Dismissed

Mr Jayakumar v. State Bank of India

DRT29 Jan 2026SA/304/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed a Section 17(1) SARFAESI Act petition challenging an order allowing bank possession. The court found the bank duly complied with statutory notice requirements under Sections 13(2) and 13(4) and affirmed the District Magistrate's order.

What did the court decide?

The Section 17(1) Application is dismissed; the order of the District Magistrate dated 3.5.2024 is affirmed; parties bear own costs.

Mr Jayakumar versus State Bank of India — Banking and Recovery | DRT (2026)

¶1

IN THE DEBTS RECOVERY TRIBUNAL – II AT CHENNAI

¶2

Dated this 29^th day of January, 2026

¶3

PRESENT: SHRI SHARANG DHAR UPADHYAY Presiding Officer

¶4

SA No.304 of 2024

¶5

Jayakumar

¶6

Son of Ambalavanan

¶7

No.73, Mettu Street Visamangalam Village Melathangal, Chetpet Taluk Tiruvannamalai District – 606 807

¶8

Mrs. A. Lalitha Wife of Ambalavanan No.73, Mettu Street Visamangalam Village Melathangal, Chetpet Taluk Tiruvannamalai District – 606 807 … Applicants

¶9

Versus

¶10

The Authorised Officer State Bank of India RBO-4, Chengalpet Branch Chengalpet – 603 001 … Respondent

¶11

Counsel on Record / Appeared

¶12

Applicant by : Ld. Counsel M/s N. Mahendrababu, G. Sanjeevi & K. Priyadharshini Respondent by : Ld. Counsel M/s Suresh Law Associates

¶13

O R D E R

¶14

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

¶15

challenging the measures initiated by the defendant bank pursuant to

¶16

¶17

the order of the Learned District Collector and District Magistrate, Tiruvannamalai in RC. No.C2/1638453/2023 dated 03.05.2024.

¶18

The facts leading the impugned order is that the applicants had obtained housing loan of Rs.6,50,000/- in the year 2016 and has been regularly servicing the loan, however, the respondent has wrongly classified the loan account as NPA. The schedule mentioned property is the primary security for the loan. It is stated that the respondent without serving the demand notice and possession notice have initiated the proceedings under Section 14 of the SARFAESI Act. It is also stated that the impugned action of the respondent has been initiated without complying with the provisions of the SARFAESI Act and the Rules made thereunder.

¶19

Along with the SA, the applicants had filed the letter issued by the Tahsildar dated 10.6.2024 and the order passed by the Learned District Magistrate, Tiruvannamalai dated 03.05.2024.

¶20

In the grounds, it is stated that the respondent has wrongly classified the loan account as NPA, the demand notice under Section 13(2) of the SARFAESI Act is neither issued nor served on the applicants and the Respondent has failed to comply with Rule 8 of the Security Interest (Enforcement) Rules, 2002. It is also alleged that the

¶21

¶22

Possession notice has neither been affixed on the secured asset nor published in newspapers.

¶23

Upon notice, the defendant bank filed its counter. In the counter filed along with the documents it is contended that SA is not maintainable in law or on facts. It is stated that the loan account has been classified as NPA on 22.12.2021 strictly in accordance with the guidelines of the RBI. It is also stated that the respondent has issued the demand notice under Section 13(2) of the SARFAESI Act on 19.1.2022 and the same was duly served on the applicants on 25.1.2022. It is further stated that the respondent issued the Possession Notice under Section 13(4) of the SARFAESI Act on 7.4.2022 and the same is duly served on the applicants on 12.4.2022, affixed on the secured asset on 7.4.2022 and published in “Dinamani” Tamil Edition and “The Indian Express” English edition on 13.4.2022. It is stated that the applicants despite being served with the statutory notices did not come forward to clear the dues and hence the respondent was constrained to initiate action under Section 14 of the SARFAESI Act. It is also stated that the respondent has scrupulously followed the provisions of the SARFAESI Act and the Rules made thereunder and prayed for dismissing the SA.

¶24

¶25

The defendant bank filed various documents viz., the demand notice dated 19.1.2022 along with postal acknowledgements, Possession Notice dated 7.4.2022 along with postal acknowledgements, proof of affixture of possession notice, copy of paper publication in “Dinamani” & “The Indian Express”, the affidavit filed by the respondent before the District Magistrate dated 21.12.2023 and the order passed by the Ld. District Magistrate, Tiruvannamalai dated 3.5.2024.

