Dismissed

Waldemar Mercantile Pvt. Ltd. v. Union Bank of India

DRT2 Mar 2026SA/304/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal disposed of a Section 17(1) application challenging SARFAESI proceedings initiated by Union Bank of India against M/s. Waldemar Mercantile Pvt Ltd. The applicants alleged procedural irregularities, NPA misclassification, and suppression of facts regarding prior settlement. The Tribunal found the applicants failed to prove their case in their favor and dismissed the appl

What did the court decide?

SA No. 304/2024 stands dismissed. No costs.

Waldemar Mercantile Pvt. Ltd. versus Union Bank of India — Company and Corporate | DRT (2026)

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SA No.304/2024

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI

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DATED THIS 2^nd DAY OF MARCH, 2026

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PRESENT: SEEMA SINHA

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[PR. DISTRICT & SESSIONS JUDGE - Retd]

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PRESIDING OFFICER

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SA No. 304/2024

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M/s. Waldemar Mercantile Pvt Ltd., Rep by its Managing Director, Mr. N. Baladhandapani, No.33 B A/3, Post Office Road, KS Nagar, Ramanathapuram, Coimbatore – 641 045.

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Mr. N. Baladhandapani, S/o. Nataraj, No. 209, Spring Field Park, 49 Subramaniam Kovil Street, Ramanathapuram, Coimbatore – 641 045.

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Mrs. S. Ponni, W/o. N. Baladhandapani, No. 209, Spring Field Park, 49 Subramaniam Kovil Street, Ramanathapuram, Coimbatore – 641 045. --- Applicants

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-Vs-

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Union Bank of India, Rep. by its Authorized Officer/Chief Manager, Asset Recovery Branch, PB. No. 8, 235, Oppanakara Street, Coimbatore – 641 001. --- Defendant Bank Appearance of Advocates: M/s. S. Suresh ---- Counsel for the Applicants Mr. R. Pandivel ---- Counsel for the Defendant Bank

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Page 1 of 10

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SA No.304/2024

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

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O R D E R

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1 . This Application has been filed under Sec.17(1) of the SARFAESI Act 2002 by the Applicants praying that this Hon'ble Tribunal may be pleased to set aside the entire SARFAESI Proceedings initiated by the Defendant Bank ending up with the order passed by the Ld. CJM, Dindigul u/s. 14 of the SARFAESI Act made in Crl.M.P.No. 1653 of 2024 dated 01.04.2024 appointing an Advocate Commissioner for taking Physical Possession of the Schedule Mentioned Properties and to pass such other orders.

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2 . The brief averments of the Application filed by the Applicants are as follows:-

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The Counsel for the Applicants submitted that the 1^st Applicant is a private company which is involved in scrap business for the past ten years. The 2^nd Applicant is the Managing Director of the 1^st Applicant Company. The 2^nd and 3^rd Applicants are the Guarantors to the loan obtained a sum of Rs. 25 Lakhs for Business purpose of the 1^st Applicant in the year 2012. It is further stated that the Applicants were regular in repayment of loan amount and by the year 2015 they were paid Rs. 50 Lakhs. However, due to heavy strike in the business and after introduction of GST, there is serious business crisis, they were not able to pay the monthly installments regularly which caused the loan become NPA on 31.12.2017. Furthermore, at the time of availing the loan facilities, the Applicants were directed to execute the printed unfilled documents which were subsequently filled up by the Defendant Bank to suit their convenience. The Applicant denied all the allegations that valid mortgage was created over the Schedule Mentioned Property.

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It is further submitted that the Applicants are facing a lot of cash flow issues due to lockdown announced by the Government of India. Thereafter the Applicants requested the Defendant Bank for waiver of interest and waiver of interest on interest. Further, the Applicants are unable to make heavy repayment schedule, when the Applicants requested the Defendant Bank for enhancement of Loan limit, the Defendant also promised to enhance the loan

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Page 2 of 10

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SA No.304/2024

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limit. The account is still in operation and the Applicants are remitting the amount regularly and an account which is in operation is shown as NPA in the Defendant’s notice which is arbitrary and illegal under SARFAESI Act, only after 90 days from declaring the account as NPA, the 13(2) notice under SARFAESI Act can be issued.

