Dismissed

Ms Ans Industries v. State Bank of India

DRT13 Oct 2025SA/604/2022

Case brief

AI extract

What is this about?

Debt Recovery Tribunal dismissed a petition filed under Section 17(1) of the SARFAESI Act seeking to set aside an e-auction sale notice. The court held that the bank had complied with statutory provisions for valuation, notice, and publication, finding no merit in the applicants' complaints regarding reserve prices or description of assets.

What did the court decide?

The Special Application (SA No.604 of 2022) was dismissed; all other pending interim applications were closed; parties to bear their own costs.

Ms Ans Industries versus State Bank of India — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL – II AT CHENNAI

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Dated this 13^th day of October, 2025

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PRESENT: SHRI SHARANG DHAR UPADHYAY Presiding Officer

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SA No.604 of 2022

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M/s. ANS Industries Rep. by its Managing Partner Mr. S. Anbarasan

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S/o. Late. Mr. A.K. Swaminathan S.F.No.51/4B, Perumbadi Road Nellorepet, Gudiyattam Vellore District-632 602

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Mr.S. Anbarasan Late. Mr. A.K. Swaminathan S.F.No. 51/4B, Perumbadi Road Nellorepet, Gudiyattam Vellore District -632 602

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Mrs. Rajakumari W/o S.Anbarasan S.F.No. 51/4B, Perumbadi Road Nellorepet, Gudiyattam Vellore District -632 602

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Mrs. Navaneetham W/o. Late Mr. A. Swaminathan, S.F.No. 51/4B, Perumbadi Road, Nellorepet, Gudiyattam, Vellore District -632 602.

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Mr.S.T. Palanisamy S/o. Thanigimalai No.73/27, V.P. Koil Street Pichanur, Gudiyattam Vellore District

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Mrs. Tennarasi D/o Late Swaminathan S.F.No. 51/4B, Perumbadi Road Nellorepet, Gudiyattam Vellore District -632 602 …Applicants

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Versus

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The Authorised Officer Stressed Assets Recovery Branch State Bank of India Red Cross Buildings Old No.50, New No.32, Montieth Road Egmore, Chennai – 600 008

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The Branch Manager State Branch of India No.15, Railway station road Kondasamudram Gudiyatham-632602

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M/s Jamuna Steel Rolling Mills Rep. by its Authorised Person No.39/40, Prakash Vihar, Sahbad Daulatpur, New Delhi – 110 042 …Respondents

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Counsel on Record / Appeared

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Applicant by : Ld. Counsel M/s P. Tamilvel Respondents 1 & 2 by : Ld. Counsel M/s Ramalingam & Associates 3^rd Respondent by : None

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O R D E R

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This petition is filed under Section 17(1) of the SARFAESI Act seeking

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to set aside the e-auction sale notice dated 21.10.2022 issued by the 1^st respondent bank scheduling the sale to 19.11.2022.

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Facts of the case as averred in the SA

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2.0 The 1^st applicant is the Partnership concern engaged in the business of Steel Rolling Factory for manufacturing of TMT Steel bars. The respondent bank had sanctioned various credit facilities vide its sanction dated

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29.10.2010 viz., CC Limited of Rs.10 lakhs; Term Loan of Rs.40 lakhs and

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Term Loan Rs.15 lakhs. Out of the sanctioned second term loan limit of Rs.15 lakhs only Rs.14 lakhs alone was disbursed to the applicant.

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2.1 Based on the technical committee inspection report dated 13.07.2011 the respondent bank vide sanction dated 08.02.2012 enhanced the CC limit from Rs.10 lakhs to Rs.1 crore and the term loan limits remained unchanged. The term loan of Rs.36 lakhs and Rs.14 was repayable in 50 equated monthly installments. The applicant’s industry became sick only due to the act of the respondent bank that the bank did not sanction and disburse the amount orally agreed upon.

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2.2 Though the applicants were remitting the installments regularly, the loan account was wrongly classified as NPA. The respondent bank issued the demand notice under Section 13(2) on 31.05.2013 followed by a possession notice on 27.12.2013 demanding a sum of Rs.1,65,30,672.74p. The demand notice was not properly served on the applicants.

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2.3 Challenging the possession notice dated 27.12.2013, the applicants filed SA No.67 of 2014 before DRT-III Chennai raising various grounds giving details of the infirmities in the action of the respondent bank. The said SA came to be dismissed by DRT-III Chennai by its order dated 11.03.2014. It is stated that the Tribunal has not decided the SA on merits and the applicants are entitled to allege the illegality and irregularity for declaring the loan account as NPA.

