Allowed

M s Pmr Brick Works Rep by its Prop Mr S Mathivanan v. Indian Bank

DRT11 May 2026SA/270/2026

Case brief

AI extract

What is this about?

The DRT stayed an IA seeking to halt a property auction scheduled under the SARFAESI Act. The borrowers challenged the sale of agricultural land, claiming exemption under Section 31(i) and alleging insufficient valuation. The bank relied on a Supreme Court precedent to argue for commercial usage but failed to file a detailed counter or affidavit. The Tribunal stayed the auction to ascertain the la

What did the court decide?

Stay of the auction of the schedule property scheduled on 15.05.2026 and liberty granted to approach the respondent bank for an amicable settlement.

M s Pmr Brick Works Rep by its Prop Mr S Mathivanan versus… — Banking and Recovery | DRT (2026)

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IA No.876/2026 In SA No.270/2026

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11.05.2026

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 11^th day of May, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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IA No. 876 of 2026

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SA No. 270 of 2026

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M/s. PMR Bricks Works, Rep. by its Prop. Mr. S. Mathivanan No.90, Seethananjeri Post, Pinaiyur Village, Uthiramerur Taluk, Kancheepuram District – 603 106

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Mr. S. Mathivanan S/o M. Selvaraj, No.1, Devadass Street, Vedhchalam Nagar, Chengalpattu – 603 011.

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…Applicants

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-Vs-

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Indian Bank, Rep. by its Authorized Officer, Zonal Office, Kancheepuram, 510/511, Gandhi Road, Kancheepuram – 631 501.

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…Respondent

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Counsels on record / appeared: Counsel for Applicant : M/s. G. Desingu Counsel for Respondent : Mr. C. Ramaiah

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Uploaded in E-Drt on 11.05.2026 at 01:33 p.m.

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IA No.876/2026 In SA No.270/2026

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11.05.2026

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ORDER ON IA No.876/2026 In SA No.270/2026

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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].

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Applicant is the borrower who has filed a present SA challenging the Sale Notice dated 06.04.2026 scheduling the property to be sold on 15.05.2026. Applicant has filed IA No.875/2026 the petition for an early hearing stand allowed taking the matter on board. IA No.876/2026 is a petition seeking for stay of the auction notice dated 06.04.2026.

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The first applicant is the borrower and the second applicant is the proprietor of 1^st applicant. The applicant has challenged the Sale notice dated 06.04.2026 scheduling the sale to be held on 15.05.2026, on the ground that property is a agricultural land as per the description in the Sale notice 06.04.2026 and also as per the MODT dated 12.11.2019 executed by the 2^nd applicant favoring the respondent bank.

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In the sale notice it is mentioned that the land measuring 4.29 acres with chamber unit constructed thereon, whereas the chamber unit is constructed partly in S.No.54 and partly in S.No.52/1B and S.No.52/1B2 which is owned by different person which is not mortgaged to the respondent bank.

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Uploaded in E-Drt on 11.05.2026 at 01:33 p.m.

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IA No.876/2026 In SA No.270/2026

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11.05.2026

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Further in MODT it is mentioned that land alone is described and chamber unit is not mentioned, hence the respondent bank cannot proceed under the Act, same as agricultural property is exempted under Section 31(i).

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The property was put for sale of Rs.70 lakhs without taking proper valuation from an approved valuator and the upset price is below market price and the respondent bank is trying to sell the property at throw away price to their known person. The applicant is making attempts to mobilize the funds which requires six month time. Hence, the applicant prays to grant interim order of stay to be held on 15.05.2026.

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Though the matter was taken up on 05.05.2026 and the respondent was given liberty to file the counter along with supporting documents and the matter stood posted on 08.05.2026. However, the respondent bank has not filed any counter or objections for IA No.876 of 2026 for stay on the scheduled date on 08.05.2026. Further, the respondent bank has now filed the objection memo by the counsel contending that the applicant had availed the following facilities:

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i. OCC Loan vide A/c. No.6827518758 with interest @14.65%

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ii. FITL Loan vide A/c. No.6989035967 with interest @8.95%

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iii. MSME-TL vide A/c. No.7184997911 with interest @10.60%

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iv. GECLS EXT 1.0 vide A/c.No.7186841666 with interest @8.75%

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Further, the schedule property was mortgaged as charge on block assets of the company and hypothecation of movable assets, stocks and

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Uploaded in E-Drt on 11.05.2026 at 01:33 p.m.

