demand, possession, and auction notices, validating the recovery process.

What did the court decide?

The Securitization Application is dismissed; interim order granted, if any, stands vacated. No order as to cost.

A Sudha versus City Union Bank Limited — Execution and Attachment | DRT (2025)

SA No.540/2023

09.12.2025

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

¶5

Dated this the 09^th day of December, 2025

¶6

Present: SMT. S.V. GOWRAMMA Presiding Officer

¶7

SARFAESI APPLICATION No. 540 of 2023

¶8

Mrs. A. Sudha, W/o A. Arunraj Door No.6, Thiruppanalwar Street, Kattankulathur, Maraimalai Nagar, Chengalpattu – 603 203. ….Applicant -Vs-

¶9

The Authorised Officer, City Union Bank Limited, Credit Recovery and Management Department, “NARAYANA”, Administrative Office,

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No. 24-B, Gandhi Nagar, Kumbakonam – 612 001. ….Respondent

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Counsels on record / appeared:

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Counsel for Applicant : M/s. J. Prince

¶13

Counsel for respondent : M/s. A. Karthikeyan

¶14

ORDER ON SA 540/2023

¶15

The present Securitization Application [SA] is filed on 11.10.2023 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].

¶16

The applicant has challenged Sec.14 Order dated 19.09.2023 in C.M.P. No.3828 of 2023 passed by Chief Judicial Magistrate, Chengalpattu and the outstanding amount due as per Sec.14 order is Rs.12,54,189/-

SA No.540/2023

09.12.2025

Pleadings of the applicant:

¶21

The case as put forth is the applicant as borrower had availed a loan of Rs.12 Lakhs from the respondent bank and also offered the schedule mentioned property as collateral security and stood as the guarantor for the loan availed. The applicant submits that the borrower has been making remittance of the loan as contemplated under loan agreement promptly without any delay.

¶22

It is submitted that the borrower never allowed their loan account to become NPA and has been remitting the payments well in advance and maintaining the account. There was no default of the statutory period so as to classify the loan account as NPA. It is further submitted that the applicant and others were also made to sign many blank papers contents of which are not known to the applicant and same are not binding on the applicant.

¶23

It is further submitted that all of a sudden, the respondent had issued Possession Notice to the applicant claiming to have issued Demand Notice 16.11.2022 to the applicant calling upon to pay the due amount within 60 days from the date of notice, which is not been served to all the parties.

¶24

It is mandatory on the part of the respondent to classify the loan account as NPA as per Section 2(o) of the SARFAESI Act and in accordance with the RBI guidelines. The respondent does not have any authority to enforce their security interest over the schedule mentioned property. Without even proper demand made by the applicant, respondent issued

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09.12.2025

possession notice in a mechanical manner without issuing Sec.13(2) Demand Notice to all the parties.

¶29

Further the respondent had hastily filed petition U/s.14 before the Hon’ble CJM, Chengalpattu using back door method to evict the lawful possession of the property from the applicant through the order Hon’ble CJM, Chengalpattu. Without serving Demand Notice and Possession Notice without compliance of the statutory requirements, the respondent ought not to have invoked under Sec.14 of the Act.

¶30

It is further contended that the secured creditor has not registered the security interest with the Central Registry. The Ld. CMM/CJM is empowered to take physical possession of the property only after taking inventory if necessary, with the assistance of police and order has been misused by the respondent to throw out the applicant from the property.

¶31

The respondent did not serve the Sec.13(2) notice there by impaired the right vested with the applicant under Sec.13(3-A) of the Act, The respondent willfully suffocated the right of the applicant under Sec.13(3A). The Authorised Officer of the respondent has not served, affixed or published the possession notice. The respondent bank has failed to satisfy the statutory requirements under the SARFAESI Act and the relevant rules framed there under. Hence, applicant prays to set aside the Sec.14 order passed by the Hon’ble CJM, Chengalpattu.