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2.4 The respondent bank issued auction sale notice dated 20.06.2016 fixing the sale on 28.07.2016. Challenging the same the applicants filed SA No.374 of 2016. The said SA came to be dismissed as infructuous as the respondent bank reported that the sale has not taken place on the scheduled date.

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2.5 The second sale notice issued in the year 2019 was challenged by the applicants by filing SA No. 80 of 2019. Again the SA was dismissed as infructuous pursuant to the submission of the respondent bank that the sale did not take place on the scheduled date.

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2.6 The respondent bank has now issued the e-auction sale notice dated 21.10.2022 scheduling the sale on 19.11.2022. The reserve price for the 1^st item of property has been fixed as Rs.3,69,40,000/- but actually the property is worth more than Rs.12 crores. The reserve price for the 2^nd item of property has been fixed as 13,71,000/- but actually the property is worth more than Rs.20,00,000/-. The reserve price for the 3^rd item of property has been fixed as Rs.25,35,000/- but actually the property is worth more than Rs.5 crores. The details of factory building are not mentioned in the notice. The description of the property in the sale notice is not proper.

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2.7 The respondent bank has initiated proceedings under Section 14 of the SARFAESI Act before the District Collector, Vellore without furnishing the copy of the order passed under Section 14 of the SARFAESI Act. The applicant gave a representation on 22.8.2022 to the District Collector and thereafter the copy of the order dated 15.12.2021 was furnished to the

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applicant. Hence the present SA is being filed challenging the e-auction sale

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notice and the actions of the respondent bank pursuant to the same.

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Grounds Urged

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3.0 (i) The respondent has not complied with Rule 8(5) of the Security Interest (Enforcement) Rules, 2002. The respondent bank has not obtained a valuation report from the approved valuer and the reserve price fixed is much lower than the value of the properties.

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(ii) The demand notice issued on 31.05.2013 is forged one and is not served on the applicants.

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(iii) The communication dated 4.11.2019 that the demand notice was

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sent by registered post, however, the record produced respondent bank that the same was sent by speed post.

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(iv) The classification of the loan account as NPA is against the guidelines of RBI.

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(v) The auction sale does not disclose the terms and conditions of the auction as per Rule 8 and 9 of the Security Interest (Enforcement) Rules, 2002 and has thus not complied with the said rules.

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(vi) The respondent bank has failed to comply with Rule 8(1),8(2), 9(4) and 8(6)(d) of Security Interest (Enforcement) Rules, 2002.

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(vii) The respondent bank has charged usurious interest and hence the amount claimed in the sale notice is not proper.

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(viii) The impugned sale notice is neither published in newspapers nor affixed on the secured asset.

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(ix) The loan account has been classified as NPA even before the factory did not commence its commercial operation.

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Documents filed by the Applicants

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4.0 (i) Loan sanctioned letters.

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(ii) Master Circular issued by RBI dated 01.07.2011.

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(iii) Inspection report dated 13.07.2011 filed by Assistant Manager, Consultancy Service Cell.

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(iv) Statement of Accounts issued by the 2^nd respondent in respect of Term Loan I & II.

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(v) Communication dated 5.3.2013 from respondent bank regarding renewal of loan accounts.

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(vi) Communication dated 5.3.2013 from respondent bank regarding recovery of processing charge.

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(vii) Letter from respondent bank dated 11.3.2013.

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(viii) Statement of account in respect of Cash Credit.

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(ix) Demand Notice dated 31.5.2013.

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(x) Letter from respondent bank dated 07.06.2013.

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(xi) Possession Notice dated 27.12.2013.

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(xii) Order dated 11.3.2015 in SA No.67 of 2014.

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(xiii) Order dated 08.08.2016 in SA No.374 of 2016

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(xiv) Sale Certificate dated 20.03.2017 to M. Anandhakumar.

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(xv) RTI reply dated 11.6.2018 by respondent bank.

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(xvi) Interim order dated 23.03.2019 in SA No.80 of 2019.

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(xvii) Final order dated 25.09.2019 in SA No.80 of 2019.

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(xviii) Reply stated 04.11.2019 issued under RTI Act.

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(xix) Sale certificate dated 07.11.2019 to A. Senthil Kumar

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(xx) Order of Hon’ble High Court dated 19.12.2019 in W.P. No.34745 of 2019.

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(xxi) Reply dated 23.03.2020 and 24.07.2020 under RTI Act.

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(xxii) Information dated 19.08.2020 by first appellate authority under RTI Act.

