Dismissed

C Krishnamurthy v. Indian Overseas Bank

DRT19 Dec 2025SA/94/2023

Case brief

AI extract

What is this about?

In this securitization application, the applicant challenged the respondent bank's Section 13(4) possession notice and demand notice. The court examined procedural compliance regarding notice service, newspaper publication, and NPA classification, relying on prior precedents. The court found the bank had strictly adhered to the SARFAESI Act and rules.

What did the court decide?

The secoiritization application was dismissed; the Section 13(2) Demand Notice and Section 13(4) Possession Notice were upheld as valid.

C Krishnamurthy versus Indian Overseas Bank — Banking and Recovery | DRT (2025)

SA No.94/2023

19.12.2025

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 19^th day of December, 2025

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Present: SMT. S.V. GOWRAMMA

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Presiding Officer

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SA No. 94 of 2023

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Mr. C. Krishnamurthy, S/o Chinnadurai No.168/137, Murugamangalam Road, Alangudi Village, Kuthalam Taluk, Nagapattinam – 609 801 …Applicant

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-Vs-

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The Authorized Officer, Indian Overseas Bank, Kuttalam Branch, No.50, Mettu Street, Kuttalam, Nagapattinam – 609 801 …Defendant

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Counsels on record / appeared:

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Counsel for Applicant : M/s. U. Kathiravan Counsel for Respondent : Mrs. V. Rajeswari

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ORDER ON SA No.94/2023

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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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SA No.94/2023

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2 19.12.2025

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The applicant has filed the present SA challenging the Possession Notice dated 10.01.2023 and the outstanding amount due as per Possession notice is Rs.38,58,347.48/-

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3. Pleadings of the applicant:

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3.1 Applicant had availed various loan from the respondent bank for sum of Rs.30,00,000/- for KCCDC Loan vide A/c. No.004502000000089, sum of Rs.8,86,000/- for AGFAM Loan vide A/c. No.004503831000004 and sum of Rs.7,72,000/- for AGFAM-I Loan vide A/c. No.004503831000005 in the year 2010.

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3.2 Applicant has mortgaged their property as security towards the loan and also paid Rs.8 Lakhs towards their loan account which was not considered by the bank and are claiming an enormous amount of Rs.38,58,347.48/- without proper accounts. Further, the bank has failed to serve Section 13(2) Demand Notice to the applicant and has not followed the procedures under the SARFAESI Act.

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3.3 Subsequently, the bank had issued Section 13(4) Possession Notice dated 10.01.2023 which is not affixed on the conspicuous part of the property in violation of Rule 8(1), Appendix-IV of the SIE Rules and also claimed that the possession of the property was taken on 10.01.2023 which is illegal and arbitrary.

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3.4 The bank has initiated each step without mentioning the name of the Authorized Officer and also failed to furnish the name of Authorized Officer

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in the Demand Notice and impugned Possession Notice dated 10.01.2023 under Rule 8(1).

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3.5 In the grounds it is contended that the respondent bank has not classified the loan account as NPA under Section 2(o), the respondent bank has failed to serve Demand notice without mentioning the authorized officer name, hence the Demand notice is defective. The respondent bank has violated the provisions of Rule 8(1) and 8(2) when issuing the Possession Notice dated 10.01.2023 and it is contrary to the terms and conditions of the extended loan facility.

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3.6 The Possession notice is not issued to the applicant and the same is not affixed on the conspicuous part of the property nor published in two Newspapers as contemplated under the Act. The respondent bank has not followed the RBI guidelines when classifying the applicant’s loan account as NPA. Hence the applicant prays to set aside the impugned possession notice dated 10.01.2023 as null and void.

