Allowed

Kannan v. Union Bank of India

DRT10 Aug 2026SA/319/2024

Case brief

AI extract

What is this about?

In a Securitization Application, the DRT set aside a Section 13(4) Possession Notice issued by the Union Bank of India because the description of the mortgaged property failed to include the required land boundaries and extent as mandated by SIE Rules Appendix IV.

What did the court decide?

Impugned Section 13(4) Possession Notice dated 04.05.2024 set aside; interim order of status quo granted on 14.06.2024 vacated.

Kannan versus Union Bank of India — Company and Corporate | DRT (2026)

SA No.319/2024

10.08.2026

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 10^th day of August, 2026

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Present: SMT. S.V. GOWRAMMA

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Presiding Officer

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SA No. 319 of 2024

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Mr. S. Kannan S/o Mr. Sourirajan No.109, 1^st floor Lakshmanasamy salai, KK Nagar Chennai – 600 078.

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Mr. S. Kannan Also at: Flat No. E 505, 5^th Floor, Block E, Phase No.1, Amarprakash temple waves, Kundrathur, Chennai – 600 069.

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…Applicant

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-Vs-

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The Authorised Officer, Union Bank of India, 51, Arunachalam Road, Opp Prasad film lab, Saligramam, Chennai – 600 093.

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…Respondent

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Counsels on record / appeared: Counsel for Applicant : Mr. Sakthivel G Counsel for Respondent : Mr. G.V. Anjaneya Babu

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ORDER ON SA 319 /2024

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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

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SA No.319/2024

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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 Possession notice dated 04.05.2024 admitting the availing of Housing loan of Rs. 27,00,000/- in the year 2016 and also mortgage of his property at Kundrathur village as security towards the credit facilities availed by the applicant.

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As the applicant was irregular in repayment, the bank has classified the loan account as NPA on 17.01.2014 and issued Demand notice dated 18.01.2024 followed by Possession notice dated 04.05.2024. The respondent bank has failed to serve the said notices and the applicant got knowledge about notices through the paper publication. Subsequently, the bank has published 30 days sale notice for sale of the schedule property and applicant is trying to regularize the loan account vide OTS proposal and undertakes to settle the account.

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It is contended that bank has failed to serve Demand Notice and Possession Notice and also failed to affix the possession notice on the property. Further, the bank has failed to mention the redemption clause available to applicant under Section 13(8) of Act in the possession notice and also failed to issue proper Section 13(4) Possession Notice under Rule 8(2) & 2(A) of SIE Rules. On these grounds, the applicant prays to set aside the Section 13(4) Possession Notice dated 04.05.2024.

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The respondent bank has filed a detailed counter contending that applicant availed Housing Loan of Rs.27,00,000/- in the year 2016 and also

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10.08.2026

mortgaged the property in favor of the respondent bank. The payments made by the applicant was duly credited into loan which is reflected in the statement of account and the applicant has defaulted in the repayment.

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It is submitted that the respondent bank has issued Section 13(2) Demand Notice dated 18.01.2014 which was willfully refused by the applicant as postal endorsement as “Unclaimed Returned to Sender” on 24.01.2024, hence Section 13[2] notice was published in Newspapers.

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The applicant has failed to discharge their entire liability and the respondent bank has issued Section 13(4) Possession Notice dated 04.05.2024 which the applicant refused to receive with an endorsement as “Unclaimed Returned to Sender” on 10.05.2024. Further, the respondent bank has affixed the notice on the property and also published in two Newspapers.

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The respondent bank has issued Sale notice under Rule 8 dated 21.05.2024 to the applicant which came to be returned with an endorsement as “No such person” and also published in Newspapers. The applicant has defaulted in the repayment and the loan account was classified as NPA in accordance with the RBI guidelines and also charged the rate of interest as per the agreed loan documents.

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It is submitted that the respondent bank has taken symbolic possession by affixing the notice on the property. In spite of opportunities given by the bank, the applicant has failed to discharge their entire liabilities and has failed to comply with the interim order dated 14.06.2024

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SA No.319/2024

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passed by this Tribunal. Hence, the respondent bank prays to dismiss the present SA.

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

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It is discernible from the records that the applicant has availed Housing loan of Rs.27,00,000/- in the year 2016 and also mortgaged his property as collateral security to secure the repayment of the credit facilities availed by the applicant which is undisputed fact by the applicant.

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Due to the default in the repayment, the respondent bank has classified the loan account as NPA on 17.01.2024 as per the RBI guidelines. After, classifying the loan account as NPA the respondent bank has issued Section 13(2) Demand Notice dated 18.01.2024 which is sent through RPAD and the same is returned with an endorsement as “Unclaimed”. Further, the Demand notice dated 18.01.2024 is also published in two Newspapers, one in “New Indian Express” (English) and another in “Dinamani” (Tamil) both dated on 31.01.2024.

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The respondent bank has proceeded further and issued Section 13(4) Possession Notice dated 04.05.2024 which is sent through RPAD and the same is returned with an endorsement as “Addressee absent”. Further, the possession notice is affixed on the property and published in two Newspapers, one in “The New Indian Express” (English) and another in “Dinamani” (Tamil) both dated on 05.05.2024.

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SA No.319/2024

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It is seen from the records that the respondent bank has issued the sale intimation notice dated 21.05.2024 and also submitted that the physical possession of the property was taken on 04.05.2024. The issuance of sale intimation notice was admitted by the applicant at Para No.3 of the present SA.

