Allowed

Mirunalini v. Bandhan Bank Limited

DRT27 Apr 2026SA/309/2023

Case brief

AI extract

What is this about?

The Tribunal set aside the impugned order passed by the CJM allowing possession under Section 14 of the SARFAESI Act. The Tribunal held that the CJM failed to verify mandatory documents and the bank failed to rebut the applicant's allegations regarding defective procedures.

What did the court decide?

The impugned order dated 28.06.2023 passed by the CJM is set aside. Expenditures incurred in obtaining the impugned order and possession notice are excluded from the loan account.

Mirunalini versus Bandhan Bank Limited — Contract and Commercial Disputes | DRT (2026)

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SA No. 309/2023

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI

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DATED THIS 27^th DAY OF APRIL, 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. 309/2023

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Mrs. Mirunalini, W/o John Kennedy, Old S. No. 366, New S. No. 655/14, Door No. 7/294, Kovil Street, Kamalapuram, Jambuduraikottai Village, Nilakkottai TK, Dindigul District – 624 202. --- Applicant

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-Vs-

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The Authorised Officer, Bandhan Bank Ltd.,

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Door No. 32, Sector – V, Salt Lake City,

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Kolkatta – 700 091.

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The Branch Manager, Bandhan Bank Ltd., Zion Towers, 1^st Floor, No. 39, Pandian Nagar, Bye-Pass Road, Kalavasal Junction, Madurai – 625 016.

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The Chief Judicial Magistrate, Dindigul, Dindigul District.

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--- Defendants

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Appearance of Advocates:

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Mr. P. Babu ---- Counsel for the Applicant 3^rd Defendant is none other than the Ld. CJM, Dindigul 1^st & 2^nd Defendant present and not filed Vakalat, etc.,

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This SARFAESI Application was heard in the presence of Counsel for the Applicant 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. 309/2023

O R D E R

1 . This Application has been filed u/s.17(1) of the SARFAESI Act, 2002 by the Applicant praying that this Hon'ble Tribunal may be pleased to set aside all the proceedings initiated under SARFAESI Act. (i.e) The Impugned Order in Cr. M.P. No. 8083/2023 dated 28.06.2023 passed by the 3^rd Defendant U/s. 14 of the SARFAESI Act, 2002.

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

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(i). The applicant submits that she has approached the 2^nd defendant and sought home loan for a sum of Rs.9,00,000/- on 30.03.2017. Considering the request made by the applicant, the 2^nd defendant has sanctioned housing term loan amount to a limit of Rs.9,00,000/-on 30.03.2017.

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(ii). It is submitted that the applicant has paid the loan dues as per the terms and condition of the loan agreements. The principal borrower has repaid the loan dues till the intervention of COVID-19 pandemic. Due to the lock down declared by the Central Government, the principal borrower could not run its business and suffered huge loss. In the result, the applicant could not make the loan dues as agreed. Hence, the 2^nd defendant declared the loan account of the applicant as NPA without following the reserve bank of India guideline.

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(iii). It is further submitted that the 2^nd defendant has issued demand notice dated 05.07.2021 under Sec.13 (2) of the Securitization And Reconstruction of Financial Assets and Enforcement of Security Interest act against the dwelling house and directed to pay a sum of Rs.11,18,570/-with subsequent interest and cost. The same was not served to the borrower. On receipt of the said demand notice, the applicant approached the 2^nd defendant and requested that she is ready to pay the irregular payment in a sum of Rs. 2,70,627/- and also requested to renew/restructure her loan amounts citing the Covid-19 Pandemic. The authorized officer also gave

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Page 2 of 8

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SA No. 309/2023

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assurance to the applicant that they will forward her genuine request to the higher authority for necessary approval. It is pertinent to note that instead of restructuring the said loan, the 2^nd defendant issued possession notice dated 08.10.2021 under Sec.13 (4) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest demanding a sum of Rs.11,18,570.73/ as on date 01.07.2021. The said possession notice was not affixed in the conspicuous part of the mortgaged property and the same was not published in two leading news paper within 7 days from the date of possession notice.

