Allowed

M Murugeswari v. Punjab National Bank

DRT11 Sept 2025SA/621/2023

Case brief

AI extract

What is this about?

In this SARFAESI application, the applicant sought to set aside a Possession Notice issued by the bank. The Tribunal examined procedural irregularities regarding service of Demand Notice and newspaper publication. Finding significant defects in the bank's compliance with statutory requirements, the Tribunal set aside the Possession Notice while allowing the bank to initiate fresh recovery proceedi

What did the court decide?

Possession Notice dated 17.10.2023 set aside; expenditures on notice excluded from loan account; liberty granted to bank for fresh action.

M Murugeswari versus Punjab National Bank — Banking and Recovery | DRT (2025)

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SA No.621/2023

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI DATED THIS 11^th DAY OF SEPTEMBER, 2025 PRESENT: SEEMA SINHA [PR. DISTRICT & SESSIONS JUDGE - Retd] PRESIDING OFFICER

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SA No. 621/2023

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M. Murugeswari, W/o. P. Marimuthu, Jayabharath Housing, Unit-4, Aruppukottai Main Road, Avaniapuram, Madurai – 625 012. --- Applicant

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-Vs-

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The Authorised Officer, Punjab National Bank, SASTRA, PNB House, Trichy Thanjavur Road, Kailasapuram, Trichy -620 014. --- Defendant Bank

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Appearance of Advocates: Mr. K. Murugan --Counsel for the Applicant Mr. R. Pandivel --- 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(1) of the SARFAESI Act, 2002 by the Applicant praying that this Hon'ble Tribunal may be pleased to set aside the Possession Notice dated 17.10.2023 issued by the Defendant Bank.

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Page 1 of 9

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SA No.621/2023

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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 the Applicant and Applicant's husband P. Marimuthu have been running a tailoring unit for manufacturing readymade garments for a private company. In order to improve the business, Applicant and her husband approached the Capital First Finance for availing certain credit facility. The property described in the description of property belongs to Applicant. After perusing all the records of Applicant and Applicant's husband, Capital First Finance sanctioned a sum of Rs. 32,00,000/- towards Mortgage loan. The Applicant was servicing the principal and interest very promptly and regularly. The Applicant requested for additional loan of Rs. 10,00,000/- but Capital First Finance was not inclined. Hence, the Applicant and her husband approached the Defendant to take over the loan from Capital First Finance and to grant a loan of Rs. 50,00,000/-. After perusing all the records, the Defendant agreed to give a sum of Rs. 50,00,000/-. So, Applicant executed MODT in favour of Defendant for Rs. 50.00 Lakhs on 30.08.2018. On the contrary, Defendant sanctioned only a sum of Rs. 37.00 Lakhs to the Applicant. The Applicant was servicing the principal and interest very promptly and regularly and so far, paid a sum of Rs. 21,37,649/- towards the loan account approximately.

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The Applicant submitted that due to labour problem and heavy competition in the field besides demonetization, introduction of GST, Covid19 Pandemic followed by Omicron, she incurred heavy loss. Hence, she could not repay the loan dues to Defendant. Thereafter, the Defendant issued Notices U/s.13(2) & 13(4), but the same was not served on the Applicant and her husband. The Defendant has affixed the 13(4) notice in the property and after perusing the affixture of 13(4) notice, the Applicant came to know that Defendant has already issued Demand Notice on 19.05.23. Immediately, Applicant rushed to the Defendant and sought an explanation with regard to the said Demand Notice and Possession Notice dated 17.10.2023, but the Defendant was not in a position to explain as to why the said Demand Notice and Possession Notice was issued to the Applicant. The Applicant requested the Defendant to regularize the account, but it was not considered by the Defendant. The Defendant has also not considered to grant Covid-19 loan, if it is granted, the Applicant's loan account will not slip into NPA. Hence, the classification of Applicant's loan account as NPA itself is invalid and incorrect. The Applicant submitted that Defendant has filed OA No. 193 of 2022 against Applicant and her husband for recovery of Rs. 45,20,055.49p before this Hon'ble Tribunal and the same is still pending for adjudication.

