Dismissed

Mr B Sankaralingam v. City Union Bank Limited

DRT20 Jan 2026SA/369/2023

Case brief

AI extract

What is this about?

The court dismissed an application challenging a second sale notice under the SARFAESI Act. It upheld the bank's actions, noting due compliance with statutory procedures regarding demand, possession, and auction notices, finding no irregularities that would invalidate the sale.

What did the court decide?

Impugned second Sale Notice dated 07.06.2023 and subsequent sale held on 19.07.2023 are held valid and dismissed unless otherwise ordered.

Mr B Sankaralingam versus City Union Bank Limited — Execution and Attachment | DRT (2026)

SA No.369/2023

20.01.2026

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 20^th day of January, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SARFAESI APPLICATION No. 369 of 2023

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Mr. B. Sankaralingam, Son of Balasupramaniyam, Old No.17, New No.33, 1^st Street Kamaraj Nagar, Avadi, Chennai -600 071.

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Mrs. S. Chitra, Wife of Sankaralingam, Old No.17, New No.33, 1^st Street Kamaraj Nagar, Avadi, Chennai -600 071. ….Applicants

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-Vs-

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City Union Bank Limited, Registered Office at, No.24-B, Gandhi Nagar, Kumbakonam -612 001. Rep by its Authorized Officer, Mr. K.V. Sathya Narayanan, Chennai .….Respondent

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Counsels on record / appeared:

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Counsel for Applicant : M/s. R. Chittibabu Counsel for respondent : M/s. R. Sriram

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ORDER ON SA 369/2023

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The present Securitization Application [SA] is filed on 11.07.2023 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].

SA No.369/2023

20.01.2026

The applicant has challenged the Sale Notice dated 07.06.2023 and fixed sale on 19.07.2023 and the outstanding amount due as per Sale Notice is Rs.18,83,290/-

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Pleadings of the applicant:

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The 1^st applicant is the borrower; the 2^nd applicant is the coborrower availed two mortgage loans in the year 2019 vide loan A/c.No.501812080056706, 501812080057998, one loan of Rs.14 Lakhs by mortgaging Schedule “A” property and availed another loan of Rs.8 Lakhs by mortgaging schedule “B” property and created an Equitable Mortgage by way of Memorandum of Deposit of Title Deeds of the property dated 14.11.2019.

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It is submitted that the applicants agreed to repay the loan against the A schedule property at Rs.24,169/- for 91 EMI and paid an amount of Rs.14,23,000 till January 2022 without any default in the repayment. Further, the applicants have agreed to repay the loan against the B schedule property at Rs.14,165/- for 90 EMIs and till January 2022, applicants had paid an amount of Rs.1,43,000/- without any default in the repayment.

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Due to sudden downfall of their business during the period of November 2021 and January 2022, they become jobless and have no regular income to repay the dues on time to the loan agreement. The respondent suppressed the entire repayment of Rs.22,46,720/- made by the applicants to loan account.

SA No.369/2023

20.01.2026

The respondent issued Demand Notice dated 28.10.2021 under section 13(2) of the SARFAESI Act, demanding an amount of Rs.21,79,934/- with further penal interest due in the loan account. The applicants were shocked and surprise regarding the claim of penal interest, the interest claimed by the respondent which is not as per the term of the loan sanction order of the RBI guidelines.

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The 1^st applicant vide letter dated 17.02.2022 replied to notice under u/s.13(2) of the Act requested for consideration of the waiver of penal interest and reschedule of the payment of debts payable by them with simple interest as per RBI guidelines. The applicants agreed to repay the loan regularly in order to redeem property. But, the respondent having received it has not chosen to reply in terms of Sec.13(3a) of the Act.

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The respondent issued Possession Notice dated 07.01.2022 u/s.13(4) of the SARFAESI Act and the applicants paid some amounts in after receiving Possession Notice from the respondent. The Sale Notice dated 15.02.2022 fixing the sale fixed on 30.03.2022 between 11.00 am and 12.00 pm which is not properly affixed on conspicuous place in the property.

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The applicant challenged the sale notice dated 15.02.2022 in SA.141 of 2022 and the Tribunal granted conditional order against e- action sale notice dated 15.02.2022 on conditional payment, which the applicant deposited first 10% of outstanding amount and same has been

SA No.369/2023

20.01.2026

acknowledged by the bank and another second 10% of sale notice has not been deposited by the applicant due to health illness and second part of conditional amount paid 13.12.2022 case was disposed on 10.01.2023. Thus the applicants repaid loan a sum of Rs.2,40,000/- on 01.06.2023.

