Dismissed

Ms Hashini Enterprises v. Punjab National Bank

DRT15 Apr 2026SA/119/2024

Case brief

AI extract

What is this about?

The applicant challenged a Section 14 order for physical possession of secured property. The Tribunal held that Section 14 actions are ministerial, verifying creditor compliance is the only duty, and dismissed the application, upholding the validity of Section 13 notices issued despite the applicant's plea of default.

What did the court decide?

The Securitization Application is dismissed. The Section 14 order dated 25.10.2023 is upheld as valid. Interim orders stand vacated.

Ms Hashini Enterprises versus Punjab National Bank — Banking and Recovery | DRT (2026)

SA No.119/2024

15.04.2026

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 15^th day of April, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SARFAESI APPLICATION No. 119 of 2024

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Hashini Enterprises Rep. by its Partner Mr. Sudarshan, S/o, Mohan No. 2B-A, Sai Sananda Apartments, No. 51, Velachery Main Road Velachery, Chennai - 600 042.

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Hashini Enterprises Also at: No. 14, Annai Illam, First Floor, ALS Nagar, Main Street, Madambakkam, Chennai -600 126. ….Applicant -Vs-

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The Authorized Officer Punjab National Bank, Circle Sastra Center, Chennai South PNB Towers, Nos.46 to 49, Royapettah High Road, Chennai -600 014. ….Respondent

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Counsels on record / appeared:

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Counsel for Applicant : M/s. S. Santhosh, J. Jayakumar, K. Mageshwaran. Counsel for respondent : M/s. R. Jagadeesan, M.A. Abdul Wahab, V. Revathi.

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ORDER ON SA 119/2024

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The present Securitization Application [SA] is filed on 28.02.2024 under sub section [1] of S.17 of the Securitization And Reconstruction of

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Financial Asset and Enforcement of Security Interest Act,2002 (for short the ‘Act’) challenging the action and the measure taken by the secured

SA No.119/2024

15.04.2026

creditor under the Security Interest Enforcement Rules, 2002 [for short the Rules].

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The applicant has challenged the Sec.14 order dated 25.10.2023 in C.M.P. No.7277 of 2023 passed by the Hon’ble Special Judge/Chief Judicial Magistrate, Chengalpet and the outstanding amount due as per Sec.14 order is Rs.91,30,828.54/-

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Pleadings of the applicant:

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It is the case of applicant that they had availed Loan amount for the business loan for cotton and its allied activities to the tune of Rs.80 Lakhs and offered their schedule mentioned immovable property as security for due repayment of loan thus availed. Due to Covid-19 Pandemic, applicant faced huge loss in business resulting in default in repayment of installments and classification of loan account as NPA by respondent without following the mandatory rules and regulations of RBI.

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It is contended that the property was to auction vide sale notice dated 18.02.2023 scheduling the E-Auction on 13.03.2023 fixing the reserve price at Rs.1,66,00,000/-, but the auction purchaser could not pay the entire amount within 30 days owing to which, the said sale is set aside.

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Meanwhile respondent had permitted applicant for OTS for an amount of Rs.1,16,00,000/ out of which Rs. 23 lakhs were paid immediately and the balance Rs. 93 lakhs is to be paid by or before 20.12.2023. As applicant could not muster enough funds within the time granted by respondent, a fresh sale notice dated 09.02.2024 is issued fixing the E-Auction sale on

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15.04.2026

29.02.2024. The said sale was challenged in SA No. 110/2024 which came up for hearing before this Tribunal and this Tribunal has granted a STATUS QUO on payment of conditional order of 20% of the outstanding amount.

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The conditional order was compiled by depositing DD for Rs.18,40,000/- to the loan account, another 15% of the outstanding is to be paid by the applicant on or before 31.03.2024. In the meanwhile measures were initiated by respondent bank under Section 14 of SARFAESI Act before Ld. CJM, Chengalpat in C.M.P No.7277/2023 dated 25.10.2023.

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Consequently, the applicant was unable to discharge the obligations towards the loan account was classified as NPA and Sec.13(2) was allegedly given on 26.04.2021. Further, the applicant was attempting to settle the outstanding dues, no assistance was forth coming from the respondent herein resulting which the applicant had to close down the business.

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It is submitted that it is a residential property and even according to the bank the loan is Rs.91,30,825.54/- as on 23.09.2021, subsequent to which the applicant has paid huge amounts towards OTS. Further, the bank’s own valuation report in the year 27.10.2018 the forced sale value is Rs.2,05,88,000/-. The respondent bank has flouted all the rules under SARFAESI Act and did not even served the auction notice as mandated by the Act.

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The respondent has issued the Advocate Commissioner notice dated 26.02.2024 to take physical possession of the property even though the respondent having knowledge about the SARFAESI application filed by the

SA No.119/2024

15.04.2026

applicant on 23.02.2024 and same was ordered on 26.02.2024. The property given as security is 10 times more value than that of the actual alleged due.

