Dismissed

Sanjana Metalware India Pvt. Ltd. v. Deustche Bank

DRT21 Jul 2026SA/318/2025

Case brief

AI extract

What is this about?

Debts Recovery Tribunal dismissed the securitization application challenging a Section 14 order. The court held that the bank complied with statutory requirements regarding CERSAI registration, Demand Notice service, and asset classification, finding no procedural infirmities.

What did the court decide?

Securitization Application No. 318/2025 dismissed; interim orders vacated; pending applications disposed of in terms of the final order.

Sanjana Metalware India Pvt. Ltd. versus Deustche Bank — Company and Corporate | DRT (2026)

SA No.318/2025

21.07.2026

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 21^st day of July, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SARFAESI APPLICATION No. 318 of 2025

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M/s. Sanjana Metalware India Pvt Ltd., Represented by its Director R. Selvaraj, Having office at Unit No.1, 21-H, Sidco Industrial Estate, Ambattur, Chennai -600 098, Tamilnadu. ….Applicant -Vs-

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The Authorised Officer, M/s. Deutsche Bank AG, Thousand Lights Branch, No.4-4A, Western Tower, Sunny Side, Shafi Mohammad Road, Chennai -600 006. ….Respondent

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Counsels on record / appeared:

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Counsel for Applicant : M/s. S. Vignesh, R. Revanth Kumar Counsel for respondent : M/s. T.K.M. Sai Krishnan

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ORDER ON SA 318/2025

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The present Securitization Application [SA] is filed on 06.05.2023 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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The applicant has challenged the Sec.14 order dated 18.12.2019 in Crl.M.P. No.4838 of 2019 passed by Chief Metropolitan Magistrate, Egmore, Chennai and the outstanding amount due as per Sec.14 order is Rs.3,74,49,236.50/-

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It is the case of the Applicant M/s. Sanjana Metalware India Pvt ltd., represented by its Director R. Selvaraj had availed a Loan Against Property a sum of Rs.4 Crores vide Loan A/c. No. 300027592180019 from the respondent bank on 25.02.2016 for the expansion of the applicant’s business.

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3.1 The property more fully described in the Schedule hereunder was extended as security for the repayment of the above credit facility by depositing the title deeds pertaining to the subject property with the Respondent Bank. The Applicant had also executed a Memorandum of Deposit of Title Deeds vide Doc. No. 323/2016, in favour of the Respondent Bank.

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3.2 It is submitted that the Term Loan was repayable in 180 EMIs of Rs.4,54,639/-, commencing from 05.04.2016, the Applicant was regular in making payments towards the credit facility until the global recession and stagnation in the gulf market, which adversely affected the Applicant's business, resulting in delays in repayment towards the credit facility.

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3.3 It is contended that the applicant requested for a moratorium period of two years be granted for repayment of the dues under the above credit facility and not to take any coercive measures till then. However, the applicant were shocked and surprised, the Respondent has initiated measures under the SARFAESI Act, informing the Applicant that the loan account was classified as NPA on 07.05.2019. The classification has been done mechanically in a hurried manner.

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3.4 The Applicant came to know about the order dated 18.12.2019 passed by the Ld. CMM, Egmore, Chennai in Crl.M.P. No. 4838/2019 U/s.14 of the Act only when the Authorized Officer of the Respondent informed the Applicant over the phone and called upon Director of the Applicant to either settle the loan account or hand over the possession of the subject property on or before 30.04.2023, failing which the Respondent would take physical possession after obtaining an extension of time from the Ld. CMM. However, neither the respondent nor the Advocate Commissioner served any written notice upon the Applicant or the Guarantors informing them of the impugned order.

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3.5 It is contended that in the Sec.14 order passed by the Ld. CMM, Egmore, it is mentioned that the Respondent had issued a Demand Notice dated 31.05.2019 claiming an outstanding amount of Rs.3,74,49,236.50/as on 31.05.2019. However, the Demand Notice was not served upon the Applicant. Further, without issuing a proper Demand Notice under the provisions of the SARFAESI Act, the Respondent had illegally obtained the order dated 18.12.2019 from the Ld. CMM, Egmore. The Respondent has failed to comply with the mandatory conditions as prescribed U/s.14(1)(b) of the Act.

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3.6 The applicant contended that the respondent can initiate the measures under the SARFAESI Act only after the registration of the security interest before the central registry and as the respondent have not registered the charge in the central registry they cannot proceed under the SARFAESI Act.

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3.7 It is submitted that the respondent had failed to mention the total claim of the respondent as on date of filling of the Sec.14 application in violation to section 14(1)(i) of the Act. Further, the entire proceedings initiated by the respondent are illegal, unjust, and contrary to the SIE Rules, and the intention of the respondent is to somehow or other to sell the properties for unjust price to cover up its outstanding dues. The total outstanding amount and the demand made by the Respondent are illusory, exorbitant and not in conformity with the terms of the agreement and therefore is illegal. The Respondent has failed to give due credit to the various payments made towards the loan account.

