Dismissed

M Balamurugan v. Union Bank of India

DRT26 Nov 2025SA/645/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal dismissed the applicant's challenge against the respondent bank's Section 13(2) Demand Notice and Section 13(4) Possession Notice issued under the SARFAESI Act. The court held that the bank followed all mandatory procedures regarding notice issuance, publication in newspapers, and affixing notices on the property. Thus, the applicant's contention regarding procedural vio

What did the court decide?

The Securitization Application was dismissed. The Possession Notice dated 09.10.2023 and the Demand Notice dated 01.08.2023 were upheld as valid.

M Balamurugan versus Union Bank of India — Banking and Recovery | DRT (2025)

SA No. 645/2023

26.11.2025

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 26^th day of November, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SA No. 645 of 2023

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Mr. M. Balamurugan, S/o Muthuvel D.No.15/42, Cherian Nagar, 2^nd Street, New Washermenpet, Tondiarpet, Chennai - 600031 ….Applicant

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-Vs-

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The Authorized Officer, Union Bank of India, Vembakkam Branch, S.No.496/25, Vembakkam Road, Ponneri, Tiruvallur – 601 204 …Defendant Counsels on record / appeared: Counsel for Applicant : M/s. G. Sanjeevi Counsel for Respondent : M/s. S. Parthasarathy

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ORDER ON SA No.645/2023

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The present Securitization Application [SA] is filed 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].

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The applicant has challenged the Possession Notice dated 09.10.2023 and the outstanding amount due as per Possession notice is Rs.59,58,599/-.

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3. Pleadings of the applicant:

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3.1 Applicant has approached the respondent bank for sanction of Over Draft facility for a sum of Rs.50,00,000/- and another Loan of Rs.8,00,000/- in the year 2021. The applicant had created Equitable Mortgage of the property and executed necessary documents in favor of the respondent and the applicant was regular in their repayment upto May 2023 and due to business loss has defaulted in the loan dues.

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3.2 Due to the defaults in repayment, the respondent bank has classified the loan account as NPA and issued Section 13(2) Demand Notice on 01.08.2023 calling upon the applicant to repay the sum of Rs.59,58,599/- which is not received by the applicant.

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3.3 It is submitted that the respondent replied vide letter dated 10.10.2023 and also issued Section 13(4) Possession Notice dated 09.10.2023. The respondent bank has charged heavy interest and also capitalized penal interest on monthly basis which is in violation of RBI guidelines.

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3.4 Further the respondent bank has not registered the security interest in Central Registry which is in violation of circular issued by the Reserve Bank of India and the measures initiated by the respondent bank under SARFAESI Act are null and void. The borrower made substantial payments even after the demand notice but the respondent is not in a habit of giving proper credit to the payments.

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26.11.2025

3.5 In the grounds, it is contended that the respondent bank did not issue Section 13(2) notice prior to issuance of Section 13(4) Possession Notice and has not followed the procedures under SARFAESI Act and Rule 8(1) of SIE Rules. The Possession Notice has not published in two Newspapers, as mandated under the Rule 8(2) of SIE and also not affixed.

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3.6 Further, the respondent bank has classified the loan account as NPA which is in violation of RBI guidelines. It is contented that the Possession Notice is not delivered to the applicant and the amount is not crystallized among the grounds and prays to set aside the Possession Notice dated 09.10.2023.

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4. Objections of the respondent bank:

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4.1 The respondent bank has filed a detailed counter, contending that

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the applicant has availed various credit facilities which are follows:

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SI No.	Nature of Facility	A/c. No.	Sanction Amount (in Lakh)	Date of sanction	Outstanding as on 23.02.2024 (Rs.)
1.	Secured Overdraft	185531100000016	50.00	12.11.2022	45,04,704/-
2.	GCLE1	185530100118315	4.30	17.06.2020	2,82,653/-
3.	UGECL	185516990000014	3.47	10.12.2021	2,34,406/-
		Total			50,21,763/-

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4.2 As the applicant defaulted in their payment and the loan account

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was classified as NPA on 28.07.2023. The Bank had issued Section 13(2) Demand Notice on 01.08.2023 by registered post on 02.08.2023 which is

SA No. 645/2023

26.11.2025

acknowledged by the Applicant on 03.08.2023 and also published in Tamil and English newspapers on 09.08.2023. The Applicant has raised objections to the Demand Notice and the bank has replied to the objection received on 05.10.2023 vide letter dated 10.10.2023.

