Dismissed

Eliyaas v. State Bank of India

DRT4 Jul 2025SA/95/2025

Case brief

AI extract

What is this about?

Debts Recovery Tribunal dismissed the Applicant's Securitization Application challenging a Section 14 order for possession. The Court held that Section 14 proceedings are ministerial, require no adjudication, and the order stood upheld based on compliance with statutory requirements.

What did the court decide?

Securitization Application No. 95 of 2025 dismissed; Section 14 order dated 29.11.2024 upheld.

Eliyaas versus State Bank of India — Banking and Recovery | DRT (2025)

SA No.95/2025

04.07.2025

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 4^th day of July, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SA No. 95 of 2025

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R. Eliyaas, S/o M.A. Rahim, R/a No.89, EB Office Road, Sakthi Nagar, Survey No.138/1, Perumalpattu, Thiruvallur -602 024. ….Applicant

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-Vs-

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The Authorized Officer, State Bank of India, ARMB No.44, Eldams Road, First Floor, Teynampet, Chennai -600 018. ….Respondent

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Counsels on record / appeared:

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Counsel for Applicant : M/s. D. Durairaj Counsel for respondent : M/s. KCYR Associates

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ORDER ON SA 95/2025

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The present Securitization Application [SA] is filed on 23.01.2025 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 Order dated 29.11.2024 passed by Chief Judicial Magistrate, Thiruvallur, in Crl.M.P. No.11214 of 2024 and the outstanding amount due as per Sec.14 order is Rs.6,11,725/-

SA No.95/2025

04.07.2025

Pleadings of the applicant:

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The applicant availed Housing Loan of Rs.27 Lakhs on 05.10.2012 which was to be repaid in 360 monthly instalments of Rs.24,649/- along with 8.95% p.a from December 2012. Applicant had mortgaged the residential property land and building comprised in S.No.138/1 to an extent of 2400 sq.ft., in which Northern side 1440 sq.ft., as in the New S.No.138/2 as per patta No.841, situated at No.89, Perumal pattu village, Thiruvallur Taluk and District as collateral security towards the facility.

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3.1. It is contented that the applicant was making the EMI payment regularly without any default and paid 72 EMIs, without any reason the respondent have added a sum of Rs.6,00,000/- into the loan account. Hence the applicant was unable to pay the installments and the account was classified as NPA and bank has initiated measures under the SARFAESI Act. The applicant had challenged the Sale Notice in SA.No.13/2019 and deposited an amount of Rs.4,00,000/- which has not been credited or adjusted to be loan account and bank are claiming an amount of Rs.42,93,262/- with the interest and for refused to give the account statement.

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3.2 The bank have initiated the measures wrongly and the Sec.13(2) demand notice is issued on 02.07.2018 to which the applicant raised oral objection and without considering request made by the applicant, the bank has issued the Possession Notice dated 08.10.2018 followed by the sale notice dated 22.09.2022 fixing the E-Auction Sale which taken place on 18.10.2022.

SA No.95/2025

04.07.2025

3.3 The bank without considering the payments made have proceeded and have approached the Magistrate, Thiruvallur, in Crl.M.P. No.11214 of 2024 and filed section 14 application which came to be allowed on 29.11.2024, directing to take the physical possession of the property. Hence the applicant have preferred the present SA on the Grounds that the Chief Judicial Magistrate, without serving any notice to the applicant have passed the order and bank had initiated measures in violation of the RBI guidelines.

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3.4 The demand notice and the possession notice is not been duly served. Hence the measure it is liable to be set aside. Hence prays to set aside the Sec.14 order dated 29.11.2024.

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Objections of the respondent bank:

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The respondent bank in their counter submits that the applicant availed credit facility of Home Loan for an amount of Rs.27 Lakhs vide Letter of Arrangement dated 05.10.2012 and has mortgaged the property by way of Deposit of Title Deeds and registered the MODTD dated 08.10.2012 registered as Doc.No.12960 of 2012 with SRO Thiruvallur for the facility granted/availed by the applicant. Hence the security is created which is also registered with CERSAI in compliance of Sec.26(D) of the SARFAESI Act and Rules 2002.