SA No.540/2023

09.12.2025

Objections of the respondent bank:

¶36

The respondent bank denied the allegations and averments made in the SA, contending that the respondent bank, through its Maraimalai Nagar Branch had extended the loan facilities to M/s. Kingson Enterprises, represented by its Proprietor, Mrs. A. Sudha, the applicant herein and Mr. Arunraj Arun as Co-obligant. They availed the loan by executing the necessary documents in the nature of “Secured OD without DP” vide A/c. No.512120020034631, a sum of Rs.12 Lakhs to be repaid at the rate of 13.75% p.a compoundable with monthly. 11. It is submitted that the applicant had offered the property, owned by Settlement Deed dated 25.02.2020, vide Doc.No.438/2020, in the office of Joint-I, Sub-Registrar, Chengalpattu, admittedly by creating the Mortgage by Deposit of Title Deeds on 06.05.2020 and same was registered as Memorandum of Deposit of Title Deeds dated 07.05.2020, vide Doc.No.789/2020, in the Office of Joint-I, Sub-Registrar Chengalpattu.

¶37

Therefore the security interest had been admittedly created by the applicant herein in favour of respondent bank, which is the subject matter of the order in Crl.M.P.No.3823/2023, passed by the Ld. CMM, Chennai under section 14 of the SARFAESI Act.

¶38

The applicant, being the proprietrix of M/s. Kingson Enterprises, after availing the credit facility, did not repay the loan as per agreed terms, resulting in declaration of loan accounts as NPA on 29.07.2022. The respondent bank as a secured creditor had issued a Sec.13(2) Demand Notice 16.11.2022 to M/s. Kingson Enterprises, represented by the

SA No.540/2023

09.12.2025

applicant herein and Mr. Arunraj Anbu, the husband of applicant, demanding the outstanding due of Rs.12,54,189/- as on 14.11.2022 in respect of “Secured OD without DP” together with interest at the rate of 15% + 2% Penal Interest (Non-compounded) compounded with monthly rests from 15.11.2022 till the date of realization, within 60 days from the date of notice. The Demand Notice dated 16.11.2022 was duly served on the M/s. Kingson Enterprises, the applicant herein and Mr. Arunraj Anbu.

¶43

As the borrowers did not come forward to repay the dues even after expiry of statutory period, the respondent bank had issued Sec.13(4) Possession Notice dated 15.02.2023 under Section 13(4) of the SARFAESI Act, and the same was admittedly served on the M/s. Kingson Enterprises, represented by the applicant and Mr. Arunraj Anbu, the husband of applicant. The respondent bank had also affixed the Possession Notice in the conspicuous part of the Secured Property and also published the Possession Notice in leading two newspapers one in English daily “Deccan Chronicle” Chennai Edition and another one in Tamil daily “Dinakaran” Chennai Edition both dated 17.02.2023.

¶44

The respondent bank, before proceeding with auction of the property, inter alia complied with Rule 8(5) of the SIE Rules, issued the Re-Tender Cum Auction Sale Notice dated 20.05.2023, fixing the sale on 08.06.2023, which was duly served, affixed and published in leading newspapers English daily “Deccan Chronicle” Chennai Edition and Tamil daily “Dinakaran” Chennai Edition both dated 21.05.2023 as required under law.

SA No.540/2023

09.12.2025

On 08.06.2023, the Authorized Officer of the Respondent Bank had conducted the Auction Sale of the secured asset and confirmed the sale in favour of one Mr. Mahendiran Arunothayam as the highest bidder for an amount of Rs.6,06,000/- vide Sale Confirmation Letter dated 08.06.2023, on payment of Rs.1,51,500/- being 25% of the Sale Amount, and same was intimated to the applicant and others. Subsequently, the Sale Certificate was issued on 10.08.2023, to the Auction Purchaser Mr. Mahendiran Arunothayam, on payment of the balance amount of within the time extended by the respondent bank. As 3^rd party right has been created in favour of Auction Purchaser in respect of Secured Asset, the applicant herein has no right over the property.