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Page 2 of 9

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SA No.621/2023

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It is further submitted that the symbolic possession of the property taken by the Defendant is illegal and liable to be set aside. The Defendant has also failed to publish the said Possession Notice in two leading newspapers. The Defendant has not followed Rule 8 (1) of the Security Interest (Enforcement) Rules 2002, hence the Possession Notice is untenable in law and unsustainable. The Possession Notice has also not been served on the borrowers as required under SARFAESI Act. As per Possession Notice, the Defendant claimed a sum of Rs. 25,74,010.11p is due from Applicant as on 30.04.2023. The Defendant has failed to observe the procedures while issuing notices under SARFAESI Act. The Defendant has acted in an arbitrary manner. Hence, this SARFAESI Application is preferred on the following among other

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Main Grounds:-

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The Act of the Defendant is illegal and therefore the alleged Possession Notice is liable to be set aside as illegal.

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The Defendant has not furnished the Statement of Account in oral to enable the Applicant to satisfy the liability due to the Defendant.

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The Defendant has not given proper entries of various payments made by the Applicant. The Interest charged by the Defendant is not in accordance with RBI Guidelines.

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The Defendant has not made proper Paper Publication of the notices issued under Sections 13(2) and 13(4) notices as contemplated under SARFAESI Act.

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The Defendant did not give any proper Demand Notice and Possession Notice as contemplated under SARFAESI Act.

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The classification of borrower's account as NPA itself is invalid. No break up details is provided with regard to the principal amount and interest due on the alleged date of NPA.

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The Defendant has failed to give the correct description of property for the secured asset in the Possession Notice dated 17.10.23 and failed to give correct outstanding amount in the Possession Notice.

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Description of Property

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An extent of 2 cent 275 ½ sq.ft. of vacant house site along with house construction consists of having East West Northern 47 ¼ ft. Southern 45 ½

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Page 3 of 9

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SA No.621/2023

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ft. North South Eastern 20 feet Western 20 ft. Hence, 927 ½ Sq.ft. house site including of Eastern 220 sq.ft. for road. Hence, 1147 ½ sq.ft. out of 83 cents (0.33.50) divided into plots in the name and style of Sona Nagar plot bearing No. 33 in Punja R.S.No. 16/3B2 bearing patta No. 383 at present as per sub division R.S.No. 16/3B2A2 bearing patta No. 2193 situate at Nilayur Bit-1 Madurai South Taluk, Tirupparankundram Sub-District, Madurai South Registration District having its following four boundaries bounded on the East by 16 feet breadth of common road

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West by S.No. 16/3A Nadanagopalanayaki Colony House site North by Plot No. 34 House site South by Plot No. 32 House site

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The Applicant has submitted the following List of documents in support of her claim in the SA, which are as follows:

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LIST OF DOCUMENTS

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S.No.	Date		Description
1	17.10.2023	13(4)Notic	e
2	11.08.2022	Summon	received in	OA	No.
		193/2022

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3 . On the other hand, the Counsel for the Defendant Bank appeared before this Tribunal and filed Vakalat, Reply Statement, Typed set, & Written Arguments in which they submitted that the Applicant had categorically admitted the borrowal of loan & execution of loan documents & creation of mortgage & default in payment in her SARFAESI Application.

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It is further submitted that the Applicant has never approached the Bank after issuance of Demand Notice & Possession Notice and so the question that the Bank has not given any proper explanation doesn't & will not arise at all and that the Applicant has not taken any steps to regularize the account despite giving several opportunities therefore the account was classified as NPA and that the classification of NPA is valid & correct & Proper and hence the Possession Notice is neither illegal nor in blatant violation of the provisions of SARFAESI Act & Rules. The Bank has published the Possession Notice in two leading newspapers and that the Possession Notice is neither untenable nor unsustainable. The bank has followed all the procedures prescribed under the Act & Rules. There are no irregularities & illegalities and that the action of the bank is neither against the principles of natural justice nor arbitrary in nature nor illegal and that the bank has furnished the Statement of Accounts "then & there" 'as & when' requested by