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4.2 Subsequently, the Bank has issued Section 13(4) Possession Notice on 09.10.2023 under the Act and Rule 8(1) which is sent by Registered Post on 12.10.2023. The Applicant acknowledged the receipt of Possession Notice on 13.10.2023 in one address and other covers returned unserved to the other Borrowers/Guarantors on 13.10.2023. The Possession Notice is affixed in a conspicuous place of the property and also published in Tamil and English dailies on 13.10.2023.

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4.3 Further, the interest and installment of principal remained overdue for a period of more than 90 days as on the date, hence the respondent bank has classified the loan account as NPA under Section 2(o) of the Act as per the RBI guidelines. The applicant has filed an appeal under Section 17(1) of the Act, challenging the conditional order to pay a sum of Rs.6 Lakhs by way of Demand Draft on 29.12.2023 and further sum of Rs.6 Lakh also paid on 19.01.2024. Hence prays to dismiss the present SA.

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

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5.1 The Applicant is the Guarantor has impugned the Possession Notice on 09.10.2023 and does not dispute that the borrower has availed

SA No. 645/2023

26.11.2025

Overdraft facility of Rs.50,00,000/- and another Loan of Rs.8,00,000/- in the year 2021 to which the applicant has mortgaged the property as collateral security towards the credit facilities availed by the borrower and the charges also registered before the Central Registry and the CERSAI report produced at page no.88 along with Memorandum of Deposit of Title Deeds at page No.48. Thus the contention that there is no charge registered before the Central Registry fails and the respondent as secured creditor has initiated measures under the Act.

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5.2 The Respondent Bank in the counter submits that the borrower M/s. B.G. Motors represented by its Partners had availed the secured Overdraft facility of Rs.50,00,000/-, GCLE1 of Rs.4.30 Lakhs and UGECL of Rs.3.47 Lakhs totaling Rs.57,77,000/- to which the applicant deposited the original title deeds by way of Memorandum of Deposit of Title Deeds registered as Doc. No.8192 of 2021 on 09.12.2021 on the office of SRO, Madhavaram. As the Borrower and Guarantor defaulted in the repayment the loan account was classified as NPA on 28.07.2023 as per the RBI guidelines and bank have issued Section 13(2) Demand Notice on 01.08.2023 by registered post on 02.08.2023 which is received by the Applicant and the Partners on 03.08.2023 as per the postal acknowledgement card.

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5.3 The bank has also published the Demand Notice in Tamil and English Newspapers on 09.08.2023 at page No.28 and 29 as the S.13[2] demand notice sent to M/s. Gokul Raj Bharathy and Mr. Balamurugan M

SA No. 645/2023

26.11.2025

returned as ‘unclaimed’ as per the unclaimed covers produced at page No.27. The further contention that they have not received the Section 13(2) Demand Notice fails as the applicant have raised objection to the notice on 10.10.2023. The borrower M/s B.G. Motors have raised objections to the Section 13(2) Demand Notice admitting the availing of the credit facilities and the execution of the loan documents. In the notice, it is contented that they have not received any notice and they were shocked to see the paper publication stuck on 19.08.2023 in the premises. In fact, it seen having admitted and utilized the Over Draft facility for the business purposes and could not repay dues to their business loss.

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5.4 On receipt of the objection to the Section 13(2) Demand Notice, the Respondent Bank have replied vide letter dated 10.10.2023 contenting about the issuance of the Section 13(2) Demand Notice and have not received by the partners and the borrower. The notice sent to M/s. B.G. Motors. Balamurugan M and Gokul Raj Bharathy were received as per the acknowledgement copy and notice to Gokul Raj Bharathy was returned hence, the respondent bank have issued paper notification on 09.08.2023 and the same is also pasted on the premises.

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5.5 Further, it is also the admitted fact, that the Section 13(2) Demand Notice was pasted on the premises in the objection raised by the applicant to Section 13(2) Demand Notice. Thus it is evident that the respondent Bank as secured creditor after classified as NPA has issued Section 13(2)

SA No. 645/2023

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which is sent by RPAD and as one of the partner Mr. Gokul Raj Bharathy did not receive it, the Bank has published the Possession Notice and also affixed on the property which is admitted by the applicant. Thus, it is clear that the bank as secured creditor has followed the procedure as mandated under the Act and Rules therein, resulting in upholding the Section 13(2) Demand Notice dated 01.08.2023 as valid notice issued by following the procedures.

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5.6 As the Borrower and Guarantor did not liquidate the liability within the period of 60 days as mandated, the bank has issued the Possession Notice on 09.10.2023 which was sent by RPAD and the postal receipt and the acknowledgement card along with the returned cover at produced Page No.35 and 36 as per the procedure. The Bank has published the Possession Notice in Tamil and English newspaper on 13.10.2023 under Rule 8(2) and the paper publication of the Possession Notice at Page No.46 and 47.