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(iv). The applicant submits that now she came to know that the 2^nd defendant has filed an application under sec.14 of the SARFAESI Act, 2002 before the defendant to take physical possession of the secured assets through advocate commissioner. The Hon'ble CJM, Dindigul was pleased to allow the said Criminal Miscellaneous petition No.8083/2023 under Sec. 14 of the SARFAESI Act, 2002 by its order dated 28.06.2023. It is submitted that the 1^st defendant failed to mention the outstanding balance payable by the applicant in the impugned order dated 28.06.2023 passed by the 3^rd defendant.

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“As per Sec.14 (b) forward such asset and documents to the secured creditor

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[Provided that any application by the secured creditor shall be accompanied by an affidavit duly affirmed by the authorized officer of the secured creditor, declaring that

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(i) the aggregate amount of financial assistance granted and the total claim of the Bank as on the date of filing the application”.

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(v). It is further submitted that order passed by the 3^rd defendant has wrongly passed the order mentioning the outstanding amount payable by the applicant in a sum of Rs.1,27,13,443/- instead of Rs.11,18,570/-. In the light of above, the impugned order passed by the 3^rd defendant ought to be set aside with exemplary cost. Hence this SARFAESI application is filed by the applicant before this Hon'ble Tribunal.

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SA No. 309/2023

GROUNDS

A) The impugned order dated 28.06.2023 passed by the 3^rd defendant under Sec.14 of the SARFAESI Act and the entire measures initiated under the SARFAESI act are arbitrary in nature, illegal, contrary to law, want for weight of evidence etc and thus liable to be set aside. The 1^st defendant failed to follow the procedures contemplated in the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and security interest rules and also failed to file affidavit before the 3^rd defendant. The bank has suppressed the entire facts before the 3^rd defendant and the action of the 1^st defendant obtaining the impugned order dated 28.06.2023 under Sec. 14 of the SARFAESI Act, seeking to proceed against the dwelling house claimed to be the secured assets is contrary to law, without jurisdiction, arbitrary and unreasonable, violative of the principles of natural justice and, also colorable exercise of power and the measures had been taken in unpredictable manners. The 1^st defendant failed to mention the outstanding balance payable by the applicant in the impugned order dated 28.06.2023 passed by the 3^rd defendant.

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B) Wrongful Classification of NPA: The defendant wrongly classified the applicants' account as Non-Performing Assets (NPA). The 1^st defendant has not followed the Reserve Bank of India guidelines while classifying the account as NPA. Further the defendant ought to have seen that the classification of the applicant loan account as NPA during the COVID -19 Lock Down is illegal, especially when the applicant paid the loan dues till the intervention of Covid-19 pandemic.

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C ) Non Compliance of Sec 13(2) & Sec 14: The 1^st defendant bank has failed to issue demand notice to the other borrower. The 1^st defendant bank has failed to affix the possession notice dated 08.10.2021 on the conspicuous part of mortgaged properties and failed to publish the possession notice in

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Page 4 of 8

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SA No. 309/2023

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two leading newspapers. The 1^st defendant has failed to register the alleged transaction registered with the Central Registry as per the Act & rules. It is submitted that the Authorized Officer is a Quasi Judicial Authority under the Act and hence the Authorized Officer name must be mentioned in the impugned order.

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D) Statement of account not furnished: The applicant further alleges that the 1^st defendant bank has not furnished the complete statement of account as the details of certain credits to the account are not reflected. Hence the 1^st defendant bank has to be directed to furnish complete statement of accounts. It is submitted that at the time of loan sanction, the 1^st defendant bank has obtained various signatures from the applicant blank papers and prefilled forms and he was kept in dark for which it could be used. Thus in the interest of natural justice, the bank is called for the entire documents available in its custody which it alleges to rely upon confirming the creation of the mortgage. The interest levied by the 1^st defendant bank is against the principles laid down in Reserve Bank of India Guideline rules.

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E) It is submitted that the 1^st defendant has mentioned a schedule of property in the demand and possession notice and in total contra to that they have mentioned the schedule of property wrongly in the impugned order passed by the 3^rd defendant. It is pertinent to note that in the impugned order the amount payable by the applicant as well as the schedule of property are totally wrong. Hence, the impugned order is not an executable one.

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As per Sec.14 (b) forward such asset and documents to the secured creditor: [Provided that any application by the secured creditor shall be accompanied by an affidavit duly

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(i) the aggregate amount of financial assistance granted and the total claim of the Bank as on the date of filing the application. It is submitted that order passed by the 3^rd defendant wrongly mentioned

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Page 5 of 8

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SA No. 309/2023

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the outstanding amount payable by the applicant in a sum of Rs. 1,27,13,443/- instead of Rs.11,18,570/-.