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(xxiii) Complaint dated 12.10.2020 pending before JM, Gudiyattam in C.M.P. No.1884 of 2020.

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(xxiv) Sale notice dated 27.10.2022 by 1^st respondent.

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(xxv) Information under RTI Act on 02.05.2022.

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(xxvi) Information under RTI Act on 21.09.2022 alongwith its translation.

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Counter of Respondent

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5.0 The SA filed by the applicants has no merits and the same is liable to be dismissed in limine with exemplary cost as the Applicants are filing case after case continuously from the year 2014, without taking any step to repay the public money that they had availed and enjoyed.

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5.1 There is absolutely no merit in the SA and it contains only misleading information and no specific infirmities were pointed out by the Applicant. The Applicant cannot maintain the SARFAESI appeal as all the contentions were raised in T.A No. 86 of 2019 by the Applicant and DRT-I allowed the TA on 31.08.2021 after considering all these averments, hence the present SA is hit by principles of res-judicata.

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5.2 Due to the default committed by the Applicants the loan Account was classified as NPA as on 25.04.2013, the Bank is continuously initiating measures under SARFAESI Act and also filed Original Application to recover the dues from the Applicants, however, for all these years the Applicants despite clearing the dues had been filing one case after another and this SA also one such litigation initiated by the Applicants, to stall the recovery measures by the Bank.

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5.3 The facts of the case are:-

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(a) The First Applicant is a partnership firm and the Second Applicant is the Managing Partner. The Applicants 3 and 4 are also partners of the Firm. The Fifth Applicant is a Third party guarantor. The Sixth Applicant is the daughter of one of the guarantors late Mr. A.K. Swaminathan. The first Applicant is a partnership firm was setup with an objective to manufacture (TMT non-tested) rolled bars.

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(b) The Applicant approached the Bank in the year 2009 seeking for a Credit Facility and Term Loan. Accordingly, the Bank had sanctioned

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a Cash Credit facility of Rs. 10 Lakhs and Term Loan of Rs. 40 Lakhs on 16.10.2019. The Credit facility was sanctioned only for the period of 12 months subject to the renewal after 12 months. The term Loan was agreed to be repaid in 60 equated monthly instalments. The facilities were availed by the Applicants and to secure the same, they have executed necessary loan documents. The First, Second, Fourth, Fifth, Sixth Applicants had mortgaged the immovable properties owned by them to secure the said facilities availed by the First Applicant. All the Applicants who had mortgaged their respective properties had also executed letters of confirmation, confirming the creation of mortgage on 07.10.2009, apart from executing Memorandum of deposit of title deeds on 23.10.2009, confirming the creation of mortgage, which was also registered as Doc. No. 8119 of 2009 on the file of the SRO, Gudiyattam.

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(c) At the request of the Applicants they had renewed the Cash Credit facility of Rs. 10 lakhs and the term loan of Rs. 40 Lakhs apart from sanctioning a fresh Term Loan-II of 15 Lakhs to the Applicants on 01.11.2010. The said facilities were sanctioned for purchase of additional machineries and to carry out civil work for coal pulveriser and weigh bridge foundation work. Due to delay in completion of constructions and obtaining electricity connection, commencement of production was delayed. Hence, the Applicants approached the bank and sought for enhancement of Cash Credit facility to a sum of Rs. 1 crore. Considering the Applicants request the Bank conducted a study

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on the viability of the project cost, production feasibility

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available/proposed sanctioned the enhanced facility of Rs. 1 crore in and by a sanction letter dated 21.02.2012.The existing facilities Term Loan 1 and 2 continued from the earlier sanction. The Applicants executed necessary loan documents to secure the said facilities and also extended mortgage of the properties, to secure the enhanced cash credit facility.

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(d) The Applicants agreed to repay the Cash Credit facility on Demand, Term Loans 1 & 2 to be repaid 50 equated monthly installments should have commenced from the month of July 2012 but there was no repayment by the Applicants. On 04.04.2013 the Second Applicant sent a letter requesting to grant more time to regularize the accounts, which was granted however the Applicants failed to regularize the loan account and to make payment. The Applicants had also failed to pay the interest accruals and consequently the loan account of the first Applicant was classified as Non-Performing Asset as on 25.04.2013. Consequent thereto the Respondent Bank issued demand notice under section 13(2) of SARFAESI Act on 31.05.2013, calling upon them to pay the arrears of amount of Rs. 1,59,36,452 as on 30.05.2013 and the samewas served on Applicants.