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4. Objections of the respondent bank:

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4.1 The respondent bank has filed a detailed counter, inter alia contending that the applicant has availed various credit facilities which are as follows:

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S.No.	Facility	Sanction Limit (Rs. In Lakhs)	Date of Sanction	Amount Disbursed (Rs.)
1.	KCCDC 004502000000089	3.00	09.09.2010	3,00,000/-
2.	AGFAM 004503831000004	8.86	16.12.2010	5,86,000/-

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SA No.94/2023 4 19.12.2025

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3.	AGFAM	7.72	16.12.2010	6,49,400/-
	004503831000005

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It is submitted that these facilities were secured by the hypothecation of Mahindra & Mahindra Tractor and also mortgaged the residential land and building at Door No.168/137, Alangudi Village, Kuttalam Taluk, Nagapattinam District which belongs to the applicant here in.

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4.2 The applicant defaulted in the repayments and the respondent bank has classified the loan account as NPA on 27.12.2013 as per the RBI guidelines. In spite of several reminders, applicant has failed to repay the dues and the respondent bank has issued the Section 13(2) Demand Notice 09.09.2022 to the Borrower which was duly acknowledged by the applicant here in.

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4.3 Further the postal acknowledgement card is not signed by the applicant and the respondent bank had published the Demand Notice dated 09.09.2022 in two Newspapers, one in “The New Indian Express” (English) and another in “Dinamalar” (Tamil) on 06.11.2022, and the same is also affixed on the conspicuous part of the property under Rule 3(1) of SIE Rules.

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4.4 Subsequently, the applicant has sent a reply to the Demand Notice vide letter dated 04.11.2022 to which the Authorized Officer of the respondent bank had sent a reply on 17.11.2022. As the applicant has availed various credit facilities and defaulted in the repayment which resulted in classification of the loan account as NPA on 27.12.2013. Since the applicant has made a representation with regard to the Demand Notice

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19.12.2025

dated 09.09.2022 is also replied by the Authorized officer of the bank vide letter dated 17.11.2022. The Demand notice is also published in two Newspapers and also affixed on the property as per the procedures made there under. Subsequently, the bank has taken Symbolic Possession of the Mortgaged Property on 10.01.2023, the Possession notice dated 10.01.2023 is duly served to the applicant.

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4.5 The Possession Notice is also affixed on the property and the same is also published on 13.01.2023 in two leading newspapers one in “The New Indian Express” (English) and another in “Dinamalar” (Tamil). Thus, the bank has followed all the procedures as prescribed under the SARFAESI Act.

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4.6 The outstanding amount due mentioned in the Possession notice dated 10.01.2023 is calculated as per the terms and conditions of the sanction and the Possession notice is also affixed on the property. The respondent bank has also produced the statement of accounts for the loan accounts.

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4.7 The authorized officer of the respondent bank can be changed by transfer and there is no need in mentioning his name in the statutory notices as per the Security Interest (Enforcement) Rules. The respondent bank has also duly countered each and every grounds as raised by the applicant here in. The respondent bank has contended that the applicant had availed Term loan against mortgage of residential property and the demand notice is also served to the applicant herein. Further there is no

SA No.94/2023

19.12.2025

defect in the Possession notice issued by the respondent bank which is also affixed on the mortgaged property and published in two Newspapers on 13.01.2023.

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4.8 The respondent bank has filed a memo on 01.09.2025 stating that the applicant has not raised any specific contention that both the hypothecated assets and mortgaged assets were taken by a single Possession notice in the present SA. Though the respondent bank places reliance on the following judgments for the contention raised by the applicant with regard to the possession notice, M/s. Sama Rubbers Vs. South Indian Bank and ARCE Polymers Pvt Ltd. Vs. M/s. Alphine Pharmaceuticals Pvt Ltd. & Ors. Therefore the respondent bank has followed all the provisions as mandated under the Act and prays for dismissal of 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 It is discernible from the records that the applicant had availed the following loan facilities:

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S.No.	Facility	Sanction Limit (Rs. In Lakhs)	Date of Sanction	Amount Disbursed (Rs.)
1.	KCCDC 004502000000089	3.00	09.09.2010	3,00,000/-
2.	AGFAM 004503831000004	8.86	16.12.2010	5,86,000/-
3.	AGFAM 004503831000005	7.72	16.12.2010	6,49,400/-

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To secure the credit facilities availed, applicant has hypothecated

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Mahindra & Mahindra Tractor and created an equitable mortgage on

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residential land building by way of Memorandum of Deposit of Title Deeds which is not disputed by the applicant here in.