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4.1 The applicant did not operate the account and there was an irregularity in terms of the terms and conditions. Inspite of repeated request the applicant did not regularize the loan account resulting in the

SA No.95/2025

04.07.2025

classification of account NPA on 30.06.2018 as per the RBI guidelines. The bank issued the demand notice under Sec.13(2) on 02.07.2018 intimating the declaration of the account NPA on 30.06.2018 and calling upon the borrowers to remit the entire liability of Rs.35,19,598/- as on 01.07.2018 with further interest from 02.07.2018.

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4.2 Subsequently the possession notice is issued on 08.10.2018 and as the applicant made some substantial payment the bank have issued the fresh demand notice under Sec.13(2) on 30.07.2019 and informed about declaring the account as NPA on 30.06.2018 to remit the entire liability of Rs.33,51,888/- due as on 28.07.2019.

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4.3 The demand notice dated 30.07.2019 was sent to the applicant by RPAD which is duly received and acknowledged by the applicant. After the completion of more than 60 days, symbolic possession of the property was taken on 03.12.2021, the possession notice was also affixed on the property and photographs is also produced.

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4.4 The Possession Notice dated 03.12.2021 was also sent by RPAD which is duly received by applicant as per the acknowledgement and the possession notice published in the 2 leading newspapers The Tamil daily Newspaper “Dinakaran” and the English Daily Newspaper “Times of India” on 04.12.2021. The respondent have followed the due process of law as provided in the SARFAESI Act and as there was no response from the applicant, the bank issued the sale notice 22.09.2022 scheduling the auction to be held on 18.10.2022 for a reserve price of Rs.35,62,000/-.

SA No.95/2025

04.07.2025

4.5 The sale notice dated 22.09.2022 was sent by RPAD which is received by the applicant, the sale notice is affixed on the property on 22.09.2022 and published in “Dinakaran” and Time of India on 25.09.2022. The auction was held on 18.10.2022 respondent was sold property to the successful bidder.

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4.6 The applicant had challenged the sale notice dated 22.09.2022 in SA.No.507 of 2022 which came to be disposed. The applicant had undertaken to comply the payment as directed by the Tribunal. As the applicant failed comply with payment the Tribunal recording the same disposed of the SA.

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4.7 The respondent in order to take the possession filed Sec.14 application before the CJM Thiruvallur and obtained order in Crl.MP. No.11214/2024 on 29.11.2024 to take the physical possession of the property. The bank has produced the documentary proof to prove that the followed all the procedures as laid down under the Act. Hence the respondent prays for dismissal of the SA.

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Heard and perused the records of the case.

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The applicant borrowed Housing Loan of Rs.27 Lakhs on 05.10.2012 and had mortgaged the residential property as collateral security towards the facility by MODTD dated 08.10.2012 registered as Doc.No.12960 of 2012 with SRO Thiruvallur which is also registered with CERSAI in compliance of Sec.26(D) of the SARFAESI Act and Rules 2002.

SA No.95/2025

04.07.2025

Due to default in repayment the account is classified as NPA on 30.06.2018 as per the RBI guidelines. The bank issued the demand notice under Sec.13(2) on 02.07.2018 calling upon the borrowers to remit the entire liability of Rs.35,19,598/- as on 01.07.2018 with further interest from 02.07.2018.

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5.1 The demand notice dated 30.07.2019 was sent to the applicant by RPAD which is duly received and acknowledged by the applicant. As the applicant did into repay the entire amount as demanded in the S.13[2] notice within 60 days nor raised any objections, the respondent possession notice under S.13[4] on 03.12.2021, the possession notice was also affixed on the property as per photographs produced.

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5.2 Then followed by the possession notice dated 03.12.2021 the possession notice is also served on the applicant. As per the postal acknowledgement cards and affixed on the property and published in the Newspapers Tamil “Dinakaran” and English Times of India. It is evident that the respondent bank has secured creditor as initiated measures and have followed the due procedures in issuing the Sec.13(2) demand notice and Sec.13(4) possession notice which is also supported by document for the due compliance of the measures statements.