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The respondent issued second Tender Cum Auction Sale Notice dated 07.06.2023, under Rules 8(6) of the SIE Rules for realization of the debts, the tenders/bids shall be opened on 19.07.2023 at 12 to 1 p.m at the same address and respondent may dispossess them from the properties.

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In the grounds, it is contended that the respondent did not issue Sec.13(2) notice which the respondent impaired the statutory rights vested with the applicant under section 13(3-A) of the Act and respondent willfully suffocated the right of the applicant U/s.13(3-A), the possession issued by the respondent is bad in law.

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The bank has not followed the provisions of the Act and rules in taking measures in respect of the secured asset as there is no default in the account and made payment as directed by the bank. The principal loan amount and the claim of penal interest are against the law and not as per the terms of sanction. The respondent failed to follow the statutory mandatory procedure prescribed under Rule 8 of the SIE Rules, regarding the compliance of procedure under Rule 8(1) of the SIE rules.

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The respondent failed to obtain the valuation of the property from an approved valuer under the wealth tax Act. The reserve price at Rs.48

SA No.369/2023

20.01.2026

Lakhs fixed by the respondent is not reasonable and correct. The bank failed to offer an opportunity to the applicants for mobilize the funds to clear the dues. The procedural irregularities will render possession and sale notices invalid, hence applicants prays to set aside the Sale Notice dated 07.06.2023.

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Objections of the respondent bank:

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The respondent bank in their counter contend that the 1^st applicant along with Co-borrower availed an OSL Term Loan of Rs.14 Lakhs by mortgaging “A” Schedule property under loan A/c.No.501812080056706 in the year 2019. The applicant availed another OSL Term Loan of Rs.8 Lakhs by mortgaging “B” Schedule property under loan A/c.No.501812080057998 in the year 2019.

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The 1^st applicant being owner of the schedule properties created equitable mortgage by way of Memorandum of Deposited of Title Deeds in favour of the respondent. The applicant was irregular in the repaying the loan amount and a chronic defaulter. Due to continuous default in the repayment the loan account was classified as NPA on 12.09.2021 following the norm of RBI guidelines.

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The respondent issued Demand Notice dated 28.10.2021 under section 13(2) to the applicants, which is received and acknowledged by the applcaint in para 5 of the SA admitted the issuance of the notice demanding an amount of Rs.21,79,934/- the applicants have duly acknowledged.

SA No.369/2023

20.01.2026

It is submitted that the applicants neither settled the outstanding amount of Rs.21,79,934/- and also did not respondent to the said notice. The applicant’s claim that they have given a letter dated 17.02.2022 in response to Sec.13(2) notice is false and applicants are called to substantiate their claim by submitting necessary documents in proof of the same.

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The respondent issued Possession Notice dated 07.01.2022 which is received and duly acknowledged. Possession Notice published in two newspapers one in English and another one in Tamil and also affixed in the mortgaged properties following Rule 8 of the SARFAESI Act, the applicants in para 7 of the SA have admitted the issuance of the possession notice and also made some payments.

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The bank obtained valuation reports for both the properties and issued the Auction Sale Notice dated 15.02.2022 which was challenged in SA.No.141/2022 and the conditional interim order of stay to remit 10% of the sale notice within a period of three weeks and compliance of the same, a further 10% of the outstanding amount to be remitted towards the loan account which the applicants failed to comply with the condition order and SA was dismissed on 10.01.2023.

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It is submitted that the respondent issued the Auction Sale Notice dated 07.06.2023 fixing the E-Auction on 19.07.2023, the applicants have duly acknowledged the notice and auction sale notice was also

SA No.369/2023

20.01.2026

affixed on the properties and paper publication of the Auction Sale Notice was also effected in English and Tamil Newspapers.

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The 1^st applicants property is sold to Auction Purchaser, Mr. M.A. Mathew S/o of Varghese, 11, Radhakrishnan Street, NanthvinMettur, Kamaraj Nagar, Thiruvallur -600 071 for sale consideration of Rs.50,06,000/- and the sale certificate dated 02.08.2023 has been issued to the Auction Purchaser.