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5.2 Applicant was irregular in the repayments and due to the default made in the repayment, the respondent bank has classified the loan account as NPA on 27.12.2013 as per the RBI guidelines. Though the applicant has contended that classification of the account as NPA as per Section 2(o) is not specifically pointed out the illegality in classifying the loan account as NPA as per Section 2(o) of the Act.

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The Section 2(o) is extracted here as under:

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“non-performing asset” means an asset or account of a borrower, which has been classified by a bank or financial institution as sub-standard, doubtful or loss asset”

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5.3 After classifying the loan account as NPA, the respondent bank has issued Section 13(2) Demand Notice dated 09.09.2022 calling upon the borrower to discharge his entire liability within a period of 60 days from the date of receipt of the notice. On perusal of the Demand notice dated 09.09.2022 produced by the respondent bank at Page No.7 to 10 of their typed set, clearly reflects the; the details of the borrower, total dues in the loan accounts, date of classification of the loan account as NPA, description of the securities created by the applicant in favor of the respondent bank.

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5.4 Further, the Demand Notice dated 09.09.2022 is duly served to the applicant here in as per the acknowledgment card produced at Page No.11 of respondent bank’s counter. The applicant has replied vide letter dated

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04.11.2022 to the demand made by the respondent and the respondent bank has replied to the representation of the applicant vide their reply letter dated 17.11.2022 as is evident from the letters produced by the respondent bank at Page No.12 and 13 of respondent’s counter. Thus, the respondent bank has complied under Section 13(3A) of the SARFAESI Act.

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5.5 The Demand Notice is duly published in two Newspapers, one in “The New Indian Express” (English) and another in “Dinamalar” (Tamil) both dated on 06.11.2022 as evident from the paper publications produced at Page No.14 and 16 of respondent’s counter. The Demand notice is also affixed on the conspicuous part of the mortgaged property as reflected from the photograph of affixture produced at page No.17 of respondent bank’s counter.

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5.6 Even after the receipt of the Demand notice, applicant has failed to discharge the entire liabilities within the period of 60 days from the date of receipt of notice. Hence, the respondent bank has proceeded further and issued Section 13(4) Possession notice dated 10.01.2023 which is duly received and acknowledged by the applicant as evident from the acknowledgment card produced at Page No.20 of respondent’s counter.

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5.7 The Possession notice is duly affixed on the conspicuous part of the mortgaged property as reflected from the photograph of affixture produced at Page No.21 of respondent’s counter. The respondent bank has also published the Possession notice in two Newspapers, one in “The New Indian Express” (English) and another in “Dinamalar” (Tamil) both dated on

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13.01.2023 as evident from the paper publication produced at Page No.22 to 24 of respondent’s counter.

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5.8 A specific contention raised by the applicant is that the respondent bank has failed to furnish the name of Authorized officer and different unnamed Authorized officers were involved in each measure is not sustainable, on perusal of the Demand Notice, Possession Notice, produced by the respondent bank issued by the Authorized officer along with the seal of the respondent bank as secured creditor and seal of the Authorized officer are affixed as per the Rule 2(a) of the SIE Rules

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(a) “authorized officer” means an officer not less than a chief manager of a public sector bank or equivalent, as specified by the Board of Directors or Board of Trustees of the secured creditor or any other person or authority or affairs of the secured creditor, as the case may be, to exercise the rights of a secured creditor under the [Act].