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3.8 It is further submitted that the Applicant had availed credit facilities from two other financial institutions, namely M/s. Fullerton India Private Ltd. for a sum of Rs.2 Crore and M/s. HDB Financial Services Limited for a sum of Rs.4,74,80,855/-. Owing to business turmoil, those two accounts also slipped into NPA. However, over a period of time, the Applicant managed to settle the loan facility availed from M/s. Fullerton India Private Ltd. on 06.02.2023 and settled the credit facility with M/s. HDB Financial Services Limited on 20.03.2023.

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3.9 The Applicant submits that the schedule property is the dwelling house of the Director and the Guarantor, and that they will suffer severe hardship and mental agony if the Respondent takes physical possession of the property. On these grounds, the applicant prays to set aside the Sec.14 order passed by Ld. CMM, Egmore.

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The respondent bank has filed a detailed counter contending that the Applicant, along with the co-borrowers, had availed Loan Against Property for a sum of Rs.4,00,00,000/- vide Offer Letter dated 25.02.2016 under Loan Account No. 300027592180019 from the respondent bank.

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4.1 The title deeds of the schedule mentioned property were deposited with the Respondent Bank for the purpose of creating an Equitable Mortgage, and further the Applicant, along with the co-borrowers, had executed the necessary documents as security for the loan facilities sanctioned and disbursed by the Respondent Bank.

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4.2 The Applicants defaulted in the repayment of EMI amounts and failed to adhere to the terms and conditions of Loan Agreement in spite of many reminder calls given to the applicant. Hence, the loan account was classified as NPA on 07.05.2019 in accordance with Section 2(o) of the SARFAESI Act.

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4.3 The Applicants did not make any repayment to regularize the loan account. Hence, the Bank has issued Demand Notice U/s.13(2) dated 31.05.2019, to the applicant and co-borrowers, calling upon them to discharge their legitimate liability for a sum of Rs.3,74,49,236.50/- as on 06.05.2019. The demand notice was duly served upon the applicant and co-borrower and service was completed as envisaged in Rule 3(1) of the SIE Rules.

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4.4 It is submitted that whatever amount paid by the applicant has been given credit to the loan account by the respondent bank and the same is

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reflected in the statement of Accounts of the applicant. The interest rates are in accordance with the terms and conditions of the loan agreement, which was expressly executed and accepted by the applicant.

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4.5 The Authorized Officer, as defined U/s.2(a) of the SIE Rules, exercised the power to initiate SARFAESI proceedings on behalf of the respondent bank against the borrowers for recovery of the outstanding amount legitimately due and payable to the respondent bank.

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4.6 The Applicants made false statements in their affidavit before this Tribunal with the intention to mislead for wrongful gain in accordance with the Judgment of the Hon’ble High Court of Madras in order dated 11.10.2017 in W.A.No.367 of 2017 M. Lilly Vs District Collector .

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4.7 As no payments were forthcoming, the respondent bank proceeded further and had approached the Ld. CMM, Egmore by filing an application U/s.14 of the Act. The Court, vide order dated 18.12.2019 passed in Crl.M.P. No. 4838 of 2019, appointed an Advocate Commissioner to take possession of the schedule mentioned property. The sec.14 order was passed only after considering all the evidentiary documents submitted by Authorized Officer of the respondent bank. It is pertinent to note that the respondent bank meticulously followed all the procedures in accordance with the provisions of law.

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4.8 It is submitted that, as observed and held by the Hon’ble Supreme Court in the case of NKGSB Cooperative Bank Limited vs. Subir Chakravarthy & Ors. (Civil Appeal No. 1637 of 2022), decided on

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25.02.2022, the steps taken by the CMM/DM while taking possession of the secured assets and the documents relating thereto is a ministerial step.

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4.9 It is submitted that the borrower need not be put on notice by the court before passing the order U/s.14 of the Act, as the said order is only a ministerial order and not a judicial order. Hence, the order dated 18.12.2019 in Crl.M.P.No.4838 of 2019 passed under Sec.14 of the SARFAESI Act does not suffer any legal infirmities, as alleged by the applicant.

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4.10 It is evident that the schedule mentioned property was mortgaged with the respondent bank, and the respondent bank had full right to initiate SARFAESI action over the property if the applicant defaults in repayment of the loan facility. Despite being provided sufficient opportunities by the respondent bank to settle or regularize the loan account, the applicant and co-borrowers miserably failed to prove their bona-fide by repaying the legitimate amount due and payable to the respondent bank. Hence, the applicant cannot make any bald allegations against the respondent bank for initiating SARFAESI proceedings in accordance with law.

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4.11 The respondent bank has duly followed all the measures under the Act and therefore, the respondent bank prays for dismissal of the SA.

