Dismissed

Abikavi Nattu Kozhi v. 16

DRT27 Jan 2026SA/234/2023

Case brief

AI extract

What is this about?

In a Section 17(1) petition under the SARFAESI Act, the applicants challenged a possession notice and the non-service of a demand notice. The Tribunal examined compliance with Rules 3(1), 8(1), and 8(2) of the Security Interest (Enforcement) Rules, 2002, relying on 2014 Supreme Court precedents.

What did the court decide?

The Application (SA No.234 of 2023) is dismissed. All other pending interim applications are closed.

Abikavi Nattu Kozhi versus 16 — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL – II AT CHENNAI

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Dated this 27^th day of January, 2026

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PRESENT: SHRI SHARANG DHAR UPADHYAY Presiding Officer

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SA No.234 of 2023

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M/s Abikavi Nattu Kozhi

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Rep. by its Proprietor

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Mr. K. Govindaraj

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Door No.1, Housing Board Salem Main Road, Kaveripattinam Krishnagiri – 635 112

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K. Govindaraj

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Son of Mr. Krishnan

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Door No.119, Erraalli, Pthapuram Kaveripattinam, Krishnagiri – 635 112

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Mrs. Muniyammal Krishnan Wife of Mr. Krishnan

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Door No.119, Erraalli, Pthapuram

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Kaveripattinam, Krishnagiri – 635 112 … Applicants

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Versus

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The Authorised Officer Axis Bank Limited 2^nd Floor, Door No.31, Old No.1 South Mada Street, Mylapore Chennai – 600 004 …Respondent

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Counsel on Record / Appeared

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Applicants by : Ld. Counsel Mr. K.C. Krishnamoorthy Respondent by : Ld. Counsel Mr. T.K.M. Sai Krishnan

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O R D E R

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1.0 This petition is filed under Section 17(1) of the SARFAESI Act

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challenging the Possession Notice dated 12.05.2023 issued by the

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Respondent Bank under Section 13(4) of the SARFAESI Act.

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Facts of the case as averred in the SA

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2.0 The applicants approached the respondent bank for grant of credit facility for development of its business and considering the said request the respondent vide sanction letter dated 17.10.2018 sanctioned Overdraft Agricultural facility of Rs.18,00,000/- and a further loan of ECLGS Term Loan of Rs.3,00,000/-

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2.1 The applicants were regular in repayment of the loan dues, however, due to COVID-19 pandemic the applicant suffered loss resulting in classification of the account as NPA on 29.04.2022.

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2.2 All of a sudden the respondent bank affixed the possession notice dated 12.05.2023 on the premises and the applicant came to know of the SARFAESI proceedings only after seeing the said notice. It is stated that the respondent did not serve the demand notice dated 20.05.2022 as alleged in the Possession Notice dated 12.05.2023. It is also stated that the action of the respondent bank affixing the possession notice without serving the demand notice is unsustainable and is liable to be set aside.

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2.3 The applicants were taking steps to clear the dues under One Time Settlement, but the respondent bank without considering the same hurriedly issued the impugned possession notice dated 12.05.2023.

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Grounds Urged

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3.0 (i) The respondent failed to serve the demand notice dated 23.05.2023 issued under Section 13(2) of the SARFAESI Act thereby deprived the right of the applicants under Section 13(3-A) of the SARFAESI Act.

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(ii) The possession notice is not in accordance with Rule 8(1) of the Security Interest (Enforcement) Rules, 2002 as the same is not published in leading newspapers.

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(iii) The possession notice is neither delivered to the applicants nor affixed on the secured asset.

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(iv) The respondent has failed to comply with Rule 8(2) of the Security Interest (Enforcement) Rules, 2002.

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3.1 The applicants had filed a copy of the Possession Notice dated 12.05.2023 along with the SAQ

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Counter of Respondent

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4.0 Upon notice the respondent filed counter affidavit stating therein that the SA is liable to be dismissed. The respondent states that at the request of the applicants the respondent sanctioned Overdraft Agri Service Provider facility of Rs.18,00,000/- vide sanction dated 17.10.2018 and ECLGS Term Loan of Rs.3,00,000/- vide sanction dated 23.07.2020. The applicants executed necessary loan and security documents and

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mortgaged the schedule mentioned property in favour of the applicant. The applicants defaulted in repayment and hence the loan account was classified as NPA on 29.04.2022 strictly in accordance with the guidelines of RBI.

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4.1 It is stated that the demand notice was issued on 20.05.2022 and the same was dispatched to the applicants on 26.05.2022 and received by them on 28.05.2022. Thus the respondent has complied with provisions of Rule 3(1) of the Security Interest (Enforcement) Rules, 2002. Therefore the averment with regard to the non-service of demand notice is a blatant lie.

