Allowed

Jerome Sahayaraj v. Jana Small Finance Bank Ltd.

DRT14 Oct 2025SA/701/2024

Case brief

AI extract

What is this about?

The Tribunal allowed an application seeking to set aside a Possession Notice issued by Jana Small Finance Bank. It held that the bank failed to strictly follow Service and Enforcement Rules regarding the publication and affixation of notices.

What did the court decide?

The Possession Notice dated 03.08.2024 is set aside; applicants allowed liberty to initiate fresh action under SARFAESI Act & Rules.

Jerome Sahayaraj versus Jana Small Finance Bank Ltd. — Banking and Recovery | DRT (2025)

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SA No.701/2024

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI

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DATED THIS 14^th DAY OF OCTOBER, 2025

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PRESENT: SEEMA SINHA

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[PR. DISTRICT & SESSIONS JUDGE - Retd] PRESIDING OFFICER

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SA No. 701/2024

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Jerome Sahayaraj, S/o. Adaikkalam, No. 4/62, North Street, Navalurkuttapattu (PO), Srirangam, Trichy – 620 009. --- Applicant

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-Vs-

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The Authorized Officer,

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Jana Small Finance Bank Limited, Regional Office, 28/36, First Floor, South West Bong Road, T. Nagar, Chennai – 600 017.

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The Branch Manager,

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Jana Small Finance Bank Limited, No. 1, Ramalinga Nagar, Chennai Plaza, Trichy – 625 617. --- 1^st & 2^nd Defendants Bank

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Appearance of Advocates: Mr. M. Arun Murugan ---- Counsel for the Applicant M/s. S. Babu ---- Counsel for the 1^st & 2^nd Defendants Bank

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This SARFAESI Application was heard in the presence of Counsels for the Applicant and the 1^st & 2^nd Defendant Banks 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 03.08.2024 served on 19.08.2024 issued

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Page 1 of 9

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SA No.701/2024

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by the 1^st & 2^nd Defendant and quash the same as illegal and to restore the symbolic possession back to the Applicant and permit the Applicant to redeem the property.

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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 has availed a loan from the Defendant under Home Loan for an amount of Rs. 14,18,773/. Additionally, the Applicant has taken a top-up loan for a sum of Rs. 7,24,412/-. And, another loan has been availed under an AHL pre-approved express top-up loan for a sum of Rs. 1,01,270/-. In total, a sum of Rs. 22,44,004/- has been availed by the Applicant as of 07^th April 2014. It is further submitted that the Applicant has mortgaged his residential property for the said loan and has faithfully repaid the loan amount along with its EMIs properly and regularly. The loan account has not been out of order. The total outstanding amount of Rs. 22,44,004/- in the year 2014 has been substantially reduced to Rs. 15,20,780/- in the year 2024 after consistent repayments made by the Applicant.

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It is further submitted that thereafter on 17^th April 2024, the Defendant sent a recall notice for a sum of Rs. 15,20,780/-. Further, it is submitted that the NPA date mentioned in the Demand Notice was handwritten. The Applicant stated that there was only a minor delay in repayment during the period of COVID-19 Pandemic and aside from this there has never been any delay in repaying the loans. Thereafter, the Applicant sent several representations and approached the Defendant Bank requesting an opportunity to settle the outstanding amount under a onetime settlement scheme. However, the Bank’s Authorized Officer did not respond adequately and failed to provide any opportunity to settle the account amicably.

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Thereafter, without providing any opportunity for resolution, the Defendant Bank issued a Possession Notice dated 03.08.2024. The Notice was not affixed on the property nor it was published in leading newspapers. Further, in the Possession Notice, the Defendant Bank failed to include the measurement of the building as required by the relevant acts and rules. Further submitted that the Defendant is deliberately trying to seize the property by any means possible, as it is a valuable residential property.

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Main Grounds :-

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The Defendant failed to see that the Defendant’s actions, including issuing a Possession Notice without proper notice or procedures, suggest a breach of the contractual obligations.

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Page 2 of 9

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SA No.701/2024

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The handwritten NPA date in the Demand Notice raises questions about the accuracy and reliability of the document.

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The Defendant failed to give an opportunity for one time settlement.

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The Possession Notice not pasted on the conspicuous part of the property.

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The Possession Notice not published in the leading newspaper. The Bank failed to mention the description of the property and failed to mention the measurement of the building. The Bank failed to mention the address of the Applicants in the Possession Notice.