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5.9 Hence the Authorized officer is an officer of the bank who exercises the power of superintendent and controls the business of the secured creditor, the contention that the respondent bank has failed to furnish the details of the Authorized officer and different unnamed Authorized officers would not sustain as per the Rule 2(a) of the SIE Rules. Thus, notice issued by Authorized officer is as per the Rule 2(a) and nowhere the names of Authorized officer is required to be mentioned as per the Act and Rules. Even otherwise the applicants after receipt of the Section 13(2) Demand

SA No.94/2023

19.12.2025

Notice did not raise any such contention about the officer being an Authorized officer under SARFAESI Act. As per the board resolution, the Chief Manager has been appointed as the Authorized officer to exercise the rights under the SARFAESI Act.

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5.10 The another contention as raised by the applicant is that the respondent bank has failed to serve Demand Notice dated 09.09.2022 to the applicant is not sustainable as the respondent bank has duly served the Demand notice as evident from the acknowledgment card produced at Page No.11 of respondent’s counter. The Demand notice is duly published in two Newspapers, one in “The New Indian Express” (English) and “Dinamalar” (Tamil) both dated on 06.11.2022 as evident from the paper publications produced at Page No.14 and 16 of respondent’s counter. Though the Demand notice is also affixed on the conspicuous part of the mortgaged as reflected from the photograph of affixture produced at Page No.17 of respondent’s counter.

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5.11 The applicant has raised an contention that the respondent bank failed to consider the payment of Rs.8.00 lakhs paid by the applicant which is not supported by any documents and the respondent bank has claimed an exorbitant amount also fails as the respondent bank has charged interest as per the agreed terms and conditions of the sanction and the respondent bank has also produced the statement of accounts for the loan accounts at Page No.25 to 46 of respondent’s counter to evidence the crediting of amount paid to the loan account.

SA No.94/2023

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5.12 The applicant has contended that the Possession notice dated 10.01.2023 is neither published in two Newspapers, nor affixed on the property is not sustainable as the respondent bank has duly published in two Newspapers, one in “The New Indian Express” (English) and another in “Dinamalar” (Tamil) both dated on 13.01.2023 as evident from the paper publications produced at Page No.22 to 24 of respondent’s counter. The Possession Notice dated 10.01.2023 is also affixed on the conspicuous part of the property as reflected from the photograph of affixture produced at Page No.21 of respondent’s typed set.

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5.13 Though the applicant has raised a contention during the course of arguments which is not pleaded in the SA that the respondent bank has taken both hypothecated assets and mortgaged assets by issuing a single Possession notice dated 10.01.2023 is countered by the respondent bank by relying on the judgment ARCE Polymers Pvt Ltd. Vs. M/s. Alphine Pharmaceuticals Pvt Ltd. & Ors at para 29 where it is held that

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“we do not agree with High Court that the machinery should have been separately auctioned or sold. This would be putting fetters and restrictions on the bank by barring the bank from selling the machinery along with the building and the land. Prejudice and loss caused to the borrower is not shown and established.”

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5.14 The respondent bank has relied on the Hon’ble High Court of Kerela Judgment in M/s. Sama Rubbers Vs. South Indian Bank, further the applicant have relied on the non mentioning of the specific details and the

SA No.94/2023

19.12.2025

Section 14 order is passed without any merits. In fact, the Possession notice issued by the respondent bank clearly reflects the details of the hypothecated assets and mortgaged assets, though the applicant has not raised any specific contention in the present SA. Hence, the contention that the respondent bank has taken both hypothecated assets and mortgaged assets by issuing one Possession notice is not sustainable.

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5.15 On perusal of the records it is seen that the respondent bank as a secured creditor has classified the loan accounts as NPA on 27.12.2013 and proceeded to issue Demand Notice 09.09.2022 which is established with supporting documents for due service of Section 13(2), contrarily the applicant has raised objections to Section 13(2) notice under Section 13(3A). In spite of receipt of Section 13(2) Demand notice, the applicant failed to liquidate the liability within 60 days under the Act.

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5.16 The respondent bank proceeded further in issuing the Possession notice dated 10.01.2023 which is duly served to the applicants herein as per the acknowledgements produced by the respondent, affixed on the conspicuous part of the property, published in two Newspapers as mandated under the Act. Thus, the respondent bank has established the due compliance of the procedures in initiating the measures under the Act.