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Page 4 of 9

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SA No.621/2023

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the Applicant. The bank has credited all the payments made by the Applicant and that the Bank has charged interest only as per contract & RBI guidelines and that it is not necessary to mention the change of rate of interest in the Demand Notice & Possession Notice and that the Demand Notice & Possession Notice issued by the bank are proper. It has not contravened the provisions of the Act & Rules. Further, it is not necessary to give breakup details with regard to principal & interest due on the date of NPA in the Demand Notice & Possession Notice. The bank has demanded the correct amount in the Demand Notice & Possession Notice and it is neither inflated nor false nor excessive nor unwarranted nor without any basis & justification. Further, the bank has affixed the Possession Notice and the bank has not resorted the SARFAESI Proceedings either to pressurize or coerce the Applicant, whereas the bank has initiated the SARFAESI Proceedings to recover the loan amount since the Applicant has not repaid the loan amount despite giving several opportunities. The Bank has given correct description of property & correct outstanding amount in the Possession Notice so the Possession Notice is not liable to be set aside.

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It is further submitted that the Bank has issued Demand Notice but the Applicant has wantonly & willfully evaded to receive the same and so the Defendant Bank has published the same in two leading newspapers and further affixed the Demand Notice on the conspicuous part of the residential address of the Applicant as mentioned in the Demand Notice. Thereafter, the Bank has taken symbolic possession of the property & issued Possession Notice but the Applicant has wantonly & willfully evaded to receive the same and that the Bank has affixed the Possession Notice on the conspicuous part of the property and the Possession Notice was also published both in Tamil daily & in English daily in time. The Bank has sent Demand Notice & Possession Notice to the address as mentioned by the Applicant herself in the SARFAESI Application, but the same was returned with an endorsement as "No such Addressee". The Applicant has not sent any reply to the 13(2) Demand Notice.

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It is further submitted that there is no procedural irregularity on the part of the Defendant Bank in issuing the Demand Notice & taking possession & issuing Possession Notice under the SARFAESI Act & Rules and that the alleged procedural irregularity mentioned in the SARFAESI Application are not factually & legally correct. The Applicant is a willful & chronic defaulter. The only remedy available to the Applicant is to re-pay the entire dues to the Defendant Bank in order to stop the sale as per section 13(8) of the SARFAESI Act.

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Page 5 of 9

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SA No.621/2023

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Therefore, it is prayed that this Hon'ble Tribunal may be pleased to dismiss the Application with cost and thus render justice.

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Typed set filed on the side of the Defendant Bank

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S.No.	Date	Particulars
1	19.05.23	Demand Notice with return covers
2	19.05.23	Demand Notice Paper Publication in English daily
3	19.05.23	Demand Notice Paper Publication in Tamil daily
4	02.08.23	Photo showingaffixture of Demand Notice
5	17.10.23	Possession Notice with return covers
6	17.10.23	Possession Notice Paper Publication in English daily
7	17.10.23	Possession Notice Paper Publication in Tamil daily
8	17.10.23	Photo showingaffixture of Possession Notice

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Additional Typed set filed on the side of the Defendant Bank

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S.No.	Date	Particulars
1	19.05.23	Demand Notice Paper Publication in English dailyoriginal
2	19.05.23	Demand Notice Paper Publication in Tamil dailyoriginal
3	02.08.23	Original Photographyshowingaffixture of Demand Notice
4	17.10.23	Possession Notice Paper Publication in English dailyoriginal
5	17.10.23	Possession Notice Paper Publication in Tamil dailyoriginal
6	17.10.23	Original Photographyshowingaffixture of Possession Notice

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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, and also after considering the arguments by both the Counsels, I find that it is admitted fact that the Applicant has availed Mortgage Loan for a sum of Rs. 37.00 Lakhs from the Defendant Bank in order to improve the business. However, due to labour problem and heavy competition in the field besides demonetization, introduction of GST, Covid-19 Pandemic followed by Omicron, she incurred heavy loss and could not repay the loan dues to the Defendant Bank. So, I find that it is admitted fact that Applicant could not repay the loan amount. The Applicant further stated that when the Defendant

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Page 6 of 9

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SA No.621/2023

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Bank affixed the 13(4) notice on the conspicuous part of the property only then she came to know that the Defendant Bank had already issued Demand Notice on 19.05.2023. The Applicant further submitted that the said notices issued u/s.13(2) & 13(4) of SARFAESI Act was not served to the borrowers. Further, it is submitted that the Defendant Bank has filed OA No. 193 of 2022 against Applicant and her husband for recovery of Rs. 45,20,055.49p (Rupees Forty Five Lakhs Twenty Thousand Fifty Five and Paise Forty Nine only).

