Dismissed

Rml Jewellery v. Bank of Baroda

DRT25 Jun 2026SA/377/2025

Case brief

AI extract

What is this about?

This Tribunal dismissed an application under Section 17(1) of the SARFAESI Act challenging an order of the Chief Metropolitan Magistrate granting possession of secured assets. The Tribunal held the CMM did not have adjudicatory powers under Section 14 and confirmed the order found no illegality since the bank had demonstrated compliance with affixation and publication requirements.

What did the court decide?

The Sale Application is dismissed and the order of the Chief Metropolitan Magistrate dated 08.05.2025 is confirmed. Parties to bear their own costs.

Rml Jewellery versus Bank of Baroda — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL – II AT CHENNAI

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Dated this 25^th day of June, 2026

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PRESENT: SHRI SHARANG DHAR UPADHYAY Presiding Officer

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SA No.377 of 2025

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M/s RML Jewellery Rep. by its Proprietor Ms. Revathi Mani, D/o D. Mani Registered Office at No.6/25, Lakshmi Nagar Mowlivakkam, Porur

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Chennai – 600 116

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Also at

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H. No.2/37, Indira Gandhi Second Street Chooleimedu, Chennai – 600 094

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D. Mani S/o K. Dakshinamoorthy H. No.2/37, Indira Gandhi Second Street Chooleimedu, Chennai – 600 094

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Latha Mani W/o D. Mani H. No.2/37, Indira Gandhi Second Street Chooleimedu, Chennai – 600 094 … Applicants

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Versus

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Bank of Baroda Represented by its Authorized Officer Mr. Prem Kumar. G Central Office at No.25, 1^st Street, Rangarajapuram Kodambakkam, Chennai – 600 024 … Respondent

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Counsel on Record / Appeared

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Applicants by : M/s S.C. Viswanath, M.K. Adhmapriyadharisini K.S. Gowtham Respondent by : Mr. E. Akshai Mani

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ORDER

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This petition is filed under Section 17(1) of the SARFAESI Act challenging the measures initiated by the respondent bank pursuant to the order of the Learned Chief Metropolitan Magistrate in Crl. M.P. No.4968 of 2025 dated 08.05.2025.

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Brief facts of the case as averred in the application

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The facts leading the impugned order is that the 1^st applicant had availed Production Credit Loan of Rs.54,00,000/- from the respondent bank on 22.02.2024 for its jewellery business. The 2^nd and 3^rd applicants are the parents of the proprietor and also guarantors to the loan availed by 1^st applicant. To secure the said facility the applicants created equitable mortgage over the schedule mentioned property in favour of the respondent bank by executing Memorandum of Deposit of Title deeds dated 19.3.2024 registered as Doc. No.1138 of 2024 and 17.08.2005 registered as Doc. No.3406 of 2005.

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The applicants were making the remittances regularly, however, the respondent bank charged exorbitant interest and did not disclose the outstanding dues to the applicants.

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The subject loan was earlier with Fed Bank and the loan, however, at the insistence of the respondent bank’s officials for sanction of higher loan limit the loan was allowed to be taken over. The respondent cleared the dues

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of the Fedbank but failed to release the balance excess amount to the applicants. The respondent wrongly classified the loan account as NPA on 08.09.2024.

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The respondent without complying with the mandatory provisions of law has proceeded under Section 14 of the SARFAESI Act and obtained the impugned order, wherein the Ld. CMM has failed take into consideration he remittances made by the applicants and hence the order is liable to be set aside.

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Along with the SA, the applicant filed the impugned order dated 08.05.2025, Sanction letter of Fedbank dated 26.02.2021, Loan sanction letter for Rs.74,50,000/- dated 07.05.2024, Loan sanction letter dated 12.02.2024 for Rs.54,00,000/- and sale notice dated 24.02.2025 issued by the respondent bank.

