Dismissed

T Charles v. Bank of Baroda

DRT13 Jan 2026SA/162/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed an application filed by a co-borrower seeking to set aside a possession notice under the SARFAESI Act. The court found that the bank had strictly followed procedural requirements despite disputes raised by the applicant regarding interest rates and insurance lapse, noting the applicant's partial compliance with a prior stay order.

What did the court decide?

The SARFAESI Application is dismissed with no costs, and all pending internal applications are disposed of.

T Charles versus Bank of Baroda — Contract and Commercial Disputes | DRT (2026)

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SA No.162/2024

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI

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DATED THIS 13^th DAY OF JANUARY, 2026

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PRESENT: SEEMA SINHA

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[PR. DISTRICT & SESSIONS JUDGE - Retd] PRESIDING OFFICER

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SA No. 162/2024

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T.Charles, S/o. Teerthose, No.2-376, 11^th Anbiyam, Ramanthurai Post, Kanyakumari District.. …. Applicant

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The Chief Manager & Authorized Officer, Bank of Baroda, Thengapattanam Branch, AKS Towers, Beach Road, Thengapattanam-629 17 3, Kanyakumari District. …. Defendant Bank

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Appearance of Advocates: Mr. R.Pon Karthikeyan ---- Counsel for the Applicant Mr. R.Pandivel ---- Counsel for the Defendant Bank

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This SARFAESI Application was heard in the presence of Counsels for the Applicant and the Defendant Bank and fixed for passing final order before me and upon hearing the arguments of the Counsels and having stood over for consideration till this day, this Tribunal delivered the following:

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SA No.162/2024

O R D E R

1 . This Application has been filed u/s. 17 of the SARFAESI Act, 2002 by the Applicant praying that this Hon'ble Tribunal may be pleased to set aside the Possession Notice dated 20.02.2024.

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2 . The brief averments of the Application filed by the Applicant is as follows:-

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(a) The Counsel for the Applicant submitted that he is the coborrower of the loan availed by his son namely Thiru.Dony Adlas. The Applicant’s son was engaged in fishing activities and was the only breadwinner of the Applicant’s family. In order to develop his business, the Applicant’s son approached the Defendant Bank for a loan. Initially, a MOD was created on 12.03.2020 in Document No. 809 of 2020 in respect of the scheduled property. However, the loan was not sanctioned as promised by the Defendant for reasons best known to them. Since the Applicant’s son was under the impression that the loan would be processed, he borrowed amounts from various persons at huge interest and started the fishing business. Unfortunately, the Defendant bank failed to process the loan as promised by them. Due to the same, the Applicant and his son faced a huge setback and were forced to clear the loan dues by pledging jewels and borrowing money at higher interest, because of which the Applicant’s son had to face a severe financial crisis. While this was so, the Branch Manager agreed to grant a loan to the Applicant and his son. Hence, on 20.01.2021, another MOD was created by cancelling the earlier MOD dated 12.03.2020, and a sum of Rs.15,00,000/- was sanctioned. The petition property belongs to the Applicant and the same was given as collateral security for the said loan amount. The Applicant was shown as co-borrower for the said loan transaction.

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Page 2 of 11

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SA No.162/2024

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(b) The Applicant further submitted that the insurance policy for the said loan amount was also subscribed in his son’s name by the Defendant Bank. The Applicant and his son followed all the instructions given by the Manager, believing her words. Though the loan amount was Rs.15,00,000/-only Rs.14,26,533/- was credited. When the same was enquired about, the bank officials informed that the remaining amount was debited for other miscellaneous expenses. In fact, the registration expenses for the MOD itself were borne by the Applicant and his son.

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(c) The Applicant further submitted that due to the attitude of the Bank, the Applicant’s son faced a severe financial crisis and suffered losses in his business. It is pertinent to note that the Bank authorities, who ought to have renewed the insurance policy, failed to intimate the same to the Applicant and his son, which resulted in the lapse of the policy. While this was so, there was default in paying the monthly EMIs, which resulted in the classification of the account as an NPA, and some collecting agents sent by the Bank came to the Applicant’s house and issued life threats and caused mental agony. Due to the same, the Applicant’s son was under severe stress and mental agony. Suddenly, on 13.09.2023, the Applicant’s son died due to a heart attack.

