Dismissed

M s Sri Sri Venkateshwar Educational Trust v. Reliance Commercial Finance Limited

DRT3 Jun 2026SA/11/2023

Case brief

AI extract

What is this about?

In this Securitization Application, an educational trust challenged a possession notice issued under Section 13(4) of the SARFAESI Act. The Debts Recovery Tribunal upheld the secured creditor's actions, finding no illegality in the Issuance and service of the notice.

What did the court decide?

The Securitization Application was dismissed with costs. Any interim order granted previously was vacated.

M s Sri Sri Venkateshwar Educational Trust versus Reliance… — Company and Corporate | DRT (2026)

SA No.11/2023

03.06.2026

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

¶5

Dated this the 03^rd day of June, 2026

¶6

Present: SMT. S.V. GOWRAMMA Presiding Officer

¶7

SA No. 11 of 2023

¶8

M/s. Sri Sri Venkateshwar Educational Trust, Rep. by its Chairman, Mr. G. Perumal, Son of Govindhasamy. Having their registered office at: H. Dhoddampatti Post, Harur Taluk, Dharmapuri District - 636 903. …Applicant

¶9

-Vs-

¶10

Reliance Commercial Finance Limited, Rep. by its Authorized Officer, Registered Office at: 7^th Floor, B-Wing, Trade World, Kamala Mills Compound, S.B. Marg, Lower Parel, Mumbai – 400 013. …Respondent

¶11

Counsels on record / appeared:

¶12

Counsel for Applicant : M/s. A.M. Kamalanath Counsel for Respondent : M/s. K.B.Vivekanandhan

¶13

ORDER ON SA No.11/2023

¶14

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

¶15

the action and the measure taken by the secured creditor under the Security Interest Enforcement Rules, 2002 [for short the Rules].

SA No.11/2023

03.06.2026

The applicant has challenged the Sec.13(4) Possession Notice dated 09.12.2022 and the outstanding amount due as per Possession notice is Rs.2,24,24,097/-

¶20

The applicant is a trust in the name and style of “Sri Sri Venkateshwar Educational Trust” founded by 42 educationists in the Harur Taluk of the Dharmapuri District with a view to create a platform for the socioeconomically backward class of people.

¶21

3.1 The trust started a school in the name and style of Shri Vijayya Vidhyalaya Matriculation Higher Secondary School which established in H. Doddampatti Village in the Harur Taluk of the Dharmapuri District a school catering the needs of 1200 students and the same was upgraded from Primary School to Higher Secondary School in the year 2016 with 1700 students studying in the school.

¶22

3.2 In order to accommodate the influx of these students and to develop the infrastructure facility, the applicant availed a Loan of Rs.50 Lakhs and Rs.2 Crores vide Loan Account No. RLERSLM000314830 and RLEFSLM000330652 which was disbursed to the applicant on 03.12.2015 and 30.09.2016.

¶23

3.3 After the disbursal, the applicant has executed the loan agreements and the property is given as security which is valued more than the dues of Rs.2,24,24,097/-. It is contended that the respondent has no right to invoke the provisions of the Act, as there is no mismatch between the securities available with that of the alleged debts.

SA No.11/2023

03.06.2026

3.4 Applicant was diligently repaying the dues along with interest and Principal till March 2020, however, due to COVID-19 pandemic, the applicant defaulted in the repayment. Further, the applicant has paid a total sum of Rs.2,40,10,159/- towards the principal and the interest which is not being considered by the respondent while issuing the recovery notices. The applicant detailed the amount paid towards the Loan Account:-