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SCHEDULE OF PROPERTY

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Trichy District, Trichy Registration District, Woraijur-Sub Registration District, Sirangam Taluk, within Strangam. Taluk, Navalur Kuttapattu Village Panchayat Board Limit, Navalur Kultapattu Village the property comprised in Old Survey No. 228/1 Part Natham New Survey No. 544/15 an Extent of 0.00.67 Sq Mt., Ward New Survey No. 544/16 an extent of 0.00.62 Sq Mt, Total exieut of 129 Sq mt, as per Field Map an Extent of 1433 ½ Sq A, Equivalent to 133 Sq Mt., together with Terraced house, Water tap connection, ½ HP Electric Motor, Northern and Eastern compound wall, pathway and all easement rights Door No. 4/62, Assessment No. 691, Water tap connection I{o.97, is situated within the following four boundaries

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North by	:	East West Road
South by	:	Property belongs to Chinnappudaiyar
East by	:	North South Road
West by	:	Plot belongs to Adaikalam and Gnambal
East West	Meas	urement: North 28 ¼ Feet South 36 Feet
North Sout	h Me	asurement: East 45 ¼ Feet West 44 Feet
Total exten	t of :	1433 ½ Sq ft, equivalent to 133 Sq Mt.,

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

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Typed Set Pages

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S.No.	Date	Particulars
1	17.04.2024	Recall Notice
2	20.04.2024	Demand Notice
3	03.08.2024	Possession Notice

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Page 3 of 9

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SA No.701/2024

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3. On the other hand, the Counsel for the 1^st & 2^nd Defendants Bank appeared before this Tribunal and filed Vakalat, Reply Statement, Written Argument, Typed set of papers & Additional Typed set of papers in which they submitted that the grounds raised by the Applicant in the Application are not tenable and liable to be rejected. The Defendant Bank complied all the mandates and procedure prescribed under the SARFAESI Act.

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It is further submitted that the Applicant along with his wife Mrs. Vinitha has availed Home Loan vide sanction letter dated 29.01.2020 for a sum of Rs. 14,18,773/- at the rate of 15% interest fixed for the 1^st 36 months and thereafter fluctuating according to the RBI norms by pledging the Schedule Mentioned Property having extend of 67 Sq.mr comprised in Natham New Survey No. 544/15 and having extent of 62 Sq.mr comprised in Natham New Survey No. 544/16 both correlating to old Survey No. 228/1 Trichy District. The Applicant along with his wife Mrs. Vinitha has availed Top up loan facility for a sum of Rs. 7,24,412/-. The Applicant along with his wife Mrs. Vinitha has availed again a pre-approved express Top up loan facility for a sum of Rs. 1,01,270/-.

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It is further submitted that the Applicant is a chronic Defaulter and failed to pay the loan amount as prescribed by the Bank. The Applicant has not provided any proof to show that he suffered the loss in his business due to Covid-19 and he is put to strict proof of the same. The Borrower is very much irregular in repaying the loan as it is seen from the records of the account statement of the borrower’s account. Hence, the borrower’s account was declared as NPA as early 04.05.2022 on and pursuant to the same earlier SARFAESI proceedings were initiated and an order u/s. 14 of SARFAESI Act came to be passed in Cr.MP No. 35511 of 2022 on 26.05.23 and subsequently Physical Possession also taken by the Defendants Bank on 12.06.23 and subsequently the Applicant normalized the account on payment of necessary dues. Later the Applicant has defaulted in paying the EMI and the borrower/guarantor/Applicant herein had not taken any steps to regularize the account or repay the loan. The Applicant never approached the bank for any regularization or repayment.

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It is further submitted that due to the default of Applicant, the Applicant’s loan account was classified as NPA again on 01.01.24 and after classification of NPA, the Defendant Bank had issued a Recall notice on 17.04.24, but the Applicant failed to regularize his loan account even after the repeated demands. Hence, the Defendants Bank issued the Demand Notice on 20.04.2024, informing the classification of NPA and existing liability of entire loan account to the Applicant, but the Applicant failed to regularize his loan account even after the repeated demands. Hence, the Defendant Bank issued

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Page 4 of 9

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SA No.701/2024

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a Possession Notice dated 03.08.24 and the same was published in two Newspapers having wide circulation on 06.08.24 and the same was affixed on conspicuous place of the Schedule of Property. Even after receiving the Possession Notice, the Applicant failed to take any steps to regularize his loan amount and never approached the Defendant Bank to clear his outstanding amount. Hence, the Defendant Bank approached the Ld. CJM, Trichy and obtained an Order dated 27.02.25 in Cr.M.P.No.22114 of 2024. It is further submitted that there is no bar in SARFAESI Act in handwritten NPA date and the Applicant is liable to pay a sum of Rs. 18,21,092.11p as on 03.03.2025. It is further submitted that despite the communication from the Defendant, the Applicant neither cleared the arrears nor did any effort to clear the arrears.

