Allowed

Mr Govindaraju v. Shriram Transport Finance Company Limited

DRT9 Jul 2025SA/657/2023

Case brief

AI extract

What is this about?

The applicant challenged a Securitization Application against a Sec.14 Order obtained previously. TR allowed the application and set aside the Sec.14 Order due to failure to register security interest and procedural defects in possession notice. Respondents failed to counter. Notice to other respondents set aside as ex-parte.

What did the court decide?

Sec.14 Order dated 14.08.2023 set aside. Pending IA/s disposed. No order as to cost. Notice to Respondents 2 and 3 set aside ex-parte.

Mr Govindaraju versus Shriram Transport Finance Company Limited — Banking and Recovery | DRT (2025)

SA No.657/2023

09.07.2025

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 9^th day of July, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SA No. 657 of 2023

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Mr. Govindaraju, S/o Mr. Latchumanan, Aged 50 years and residing at, No.10, Subramania Siva Street, (Hotel Ram International backside), Govindasalai, Orleanpet, Puducherry -605 001. ….Applicant

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-Vs-

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Shriram Transport Finance Company Ltd., Now Shriram Finance Limited, Rep. by its Authorized Officer,

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No.23/24, Schakaralaya Motors, 1^st Floor, Guber Nagar corner, Cuddalore Main Road, Nainarmandapam, Puducherry -605 004.

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Mr. Selvakumar, S/o Mr. Arumugam, Aged 52 years and residing at, No.25, Kandappa Mudaliar Street, Raj Bhavan, Puducherry -605 001.

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Mr. Raveindran, S/o Mr. Venugopal, Aged 53 years and residing at, No.6, Karunanidhi Street, Govindasalai, Puducherry -605 001. ….Respondents

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Counsels on record / appeared:

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Counsel for Applicant : M/s. V. Kamala Kumar Counsel for represents: Ex-parte

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ORDER ON SA 657/2023

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The present Securitization Application [SA] is filed on 13.12.2023

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under sub section [1] of S.17 of the Securitization And Reconstruction of

SA No.657/2023

09.07.2025

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 filed challenged the Sec.14 Order dated 14.08.2023 passed by Chief Judicial Magistrate, Court at Puducherry, in Crl.M.P. No.6773 of 2023 and the outstanding amount due as per Sec.14 order is Rs.81,56,387/-

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The applicant availed a term loan of Rs.45 Lakhs from Shriram Transport Fiancé Company Limited which was merged with Shriram Finance Limited, the respondent no.1. The loan was sanctioned vide sanction letter dated 21.11.2017 to be repayable in 60 monthly installments of Rs.45,100.00 along with interest at 18% p.a. The immovable property situated at Vasanth Nagar, Thengaithittu, Poducherry, referred to as the ‘secured asset’ was mortgaged as collateral security.

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It is contended that applicant was forced to execute a Memorandum of Deposit of Title Deeds dated 20.11.2017, which is registered as Doc.No.15647 of 2017 towards the loan of Rs.75,00,000/-. Applicant was regularly repaying, however due to some unforeseen family situation he could not repay the amount and the account was classified as NPA on 20.12.2018. The SARFAESI Proceedings were initiated and Demand Notice dated 16.11.2021 was issued under Sec.13(2) of the Act, calling upon the

SA No.657/2023

09.07.2025

applicant to make a payment of Rs.81,56,387.00 as on 29.10.2021, together with future interest.

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The Respondent No.1 took constructive possession of the secured asset vide possession notice dated 07.07.2022, but the Lender miserably failed to comply with Rule 8(2) of the Security Interest (Enforcement) Rules, 2002, as the Possession Notice was not published in newspaper.

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However, the applicant was served with a Caveat application on 23.10.2023, and then the applicant gained knowledge that the Respondent No.1 had obtained the Sec.14 order dated 14.08.2023 in Crl.M.P. No.6773 of 2023 on file of the learned Chief Judicial Magistrate Court at Puducherry.

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Upon obtaining certified copies, it seen that the respondent have failed to register the creation of the security interest with the Central Registry (CERSAI) as contemplated under Section 26-B of the Act, the Ld. it CJM has dismissed the application filed under section 340 of Cr.P.C for recalling the Sec.14 Order, which came to be dismissed on 28.11.2023, holding that the applicant ought to agitate his grievance, before this Hon’ble Tribunal.

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Hence the present SA is filed on the grounds that the respondent have issued the Demand Notice 16.11.2021 and Possession Notice dated 07.07.2022 are bad as security interest is not registered with the Central Registry, the possession notice dated 07.07.2022 is bad as it is not published in the paper publication. Hence prays for setting aside the Sec.14 Order.