¶28

Loan Account No.: RLERSLM000314830 Total Sum: Rs.50,00,000/-

¶29

S.No.	Financial Year	Principal Paid	Interest Paid	Total Paid
1.	2015-2016	Rs.99,241.54p/-	Rs.2,25,355.46p/-	Rs.3,24,597/-
2.	2016-2017	Rs.4,38,858.41p/-	Rs.7,52,861.59/-	Rs.11,91,720/-
3.	2017-2018	Rs.5,14,460.89p/-	Rs.6,77,259.11/-	Rs.11,91,720/-
4.	2018-2019	Rs.5,86,972.56p/-	Rs.6,04,747.44p/-	Rs.11,91,720/-
5.	2019-2020	Rs.6,00,092.52p/-	Rs.4,92,317.48p/-	Rs.10,92,410/-
6.	2020-2021	Rs.63,802.78p/-	Rs.43,500.22p/-	Rs.1,07,303/-
7.	2021-2022	Rs.56,616.70p/-	Rs.42,693.30p/-	Rs.99,310/-
8.	2022-2023	Rs.2,44,251.86p/-	Rs.1,62,468.16p/-	Rs.4,06,720/-
	Total	Rs.26,04,297.26/-	Rs.30,01,202.76p/-	Rs.56,05,500/- (A)

¶30

Loan Account No.: RLERSLM000314830 Total Sum: Rs.50,00,000/-

¶31

S.No .	Financial Year	Principal Paid	Interest Paid	Total Paid
1.	2016-2017	Rs.6,89,949.31p /-	Rs.13,39,118.69p/-	Rs.20,29,068/-
2.	2017-2018	Rs.18,45,099.7 2p/-	Rs.28,21,196.28p/-	Rs.46,66,296/-
3.	2018-2019	Rs.20,74,186.3 9p/-	Rs.25,92,109.61p/-	Rs.46,66,296/-
4.	2019-2020	Rs.18,72,123.0 9p/-	Rs.20,16,679.91/-	Rs.38,88,803/-
5.	2020-2021	Rs.5,83,018.74p /-	Rs.5,84,871.26/-	Rs.11,67,890/-

SA No.11/2023

03.06.2026

6.	2021-2022	Rs.1,93,937.77p /-	Rs.1,94,920.23/-	Rs.3,88,858/-
7.	2022-2023	Rs.8,44,986.19p /-	Rs.7,52,462.56/-	Rs.15,97,448.7 5/-
B	Total	Rs.81,03,304.2 1/-	Rs.1,03,01,358.54p/ -	Rs.1,84,04,659 .75p/- (B)

¶36

Total sum paid (C) = A+B =Rs.56,05,500/- + Rs.1,84,04,659.75/Total Sum paid (C) = Rs.2,40,10,159.75/-

¶37

3.5 Thus, it is clear that the applicant has made sufficient payment and due to pandemic situation, applicant suffered a huge setback in their businesses. Further, the school was taken over by the Government between the month of August 2020 to July 2021 to accommodate the COVID patients and the school was stalled for the period of 2 years between 2020 to 2022.

¶38

3.6 The respondent had classified the Loan Account of the applicant as NPA on 15.02.2021 despite their regular repayment and has invoked the SARFAESI Act by issuing Section 13(2) Notice dated 18.07.2022. As per the direction of the State Government, the school was reopened on 07.03.2022 for physical classes and the applicant ran the school full-fledged and began their regular repayments. The respondent bank has initiated the

¶39

measure under SARFAESI Act which lacks total transparency and fair dealing which is against the decision made in the “Mardia Chemical’s” by the Hon’ble Supreme Court.

¶40

3.7 In the grounds, it is contended that the bank has taken the physical possession of the property without following the procedures as prescribed under SARFAESI Act. The bank has errored in issuing the possession notice

SA No.11/2023

03.06.2026

on 09.12.2022 without giving a helping hand to the applicant during the COVID Pandemic.

¶45

3.8 Further, the bank has failed to note that the value of securities is more than the alleged due amount and bank ought to have not classified the account as NPA. The applicant has expressed their intention to settle their liability under a One Time Settlement and has made payment more than Rs.2.40 Crores, without the considering the repayment and without extending the time to pay the dues, respondent bank has initiated the SARFAESI measures. Hence the applicant prays to set aside the Section 13(4) possession notice dated 09.12.2022.

