Dismissed

R Rajendrababu v. Central Bank of India

DRT22 Sept 2025SA/679/2023

Case brief

AI extract

What is this about?

The DRT dismissed the applicant's Security Application challenging the bank's issuance of a Possession Notice under the SARFAESI Act. The court held that the bank duly complied with procedural requirements, including the Demand Notice and publication of the Possession Notice, after the applicant failed to clear the overdue dues within the stipulated period.

What did the court decide?

Security Application dismissed; interim order vacated; pending IAs closed; no order as to costs.

R Rajendrababu versus Central Bank of India — Banking and Recovery | DRT (2025)

SA No.679/2023

22.09.2025

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 22^nd day of September, 2025

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Present: SMT. S.V. GOWRAMMA

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Presiding Officer

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SA No. 679 of 2023

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R. Rajendrababu, S/o, Mr. Ramakrishna Pillai Plot No. 39 and 40, IV Main Road, VGN Southern Garden, Kowl Bazar, Pallavaram, Chennai – 600074. ….Applicant

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-Vs-

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The Authorized Officer, Central Bank of India, Nandambakkam Branch, No. 5/12, Poonamalle Road, Nandambakkam, Chennai – 600 089. …Defendant Counsels on record / appeared: Counsel for Applicant : M/s. P.D. Gokularam Counsel for Respondent : M/s. Anil Relwani

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ORDER ON SA No. 679/2023

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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].

SA No.679/2023

22.09.2025

The applicant has filed the present SA challenging the Possession Notice dated 27.09.2023 and the outstanding amount due as per Possession Notice is Rs.24,59,292/-

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3. Pleadings of the applicant:

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3.1 The applicant is the borrower availed two loans, Housing Loan of Rs.6,02,700/- on 20.07.2012 and Construction Loan under Direct Housing Finance Scheme for Rs.15,56,000/- on 06.01.2013 and applicant has mortgaged the property as security to the loan availed.

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3.2 It is submitted that the applicant was prompt in repayment. However, due to unexpected and sudden downfall in the business he has not maintained the financial discipline and the account was classified as NPA by the Respondent Bank.

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3.3 Though the Applicant was making attempt to recognize the monies to settle the loan account and was making every attempt to redeem the property approached the respondent bank seeking time to arrange the funds. Though, the Respondent Bank granted some time have proceeded in issuing the Possession Notice on 27.09.2023. Hence, the applicant has filed the present SA aggrieved by the issuance of the Possession Notice on 27.09.2023.

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3.4 In the grounds, it is contended that the measures initiated by the bank is illegal and abuse of process of law. The classification of the account of the NPA is without any basis and against the RBI guidelines. The Possession Notice is not issued under Rule 8(2), and it is not

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SA No.679/2023

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3 22.09.2025

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published in the two newspapers, nor affixed on the property and the Possession Notice is not issued by the Authorized Officer. Though the applicant intends to settle the amount, the bank has not given the statement of account. Hence, on these the grounds the applicant prays to set aside the Possession Notice dated 27.09.2023.

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4. Objections of the respondent bank:

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4.1 The bank has filed detailed counter and denies all the averments made in the present SA. It is the case of the bank, that the applicant is the borrower and Mrs. Ajithakumary is the co-borrower who have availed two loans from the respondent. The first loan is the Housing Loan for purchase of plot under Direct Housing Finance Scheme for Rs.6,02,700/which was sanctioned on 20.07.2012 vide Account No.3191961247 and the applicant had availed a Construction Loan under Direct Housing Finance Scheme for Rs. 15,56,000/- which was sanctioned on 06.01.2013 vide Account No.3231996211. The applicant has mortgaged the schedule mentioned property in favour of the bank as Secured Asset.

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4.2 The Applicant and the Co-Borrower defaulted in repayments and failed to maintain financial discipline in spite of repeated request. Hence, the account was classified as NPA on 31.03.2021 in accordance with RBI guidelines.

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4.3 The Applicant and the Co-Borrower did not make any repayment to regularize the loan account. Hence, the Bank has issued the Demand Notice under Section 13(2) on 20.04.2021 calling upon the applicants to

SA No.679/2023

22.09.2025

repay a sum of Rs.24,59,292/- as on 20.04.2021 within 60 days from the date of the receipt of notice. The Applicant received the Demand Notice however did not make any representation nor raised any objections to the demand made and also failed to repay the entire amount due. Hence, the Bank have been issued Possession Notice dated 27.09.2023 under Section 13(4) read with Rule 8 of the Security Interest (Enforcement) Rules, 2002 and took symbolic Possession of the property.

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4.4 In fact, the applicant has enclosed the Possession Notice in page 8 of the SA paper book. The Possession Notice is prepared as possible as per Appendix IV to the Security Interest (Enforcement) Rules 2002, and also affixed on the conspicuous part of the Schedule Mentioned Property. The Possession Notice was delivered to the applicant and co-borrower in person which is acknowledged by them. The Possession Notice is also published in two Newspaper on 02.10.2023 one in English Daily Business Standard, Chennai Edition and in Tamil Daily Hindu Tamil, Chennai Edition on 02.10.2023.

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4.5 The Applicant has filed the present SA Challenging the Possession Notice and does not dispute availing of the Loan Facility. However, the Applicant was never prompt in repayment of the monies which resulted in the classification of the loan account as NPA on 31.03.2021 as per RBI guidelines. The Bank denies the averments made in the SA and applicant contention attempt that are made to clear the liability which is denied as the applicant did not approach the bank for any settlement. The bank has strictly exercised the power under Section 13 (2) and Section 13 (4) with

SA No.679/2023

22.09.2025

Rule 8 of the Security Interest (Enforcement) Rules, 2002 and issued Demand Notice and Possession Notice in accordance with the Act and Rules made there under. The grounds as raised by the applicants are false and frivolous and without any legal basis. The Possession Notice is issued in accordance with the SARFAESI Act under rules which is legally enforceable under the Act.