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(e) Having received the Demand Notice the Applicant sent a letter dated 06.06.2013, asking for a moratorium period of 18 months and further to restructure the term loan. In the said letter, the Applicant had

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admitted the liability and also stated that the manufacture was decreased due to the power problem they faced hence, the Applicants could not repay the credit facilities on time.The Applicants further stated that due to frequent power failure the furnace became cold and that in the process of reheating they have suffered heavy loss. The Applicants again sent a letter dated 22.07.2013, admitting their liability and also had stated that due to power problem they had suffered heavy loss during the season period of January to June and that the month of July to December being off season they had to run the business in loss.

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(f) The Applicants had also executed a revival letter of 01.08.2013, admitting and acknowledging the outstanding due amount in the above said facilities, as on 01.08.2013. As there was no step taken by the Applicants to repay the dues, the Respondent bank issued possession notice dated 27.12.2013 thereby taking symbolic possession of the secured asset. The possession notice was also published in one issue of Tamil Daily “Dhinamani” and one issue of English daily “The New Indian Express” on 29.12.2013 and affixed in conspicuous places of the secured assets.

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(g) Even after taking symbolic possession of the property there was no response from the Applicants towards repayment. Hence, the Respondent Bank filed O.A. 97 of 2015 before DRT-III, Chennai for the recovery of the outstanding dues. Initially the Applicants appeared in the O.A and subsequently they choose not to appear. During 2019,

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notification was issued by the Ministry of Finance regarding territorial Jurisdiction shuffle hence, the O.A was transferred to DRT-I, Chennai and renumbered as T.A No. 86 of 2019. Subsequent to transfer notice was hearing was sent to all the parties, there was no appearance on behalf of the Applicants herein and after hearing bank’s submission DRT–I, Chennai allowed T.A No. 86 of 2019 vide order dated 01.08.2019.Thereafter, the Applicants 1 & 2 filed two Applications in M.A No. 64 & 65 of 2019 seeking to re-open the T.A No. 86 of 2019 also filed W.P No. 34745 of 2019 on the file of Hon’ble High Court, Madras praying for writ of mandamus that the Bank shall not take any coercive action against the mortgaged property.

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(h) In the said Writ Petition the 2^nd Applicant appeared party in person and contended that subsequent to transfer of T.A No. 86 of 2019 no notice of hearing was served on him and the Hon’ble High Court, directed the bank to verify the same with the DRT–I, Chennai. On verification it was found that no indication was sent to the 2^nd Applicant and the same submitted before the Hon’ble High Court, hence, the final order dated 01.08.2019 passed in T.A No. 86 of 2019 was set aside and DRT–I was directed to hear arguments afresh. Accordingly, the Hon’ble DRT-I, after hearing all the parties concerned including the Applicants also accepted the additional documents filed by the Applicants and had allowed the claim of the Applicant Bank as prayed for, vide an order dated 31.08.2021. Even after the final disposal of the original

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Application the Applicants had failed to repay the dues to the Respondent Bank.

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(i) Aggrieved by the aforesaid order the 2^nd Applicant filed Writ Petition in W.P No. 23989 of 2021 seeking for a Writ of Certiorarified Mandamus calling for the records in order passed by the DRT–I, Chennai in T.A No. 86 of 2019 dated 31.08.2021 and quash the same as illegal incompetent without Jurisdiction contradictory to itself. The Writ Petition came up for admission on 10.11.2021, as efficacious alternative remedy available to the Petitioner the Writ Petition was not entertained and dismissed. It is imperative to note that till now the final order dated 31.08.2021 passed in T.A No. 86 of 2019 is in force and remains unchallenged. As the Applicants are continuously thwarting the entire recovery measures of the Respondent Bank they had issued sale notice dated 21.10.2022, fixing the auction on 19.11.2022. On the date of auction, only plant and machineries which is more fully described in item 3 of sale notice was sold to the highest bidder, for a sum of Rs.65,35,000/-. On receipt of the sale proceeds, the same was given credit to the loan account of the Applicants. Aggrieved by the sale notice the Applicants had filed the above SA, with misleading facts.