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(d) The Applicant further submitted that he approached the Defendant Bank to close the loan account by processing the insurance policy, and only at that time he was shocked to learn that the insurance policy had lapsed due to non-renewal. This fact was not informed to the Applicant by the Bank or the policy agent. Due to the conduct of the Defendant Bank, the Applicant has sent a complaint before the Banking Ombudsman, and the same is pending. In the meantime, the Respondent has initiated

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Page 3 of 11

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SA No.162/2024

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SARFAESI proceedings by issuing a demand notice under Section 13(2) on 29.11.2022. Following the Demand Notice, the Defendant Bank issued two Possession Notices dated 20.01.2024 and 20.02.2024. Now, based on the Possession Notice dated 20.02.2024, the Defendant is trying to bring the schedule property for action sale at a lesser price. Issuance of two Possession Notices is barred under the Act, and no reason was stated for issuing two Possession Notices.

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(e) The Applicant further submitted that the Defendant Bank acted against the RBI guidelines and the provisions of the SARFAESI Act by abusing the process of law and trying to grab the schedule property. The schedule property is a valuable property and, under the guise of Possession Notices, the Defendant will take coercive steps to bring the property to auction at a lesser price and to lock and seal the dwelling house. The petition property is the only dwelling house of the Applicant. The Applicant would be put to irreparable loss and hardship if the house property is locked and sealed. The arbitrary act of the Defendant violated the fundamental right guaranteed under Article 21 of the Indian Constitution and Article 300(4) of the Indian Constitution.

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Main Grounds:

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The impugned Possession Notice of the Defendant is against the principles of natural justice .

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The Defendant has not followed the mandatory requirements of law before issuing the Possession Notice.

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The Defendant Bank has flouted the mandatory requirements before issuance of the Possession Notice, on this ground the impugned order fails.

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SA No.162/2024

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The Defendant Bank has charged interest on interest in order to take over the property from the Applicant, which is against the principles laid down in Ravindra’s case. Till date, the Defendant has not furnished the statement of accounts.

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The Possession Notice has not disclosed the date of NPA as such the same was not issued in consonance with the provisions of the SARFAESI Act.

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Even after the Applicant requested the Defendant for the account statements, the Defendant has not furnished the details or the statements of the account.

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The Defendant Bank has hastily issued the Possession Notice without even considering the payments made by the Applicant and without following the provisions under Section 13 of the SARFAESI Act.

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The Defendant Bank has not followed the Rules and Guidelines issued by the RBI and has hurriedly initiated the SARFAESI proceedings.

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DESCRIPTION OF PROPERTY

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Enayamputhenthurai Village, Munchirai Sub Registry, Killiyoor Taluk, Kanyakumari District, Tamil Nadu State. Equitable Mortgage of land and Residential building for an extent of 5.548 cents in Enayamputhenthurai village with a building bearing door no 2-376 of Munchirai Sub registry in Killiyoor Taluk of Kanyakumari District. Old Sy no.2296A, RS no.427/9A.

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Boundaries :

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North : Property of Maria Cletus

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South : Property of Narbert

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East : Property of Narbert

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West : Property belongs to Village

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SA No.162/2024

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Property in the name of Mr.Charles T.

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The Applicant has submitted the following List of documents in support of his claim in the SA, which are as follows:

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S.No.	Date	Description of Documents
1.	29.11.2022	Demand Notice
2.	27.09.2023	Death Certificate of Borrower
3.	20.02.2024	Possession Notice
4.	23.01.2024	Acknowledgement issued bythe RBI

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3 . On the other hand, the counsel for the Defendant Bank appeared before this Hon’ble Tribunal and filed a Vakalatnama, Reply Statement, and a typed set of papers, wherein it was submitted that the entire loan amount of Rs.15,00,000/- was duly credited to the loan account. It was further submitted that the applicant’s son, namely Thiru Dony Adlas, voluntarily availed a life insurance policy with M/s. India First Life Insurance Company for a sum of Rs.1,25,000/- and paid the first premium. However, he failed to pay the subsequent premiums, and consequently, the insurance policy lapsed due to non-payment of premiums. The Applicant himself has admitted in the SARFAESI Application that the insurance policy had lapsed.