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

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It is manifest from the records that the applicant, along with the coborrowers, had availed a loan against property for a sum of Rs.4 Crores under A/c.No.300027592180019, vide offer letter dated 25.02.2016. The applicant had agreed to repay the loan as per the terms and conditions of sanction and also mortgaged the property as security towards the credit facility availed, M/s. S. Lakshmi has executed the Memorandum of Deposit of Title Deeds has been registered vide Doc.No.323 of 2016 which is seen from the Sec.14 order.

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5.1 The equitable mortgage is registered before the Central Registry dated 08.09.2023, and the respondent bank had filed CERSAI report duly evidencing registration of the security interest with the central registry which is produced at Pg.18-21 of counter.

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5.2 As the borrower and the co-borrowers defaulted in the repayment, the loan accounts were classified as NPA on 07.05.2019 as per the RBI guidelines. Subsequent to the classification, the respondent has issued Section 13(2) demand notice to the applicant and the co-borrowers on 31.05.2019 calling upon them to pay the outstanding amount of Rs.3,74,49,236.50/- due as on 06.05.2019 along with other charges.

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5.3 The Demand Notice clearly describes the types of loan availed, the nature of facility and the documents executed by the borrowers. Further the description of the properties is clearly mentioned in the S.13(2) demand notice.

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5.4 The Sec.13(2) Demand Notice is sent by RPAD, which the borrower and co-borrowers have received the same as per the Acknowledgement Cards produced at Pg.16 and 17 of counter. In spite of receipt of Sec.13(2) demand notice as the borrower and the guarantor did not liquated the liability within 60 days nor raised any objections to the demand made, the respondent bank has proceeded further under the Act.

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5.5 The contention of the applicants that Demand Notice is not served, is disproved by the respondent bank by producing Acknowledgement Cards evidencing service of Demand Notice to the borrower and co-borrowers. The respondent bank has also produced CERSAI Report evidencing registration with the Central Registry.

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5.6 Despite receipt of Demand Notice, as applicants did not come forward to repay the dues, respondent bank proceeded further under SA and had approached Ld. CMM for taking physical possession of secured asset.

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5.7 There are no infirmities in the procedure adopted by the respondent bank and the same is found to be in accordance with law. Accordingly S.13[2] demand notice dated 31.05.2019 and S.13[4] possession notice are held as valid notices issued in accordance with the Act and the Rules made under. The applicant has failed to make out any case of infirmities or violations in the S.14 Order or in the measures taken by the secured creditor under the Act.

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5.8 For the foregoing reasons, the present SA fails and accordingly SA stands dismissed. Interim Order granted, if any stands vacated, pending IAs are disposed of in terms of this final order. No order as to cost.

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Sd/-

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(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI

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( Dictated to Steno (Suriya), transcribed by him, corrected, signed and pronounced by me on this the 21^st day of July, 2026)

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ANNEXURES

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LIST OF DOCUMENTS PRODUCED BY THE APPLICANT

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Sl. No.	Description of Documents	Documents No.
1.	Affidavit filed by the respondent before the Hon’ble Chief Metropolitan Magistrate Egmore, Chennai in Crl.M.P.No.4838/2019 dated 09.09.2019.	A-1
2.	Petition filed by the respondent U/s.14 of SARFAESI, Act 2002 before the Hon’ble Chief Metropolitan Magistrate Egmore, Chennai in Crl.M.P.No.4838/2019 dated 09.09.2019.	A-2
3. L	Impugned order passed by the Hon’ble Chief Metropolitan Magistrate Egmore, Chennai in Crl.M.P.No.4838/2019 dated 18.12.2019. IST OF DOCUMENTS PRODUCED BY THE RESPO	A-3 NDNET
Sl. No.	Description of Documents	Documents No.
1.	Demand Notice issued U/s.13(2) of SARFAESI Act along with its Despatch Proof and Service Proof dated 31.05.2019.	R-1
2.	CERSAI Report dated 08.09.2023.	R-2

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SCHEDULE OF PROPERTY

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(As mentioned in the CMM Order)

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Property stands in the name of Mr. S. Lakshmi.

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Property being Flat No. 1 in the 4^th Floor, in Block - A of an area of 2665 Sq.ft., in the building known as "Rain Tree", (Including common areas along with two reserved covered car park) together with an undivided 1449.18 sq.ft., share of land in the total extent measuring 26 grounds 2376 sq.ft., comprised in R.S.No. 1553/1 of Mylapore Village, bearing Door No.21 (old No. 9), venus colony 2nd street Alwarpet, Chennai -600018 and the Land bounded on the:

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North by: Varadharajapuram Main Road

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South by: Venus colony 2nd street

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East by: Private passage leading to an Apartment Block "Venus Apartments" abutting Varadharajhapuram Main Road

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West by: Aashiana Residential complex

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Situated within the Sub- Registration District of Chennai Central and Registration District of Chennai Central.

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