¶46

The respondent institution has filed a detailed counter inter-alia contending that applicant is borrower who is a Trust running a school in the name and style of “Shri Vijayya Vidhyalaya Matriculation Higher Secondary School” and for the purpose of upgrading the infrastructure of the school, applicant has availed two loans for a sum of Rs.50 Lakhs and Rs.2 Crores. Considering the request, the bank sanctioned the loan on 28.11.2015 and 29.09.2016 vide two loan accounts:-

¶47

(i) Loan Account No. RLERSLM000314830 for Rs.50 Lakhs and

¶48

(ii) Loan Account No. RLEFSLM000330652 for Rs.2 Crores, from respondent Salem Branch on 03.12.2015 and 30.09.2016. The loan amount to be repaid with an interest at 17.35% p.a. on floating basis in 84 monthly installments starting from 15.01.2016 for the repayment of Rs.50 Lakhs and a monthly EMI of Rs.99,310/- towards the loan account of Rs.2 Crores

SA No.11/2023

03.06.2026

to be paid with interest at 15.26% p.a. on floating basis in 84 monthly installments.

¶53

4.1 The property owned by Sri. V. Tamilvanan and 29 others were created equitable mortgage vide MODT bearing Doc.No.5570/2015 dated 16.12.2015 and Doc.No.4098/2016 dated 14.10.2016 both registered at SRO, Harur and the all the 30 executants have executed the MOTD as coborrowers. As the applicant did not repay the loan as undertaken, the loan accounts were classified as NPA on 15.02.2021, and the bank has initiated measures under SARFAESI Act by issuing Section 13(2) Demand Notice on 18.07.2022 demanding a payment of Rs.2,24,24,097/- (Rs.39,16,209/- + Rs.1,85,07,888/-) towards both the loan accounts payable within 60 days.

¶54

4.2 The applicants have received the notice on 02.08.2022 as per the postal seal and the acknowledgement card and the returned covers evidencing the dispatch of the notice were also filed in the counter. After the service of the Section 13(2), the respondent was constraint to take symbolic possession under Section 13(4) read with Rule 8(1) of the SIE Rules. The possession notice is duly served on 16.12.2022 as evidence by the postal seal appearing on the envelope and the acknowledgement cards which was returned and the same is also filed along with the counter.

¶55

4.3 Further, the applicant admitted the receipt of the Section 13(4) notice, and therefore the service of possession notice is completed as per the provisions of the Act. The possession notice is affixed on the property and published in two newspapers one in English “The New Indian Express”

SA No.11/2023

03.06.2026

and another one in Tamil “Dinamani” on 16.12.2022 within 7 days as per Rule 8(2) of the SIE Rules.

¶60

4.4 At the time of service of the possession notice a panchnama was also prepared and the same is produced for taking the symbolic possession of the subject property. Thus, the respondent has served the Section 13(2) and the Section 13(4) was affixed, published and have acted well in accordance with the provisions and rules of the SARFAESI Act and Rules.

¶61

4.5 The respondent denies the averments made in the SA contending that the applicant to start the school had availed the loan and mortgaged the and the claim of the applicant that the property value is more than the debt is not substantiated as dues of Rs.2,24,24,097/- is not supported by any documents. The details of the payments made by the applicant towards both the loan accounts from the year 2015 to 2016 and from 2022 to 2023 is already produced and the contention that the school served as shelter for during Pandemic is a matter of record which does not need any comment.

¶62

4.6 As the applicant account was classified as NPA, the bank has initiated the measures after classifying account as NPA and have proceeded further under the Act. On these grounds the respondent prays to dismiss the SA with Cost.

SA No.11/2023

03.06.2026

Heard both sides of the Counsels and perused the records of

¶67

the case.

¶68

It is evident that the applicant “Sri Sri Venkateshwar Educational Trust” has availed 2 loans; a loan of Rs.50 Lakhs and another loan of Rs.2 crores vide Loan Account No. RLERSLM000314830 and RLEFSLM000330652 which was sanctioned vide communication letter dated 28.11.2015 and 29.09.2016 produced from Page No.7 to Page No.19 of the counter.

