Dismissed

Ravichandran v. Indian Bank

DRT10 Dec 2025SA/622/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed an application challenging an Advocate Commissioner's notice for possession. The Tribunal found no illegality as the bank produced evidence of compliance with mandatory statutory requirements, though it rejected the applicant's grounds regarding non-service of notices and NPA classification.

What did the court decide?

Application dismissed; respondent bank's orders upheld; parties bear own costs.

Ravichandran versus Indian Bank — Contract and Commercial Disputes | DRT (2025)

¶1

IN THE DEBTS RECOVERY TRIBUNAL – II AT CHENNAI

¶2

Dated this 10^th day of December, 2025

¶3

PRESENT: SHRI SHARANG DHAR UPADHYAY Presiding Officer

¶4

SA No.622 of 2024

¶5

M/s Sri Venkateswara Textile Proprietor, A. Ravichandran S/o Arunachalam No.2/56, Athiganoor Village Krishnagiri District – 635 203 … Applicant

¶6

Versus

¶7

The Authorised Officer Indian Bank, Kannandahalli Branch Krishnagiri District – 635 203 … Respondent

¶8

Counsel on Record / Appeared

¶9

Applicant by : Ld. Counsel M/s C. Pritheevraj Respondent by : Ld. Counsel M/s L. Ramkumar

¶10

ORDER

¶11

This petition is filed under Section 17(1) of the SARFAESI Act challenging the measures initiated by the respondent bank through Advocate Commissioner’s Notice dated 30.12.2024, in pursuant of order dated 30.10.2024 made in Crl. M.P. No.7350 of 2024 on the file of Chief Metropolitan Magistrate, Krishnagiri passed under Section 14 of the Act.

¶12

¶13

Facts as pleaded in the appllication

¶14

2.0 The applicant contends that Mr. Ravichandran, the Proprietor of M/s Sri Venkateswara Textiles the applicant herein approached the respondent for grant of credit facility for development of his business during December 2013 and the respondent sanctioned a sum of Rs.5,00,000/-. It is also contended that the applicant created equitable mortgage over the schedule mentioned property in favour of the respondent.

¶15

2.1 The applicant was regular in repayment of the said loan and hence the respondent enhanced the limit from Rs.5,00,000/- to Rs.10,00,000/during October 2015 and the applicant also executed a supplemental Memorandum of deposit of title deeds to secure the enhanced limits.

¶16

2.2 It is stated that the respondent again offered and enhanced the limit by Rs.6,00,000/- during November 2018 and the applicant again executed a supplemental Memorandum of deposit of title deeds to secure the enhanced limits.

¶17

2.3 It is also stated that due to COVID-19 pandemic the applicant’s business suffered severe loss and hence the respondent again sanctioned an enhancement (COVID-Repo Loan) of Rs.5,24,000/-. Despite the same applicant’s business suffered loss and the respondent classified the loan account as NPA. The respondent without serving the

¶18

¶19

demand notice under Section 13(2) of the SARFAESI Act issued e- auction sale notice dated 2.6.2022 fixing the sale on 7.7.2022. Challenging the same the applicant filed SA No.350/2022 and the same came to be dismissed for non-prosecution.

¶20

2.4 The respondent thereafter issued the sale notice dated 11.10.2023 fixing the sale on 23.08.2023 and challenging the same the same the applicant has filed SA No.484 of 2023 before this Tribunal.

¶21

2.5 The respondent has suppressed all material facts and filed the petition before the Ld. CJM, Krishnagiri and has obtained the order to take physical possession of the schedule mentioned property.

¶22

2.6 Along with the SA the applicant has filed the order passed by Ld. CJM, Krishnagiri dated 30.10.2024 and the Advocate Commissioner notice dated 30.12.2024 (however mentioned in the index as 24.12.2024).

¶23

Grounds urged

¶24

3.0 The grounds urged are:

¶25

(i) The action of the respondent is against the guidelines of RBI.

¶26

¶27

(ii) The demand notice is not served on the applicant and without issuing the demand notice the respondent cannot issue possession notice and sale notice.

¶28

(iii) The respondent has violated Rule 3 of the Security Interest (Enforcement) Rules, 2002.

¶29

(iv) The possession notice is neither affixed on the secured asset nor published in newspapers.

¶30

(v) Despite the applicant informing the respondent about the business loss due to COVID-19 pandemic the respondent has proceeded to classify the loan account as NPA, contrary to the guidelines of RBI.

¶31

(vi) The amount mentioned in the Section 14 order is erroneous, not correct and is highly exorbitant.