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The challenge to the Possession Notice dated 04.05.2024 is Firstly, that the respondent bank has failed to serve the statutory notices i.e., Demand Notice and Possession Notice to the applicant which is duly countered by the bank, the Demand Notice and Possession Notice were sent through RPAD and returned with an endorsement as “Unclaimed” and “Addressee absent” respectively, hence it is a deemed service under Section 17 of General Clauses Act 1977. Therefore, the contention of the applicant that the respondent bank has failed to serve Section 13(2) Demand Notice and Section 13(4) Possession Notice fails.

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Secondly, the respondent bank has failed to affix and publish the Possession notice in Newspapers as per Rule 8(1) and (2) of SIE Rules is contrary to documents produced by the respondent which clearly reflects that the bank has affixed the Possession notice on the property as per Rule 8(1) as evident from the photograph of affixture produced at Page No.10 of respondent’s counter and also published in two Newspapers as per Rule 8(2), one in “ The New Indian Express” (English) and another in “Dinamani” (Tamil) both dated on 05.05.2024 as evident from the paper publications produced at Page No.11 and 12 of respondent’s counter. Hence, the

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SA No.319/2024

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contention of the applicant with regard to the affixture and publication of Possession notice dated 04.05.2024 fails.

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Thirdly, the respondent bank has failed to issue Possession notice dated 04.05.2024 as per Appendix IV of Rule 8(1) and on perusal of description of the property in the Section 13(4) Possession Notice dated, it is evident that the there is no clear description of the schedule property and the property described as per Section 13(4) Possession Notice is extracted hereunder:

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Description of the property as per Possession Notice dated 04.05.2024:

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Apartment No. E505 in the fifth floor, Block No.E, Phase No.1 of the residential project Temple Waves with super Built up area 852 square feet along with the undivided share of land measuring to an extent of 320 sq.ft., of land in Survey Nos.707/1A, 707/1B, 707/3, 708/3, 727/1A & 1B, 709 Part 1, 726/1 & 2, 721/1 & 2, 710/1, 734 Part, 616/1, 728/1, 727/2, 728/2 Part Kundrathur Village Sriperumbudur Taluk Kancheepuram District.

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The property situated in the registration district of South Chennai and Sub Registration District Kundrathur.

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The respondent bank has failed to mention the entire extent of land on which the apartment is constructed on boundaries of the secured asset in the impugned Possession Notice dated 04.05.2024 which is in violation of Appendix IV of Rule 8(1) of SIE rules and the same is extracted hereunder for better adjudication,

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Rule 8(1):

Where the secured asset is an immovable property, the authorized officer shall take or cause to be taken possession, by delivering a possession notice prepared as nearly as possible in Appendix-IV to those rules, to the borrower and by affixing the possession notice on the outer door or at such conspicuous place of the property.

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Appendix IV

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…Description of the immovable property

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All that part and parcel of the property consisting of Flat No. …… / Plot No. …… In Survey No. …… / City or Town Survey No. …… / Khasra No. ……… within the registration sub-district …… and District ……

Bounded:

On the North by

On the South by

On the East by

On the West by

Hence, the description of the property as described in the Possession notice dated 04.05.2024 is not clear and the same is in violation of the Appendix IV of Rule 8(1) of SIE Rules. The property as described in the possession notice is not identifiable and the apartment cannot be identified on the extent of land constructed and the same is not full description of the property as per the format. Hence it is an irregularity in the measure under Rule 8(1) of SIE Rules, on this ground the present SA is only to be allowed.

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For the foregoing reasons, the impugned Section 13(4) Possession Notice dated 04.05.2024 is set aside.

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Resultantly, the present SA is allowed, Interim order of status quo granted on 14.06.2024 stands vacated, pending IAs are disposed of in terms of this final order. No order as to cost.

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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 10^th day of August, 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	Document No.
1.	Paper publication of 13(2) Notice published on 31.01.2024.	A-1
2.	Possession Notice dated 04.05.2024.	A-2
3.	30 days notice paper publication published on 01.06.2024.	A-3
4.	Statement of Accounts dated 15.01.2024	A-4

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LIST OF DOCUMENTS PRODUCED BY THE RESPONDENTS

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Sl. No.	Description of Documents	Document No.
1.	Demand Notice dated 18.01.2024	R-1
2.	Postal Endorsement dated 24.01.2024	R-2
3.	Copies of Newspaper Publication (2) dated 31.01.2024	R-3
4.	Possession Notice dated 04.05.2024	R-4
5.	Postal Endorsement dated 10.05.2024	R-5
6.	Photo of the affixture of Possession Notice	R-6

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SA No.319/2024

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7.	Copies of Newspaper Publication (2) dated 05.05.2024	R-7
8.	Sale Notice dated 21.05.2024	R-8
9.	Postal Endorsement dated 29.05.2022	R-9
10.	Copies of Newspaper Publication (2) dated 01.06.2024	R-10
11.	Statement of Accounts	R-11

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SCHEDULE OF PROPERTY

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All that piece and parcel of Apartment No.E505, in the fifth floor, Block No.E, Phase No.1 of the residential project temple waves with super built up area 852 square feet along with the undivided share of land measuring to an extent of 320 (three hundred and twenty) square feet of land in survey Nos.707/1A, 707/1B, 707/3, 708/3, 727/1A & 1B, 709 part, 709 part 1, 726/1 & 2, 721/1 & 2, 710/1, 734 part, 616/1, 728/1, 727/2, 728/2 part Kundrathur Village, Sriperumbudur Taluk, Kancheepuram district.

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The property situated in the Registration district of south Chennai and Sub-Registration district Kundrathur.

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

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Kannan v. Union Bank of India

Case brief

What is this about?

What did the court decide?

Kannan v. Union Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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