Dismissed

M Velan v. Piramal Capital Housing Finance Ltd.

DRT25 Feb 2026SA/134/2023

Case brief

AI extract

What is this about?

In Securitization Application No. 134/2023, the Debts Recovery Tribunal dismissed the challenge to a sale notice issued under the SARFAESI Act. The court held that the auction sale was valid and statutory procedures were followed, though Non-Performing Asset (NPA) classification was found.

What did the court decide?

The Securitization Application challenging the Sale Notice and the sale conducted on 08.03.2023 was dismissed.

M Velan versus Piramal Capital Housing Finance Ltd. — Banking and Recovery | DRT (2026)

SA No.134/2023

25.02.2026

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 25^th day of February, 2026

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Present: SMT. S.V. GOWRAMMA

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Presiding Officer

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SA No. 134 of 2023

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Mr. M. Velan, S/o Munusamy, No.A17/2, 3^rd Cross Street, Olympic Colony, Mogappair, Padi Chennai – 600 050.

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…Applicant

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-Vs-

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The Authorised Officer, Piramal Capital & Housing Finance Ltd, Regional Office, “Kalpalathika Towers”, 3^rd Floor, New NO.36, Old No.24, Dr. Ambedkar Road, Ashok Nagar Main Road, Kodambakkam, Chennai – 600 024.

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…Respondent

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Counsels on record / appeared: Counsel for Applicant : Ms. M. Lakshmipathy Counsel for Respondent : Mr. T.K.M. Sai Krishnan

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ORDER ON SA 134 /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].

SA No.134/2023

25.02.2026

The applicant has challenged the Sale notice dated 02.02.2023 fixing the sale on 08.03.2023 and the outstanding amount due as per Sale notice is Rs.1,13,84,402.66/-

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3. Pleadings of the Applicant.

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3.1 The applicant the year 2017 availed home loan of Rs.89,44,814/from the respondent institution, was regular in the repayment of the monthly installments, however defaulted due to the Covid – 19 pandemic and loss of income which resulted in classification of the loan account as NPA by the respondent institution.

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3.2 Though the applicant repaid up to June 2021, respondent proceeded in issuing Section 13(4) Possession Notice dated 16.02.2022 which was challenged before this Tribunal in SA No.166 of 2022. The SA came to be allowed on 29.08.2022 directing the respondent bank to initiate

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measures if the default continues. Though regular repayments are made from September 2022, the respondent has issued impugned Sale notice.

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3.3 The applicant challenged the Sale notice dated 02.02.2023 contending that classification of the loan account as NPA is not as per the RBI guidelines and issued the sale notice without giving proper credit to the payments made by the applicant. It is a specific contention of the applicant that the respondent has not issued the fresh Possession Notice dated 24.12.2022 as reflected in the Sale Notice dated 02.02.2023 and has not affixed the sale notice nor published in two Newspapers.

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25.02.2026

3.4 On these grounds the applicant prays to set aside the Sale notice dated 02.02.2023 fixing the sale to be held on 08.03.2023.

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4. Objections of the respondent bank:

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4.1 The respondent institution in their detailed counter denied all the averments in the SA, contending that the applicant and others approached for sanction of Rs.89,44,814/- which was sanctioned on 30.10.2017 under Loan code No.00003355 and also executed loan agreement and other documents. To secure the repayment of the credit facilities availed, the applicant had created an equitable mortgage by way of Memorandum of Deposit of Title Deeds in favor of the respondent which is also admitted by the applicant herein.

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4.2 As the applicant failed to repay the monthly installment as per the terms and conditions of loan agreement which resulted in classification of loan account as NPA on 12.05.2021 as per the RBI guidelines and Section 2(o) of the SARFAESI Act. Further, the respondent has issued Section 13(2) Demand Notice dated 30.06.2021 to pay the entire outstanding amount of Rs.96,11,532/- which was served to the applicant as per Rule 3(1) of the SIE Rules.

