Dismissed

Charles Rajakumar v. State Bank of India

DRT2 Apr 2026SA/12/2024

Case brief

AI extract

What is this about?

Debts Recovery Tribunal dismissed a Securitization Application challenging a Section 14 order passed by a Chief Judicial Magistrate. The Court held that Section 14 is ministerial, the bank complied with all notice requirements, and the applicant waived rights by failing to object within the limitation period.

What did the court decide?

The present Securitization Application was dismissed; interim orders were vacated pending further proceedings.

Charles Rajakumar versus State Bank of India — Contract and Commercial Disputes | DRT (2026)

SA No.12/2024

02.04.2026

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 02^nd day of April, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SARFAESI APPLICATION No. 12 of 2024

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Mr. Charles Rajakumar, S/o. Jayraj, No. 11, Flat No.F1, Cross Street, West Karikalan, 3rd Street, Sidco Nagar, Adambakkam, Chennai 600 088.

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Mrs. Esther Arul Mary, W/o. Charles Rajakumar, No. 11, Flat Ro.F1, Cross Street, West Karikalan, 3rd Street, Sidco Nagar, Adambakkam, Chennai 600 088. ….Applicants -Vs-

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State Bank of India Rep by its Authorised Officer RACPC - MRC NAGAR Branch No. 4, Santhome High Road, Mylapore, Chennai 600 004. ….Respondent

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Counsels on record / appeared:

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Counsel for Applicant : M/s. S. Meenakshi Sundaram, Mis. B. Priyanka.

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Counsel for respondent : M/s. N. Kishore Kumar, A.K. Vidhya.

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ORDER ON SA 12/2024

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The present Securitization Application [SA] is filed on 04.01.2024

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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

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02.04.2026

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 05.09.2022 in C.M.P. No.8249 of 2022 passed by Chief Judicial Magistrate, Chengalpattu and the outstanding amount due as per Sec.14 order is Rs.1,12,83,780.20/-

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Pleadings of the applicant:

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The Applicants had approached the Respondent bank to avail a Term Loan of Rs.94,65,000/- which was sanctioned on 29.10.2018. The loan is secured by depositing the title documents pertaining to the property by executing a Memorandum of Deposit of Title Deeds vide Doc No.13856/2018 in favour of the Respondent Bank.

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3.1 The applicants accepted the terms and conditions of the borrowing regularly repaid the EMls in the earlier stage but were irregular in repayment towards the credit facility due to COVID 19 and Nationwide Lock down their close relatives vacated the let-out premises, which was created a huge financial loss to them.

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3.2 The 1st Applicant lost job due to health issues and both the Applicants are struggling to run their livelihood resulted delay in regularizing their account within the expected time and as a result the Account was classified as NPA. The applicants made several requests to the Respondent Bank to grant a moratorium period of two years. However, the Respondent Bank failed to the bonafide requests of the Applicants.

SA No.12/2024

02.04.2026

3.3 The 1st Applicant met the Respondent Bank time to time and explained about the sudden unexpected financial difficulties and requested to grant a moratorium period for two years to repay the money towards the credit facility and not to take any measures till then. However, the Respondent has taken measures under SARFAESI Act informing the Applicants that the Respondent Bank has declared the loan account as NPA on 13.12.2021.

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3.4 The Applicants came to know about the Order dated 05.09.2022 passed by the Hon'ble CJM, Chengalpattu in C.M.P. No. 8249/2022, when the Advocate Commissioner issued notice on 16.12.2023. The applicants further submit that no notice were served by the Respondent Bank or by the Advocate Commissioner about the impugned order. After receiving the Advocate Commissioner's notice the Applicants immediately approached the Counsel on Record and downloaded the web copy of the impugned order on 16.12.2023.

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3.5 The Respondent Bank issued Sec.13(2) demand notice on 30.12.2021 demanding the outstanding balance of Rs.1,12,83,780.20/and the demand notice is not served to the Applicants. It is clearly showing that without issuing a proper demand notice under the provision of the SARFAESI Act, the Respondent Bank illegally obtained the impugned order.

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3.6 The bank has failed to comply with the conditions under section 14(1) (b) of SARFAESI Act, and the absence of legally enforceable Demand Notice

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02.04.2026

as required under the Act and Rules, the Respondent Bank cannot proceed further under the act.

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3.7 The respondent can initiate the measures under the SARFAESI Act only after the registration of the security interest before the central registry and as the respondent have not registered the charge in the central registry they cannot proceed under the SARFAESI Act.

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3.8 It is seen that Section 14(1)(i) of the Act mandates the Secured Creditor shall declare the aggregate amount of financial assistance granted and the total claim of the bank as on the date of filing the application. However, a bare perusal of the Section 14 Application of the Respondent will show that the Respondent has failed to mention the total claim of the Respondent as on date of filing of the Section 14 Application in violation to section 14(1) (i) of SARFAESI Act.