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5.4 The averments made by the Applicants in para 1 to 4 as to the facilities availed by them are matters of record and the contra allegations as to the facilities sanctioned are denied by the Bank. The Applicants are put to strict proof of the allegation made in this regard. As stated supra, the Respondents

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had written numerous letters to the Respondent Bank, that due to the loss they have suffered and the power problem they had faced, they had suffered heavy loss in the business and there was not even the murmur that due to the mistake on part of the Bank they could not repay the amount. The letters written by the Respondents would testify that the delay in completion of erection and obtaining EB supply, the commencement of production, which was to start from October 2010, was delayed. The First Applicant had obtained the EB Connection, well before the completion of erection of the unit and as a result the first Applicant had to pay huge amount towards demand charges for about 8 months without any production. The Applicants had committed a great error of utilizing the amount sanctioned by the Bank for paying the electricity charges and this had resulted in the Applicants suffering huge loss. In the earlier communications, the Applicants had admitted the mistakes committed by them and the amount that they had to pay towards EB charges but only in the above SARFAESI appeal, the Applicants are making baseless allegations against the bank as though they had faced the difficulties only because of the bank, which is nothing but a bundle of lies.

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5.5 The Applicants are put to strict proof as to various allegations made in paragraph 5 and 6 of the Appeal. The Applicant neither sought for loan of Rs. 3 crores nor the bank had agreed to the same. The facilities will be sanctioned to any borrower only based on the repayment capacity and the security they are offering and there cannot be any oral contract as to the facilities, as wrongly alleged by the Applicants, which is baseless and frivolous. The

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Allegation made by the Applicant as to the demand notice and possession notice are also wrong. The copy of the demand notice and the paper publications were also marked in T.A. 86 of 2013 before the Hon’ble DRT-1 at exhibits A 22 to A 30. The Applicants were party to the said proceedings, and they are well aware of the demand notice, possession notice and necessary publications for the same. Willfully the Applicants are making false allegation as to the demand notice, possession notice and service of the same.

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5.6 As to the averments and allegations made in paragraph 7 to 10 regarding the three SAs filed by the Applicants, the Respondent Bank had clearly stated supra that the result of the same and the observation made by the Tribunals while disposing the SARFEASI Applications. S.A. 67 of 2014, though dismissed for default the Hon’ble DRT-III had confirmed that no infirmity in the S.A. is reported and even according to the counsels for the Applicants the actions of the Respondent Bank are in accordance to law. In the same way though S.A. 67 of 2014 was dismissed as the sale notice had become infructuous for want of bidders, the Hon’ble Tribunal had recorded that the Appellants had failed to establish any infirmities in the S.A. When S.A. 80 of 2018 was disposed as infructuous on 25.09.2019, there was no representation for the Applicants. It is pertinent to note here that the Applicants never took any steps either to set aside or challenging the final order passed in the above SARFAESI Appeal and hence, the observation made by the Tribunal had become final.

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5.7 The Applicants is making submission before this Hon’ble Tribunal that as all the SARFAESI Applications filed by them had not been decided on merits, the Applicants are legally entitled to point out the violation committed by the Bank. Having failed to take steps to set-aside the order passed in SARFAESI Appeals, including the non-compliance of the conditional order the Applicants are submitting that the same were not decided on merits and hence they are legally entitled to point out the alleged violation committed by the Bank, which is contrary to the fact that the orders of the Tribunal is clear to the effect that there are no infirmities in the action of the respondent bank.

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5.8 In so far as the averments in paragraphs 11 to 13, the Respondent Bank submits that the E-auction sale notice has entire details as required under the Act. The Respondent Bank had obtained valuation certificate and only based on that the reserve price was set. As to the allegations made by the Applicants regarding left out machineries the Applicants are put to strict proof of the same. The Respondent Bank submits that the Applicants are making baseless allegations in the air. What are the copies required by the Applicants the same were provided to them and the contra allegations are denied.

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5.9 The Respondent bank has also gone through the various averments made by the Applicants in the grounds of the SARFAESI Application and deny the same. The Respondent Bank submits that before issuing the Sale Notice they had indeed obtained a valuation report from an approved valuer and the contra allegations by the Applicants are denied. As to the present value of the

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Mortgaged property the Applicants are called upon to prove their allegation as to the valuation of the properties. The Applicants are also called upon to prove their allegation that proper particulars of buildings and machineries have not been furnished in the Sale Notice. The Respondent Bank submits that the entire details as required under the Act had been provided in the Sale Certificate and the Contra allegations by the Applicants are denied and they are called upon to prove the same.

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5.10 The Respondent Bank denies the baseless allegations made by the Applicants in the paragraph b and c of the grounds that the Demand Notice dated 31.05.2013 is forged one and it was not sent to the Applicants. It is surprising to note that the Applicants have invented a new allegation as to the Demand Notice that was issued in the year 2013 as extracted supra in the SARFAESI Appeals filed by the Applicants and also in the original application filed by the Respondent bank it had been observed continuously by the Tribunals that there were no infirmities in the steps taken by the Applicant Bank. The Demand Notice and proof of delivery of the same and also publication of the same in Tamil and English Dailies were established before the Tribunal through Exhibits A 22 to A 30. The Applicants who were party to the O.A. proceedings have full knowledge of the same.