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It is submitted that the applicant had paid Rs.23 Lakhs and entered into OTS which was accepted by the bank on 09.10.2023 and the applicant had to pay entire due by 20.12.2023 which is totally suppressed in the petition and the bank obtained order from the Ld. CJM on 25.10.2023.

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On these grounds the applicant prays to set aside the Sec.14 order passed by the Hon’ble Special Judge/CJM, Chengalpat.

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Objections of the respondent bank:

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The respondent has filed the counter contending that the applicant entered into an OTS confirmation from the respondent dated 09.10.2023 for an amount of Rs.1,16,00,000/- out of which Rs.23,00,000/- was paid and the balance amount could not be paid. The applicant’s contention that

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they were prompt and regular in repaying the loan amount to the respondent, no proper valuation was done in the accordance to the rules laid down, and did not serve the auction notice, and issued the sale notice, no proper moratorium was given, interest and penal interest charged exorbitant, mandatory provisions of SARFAESI Act not complied with, an Advocate commissioner's notice on 26.02.2024 for taking physical possession of the property on the basis of order Crl.M.P.No.7277/2023 dated 25.10.2023 is bad in law and liable to set aside and therefore denied.

SA No.119/2024

15.04.2026

The respondent bank has followed the procedure and Rules and mandated under the SARFAESI Act. It is submitted that the respondent bank has issued the demand and possession notices in accordance with the SARFAESI Act, and all these notices have been acknowledged by the Applicant. The possession notice was published in vernacular and English newspapers as stipulated under the SARFAESI Act. The possession notice was also affixed on the property as required under the Law.

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It is submitted that the account was classified as NPA in accordance with RBI guidelines, the interest charged is as per the interest rate prevalent from time to time in the Bank. Hence, the Bank has followed the provisions and rules as contemplated under SARFAESI Act. The Applicant did not pay the repayment as agreed to and therefore the loan accounts slipped into NPA.

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The Respondent bank denies all the allegations made in the present SA and as the respondent have followed all the procedures in accordance with act, prays for dismissal of the SA.

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Heard both sides of the Counsels and perused the records of

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the case

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It is manifest from the records that the applicant had availed Cash Credit limit of Rs.80.00 Lakhs, Overdraft limit of Rs.8 Lakhs and Term Loan limit of Rs.5.68 Lakhs vide A/c.No.4920008700000589, 4920009300000313, 49200CF00000437 /credit facilities availed by M/s. Hashini Enterprises.

SA No.119/2024

15.04.2026

In fact the applicant does not dispute the availing of the facilities and the mortgage of the property including the default in the repayment. Due to continuous default in the repayment, the loan account of the applicant was classified as NPA as per RBI guidelines.

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Subsequent to classification of the account as NPA, the bank has issued S.13(2) Demand Notice dated 26.04.2021, where the notice clearly describes the types of loan availed, the nature of facility and the documents executed by the borrowers. Further the description of the properties is clearly mentioned in the S.13(2) demand notice.

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It is seen that the representation given by the applicant to the respondent bank for the demand notice issued and reply given by the respondent bank to the applicant for the above said representation which is produced at Pg.4 to 6 of counter.

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The respondent issued the Sec.13(4) Possession Notice on 23.09.2021 sent through Registered Post with Acknowledgment, which the applicant and the Co-borrowers have received the Possession Notice as per the Acknowledgement Card produced at Pg.8,9 and 9A. The Possession Notice is published in two newspapers one in Vernacular Language and another one in English both dated 23.09.2021 and the Possession Notice is affixed on the conspicuous place of the property as per the photograph of affixture produced at Page No.12 and 13 of respondent bank’s typed set.

SA No.119/2024

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It seen that the respondent has produced the copies of the S.13(2) Demand Notice and S.13(4) Possession Notice and its acknowledgement cards for due compliance of the measures taken.

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It is submitted that the sale notice dated 09.02.2024 issued by the Respondent (impugned order) is produced at pages 33–35 of the S.A. book. The Applicant filed S.A. No. 110/2024 challenging the said sale notice and the Tribunal’s order therein (pages 45–46). Since the sale scheduled on 29.02.2024 did not take place, the said S.A. has become infructuous, as recorded in the proceedings dated 06.04.2026.

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As the applicants failed to repay the entire outstanding amount the bank has proceeded and approached the CJM, Chengalpat in u/s 14 of the SARFAESI Act. The Hon’ble CJM after perusal of the application and the loan documents produced by the respondent bank allowed the S.14 application on 25.10.2023.

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The Ld. Magistrate after due verification of the documents and the pleadings in Sec.14 application have allowed the S.14 petition filed by the secured creditor by directing the Advocate Mr. R. Arun Balaji, as the Advocate Commissioner to inspect the petition mentioned property, take inventories if necessary and thereafter take possession of the petition mentioned property and hand over the same to the petitioner/bank.

