Allowed

S Alexander v. City Union Bank Limited

DRT8 Aug 2025SA/596/2023

Case brief

AI extract

What is this about?

The Applicant challenged an order by the District Collector for physical possession under the SARFAESI Act, claiming the survey number in the Collector's order differed from the original notice. The Tribunal found a discrepancy in the survey number and set aside the order, allowing fresh recovery actions.

What did the court decide?

The impugned order dated 23.11.2020 passed by the District Collector is set aside. Expenditures incurred in the order shall not be added to the loan account.

S Alexander versus City Union Bank Limited — Banking and Recovery | DRT (2025)

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SA No.596/2023

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI

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DATED THIS 08^th DAY OF AUGUST, 2025

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PRESENT: SEEMA SINHA

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[PR. DISTRICT & SESSIONS JUDGE - Retd] PRESIDING OFFICER

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SA No. 596/2023

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Mr. S. Alexander, S/o. Mr. Soundarapandian, No. 156-B, Church Street, Mallingapuram @ M. Anaimalaiyanpatti, Uthamapalayam Taluk, Theni District. …. Applicant

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The Authorized Officer, City Union Bank Limited, Ward No. 21, 79-79A, Velappar Koil Street, Cumbum, Theni District. …. Defendant Bank

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Appearance of Advocates: Mr. R. Ravichandaran ---- Counsel for the Applicant M/s. V. Sukumar ---- Counsel for the Defendant Bank

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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 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 23.11.2020 in ROC.No.4013/2019/C5 passed by the District Collector, Theni u/s.14 of the SARFAESI Act 2002 in pursuance

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SA No.596/2023

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thereof the Notice dated 15.09.2023 issued by the Special Tahsildar (Stamps) and quash the same and pass such further or other orders.

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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 he is an Omni Bus Driver and he has purchased a house site bearing Plot No. 31 comprised in S.No. 80/6 situated at Malingapuram @ Anaimalayanpatti Village, Uthamapalayam Taluk, Theni District in the year of 2010. It is submitted that the Applicant has availed Housing Loan for a sum of Rs. 7,00,000/- for constructing a house under Swayam Griha – SAL BR Type. It is further submitted that the Applicant has agreed to repay the said amount in 126 equal monthly installment of Rs. 10,000/- each. The Applicant has deposited his title deeds and created equitable mortgage over the property described in the Schedule. He has repaid the loan from 2014 to 2017 without any default. Thereafter, the Applicant was put to unbearable financial constraints and he was not able to repay the loan dues to the Defendant Bank as per terms of the agreement in time.

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It is further submitted that the Defendant Bank issued notice to him, so he personally met the Defendant Bank officials and requested to grant some time to repay the irregular portion of the loan amount and the Bank officials also advised to repay the loan due at the earliest. To the shock and surprise of the Applicant, the Bank issued a letter to the Applicant informing that the Applicant's loan account was classified as Non Performing Assets. Thereafter, the Defendant Bank issued Possession Notice on 06.02.2018. Now, the Defendant Bank initiated action to take Physical Possession of the secured assets through District Collector, Theni U/s. 14 of the SARFAESI Act vide proceedings in ROC.No. 4013/2019/C5. Further the District Collector, delegate his power to the Special Tahsildar (Stamps) to take Physical Possession of the property and to hand over the same to the Defendant Bank.