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5.7 The contention that the borrower has repaying the accounts regularly and the whatever the payments made is reflected in the Statement of accounts vide A/c. Nos. 185531100000016, 185530100118315 and 185516990000014 as per the statements at Page No. 91 to 93 evidencing the payments towards the loan accounts.

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5.8 It is seen from the records, that the Possession Notice is duly served as per the procedure and the bank has established the due

SA No. 645/2023

26.11.2025

compliance in issuing the Section 13(4) Possession Notice which is also supported by the documents for the compliance.

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5.9 Though the applicant has challenged the Section 13(4) Possession Notice, have failed to point out any validity or illegality in the measures taken by the bank, resulting in upholding the measures in issuing the Section 13(2) Demand Notice dated 01.08.2023 and Section 13(4) Possession Notice dated 09.10.2023 under the Act and Rules.

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For the foregoing reasons, the present SA is dismissed. Interim Order granted, if any stands vacated, pending IAs are disposed of in terms of this final order. No order as to cost.

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

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(Dictated to Steno (Deepika), transcribed by her, corrected, signed and pronounced by me on this the 26^th day of November, 2025)

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ANNEXURES

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LIST OF DOCUMENTS PRODUCED BY THE APPLICANT

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Sl. No.	Description of Documents	Document No.
1.	Possession Notice dated 09.10.2023.	A-1

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LIST OF DOCUMENTS PRODUCED BY THE RESPONDENTS

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Sl. No.	Description of Documents	Document No.
	Letter of Sanction for Secured Overdraft dated
1.	04.02.2022.	R-1

SA No. 645/2023

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2.	Demand Notice under Rule 13(2) issued to the Borrower dated 01.08.2023.	R-2
3.	Postal Receipts dated 02.08.2023.	R-3
4.	Acknowledgement of M/s BG Motors represented by its partners, Mr. M. Balamurugan and returned cover from Mr. Gokulraj Bharathy dated 03.08.2023.	R-4
5.	Paper Publication in Tamil and English dated 09.08.2023.	R-5
6.	Objections raised by the Applicant under Section 13(3)(A) dated 05.10.2023.	R-6
7.	Reply to objection sent by the Respondent dated 10.10.2023.	R-7
8.	Postal receipts dated 12.10.2023.	R-8
9.	Possession Notice under Rule 8(1) dated 09.10.2023.	R-9
10.	Postal Receipts dated 12.10.2023.	R-10
11.	Acknowledgement/Returned covers dated 13.10.2023.	R-11
12.	Affixing possession notice – Photographs Rule 8(1)	R-12
13.	Paper publication in Tamil and English under Rule 8(2) dated 13.10.2023.	R-13
14.	Memorandum of Deposit of Title Deeds registered as Document No.8192 of 2021 in favour of Respondent dated 09.12.2021.	R-14
15.	Sale Deed registered as Document No.8191 of 2021 in favour of Applicant dated 09.12.2021.	R-15
16.	Security Interest created by the Bank CERSAI search report dated 08.12.2012.	R-16
17.	Statement of Account in Loan A/c No.185531100000016 dated 23.02.2024.	R-17
18.	Statement of Account in Loan A/c No.185530100118315 dated 23.02.2024.	R-18
19.	Statement of Account in Loan A/c No.185516990000014 dated 23.02.2024.	R-19

SA No. 645/2023

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SCHEDULE OF PROPERTY

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All that piece and parcel of land with shed Bearing Plot No.37, situated at Padmavathy Street, Krishanamoorthy Nagar (layout Approval No.38/1971) Kodungaiyur, Chennai – 600 118, Comprised in Survey No.295/1A, as per extract from the Town Survey Land Register T.S.No.25, Block No.57 of Kodungaiyur Village, earlier Fort Tondiarpet Taluk, now perambalur Taluk, Chennai District, Tamil Nadu, measuring to an extent of 2016 Square Feet, and bounded on the: Boundaries:

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North by : 20 Feet Wide Road (Padmavathy Street) South by : Plot No.38 – Land & Building (Door No. 38/11 passage) East by : 20 feet wide road – Perumal Street West by : Survey Nos. 292 and 293 (Commercial Shed),

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In all extent of 2016 Sq.Ft, situated within the Registration District of Chennai North and Sub Registration District of Sembium now in Madhavaram, within the limits of Greater Chennai Corporation.

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

M Balamurugan v. Union Bank of India

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M Balamurugan v. Union Bank of India

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