Dismissed

K Jayakumar v. Indian Bank

DRT25 Mar 2026SA/334/2023

Case brief

AI extract

What is this about?

An application under Section 17 of the SARFAESI Act challenging a Collector's order for physical possession was dismissed. The Tribunal found the applicant failed to prove the mortgaged land was agricultural and that the bank complied with procedural requirements.

What did the court decide?

Section 17 application dismissed with no costs; conditional stay order vacated; pending IAs disposed of.

K Jayakumar versus Indian Bank — Banking and Recovery | DRT (2026)

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SA No.334/2023

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI

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DATED THIS 25^th DAY OF MARCH, 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. 334/2023

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Mr.K.Jayakumar, Proprietor, M/s. Kathir Enterprises, Door No.5-l/52, New Colony, Singampunari, Sivagangai District. …. Applicant

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Vs 1. The Authorized Officer, Indian Bank, Singampunari Branch, 1- 101, Karaikudi Road, Singampunari, Sivaganga – 630502 …. 1^st Defendant Bank 2. Indian Bank Rep. by its Branch Manager, Singampunari Branch, 1 - 101 , Karaikudi Road, Singampunari, Sivaganga - 630502 …. 2^nd Defendant Bank 3. The Chief Judicial Magistrate, Sivagangai Sivagangai District …. 3^rd Defendant

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Appearance of Advocates: M/s. Vastlaw Associates ---- Counsel for the Applicant Mr. R.Pandivel ---- Counsel for the 1^st & 2^nd Defendants Bank 3rd Defendant is none other than the Ld. CJM, Sivagangai District

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SA No.334/2023

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This SARFAESI Application was heard in the presence of Counsels for the Applicant and the Defendant Bank and fixed for passing final order before me and upon hearing the arguments of both 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 u/s. 17 of the SARFAESI Act, 2002 by the Applicant praying that this Hon'ble Tribunal may be pleased to call for the records pertaining to the initiation of proceedings under the SARFAESI Act, 2002 ending up with the Order of the Chief Judicial Magistrate, Sivagangai dated 28.11.2022 in Crl.M.P.No. 7849/2022 and quash the same.

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

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a) The Counsel for the Applicant submitted that the Applicant is the Proprietor of M/s. Kathir Enterprises doing business of brick works. To develop the business activities, the Applicant approached the 2^nd Defendant bank and requested to provide credit facilities, and the 2^nd Defendant bank sanctioned an overdraft secure trade finance loan facility for a sum of Rs.39.90 lakhs by their sanction letter dated 20.08.2018. For the above loan transactions, the Applicant, his father M.Kathiresan, and his mother Mrs.Jayakodi stood as guarantors and offered the schedule mentioned agricultural property as collateral security. The Defendants, at the time of sanction, obtained signatures from the Applicant and the guarantors in prefilled forms and blank papers, and the Applicant was kept in the dark as to what purpose they have been used for.

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b) It is submitted that the Applicant was very prompt in repaying the loan amounts. But due to heavy financial problems and reasons beyond their control, the borrowers could not repay the loan amount properly and hence the repayment was a little bit irregular. In the meantime, the Applicant's business came to a standstill due to the COVID-19 pandemic and the continuous lockdown announced by the Central Government and State Government. Further, the Applicant's mother died due to the COVID-19 virus on 10.07.2020. The Ministry of Finance, considering the difficulties faced by the business circle owing to the global threat, has directed the banks not to proceed further against the NPA accounts and not to classify fresh NPA till the COVID-19 pandemic is under control, and also RBI has filed an affidavit before the Hon'ble Supreme Court of India to this effect. The 1st Defendant, without considering the various circulars issued by the Reserve Bank of India and the Ministry of Finance with regard to the bad impact of the COVID-19 pandemic, wrongly classified the Applicant's loan account as Non-Performing Asset (NPA) on 26.05.2021 and proceeded under the SARFAESI Act.

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c) It is submitted that subsequently the Defendant bank invoked the SARFAESI Act and issued a Demand Notice dated 10.11.2021 demanding a sum of Rs.46,19,767/- under Section 13(2) of the Act. It is submitted that subsequently the 1st Defendant, without withdrawing the earlier Demand Notice, issued yet another Demand Notice dated 03.03.2022 demanding a sum of Rs.48,47,509/- under Section 13(2) of the Act. The Defendants cannot invoke the SARFAESI Act since the schedule mentioned properties are agricultural lands which are exempted under Section 31(i) of the Act.