SA No.657/2023

09.07.2025

Thought the respondent has filed the vakalat there was no counter filed refuting the contentions raised by the applicant inspite of sufficient opportunities granted on 07.03.2024: 27.03.2024; 16.04.2024; 21.05.2024, 19.06.2024, 10.09.2024, 21.11.2024 and even on 06.02.2025, hence counter to SA came to be closed.

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In the present SA, as the applicant had not taken steps on R2 and R3, notice was ordered on 07.02.2025. It seen that the applicant has taken the notice and also filed the AOS which reflects that notice to R2 and R3 is served as per the acknowledgement card on 10.02.2025 and 11.02.2025. However the same was not recorded vide proceedings dated 20.02.2025. Hence the matter was reopen on 30.06.2025.

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The applicant has taken notice on SA and filed AOS evidencing the service of the notice on the case, however none represented the 2^nd and 3^rd respondent, hence they are set aside ex-parte on 07.07.2025.

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The respondent as secured creditor has not come forward to counter all the contention as raised in the SA, the present SA stands allowed setting aside S.14 Order dated 14.08.2023 in Crl.M.P.No.6773 of 2023 on file of the Chief Judicial Magistrate at Puducherry. Interim order granted if any stands vacated. Pending IA/s are disposed of in terms of this Order. No order as to cost.

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Sd/-

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(S.V. GOWRAMMA)

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PRESIDING OFFICER,

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DRT-III, CHENNAI

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Dictated to Steno (Suriya), transcribed by him, corrected, signed and pronounced by me on this the 9^th day of July, 2025)

SA No.657/2023

09.07.2025

ANNEXURES

LIST OF DOCUMENTS PRODUCED BY THE APPLICANT

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Sl. No.	Description of Documents	Documents No.
1.	Sanction letter issued by Shriram Transport Finance Company Limited to Applicant dated 21.11.2017.	A-1
2.	Memorandum of Deposit of Title deed executed by Applicant in favour of Shriram Transport Finance Company Limited dated 20.11.2017.	A-2
3.	Demand Notice under Section 13(2) of SARFAESI Act dated 16.11.2021.	A-3
4.	Possession Notice under Section 13(4) of the SARFAESI Act dated 07.07.2022.	A-4
5.	Publication of Demand Notice by Shriram Finance Limited dated 07.02.2023.	A-5
6.	Application under Section 14 of SARFAESI Act by Respondent No.1 dated 26.04.2023.	A-6
7.	Impugned Order in Crl.M.P.No.6773 of 2023 on file of the Chief Judicial Magistrate at Puducherry, under Section 14 of SARFAESI Act dated 14.08.2023.	A-7
8.	Caveat Petition filed by the Respondent No.1 dated 19.10.2023.	A-8
9.	Petition filed in Crl.M.P. No.6773 of 2023, for recall of order under Section 14 of SARFAESI Act dated 02.11.2023.	A-9
10.	Notice issued by the Advocate Commissioner along with cover dated 02.11.2023.	A-10
11.	Order of Interim stay in Crl.M.P. No.10684 of 2023 dated 03.11.2023.	A-11
12.	Counter Statement in Crl.M.P. No.10684 of 2023 filed by Respondent No.1 dated 16.11.2023.	A-12
13.	Impugned order in Crl.M.P.10684 of 2023 dated 28.11.2023.	A-13
14.	CERSAI registration of the Secured Asset dated 20.11.2017.	A-14
15.	Certificate of Incorporation of Respondent No.1 dated 13.11.2022.	A-15

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SCHEDULE OF PROPERTY

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(as contained in the Section 14 application)

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All that part and parcel of property Puducherry R.D., Puducherry Sub R.D., within the limit of Puducherry Municipality, Village No.42,

SA No.657/2023

09.07.2025

Thengaithittu Revenue village in Vasantha Nagar as per the Rectification deed, Ward No.P, Block No.1, T.S.No.10/1/A/1/C, R.S.No.5 Pt., Cadastre No.6 Pt., 7 and measuring 2 Kuzhies 01 Veesams and as per layout measuring East to West 60 feet, South to North 20 feet, total extent 1200 sq. feet of vacant Plot bearing No.106.

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Boundaries: West of new pathway, north of land of Mannappan, South of land of Ramalingam, Gopalakrishnan and Govindan, East of land owned by Electricity Department. As per layout: East of land owned by Electricity Department, West of 3^rd Main road in Vasantha Nagar, South of Plot No.107, and North of Plot No.105.

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Sd/- PRESIDING OFFICER, DRT-III, CHENNAI

Mr Govindaraju v. Shriram Transport Finance Company Limited

Case brief

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Mr Govindaraju v. Shriram Transport Finance Company Limited

Case brief

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