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SA No.596/2023

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It is further submitted that he has once again approached the Defendant officials to grant some more time to repay the balance outstanding by installment and to waive the penal interest by restructuring the loan since the Housing Loan period to repay the amount has not been completed, which was not considered by the Defendant Bank. Further, it is submitted that the Impugned order passed by the District Collector and the property described in the Order is totally different from the property described in the Demand and Possession Notice. In the light of above based on the property described in the impugned order the Special Tahsildar could not identified and executed the order passed by the District Collector, Theni. Hence, on the sole ground alone the impugned order has to be dismissed. While the facts are being so, the special Tahsildar issued a notice in Na.Ka.No. 807/2020/E dated 15.09.2023 directed the Applicant to vacate the secured asset on or before 05.10.2023, failing which they will take Physical Possession of the secured asset. Further, it is submitted that the Applicant and his family members are residing in the secured assets (Dwelling house) and he is having only this property. Now the Special Tahsildar issued a notice in Na.Ka.No. 807/2020/E dated 15.09.2023. On receipt of the notice the Applicant filed this Application U/s. 17(1) of the SARFAESI Act before this Hon'ble Tribunal on the following Grounds:

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Main Grounds:

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The Defendant failed to file Affidavit before the District Collector, Theni.

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The Defendant Bank suppressing the entire facts before the Ld. District Collector, Theni and obtained the Impugned Order dated 23.11.2020 against the dwelling house.

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The Defendant wrongly classified the Applicant's loan account as NPA.

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The Defendant Bank failed to issue Demand Notice to the Applicant.

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The Defendant Bank has failed to affix the Possession Notice on the conspicuous part of mortgaged property and failed to publish the Possession Notice in two leading newspapers.

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SA No.596/2023

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The Impugned Order has been passed by the District Collector, Theni without proper description of property and it was totally different from the property described in the Demand and Possession Notice.

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The Defendant has failed to register the alleged transaction with the Central Registry as per the Act & Rules.

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The Authorized Officer name must be mentioned in the notices.

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Statement of Accounts not furnished by the Defendant Bank.

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The interest levied by the Defendant Bank is against the principles laid down in RBI Guideline rules.

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Schedule of the Property

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All that piece and parcel of the land together with building constructed and any super structure to be put up thereon situate at Theni District, Periyakulam Registration District, Uthamapalayam Sub-Registration District, Mallingapuram @ Anaimalayanpatti Village, Residential house site in S.No. 80/6 bearing Plot No. 21 measuring 864 square feet situated within the following boundaries:

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North : Plot No. 20 South : Plot No. 22 East : Plot No. 32 West : 14 feet wide South-North common pathway

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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	Documents Particulars
1.	06.02.2018	Possession Notice
2.	23.11.2020	Impugned Orderpassed bythe District Collector, Theni
3.	15.09.2023	Orderpassed bythe Special Tahsildar(Stamps), Madurai
4.	05.10.2023	Order passed in W.P.(MD) No. 24202/2023 by the
		Hon'ble High Court of Madras(Madurai Bench)

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3 . On the other hand, the Counsel for the Defendant Bank appeared before this Tribunal and filed Vakalat, Counter/Reply Statement, Written Arguments & Typed set of papers in which he has submitted that the

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SA No.596/2023

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Applicant borrowed the Housing Loan facility to the tune of Rs. 7,00,000/ (Rupees Seven Lakhs only) from the Defendant Bank. The Applicant's wife Vanithamary stood as a Co-obligant to the said loan facility. Since, default in repaying the said loan facility, their loan account was classified as Non Performing Assets on 17.04.2017. Thereafter, the Bank has sent the Demand Notice to the Applicant and also to Co-obligant Smt. Vanithamary, which was also received by both of them. Even, then the Applicant did not repay the outstanding loan amount. Thereafter, Possession Notice dated 06.02.2018 was issued and the same was delivered upon the Applicant. The bank has affixed the Possession Notice in the premises and thereby the bank had taken the symbolic possession of the secured asset. Thereafter, the Bank published the Possession Notice in two vernacular newspapers on 09.02.2018.