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(a) It is further submitted that upon receipt of the earlier Possession Notice dated 20.01.2024, the Applicant approached the Bank and undertook and promised to settle the entire loan account, requesting the Bank not to publish the Possession Notice. However, the Applicant wantonly and willfully failed to settle the loan account and thereby did not adhere to his undertaking and promise. Relying on the false promise and undertaking of the Applicant, the Bank refrained from publishing the earlier Possession Notice dated 21.01.2024 and subsequently issued a fresh Possession Notice dated 20.02.2024, which was published only after withdrawing the earlier Possession Notice.

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(b) It is further submitted that upon non-repayment of the loan, the Bank was fully entitled to invoke the provisions of the SARFAESI Act by taking symbolic possession of the secured property and to bring the same for public auction, sell the property, and

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Page 6 of 11

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SA No.162/2024

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thereafter take physical possession. Proceedings initiated under the SARFAESI Act do not amount to coercive steps. The Bank will bring the property for sale only after obtaining a due valuation report. As on date, the Bank has not brought the property for sale.

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(c) It is further submitted that the Bank has never acted in violation of the RBI Guidelines or the provisions of the SARFAESI Act, nor has it abused the process of law. The Bank has never intended to grab the applicant’s property. The Bank has not acted arbitrarily and has not violated the fundamental rights guaranteed under Articles 21 and 300A of the Constitution of India. The issuance of the Possession Notice is not contrary to the principles of natural justice. The Bank has complied with all mandatory requirements of the Act and the Rules before issuing the Possession Notice. Merely because a small payment was made, the loan account does not become eligible for upgradation. The Possession Notice was issued strictly in accordance with the provisions of the SARFAESI Act, the Rules framed thereunder, and the guidelines issued by the Reserve Bank of India. It is not mandatory to mention the date of classification of the account as NPA in the Possession Notice. The Bank has charged interest strictly as per the terms of the contract.

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(d) The Defendant Bank further submitted that it issued the Demand Notice and thereafter took symbolic possession of the property and issued the Possession Notice. The Possession Notice was duly served on the applicant and affixed on a conspicuous part of the secured property. The Possession Notice was also published in both Tamil daily and an English daily within the prescribed time. The applicant has admitted receipt of the Demand Notice as well as the Possession Notice and has not submitted any reply to the Demand Notice. There is no procedural irregularity on the part of the Defendant Bank in issuing the Demand Notice and Possession Notice or in taking symbolic possession of the property. The notices were issued strictly in accordance with the procedure prescribed under the SARFAESI Act and the Rules.

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Page 7 of 11

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SA No.162/2024

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(e) It is further submitted that if the Possession Notice is set aside, the Defendant Bank will suffer untold hardship and irreparable loss and injury, whereas no prejudice will be caused to the Applicant. The Applicant is a willful and chronic defaulter. The Applicant has willfully, wantonly, and deliberately failed to repay the loan amount despite having sufficient means to do so. The sole intention of the Applicant is to prolong the proceedings without making any payment and to defeat, delay, and defraud the valuable rights of the Defendant Bank. Further, as per Section 13(8) of the SARFAESI Act, the applicant is required to repay the entire dues to the Defendant Bank in order to stop the sale. Hence, the present SARFAESI Application is not maintainable either in law or on facts.

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(f) Therefore, it is prayed that this Hon'ble Tribunal may be pleased to dismiss the above SARFAESI Application with cost and thus render justice.

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TYPED SET OF DOCUMENTS FILED BY THE DEFENDANT BANK

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S.No.	Date	Particulars
1	29.11.22	Original Demand Notice with Original AD Cards
2	20.02.24	Original Possession Notice with Original AD Card
3	20.02.24	Possession Notice Original Paper Publication in English Daily “The New Indian Expres’’ Published on 22.02.24
4	20.02.24	Possession Notice Original Paper Publication in Tamil Daily“Dinamani” Published on 22.02.24
5	20.02.24	Original Photography with date & time showing affixture of Possession Notice

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4. ON THE BASIS OF ABOVE PLEADINGS THE POINT WHICH ARISES FOR CONSIDERATION IS:-

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WHETHER THE APPLICANT IS ENTITLED TO GET THE RELIEFS AS PRAYED FOR?