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It is seen that the loan A/c.No.501812080056706 reflects an outstanding balance of Rs.17,90,712.34 as on 14.02.2024 and another loan A/c.No.501812080057998 reflects an outstanding balance of Rs.2,77,094.47/- as on 14.02.2024. As the respondent have followed all the procedures in accordance with act 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 1^st applicant is the borrower availed CUB OSL Term Loan of Rs.14 Lakhs vide A/c.No.501812080056706 by mortgaging “A” Schedule property and applicant availed another CUB OSL Term Loan of Rs.8 Lakhs vide A/c.No.501812080057998 by mortgaging “B” schedule property and total amount of Rs.22 Lakhs as security towards the credit facility. To secure the credit facilities availed, applicant has executed the Memorandum of Deposit of Title Deeds of the property.

SA No.369/2023

20.01.2026

In fact the applicant does not dispute the availing of the facilities and the mortgage of the property including the default in the repayment. Due to continuous default in the repayment, the loan account of the applicant was classified as NPA on 12.09.2021.

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Subsequent to classification of the account as NPA, the bank has issued S.13(2) Demand Notice dated 28.10.2021, where the 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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The Sec.13(2) Demand Notice is sent by RPAD which the applicant have received as per the Acknowledgement card produced at Pg.8-9 of counter. In spite of receipt of Sec.13(2) demand notice, as the borrower and the guarantor did not liquated the liabilitywithin the period of 60 days and nor raised any objections to the demand made by the respondent bank. The respondent issued the Sec.13(4) Possession Notice on 07.01.2022 which was admitted to be received by the applicant and Possession Notice is also published in two newspapers one in English “Deccan Chronicle” and another one in Tamil “Dinakaran” both dated 07.01.2022 and affixture of possession notice produced at pg.16 evidences due service of possession notice.

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It is an admitted fact that applicant has not challenged the Sec.13(4) possession notice dated 07.01.2022 within the period of 45 days as required under section 17(1) of the SARFAESI Act. However, the

SA No.369/2023

20.01.2026

respondent have establish the due compliance of the procedure in issuing the statutory notices with supporting documents resulting in upholding the Sec.13(2) Demand Notice dated 28.10.2021 and 13(4) Possession Notice dated 07.01.2022 as valid notices issued under the Act and Rules.

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It is seen that the Auction Sale Notice dated 15.02.2022 was issued to the applicants which is challenged in SA.No.141/2022 before the Tribunal and Hon’ble Tribunal passed a conditional order directing the applicants to remit 10% of the sale notice amount within a period of three weeks and compliance of the same, a further 10% of the outstanding amount to be remitted towards the loan account. The applicants failed to comply with the condition order and SA was dismissed on 10.01.2023.

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The respondent issued the 2^nd Auction Sale Notice dated 07.06.2023 after complying the procedure prescribed under the Rules. The E-Auction was fixed on 19.07.2023, the applicants have duly acknowledged and Sale Notice is also published in two newspapers one in English and another one in Tamil both dated 07.06.2023 respondent produced at Pg.34 and 35,and affixture of sale notice produced at pg.36 evidences due service of sale notice.

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The sale was successfully held conducted on 19.07.2023 and successful bidder Mr. Mathew has bid the property for Rs.50,06,000/- and on completion of payment of the complete sale amount, the sale certificate is issued on 02.08.2023 the outstanding amount due Rs.17,90,712.34/-due as on 14.02.2024. The respondent bank have

SA No.369/2023

20.01.2026

complied with all the guidelines of the RBI and the SARFAESI Proceedings and have conducted the auction and after following all the procedures.

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Thus, it is seen from the records that after classifying the account as NPA Sec.13(2) Demand Notice dated 28.10.2021 and Sec.13(4) Possession Notice dated 07.01.2022 is issued. In spite of receipt of statutory notices as the borrower and mortgagor failed to liquidate the entire outstanding liability due, the respondent issued sale notice dated 15.02.2022 which is challenged in SA.No.141.2022 and the SA came to be dismissed as applicant did not comply with the interim order. The present SA is filed challenging the 2^nd sale notice dated 07.06.2023 and applicant has failed to establish any irregularity in the measures and also in the sale held pursuant to sale notice dated 07.06.2023. The respondent have established the due compliance of the procedures as mandated under the Act and the Rules in conducting the sale on 19.07.2023 and in issuing the sale certificate dated 02.08.2023.