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5.11 The allegation made in paragraph d of the grounds are also baseless and hereby denied. All these points were discussed in the contested original application, findings were given and award was also passed in favour of the Respondent Bank. The Applicants are once again agitating the same issue

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before this Hon’ble Tribunal and the Applicants are put to strict proof of these allegations. As to the allegations made in paragraph e of the grounds of the Appeal, the Respondent Bank submits that the auction sale notice which is filed before this Hon’ble Tribunal would show that necessary particulars have been given in the sale notice. The Applicants are hereby called upon to prove the baseless allegations that they are making.

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5.12 The allegation as to the demand notice made in paragraph f of the grounds of appeal is highly irrelevant in view of the submission made by the Applicants supra. It is for the Applicants to prove that how the demand notice was not issued as per the Act and why the auction sale notice is liable to be set aside. The Auction sale Notice is an e-auction sale notice and what are all the particulars necessarily included in the e-auction sale notice had been included in the sale notice and the contra allegations made in g and h by the Applicants are hereby denied and the applicants are called upon to prove the same.

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5.13 The allegations made in paragraph i of the grounds of appeal is baseless and the Act makes it very clear who can act as an Authorised Officer.

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5.14 As to the averments and allegations made in paragraph J of the grounds, the Respondent Bank submits that interest have been charged strictly as per the guidelines of the RBI and all the contra allegations are hereby denied. By stating that no charge has been created over the suit

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schedule property, after conceding to the same from the year 2013, the Applicants are making mockery of the entire judicial system by stating that no charge has been created over the suit schedule property and hence the bank is not a secured creditor in the eye of law. The Applicants are also called upon to prove the baseless allegation made in the paragraph k of the grounds. As to the averments made in paragraph l of the grounds, the Respondent bank reiterates that it had obtained valuation report without proceeding of sale under the act. As to the allegations made in the paragraph M of the ground the Respondent bank reiterates that the sale notice was published in one issue of Tamil Daily and English Daily on 27.10.2022. The sale notice was also affixed in the mortgaged property, as required under the act. The contra allegations are denied.

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5.15 The allegations made by the Applicants as to the master circular in paragraph n have been submitted by them in the Original Application filed by the Bank, which was transferred to DRT-1 and renumbered as T.A. No. 86 of 2019. In the final award passed on 31.08.2021 in T.A. No. 86 of 2019, the Hon’ble DRT-1 had dealt with this point raised by the Applicant in paragraph 16 & 17 of the award and had confirmed that the points raised by the Applicants could not be considered. Thus, the entire allegations made by the Applicants in paragraph n of the grounds was early raised by the Applicants and finally settled by the Tribunal observing that the Applicants cannot shelter under these points. The Applicants are raising the same settled issues also in this SARFAESI Appeal which cannot be entertained.

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5.16 The applicants having availed the facilities in the year 2009, enjoyed the same and enriched themselves, the Applicants committed default in repayment even in the year 2013. After classification of the account as NPA in the year 2013, till date the Applicants are running to one court or another with baseless allegations and without taking any step, to clear the dues. As the Applicants have not repaid any amount and also did not pay the interest accruals, the amount outstanding in the account of the First Respondent due and repayable by the Applicants is Rs. 4,93,68,844/- as on 15.02.2023. The Applicants are liable to repay this outstanding amount, after giving credit to all the sale proceeds received out of the sale of few mortgaged properties.

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5.17 The Applicants are chronic defaulters and court birds, always dragging the Respondent Bank to litigation without any cause. If the SARFAESI Appeal is entertained the Respondent Bank would suffer a lot and it would be very difficult for the realizing the dues from the Defaulters. So far as the Sale Notice that is challenged in this SARFAESI appeal is concerned, the Item 3 property alone was sold and the other two items of properties are not sold due to want of bidders. The applicants have not pointed any infirmity in the actions of the Respondent Bank, which was also confirmed by the Tribunals in the earlier proceedings.

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5.18 Thus contending it is prayed that the SA is liable to be dismissed with exemplary cost.

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Documents filed by the Respondent Bank

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6.0 (a) True extract of the proceedings of DRT-III Chennai in SA No.67/2014 dated 11.03.2015.

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(b) True extract of the proceedings of DRT-III Chennai in SA No.374/2016 dated 08.08.2016.

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(d) Order passed by DRT-I Chennai on 01.08.2019 in TA No.86/2019 (OA No.97/2015).

