Dismissed

G Mahalakshmi v. Union Bank of India

DRT7 Oct 2025SA/559/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed an application challenging a Section 14 possession order. The Court held that Section 14 powers are ministerial and non-adjudicatory, making the order final. The bank demonstrated compliance with Section 13 notices and sale procedures, leading to dismissal.

What did the court decide?

The Securitization Application was dismissed with no order as to costs, and any interim stay order was vacated.

G Mahalakshmi versus Union Bank of India — Banking and Recovery | DRT (2025)

SA No.559/2022

07.10.2025

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 7^th day of October, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SA No. 559 of 2022

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G. Mahalakshmi, W/o Gokulakannan, No.11, F2, Ranganathan Avenue, 3^rd Cross Street, Thirumalai Nagar, Chennai -600 099. ….Applicant -Vs-

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M/s Union Bank of India, Formerly known as Andhra Bank, Perambur Branch, No.3 & 4, Paper Mills Road, Perambur, Chennai -600 099. Rep. by its Authorised Officer, Mr. C. Sujajoshua, (Amended as per order in CMP.5354/22 Dated 18.07.2022) ….Respondent

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Counsels on record / appeared:

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Counsel for Applicant : M/s. J. Rajmohan Counsel for respondent : M/s. S. Parthasarathy

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ORDER ON SA 559/2022

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The present Securitization Application [SA] is filed on 22.12.2022 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 filed the present SA challenging the Sec.14 order dated 08.11.2022 in Crl.M.P. No.1213 of 2021 passed by Chief Judicial Magistrate, Tiruvallur and the outstanding amount due as per Sec.14 order is Rs.46,47,741/-

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Pleadings of the applicant:

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The applicant is the borrower who had availed a housing loan for the purchase of flat in the year 2017 for a sum of Rs.36,50,000/- agreeing to repay the same and monthly installments of Rs.30,180 p.m for a period of 295 months along with floating rate of interest @8.75% per annum and had mortgaged the flat worth Rs.60,51,000/- as security towards the repayment.

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The applicant has also executed the deposit of title deeds favoring the respondent bank on 26.04.2017 registered as Doc.No.2172/17 at SRO, Madhavaram. The applicant was paying the regular EMI till the end of year 2018 but could not pay the EMI’s for a period of 3 months and immediately, the respondent bank have issued the Sec.13(2) demand notice on 01.09.2018 calling upon the applicant to pay the entire outstanding amount of Rs.38,37,978.50/- within a period of 60 days, which was followed by the possession notice dated 22.11.2018.

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It is contended that the applicant contents that she is a house wife and her husband is working in private concern was not able to pay the monthly EMI’s for a 3 months due to covid-19 which started form March 2020 and second wave from April 2021. The respondent without

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considering the situation have issued the sale notice during the pandemic situation on 09.12.2020 fixing the e-auction sale on 30.12.2020 by giving a 15 days’ time to discharge the liability under rule 8 & 9 of the security interest rules,2002. Immediately the applicant approached the bank seeking for moratorium period of six months and also submitted the tenant residing has offered to purchase the flat.

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However, the applicant was shocked to now that the advocate commissioner has been appointed under Sec.14 order 08.11.2022 passed by the CJM, Tiruvallur in Crl.M.P.No.1213/2021 for taking the possession. The applicant came to know that the bank has committed breach of trust by colliding with the bidder and have sold the residential flat for a very low price of Rs.36 Lakhs has against the market value of more than Rs.60 Lakhs.

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The respondent bank without given an opportunity to enter into a triparty agreement with her tenant who had expressed to purchase the flat have sold the property at a lower price. In the grounds, it is contented that the impugned order dated 08.11.2022 passed by CJM, Tiruvallur in Crl.M.P.No.1213/2021 is liable to be set aside as the bank has suppressed the material facts about the auction sale conducted on 30.12.2020 and the issuance of the sale certificate dated 23.04.2021.

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The bank have suppressed the fact of handed over the delivery and possession of the property as mentioned in the sale certificate dated 23.04.2021 which is registered in the officer of the Sub Registrar as

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Doc.No.3117/2021 at SRO, Madhavaram. The bank has not followed all the procedures and have violated the constitutional right to hold the property under Article 300A. Hence prays to set aside the measure of taking physical possession pursuant to order dated 08.11.2022 passed by CJM, Tiruvallur in Crl.M.P.No.1213/2021.

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Objections of the respondent bank:

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The respondent bank has filled the detailed counter inter alia contenting that the applicant has preferred the present application under section 17 challenging the order of Chief Judicial Magistrate, Tiruvallur in Crl.M.P. No.1213 of 2021. It is specific contention of the respondent bank that the appeal is not maintainable either in law or on facts and is liable to be dismissed in limine as the applicant has filed the appeal without any cause and abuse of the process of the law and for malafide intentions.