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4.3 As the applicant has not raised any representation nor discharged their entire liability within the period of 60 days from the date of receipt of the Demand Notice, the respondent has issued Section 13(4) Possession Notice dated 02.09.2022 to the applicant which was served to the applicant and affixed on the conspicuous part of the property. The Possession Notice

SA No.134/2023

25.02.2026

is also published in two Newspapers within 7 days from the date of issuance of the Possession Notice.

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4.4 The applicant has filed SA No.166 of 2022 before this Tribunal which came to be allowed on 29.08.2022 with a liberty to initiate fresh action against the applicant. The respondent issued another Possession Notice dated 02.09.2022 to applicant and other borrowers. Further the applicant failed to repay the monthly instalment with regard to the order dated 29.08.2022, hence respondent issued sale notice dated 02.02.2023 fixing a reserve price of Rs.3,16,40,000/- with an EMD amount of Rs.31,64,000/- which is served to the applicant with clear 30 days’ notice.

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4.5 The impugned sale notice is also published in two Newspapers, one in “The New Indian Express” (English) and another in “Dinamani” (Tamil) both dated on 03.02.2023, affixed on the conspicuous part of the property and followed all the procedures under Rule 9(1) of the SIE Rules. The applicant cannot approbate and reprobate on the security interest created over the schedule property, issued the Sale notice dated 02.02.2023 scheduling the sale to be held on 08.03.2023 in accordance with the provisions as prescribed under the SARFAESI Act.

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4.6 Additionally, the payments made by the applicant are properly credited into the loan account, charged interest rate as per the terms and conditions of the loan agreement and as per the RBI guidelines. The applicant had sufficient time to regularize or to settle the loan account and

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also relied on the Judgment of Hon’ble High Court of Madras dated 11.10.2017 in W.A.No.367 of 2017, M. Lilly Vs District Collector.

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4.7 As the respondent institution has followed all the procedures as contemplated under the SIE Rules and SARFAESI Act, 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 availed credit facility of a sum of Rs.89,44,814/- in the year 2017 from the respondent institution which is secured by loan documents and also equitable mortgage in respect of schedule property by way of Memorandum of Deposit of Title Deeds which is also admitted by the applicant vide Para No.3 of the present SA.

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5.2 The applicant failed to comply with the Terms and Conditions of the sanction and failed to make payment for a period of 90 days resulting in classification of the loan account as NPA on 12.05.2021 in accordance with the RBI guidelines and in accordance with Section 2(o) of the Act, which reads as under:

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Section 2(o): 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 A mere statement that the account is not classified as per RBI guidelines and as per Section 2[o] does not merit any consideration without

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25.02.2026

any specifically pointing out the illegality in classifying the account as NPA. Hence, the contentions as raised by the applicant that the respondent bank has not classified the loan account as NPA fails.

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5.4 After, classifying the loan account as NPA on 12.05.2021, the respondent institution has issued Section 13(2) Demand Notice dated 30.06.2021 calling upon the borrowers/guarantors/mortgagors to repay the total outstanding amount of Rs.96,11,532/- which is duly served to the borrowers and the same is not disputed by the applicant herein.

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5.5 Even after the receipt of the Section 13(2) Demand Notice, the applicant failed to raise any objection to the demand made nor discharged their entire liabilities within the period of 60 days. Hence, the respondent institution has proceeded further and issued Section 13(4) Possession Notice dated 16.02.2022 which was challenged by the applicant before this Tribunal in SA No.166 of 2022 which came to be allowed vide order dated 29.08.2022 setting aside the Possession Notice dated 16.02.2022.

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5.6 Subsequently, respondent bank has issued fresh possession notice 02.09.2022 which the applicant denies of service of the notice which is duly countered by the respondent bank by producing the copy of the Possession Notice sent through RPAD and duly received by the applicant and other as evident from the postal receipts and postal track report produced at Page No.10 to 18 of the respondent’s counter. The Possession Notice is published in two Newspapers, one in “The New Sunday Express” (English) and another in Tamil daily Newspaper both dated on 04.09.2022.