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d) It is submitted that the 1st Defendant went further and issued Possession Notices on 08.07.2022 and 14.07.2022 and took symbolic possession of the schedule mentioned properties under

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SA No.334/2023

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Section 13(4) of the Act. The 1^st Defendant has not strictly adhered to the Security Enforcement Rules, has not affixed the Possession Notices dated 08.07.2022 and 14.07.2022 on the outer side of the properties, failed to serve the same to all the parties concerned and failed to publish the same in two dailies within the prescribed time as per the rules. The Defendants cannot invoke the SARFAESI Act and take possession of the schedule mentioned properties since the same are agricultural lands which are exempted under Section 31(i) of the Act.

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e) It is submitted that the Applicant preferred a SARFAESI application challenging the Possession Notices dated 08.07.2022 and 14.07.2022 before this Hon'ble Tribunal in S.A. No. 311 of 2022. This Hon'ble Tribunal, by its order dated 26.08.2022, was pleased to grant interim stay on condition that the Applicant shall pay a sum of Rs.22.00 lakhs in two installments. But the Applicant could not comply with the conditional order due to his poor financial condition.

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f) It is submitted that the 1^st Defendant has issued another Notice of Intended Sale dated 10.07.2023 fixing the E-Auction Sale on 31.07.2023. The 1^st Defendant has undervalued the properties and brought the agricultural lands for sale, which they are not entitled to do under the SARFAESI Act. But the same could not be materialized for want of bidders.

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g) It is submitted that while so, the Applicant was shocked to receive a notice dated 19.07.2023 on 20.07.2023 from the Advocate Commissioner S. Karikalan stating that he has been appointed as Advocate Commissioner by the 3rd Defendant to take physical possession of the schedule property and that he has proposed to execute the warrant and take physical possession of the schedule properties on 27.07.2023. Only then the Applicant came to know

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SA No.334/2023

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that the 1st Defendant had obtained an order from the Chief Judicial Magistrate, Sivagangai in Crl.M.P. No. 7849 of 2022, appointing Advocate S. Karikalan as Advocate Commissioner for taking physical possession of the property. The 1^st Defendant has suppressed the nature of the property, which is agricultural land exempted under the Act, and obtained the Section 14 order. Though the Advocate Commissioner had fixed 27.07.2023 to take physical possession, he did not turn up on that day due to his personal reasons, but later on the Advocate Commissioner was trying to take physical possession of the property next week.

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h) It is submitted that hence the Applicant prefers the present Application under Section 17(1) of the SARFAESI Act against the order of the Chief Judicial Magistrate, Sivagangai dated 28.11.2022 in Crl.M.P. No. 7849 of 2022 before this Hon'ble Tribunal for the following and among other grounds.

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The impugned order of the Chief Judicial Magistrate, Sivagangai dated 28.11.2022 in Crl.M.P. No. 7849 of 2022 and the entire measures initiated under the SARFAESI Act by the 1^st Defendant are arbitrary, illegal, and against the provisions of the SARFAESI Act and the Security Interest (Enforcement) Rules.

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It is submitted that the Defendants failed to follow the procedures contemplated in the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and the Security Interest Rules.

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The 1^st Defendant cannot proceed under the SARFAESI Act and conduct the sale of the schedule mentioned property since the said property is an agricultural land which is exempted under Section 31(i) of the Act.

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SA No.334/2023

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The 1^st Defendant failed to consider the various judgments of the Hon'ble Supreme Court and various High Courts which categorically state that the banks cannot proceed under the SARFAESI Act with regard to agricultural lands.

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The 1^st Defendant failed to consider the fact that all the revenue records pertaining to the schedule mentioned property at the time of creation of mortgage and till now clearly show that the schedule properties are agricultural lands and therefore exempted under the Act. Even at the time of executing the Memorandum of Deposit of Title Deeds, the schedule property was an agricultural land and the revenue records clearly show that coconut and corn are cultivated in the said land and therefore they are exempted under the Act.

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Wrongful Classification of NPA: The Defendants wrongly classified the Applicant’s account as a Non-Performing Asset (NPA). The Defendants have not followed the Reserve Bank of India guidelines while classifying the account as NPA without affording an opportunity to regularize the account.

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Non-compliance of Section 13(2): The 1^st Defendant has failed to furnish all the particulars as mentioned in the Act and Rules in the Demand Notice. Further, the person who has issued the Demand Notice is not an authorized officer as contemplated under the Act. The 1^st Defendant is put to strict proof of service of the Demand Notice to all the parties concerned.