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The respondent denies all the allegations made in the ground and the averments made in the SA and the grounds in the appeal. It is the case of the respondent bank that the applicant borrower had availed housing loan of Rs.36.50 Lakhs on 19.04.2017 vide loan account No.158930100026582 and had mortgaged the property which was purchased by way of Housing Loan under the Registered Sale Deed in Document No.2171 of 2017, dated 24.04.2017.

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The applicant has deposited the title deeds, the sale deed and other documents pertaining to the land and building measuring built up area of 877 Sq.ft., undivided share of 482 sq.ft., out of total extent of 3300 sq.ft.,

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flat bearing No.F2, 1^st Floor in “Vel’s Pride” at Plot No.11, Thirumalai Nagar, Extension, known as Ranganathan Avenue, Madhavaram Village, Madhavaram Taluk, Thiruvallur District comprised in Survey No.1392/2 part, within the Sub Registration District of Madhavaram and Registration District of Madhavaram Chennai North.

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Further the applicant had deposited the title deeds by way of MOTD (Memorandum of Deposit of Title Deeds) which has registered as Doc.No.2172 of 2017 dated 26.04.2017. The applicant was irregular in making the repayment, the account was classified as NPA on 29.08.2018 as per RBI guidelines and the total outstanding amount in the loan account is of Rs.46,47,741/- as on 24.09.2020. The bank has issued the demand notice dated 01.09.2018 under section 13(2) by registered post which is received as per the acknowledgement on 17.09.2018.

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The applicant was specifically asked to discharge the liabilities within a period of 60 days from the date of the receipt of the demand notice failing which the bank would proceed further for enforcement of the Act. The bank has issued the possession notice dated 22.11.2018 under section 13(4) rule 8(1), the possession notice was sent by registered post and the borrowers have received it which is acknowledged on 19.12.2018. The possession notice is also affixed on the property and paper publication in Tamil and English having circulation in the region if effected on 28.11.2018.

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The bank has issued the 1^st sale notice on 14.05.2019 with a clear 30 days’ notice fixing the auction sale on 28.06.2019 between 11.30 am and

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12.30 noon. The sale notice was sent by registered post which is received by the borrower on 17.05.2019, the paper publication of the sale notice is effected in Tamil and English on 16.05.2019. The bank have issued the 2^nd sale notice dated 09.12.2020 giving a clear 15 days’ notice fixing the auction on 30.12.2020. The sale notice returned un-served on 11.12.2020, the sale notice is affixed on the property as mandated under Rule 8(7), published in the two newspapers English and Tamil on 11.12.2020 as referred under Rule 8(6). The bank has obtained valuation form the approved valuer and fix the reserve price of property at Rs.44.00 Lakhs before effecting sale of the secured asset.

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The sale was intimated to the successful bidder on 30.12.2020 for the bid price of Rs.36.00 Lakhs and the sale confirmation was issued on 31.12.2020. The auction purchaser has paid 25% of the bid amount as upfront Rs.9.00 Lakhs including the EMD remitted on 01.01.2021. The bidder has also pay the balance amount within 15 days of the sale confirmation which is issued on 31.12.2020. The auction purchaser vide letter dated 12.01.2021 requested the Authorized Officer to grant 3 months’ time to make the balance payment of 75% which was granted by the authorized officer vide letter dated 13.01.2021 as contemplated under Rule 9(4).

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Subsequently the auction purchaser has paid the entire sale consideration and the sale certificate was issued by the 1^st respondent on 31.03.2021. The bank initiated the measure after classifying the account as NPA giving 60 days’ notice and have issued the Sec.13(2) demand notice

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and Sec.13(4) possession notice. The applicant has filed the present SA challenging the Sec.14 Order dated 08.11.2022 and the matter came up on 30.12.2022 and the Tribunal while considering the IA for stay has passed this orders.

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‘Perused records. Since Applicant had filed a Memo suggesting that Applicant is ready with 35% of the due amount mentioned in the Ld. CJM order, available in the form of demand draft as Respondent Bank had refused to receive the said amount and consequently prayed for stay of all further proceedings under SARFAESI, it was contemplated to be done son. It later transpired that sale is already concluded even prior to the order from Ld. CJM and hence no interim stay in granted at this stage. However, applicant is permitted to deposit the balance claimed amount to continue his possession contrary to the order of Ld. CJM by or before 31.01.2023. ’

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The applicant has complied with the conditional order and paid 35% on 07.01.2023 being Rs.16,26,710/- and paid 65% on 27.01.2023 being Rs.30,21,031/- totaling to Rs.46,47,741/-. The applicant had more opportunity to redeem the property and never challenged the possession notice dated 22.11.2018 and after issuance of several sale notices, scheduling the property to be sold, the applicant has now challenging the sale notice and challenging the sale certificate in SA challenging the Sec.14 order.