¶32

Counter filed by Respondent

¶33

4.0 The applicant availed Secured OD facility of Rs.26,00,000/- and IND GECLS COVID-19 Loan of Rs.5,24,000/- from the 1^st respondent. The applicant as Proprietor of M/s Sri Venkateswara Textile created equitable mortgage over the schedule mentioned property in favour of respondent by executing Memorandum of Deposit of Title deeds dated 6.9.2013 registered as Doc. No.2130 of 2013 and also executed other loan documents. In view of the default committed by the applicant the

¶34

¶35

loan account was classified as NPA on 30.04.2021 strictly in accordance with the guidelines of RBI and the demand notice was issued on 17.9.2021 followed by possession notice dated 27.12.2021. The said possession is affixed on the secured asset and duly published in leading newspapers. The SA 350/2022 filed by the applicant challenging the sale notice dated 2.6.2022 is dismissed for default and non-prosecution. As the applicant failed and neglected to clear the outstanding dues the 1^st respondent issued the sale notice dated 11.10.2023 fixing the sale on 30.10.2023. The applicant failed to comply with the interim order of this Tribunal dated 30.10.2023 and hence the sale was confirmed in favour of the highest bidder for a sale price of Rs.33,12,100/- and the sale certificate was also issued on 30.01.2024 and the possession of the secured asset is also handed over to the auction purchaser, Mrs. Manju Singhal. While so, the respondent filed a petition under Section 14 of the SARFAESI Act before Ld. CJM, Krishnagiri in Crl. M.P. No.7350 of 2024 and on 30.10.2014 the Ld. CJM allowed the petition and appointed

¶36

an Advocate Commissioner to take physical possession of the secured asset and for delivering the same to the respondent.

¶37

4.1 The loan account is classified as NPA strictly in accordance with the guidelines of RBI and the demand notice dated 17.9.2021 was duly served to the applicant by hand and the same was acknowledged.

¶38

¶39

4.2 The SA No.350/2022 challenging the sale notice dated 2.6.2022 filed by the applicant was dismissed for default, however, the sale did not take place for want of bidders. The applicant challenged the notice of sale dated 11.10.2023 vide SA No.484 of 2023 and this Tribunal passed a conditional order on 30.10.2023 and the applicant did not comply the same and hence the stay stood automatically vacated.

¶40

4.3 While so, the applicant filed the above SA challenging the order dated 30.10.2024 passed by Ld. CJM, Krishnagiri and this Tribunal vide order dated 2.1.2024 passed an order directing the respondent to file counter and ordered status quo till the next date of hearing.

¶41

4.4 The sale of the secured asset has taken place and the sale certificate is also issued in favour of the highest bidder Mrs. Manju Singhal on 30.1.2024 and the same is pending before SRO for registration.

¶42

4.5 The applicant has not made out a single ground to challenge the

¶43

impugned notice and hence the SA is liable to be dismissed.

¶44

4.3 The SA is liable to be dismissed with exemplary costs.

¶45

4.4 Documents filed by the 1^st Respondent

¶46

(i) Agreement of Open Cash Credit dated 19.11.2018.

¶47

¶48

(ii) Memorandum of Deposit of Title deeds dated 6.9.2013 registered as Doc. No.2130 of 2013 executed by Mr. A.

¶49

Ravichandran in favour of 1^st respondent.

¶50

(iii) Demand notice dated 17.09.2021 along with

¶51

acknowledgement of applicant.

¶52

(iv) Possession Notice dated 27.12.2021.

¶53

(v) Photograph evidencing affixture of possession notice on 27.12.2021.

¶54

(vi) Paper publication of possession notice in English and Tamil daily dated 30.12.2021.

¶55

(vii) Valuation report dated 2.6.2023.

¶56

(viii) Sale notice dated 11.10.2023.

¶57

(ix) Photograph affixing the sale notice on the secured asset.

¶58

(x) Paper publication of sale notice both in English and Tamil daily dated 14.10.2023.

¶59

(xi) Sale certificate dated 23.11.2023 issued in favour of auction purchaser, the 2^nd respondent herein.

¶60

(xii) State of Accounts.

¶61

5.0. The matter is heard. In the wake of available material on record,

¶62

the only question that arises for consideration in the present SA is:

¶63

¶64

Whether the orders of the Learned CJM, Krishnagiri is suffering from the impropriety or irregularity rendering it void in law?