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The Defendant Bank also filed Petition for taking Physical Possession of the property under section 14 of SARFAESI Act before the District Collector, Theni seeking to take and hand over Physical Possession of the schedule of property to the Bank vide ROC No. 4013/2019/C5. The District Collector, Theni vide order dated 23.11.2020, appointed a special Tahsildar (Stamps), Theni to take Physical Possession of the secured asset. When the Officer attempted to take Physical Possession of the secured asset, the same was resisted by the Applicant by one or another way. Further, the special Tahsildar (Stamps), Theni issued a notice dated 15.09.2023 in Na.Ka.No. 807/2020/East informing the Applicant that he intended to take Physical Possession on 05.10.2023. As against the said notice, the Applicant filed W.P.(MD)No. 24202 of 2023 before the Hon'ble High Court of Madras (Madurai Bench) and the Hon'ble High Court passed order dated 05.10.2023 directing the Applicant to approach Debts Recovery Tribunal, Madurai within a period of 15 days from the date of receipt of order.

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It is further submitted that the Impugned Order passed on 23.11.2020 by the District Collector, Theni. The Notice issued by the Tahsildar (Stamps), Theni is the consequent proceedings of the Order dated 23.11.2020. Therefore, the Applicant ought to challenge the order within a period of limitation. Further, the Applicant availed the above said loan facility and mortgaged the property and also agreed to repay the loan facility within 120 Monthly installment. The Defendant Bank followed the due process of law and initiated the SARFAESI proceedings in view of default. The Defendant complied all procedure prescribed under the SARFAESI Act. Further, it is submitted that the Applicant never approached the Bank with an intention to settle the loan. The Bank had given numerous opportunities to the Applicant to settle the loan but the Applicant failed to do so. After initiation of proceeding u/s. 13(2) of the SARFAESI Act, the Possession

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SA No.596/2023

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Notice U/s. 13(4) of the SARFAESI Act dated 06.02.2018 issued by the Bank to the Applicant. Subsequently, as per the SARFAESI Act the Bank filed the Application under SARFAESI Act before the District Collector, Theni vide proceeding in ROC.No. 4013/2019/C5. Further it is submitted that the description of Schedule of Property was correctly mentioned in the Demand Notice, Possession Notice and Order of the District Collector, Theni. After perusing all the requirements as contemplated u/s. 14 of the SARFAESI Act, the District Collector appointed the Special Tahsildar and directed him to take over the Physical Possession of the Property, which is perfectly valid. The Defendant Bank also filed Affidavit before the District Collector, Theni. After May 2019 to till the date of obtaining the conditional order, the Applicant has not paid the single penny.

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It is further submitted that before commencement of Covid-19, the account of the Applicant became NPA on 17.04.2017 by following the guidelines of RBI. The Defendant Bank issued Possession Notice on 06.02.2018. The same was duly served by affixture in the schedule of property. The Bank levied interest as per the guidelines of RBI. The Defendant already furnished account statement in all occasions as requested by the Applicant.

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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 PAPERS FILED BY THE DEFENDANT BANK

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S.No.	DATE	Description
1	28.09.2017	Demand Notice and AD Card
2	06.02.2018	Possession Notice and AD Card
3	06.02.2018	Possession Notice affixed in the scheduled property
4	09.02.2018	Possession Notice published in English daily
5	09.02.2018	Possession Notice publishedin Tamildaily

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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

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SA No.596/2023

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dispute between the parties with regard to the availment of loan facilities by creating equitable mortgage on his property. In this case, the Applicant contended that initially the Applicant has repaid the monthly installments regularly however, since the Applicant was put to unbearable financial constraints he was unable to repay the loan dues to the Defendant Bank. Hence, the Defendant Bank has initiated recovery proceedings and classified the Applicant's loan account as NPA on 17.04.2017 and issued Demand Notice on 28.09.2017 U/s.13(2) of SARFAESI Act for a sum of Rs. 6,77,053/- (Rupees Six Lakhs Seventy Seven Thousand and Fifty Three only). On the other hand, the Applicant contended in his averments that he did not receive any Demand Notice from the Defendant Bank. I also perused the documents filed by the Defendant Bank and I find that at page nos. 5 & 6 of Bank's Typed set of papers, Bank has filed AD cards for having sent Demand Notice to the Applicant and his Wife, which proves that the Applicant has received the Demand Notice.