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Page 8 of 11

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SA No.162/2024

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5 . Having heard the parties and after going through the entire documents available on the records, this Tribunal find that there is no dispute between the parties with regard to the availment of loan facilities by creating equitable mortgage on their property. In this case, the Applicant is the co‑borrower of the loan account availed by his son, Thiru Dony Adlas, who obtained the loan facility from the Defendant Bank for business purposes by mortgaging the property mentioned in the schedule. The Applicant contended that the borrower faced a severe financial crisis and suffered losses in his business. In response, the Defendant Bank submitted that T. Charles obtained a credit facility for a sum of Rs. 15,00,000/- (Rupees Fifteen Lakhs only). Since the borrower failed to repay the interest on the loan as agreed, and despite being given sufficient opportunities, failed to regularize the loan account, the loan account was classified as a Non‑Performing Asset (NPA) on 28.11.2022 in accordance with applicable norms. I also find that neither party not Defendant Bank has submitted the Statement of Accounts in respect of the loan account.

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Thereafter, the Defendant Bank had issued the Demand Notice under Section 13(2) of the SARFAESI Act on 29.11.2022 to the borrower and the Applicant through registered post. I also perused the documents filed by the Defendant Bank. The Bank has submitted the original copy of the Demand Notice and the AD cards, which are attached at pages 1 to 8 of the Bank’s typed set of papers. The AD cards show that the notice was received and signed by another person. However, there is no denial by the Applicant that he has not received the Demand Notice. Further, I find that the applicant has not filed any document to show that he sent a reply or representation to the Demand Notice dated 29.11.2022 under Section 13(3A) of the SARFAESI Act to the Defendant Bank, despite having received the Demand Notice.

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Page 9 of 11

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SA No.162/2024

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Further I perused the documents and I find that at page nos. 9 to 11 of Bank's typed set of papers, Bank has filed Original copies of Possession Notice dated 20.02.2024 issued U/s. 13(4) of SARFAESI Act for a sum of Rs.13,83,625/- (Rupees Thirteen Lakh Eighty Three Thousand Six Hundred Twenty Five Only) and AD Cards as proof of service upon the Applicant. However, the AD cards show that the notice was received and signed by another person. I also find that the Bank has produced the Original copies of Paper Publication of Possession Notice in two newspapers one in English and another in Tamil (Bank's Typed set of papers at page nos. 12 to 13) and also filed Original photo at page no. 14 of Bank's typed set of papers as evidence for having affixed the Possession Notice on the conspicuous part of the property. Thus, I find that the Defendant Bank has strictly followed the SARFAESI procedures, while issuing Possession Notice to the Applicant.

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Further, the Applicant has not placed any material evidence before this Tribunal to substantiate his claim that rate of interest has been charged excessively against the guidelines of RBI. Further, he has not submitted any document to prove that they made representations to the Defendant Bank to furnish the copy of Statement of Accounts.

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I also find that during the pendency of the case, this Tribunal has granted a conditional stay order dated 05.03.2024 for a sum of Rs.13,83,625/- (Rupees Thirteen Lakh Eighty Three Thousand Six Hundred Twenty Five Only) to be paid in Four installments by the Applicant, the Applicant has also partly complied with the conditional order and tried to prove his bona-fide.

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Under the above facts and circumstances of the case, this Tribunal is of the considered view that Applicant has failed to prove his case and on the other hand, I find that the Defendant Bank has followed the

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Page 10 of 11

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SA No.162/2024

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procedures strictly for recovery of loan amount under SARFAESI Act as such I do not find any merit in the above SARFAESI Application.

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In the result, SA No. 162/2024 stands dismissed with no costs. Consequently, all pending IAs (if any) are also disposed of. No costs.

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Dictated to MTS (KK), taken down, transcribed, typed by him, corrected and pronounced by me in the Open Court in this the 13^th January, 2026.

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Sd/- (SEEMA SINHA) PRESIDING OFFICER

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Uploaded on 17.01.2026

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Page 11 of 11

T Charles v. Bank of Baroda

Case brief

What is this about?

What did the court decide?

T Charles v. Bank of Baroda

Case brief

What is this about?

What did the court decide?

What the court decided

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