¶49

Subsequently, the respondent bank has obtained order from the Ld. CJM, Chengalpattu U/s.14 of the SARFAESI Act. Impugning the order dated 19.09.2023, the present SA has been moved by the Applicant before this Tribunal on various trivial grounds. It is further submitted that the applicant had violated the compliance of conditional order before this Tribunal for the grant of interim stay. There are no infirmities in the procedure adopted by the respondent bank in their SARFAESI actions and hence prayed for dismissal of the SA.

¶50

Heard both sides of the Counsels and perused the records of the case

¶51

The applicant is the Proprietrix of M/s Kingson Enterprises, along with her husband, who is co-applicant, had availed “Secured OD without DP” loan for a sum of Rs.12 Lakhs on 07.05.2020 vide

SA No.540/2023

09.12.2025

A/c.No.512120020034631, which is repayable at the rate of interest 13.75% p.a. compoundable with monthly rests.

¶56

The applicant mortgaged her immovable property as security towards the credit facility and had deposited the title deeds of the property on 06.05.2020 as security and the same was registered as Memorandum of Deposit of Title Deeds dated 07.05.2020, vide Doc.No.789/2020 in the Officer of Joint-I Sub Registrar, Chengalpattu. The equitable mortgage is registered before the central registry dated 08.05.2020 which is produced by the respondent vide Diary No.5904/2025. The contention that the applicant was made to sign blank papers would not come to aid of the applicant, as the applicant admits loan availed, mortgage of the property by deposit of title deeds and execution of loan documents. The applicant did not complain to authorities of the bank about signing of blank papers and no evidence is produced in support of such a contention. The applicant is the proprietary of a firm who is doing business cannot be ignorant or illiterate who do not understand the implications of signing blank papers.

¶57

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 29.07.2022, in accordance with RBI guidelines.

¶58

The respondent had issued the Sec.13(2) Demand Notice dated 16.11.2022 claiming an amount of Rs.12,54,189/- due as on 14.11.2022 along with other charges. The applicant have received the Demand Notice

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as per the Acknowledgement Card produced at Pg.14 and 15 of typed set of documents.

¶63

In spite of receipt of Sec.13(2) Demand Notice as the borrower and the guarantor did not liquated the liability, the respondent had issued the Sec.13(4) Possession Notice on 15.02.2023, which was duly served as per the Acknowledgement Cards produced at pg.19 and 20, affixture of Possession Notice produced at pg.18 of typed set of documents respectively. Possession notice is also published in two newspapers one in English “Deccan Chronicle” Chennai Edition and another one in Tamil “Dinakaran” Chennai Edition both dated 17.02.2023 as per the paper publication produced at Page No.21-23 of respondent bank’s typed set.

¶64

It seen that the respondent has produced the copies of the S.13(2) Demand Notice and S.13(4) Possession Notice and its acknowledgement cards for due compliance of the measures taken.

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Subsequently, as applicant did not come forward to repay the dues, the respondent bank had issued Re-Tender Cum Auction Sale notice dated 20.05.2025 scheduling the sale to be held on 08.06.2023, which has been duly received by the applicant, acknowledgement cards produced at pg.28 and 29, and affixture of Sale Notice Produced at pg.26, and published in two Newspapers one in English “Deccan Chronicle” and another one in Tamil “Dinakaran” both dated 21.05.2023. On 08.06.2023, the Authorised Officer of the respondent bank had conducted the auction sale of the secured asset and confirmed the sale in favour of one Mr. Mahendiran Arunothayam, as

SA No.540/2023

09.12.2025

the higher bidder for an amount of Rs.6,06,000/- vide auction confirmation letter dated 08.06.2023, on payment of Rs.1,51,500/- being the 25% of the auction sale amount and the same was intimated to the applicant and others vide Sale Confirmation Letter dated 08.06.2023.