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Thus, it is evident that the Ld. Magistrate on examination of the pleadings in the S.14 application supported by the documents, have passed an order dated 25.10.2023 directing the Advocate Commissioner to take

SA No.119/2024

15.04.2026

the possession of the property. Though the applicant have filed the present SA impugning the Sec.14 order dated 25.10.2023 passed by Ld. CJM, Chengalpet has not pointed out any illegality in the measures taken by the respondent herein.

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On the other hand, it is seen that the statutory notices, the Demand Notice dated 26.04.2021 and Possession Notice dated 23.09.2021 are issued to the applicant in accordance to law, applicant have waived right to raise any contention with regard to Sec.13(4) Possession Notice within the period of 45 days. Hence any contentions to Sec.13(4) Notice is barred by limitation.

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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 non- adjudicatory in nature and the process to be followed under Section 14 does not involve any element of quasi-judicial function nor it requires any application of mind.

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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 ARC (P) Ltd. as under:

SA No.119/2024

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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”.

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The Supreme Court in the judgment of Authorized Officer, Indian Bank v D Visalakshi and other, has held that a Chief Judicial Magistrate is equally competent to deal with the application moved by the secured creditor under Section 14 of the SARFAESI Act. Hence, the Sec.14 dated 25.10.2023 in C.M.P. No.7277/2023 passed by the Hon’ble Special Judge/CJM, Chengalpet is a valid Order.

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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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31. T hus, the Sec.14 order dated 25.10.2023 in C.M.P. No.7277/2023 passed by the Hon’ble Special Judge/CJM, Chengalpet is after due consideration of the application, affidavit in support of compliance of

SA No.119/2024

15.04.2026

procedures along with documents is an execution Order issued where no adjudication is required. The Order is passed considering the due compliance of the provisions of the S. 14 [i-ix].

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On examination of pleadings and documents produced by respective parties, the Tribunal comes to conclusion that the respondent bank as secured creditor has initiated measures under the Act after classifying the

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account as NPA.

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Consequent to classification of account as NPA has issued S.13[2] Demand Notice followed by Possession Notice and have complied all the procedures as contemplated under the Act and the Rules with supporting documents. Thus it is held that the Demand Notice u/s S.13[2] dated 26.04.2021 and S.13[4] Possession Notice dated 23.09.2021 are held as valid notices issued under the Act.

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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.

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Sd/- (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 15^th day of April, 2026)

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ANNEXURES

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LIST OF DOCUMENTS PRODUCED BY THE APPLICANT

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Sl.	Description of Documents	Documents
No.		No.
1.	Valuation Report dated 27.10.2018.	A-1

SA No.119/2024

15.04.2026

2.	Earlier Sale notice dated 18.02.2023.	A-2
3.	OTS confirmation given by bank dated 09.10.2023.	A-3
4.	Proofs of payments.	A-4
5.	Order passed by the Hon’ble Special Judge/Chief Judicial Magistrate at Chengalpat in C.M.P.No.7277 of 2023 dated 25.10.2023.	A-5
6.	Sale Notice issued by the defendant (Impugned Order) dated 09.02.2024.	A-6
7.	Copy of the SARFAESI Application SA.No.110/2024 challenging the Sale notice dated 09.02.2024 dated 22.02.2024.	A-7
8.	Order passed by this Hon’ble Tribunal on the SA.No.110 of 2024 dated 26.02.2024.	A-8
9.	Compliance letter by the applicant through the Demand drafts dated 26.02.2024.	A-9
10.	Notice issued by the Advocate Commissioner to take possession over mentioned properties dated 26.02.2024.	A-10

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LIST OF DOCUMENTS PRODUCED BY THE RESPONDNET

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Sl. No.	Description of Documents	Documents No.
1.	Notice under section 13(2) of the securitisation and reconstruction of financial assets and enforcement of security interest Act, 2002 along with copy of the Acknowledgment slip dated 26.04.2021.	R-1
2.	Representation given by the applicant to the respondent bank for the demand notice issued dated 28.06.2021 received on 29.06.2021	R-2
3.	Reply given by the respondent bank to the applicant for the above said representation dated 09.07.2021.	R-3
4.	Possession Notice (for immovable property) along acknowledgment dated 23.09.2021.	R-4
5.	Paper Publication published both in Vernacular Language and English paper.	R-5
6.	Photograph of the property with possession notice affixed.	R-6

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SCHEDULE OF PROPERTY

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Property Owned to Mr. M. Sudarshan:

SA No.119/2024

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All that piece of parcel of land and building bearing Plot No.169, situated in Old No. 12, New. No.27, Sammandam Street, Nemilicherry Village, Comprised in Survey No. 179/2, measuring a 5 cents or 2180 sq.ft and superstructure constructed thereon in the building to an extent of 3100 sq.feet situated in Alandur Taluk, Kancheepuram District Presently Pallavaram Taluk, Chengalpet District.

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North By: Sammandam Street,

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South By: VijaiPillai Property, East By: S.V.Kannan Property,

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West by: Aravamudam Property,

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And lying within the Registration District of Chennai South and Sub Registration District of Pallavaram.

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

Ms Hashini Enterprises v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

Ms Hashini Enterprises v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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