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The Applicant reserves her right to file additional grounds as and when necessary.

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SCHEDULE OF THE PROPERTY

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In Dindigul District, Dindigul Registration District, Chinnalapatti SubRegistration District, Nilakkottai Taluk, Jambudurai Kottai Village and Panchayat Kamalapuram, Natham Old S.No.366, New Natham S.No.655/49, D.No.7/294 a land and building bound on:

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North : East-West Street East : Natham Vacant site South : House of Veerappan West : Lane Street

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The measurements are on East-West 506 meter on the Northern side, 8 meter on the Southern side; North-South 10.06 meter on the Eastern side, 9 meter on the Western side, totaling 67 square meter.

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The Applicants have 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
1.	05.07.2021	Demand Notice U/s 13(2)of SARFAESI Act.
2.	08.10.2021	Possession Notice U/s 13(4)of SARFAESI Act
3.	28.06.2023	Order passed by 3^rdDefendant under Sec. 14 of
		SARFAESI Act.

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3 . On the other hand, the Defendant Bank did not appear before this Tribunal inspite of service of notices, hence this case was heard Ex-Parte.

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4. ON THE BASIS OF THE 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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SA No. 309/2023

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5 . Having heard the parties and after going through the entire documents available on records, and also after considering the arguments by the Counsels, I find that it is admitted fact that the Applicant has taken loan from the Defendant Bank but the Applicant failed to repay the loan amount as such the loan account has been classified as NPA. The Applicant in his averment stated that the Bank has issued Demand Notice u/s. 13(2) of the SARFAESI Act on 05.07.2021 and also issued Possession Notice u/s 13 (4) of the SARFAESI Act on 08.10.2021. Further, the Applicant stated that the Bank has failed to affix the Possession Notice on the conspicuous part of the property.

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Further, the applicant contended that the Bank has failed to follow the procedure contemplated in the SARFAESI Act. The Chief Judicial Magistrate, Dindigul has passed order in Cr. M.P. No. 8083/2023 on 28.06.2023 under Sec 14 of SARFAESI Act and he had failed to verify as to whether the provision of the Act has been followed by defendant bank or not. The CJM, Dindigul failed to see that the applicant does not contain the necessary particulars, annexure and affidavit which is mandatory. Hence, the order of CJM, Dindigul ought to have rejected the application.

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On the other hand, the Bank did not appear inspite of service of notice to rebut the allegation of the applicant by filing evidences.

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Further, the Applicant has not placed any material evidence before this Tribunal to substantiate his claim that the classification of loan account as NPA is wrong and rate of interest has been charged excessively against the guidelines of RBI.

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In view of the above facts and circumstances of the case and also in the light of provisions mentioned in the SARFAESI Act, I find that applicant’s allegations were not rebutted by the defendant bank by filing any

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Page 7 of 8

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SA No. 309/2023

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evidence in-spite of knowledge of this case, hence, this case is liable to be allowed.

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In the result,

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(a) SA No. 309/2023 is allowed as prayed for.

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(b) The Impugned Order passed by the Ld. CJM, Dindigul in Cr. M.P. No. 8083/2023 dated 28.06.2023 is hereby set aside.

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(c) All the expenditures incurred in obtaining the Impugned Order passed by the Ld. CJM, Dindigul in Cr. M.P. No. 8083/2023 dated 28.06.2023 and all the expenditures incurred in respect of issuance of Possession Notice dated 08.10.2021 etc. shall not be included in the loan account of the Applicant.

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(d) The 1^st Defendant Bank is at liberty to initiate fresh action against the Applicant as per the SARFAESI Acts & Rules. Consequently, all pending IAs (if any) are also disposed of. No costs.

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Dictated to Typist (SKP), taken down, transcribed, typed by her, corrected and pronounced by me in the Open Court in this the 27^th April, 2026.

Sd/-

(SEEMA SINHA)

PRESIDING OFFICER

Uploaded on 07.05.2026

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Mirunalini v. Bandhan Bank Limited

Case brief

What is this about?

What did the court decide?

Mirunalini v. Bandhan Bank Limited

Case brief

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