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5.3 Subsequently the bank has filed Sec.14 application before the Hon’ble CJM, Thiruvallur in Crl.M.P.No.11214 of 2024 on 22.11.2024. The Hon’ble CJM after due verification of the application and affidavit and also the

SA No.95/2025

04.07.2025

supporting documents produced by the respondent bank have allowed 14 application vide order dated 29.11.2024.

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5.4 It seen from the affidavit that the Hon’ble CJM have verified has required under section 14 (i)to (ix) have allowed the petition and have also directed the police the assist in taking the possession of the secured assert by appointing the advocate commissioner. The advocate commissioner has issued the notice to vacate the property on 08.01.2025 which is produced by the applicant pg.13 of 26.

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5.5 Thought the applicant as challenged the Sec.14 order has not made out any grounds to set aside the order as prayed for and only contention is that the Sec.13(2) demand notice and Sec.13(4) possession notices are not served, which is counter by the respondent bank by producing the documents in proof of the measures taken. It is a matter of record that the applicant have filed the SA.13 of 2019 challenging the sale notice and also filed SA.507.2022 challenging the E-Auction sale notice dated 18.10.2022. As the present SA is filed challenging the Sec.14 Order the Tribunal in not keen in adjudicating any measures in respect to the Sale Notices.

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5.6 Now considering the challenge to S.14 Order, it is appropriate to mention the declaration of The Hon’ble Supreme Court and various Hon’ble High Courts in various judgments has held that the power of Designated Court under Section 14 SARFAESI Act, 2002 is ministerial and nonadjudicatory in nature and the process to be followed under Section 14 does

SA No.95/2025

04.07.2025

not involve any element of quasi-judicial function nor it requires any application of mind

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5.7 The Hon’ble Supreme Court in the matter of Kotak Mahindra Bank

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vs Girnar Corrugators Pvt. Ltd. & Others , held that while exercising power under Section 14 of the SARFAESI Act, District Magistrate or even the Chief Metropolitan Magistrate has no jurisdiction to adjudicate the dispute between secured creditor and debtor.”

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5.8 The Hon’ble Bombay High Court in the matter of Phoenix ARC Pvt. Ltd. Vs. The State of Maharashtra has held that Court is only required to verify the affidavit of Secured Creditor filed in pursuance of the proviso to Section 14 and nothing more. The above Bombay High Court judgment has since been confirmed by the Hon’ble Supreme Court by its judgment dated 26.09.2022 in the matter of Balakrishna Ram Tarle v. Phoenix

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ARC (P) Ltd. as under:

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“Thus, the powers exercisable by CMM/DM Under Section 14 of the SARFAESI Act are ministerial step and Section 14 does not involve any adjudicatory process qua points raised by the borrowers against the secured creditor taking possession of the secured assets. In that view of the matter once all the requirements Under Section 14 of the SARFAESI Act are complied with/satisfied by the secured creditor, it is the duty cast upon the CMM/DM to assist the secured creditor in obtaining the possession as well as the documents related to the secured assets even with the help of any officer subordinate to him and/or with the help of an advocate appointed as Advocate Commissioner. At that stage, the CMM/DM is not required to adjudicate the dispute between the borrower and the secured creditor and/or between any other third party and the secured creditor with respect to the secured assets and the aggrieved party to be relegated to raise objections in the proceedings Under Section 17 of the SARFAESI Act, before Debts Recovery Tribunal”.

SA No.95/2025

04.07.2025

5.9 Additionally, Section 14(3) of the SARFAESI Act statuses that no action taken by the Chief Metropolitan Magistrate or District Magistrate (or any officer authorized by them) under S.14 can be challenged in court or before any other authority. This provision ensures that the authority of these officials in enforcing security interests is final and not subject to further review.

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5.10 T hus, the S. 14 order passed by the Ld. Section 14 order dated Hon’ble CJM, Thiruvallur in Crl.M.P.No.11214 of 2024 is after due consideration and is only an execution order where no adjudication is required and the Order is passed considering the compliance of the provisions of the S. 14 [i-ix].

