Allowed

Nathiya v. Indian Bank

DRT3 Sept 2025SA/609/2023

Case brief

AI extract

What is this about?

In this Securitization Application, the applicant challenged a Possession Notice issued by the respondent bank. The core dispute concerned the procedural compliance regarding the issuance of the Section 13(2) demand notice. The Tribunal found that the bank had not validly served the demand notice to the applicant, rendering the subsequent possession notice defective and unsustainable.

What did the court decide?

The Securitization Application is allowed. The Section 13(2) demand notice dated 17.03.2023 and the possession notice dated 05.10.2023 are set aside.

Nathiya versus Indian Bank — Banking and Recovery | DRT (2025)

SA No.609/2023

03.09.2025

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 3^rd day of September, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SA No. 609 of 2023

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Mrs. Nathiya, W/o. Vinoth, No-165, Govindhachetty Street, Kaveripattinam, Krishnagiri -635 112. ….Applicant -Vs-

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The Authorised Officer, Indian Bank, No.91, DDDC Buildings, Dharmapuri -635 111.

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Also at Indian Bank, Karimangalam Branch, 16, Palacode Road, Karimangalam -635 111 Dharmapuri District ….Respondent

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Counsels on record / appeared:

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Counsel for Applicant : M/s. V.P. Parivallal, G. Sanjeevi Counsel for respondent : M/s. L. Ramkumar

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ORDER ON SA 609/2023

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The present Securitization Application [SA] is filed on 08.11.2023 under sub section [1] of S.17 of the Securitization And Reconstruction of Financial Asset and Enforcement of Security Interest Act,2002 (for short the ‘Act’) challenging the action and the measure taken by the secured creditor under the Security Interest Enforcement Rules, 2002 [for short the Rules].

SA No.609/2023

03.09.2025

The applicant has filed the present SA challenging the Possession Notice dated 05.10.2023 and the outstanding amount due as per Possession Notice is Rs.2,46,86,595/-

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Pleadings of the applicant:

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The applicant is the mortgagor and mortgaged her property as security towards the loan availed by the borrower. Borrower is the husband of applicant and had availed Open Cash Credit facility loan of Rs.1,50,00,000/-, SME Loan of Rs.1,00,00,000/- in the year 2018 for developing business and also executed all loan documents favoring the bank.

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The defendant also sanctioned Rs.15,00,000/- and Term Loan of Rs.7,58,000/- in the year 2020. Due to Covid-19 and continuous illness of the Family members, applicant was unable to continue the repayment, the account was classified as NPA and as per the RBI guidelines and the respondent have issued the possession notice dated 05.10.2023.

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It is contented that the respondent has not issued the demand notice dated 17.03.2023 and apprehending that the respondent may take possession, the present SA is filed. In the grounds it is contended that Sec.13(2) notice is not issued and the bank has not followed the provision of the SARFAESI Act; not published the possession notice in two newspapers and there is no proper description of the property, hence the applicant prays to set aside the possession notice dated 05.10.2023.

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Objections of the respondent bank:

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The bank has filed the counter inter alia contenting that the applicant availed Open Cash Credit facility of Rs.1,50,00,000/-, Term Loan for sum of Rs.1,00,00,000/-, Covid -19 emergency for sum of Rs.15,00,000/- and another Term Loan for sum of Rs.7,58,000/- vide sanction dated 23.03.2018, 04.08.2020 and 28.05.2021. The applicant stood as a guarantor to the loan availed by the M/s. New Sarojini Jewellery, represented by its proprietor Mr. S. Vinoth. The applicant had mortgaged the property favoring the respondent bank. The borrower was irregular and despite repeated request, they failed to make payment to the bank and the account was classified as NPA on 14.03.2023 demanding an outstanding amount of Rs.2,36,05,110/- as on 16.03.2023.

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The bank have issued the Sec.13(2) demand notice on 17.03.2023 demanding an amount of Rs.2,36,05,110/- to be repaid within the period of 60 days. The notice sent to the applicant, M/s New Sarojini Jewellery and to Mr. S. Vinoth represented by its proprietor Mr. S. Vinoth and the same were returned with an endorsement “Unclaimed”. The demand notice was published in the Vernacular daily “Dinamalar” on 04.08.2023 and also published in English Newspaper “The New Indian Express” on 04.08.2023. However the applicant did not repay the amount, hence the bank has issued the possession notice on 05.10.2023 which was also sent by registered post with acknowledgement due and the same is duly acknowledged by the applicant.