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4.2 It is also stated that the possession notice dated 12.05.2023 was issued and the same was dispatched to the applicants on 15.05.2023 and received by the applicants on 16.05.2023 and the same is also affixed on the secured asset. The said possession notice is published in two leading newspapers dated 16.05.2023.

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4.3 It is further stated that the respondent bank has complied with Rules 3(1), 8(1) and 8(2) of the Security Interest (Enforcement) Rules, 2002. The respondent has filed the documents to prove the compliance of the provisions of the SARFAESI Act and the Rules made thereunder.

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4.4 Therefore, the SA is liable to be dismissed.

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4.5 Alongwith the SA the respondent filed typed set viz., demand notice dated 20.05.2022 along with proof of dispatch and service and possession notice dated 12.05.2023 along with proof of service, its affixture and publication in newspapers.

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Points for consideration

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5.0 Having heard at length the arguments of the Ld. Counsels appearing on behalf of the parties and after going through the documents available on record, the following point arises for determination in these proceedings:-

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Whether the impugned possession notice is in accordance with the Act and the Rules framed thereunder?

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Answers to the point for consideration

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6.0 At the outset, it is to be stated that while the secured creditor has been given the right to enforce the security interest without the intervention of the Court or Tribunal, the secured creditor while enforcing the same shall invariably comply the provisions of the SARFAESI Act and the Rules made thereunder, lest, the Tribunal can set aside the same if questioned.

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6.1 Hon’ble Supreme Court of India, in re Mathew Vargheese Vs. M. Amirtha Kumar and others 2014 (5) SCC P-610( paragraph 24) held :

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“that a free hand is given to the SECURED CREDITOR for the purpose of enforcing any security interest created in favour of SECURED CREDITOR, without the intervention of the Court or Tribunal. The only other relevant aspect contained in the said sub- section is that such enforcement should be in

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accordance with the provisions of this Act . A reading of Section 13(1), therefore, is clear to the effect that while on the one hand any SECURED CREDITOR may be entitled to enforce the SECURED ASSET created in its favour on its own without resorting to any court proceedings or approaching the Tribunal, such enforcement should be in conformity with the other provisions of the SARFAESI Act ”

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6.2 In so far as the case on hand is concerned, since the subject matter of challenge is Possession Notice issued in terms of Section 13(4) of the SARFAESI Act, the same shall be in conformity with Rule 8(1) and 8(2) of the Security Interest (Enforcement) Rules, 2002, which are as follows:

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“ 8. Sale of immovable secured assets.—

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(1) Where the secured asset is an immovable property, the authorised officer shall take or cause to be taken possession, by delivering a possession notice prepared as nearly as possible in Appendix IV to these rules, to the borrower and by affixing the possession notice on the outer door or at such conspicuous place of the property.

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(2) The possession notice as referred to in sub-rule (1) shall also be published in two leading newspapers, one in vernacular language having sufficient circulation in that locality, by the authorised officer.”

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6.3 The respondent bank, in its counter affidavit, have firmly asserted that they had complied with the required mandatory procedure and also filed documents in support of the said contention.

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6.4 In so far as the ground raised by the applicant with regard to non-service of demand notice dated 20.05.2022 is concerned the respondent has filed a copy of the demand notice and the proof of service at Page Nos.10 to 18. Therefore, this ground of the applicant fails.

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6.5 In so far as the ground raised by the applicants with regard to the noncompliance of Rule 8(1) and 8(2) of the Security Interest (Enforcement)

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Rules, 2002 is concerned, possession notice dated 12.05.2023 is concerned the respondent has filed the possession notice and the postal acknowledgements of having served the same on the applicants at Pages 19 to 23 of its typed set of documents filed along with the SA. The respondent has also produced the copies of paper publication dated 16.05.2023 at pages 24 to 27 of the typed set for having published the same in English and Tamil dailies well within 7 days of the notice. Further the respondent has filed the photographs evidencing affixture of the possession notice on the secured asset at Page 28 of the typed set. Thus this ground raised by the applicants also fails.

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6.6 Thus, there is compliance of mandatory provisions of the SARFAESI Act and the Rules made thereunder by the Authorised Officer while issuing the possession notice impugned in this application, hence, the same does not call for any interference by this Tribunal. Point is answered accordingly. Further, during the course of the arguments the Ld. Counsel for the applicant fairly conceded that the possession of the property has already been taken.

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7.0 Therefore, for the aforesaid reasons, the Tribunal finds no merit or substance in the application and the measures as initiated by the respondent bank are in conformity with the provisions of the SARFAESI Act and the Rules made thereunder, as such, the same does not warrant any interference from the this Tribunal.

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