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(e) Order passed by Hon’ble High Court of Madras dated 19.12.2019 in W.P. No.34745 of 2019.

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(f) Order of DRT-I Chennai dated 31.08.2021 in TA No.86 of 2019.

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(g) Land and building valuation report given by Sadha Consultancy

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(h) Valuation report (Plant & Machinery)

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(i) Land and building valuation report

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(j) Public e-auction notice dated 21.10.2022 sent by the respondent bank to the applicants.

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(k) Copy of paper publication dated 27.10.2022 in English daily “The New Indian Express”.

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(l) Copy of paper publication dated 27.10.2022 in Tamil daily

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“Dinamani”.

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(m) Acknowledgement cards and postal covers.

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(n) Proof of affixture of sale notice.

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(o) Copy of sale certificate dated 3.12.2022.

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(p) RBI Circular dated 20.11.2012.

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(q) RBI Circular dated 25.11.2013.

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Rejoinder filed by Applicants

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7.0 The applicants filed common rejoinder vide Dy No.6129 of 2023 dated 03.08.2023 reiterating the contentions made in the SA.

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Points for consideration

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8.0 Having heard at length the arguments of the Ld. Counsels appearing on behalf of the parties and after going through the documents available on record and the Proof Affidavit filed by the bank in TA No.86/2019 DRT-I Chennai (renumbered as NDN TA 1896 of 2023) in view of the references made by both parties, the following point arises for determination in these proceedings: -

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Whether the impugned sale notice and the subsequent proceedings of respondent are in confirmation with the provisions of the SARFAESI Act, and the Rules framed thereunder?

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Answers to the point for consideration

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9.0 The applicants during the course of hearing had filed IA Dy No.471 of 2024 seeking to permit the applicants to file a proof affidavit and examine the petitioner as PW-1 in the SA to prove his case. Pursuant to the objections raised by the Registry of this Tribunal, the same was placed before the Bench. This Tribunal by its proceedings dated 05.02.2025 while dismissing the IA had observed that the applicant is at liberty to rely on those documents during the course of arguments.

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9.1 The applicants also filed their written submissions along with dates and events. The same is perused and taken into consideration by this Tribunal. The applicants also relied upon the judgment of the Hon’ble Supreme Court in the matter of “ Sree Anandhakumar Mills Ltd., Vs. Indian Overseas Bank & Ors” reported in 2018 2 DRTC 1; “M/s Sardar Associates & Others Vs. Punjab & Sind Bank & Others” reported in 2009 8 SCC 257 and the judgment of Hon’ble DRAT, Kolkatta in “ Union Bank of India & Anr. Vs. Dilshad Elahi” dated 3.5.2024.

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9.2 At the outset, it is to be stated that while the secured creditor has been given the right to enforce the security interest without the intervention of the Court or Tribunal, the secured creditor while enforcing the same shall invariably comply the provisions of the SARFAESI Act and the Rules made thereunder, lest, the Tribunal can set aside the same if questioned.

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9.3 In so far as the ground raised by the applicants with regard to the classification of the account as NPA is concerned, it is the contention of the applicants that the loan account has been classified contrary to the guidelines of the RBI. On the other hand, the respondent bank would contend that the classification of the account as NPA has been done strictly in accordance with the guidelines of RBI. A perusal of the documents filed by the respondent bank and the applicants, especially, the statement of accounts (at Pages 69 to 153 of documents filed by applicants) clearly reveal that the applicants have committed default in repayment and have also failed to pay the interest accrual for more than 90 days and hence the respondent bank has rightly classified the loan account as NPA in the year 2013.

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9.4 In so far as the contention of the applicants that the demand notice is a forged one and the same has not been served on the applicants is concerned, it would be pertinent to note that the respondent bank has issued the demand notice on 31.05.2013 and a perusal of the order of this Tribunal dated 31.8.2021 made in TA No.86 of 2019 reveals that the applicant has filed the proof of delivery of the same and also publication of the same in Tamil and English dailies as Exhibits A-22 to A-25. Further, it is seen from the reply sent by the respondent bank to the 1^st applicant under Right to Information Act enclosing the postal acknowledgements of having served the demand notice on the applicants (Page Nos.125 and 126 of documents filed by the applicant in the SA), the applicants have been served with the notice. Therefore, this ground raised by the applicant fails.