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It is further submitted that the alleged amount claimed by the Defendant Bank for a sum of Rs. 26,53,754.68p as on 29.02.2024 is highly excessive and incorrect. The Applicants were also made several payments and they were not properly accounted. Therefore, the account cannot be classified as NPA. Hence, the notices issued u/s. 13(2) and 13(4) of SARFAESI Act are not maintainable. It is further stated that the Defendant has committed serious irregularities and also failed to obtain Valuation report from the Approved Valuer before bringing it into public auction which is mandatory under Rule 8(5) of the SARFAESI Rules. The value of the property at the time of availing loan is Rs. 1,00,00,000/- towards House property. However, the present value of the land and building of the secured property described schedule is Rs. 5.00 crore and forced value of the property is Rs. 4.00 Crore. In fact, the Valuation Report of the secured property at the time of sanction of loan itself was around Rs. 1.00 crore. The Defendant Bank failed to send proper Sale Notice without mentioning Description of Property, Upset price and without following the mandatory procedure of obtaining Valuation Report under Rule 8(5) of the said Rules.

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It is further submitted that inspite of Applicant’s repeated requests, the Defendant evaded to give reconciliation of accounts to verify the actual dues. There is no detail for declaring the account as NPA. Most of the Applicants’ payments were not properly given credit and inspite of the Applicants’ insistence, no Statement of Account was provided. The Applicants expressed his willingness to settle the loan amount. The Defendant never intended to recover the amount but to harass the Applicants and disburse the properties to collect huge interest from the Applicants. Further it is stated that the properties mortgaged by the Applicants are worthier and a small portion of which is sufficient to settle the liability if any. Admittedly, the Applicants are ready to settle the legally enforceable due in one time settlement. Inspite of the best efforts for an amicable settlement, the Defendant is keen of disposing the property for his arbitrary claims and issued notice for sale of property.

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It is further submitted that earlier the Defendant Bank issued the Sale Notice dated 16.06.2023, fixing the e-auction sale on 27.07.2023 and the same was challenged by the Applicants before the Hon’ble DRT, Coimbatore and obtained a conditional order for a sum of Rs. 20,00,000/- in two equated installments. The Applicants were complied with the conditional Order. Subsequently, the sale was not held for want of bidders, hence, the SA was

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Page 3 of 10

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SA No.304/2024

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not pressed by the Applicants. However, the Defendant Bank again issued an Auction Sale Notice dated 22.03.2024, fixing the date of sale on 16.04.2024. Aggrieved over the same, the Applicants filed an Application in SA No. 285 of 2024, before the Hon’ble DRT, Coimbatore and the same was posted for hearing on 16.04.2024. Further, it is submitted that in the meantime, the Defendant Bank suppressing all the above facts had approached the Ld. CJM, Dindigul and filed a petition u/s. 14 of the SARFAESI Act and obtained an Order dated 01.04.24 in Crl. M. P. No. 1653 of 2024 and an Advocate Commissioner was also appointed for taking Physical Possession of the Schedule Mentioned Properties. Aggrieved over the same, the Applicants are filing the present Application among the following and other

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Main Grounds: -

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i) The Order passed by the Ld. CJM, Dindigul in Crl.M.P.No. 1653 of 2024 dated 01.04.24 is liable to be set aside. ii) The classification of NPA during covid-19 pandemic period is illegal and bad in law and hence all the further proceedings initiated by the Defendant is not legally sustainable. iii) The Defendant ought to have seen that the Applicants are eligible for renewal/restructuring of the loan account in view of the RBI guidelines issued during Covid-19 Pandemic. iv) The Defendant Bank had not affixed the Possession Notice on the conspicuous part of the properties, and not published the same in two leading newspapers as contemplated under the Rules.

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v) The Ld. CJM, Dindigul ought to have seen that the Applicants have paid Rs. 20,00,000/- towards compliance of the conditional order passed in SA No. 503 of 2023 by the Hon’ble DRT, Coimbatore and the loan outstanding was drastically reduced to Rs. 26,53,754.68p. The above fact was suppressed by the Defendant Bank.