SA No.134/2023

25.02.2026

5.7 The Possession Notice is affixed on the conspicuous place of the property as reflected from the photograph of affixture produced at Page No.21 to 22. It is pertinent to note that the contention of the applicant with regard to the Possession Notice dated 24.12.2022 is not within the period of 45 days and it is barred by limitation under Section 17(1) of the SARFAESI Act, however the respondent institution has countered the service of S.13[4] notice with supporting documents as prescribed under the Act and Rules made thereunder. Hence, the contentions with regard to the Section 13(4) Possession Notice is not sustainable.

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5.8 The respondent bank has proceeded in issuing Sale Notice dated 02.02.2023 which is duly received by the applicant as per the Postal tracking report produced at Page No.23 to 30 of respondent’s counter. The details of the secured asset are clearly described in the Sale notice as per the Sale notice produced by the applicant at Page No.14 to 16 of the present SA, hence the contention of the applicant that there is clear description of the property in the sale notice does not sustain.

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5.9 The sale notice dated is 02.02.2023 and the property is sold on 08.03.2023, hence there is clear 30 days’ notice given by the respondent bank and the contention raised by the applicant that there is no clear 30 days’ notice in issuing the sale notice is not sustainable.

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5.10 Further the Sale notice is duly affixed on the conspicuous part of property under Rule 8(7) of SIE Rules as evident from the photograph of affixture produced at Page No.36 to 38 of respondent’s counter and also

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published in two Newspapers as per Rule 8(6) of SIE Rules which is reflected from the paper publications produced at Page No.34 and 35 of the respondent’s counter. Hence, the contentions with regard to the Sale notice 02.02.2023 as raised by the applicant is duly countered by the respondent bank by producing supporting documents and same is not sustainable.

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5.11 The further contention that the borrower Mr. Munusamy is deceased and it is seen from the sale notice dated 02.02.2023 that Late Munuswamy is the guarantor and the applicant Mr. M. Velan is the son of Late Munuswamy who is duly represented as Legal heir. Further the mortgaged property is not owned by the Late Munuswamy and applicant being legal heir of the guarantor and the term borrower includes guarantor as per Section 2(f) of SARFAESI Act and the same is reproduced herein:

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Section 2(f):

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“borrower” means [any person who, or a pooled investment vehicle as defined in clause (da) of section 2 of the Securities Contracts (Regulation) Act, 1956 which,] has been granted financial assistance by any bank or financial institution or who has given any guarantee or created any mortgage or pledge as security for the financial assistance granted by any bank or financial institution [and includes a person who, or a pooled investment vehicle which,] becomes borrower of a [asset reconstruction company] consequent upon acquisition by it of any rights or interest of any bank or financial institution in relation to such financial assistance [or who has raised funds through issue of debt securities];

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5.12 The further contention that the respondent bank has initiated further measures against the dead person cannot sustain as the applicant

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25.02.2026

being the Legal Heir of the guarantor is duly served with all the notices under the SARFAESI Act. The said contention was not raised or pleaded in the present SA, however as a last resort the applicant has raised the contention of the notices to Legal heir of the deceased guarantor is without any being there in the present SA. The Tribunal places reliance on the judgement of The Jammu & Kashmir High Court in the case titled Smt. Sundri and Ors Vs J&K Bank & Anr where it is held that a secured creditor is not required to issue a fresh notice to the legal heirs of a deceased borrower before invoking Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002.

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5.13 The Tribunal also relies on the Judgment of the Hon’ble Kerala High court in the case titled Abhijith B. v. Bank of Maharashtra and Ors where it is held that Bank's Right to recover becomes absolute once demand notice is served in borrower's lifetime, fresh notice to legal heirs is not needed.

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5.14 It is a specific contention of the applicant that though he obtained an interim order on 07.03.2023, the respondent has sold the property on 08.03.2023 during the interim order is countered by the respondent contending that the applicant had obtained an Interim order on 07.03.2023 directing him to make 10% of the outstanding amount on or before 10.30 a.m which the applicant has intimated to the respondent only on 11.03.2023 at that time the sale was already held on 08.03.2023. Hence

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there is no disobedience of the interim order of the Tribunal as contended by the applicant.

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5.15 Further, it is also seen from the proceedings dated 20.06.2023 that both the applicant and respondent were present and the Tribunal had permitted the respondent institution to refund the 25% of the amount received from the auction purchaser as the applicant undertakes to regularize the loan account before next hearing date i.e., 21.07.2023.