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The 1^st Defendant failed to serve 30 days’ Sale Notice to the Applicant and all the parties concerned. Further, the 1^st Defendant failed to affix the Sale Notice on the outer side of the schedule properties and failed to publish the same in two leading newspapers and failed to update the Sale Notice on the bank's official website as per the rules.

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Further, the person who has issued the Sale Notice is not an authorized officer as contemplated under the Act.

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The 1^st Defendant herein has filed the Application under Section 14 of the Act before the 3^rd Defendant, who without ascertaining all the facts and verifying all the documents, passed the impugned order directing the Advocate Commissioner to take physical possession, which is illegal.

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The Chief Judicial Magistrate Court, Sivagangai cannot pass the impugned order since the application filed under Section 14 of the SARFAESI Act by the 1^st Defendant is not supported by an affidavit signed by the Authorized Officer of the 1^st Defendant as laid down by the Hon'ble Madurai Bench of the Madras High Court in W.P. (MD) No. 12789 of 2016 in United Bank of India vs. District Collector, Madurai.

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The Chief Judicial Magistrate Court, Sivagangai has passed the impugned order without any application of mind and without considering the directions laid down by the Hon'ble High Court. The Chief Judicial Magistrate Court, Sivagangai failed to verify and note down the features and nature of the property to be physically taken.

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The impugned order under Section 14 has been passed beyond the period of 30 days from the date of Application as contemplated under the Act.

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The 2^nd Defendant bank has not mentioned the correct updated outstanding amount in the Section 14 application.

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The 2^nd Defendant bank has not followed the rules and procedures and the directions of the Hon'ble High Court while obtaining orders under Section 14 of the Act.

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The 3^rd Defendant has passed the impugned order without any notice to the Applicant and without hearing the Applicant's objections, which is against the principles of natural justice and against the principle of “Audi Alteram Partem”.

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The Applicant submits that the Defendants have failed to register the alleged transaction with the Central Registry as per Section 20 of the SARFAESI Act.

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The 1^st Defendant has obtained the impugned order without considering the impact and the loss caused by the spread of the COVID-19 pandemic and the continuous lockdown throughout the country announced by the Government authorities.

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Statement of Accounts not furnished: The Applicant further alleges that the Defendant bank has not furnished the complete statement of accounts as the details of certain credits to the account are not reflected. Even after the receipt of the Demand Notice, the Applicant has paid substantial amounts on various dates. Hence, the Defendant bank has to be directed to produce/furnish a complete statement of accounts.

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It is submitted that the Defendants failed to consider the payments made by the Applicant and also the Applicant’s request for regularization of the loan account.

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The Defendants have charged an excessive rate of interest than the agreed one and further they have charged penal interest which they are not entitled to do so.

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SA No.334/2023

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SCHEDULE OF PROPERTY

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Item No:1

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In Karaikudi Registration District, Singampunari Sub-Registrar Office, Thiruppathur Taluk, Kalappur Group, Kalappur (Ayan Village), Survey No. 279/2B – Dry Land, Extent: 0.57.50 hectares (1.42 acres).

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The boundaries of the property are as follows: On North : M.V.K. Sakthivel & M.V.A. Velusamy Punjai On South : Andiyappa Chettiyar Punjai On West : S.K. Chinnaiah Ambalam & Jeyakodi Punjai On East : S.R.S. Sethu Lakshmi Punjai

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Item No:2

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In Karaikudi Registration District, Singampunari Sub-Registrar Office, Thiruppathur Taluk, A. Kalappur Group, Kalappur (Ayan) Village, Survey No. 279/8A – Dry Land.

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Extent: 0.12.60 hectares (31 cents). Four Boundaries: North : Jeyakodi Punjai South : Andiappa Chettiyar Punjai East : S.K. Chinnaiah Ambalam & Jeyakodi Punjai West : Jeyakodi Punjai

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Item No:3

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In Karikudi Registration Distric! Singampunari Sub Registrar Office, Thiruppathur Taluk, A.Kalappur Group, Kalappur (Ayan) Village Survey No.279/1A- Dryland Now newly subdivided as 279/1B,

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Extent : 0.65.9 Hectares 1.63 acres Four Boundaries : North : S.No.282/8 SevugaperumalPunjai South : S.No.279/2B Jayakodi Purriai East : S.No.279/12 Alagapuri Punjai

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West : S.No.278/2B, Alagu Puniai