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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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Type set filed by the 1^st & 2^nd Defendants Bank

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S.No.	Date	Particulars
1	29.01.2020	Loan Sanction Letter
2	28.07.2020	Loan Sanction Letter
3	31.08.2021	LoanSanction Letter
4	22.05.2017	Memorandum of Deposit of Title Deeds
5	20.04.2024	Demand Notice
6	23.04.2024	Demand Notice Paper Publication in English
7	23.04.2024	Demand Notice Paper Publication in Tamil
8	03.08.2024	Possession Notice
9	06.08.2024	Possession Notice Paper Publication in English
10	06.08.2024	Possession Notice Paper Publication in Tamil
11	04.03.2025	Statement of Accounts
12	04.03.2025	Statement of Accounts
13	04.03.2025	Statement of Accounts

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Index Additional Type set of papers

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S.No.	Date	Particulars
1	26.04.2024	DemandNoticeADCards
2	19.08.2024	Postaltrackingreports ofSec13(4)Notice
3	03.08.2024	Possession Notice Photo with affixed location
4	21.04.2025	Confirmation letter from Business Standard Daily Newspaper

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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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Page 5 of 9

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SA No.701/2024

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5. Having heard the parties and after going through the entire documents available on records, this Tribunal find that there is no dispute between the parties with regard to the availment of loan facilities by creating equitable mortgage over the Schedule mentioned property. In this case, the Applicant contended that initially the Applicant has repaid the monthly installments regularly however, due to Covid-19 Pandemic, there was only a minor delay in repayment and hence the Defendant Bank has initiated recovery proceedings and classified the Applicant's loan account as NPA on 01.01.2024 and issued Demand Notice on 20.04.2024 U/s. 13(2) of SARFAESI Act.

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The Defendants Bank in their Written Argument stated that the borrower’s account was declared as NPA as early on 04.05.2022 and pursuant to the same earlier SARFAESI proceedings were initiated and an Order u/s. 14 of SARFAESI Act came to be passed in Cr.MP.No. 35511 of 2022 on 26.05.2023 and subsequently Physical Possession also taken by the Defendants Bank on 12.06.2023 but thereafter the Applicant normalized the account on payment of necessary dues. It is stated by the Bank that later, the Applicant has defaulted in paying the EMI and the borrower/guarantor/Applicant herein had not taken any steps to regularize the account or repay the loan. And, the Applicant never approached the bank for any regularization or repayment.

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The Defendants Bank have also stated in their Written Argument that since the Applicant failed to repay the loan as agreed to and hence the loan account was declared as NPA. Thereafter, the Defendants Bank had issued a recall notice dated 17.04.2024 (Page nos. 12 & 13 of Applicant’s main SA) for a sum of Rs. 15,20,780.11p (Rupees Fifteen Lakhs Twenty Thousand Seven Hundred Eighty and paise Eleven only) to the Applicant. Thereafter, the Defendants Bank had issued a Demand Notice dated 20.04.2024 U/s. 13(2) of the SARFAESI Act for a sum of Rs. 15,20,780/- (Rupees Fifteen Lakhs Twenty Thousand Seven Hundred and Eighty only). But the Applicant in his Written Argument claimed that he had not received the Demand Notice dated 20.04.2024. I also find that the Defendants Bank had filed copies of AD Cards

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Page 6 of 9

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SA No.701/2024

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(Page nos.1 to 3 of Bank's Additional Typed set of papers) as a proof for having delivered the Demand Notice to the Applicant. However, the copies of AD cards filed by the Defendant Banks are not clearly shown the date of delivery. The Defendants Bank had also published the Demand Notice dated 20.04.2024 in English and Tamil dailies on 23.04.2024 (page nos. 22 & 23 of Bank’s Typed set of papers). But I find that the Paper Publication was made in the English Newspaper Business Standard in Chennai, not in Trichy a place where the Impugned Property is situated. Moreover, the Paper Publication copies are not legible to verify the genuineness of the contents of the Demand Notice dated 20.04.2024. Thus, the Defendant Banks failed to follow Rule 3(1) of Security Interest Enforcement Rules, 2002, which clearly says:-