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vi) The Defendant had suppressed the material facts before the Ld. CJM, Dindigul and they have not filed any affidavit along with the Petition. vii) The Defendant Bank ought to have seen that the Applicants are not chronic defaulters as they had so far all together paid more than 2/3 of the amount after the issuance of Demand Notice by the Defendant.

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Therefore, it is prayed that this Hon'ble Tribunal may be pleased to set aside the entire SARFAESI Proceedings initiated by the Defendant Bank ending up with the order passed by the Ld. CJM, Dindigul in Crl.M.P.No. 1653 of 2024 dated 01.04.24

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Page 4 of 10

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SA No.304/2024

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SCHEDULE OF PROPERTY

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Item No. 1

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Palani Registration District, Palani Joint I Sub Registration District, Palani Taluk, Sivagiripatti Village, Palani Municipality limits, Palani Village in Survey No. 78/1 an extent of 0.30 Acres. In this extent of 1 3/8 cents, Survey No. 78/2 an extent of 0.10 acres. In this Western part an extent of 2 ½ cents, Survey No. 77 an extent of 0.85 acres. In this Northern side an extent 3/8 cent. Total extent of 4 ¼ cents or 4300 sq. lings or 1853 sq.ft within the following boundaries.

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North : East West Kurumbapatti road East : House belonging to Kamalathammal South : East West Road West : Item No. 2 property

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And the building constructed therein with doors, windows, electrical connection, water connection and all other appurtenances thereof Property tax assessment No. – 20408, SC. No -300

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Item No. 2

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Palani Registration District, Palani Joint I Sub Registration District, Palani Taluk, Sivagiripatti Village, Palani Municipality limits, Palani Village in Survey No. 78/1 an extent of 0.30 Acres. In this extent of 3 5/8 cents, Survey No. 78/2 an extent of 0.10 acres. In the middle part an extent of 3/8 cent. Total extent of 4 cents or 4050 sq. lings or 1744 sq.ft within the following boundaries.

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North : Kurumbapatti road East : Property belonging to Rajammal and Item No. 1 South : East West Road West : House belonging to Karuppayee.

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Within measurements,

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East West on the North - 43 lings East West on the South – 47 lings North South on the East – 100 lings North South on the West - 80 lings

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And the building constructed therein with doors, windows, electrical connection, water connection and all other appurtenances thereof. With the right to use all common usual pathways. Total extent of Item 1 and 2 – 3597 sq.ft.

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Page 5 of 10

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SA No.304/2024

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The Applicants have submitted the following List of documents in support of their claim in the SA, which are as follows:

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S.No.	Date	Details of documents
1.	29.03.2023	13(4)Possession Notice
2.	26.07.2023	InterimOrder inSA No. 503 of2023
3.	-	Payment Challans
4.	21.09.2023	FinalOrder inSA No. 503 of2023
5.	22.03.2024	AuctionSaleNoticeissued by theDefendant
6.	01.04.2024	Impugned Order passed by the Ld. CJM in Crl.M.P.No.1653 of2024

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3. On the other hand, the Counsel for the Defendant Bank appeared before this Tribunal and filed Vakalat, Reply Statement, Typed set of Papers & Additional typed set of papers wherein they mentioned that under the heading “Facts of the case”, the Applicants have categorically admitted the borrowal of loan & execution of loan documents & creation of mortgage & default in payment & receipt of the SARFAESI Notices.

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It is further submitted that the Defendant Bank strongly, vehemently & specifically denies each & every allegations under the heading “Facts of the case” & Grounds of the SARFAESI Application. The Applicants are put to strict proof of each and every one of the said allegations with valid & acceptable evidence. Most of the allegations are unwarranted so far as the matter-inissue is concerned. It is further submitted that the Applicants were not prompt in repaying the loan. Despite having sufficient means Applicants have not repaid the loan as per the Terms and Conditions and that the reasons so alleged by the Applicants for non-repayment of loan is not acceptable. Further, Bank never obtained any signature from the Applicants in any unfilled documents at any point of time. The Applicants have executed only duly filled up documents and A valid mortgage has been created in favour of the bank. The loan account of the Applicants is not eligible for enhancement and that the bank has never promised to enhance the loan limit. So, the question of not kept-up the promise does not & will not arise at all.