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5.17 For the forgoing reasons, the present SA is only to be dismissed upholding the Section 13(2) Demand notice dated 09.09.2022 and Section 13(4) possession notice dated 10.01.2023 as valid notices.

SA No.94/2023

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Resultantly the present SA 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 (Mogesh) transcribed by him, corrected, signed and pronounced by me on this the 19^th day of December, 2025)

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ANNEXURES

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LIST OF DOCUMENTS PRODUCED BY THE APPLICANT

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Sl.	Description of Documents	Document
No.		No.
1.	Memorandum of appeal dated 16.02.2023.	A-1
2.	Possession Notice dated 10.01.2023.	A-2
3.	Vakalat dated 16.02.2023.	A-3

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LIST OF DOCUMENTS PRODUCED BY THE RESPONDENTS

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Sl. No.	Description of Documents	Document No.
1.	Counter Affidavit of Respondent Bank Documents Relied on in Counter Affidavit	R-1
2.	Demand Notice issued to Borrower Mortgagor who is the Applicant dated 09.09.2022.	R-2
3.	Postal acknowledgement for Demand Notice received on behalf of the Applicant dated 13.09.2022.	R-3
4.	Letter of the Applicant to the Respondent Bank dated 04.11.2022.	R-4
5.	Reply of the Respondent Bank to the Applicant to his letter dated 04.11.2022 on 17.11.2022.	R-5
6.	Paper Publication of Demand Notice made in The New Indian Express (English) and Dinamalar (Vernacular) dated 06.11.2022.	R-6

SA No.94/2023

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7.	Photograph showing affixture of Demand Notice on the house of the Applicant dated 03.11.2022.	R-7
8.	Possession Notice issued to the Applicant dated 10.01.2023.	R-8
9.	Postal Acknowledgement of Possession Notice from the Applicant dated 24.01.2023.	R-9
10.	Photograph evidencing affixture of Possession Notice on the mortgaged property dated 10.01.2023.	R-10
11.	Paper publication of Possession Notice made in The New Indian Express (English) and Dinamalar (Vernacular) dated 13.01.2023.	R-11
12.	Statement of account in respect of KCCDC 004502000000089 facility availed by the Applicant from 09.09.2010 to 28.02.2023 dated 17.11.2022.	R-12
13.	Statement of account in respect of AGFAM 004503831000004 facility availed by the Applicant from 16.12.2020 to 31.03.2023 dated 17.11.2022.	R-13
14.	Statement of account in respect of AGFAM 004503831000005 facility availed by the Applicant from 16.12.2020 to 31.03.2023 dated 17.12.2022.	R-14

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SCHEDULE OF PROPERTY

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DESCRIPTION OF THE PROPERTIES:

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Hypothecation of Tractor in the name of Krishnamurthy.C

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Model	: Mahindra and Mahindra Tractor (Agriculture)
Registration No	: TN51M1099
Engine No	: NCDL624
Chassis No	: 000NCDL624
Cubic Capacity	: 4
Colour	: Red
Manufacturing M	onth and Year: 2010
Fuel	: Diesel

SA No.94/2023

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Registration Date : 20.06.2011

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Mortgage

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Residential Land and Building located at R.S. No. 253/1. Wet 1.00 (out of 1.99 acres) with terraced building bearing Door No. 168/137, Alangudi Village, Kuttalam Taluk (Old Mayiladuthurai Taluk), Nagapattinam District – 609801.

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Boundaries:

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East, West and South of property of Krishnamurthy North of Murumangalam Road

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Total Plinth area of 3170 sq.ft (GF-2123 Sq.ft, FF-800 Sq.ft, Portico-247 Sq.ft)

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The Property belongs to Mr. Krishnamurthy.C, S/o Mr. Chinnadurai.

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

C Krishnamurthy v. Indian Overseas Bank

Case brief

What is this about?

What did the court decide?

C Krishnamurthy v. Indian Overseas Bank

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

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Cases cited

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