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“3. Demand Notice.- (1) The service of demand notice as referred to in sub-section (2) of section 13 of the² [ Act] shall be made by delivering⁵ [ including hand delivery] or transmitting at the place where the borrower or his agent, empowered to accept the notice or documents on behalf of the borrower, actually and voluntarily resides or carries on business or personally works for gain, by registered post with acknowledgement due, addressed to the borrower or his agent empowered to accept the service or by Speed Post or by courier or by any other means of transmission of documents like fax message or electronic mail service:

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Provided that where authorised officer has reason to believe that the borrower or his agent is avoiding the service of the notice or that for any other reason, the service can not be made as aforesaid, the service shall be effected by affixing a copy of the demand notice on the outer door or some other conspicuous part of the house or building in which the borrower or his agent ordinarily resides or carries on business or personally works for gain and also by publishing the contents of the demand notice in two leading newspapers, one in vernacular language, having sufficient circulation in that locality.”

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I also find that the Applicant has not filed any reply/representation sent U/s. 13(3-A) of SARFAESI Act to the Defendants Bank in respect of Demand Notice dated 26.04.2024.

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Thereafter, I find that the Defendant Banks had issued Possession Notice U/s. 13(4) of SARFAESI Act on 03.08.2024 for a sum of Rs. 15,20,780/- (Rupees Fifteen Lakhs Twenty Thousand Seven Hundred and Eighty only). The Applicant in his pleading has alleged that the Bank has failed to affix the Possession Notice on the conspicuous part of the property and not published the same in leading newspapers and failed to mention the description of the property and measurement of the building and address of

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Page 7 of 9

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SA No.701/2024

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the Applicants in the Possession Notice. I also perused the typed set of papers filed by the Defendant Banks and I find that the Defendants Bank had filed Postal tracking reports of Sec 13(4) Notice as evidence for having delivered the Possession Notice to the Applicant (Page nos. 4 to 7 of Bank’s Additional Typed set of papers). I also find that the Defendant Bank has also filed the copies of Paper Publication of Possession Notice dated 03.08.2024 (Page nos. 26 & 27 of Bank’s Typed set of papers) in both English and Tamil Newspapers. But I find that the Paper Publication was made in the English Newspaper Business Standard in Chennai, not in Trichy a place where the Impugned Property is situated. Moreover, the Paper Publication copies are not legible to verify the genuineness of the contents of the Possession Notice dated 03.08.2024. I also find that the Bank has also filed a copy of affixture of Possession Notice dated 03.08.2024 (Page no. 8 of Bank’s Additional Typed set of papers), whereas, I find that it is not appears to be affixed on the Impugned Property however, I find that a person is showing the Possession Notice along with a Newspaper. Hence, it cannot be considered that the Bank has affixed the Possession Notice on the conspicuous part of the property. Thus, I find that the Defendant Bank has not followed Rule 8(1) & (2) of Security Interest Enforcement Rules, 2002 strictly, which clearly says,

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"8. Sale of immovable secured assets.

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(1) Where the secured asset is an immovable property, the authorized officer shall take or cause to be taken possession, by delivering a possession notice prepared as nearly as possible in Appendix IV to these rules, to the borrower and by affixing the possession notice on the outer door or at such conspicuous place of the property."

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(2) The possession notice as referred to in sub-rule (1) shall also be published in two leading newspaper, one in vernacular language having sufficient circulation in that locality , by the authorized officer.

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The Applicant has no doubt being a defaulter is liable to pay the loan amount to the Defendants Bank and the Banks have been given ample power to recover the outstanding loan amount from the borrower by invoking the SARFAESI Act and without the intervention of any Court. But, it shall not

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Page 8 of 9

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SA No.701/2024

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allow the Bank to take the 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 his case.

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In the result,

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SA No. 701/2024 is allowed. The Possession Notice dated 03.08.2024 is hereby set aside with direction to the 1^st & 2^nd Defendant Banks not to include all the expenditures incurred in issuance of Impugned Possession Notice dated 03.08.2024 in the loan account of the Applicant.

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The 1^st & 2^nd Defendant Banks are at liberty to initiate fresh action against the Applicant as per the SARFAESI Acts & Rules. 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 14^th October, 2025.

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sd/- (SEEMA SINHA) PRESIDING OFFICER

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Uploaded on 01.11.2025

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Page 9 of 9

Jerome Sahayaraj v. Jana Small Finance Bank Ltd.

Case brief

What is this about?

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Jerome Sahayaraj v. Jana Small Finance Bank Ltd.

Case brief

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What did the court decide?

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