¶70

The Auction proceeding of the respondent bank is produced at Pg.32 and 33 of counter, and Auction Sale confirmation letter of the respondent bank to successful bidder, Mr. Mahendiran Arunothayam is produced at Pg. 34 and 35 of counter. Sale intimation letter of the respondent bank to the M/s. Kingson Enterprises, applicant and Mr. Arunraj Anbu is produced at pg.36 and 37 of counter and acknowledgement cards and return cover which is produced at Pg.38 and 39. The Sale Certificate was issued on 10.08.2023 by the respondent bank to the Auction Purchaser Mr. Mahendiran Arunothayam, which is produced at Pg.40 and 41.

¶71

As the applicants failed to repay the entire outstanding amount the bank has proceeded and approached the CJM, Chengalpattu 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 19.09.2023.

¶72

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. K. Anbarasu, has the Advocate Commissioner to inspect the petition mentioned property, take inventories if necessary and thereafter take possession of the petition

SA No.540/2023

09.12.2025

mentioned property and hand over the same to the petitioner/bank. Ld. Advocate Commissioner the Tahsildar Chengalpattu is directed to assist the Ld. Advocate Commissioner to identify the petition mentioned property by deputing competent revenue and survey officials.

¶77

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 19.09.2023 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 19.09.2023 passed by Ld. CJM, Chengalpattu has not pointed out any illegality in the measures taken by the respondent herein.

¶78

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 not involve any element of quasi-judicial function nor it requires any application of mind.

¶79

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

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even the Chief Metropolitan Magistrate has no jurisdiction to adjudicate the dispute between secured creditor and debtor.”

¶84

The Hon’ble Bombay High Court in the matter of Phoenix ARC Pvt. 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 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 raise objections in the proceedings Under Section 17 of the SARFAESI Act, before Debts Recovery Tribunal”.

SA No.540/2023

09.12.2025

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.

¶90

33. T hus, the Sec.14 order passed by the Ld. Section 14 order dated 19.09.2023 in C.M.P. No.3828 of 2023 passed by CJM, Chengalpattu 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].

¶91

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.

¶92

Consequent to classification of account as NPA has issued S.13[2] Demand Notice, Possession Notice followed by Sale 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 16.11.2022, S.13[4] Possession Notice dated 15.02.2023 and Auction Sale Notice dated 20.05.2023 are held as valid notices issued under the Act.

SA No.540/2023

09.12.2025

Accordingly, the Tribunal concludes the measure taken by the respondent bank in issuance of Section 13(2) Demand Notice dated 16.11.2022 and Section 13(4) Possession notice dated 15.02.2023 are held as valid notices and the Re-Tender Cum Sale Notice dated 20.05.2023; sale held on 08.06.2023 and Sale Certificate dated 10.08.2023 has been issued

¶97

to the Auction Purchaser Mr. Mahendiran Arunothayam, favoring auction purchaser are in accordance with the procedures as required under the Act and Rules made thereunder and same are held as valid measures.

¶98

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 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

¶103

Sl.	Description of Documents	Documents
No.		No.
1.	Possession Notice dated 15.02.2023.	A-1
2.	Copy of impugned Order passed in	A-2
	C.M.P.No.3828 of 2023 by Hon’ble Chief Judicial
	Magistrate, Chengalpattu dated 19.09.2023.

¶104

LIST OF DOCUMENTS PRODUCED BY THE RESPONDENT

¶105

Sl.	Description of Documents	Documents
No.		No.
1.	Demand Notice U/S. 13(2) of the SARFAESI Act,	R-1
	2002 of Respondent Bank issued to the M/s. Kingson Enterprises, Applicant and Mr. Arunraj Anbu dated 16.11.2022.