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4.6 The Bank has followed all the measures as required and prays dismissed of the SA.

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

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5.1 It is an admitted fact that the Applicant is the Borrower along with Mr. Ajithakumary had availed Housing Loan of Rs. 6,02,700/- vide A/c No.3191961247 and Housing Loan for Construction of Rs.15,56,000 vide A/c No.3231996211. In fact the applicant does not dispute the creation of

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the mortgage of the property as collateral security which is registered before the Sub-Registrar, Pammal and in the Registration District of Chennai South.

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5.2 It is also an admitted fact, that the Applicant defaulted in the repayment and in spite of repeated request made by the Bank, the applicant could not comply with terms of the repayment schedule, which has resulted in the classification of the account as NPA on 31.03.2021 as

SA No.679/2023

22.09.2025

per the RBI Guidelines. Though the applicant had contended that the classification of the account NPA is against the RBI guidelines and has not pointed out any illegality in the classification of the account as NPA. On the other hand, due to the continuous defaulted the Respondent Bank has classified the loan account as NPA as per the RBI Guidelines. Consequent to classification of the account as NPA, the bank has issued the Section 13(2) Demand Notice on 20.04.2021 demanding the entire outstanding amount due in the loan account. It is seen from the Section 13(2) Demand Notice that the Respondent Bank as a secured creditor as described the details of the Borrower and the Guarantor, types of loan availed and the balance due as on 20.04.2021 and the Description of the property which is secured as collateral security.

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5.3 It is also mentioned that the entire outstanding amount due to be repaid within the period of 60 days as prescribed under the Act and it is also intimated that the Respondent would be exercising the power under Section 13 and proceeds to enforce the security availed to them. Further, the Borrower attention is invited to provision of Section 13(8), the light available for the Mortgagor to redeem the property.

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5.4 Section 13(2) Demand Notice was sent by RPAD and the postal receipts are also produced at page 10 of the counter to the SA. There is no dispute with regard to the receipt of the Section 13(2) Demand Notice by the Applicant and the applicant did not liquidated the liability within the period of 60 days nor raised any objection to the demand made under

SA No.679/2023

22.09.2025

Section 13(3A) of the Act. Thus, the applicant has not raised any objection to the demand made as required under the act.

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5.5 After the completion of the 60 days as there is no demanded payment made as nor any objections received from the borrower, the Bank has proceed and issued Section 13 (4) Possession Notice dated 27.09.2023 which is admittedly received by the applicant and the coborrower personally from the respondent bank and obtained signature from the applicants on the Sec 13(4) Notice. The Possession Notice is affixed on the property and also published in two Newspapers one in English Daily Business Standard, Chennai Edition and in Tamil Daily Hindu Tamil, Chennai Edition on 02.10.2023. Thus, the Respondent Bank have established the due compliance of the measures in the procedures of SARFAESI Act. On the other hand, the applicant failed to make out any illegality or violation in the measures taken by the Respondent Bank.

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5.6 On examination of the facts, pleadings and the documents produced by both the parties, the Respondent Bank has established the due compliance of the procedures in issuing the SARFAESI notice is issuing the Section 13(2) Demand Notice dated 20.04.2021 and the Section 13(4) Possession Notice dated 27.09.2023, resulting in upholding the Section 13(2) Demand Notice dated 20.04.2021 of Sec 13(4) Possession Notice dated 27.09.2023 as valid notice issued under the Act.

SA No.679/2023

22.09.2025

For the foregoing reasons, the present SA is dismissed. Interim Order

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granted, if any stands vacated. Pending IAs are also stands closed in terms of the 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 him, corrected, signed and pronounced by me on this the 22^nd 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. No.	Description of Documents	Document No.
1.	Application Grounds dated 07.11.2023.	A-1
2.	Possession Notice dated 27.09.2023.	A-2
3.	Vakalat dated 07.11.2023.	A-3
4.	Scrutiny Sheet dated 07.11.2023.	A-4

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LIST OF DOCUMENTS PRODUCED BY THE RESPONDENTS

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Sl. No.	Description of Documents	Document No.
1.	Counter filed by the Respondent dated 20.01.2024.	R-1
2.	Demand Notice along with postal Receipt dated 20.04.2021.	R-2
3.	Possession Notice dated 27.09.2023.	R-3
4.	Photo Affixture of Possession Notice dated 27.09.2023.	R-4
5.	Possession Notice published in Business Standard dated 02.10.2023.	R-5
6.	Possession Notice published in Hindu Tamil Thisai dated 02.10.2023.	R-6

SA No.679/2023

22.09.2025

SCHEDULE OF PROPERTY

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Survey Details	Extent area/building	Registration Dist, etc
Survey No RS No.128,	861 Sq.Ft. (Plot No.	Sub Registration
Plot No. 39 and 40 in the	39 – 431 Sq.Ft Plot No	District of Pammal and
layout VGN Southern	40 – 430 Sq.Ft) with	in the Registration
Garden, Kowl Bazar,	residential building of	District of Chennai
Pallavaram, Alandur	1260 Sq.Ft	south
Taluk, Pammal SRO
Kanchipuram District,
Chennai - 600074

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House site situated within the boundaries of: Plot No 39: South By: Plot No 34, West By: Plot No 32, East By: Plot No 40, North By: IV Main Road (9meter) Plot No 40: South By: Plot No 34, West By: Plot No 39, East By: Plot No 41, North By: IV Main Road (9 meter)

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

R Rajendrababu v. Central Bank of India

Case brief

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R Rajendrababu v. Central Bank of India

Case brief

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