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The following grounds are urged in the SA: -

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(a) The classification of the loan account as NPA is wrong and before such classification the respondent has failed issue notice to the applicants.

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(b) The respondent failed to serve the demand notice issued under Section 13(2) of the SARFAESI Act on the applicants.

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(d) The remittances made by the applicants were not taken in to consideration by the Ld. CMM, Egmore in the impugned order.

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(e) The respondent without offering the restructuring options has proceeded under Section 14 of the SARFAESI Act.

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(f) The respondent has failed to comply with the provisions of the SARFAESI Act and the Rules made thereunder while proceeding under Section 14 of the SARFAESI Act.

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Counter by Respondent Bank

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Upon notice, the defendant bank filed its counter denying the averments in the SA and submitted that the SA is liable to be dismissed. M/s RML Jewellery, a proprietorship concerned represented by its Proprietor Ms. Revathi Mani along with Mr. D. Mani and Mrs. Latha Mani for grant of credit facilities and considering the said request the respondent sanctioned Mortgage Loan of Rs.54,00,000/- on 22.02.2024. The applicants executed necessary loan and security documents and also created equitable mortgage over the schedule mentioned property. As the defendants defaulted in repayment and failed to adhere to the terms and conditions of the sanction, the loan account was classified as NPA on 08.09.2024.

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The loan account was correctly classified as NPA in accordance with the guidelines of RBI as the installment of principal remained overdue

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for a period more than 90 days. The respondent issued the demand notice under Section 13(2) of the Act on 1.10.2024 demanding a sum of Rs.55,66,882.77p as on 30.09.2024. The respondent had the demand notice served on the applicants and also published the same in two leading newspapers i.e., The New Indian Express and Dinamani dated 19.10.2024 in accordance with Rule 3 of the Security Interest (Enforcement) Rules, 2002.

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The respondent issued the possession notice dated 19.12.2024 and took symbolic possession of the secured asset. The said possession notice is duly served on the applicant, affixed on the secured asset and paper publication was effected in “The New Indian Express” and “Dinamani” dated 22.12.2024 as mandated under law.

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The Ld. Chief Metropolitan Magistrate has passed a reasoned after being satisfied with the contents of the affidavit filed in support of Section 14 Application. The respondent has scrupulously followed the provisions of the SARFAESI Act and the Rules made thereunder and hence the present SA is liable to be dismissed.

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Documents filed by the Respondent Bank

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The Respondent Bank filed the following documents viz., Demand Notice under Section 13(2) of the SARFAESI Act dated 1.10.2024 along with postal receipts, returned cover and postal acknowledgement; paper publication of the demand notice in newspapers dated 19.10.2024;

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Copy of possession notice dated 19.10.2024 along with postal receipts, acknowledgement cards, photograph evidencing affixture of possession notice, paper publication of possession notice in “The New Indian Express” and “Dinamani” both dated 22.12.2024 and affidavit filed by the respondent bank before Ld. CMM, Egmore.

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The matter is heard. In the wake of available material on record, the following points arise for consideration in the present SA:

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“Whether the impugned order of Ld. Chief Metropolitan Magistrate dated 08.05.2025 in Crl. M.P No.4968 of 2025 suffers from any illegality or impropriety rendering it void in law?”

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Answers to Point for Consideration

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It is to be noted that the Hon'ble Supreme Court in “ NKGSB Cooperative Bank Limited Vs. Suber Chakravarty” and “ R.D. Jain and Company Vs. Capital First Limited CA 1755 of 2022 dated 27.07.2022 ” ruled that no adjudicatory powers are vested while deciding the application under Section 14. In the matter of “Indian Bank Vs. Vishalakshi and Another CA 6295/2015 dated 23.09.2019” , the Hon'ble Supreme Court had further held that the proceedings under Section 14 is a procedural step and purely an administrative order and there is no adjudicatory process involved. Keeping in mind the above rulings, this Tribunal can only examine whether there was compliance of

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the provisions by the defendant bank before the Learned CMM as mandated under Section 14(1) of the SARFAESI Act.