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The Applicant has submitted the following List of documents in support of her claim in the SA :-

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S.No.	Date	Description of Documents
1.	****	Patta, 'A' Register, Adangal, Kist receipt, Encumbrance Certificate, EB Connection, Certificate
2.	****	Photos
3.	12.03.2014	Deposit of Title Deeds
4.	10.11.2021	Demand Notice u/s. l3(2)
5.	03.03.2022	Second Demand Notice u/s. l3(2)
6.	08.07.2022	First Possession Notice u/s. l3(4)
7.	14.07.2022	Second Possession Notice u/s. l3(4)
8.	26.08.2022	Order of this Hon'ble Tribunal in S.A.No.311 of 2022
9.	19.07.2023	Notice issued by the Advocate Commissioner
10.	28.11.2022	Impugned Order under section L4 in Crl.M.P.No.78 49 of 2022 dated 28.1 1.2022

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3 . On the other hand, the Counsel for the 1^st & 2^nd Defendants Bank appeared before this Tribunal and filed a Vakalatnama, Written Arguments, Reply Statement, Typed set, Additional Typed set and Citation in which he has submitted that the claim of the Applicant is false & frivolous & baseless and he is not entitled to any relief as claimed in the SARFAESI Application. Hence, the SARFAESI Application has to be dismissed inlimine. Save those that are here-in-after expressly admitted all other allegations mentioned in the SARFAESI Application are denied as absolutely false & totally misleading and the Applicant is put to strict proof of every one of the said allegations.

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a) The Defendant Bank submitted that under the heading “Facts of the Case” of the SARFAESI Application, the Applicant has categorically

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admitted the borrowal of loan, execution of loan documents, creation of mortgage, default in payment, and receipt of the SARFAESI notices.

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b) The Defendant Bank strongly, vehemently, and specifically denies each and every allegation under the heading “Facts of the Case” and “Grounds” of the SARFAESI Application. The Applicant is put to strict proof of every one of the said allegations with valid and acceptable evidence. Most of the allegations are unwarranted so far as the matter in issue is concerned.

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c) The Defendant Bank strongly and vehemently denies the allegations under the heading “Facts of the Case” and “Grounds” of the SARFAESI Application stating that the bank has obtained signatures from the Applicant and guarantors in prefilled forms and blank papers, that the Applicant was very prompt in repayment of the loan, that due to heavy financial problems the Applicant was not able to repay the loan, that the account was wrongly classified as NPA during the Corona pandemic, that without withdrawing the earlier Demand Notice dated 10.11.2021 the bank issued another Demand Notice dated 03.03.2022, that the mortgage properties are agricultural properties, that the bank issued two Possession Notices dated 08.07.2022 and 14.07.2022, that the bank has not affixed the Possession Notice on the conspicuous part of the property and failed to publish the same in the newspaper, that the Applicant came to know of the order passed by the Chief Judicial Magistrate only through the notice issued by the Advocate Commissioner, and that the order passed by the Chief Judicial Magistrate and the entire measures initiated by the bank under the SARFAESI Act are arbitrary, illegal, and against the provisions of the Act and Rules.

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d) The Defendant Bank further denies the allegations that the bank has failed to follow the procedures contemplated under the SARFAESI Act and Rules, that the bank cannot proceed further under the SARFAESI Act since the properties are agricultural properties, that even at the time of executing the Memorandum of Deposit of Title Deeds the mortgage properties were agricultural properties, that the bank has wrongly classified the account as NPA, that the bank has failed to furnish all the particulars mentioned in the Act and Rules in the Demand Notice, that the bank has failed to serve the Demand Notice to all the parties, that the bank has failed to publish the Possession Notice in two leading newspapers and failed to affix the same on the conspicuous part of the property and failed to serve the Possession Notice through electronic mode, that the person who issued the Demand Notice, Possession Notice, and Sale Notice is not the Authorized Officer, that the bank has failed to serve 30 days’ Sale Notice and failed to affix and publish the Sale Notice and failed to update the Sale Notice on the bank’s official website, and that the Chief Judicial Magistrate passed the order without ascertaining the facts, without verifying all the documents, without noting the nature of the property, and without considering the directions of the High Court.