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9.5 In so far as the contention of the applicants with regard to the Possession Notice dated 27.12.2013, it is seen from the records that the respondent bank has issued the Possession Notice and the same is served on the applicants, published in newspapers viz., “The New Indian Express” and “Dinamani” and the same is also affixed on the secured asset (Ex. A-26 to A-30 filed in the OA). Therefore, the respondent bank has scrupulously complied with the provisions of the SARFAESI Act and the Rules made thereunder while issuing the possession notice.

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9.6 Further, in the SA filed by the applicants challenging the Possession Notice viz., SA No. 67 of 2024, the Ld. Counsel appearing on behalf of the applicants has fairly conceded that there are no infirmities in the action of the respondent bank and this Tribunal while dismissing the SA has recorded the same by its proceedings dated 11.03.2015 (Page 1 of typed set of papers filed by respondent bank). Therefore, the applicants are estopped from claiming otherwise.

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9.7 The other ground mainly harped on by the applicants is that the respondent bank has not obtained proper valuation report from the approved valuer and the reserve price fixed by the respondent bank in the sale notice far too low from the actual market value of the properties. In this connection, the respondent bank has filed the valuation report of M/s Sadha Consultancy (Pages 35 to 52 of the typed set of papers filed by respondent bank), valuation report in respect of plant and machinery by Mr. K. Jayavelu, Panel Valuer (at Pages 53 to 63 of the typed set of papers by respondent bank) and

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Valuation Report of Mr. E.R. Jayakumar, Chartered Engineers and Panel Valuers (at Pages 64 to 86 of the typed set of papers by respondent bank), based on which the reserve price was fixed. A perusal of the same clearly reveals that the same has been obtained from an approved valuer and the reserve price has been fixed based on the said valuation report. Therefore, this contention of the applicants also fails.

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9.8 In so far as the other ground raised by the applicants with regard to the description of the properties are concerned, it is to be stated that the same is also in accordance with the Memorandum of Deposit of Title deeds dated 23.10.2019 (Ex. A-9 in the proof affidavit filed by the bank in TA No.86/2019)

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executed by the applicants. Further, in the sale held pursuant to the impugned sale notice, it is seen that only the movable properties have been sold and hence the applicants cannot have any grievance on the same.

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9.9 In so far as the grounds raised by the applicants with regard to the impugned sale notice is concerned, it is to be stated that the respondent bank has produced a copy of the sale notice dated 21.10.2022 and proof of service of the same on the applicants at Sl. No. 13 pages 97 to 106 in the typed set filed by the respondent bank. Further, the respondent bank has also filed proof of publication of the sale notice in two leading newspapers viz., The New Indian Express and Dinamani both dated 27.10.2022 (at Sl. Nos.11 & 12 at pages 95 and 96 of the typed set of papers filed by the respondent bank). The respondent bank at S. No.14 at pages 107 to 112 of its typed set of documents has also produced the proof of affixture of the same on the

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secured asset. Therefore, it is clear that the respondent bank has complied with the provisions of the SARFAESI Act and the Rules made thereunder.

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9.10 In so far as the sale conducted by the respondent bank on 19.11.2022 pursuant to the impugned sale notice dated 21.10.2022 is concerned, it is an admitted fact that only the movable properties viz., plant and machinery have

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been sold and a sum of Rs.65,35,000/- and the auction purchaser has remitted the amounts within the prescribed time limit and hence the same does not call for any interference by this Tribunal.

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9.11 In so far as the contention of the applicants regarding the left out machineries, the applicants have not proved the same by adducing cogent evidence and hence this contention of the applicants also fails.

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9.12 Thus, it is proved by the respondent bank that there is compliance of mandatory provisions of the SARFAESI Act and the Rules made thereunder by the Authorised Officer while issuing the impugned sale notice and in consequent sale of the movable properties. Point is answered accordingly.

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10.0 Therefore, for the aforesaid reasons, the Tribunal finds no merit or substance in the application and the measures as initiated by the respondent bank are in conformity with the provisions of the SARFAESI Act and the Rules made thereunder, as such, the same does not warrant any interference from the this Tribunal.

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11.0 Hence the following:

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ORDER

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(a) SA No.604 of 2022 stands dismissed. All other pending IAs, if any, stands closed.

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(b) Parties to bear their own costs.

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12.0. A copy of this order be communicated to the parties concerned as per

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the rules.

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Sd/(SHARANG DHAR UPADHYAY) PRESIDING OFFICER DRT-II, CHENNAI

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(Dictated to PS, who typed in the system directly, corrected, signed and pronounced by me in Open Court, on this13^th day of October, 2025)

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Ms Ans Industries v. State Bank of India

Case brief

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Ms Ans Industries v. State Bank of India

Case brief

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