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3.9 It is contended that the total outstanding amount and the demand made by the Respondent Bank are illusory, exorbitant and is not in conformity with the terms of the agreement and thus is illegal. The Notice dated in the impugned order is 30.12.2021 but the outstanding as they stated as on is 27.05.2022 that itself shows the Respondent Bank acts are unjust. The Respondent has not given due credit to the various payments made towards the Loan account.

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3.10 It is further submitted that they availed a sum of Rs.94,65,000/- on 29.10.2018. Owing to the business turmoil, their accounts slipped into NPA inspite of Applicants made payments are taking strenuous efforts for

SA No.12/2024

02.04.2026

mobilizing funds to settle the outstanding with the Respondent Bank and also requires some time for the process. In pursuant to the impugned order dated 05.09.2022 passed by the Chief Judicial Magistrate, Chengalpattu in C.M.P.No.8249/2022, the Respondent will proceed and taking physical possession of the property and sell the same for a throwaway price which will incur heavy loss and damages apart from severe hardship and mental agony to the Applicants.

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3.11 On these grounds the applicant prays to set aside the Sec.14 dated 05.09.2022 in C.M.P. No.8249 of 2022 passed by the Hon’ble CJM, Chengalpattu.

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Objections of the respondent bank:

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The respondent has filed the counter contending that the applicants had availed Housing Term Loan of Rs.94,65,000.00 on 26.10.2018 and the applicants have acknowledged the sanction letter dated on 26.10.2018, the applicants have executed Arrangement Letter and Memorandum of Loan Agreement for Home Loan Granted to Public and Agreement to Mortgage dated 29.10.2018 and Memorandum relating to Deposit of Title Deeds dated 24.12.2018 and Confirmation Letter dated 06.02.2019 in favor of the respondent bank, for the loan amount together with interest at 9.% per annum for “Home Loan”,

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4.1 It is submitted that the applicants never approached the bank requesting for moratorium is denied. The account has been classified as NPA on 13.12.2021, and the Sec.13(2) demand notice was issued on

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02.04.2026

30.12.2021. The applicants have never challenged the classification of NPA after the receipt of Sec.13(2) demand notice and never submitted any representation to the bank. The Sec.13(2) demand notice issued was duly served to the applicants.

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4.2 The respondent has issued Sec.13(4) possession notice dated 17.03.2022 to the applicants, which is duly served to the applicants on 22.03.2022. The bank has affixed the possession notice on the schedule premises on 17.03.2022, published the possession notice in two newspapers one in Tamil Edition “Dinamani” and another one in English Edition “The New Indian Express” on 20.03.2022.

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4.3 It is submitted that as per sections 13 and 14 of the Act, the secured creditor has to issue a notice to the borrower in accordance with Subsection 2 of Sec.13 of the SARFAESI Act requiring him to discharge in full the liabilities within 60 days from the date of notice. Failure to honor the notice will result in taking action under Sub-Section 4 of Sec.13 of the Act. The borrower fails to clear the dues even after receiving the notice, the creditor is entitled to take possession of the secured assets in accordance with Sec.13(4) of the Act, and the secured creditor may approach the CMM or the District Magistrate under Sec.14 of the Act.

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4.4 The CMM or the District Magistrate, before passing the order that a demand was raised by the secured creditor by issuing notice u/s.13(2) of the Act, and the borrower failed to make repayment in spite of receiving the notice.

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4.5 The Respondent bank denies all the allegations made in the present SA and also followed all the measures as required. Hence respondent bank prays for dismissal of the SA.

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Heard both sides of the Counsels and perused the records of the case

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It is manifest from the records that the applicants had availed a Housing Term Loan of Rs.94,65,000/- vide sanctioned letter dated 26.10.2018, executed Arrangement Letter and Memorandum of Loan Agreement for Home Loan Granted to Public and Agreement to Mortgage dated 29.10.2018 and Memorandum relating to Deposit of Title Deeds dated 24.12.2018 vide Dco.No.13856/2018 and confirmation Letter dated 06.02.2019 in favour of the respondent bank for the loan amount together with interest at 9% p.a., for Home Loan.

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5.1 It is seen that the respondent bank had filed CERSAI report duly evidencing registration of the security interest with the central registry which is produced at Pg.16-18 of counter.

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5.2 In fact the applicants do not dispute the availing of the credit facility and mortgage of the properties as collateral security towards the credit facilities availed by them. Due to continuous default in the repayment, the loan account of the applicants was classified as NPA on 13.12.2021.

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5.3 Subsequent to classification of the account as NPA, the bank has issued S.13(2) Demand Notice dated 30.12.2021, where the notice clearly describes the types of loan availed, the nature of facility and the documents

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executed by the borrowers. Further the description of the properties is clearly mentioned in the S.13(2) demand notice.

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5.4 The Sec.13(2) Demand Notice is sent by RPAD which the applicants have received the Demand Notice as per the Acknowledgement card produced at Pg.5 and 6 of counter. In spite of receipt of Sec.13(2) demand notice as the borrower and the guarantor did not liquate the liability within 60 days nor raised any objections to the demand made, hence the respondent bank has proceeded further under the Act.