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5.11 For the foregoing reasons, the Tribunal is not inclined to interfere in the S.14 Order as it is passed after due consideration of the application, followed by Affidavit and the documents in compliance of the procedures has considered and allowed the application which does not requires any intervention from this Tribunal.

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5.12 Resultantly, present SA 95.2025 stands 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/-

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

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( Dictated to Steno (Suriya), transcribed by him, corrected, signed and pronounced by me on this the 4^th day of July, 2025)

ANNEXURES

SA No.95/2025

04.07.2025

LIST OF DOCUMENTS PRODUCED BY THE APPLICANT

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Sl.	Description of Documents	Documents
No.		No.
1.	Impugned Order dated 29.11.2024.	A-1
2.	Vacate Notice dated 08.01.2025.	A-2
3.	Bank Statement dated 07.03.2022.	A-3

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LIST OF DOCUMENTS PRODUCED BY THE RESPONDNET

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Sl. No.	Description of Documents	Documents No.
1.	Arrangement Letter made between the Petitioner Bank and the Respondents for Credit Facility amount of Rs.27 Lakhs dated 05.10.2012.	R-1
2.	Demand Notice issued by the respondent Bank to the applicant along with AD Card for the same dated 30.07.2019.	R-2
3.	Possession Notice issued by the respondent Bank to the Applicant along with AD Card for the same dated 03.12.2021.	R-3
4.	Photos taken while affixing the Possession Notice in the schedule premises dated 03.12.2021.	R-4
5.	Paper publication of the possession notice published in the Tamil Daily “Dinakaran” dated 04.12.2021.	R-5
6.	Paper publication of the possession notice published in the English Daily “The Time of India”dated 04.12.2021.	R-6
7.	Sale Notice issued by the respondent Bank to the applicant along with returned cover for the same dated 22.09.2022.	R-7
8.	Photographs taken while affixing the Sale Notice.	R-8
9.	Paper Publication of the Sale Notice made in the Tamil Daily“Dinakaran”dated 25.09.2022.	R-9
10.	Paper publication of the Sale Notice made in the English Daily “The Times of India” dated 25.09.2022.	R-10
11.	Certificate of Sale Issued by the respondent bank to the Auction Purchaser dated 21.11.2022.	R-11
12.	A dairy order in SA.507 of 2022 by this Hon’ble Tribunal dated 28.12.2022.	R-12
13.	A dairy (Final) order in SA.507 of 2022 by this Hon’ble Tribunal dated 07.02.2023.	R-13

SA No.95/2025

04.07.2025

14.	Proof Affidavit filed before the Hon’ble CJM Thiruvallur in CMP No.11214 of 2024 dated 22.11.2024.	R-14
15.	Order of Hon’ble CJM Thiruvallur in CMP No.11214 of 2024 dated 29.11.2024.	R-15
16.	Sale deed registered as Doc.No.7442/2012 with SRO Thiruvallur executed by Mr. K. Prakash S/o. R. Krishnan in favour of Mr. R. Eliyas S/o. Mr. Rahim dated 25.05.2012.	R-16
17.	MODTD registered as Doc.No.12960 of 2012 with SRO Thiruvallur in favour of Petitioner Bank dated 08.10.2012.	R-17
18.	Statement of Accounts for A/c.No.32575667824	R-18

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SCHEDULE OF PROPERTY

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All that piece and parcel of land and building in Grama Natham Vacant site comprised in S.No.138/1 to an extent of 2400 sq.ft., in which Northern side 1400 sq.ft., as in the New S.No.138/2 as per patta No.841, situated at No.89, Perumal pattu village, Thiruvallur Taluk and District.

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Which is bounded on the

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North by – Panchayet Road South by – Remaining Extent in the above Plat East by – Dilli Baskar’s site West by – Nagappan’ site Measuring East to West on the North – 30 feet East to West on the South – 30 feet North to South on the East – 48 feet North on South on the West – 48 feet

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Altogether to an extent of 1400 sq.ft., vacant site within the registration District of Kancheepuram, Sub-Registration District of Thiruvallur.

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

Eliyaas v. State Bank of India

Case brief

What is this about?

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Eliyaas v. State Bank of India

Case brief

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