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The applicant though had sufficient time to redeem the property has not redeemed it and the applicant is liable to pay a sum of Rs.12,70,858/-

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as on 12.01.2022 after the sale of the secured asset by way of auction sale and sale proceeds had been appropriated to the loan account of the applicant and there is a loss on sale to the tune of Rs.12,70,858/- after auction sale of the property. Hence the respondent bank prays for the dismissal of the SA.

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

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It is a matter of record that the applicant is the borrower who had availed the Housing Loan of Rs.36,50,000/- agreeing to repay the same on monthly installments of Rs.30,180 p.m for a period of 295 months along with floating rate of interest @8.75% per annum and had mortgaged the flat worth Rs.60,51,000/- as security towards the repayment.

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The applicant does not dispute the creation of mortgage by deposit of title deeds which is registered as Doc.No.3134/2021 in the officer of the Sub Registrar Madhavaram. Admittedly there is default in the repayment resulting in the classification of the account as NPA on 29.08.2018, the bank after classifying the account as NPA has issued the Sec.13(2) demand notice on 01.09.2018 which is admittedly received by the applicant as per the acknowledgement dated 17.09.2018 which is produced by the respondent bank at pg.19 of the typeset.

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On perusal of the S.13(2) demand notice, it is clear the respondent bank has clearly described the name of the borrower, the guarantor the types of the loan availed, the creation of the mortgage and the classification

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of the account as date of NPA and have also intimated the borrower about sec.13(8) to redeem the property as per the Act. Though the applicant have received the Sec.13(2) demand notice dated 01.09.2018 on 17.09.2018 did not repay the entire outstanding amount due within a period of 60 days nor raised any objections to the demand made.

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Hence the bank have issued the possession notice dated 22.11.2018 which was sent by RPAD, received by the applicant as per the acknowledgement card produced at Pg.21 on 19.12.2018. The respondent bank has affixed the possession notice on the secured asset as evident from pg.23 of the typeset, published the S.13(4) possession notice in English and Tamil under Rule 8(2) of the Act.

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Thus, the respondent bank have established the due compliance of the procedures as prescribed under the Act and Rules made thereunder. As the borrower and mortgager did not liquated the liability in spite of receipt of the demand notice and the possession notice, the bank has proceeded in issuing the sale notice dated 09.12.2020 which was also sent by RPAD which is returned, the sale notice is published in the two newspapers on 11.12.2020 and affixed on the property as evident from pg.41-43.

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As the sale did not materialize the bank has issued the second sale notice dated 30.12.2020 which has materialize and the property was sold to the auction purchaser. It seen that the sale was confirmed to the auction purchaser on 31.12.2020. However, the auction purchaser sought time to

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comply with the balance payment vide letter dated 12.01.2021 and authorized officer under Rule 9(4) have granted the extension to pay the balance amount vide letter dated 13.01.2021. On receipt of the entire sale consideration, the secured creditor have issued the sale certificate in favour of the auction purchaser on 31.03.2021 and the same is registered as Doc.No.3117/2021.

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Thought the applicant have challenged Sec.14 order in the present SA, the averment as reflected in the present SA is pertaining to the auction sale held and it is also pertinent to note that the applicant has not challenged the sale nor the sale notice and the sale held and have challenged the sec.14 order in guise of raising the allegations in respect to the auction held.

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As the sale notice or the sale held is not the subject matter in the present SA the Tribunal is not adjudicating the same in the present SA. Though the applicant has challenged the Sec.14 order there is no dispute with regard to the receipt of the S.13(2) demand notice and the S.13(4) possession notice dated 22.11.2018. In fact the respondent bank have produced all the documents establishing the due service of the statuary notices and the procedures with supporting documents which are held as valid notices issued under the Act.

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In fact the applicant has not pointed out any illegality in respect to the sec.14 application, affidavit or the order passed by the Ld. CJM, Tiruvallur.

SA No.559/2022

07.10.2025

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.

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Furthermore, the Hon’ble Supreme Court in the matter of Kotak

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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. 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

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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”.

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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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33. T hus, the Sec.14 order passed by the Ld. Section 14 order dated 08.11.2022 in Crl.M.P. No.1213/2021 passed by CJM, Tiruvallur is after due consideration of the application, affidavit filed 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].