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5.16 Further the records reflect that applicant had sought 10 days’ time to remit the payments towards regularizing the loan account and matter stood posted to 01.08.2023, subsequently stood adjourned to 04.09.2023 and 21.09.2023. On 21.09.2023 the applicant sought time to address the arguments and adjourned to 20.10.2023 and 20.11.2023. On 20.11.2023

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the applicant sought time to approach the respondent bank and for regularization of loan account and adjourned to 27.12.2023 and 29.01.2024.

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5.17 It is matter of record on 29.01.2024 the matter was heard and the counsel for applicant sought time to furnish the particulars of the Legal Heirs as well as the regularization of the loan account. However, there is no report of the regularization even as on 12.02.2024, 08.05.2024 and the matter stood posted for arguments on 06.08.2024, 22.10.2024, 08.01.2025, 29.07.2025, 03.09.2025, 17.09.2025 and adjourned to 23.01.2026 and the matter was heard.

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5.18 Though the applicant is seeking time to regularize the loan account from 20.06.2023 has not approached the respondent finance institution for any regularization of the loan account. Additionally, the property was sold on 08.03.2023 which the applicant is aware and has not settled the liability even as on today but have successfully prolonged the matter for more than 3 years and have failed to make out any case of the illegality in the measures initiated by the respondent finance institution.

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5.19 Upon examination of the facts, documents produced by both the parties, the applicant is the borrower and failed to repay the loan amount as agreed and on continuous default resulted in classification of the loan account as NPA on 12.05.2021. The respondent institution has proceeded further under the Act and issued the statutory notices i.e., Demand Notice and Possession Notice in accordance with the procedure as mandated under the Act.

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5.20 Further, the sale notice which is under challenge is also duly served and in fact the applicant has failed to make out a case for interference of this Tribunal for the sale held on 08.03.2023 or pointing any infirmity in the sale held. On the other hand, the applicant had sought time to regularize the loan account even after the sale was successfully held and the Tribunal had granted an opportunity in spite of 3^rd party interest on the property by sale of auction held.

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5.21 For the foregoing reasons, the applicants as borrowers even after receipt of the statutory notices has failed to liquidate the entire liabilities

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and failed to point out any illegality or irregularity in the measures taken by the respondent.

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5.22 The present SA is challenging the Sale notice dated 02.02.2023 and the sale conducted on 08.03.2023 are held as valid measures as per the provisions prescribed under the SARFAESI Act and the Rules made thereunder.

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Resultantly 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 (Mogesh), transcribed by him, corrected, signed and pronounced by me on this the 25^th day of February, 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	Document No.
1.	Memorandum of Application dated 03.03.2023	A-1
2.	Statement of Accounts	A-2
3.	Order passed in SA No.166 of 2022 dated 29.08.2022	A-3
4.	Sale Notice dated 02.02.2023	A-4
5.	Vakalath dated 03.03.2023	A-5

SA No.134/2023

25.02.2026

LIST OF DOCUMENTS PRODUCED BY THE RESPONDENTS

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Sl. No.	Description of Documents	Document No.
1.	Counter filed by the respondent bank dated 11.04.2023	R-1
2.	Copy of the Possession Notice U/s. 13(4) of SARFAESI Act along with Dispatch proof, Service proof, Paper publications and affixture dated 02.09.2022	R-2
3.	Copy of Despatch proof, Service proof, Paper Publications and Affixture of the Sale notice dated 02.02.2023.	R-3

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SCHEDULE OF PROPERTY

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All the piece and parcel of property having an extent; - Plots No.11,12,13S.No.266/6, situated in Thiruvallur District Ayapakkam village in Dharmanagar, Thiruverkadu Main Road, Chennai – 77 and with following boundaries

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North: Thiruverkadu Main Road, South: 20 feet Road, East: Mahalakshmi Property Plot & House West: 20 feet Road.

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

M Velan v. Piramal Capital Housing Finance Ltd.

Case brief

What is this about?

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M Velan v. Piramal Capital Housing Finance Ltd.

Case brief

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