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e) The Defendant Bank also denies the allegations that the Chief Judicial Magistrate has passed the order beyond the period of 30 days from the date of application, that the bank has not mentioned the correct updated outstanding amount in the Section 14 petition, that the Section 14 petition filed by the bank is not supported by an affidavit, that the bank has not followed the Rules and Procedures and directions of the High Court, that the Chief Judicial Magistrate has passed the order without giving notice to the Applicant, that the bank has not furnished the complete statement of accounts, that certain payments made by the Applicant are not reflected, that the

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bank has failed to consider the payments made by the Applicant, and that the bank has charged an excessive rate of interest as well as penal interest. All these allegations are absolutely false, totally misleading, and highly unsustainable. The fact remains that the bank has not obtained any signatures either from the Applicant or from the guarantors on any blank papers and that the borrowers, guarantors, and mortgagors have executed only duly filled-up documents. The Applicant was not prompt in repayment of the loan, and the bank does not accept the reasons stated by the Applicant for non-repayment of the loan. The bank has rightly classified the account as NPA only as per the RBI guidelines. The mortgage properties are not agricultural properties. The bank has affixed the Possession Notice on the conspicuous part of the property and has also published the same in the newspapers. It is not correct to allege that the Applicant came to know of the order passed by the Chief Judicial Magistrate only through the notice issued by the Advocate Commissioner; the Applicant was well aware of the order passed by the Chief Judicial Magistrate even earlier. The entire measures initiated by the bank under the SARFAESI Act are neither arbitrary nor illegal nor against the provisions of the Act and Rules. The bank has followed all the procedures contemplated under the SARFAESI Act and Rules and is entitled to proceed further under the SARFAESI Act. The mortgage properties were not agricultural properties even at the time of execution of the Memorandum of Deposit of Title Deeds. The bank has furnished all the particulars mentioned in the Act and Rules in the Demand Notice and has served the Demand Notice to all the parties. The bank has published the Possession Notice in two leading newspapers and affixed the same on the conspicuous part of the property. Serving the Possession Notice through electronic mode is only optional and not mandatory. The person who issued the Demand Notice, Possession Notice, and Sale Notice is the Authorized Officer. The bank has served the 30 days’

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Sale Notice, affixed and published the Sale Notice, and updated the Sale Notice on the bank’s official website. The Chief Judicial Magistrate has passed the order only after ascertaining the facts, verifying all the documents, noting the nature of the property, applying his mind, and considering the directions of the High Court. It is not mandatory that the Chief Judicial Magistrate must pass the order within 30 days from the date of application. The bank has mentioned the correct outstanding amount in the Section 14 petition, and the petition filed by the bank is supported by the affidavit. The bank has followed all the Rules, Procedures, and directions of the High Court. It is not necessary that the Chief Judicial Magistrate must give notice to the Applicant and hear him before passing the order. The bank has furnished the statement of accounts to the Applicant “then and there”, “as and when” it was requested by the Applicant. All the payments made by the Applicant have been duly credited to the loan account. The bank has considered all the payments made by the Applicant and has charged interest only as per the contract and RBI guidelines. Therefore, the order passed by the Chief Judicial Magistrate cannot be set aside.

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f) The Defendant Bank submitted that it has issued a Demand Notice and the same was also duly served on the Applicant.

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g) The Defendant Bank submitted that it has taken symbolic possession of the property and issued a Possession Notice. The Possession Notice was duly served on the Applicant and affixed on the conspicuous part of the property, and the Possession Notice was also published in both a Tamil daily and an English daily within time.

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h) The Defendant Bank submitted that the bank has initially issued a Demand Notice dated 10.11.2021. Subsequently, when the bank came to know that the guarantors Thiru. Kathiresan and

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Tmt. Jeyakodi were reported dead, the bank issued a fresh Demand Notice dated 03.03.2022 to all defaulters including the legal heirs, and thereby the earlier Demand Notice stands withdrawn.

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i) The Defendant Bank submitted that initially the bank issued a Possession Notice dated 08.07.2022. In the said Possession Notice, the date of taking possession was mistakenly mentioned, which was a typographical and inadvertent error. Therefore, the Defendant bank issued a fresh Possession Notice dated 14.07.2022, and thereby the earlier Possession Notice stands withdrawn.

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j) The Defendant Bank submitted that the Applicant has not sent any reply to the Section 13(2) Demand Notice. Non-sending of a reply to the Section 13(2) Demand Notice is fatal to his case.

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k) The Defendant Bank submitted that there is no procedural irregularity on the part of the Chief Judicial Magistrate in passing the order.

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l) The Defendant Bank submitted that as per Section 14(3) of the SARFAESI Act, “No act of the Chief Metropolitan Magistrate or District Collector done in pursuance of Section 14 shall be called in question in any court or by any authority.” Therefore, the SARFAESI Application is not maintainable and is liable to be dismissed in limine.