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Therefore, the Tribunal concludes the measure taken by the respondent bank in issuance of Section 13(2) Demand Notice dated 28.10.2021 and Section 13(4) Possession notice dated 07.01.2022 are held as valid notices and the sale notice dated 07.06.2023; sale held on 19.07.2023 and Sale Certificates dated 02.08.2023 issued favoring auction purchaser are in accordance with the procedures as required under the Act and Rules made thereunder and same are held as valid measures.

SA No.369/2023

20.01.2026

For the foregoing reasons, the present SA is dismissed. Interim Order granted, if any stands vacated, pending IAs are disposed of in

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terms of this final order. No order as to cost. 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 20^th day of January, 2026)

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ANNEXURES

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LIST OF DOCUMENTS PRODUCED BY THE APPLICANT

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Sl.	Description of Documents	Documents
No.		No.
1.	Payment Challan dated 01.06.2023.	A-1
2.	Sale Notice dated 07.06.2023.	A-2

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LIST OF DOCUMENTS PRODUCED BY THE RESPONDNET

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Sl. No.	Description of Documents	Documents No.
1.	Demand Notice U/s 13(2) of the SARFAESI Act dated 28.10.2021.	R-1
2.	Copy of duly signed acknowledgement cards in respect of Demand Notice.	R-2
3.	Possession Notices U/s 13(4) of the SARFAESI Act for schedule mentioned properties dated 07.01.2022.	R-3
4.	Paper publications of Possession Notice dated 07.01.2022.	R-4
5.	Photograph of Possession notice affixed in the properties.	R-5
6.	Valuation Reports for Schedule mentioned properties dated 12.04.2023.	R-6
7.	Impugned Sale cum Auction Notice issued by Respondent Bank dated 07.06.2023.	R-7
8.	Paper Publications of Impugned Sale cum Auction Notice issued by Respondent Bank dated 07.06.2023.	R-8
9.	Photograph of Impugned Sale Cum Auction Notice affixed in the properties.	R-9
10.	Sale Certificate dated 02.08.2023.	R-10

SA No.369/2023

20.01.2026

A- SCHEDULE OF PROPERTY

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All that pieces and parcel of land now existing and superstructure there to be put up in South Chennai Registration District, Thiruvallur District, AvadiTaluka, Avadi Sub Registration District, No.26 Paleripattu Village, GrammaNatham Survey No.1/1, an extent of 1312 1/2 Sq.ft., site on Southern side out of 2625 sq.ft., site, and its thereabouts an follows:

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Bounded on The:

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North by : Property belonged to Mr. Mani Purchased from Mrs. Mangammal South by : Kamaraj Nagar 1^st Street, East by : 5 feet Pathway and House and site of Mr. Moorthy purchased from Mr.Govindhasami West by : 2 1/2 feet Pathway and House and site belonged to Mrs. Rani purchased from Mr. Chelladurai. Measurements

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Measurements:

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East to West : 35 Feet, On Northern Side : 35 Feet, On Southern Side North to South : 75 Feet, On Eastern Side : 75 Feet on Western Side.

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B- SCHEDULE OF PROPERTY

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All the pieces and parcel of land now existing and superstructure there to be put up in South Chennai Registration District, Thiruvallur District, AvadiTaluka, Avadi Sub Registration District, No.26 Paleripattu Village, GrammaNatham Survey No.1/1, an extent of 1312 1/2 Sq.ft., site on Northern side out of 2625 sq.ft., site, and its thereabouts an follows:

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BOUNDED ON THE:

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North by : Property belonged to Mr. Mani Purchased from Mrs. Mangammal

SA No.369/2023

20.01.2026

South by : Property of Mr. B. Shangaralingam (item -1) East by : 5 feet Pathway and House and site of Mr. Moorthy Purchased from Mr.Govindhasami West by : Pathway and House and site belonged purchased from Mr. Chelladurai.

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Measurements:

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East to West : 35 feet on Northern side : 35 feet on Southern side North to South 37 1/2 feet on Eastern side : 37 1/2 feet on Western side in total Item No.1 and 2 in 2625 sq.ft. House Site.

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

Mr B Sankaralingam v. City Union Bank Limited

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Mr B Sankaralingam v. City Union Bank Limited

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