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The possession notice is published in two newspapers, one in English daily “The New Indian Express” and another in Tamil daily “Dinamani”.

SA No.609/2023

03.09.2025

Bank denies the allegations made in the SA and prays for dismissal of the

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SA.

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

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case

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There is no denial of availing the loan, mortgage of the property as security and the default in repayment resulting in classification of the account as NPA.

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The respondent after classifying the loan account as NPA had proceeded under the SARFAESI Act. And issued the S.13[2] demand notice. It is the specific case of the applicant that the Sec.13(2) demand notice dated 17.03.2023 though has returned unserved on 30.11.2023 and 01.12.2023 as per the bank acknowledgement cards, but the respondent has taken out the paper publication of the demand notice on 04.08.2023 which is not within the period of 7 days as required under the Act.

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It seen that the Sec.13(2) demand notice is dated 17.03.2023 and the bank has taken the paper publication on 04.08.2023 which is not within the period of 7 days and the returned acknowledgement cards produced by the bank at pg.63 is dated 30.11.2023 and 01.12.2023, whereas the S.13[2] demand notice is dated 17.03.2023. Thus, it is evident that the postal acknowledgement cards which is produced by the respondent bank contenting that the Sec.13(2) demand notice have returned unserved does not support the case of the bank and the bank have not produced the

SA No.609/2023

03.09.2025

correct unclaimed RPAD covers pertaining to Sec.13(2) demand notice dated 17.03.2023.

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Thus, the applicant has established that the respondent has not served the Sec.13(2) demand notice as prescribed under the Act and the documents produced does not support the due compliance of issuance of S.13(2) demand notice dated 17.03.2023. As the bank has proceeded further in issuing the possession notice dated 05.10.2023 based on the Sec.13(2) demand notice dated 17.03.2023 the possession notice is only to be set aside. Accordingly, SA Stands Allowed setting aside the Sec.13(2) demand notice dated 17.03.2023 and consequently the possession notice

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dated 05.10.2023 is also set aside. Sd/-

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

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( Dictated to Steno (Suriya), transcribed by him, corrected, signed and pronounced by me on this the 3^rd day of September, 2025)

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ANNEXURES

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LIST OF DOCUMENTS PRODUCED BY THE APPLICANT

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Sl.	Description of Documents	Documents
No.		No.
1.	Possession Notice dated 05.10.2023.	A-1

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LIST OF DOCUMENTS PRODUCED BY THE RESPONDNET

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Sl. No.	Description of Documents	Documents No.
1.	Sanction Ticket dated 23.03.2018.	R-1
2.	Sanction Ticket dated 04.08.2020.	R-2
3.	Sanction Ticket dated 28.05.2021.	R-3
4.	Demand Promissory note dated 03.04.2018.	R-4
5.	Medium Term Loan Agreement dated 03.08.2018.	R-5
6.	Agreement of Hypothecation of Movables dated 03.04.2018.	R-6

SA No.609/2023

03.09.2025

7.	Agreement of Guarantee executed by the applicant dated 03.04.2018.	R-7
8.	Agreement of Guarantee executed by the Applicant dated 05.08.2020.	R-8
9.	Agreement relating to deposit of Title Deeds registered as Doc.No.614 of 2018 in the office of Sub-Registrar, Karimangalam, executed by the Applicant in favour of the Respondent Bank dated 04.04.2018.	R-9
10.	Supplemental Memorandum of deposit of Title Deeds registered as Doc.No.1345 of 2020 in the office of Sub-Registrar, Karimangalam, executed by the Applicant in favour of the Respondent Bank dated 05.08.2020.	R-10
11.	Demand Notice along with its return covers dated 17.03.2023.	R-11
12.	Paper publication of Demand Notice both in English and Tamil daily dated 04.08.2023.	R-12
13.	Possession Notice dated 05.10.2023.	R-13
14.	Paper publication of Possession Notice both in English and Tamil daily dated 06.10.2023.	R-14
15.	Photo of Annexing the Possession Notice in the property dated 06.10.2023.	R-15
16.	Statement of Accounts.	R-16

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SCHEDULE OF PROPERTY

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All that pieces and parcel property situated at S.F. No.716/9 & 716/8, Karimangalam Town Panchayat of Dharmapuri Registration District, Karimangalam Sub Registration District, Palacode Taluk, Dharmapuri District.

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Bounded by:

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North Shop Building of Bhakthavatchalam;

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South Shop Building of Jarina Begum;

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East Cement Road

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West Trunk Road.

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