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On the other hand, I find that the Bank has issued Demand Notice u/s. 13(2) of the SARFAESI Act on 19.05.2023 for a sum of Rs. 25,74,010.11p (Rupees Twenty Five Lakhs Seventy Four Thousand Ten and Paise Eleven only). I also perused the typed set of papers filed by the Defendant Bank, I find that the Bank has produced the copies of Returned/undelivered postal envelops with postal remarks "No such addressee" (at page nos. 4 & 5 of Bank's typed set of papers). Since the postal covers sent to the Borrower and Co-borrower was returned undelivered, the Bank has made Paper Publication both in English & Tamil dailies (available at page nos. 1 & 2 of Bank's Additional typed set of papers), I also find that at the bottom of the Demand Notice, the date was written as 19.05.2022 , whereas in the Demand Notice, the date is given as 19.05.2023 . And, in Tamil daily it is handwritten as "Demand Notice published in Tamil daily "Dhinamani" on 02.08.23. I also find that at the bottom of the Demand Notice, the date was written as 19.05.2022 , whereas the actual date of issue of Demand Notice is given as 19.05.2023 . Further, the bank has filed photos at page nos. 3 & 4 of Additional Typed set of papers as a proof for having affixed the Demand Notice on the conspicuous part of the property but the copies provided do not exhibit the date & venue of affixture of Demand Notice. However, it is handwritten as "Demand Notice affixed on 02.08.23". Hence, I find that there are irregularities in issuance of Demand Notice.

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Thereafter, the Defendant Bank has issued Possession Notice dated 17.10.2023 U/s. 13(4) of SARFAESI Act. I also perused the typed set of papers filed by the Defendant Bank and I find that the Bank has produced the copies of Returned/Undelivered postal envelops with postal remarks "No such

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Page 7 of 9

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SA No.621/2023

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addressee" (at page nos. 13 & 14 of Bank's typed set of papers). The Bank has made Paper Publication in respect of Possession Notice both in English & Tamil dailies (at page nos. 5 & 6 of Bank's Additional typed set of papers). Further, the bank has filed photos at page nos. 7 & 8 of Additional Typed set of papers as a proof for having affixed the Possession Notice on the conspicuous part of the property. The Applicant has also already admitted the fact that the Possession Notice was affixed on the property.

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Further, I 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 rate of interest has been charged excessively against the guidelines of RBI and has not filed any proof for having requested for Statement of Accounts from the Defendant Bank. However, in this case, I also find that this Tribunal has granted an Ad-Interim Stay Order dated 09.11.2023. The Applicant has also complied with the conditions imposed by this Tribunal and paid a total sum of Rs. 7,74,000/- to the Defendant Bank and showed her bona-fide.

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I also find that the main contention of the Applicant in his Application is that both the borrower and co-borrower did not aware of the Demand Notice and on perusal of documents filed by the Defendant Bank, I find that first of all the postal covers sent to both the Borrower & Co-borrower was bounced back as well as the affixture of Demand Notice is also not evident that actually on which date it was affixed on the property. Although the Defendant Bank made Paper Publication of Demand Notice which is also defective i.e., the date is not correct both in English and Tamil Newspapers. Therefore, it is established that the Defendant Bank failed to prove that they had followed the SARFAESI Act & Rules strictly in issuing Demand Notice to the Borrowers/Applicant.

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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

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Page 8 of 9

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SA No.621/2023

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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 her case.

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In the result,

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(a) SA No. 621/2023 is allowed. The Possession Notice dated 17.10.2023 issued by the Defendant Bank is hereby set aside.

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(b) All the expenditures incurred in issuance of Impugned Possession Notice dated 17.10.2023 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 11^th September, 2025.

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sd/-

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(SEEMA SINHA) PRESIDING OFFICER

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Uploaded on 20.09.2025

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Page 9 of 9

M Murugeswari v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

M Murugeswari v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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