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It is further submitted by the Bank that he has mentioned the correct outstanding amount in its notices only as per the Statement of Accounts maintained by the Bank in regular course & conduct of the business and the amount claimed by the Bank is neither excessive nor incorrect. It is further stated that the Applicants have not remitted the principal & interest as per Terms and Conditions and that the Applicants failed to maintain the balance within the sanction limit and that the loan account of the Applicants is not in operation and therefore the account was rightly classified as NPA. The

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Page 6 of 10

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SA No.304/2024

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Applicants account was out of order and that the account was classified as NPA only as per the Norms & guidelines and that showing the Applicants’ loan account as NPA in the notice is neither arbitrary nor illegal. Further, the loan account was not declared as NPA during Covid period, whereas the loan account was declared as NPA well prior to Covid Pandemic.

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It is further submitted that it is not correct to allege that only after 90 days from declaring the account as NPA, Demand Notice can be issued, whereas the Bank can very well issue Demand Notice at any time after classifying the account as NPA. All the payments made by Applicants were duly credited in the loan account. Since there is a default in payment and since the account was classified as NPA, there is Cause of Action and that the notices are legally maintainable and that the notices are neither void-ab-initio nor abuse of process of law. The account was classified as NPA only as per the RBI norms and that the bank has justified in declaring the account as NPA. The Bank has further stated that the Bank has rightly followed the RBI guidelines & gazette notification and rightly declared the account as NPA and it is absolutely false to allege that for declaring the account as NPA, the said account must be non-operation for 6 months continuously; whereas a loan account will generally classified as NPA, if the interest or principal remains overdue for a period of more than 90 days and further an account will be classified as NPA if it is considered as “out of order” for a continuous period of 90 days and further the account will also be classified as NPA for various other reasons also as per the norms & guidelines of RBI.

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It is further submitted that it is not correct to allege that the Applicants have paid huge interest and that the major portion of the amount claimed by the Bank is only towards interest, whereas the fact remains that the amount paid by the Applicants are apportioned towards principal & interest as per the agreed Terms and Conditions. All the payments made by the Applicants were properly credited in the loan account and that the bank has not claimed the interest arbitrarily whereas the bank has charged interest only as per the contract. The Applicants have acknowledged the debt and that the bank has charged & claimed interest only as per the RBI guidelines. Further it is stated that the Applicants loan account was not eligible for restructure and that the Applicants are chronic defaulters and that it is not correct to allege that the Applicants have paid more than 2/3^rd amount after Demand Notice and that the action of the bank does not suffers from any error apparent of the face of record.

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It is further submitted that the Demand Notice & Possession Notice issued under SARFAESI Act is legally maintainable. The Possession Notice is affixed on the conspicuous part of the property and the bank has published

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Page 7 of 10

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SA No.304/2024

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the Possession Notice in two leading newspapers. Further it is stated that the petition filed by the bank before CJM contains all necessary details and that the bank has filed affidavit along with the petition and that the date of the notices mentioned in the CJM Petition are not contrary to the real facts.

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It is further submitted that the Applicants have not sent any reply to the 13(2) Demand Notice. Non sending reply to 13(2) Demand Notice is fatal to their case. Further, there is no procedural irregularity on the part of the CJM in passing its Order. Further it is submitted that only remedy available to the Applicants is to re-pay the entire dues to the Defendant Bank as per section 13(8) of the SARFAESI Act. The SARFAESI Application is not maintainable either in law or on facts. It is therefore prayed that this Hon'ble Tribunal may be pleased to dismiss the SARFAESI Application with cost and thus render justice.