¶26

The matter is heard. In the wake of available material on record, the following points arise for consideration in the present SA:

¶27

“Whether the impugned order of District Magistrate and District Collector, Tiruvannamalai suffers from any illegality or impropriety rendering it void in law?”

¶28

Answers to Point for Consideration

¶29

It is to be noted that the Hon'ble Supreme Court in “ NKGSB Cooperative Bank Limited Vs. Suber Chakravarty” and “ R.D. Jain and Company Vs. Capital First Limited CA 1755 of 2022 dated 27.07.2022 ” ruled that no adjudicatory powers are vested while deciding the application under Section 14. In the matter of “Indian Bank Vs. Vishalakshi and Another CA 6295/2015 dated 23.09.2019” , the Hon'ble Supreme Court had further held that the proceedings under Section 14 is a procedural step and purely an administrative order and there is no adjudicatory process involved. Keeping in mind the above

¶30

¶31

rulings, this Tribunal can only examine whether there was compliance of the provisions by the defendant bank before the Learned CMM as mandated under Section 14(1) of the SARFAESI Act.

¶32

As per Section 14(1) of the SARFAESI Act, on a request being made by the by the secured creditor, the Chief Metropolitan Magistrate or the District Magistrate as the case be take possession of such asset and documents relating thereto and forward such assets and documents to the secured creditor. The financial institutions are to declare under the affidavit the aggregate sum of financial assistance and dues payable as on the date of the application. It should be averred that the borrower / guarantor having created security interest over the property and that the borrower had committed default; upon such default the account must have been classified as NPA. It is also mandatory to aver in the affidavit regarding the issuance of demand notice, the reply thereof and the response of the secured creditor and that the borrower had not made any repayment and therefore entitled to take possession and that the other provisions of the Act have been complied.

¶33

This Tribunal is aware of the Ruling of the Hon’ble Supreme Court

¶34

in “Authorised Officer, Indian Bank Vs. Vishalakshi and another CA

¶35

No.6295/2015 disposed on 23.09.2019” holding that the spirit of

¶36

Section 14 of the SARFAESI Act is only a procedural step. It is purely

¶37

¶38

an administrative order and no adjudication is involved. The orders of the Ld. CMM / DM is only an aid to the proceedings initiated u/s.13(4) of the Act.

¶39

It is only to be looked into whether the provision of section 14(1) of the Act is complied or not. From the impugned order it is seen the necessary details to be furnished u/s.14(1) of the Act has been complied. The Ld. CMM at para 10 of the impugned order had come to a finding that “Hence perusal of all the relevant records and documents submitted by the authorized officer shows that it is a fit case for proceeding u/s 14 of SARFAESI Act, 2002” , Whether this finding is supported by the proper documents is also answered by the Ld. CMM.

¶40

However, this Tribunal has also considered the documents filed by the defendant. This includes the documents produced at S. No. 1 & 2 which is the demand notice dated 19.1.2022 and the postal acknowledgements dated 25.1.2022, the same clearly reveals that the demand notice is duly served on the applicants.

¶41

As regards the contention of the applicants that the respondent has failed to comply with the Rule 8 (1) and 8(2) of the Security Interest (Enforcement) Rules, 2002 is concerned the respondent has filed the possession notice dated 7.4.2022 and the postal acknowledgements at Sl. No.3 & 4 (Pages 15 to 20), the proof of affixture of the possession

¶42

¶43

notice at Sl. No.5 (Page 21) and the proof of publication of the possession notice in two newspapers viz., Dinamani and The Indian Express at Sl. No. 6 (Page 22 & 23) (though it is wrongly mentioned as “The Hindu” in the index to the typedset) which clearly evidence that the possession notice has been served, published and affixed on the secured asset. Therefore, this ground of the applicants fall to the ground.

¶44

Further, the applicants have not urged any grounds with regard to

¶45

non-compliance of provisions under Section 14(1) of the SARFAESI Act by the secured creditor.

¶46

Therefore, in the absence of any allegations regarding noncompliance of the provisions of Section 14(1) of the Act and documentary evidence produced by the defendant bank, this Tribunal is unable to find any illegality, impropriety or otherwise to set aside the impugned order. Hence the following:

¶47

ORDER

¶48

(i) The SA stands dismissed. The orders of the Ld. District Magistrate, Tiruvannamalai dated 3.5.2024 is hereby affirmed. All other pending IAs thus stand disposed of.

¶49