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m) The Defendant Bank submitted that the Chief Judicial Magistrate is not adjudicating any matter; whereas the bank has sought the assistance of the Chief Judicial Magistrate for taking actual possession of the property, and therefore the order of the Chief Judicial Magistrate cannot be set aside.

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n) The Defendant Bank submitted that the right to challenge the order passed by the Chief Judicial Magistrate is hopelessly barred by limitation. The Hon'ble Chief Judicial Magistrate passed the order in the month of November 2022, whereas the SARFAESI Application was filed only in the month of August 2023, which is not within the limitation period of 45 days.

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o) The Defendant Bank submitted that the Applicant has filed S.A. No. 311 of 2022 challenging the Possession Notice and that this Hon'ble Tribunal has passed a conditional order of stay, and that the Applicant has not complied with the conditional order. The Applicant has not utilized the opportunity given by this Hon'ble Tribunal.

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p) The Defendant Bank submitted that the mortgage properties are not agricultural properties and that no agricultural activities have been carried on in the mortgage properties. When no agricultural activities have been carried on in the mortgage properties, they cannot be termed as agricultural properties. The mortgage properties are dry lands and the Registration Department has classified the mortgage properties as dry lands. Further, red brick manufacturing is functioning in the mortgage properties.

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q) It is pertinent to note that the Applicant has not issued any reply to the Demand Notice. Had he felt that the properties were agricultural properties, he ought to have sent a reply to the Demand Notice. Nonsending of a reply to the Demand Notice clearly indicates that the properties are not agricultural properties. Since the properties are not agricultural properties, the Hon'ble Chief Judicial Magistrate also passed orders for taking physical possession of the property.

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r) It is further pertinent to note that in the Memorandum of Deposit of Title Deeds, as well as in the Demand Notice and Possession Notice,

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the mortgage property is mentioned as dry land. Further, in the sanction ticket it is clearly mentioned that the activity of the Applicant is brick work, and it is also mentioned that there is a building in the mortgage property. In the Memorandum of Deposit of Title Deeds, it is also mentioned that an RCC workshop and weighbridge are situated in the mortgage property. Accepting the same, the mortgagors executed the Memorandum of Deposit of Title Deeds and countersigned the sanction letter.

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s) The Defendant Bank questions and disputes the authenticity of the Adangal enclosed by the Applicant in his typed set. It is pertinent to note that the Applicant has not produced Adangal from the Tahsildar for the past 10 years. Therefore, the mortgage properties are not agricultural properties and are not exempted under Section 31(i) of the SARFAESI Act.

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t) The Defendant Bank submitted that it has issued Sale Notices dated 27.09.2022 and 10.07.2023, but the Applicant has not challenged the said Sale Notices. Non-challenging of the Sale Notices is fatal to his case.

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u) The Defendant Bank submitted that there is no procedural irregularity on the part of the Defendant bank in issuing the Demand Notice, taking possession, issuing the Possession Notice, and obtaining an order from the Chief Judicial Magistrate under the SARFAESI Act and Rules. The alleged procedural irregularities mentioned in the SARFAESI Application are neither factually nor legally correct. The Defendant bank has issued the Demand Notice, Possession Notice, and obtained the order from the Chief Judicial Magistrate only as per the provisions and procedures of the SARFAESI Act and Rules. Hence, if the Chief Judicial Magistrate’s order is set aside, the Defendant bank will be put to untold hardship

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and irreparable loss and injury. On the other hand, no prejudice will be caused to the Applicant. The balance of convenience is only in favour of the Defendant bank.

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v) The Defendant Bank submitted that the Applicant is willfully, wantonly, and deliberately not repaying the loan amount despite having sufficient means to repay the loan, and that the main intention of the Applicant is only to drag on the proceedings without making any payment and to defeat, delay, and defraud the valuable rights of the Defendant bank. Therefore, the Hon'ble Tribunal cannot give shelter to a dishonest debtor like the Applicant who is invoking the SARFAESI Act as a weapon against the lawful actions taken by the Defendant bank, that too at the last minute. The Applicant is liable to pay the amount mentioned in the SARFAESI notices with subsequent interest and costs, and the same is public money. The Applicant who seeks equity must do equity by repaying the loan amount. Hence, in the interest of justice and in order to safeguard public money, the Hon'ble Tribunal has to reject the claim of the Applicant.