¶69

5.1 The applicant had agreed to repay the loan as per the terms and conditions of sanction and also mortgaged the property as security towards the credit facility availed by way of MODT which is registered as Doc.No.5570/2015 dated 16.12.2015 and Doc.No.4098/2016 on 14.10.2016 before the SRO, Horur which is not disputed by the applicant herein. The respondent bank has produced the Memorandum of Deposit of Title Deeds in favor of the respondent bank at Page No.20 to 60 of their counter.

¶70

5.2 As the borrower and the co-borrowers defaulted in the repayment, the loan accounts were classified as NPA on 15.02.2021 as per the directives relating to asset classification issued by RBI. Subsequent to the classification, the respondent has issued Section 13(2) demand notice to the applicant and the co-borrowers on 18.07.2022 calling upon them to pay the outstanding amount of Rs.2,24,24,097/- as due in the 2 loan accounts.

SA No.11/2023

03.06.2026

5.3 The Section 13(2) Demand Notice is sent by RPAD to borrower and co-borrowers, further the applicant has filed the Section13(2) demand notice in SA, hence it is deemed to be served. The co-borrowers numbered 2, 3, 4, 5, 7, 9, 11, 13, 15, 18, 23, and 29 received the Demand Notice, as evidenced by the acknowledgment cards produced at Pages.70 to 73. The notices sent by RPAD to co-borrowers numbered 8, 10, 27, and 31 were returned with the endorsement “Unclaimed”. The Section 13(2) demand notice, postal receipts, returned covers and acknowledgment cards are produced by the respondent from Page No.61-75 of respondent’s counter.

¶75

5.4 In spite of receipt of Section 13(2) demand notice as the borrowers, co-borrowers, and guarantors neither liquated the liability within the period of 60 days nor raised any objections to the demand made, the respondent bank has proceeded further under the SARFAESI Act.

¶76

5.5 The respondent bank has issued the Section 13(4) Possession Notice on 09.12.2022 which is sent by RPAD. Further, the borrower had filed Sec.13(4) possession notice in SA, hence it is deemed to be served. The co-borrowers numbered 1,3,7,11,12,15,17,16,18,19,22,28,20,21, 24,26,30 and 31 have received the possession notice as per acknowledgement cards which is produced at Pg.82-87,90. The notices sent by RPAD to co-borrowers numbered 5, 23, 8,27,13 and 10 were returned with the endorsement “Unclaimed,” and the same are produced at Pages 87-90 of the counter. However all borrowers and guarantors are not parties to the SA.

SA No.11/2023

03.06.2026

5.6 The Possession Notice is published in two newspapers one in English “The New Indian Express” and another one in Tamil “Dinamani” both dated 16.12.2022 and the Possession Notice is affixed on the conspicuous place of the property as per the photograph of affixture produced at Page No.91 of respondent bank’s typed set. Thus, the secured creditor established due compliance with the procedures prescribed for issuing the demand notice under Section 13(2) read with Rule 3, and for issuing the possession notice under Section 13(4) read with Rule 8 of the Act.

¶81

5.7 Though the applicant has challenged the Section 13(4) possession notice have not pointed out any illegalities in the measure taken by the bank in enforcing the security available to them. On the other hand, the respondent bank has established the procedures as contemplated under the Act in enforcing the security with supporting documents as required under the Act. Hence, it is concluded that the Section 13(2) Demand Notice dated 18.07.2022 and Section 13(4) Possession Notice dated 09.12.2022 are valid notices issued by the secured creditor as per the procedure as described under the Act and rules made there under.

¶82

5.8 For the foregoing reasons, the present SA is dismissed. Interim Order granted, if any stands vacated, pending IAs are disposed of in terms of this final order. No order as to cost.