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Main Typed set by Defendant Bank

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S.No.	Date	Particulars
1	19.11.22	Demand Notice with Postal Receipts & AD Cards & Return Covers
2	19.11.22	Demand Notice original Paper Publication in English daily
3	19.11.22	Demand Notice original Paper Publication in Tamil daily
4	29.03.23	Possession Notice with Postal Receipts & AD Cards & Return Covers
5	29.03.23	Possession Notice original Paper Publication in English daily
6	29.03.23	Possession Notice original Paper Publication in Tamil daily
7	29.03.23	Original Photographyshowingaffixture of Possession Notice
8	25.10.12	Memorandum of Deposit of Title Deeds

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Additional Typed set by Defendant Bank

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S.No.	Date	Particulars
1	19.11.22	Original Demand Notice with original Postal Receipts & original AD
		Cards & original Return Covers
2	29.03.23	Original Possession Notice with original Postal Receipts & original AD Cards & original Return Covers

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

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I. Whether the Applicants have been able to prove their case in their favour?

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II. Whether the Applicants are entitled to get the reliefs as prayed

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for?

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5. Having heard the parties and after going through the entire documents

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Page 8 of 10

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SA No.304/2024

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available on records, I find that the 1^st Applicant is a private company which is involved in scrap business for the past ten years. The 2^nd Applicant is the Managing Director of the 1^st Applicant Company. The 2^nd and 3^rd Applicants are the Guarantors to the loan obtained for a sum of Rs. 25,00,000/- (Rupees Twenty-Five Lakhs only) for business purpose of the 1^st Applicant in the year 2012. Initially, the Applicants were regular in repayment, however, due to the loss in the business, and due to Covid-19 and heavy financial problem, they could not repay the loan amount properly. Hence, the Defendant Bank classified the account as NPA on 31.12.2017 and proceeded under SARFAESI Act.

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I also find that thereafter the Defendant Bank issued a Demand Notice dated 19.11.2022 u/s. 13(2) of SARFAESI Act for a sum of Rs. 40,89,150.33p (Rupees Forty Lakhs Eighty-Nine Thousand One Hundred Fifty and paise Thirty-Three only). I also find that the Defendant Bank has filed original Demand Notice with Original Postal receipts & Original AD Cards & Original Return covers (Page nos. 1 to 12 of Bank’s Additional Typed set of papers). The Defendant Bank has also made Paper Publication of Demand Notice dated 19.11.2022 in both English and Tamil dailies on 08.12.2022 (Page nos. 11 & 12 of Bank’s Main Typed set of papers). I also find that the Applicants have not filed any evidence for having sent a reply/representation to the Demand Notice dated 19.11.2022 u/s. 13(3A) of SARFAESI Act. Thereafter, the Defendant Bank had issued a Possession Notice dated 29.03.2023 U/s. 13(4) of SARFAESI Act and filed original Possession Notice, original postal receipts & original AD cards & Original return cover (Page nos. 13 to 24 of Bank’s Additional Typed set of papers). I also find that the Defendant Bank has filed Original Paper Publication of Possession Notice dated 29.03.2023 in both English and Tamil dailies (Page nos. 21 & 22 of Bank’s Main Typed set of papers) and Original Photograph showing the affixture of Possession Notice on the property (Page nos. 23 to 25 of Bank’s Main Typed set of papers). I also find that the Defendant Bank has filed a copy of Memorandum of Deposit of Title Deeds dated 25.10.2012. I also find that the Applicants had filed a copy of the Impugned Order dated 01.04.2024 passed in Crl. M.P.No. 1653 of 2024

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Page 9 of 10

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SA No.304/2024

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by the Ld. CJM, Dindigul, wherein I do not find any irregularity as stated by the Applicants. Hence, this case has no merit and the Applicants failed to prove the case in their favour.

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In the result ,

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SA No. 304/2024 stands dismissed. No costs.

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Consequently, all pending IAs (if any) are also disposed of. No costs.

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Dictated to PA (DK), taken down, transcribed, typed by her, corrected and pronounced by me in the Open Court in this the 02^nd March 2026.

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sd/-

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(SEEMA SINHA) PRESIDING OFFICER

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Dictated & corrected by me

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sd/-

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(SEEMA SINHA) PRESIDING OFFICER

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Uploaded on 09.03.2026

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Page 10 of 10

Waldemar Mercantile Pvt. Ltd. v. Union Bank of India

Case brief

What is this about?

What did the court decide?

Waldemar Mercantile Pvt. Ltd. v. Union Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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