¶65

Answers to the point for consideration

¶66

6.0 It is to be noted that the Hon'ble Supreme Court in “ NKGSB Cooperative Bank Limited Vs. Suber Chakravarty” and “ R.D. Jain and Company Vs. Capital First Limited CA 1755 of 2022 dated 27.07.2022 ” ruled that no adjudicatory powers are vested while deciding the application under Section 14. In the matter of “Indian Bank Vs. Vishalakshi and Another CA 6295/2015 dated 23.09.2019” , the Hon'ble Supreme Court had further held that the proceedings under Section 14 is a procedural step and purely an administrative order and there is no adjudicatory process involved. Keeping in mind the above rulings, this Tribunal can only examine whether there was compliance of the provisions by the defendant bank before the Learned CMM as mandated under Section 14(1) of the SARFAESI Act.

¶67

6.1 As per Section 14(1) of the SARFAESI Act, on a request being made by the by the secured creditor, the Chief Metropolitan Magistrate or the District Magistrate as the case be take possession of such asset and documents relating thereto and forward such assets and documents to the secured creditor. The financial institutions are to declare under the affidavit the aggregate sum of financial assistance and dues payable

¶68

¶69

as on the date of the application. It should be averred that the borrower

¶70

/ guarantor having created security interest over the property and that the borrower had committed default; upon such default the account must have been classified as NPA. It is also mandatory to aver in the affidavit regarding the issuance of demand notice, the reply thereof and the response of the secured creditor and that the borrower had not made any repayment and therefore entitled to take possession and that the other provisions of the Act have been complied.

¶71

6.2 The grounds raised in the petition are the demand notice issued under Section 13(2) of the SARFAESI Act is not served on the applicant, the possession notice is neither affixed nor published in newspapers as mandated under law. The respondent bank has failed to comply with the mandatory conditions before invoking Section 14 of the SARFAESI Act, the amount mentioned in the Section 14 order is exaggerated and is not correct. The respondent has failed to consider the representation of the petitioner regarding business loss due to COVID-19 pandemic and has wrongly classified the account as NPA contrary to guidelines of RBI.

¶72

6.3 In for as the ground relating to non-service of demand notice and non-compliance of Rule 3 of the Security Interest (Enforcement) Rules, 2002, is concerned, the respondent has produced the copy of the demand notice dated 17.09.2021 at Page 27 of the typed set of

¶73

¶74

documents filed by the 1^st respondent. A perusal of the same reveals that the applicant-borrower and the guarantor have affixed their signatures on the notice (at last page) for having received the same and hence this ground raised by the applicant fails.

¶75

6.4 In so far as the grounds relating to non-affixture and nonpublication of the possession notice is concerned, it is to be stated that the 1^st respondent bank has produced the possession notice dated 27.12.2021, photograph evidencing affixture of possession notice on the secured asst and the publication of the same in Tamil daily “Dinamani” dated 30.12.2021 and English daily “The New Indian Express” dated 30.12.2021 and pages 31 to 34 of the typed set of papers and hence these grounds raised by the applicant also fails.

¶76

6.5 In so far as the ground that the classification of NPA is bad, it is to be noted that the demand notice was issued as far back as 17.09.2021. When the demand notice is issued, the same is issued after classifying the account as NPA. The grievance, if any, regarding the classification of NPA should have been protested under Section 13(3) of the Act. The applicant has not furnished the copy of any such protest letter or reply to the demand notice. Therefore, the applicant has not availed the opportunity of answering the demand notice and to protest the further measures.

¶77

¶78

6.6. It is canvassed that the defendant bank has failed to comply with

¶79

the mandatory conditions while complying Section 14 of the SARFAESI Act before the Learned CJM. The mandatory requirement is to comply the affidavit as prescribed under Section 14(1) of the Act and the same are discussed by the Ld. CJM, Krishnagiri in the impugned order.

¶80

6.7. Further, the applicant has not urged any grounds with regard to non-compliance of provisions under Section 14(1) of the SARFAESI Act by the secured creditor.

¶81

7.0 Therefore, in the absence of any allegations regarding noncompliance of the provisions of Section 14(1) of the Act and documentary evidence produced by the respondent bank, this Tribunal is unable to find any illegality, impropriety or otherwise to set aside the impugned order. Hence the following:

¶82

O R D E R

¶83

SA No.622 of 2024 stands dismissed. All other pending IAs thus

¶84

stand disposed of. Parties to bear their own costs. A copy of this order be communicated to the parties concerned.

¶85

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

¶86

(Dictated to PS, who typed in the system directly, corrected, signed and pronounced by me in Open Court, on this 10^th day of December, 2025)

¶87