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As per Section 14(1) of the SARFAESI Act, on a request being made by the by the secured creditor, the Chief Metropolitan Magistrate or the District Magistrate as the case be take possession of such asset and documents relating thereto and forward such assets and documents to the secured creditor. The financial institutions are to declare under the affidavit the aggregate sum of financial assistance and dues payable as on the date of the application. It should be averred that the borrower / guarantor having created security interest over the property and that the borrower had committed default; upon such default the account must have been classified as NPA. It is also mandatory to aver in the affidavit regarding the issuance of demand notice, the reply thereof and the response of the secured creditor and that the borrower had not made any repayment and therefore entitled to take possession and that the other provisions of the Act have been complied.

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This Tribunal is aware of the Ruling of the Hon’ble Supreme Court in “Authorised Officer, Indian Bank Vs. Vishalakshi and another CA No.6295/2015 disposed on 23.09.2019” holding that the spirit of Section 14 of the SARFAESI Act is only a procedural step. It is purely an administrative order and no adjudication is involved. The orders of the Ld. CMM / DM is only an aid to the proceedings initiated u/s.13(4) of the Act.

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It is only to be looked into whether the provision of section 14(1) of the Act is complied or not. From the impugned order it is seen the necessary details to be furnished u/s.14(1) of the Act has been complied and the Ld. Chief Metropolitan Magistrate has passed the impugned having satisfied with the contents of the affidavit.

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However, this Tribunal has also considered the documents filed by the defendant. This includes the documents produced at S. No. 1 and 2 (Pages 10 to 22) which is the demand notice dated 01.10.2024, the postal acknowledgements, returned envelope and the publication of demand notice in “The New Indian Express” and “Dinamani” dated 19.10.2024, the same clearly reveals that the demand notice is duly served on the applicants as envisaged under Rule 3 of the Security Interest (Enforcement) Rules, 2002.

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As regards the contention of the applicants that the respondent has failed to comply with the Rule 8 (1) and 8(2) of the Security Interest (Enforcement) Rules, 2002 is concerned the respondent has filed the possession notice dated 19.10.2024 along with proof of service at Sl. No.4 (Pages 23 to 28), the proof of affixture of the possession notice at Pages 28-29), and the proof of publication of the “the New Indian Express” and “Dinamani” both dated 19.11.2020 at Sl. No. 5 & 6 (Page 31 and 32) and which clearly evidence that the possession notice has been served, published and affixed on the secured asset. Therefore, this ground of the applicants fall to the ground. The applicant has also

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filed copy of the affidavit filed before the Ld. Chief Metropolitan Magistrate, Egmore at Srl. No.7 (Page No.33).

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Further, the applicants have not urged any grounds with regard to noncompliance of provisions under Section 14(1) of the SARFAESI Act by the secured creditor.

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Therefore, in the absence of any allegations regarding non-compliance of the provisions of Section 14(1) of the Act and documentary evidence produced by the defendant bank, this Tribunal is unable to find any illegality, impropriety or otherwise to set aside the impugned order. Hence the following:

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ORDER

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(i) The SA stands dismissed. The orders of the Ld. Chief Metropolitan Magistrate, Egmore, Chennai dated 08.05.2025 in Crl. M.P. No.4968 of 2025 is hereby confirmed. All other pending IAs thus stand disposed of. Parties to bear their own costs.

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(ii) A copy of this order be communicated to the parties concerned.

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Sd/(SHARANG DHAR UPADHYAY) PRESIDING OFFICER

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DRT-II, CHENNAI

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(Dictated to PS, who typed in the system directly, corrected, signed and pronounced by me in Open Court, on this 25^th day of June, 2026)

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Rml Jewellery v. Bank of Baroda

Case brief

What is this about?

What did the court decide?

Rml Jewellery v. Bank of Baroda

Case brief

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What did the court decide?

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