¶83

Sd/-

¶84

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

¶85

(Dictated to Steno (Arti), transcribed by her, corrected, signed and pronounced by me on this the 03^rd day of June, 2026)

SA No.11/2023

03.06.2026

ANNEXURES

LIST OF DOCUMENTS PRODUCED BY THE APPLICANT

¶91

Sl. No.	Description of Documents	Document No.
1.	SARFAESI Application dated 01.01.2023	A-1
2.	Section 13(2) Notice with postal cover dated 18.07.2022	A-2
3.	Section 13(4) Notice with postal cover and tracking chart dated 09.12.2022	A-3
4.	Loan Account Statement for Rs.50 Lakhs dated 12.12.2022	A-4
5.	Loan Account Statement for Rs.2 Crores dated 12.12.2022	A-5
6.	Student List dated 29.12.2022	A-6
7.	Board Resolution dated 29.12.2022	A-7
8.	Vakalat dated 01.01.2023	A-9

¶92

LIST OF DOCUMENTS PRODUCED BY THE RESPONDENTS

¶93

Sl. No.	Description of Documents	Document No.
I	Counter filed by the respondent dated 20.03.2023	R-1
1.	Sanction Letter in Loan Agreement No. RLERSLM000314830 dated 28.11.2015	R-2
2.	Sanction Letter in Loan Agreement No. RLEFSLM000330652 dated 29.09.2016	R-3
3.	MoDT in Doc.No.5570 of 2015 dated 16.12.2015	R-4
4.	MoDT in Doc.No.4098 of 2016 dated 14.10.2016	R-5
5.	Notice U/s 13(2), Postal Receipts and acknowledgment cards dated 18.07.2022	R-6
6.	Possession Notice U/s. 13(4), Panchanama, RPAD receipts and acknowledgement cards dated 09.12.2022	R-7
7.	Photos evidencing affixation of Possession Notice dated 09.12.2022	R-8
8.	Paper Publications in “Dinamani” & “The New Indian Express”dated 16.12.2022	R-9

¶94

SCHEDULE OF PROPERTY

¶95

(i) Property 1:

¶96

All that part and Parcel of the Land and Building situatied in Dharmapuri District, Harur Sub R.D., H.

SA No.11/2023

03.06.2026

Dhotampatty village S.No.100/1A ad measuring a total extent of Acre 0.98 cents.

¶101

(ii) Property 2:-

¶102

All that part and Parcel of the Land and Building situatied in Dharmapuri District, Harur Sub R.D., H. Dhotampatty village S.No.100/1B ad measuring a total extent of Acre 0.91 cents. Bounded on East of a land in S.No.101/38, west of Common pathway in S.No.99/1D1 South of a land in S.No.100/1A, North of a land in S.No.100/18 and a land belonged to Sampath.

¶103

(iii) Property 3:-

¶104

All that part and Parcel of the Land and Building situatied in Dharmapuri District, Harur Sub R.D., H. Dhotampatty village S.No.100/18 ad measuring a total extent of Acre 0.96 cents. Bounded on East of a land in S.No.101/38, west of a land belonged to Jayaprakasam and Sampath, South of a land in S.No.0.91 cents of alnd in S.No.100/1B, North of a land belonged to Javaraman.

¶105

(iv)

¶106

Property 4:-

¶107

All that part and Parcel of the Land and Building situatied in Dharmapuri District, Harur Sub R.D., H. Dhotampatty village S.No.101/3A ad measuring a total extent of Acre 0.16 cents.

¶108

(v) Property 5:-

¶109

All that part and Parcel of the Land and Building situatied in Dharmapuri District, Harur Sub R.D., H. Dhotampatty village S.No.101/2B ad measuring a total extent of Acre 1.28 cents.

SA No.11/2023

03.06.2026

The above survey lands are totaling Acre 4.29 cents of land and with buildings all pathway rights and easement rights annexed to belong to Sri Sri Venkateshwar Educational Trust and 29 Others and lies within the H. Dhottampatty village and Panchayat, Harur Sub Registration District, Dharmapuri Registrarion District, Salem Registration Zone.

¶114

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

M s Sri Sri Venkateshwar Educational Trust v. Reliance Commercial Finance Limited

Case brief

What is this about?

What did the court decide?

M s Sri Sri Venkateshwar Educational Trust v. Reliance Commercial Finance Limited

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Canara Bank versus Shefali Flacila

Oriental Bank of Commerce versus Ms Bindu Rao Design Pvt. Ltd.

State Bank of India versus Pratheep

V Prathap and another versus Yes Bank

Bank of Baroda versus Anand Amritha Raj

Bank of Baroda versus Koilraj