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IA No.876/2026 In SA No.270/2026

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11.05.2026

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book debts, the applicant has also executed equitable mortgage by way of Memorandum of Deposit of Title Deeds dated 12.11.2019 registered as Doc.No.4799/2019 by the 2^nd applicant in favor of the respondent bank before the SRO, Walajabad, Kancheepuram. As the applicants failed to repay the loan amount as agreed upon, the respondent bank has proceeded under the SARFAESI Act.

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The grounds raised by the applicants that the property is agricultural land and the revenue records clearly shows that the property is Nanja Land which is countered by the respondent bank that the loan transaction is for commercial in nature for Brick works of M/s. PMR Brick Works which is situated in the schedule property and only Brick activities are carried out from the date of sanction, further the agricultural nature of the property has been changed long back and Revenue records has not updated for the reasons best known to them.

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The respondent bank relies on the Judgment of Hon’ble Supreme Court of India in ITC Limited Vs. Blue Coast Hotels Ltd and Indian

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Bank Vs. K. Pappireddiyar where it is held as follows:

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“It is the purpose for which it is held that determines its character and the existence of a few coconut trees or a vegetable patch on the land cannot alter the fact that it is held for purposes of building and not for purposes of agriculture”

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It is submitted that a mere entry of the property as agriculture land

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in the revenue record cannot be conclusive proof of nature of property,

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Uploaded in E-Drt on 11.05.2026 at 01:33 p.m.

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IA No.876/2026 In SA No.270/2026

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11.05.2026

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further the photos were taken on 07.05.2026 which is produced. Hence, the respondent bank prays to reject the contention of the applicants.

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

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The 1^st applicant is M/s. PMR Brick Works represented by its proprietor Mr. S. Mathivanan who has availed credit facilities from the respondent bank and had also mortgaged the property as described in the Sale notice dated 06.04.2026. The records reflects that the mortgaged property is an agricultural land where a portion of it being used for Brick Manufacturing. The main contention of the applicant is that the property mortgaged is a agricultural land which is evident from Revenue records of Adangal report and on verification of the description of the property in the Sale notice it is clear that the various Survey numbers are mortgaged which are as under:

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All that piece and parcel of land measuring an extent of 4.29 acres together with chamber unit constructed thereon including all its amenities with electricity service connection, comprised in Survey No.24/2A, 24/2B, 50,2A, 50/2B, 54 & 55/3, 26/1, 26/2 of V.No.90 situated in Pinayur Village & Panchayat, Uthiramerur panchayat,………

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Further when comparing the description of the property even with the MODT, it is seen that the property are agricultural land which has been given as security to the credit facilities. Further, the applicant had produced

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Uploaded in E-Drt on 11.05.2026 at 01:33 p.m.

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IA No.876/2026 In SA No.270/2026

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11.05.2026

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the photographs to evidence the brinjal cultivation being carried out in the property and the contention of the chamber unit is only on some portion of the property which is not disputed by the respondent bank herein.

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The respondent bank has placed reliance on the Judgment of in ITC

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Limited Vs. Blue Coast Hotels Ltd and Indian Bank Vs. K. Pappireddiyar and contended that mere revenue records cannot establish the agricultural land. Though the applicant has taken a contention with regard to the property being agricultural land and the respondent bank in spite of giving opportunity to counter the said contention with supporting documents have not produced any documents nor as filed detailed counter along with sanction letter nor has clarified to what extent of the property is used for chamber unit. Further, the photographs of brick manufacturing does not clearly reflects the portion of land in the various Survey Number where the commercial activity being carried out.

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The Tribunal without ascertaining the nature of land which is used for commercial activities and the respondent bank having failed to counter by way of affidavit of the Authorized Officer has failed to substantiate or counter the claim of the applicant herein. Further, the applicant has sought six months time to clear the entire liability, hence, the Tribunal feels it apt to give liberty to approach the respondent bank for any amicable settlement before the next date of hearing.

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For the foregoing reasons, IA No.876/2026 for stay of auction sale scheduled on 15.05.2026 is hereby stayed to avoid multiplication of the

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Uploaded in E-Drt on 11.05.2026 at 01:33 p.m.

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IA No.876/2026 In SA No.270/2026

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11.05.2026

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proceedings and also in creating 3^rd party interest where the exemption under Section 31(i) ascertains. List the matter on 02.07.2026 for detailed counter.

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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 11^th day of May, 2026)

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Uploaded in E-Drt on 11.05.2026 at 01:33 p.m.

M s Pmr Brick Works Rep by its Prop Mr S Mathivanan v. Indian Bank

Case brief

What is this about?

What did the court decide?

M s Pmr Brick Works Rep by its Prop Mr S Mathivanan v. Indian Bank

Case brief

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What did the court decide?

What the court decided

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