SA No.540/2023

09.12.2025

2.	Acknowledgment Cards of Demand Notice dated 16/11/2022.	R-2
3.	Possession Notice U/S. 13(4) of the SARFAESI Act, 2002 of Respondent Bank issued to the M/s. Kingson Enterprises, Applicant and Mr.Arunraj Anbu dated 15.02.2023.	R-3
4.	Photograph affixing Possession Notice dated 15/02/2023.	R-4
5.	Acknowledgment Cards and Return Cover of the Possession Notice dated 15/02/2023.	R-5
6.	Publication of Possession Notice dated 15/02/2023 in the English Daily Newspaper "Deccan Chronicle" Chennai Edition dated 17.02.2023.	R-6
7.	Publication of Possession Notice dated 15/02/2023 in the Tamil Daily Newspaper "Dinakaran", Chennai Edition dated 17.02.2023.	R-7
8.	Re-Tender cum Auction Sale Notice under SARFAESI Act, 2002 of the Respondent Bank issued to the M/s. Kingson Enterprises, Applicant and Mr. Arunraj Anbu along with Photograph affixture dated 20.05.2023.	R-8
9.	Acknowledgement Cards and Return Cover of the Re-Tender cum Auction Sale Notice dated 20.05.2023.	R-9
10.	Publication of Re- Tender cum Auction Sale Notice dated 20.05.2023 in the English Daily Newspaper “Deccan Chronicle” Chennai Edition dated 21.05.2023.	R-10
11.	Publication of Re-Tender cum Auction Sale Notice dated 20.05.2023 in the Tamil Daily Newspaper "Dinakaran", Chennai Edition dated 21.05.2023.	R-11
12.	Auction Proceedings of the Respondent Bank dated 08.06.2023.	R-12
13.	Auction Sale Confirmation Letter of the Respondent Bank to Successful Bidder, Mr. Mahendiran Arunothayam dated 08.06.2023.	R-13
14.	Sale Confirmation Intimation Letter of the Respondent Bank to the M/s. Kingson Enterprises, Applicant and Mr. Arunraj Anbu dated 08.06.2023.	R-14
15.	Acknowledgment Cards and Return Cover of the Sale Confirmation Imitation Letter dated 08.06.2023.	R-15
16.	Sale Certificate issued by the Respondent Bank to the Auction Purchaser Mr. Mahendiran, Arunothayam dated 10.08.2023.	R-16

SA No.540/2023

09.12.2025

17.	E-Copy of the Impugned	Order in	R-17
	Crl.M.P.No.3828/2023 of the CJM, dated 19.09.2023.	Chengalpattu
18.	Statement of Account for the	period from	R-18
	01/07/2021 to 02/02/2024.
19.	Proof of service dated 04.03.2024.		R-19

¶114

SCHEDULE OF PROPERTY

¶115

Immovable Property Mortgaged to our Bank

¶116

SCEHDULE –A

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Property 1

¶118

Property Owned By A. Sudha

¶119

Property Description:

¶120

All that Piece and Parcel of Grama Natham House Site measuring 2024 sq.ft., or 00188 sq.mt Comprised in Old Grama Natham Survey No.245, Part as per Grama Natham Patta No.75, the new Grama Natham Survey No.245/1, 689 Sq.ft., or 00064 sq.mt Comprised in Old Grama Natham Survey No.246B Part, as per Grama Natham Patta No.75, the new Grama Natham Survey No.246B/1 in all measuring 2713 sq.ft., or 000252 Sq.mt of Grama Natham House site with Building Situated at Door No.39/2, Christian Street Kodi Kambam Street, V.No.84, Melamaiyur Village (Big Melamaiyur Village), Chengalpattu Taluk, formerly Kancheepuram District, presently Chengalpattu District, within the Registration District of Chengalpattu and Registration Sub District of Joint-I Chengalpattu. Bounded on the

¶121

North : Road, South : Vacant Site, East : House belongs to Mrs. Arputham, West : Vacant Site,

¶122

Within the Registration District of Chengalpattu and Registration Sub District of JSR-I, Chengalpattu.

¶123

Sd/-

¶124

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

A Sudha v. City Union Bank Limited

Case brief

What is this about?

What did the court decide?

A Sudha v. City Union Bank Limited

Case brief

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