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5.5 The respondent issued the Sec.13(4) Possession Notice on 17.03.2022 sent through Registered Post with Acknowledgment, which the applicants have received the Possession Notice as per the Acknowledgment Card produced at Pg.9-11. The Possession Notice is published in two newspapers one in English “The New Indian Express” and another one in Tamil “Dinamani” both dated 20.03.2022 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.

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5.6 It is an admitted fact that applicant has not challenged the Sec.13(4) Possession Notice dated 17.03.2022 within the period of 45 days as required under section 17(1) of the SARFAESI Act. 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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5.7 As the applicants failed to repay the entire outstanding amount the bank has proceeded and approached the CJM, Chengalpattu 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 respondent have allowed the S.14 application on 05.09.2022.

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5.8 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. B. Mohammed Ali, 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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5.9 Thus it is evident that the Ld. Magistrate on examination of the pleadings in the S.14 application which is supported by the documents, have passed an order dated 05.09.2022 directing the Advocate Commissioner to take the possession of the property. Though the applicant have filed the present SA impugning the Sec.14 order dated 05.09.2022 passed by Ld. CJM, Chengalpattu has not pointed out any illegality in the measures taken by the respondent herein.

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5.10 On the other hand, though the statutory notices, the Demand Notice dated 30.12.2021 and Possession Notice dated 17.03.2022 are issued to the applicants in accordance to law, applicants have waived right to raise any contention with regard to Sec.13(4) Possession Notice within the period

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of 45 days. Hence any contentions to Sec.13(4) Notice is barred by limitation.

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5.11 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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5.12 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:

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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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5.13 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

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creditor under Section 14 of the SARFAESI Act. Hence, the Sec.14 dated

SA No.12/2024

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05.09.2022 in C.M.P. No.8249/2022 passed by Ld. CJM, Chengalpattu is a valid Order.

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5.14 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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5.15 T hus, the Sec.14 order passed by the Ld. Section 14 order dated 05.09.2022 in C.M.P. No.8249/2022 passed by Ld. CJM, Chengalpattu is after due consideration of the application, affidavit in support of compliance of 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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5.16 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 account as NPA.

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5.17 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

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30.12.2021 and S.13[4] Possession Notice dated 17.03.2022 are held as

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valid notices issued under the Act.

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5.18 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

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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 02^nd 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. No.	Description of Documents	Documents No.
1.	Order passed by the Hon’ble Chief Judicial Magistrate, Chengalpattu in CMP.No.8249/2022 dated 05.09.2022.	A-1
2.	Warrant issued to the Advocate Commissioner dated 05.09.2022.	A-2
3.	Advocate Commissioner Notice dated 16.12.2023.	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.	13(2) Demand Notice dated 30.12.2021.	R-1
2.	Acknowledgements dated 06.01.2022.	R-2
3.	13(4) Possession Notice dated 17.03.2022.	R-3
4.	Acknowledgements dated 22.03.2022.	R-4
5.	Affixture Notice dated 17.03.2022.	R-5
6.	Paper Publication in The New Indian Express and Dinamani Tamil Edition dated 20.03.2022.	R-6
7.	CERSAI Report dated 05.09.2022.	R-7

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ADDITIONAL DOCUMENTS PRODUCED BY THE RESPONDNET

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Sl. Description of Documents	Documents
No.	No.

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1.	Affidavit and petition in Crl.MP.No.8244 of 2022 dated 27.05.2022.	R-1
2.	Order copy in CMP.No.8249 of 2022 passed by the Chief Judicial Magistrate, Chengalpat dated 05.09.2022.	R-2

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SCHEDULE PROPERTY DETAILS

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SCHEDULE 'A

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(TOTAL PROPERTY)

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All that Piece and parcel of land consisting of Plot Nos.6,7 and 8 in Manohar Nagar 15^th street extension, Pallikaranai Village, Sholinganallur Taluk, Kancheepuram District, Comprised in Old Survey No.618/1, new Survey No.618/12 measuring about Sq.ft.,

Bounded on the,

North By: Plot No. 9

South By: Plot No. 5

East By: 20 Feet Road

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West By: Vacant Land

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Situate at within the Registration Sub district of Chennai South-Joint I and registration district of South Chennai.

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SCHEDULE 'B'

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923 sq.ft., out of 5400 sq.ft., undivided share in land of the Schedule A Mentioned property together with flat bearing No. D in second floor 1812 sq.ft., of super built up area (inclusive of common area, and a covered car parking in stilt floor), of the apartment known as "KRISH CROCUS" bearing plot Nos.6,7,8 Monahar Nagar extension, pallikarai, Chennai 600 100.

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Sd/-

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

Charles Rajakumar v. State Bank of India

Case brief

What is this about?

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Charles Rajakumar v. State Bank of India

Case brief

What is this about?

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