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w) The Defendant Bank submitted that the only remedy available to the Applicant is to repay the entire dues to the Defendant bank as per Section 13(8) of the SARFAESI Act.

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Hence, it is therefore prayed that this Hon'ble Tribunal may be pleased to dismiss the above Application with exemplary cost and thus render justice.

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Typed set of Papers filed by the 1^st Defendant Bank on

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03.04.2025

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S.No.	Date	Particulars
1.	10.11.21	Previous Demand notice with AD Cards
2.	03.03.22	Fresh Demand Notice with AD Cards
3.	08.07.22	Previous Possession notice

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4.	14.07.22	Fresh Possession Notice with AD Cards
5.	14.07.22	Possession Notice Paper Publication in English Daily "The New Indian Express" Published on.19.07.22
6.	14.07.22	Possession Notice Paper Publication in Tamil Daily "Dinamani" Published on 19.07.22
7.	14.07.22	Photographyshowingaffixture of Possession Notice
8.	12.10.22	Certified Copy of Petition filed by the bank before CJM Sivagangai
9.	12.10.22	Certified Copy of Affidavit filed by the bank before CJM Sivagangai
10.	28.11.22	Order passed by CJM Sivagangai in Crl.MP.7849122
11.	19.11.13	Adangal issued by VAO, Kalapur, for fasli 1422 (duringthe time of sanction)
12.	****	Classification of Land by Registration Department for fixingtheguideline value
13.	****	Photographyshowingthe entire mortgageproperty

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Additional Typed set of Papers filed by the 1^st Defendant Bank on 02.06.2025

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S.No.	Date	Particulars
1.	14.07.22	Possession Notice Paper Publication in English Daily "The New Indian Express" Published on 19.07.22(Original Paper Enclosed)
2.	14.07.22	Possession Notice Paper Publication in Tamil Daily "Dinamani" Published on 19.07.22 (Original Paper Enclosed)

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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 Applicant has been able to prove his case in his favour?

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II. Whether the Applicant is entitled to get the reliefs as prayed for?

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SA No.334/2023

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5 . Having heard the parties and after going through the entire documents available on record, this Tribunal finds that there is no dispute with regard to the availment of loan facilities by creating an equitable mortgage on his property. Since the Applicant failed to repay the loan amount, the loan account was classified as NPA. It is the contention of the counsel for the Defendant Bank that the Applicant, after availing the above-said loan facilities, failed to repay the outstanding loan dues regularly. The Applicant stated in the SA that due to severe financial problems and the COVID-19 pandemic, he was unable to pay the loan dues in time and that there is no wilful default in repayment of the outstanding loan dues. I also find that thereafter, the Defendant Bank classified the loan account as NPA on 26.05.2021, and I also find that neither the Applicant nor the Defendant Bank has submitted the statement of accounts in respect of the loan account.

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Thereafter, the Defendant Bank issued a Demand Notice under Section 13(2) earlier on 10.11.2021 for a sum of Rs.46,19,767/- (Rupees Forty Six Lakhs Nineteen Thousand Seven Hundred and Sixty Seven only), which was withdrawn since there was, inadvertently, a mistake in the facts in issuing the same to the Applicant by registered post with acknowledgement due. I also perused the documents filed by the Defendant Bank. The Bank has produced a photocopy of the Demand Notice along with the postal acknowledgment (AD) cards as proof of service on the Applicant, which are annexed at pages 01 to 08 of the Bank’s typed set of papers. Thereafter, another fresh Demand Notice dated 03.03.2022 was issued under Section 13(2) of the SARFAESI Act for a sum of Rs.48,47,509/- (Rupees Forty Eight Lakhs Forty Seven Thousand Five Hundred and Nine only) to the Applicant by registered post. I also perused the documents filed by the Defendant Bank. The Bank has produced a photocopy of the Demand Notice dated 03.03.2022 along with the postal acknowledgment (AD) cards as proof of service on the Applicant, which are annexed at pages 09 to 14 of the Bank’s typed set of papers.

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SA No.334/2023

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Thereafter, the Defendant Bank had issued a Possession Notice earlier on 08.07.2022, which was withdrawn since there was, inadvertently, a mistake in the facts in issuing the same. Thereafter, another Possession Notice dated 14.07.2022 was issued under Section 13(4) of the SARFAESI Act for a sum of Rs.51,27,569/- (Rupees Fifty One Lakhs Twenty Seven Thousand Five Hundred and Sixty Nine only), which was already challenged by the Applicant vide S.A. No. 311/2022, and the same was dismissed by this Tribunal vide proceedings dated 30.07.2024. Further, I find that there is no irregularity in the issuance of the Possession Notice dated 14.07.2022.