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Thereafter, I find that the Defendant Bank had issued Possession Notice U/s. 13(4) of SARFAESI Act on 06.02.2018 for a sum of Rs. 6,77,053/- (Rupees Six Lakhs Seventy Seven Thousand and Fifty Three only). I also find that the Defendant Bank has filed AD Cards as a proof for having sent the copy of Possession Notice to the Applicant by Post vide page nos. 9 to 11 of Bank's Typed set of papers. Further, I find that the Bank has produced the Paper Publication of Possession Notice in two newspapers one in English and another in Tamil (Bank's Additional Typed set of papers at page nos. 2 & 3). The bank has also filed Original photo as a proof for having affixed the Possession Notice on the conspicuous part of the property at page no. 1 of Additional Typed set of papers. Hence, no irregularity has been found in following the SARFAESI Act & Rules by the Defendant Bank in respect of issuance of Possession Notice dated 06.02.2018.

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Thereafter, the Defendant Bank had obtained an Order dated 23.11.2020 passed by the Ld. District Collector, Theni in Roc.No. 4013/2019/C5 dated 23.11.2020 for taking Physical Possession of the

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SA No.596/2023

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Schedule mentioned property and an Advocate Commissioner has also been appointed to take the Physical Possession of the secured asset. Challenging the same, Applicant filed this SARFAESI Application. I perused the Order of the Ld. District Collector dated 23.11.2020 as well as Schedule of Property mentioned in Demand Notice & Possession Notice and I find that there are some differences between the Schedule of Property given in the Impugned Order dated 23.11.2020 passed by the Ld. District Collector, Theni and the Possession Notice dated 06.02.2018 issued by the Defendant Bank. In particular the Survey No. mentioned in the Possession Notice dated 06.02.2018 is “80/6” , whereas in the Impugned Order dated 23.11.2020 passed by the Ld. District Collector, Theni, the Survey No. is mentioned as “ 80/6A1 ”. Hence, I do not find any merit in the issuance of the Impugned Order dated 23.11.2020 passed by the Ld. District Collector, Theni and the subsequent Order dated 15.09.2023 passed by the Special Tahsildar (Stamps), Madurai.

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I also find that both the parties have failed to produce the Statement of Accounts to verify the genuineness of the accounts. Further, the Applicant has not placed any material evidence before this Tribunal to substantiate his claim that the classification of loan account as NPA is wrong and rate of interest has been charged excessively against the guidelines of RBI.

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The Applicant has no doubt being defaulter is liable to pay the loan amount to the Defendant Bank and the Bank has been given ample power to recover the outstanding loan amount from the borrower by invoking the SARFAESI Act and without the intervention of any Court. But, it shall not allow the Bank to take the Physical Possession of the property of the Applicant without following the due process of law strictly.

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In view of the above facts and circumstances of the case, I find that the Applicant has been able to prove his case.

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SA No.596/2023

In the result,

(a) SA No. 596/2023 is allowed. The Impugned Order dated 23.11.2020 passed by the Ld. District Collector, Theni vide Roc. No. 4013/2019/C5 is hereby set aside.

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(b) All the expenditures incurred in issuance of Impugned Order dated 23.11.2020 passed by the Ld. District Collector, Theni vide Roc. No. 4013/2019/C5 shall not be included in the loan account of the Applicant.

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(c) The Defendant Bank is at liberty to initiate fresh action against the Applicant for recovery of outstanding loan amount as per the SARFAESI Acts & Rules.

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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 08^th August, 2025.

sd/-

(SEEMA SINHA)

PRESIDING OFFICER

Uploaded on 02.09.2025

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S Alexander v. City Union Bank Limited

Case brief

What is this about?

What did the court decide?

S Alexander v. City Union Bank Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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