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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.

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Consequent to classification of account as NPA, has issued S.13[2] demand notice followed by possession notice and have complied all the

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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] dated 01.09.2018 and S.13[4] possession notice dated 22.11.2018 are held as valid notices issued under the Act.

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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.

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Sd/- (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 07^th day of October, 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.	Sale Notice dated 09.12.2020.	A-1
2.	Certified copy of sale certificate dated 23.04.2021.	A-2
3.	Certified copy of MODT dated 23.04.2021.	A-3
4.	Impugned Order dated 08.11.2022.	A-4

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LIST OF DOCUMENTS PRODUCED BY THE RESPONDNET

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Sl. No.	Description of Documents	Documents No.
1.	Letter of Sanction dated 19.04.2017.	R-1
2.	13(2) Demand Notice issued to the Borrower dated 01.09.2018.	R-2
3.	Acknowledgement by Borrower dated 17.09.2018.	R-3
4.	Possession Notice under Rule 8(1) dated 22.11.2018.	R-4
5.	Acknowledgment of the Borrower dated 19.12.2018.	R-5
6.	Affixing possession notice-Photographs Rule 8 (1).	R-6

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7.	Paper Publication in English under Rule 8(2) dated 28.11.2018.	R-7
8.	Paper Publication in Tamil under Rule 8(2) dated 28.11.2018.	R-8
9.	1^stSale Notice for sale of Secured Asset under Rule 8(6) and 9(1) dated 14.05.2019.	R-9
10.	Acknowledgement by the Borrower dated 17.05.2019.	R-10
11.	Paper Publication in English under Rule 8(6) dated 16.05.2019.	R-11
12.	Paper Publication in Tamil under Rule 8(6) dated 16.05.2019.	R-12
13.	Sale Notice for sale of secured asset under Rule 8(6) and 9(1) dated 09.12.2020.	R-13
14.	Returned Cover dated 11.12.2020.	R-14
15.	Paper Publication in English under Rule 8(6) dated 11.12.2020.	R-15
16.	Paper Publication in Tamil under Rule 8(6) dated 11.12.2020.	R-16
17.	Affixing Sale Notice-Photographs Rule 8(7).	R-17
18.	Sale Intimation Letter to the Auction Purchaser dated 30.12.2020.	R-18
19.	Sale Confirmation issued to the Auction Purchaser dated 31.12.2020.	R-19
20.	Request letter from the Auction Purchaser for extension time dated 12.01.2021.	R-20
21.	Approval for extension of time for balance amount by the Authorized Officer under Rule 9 (4) dated 13.01.2021.	R-21
22.	Sale Certificate issued by the Respondent in favour of Auction Purchaser under Rule 9(6) dated 31.03.2021.	R-22
23.	Sale Certificate registered as Document No.3117 of 2021 in favour of Auction Purchaser dated 23.04.2021.	R-23
24.	Orders of CJM, Tiruvallur in Crl.M.P. No.1213 of 2021 under section 14 of SARFAESI Act, 2002 dated 08.11.2022.	R-24
25.	Valuation Report of residential building under Rule 8(5) dated 27.07.2020.	R-25
26.	Memorandum of Deposit of Title Deeds registered as Document No.2172 of 2017 in favour of Respondent dated 23.04.2021.	R-26
27.	Statement of Account in loan A/c. No.158930100026582 dated 17.01.2022.	R-27

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DESCRIPTION OF IMMOVABLE PROPERTY

SA No.559/2022

07.10.2025

Residential Flat at Plot No.11, Flat No.F2, Ruby Block, Vel’s Pride Apartments, 3^rd cross street, Thirumalai Nagar Extension, Ranganathan Avenue, Kolathur, Chennai -600 099, land admeasuring 482 sq.ft., UDS, out of 3300 sq.ft., and built up area of 877 sq.ft., together with residential flat thereon situated in Survey No.1392/2 part, Madhavaram Village, Madhavaram Taluk, Chennai District held in the name of Mrs. G. Mahalakshmi W/o Gokulakannan covered by sale deed No.2171/2017 dated 26.04.2017 and construction agreement No.2169/2017 dated 26.04.2017 registered at Sub Registrar Office, Madhavaram.

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Bounded by

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On the North by : 20 Feet Road On the South by : Plot No.16 On the East by : Thirumalai Nagar Plot On the West by : Plot No.12 Sd/-

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PRESIDING OFFICER, DRT-III, CHENNAI

G Mahalakshmi v. Union Bank of India

Case brief

What is this about?

What did the court decide?

G Mahalakshmi v. Union Bank of India

Case brief

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