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Since the Applicant himself has admitted that he failed to comply with the conditional stay order passed by this Tribunal S.A. No. 311/2022, the stay granted was vacated and the Defendant Bank had obtained the impugned Chief Judicial Magistrate’s Order dated 28.11.2022 passed by the 3rd Defendant for taking physical possession of the property in Crl.M.P. No. 7849/2022. But the Applicant was unaware of the said order. However, the Applicant received the Advocate Commissioner’s notice on 19.07.2023 for taking physical possession on 27.07.2023. Challenging the same, the Applicant filed this SARFAESI Application. I have perused the order of the Ld. CJM dated 28.11.2022 in Crl.M.P. No. 7849/2022 and the Advocate Commissioner’s notice dated 19.07.2023 and I do not find any irregularities in passing the said orders. So, I find that the Defendant Bank has fully complied with the provisions mentioned under Section 14 of the SARFAESI Act.

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I also find that during the pendency of the case, this Tribunal passed a conditional stay order dated 22.08.2023, directing the Applicant to deposit a sum of Rs.22,00,000/- (Rupees Twenty Two Lakh Only) in two equal instalments. The Applicant has complied with the terms of the conditional order and thereby demonstrated his bona-fides.

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¶146

SA No.334/2023

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Further, the Defendant Bank issued a Sale Notice dated 10.07.2023 fixing the e-auction on 31.07.2023. Moreover, the Applicant in his pleadings admitted that the Sale Notice was issued by the Defendant Bank and the same could not be materialized due to want of bidders. Whereas the Defendant Bank in the reply statement stated that the Applicant has not challenged the said Sale Notice. I also find that neither the Applicant nor the Defendant Bank has submitted the said Sale Notice.

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The principal contention of the Applicant that the secured asset is agricultural land exempted under Section 31(i) SARFAESI Act has not been substantiated by acceptable evidence. On the contrary, the materials placed on record by the Defendant Bank, including the Adangal extract and the classification of the land by the Registration Department, indicate that the property has been described as dry land and that brick manufacturing activity is being carried on in the said property. The Applicant has not produced reliable revenue records demonstrating continuous agricultural operations in the property. In the absence of such evidence, this Tribunal is unable to accept the contention of the Applicant that the secured asset is agricultural land so as to claim exemption under Section 31(i) of the Act.

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The Applicant further contended that the Defendant Bank had not registered the mortgaged property in the Central Registry of CERSAI established under Section 20 of the Act. I also find that the Defendant Bank has not filed any CERSAI report evidencing the registration of the mortgage in the Central Registry of CERSAI to rebut the allegation made by the Applicant. On a perusal of the records, it is seen that the Applicant himself admitted in his pleadings that, at the time of execution of the Memorandum of Deposit of Title Deeds (MOD), the schedule property was an agricultural property. However, the Applicant has failed to produce any evidence to show that the mortgaged property is still under cultivation. The Applicant has merely enclosed certain photographs, without indicating

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Page 22 of 23

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SA No.334/2023

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when the photographs were taken. On the other hand, the Defendant has filed photographs showing that the mortgaged property is a dry land and is presently being used for a brick manufacturing unit. Moreover, agricultural properties are excluded from Mandatory registration in the CERSAI registry.

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Further, the Applicant has not placed any material evidence before this Tribunal to substantiate his claim that the rate of interest has been charged excessively against the guidelines of RBI. Further, he has not submitted any document to prove that he made representations to the Defendant Bank to furnish the copy of the Statement of Accounts.

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Under the above facts and circumstances of the case, this Tribunal is of the considered view that the Applicant has failed to prove his case and, on the other hand, I find that the 1^st Defendant Bank has followed the procedures for recovery of the loan amount under the SARFAESI Act, as such I do not find any merit in the above SARFAESI Application.

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In the result, the SA No.334/2023 stands dismissed with no costs. Consequently, all pending IAs (if any) are also disposed of.

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Dictated to MTS (KK), taken down, transcribed typed by him, corrected and pronounced by me in the Open Court in this the 25^th March, 2026.

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Sd/- (SEEMA SINHA) PRESIDING OFFICER

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Uploaded on 02.04.2026

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K Jayakumar v. Indian Bank

Case brief

What is this about?

What did the court decide?

K Jayakumar v. Indian Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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Cases cited

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