Allowed

Mr C Shrinivas v. Union Bank of India

DRT23 Jan 2026SA/389/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal set aside the Section 13(2) Demand Notice and Section 13(4) Possession Notice issued by a bank. The court held that the bank failed to describe the mortgaged residential flat property in the notices, only detailing the land plots, thereby violating Section 13(3) of the SARFAESI Act.

What did the court decide?

Section 13(2) Demand Notice dated 12.02.2024 and Section 13(4) Possession Notice dated 28.05.2024 are set aside.

Mr C Shrinivas versus Union Bank of India — Contract and Commercial Disputes | DRT (2026)

SA No.389/2024

23.01.2026

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 23^rd day of January, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SA No. 389 of 2024

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Mr. Shrinivas C, S/o. Chandrasekaran, No.7/44, Muthalamman Koil Street, Sadras, Kalpakkam 603102. …Applicant

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-Vs-

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The Authorised Officer Union Bank of India, Velachery Branch, 15, Elephant Square, 15^th Street, Tansi Nagar, Velachery, Chennai 600042. …Respondent

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Counsels on record / appeared:

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Counsel for Applicant : Mrs. S. Gomathi Counsel for respondent : Mr. S. Parthasarathy

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ORDER ON SA 389/2024

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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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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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23.01.2026

The applicant has challenged the Possession notice dated 31.05.2024 and the outstanding amount due as per Possession notice is Rs.18,59,531.27/-

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3. Pleadings of the applicant:

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3.1 The applicant has approached the respondent bank and availed loan against property of Rs.15.70 lakhs and the same has to be repaid in 120 EMIs of Rs.23,442 with an interest of 13% and also paid processing charges of Rs.8,870/- to the respondent bank. Further the applicant had defaulted and highly irregular in the repayment and the respondent bank has issued the Section 13(2) Demand Notice in January 2019.

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3.2 Though the applicant has requested the respondent bank for copy of Demand notice and statement of accounts to calculate the penal interest and legal expenses which was not issued by the respondent bank. It is submitted that the principal outstanding is Rs.13,17,884.92 as on December 2016 and the outstanding claim on 30.06.2019 is Rs.9,93,027/at the time off issuing the Section 13(2) Demand Notice dated 12.02.2024. Hence the respondent bank has charged more than the sanctioned amount as defaulted from April 2014.

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3.3 The applicant has made payment of Rs.20.00 lakhs towards the loan account and the respondent bank have refused to furnish the statement of accounts to the applicant. The outstanding amount claimed in the Demand notice is issued before one month before the last instalment which indicates that the account is in default from the April 2014.

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23.01.2026

3.4 Further, the applicant has approached the respondent bank for OTS proposal after obtaining OTS policy from the internet. The respondent bank has rejected the OTS proposal by submitting that the applicant is not eligible for OTS and 50% of Running Ledger balance is only payable by the applicant which would reduce the outstanding claim into half.

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3.5 The respondent bank has issued Section 13(4) Possession Notice dated 28.05.2024 for taking symbolic possession of the mortgaged property which has been affixed on the same date and served to the applicant on 29.05.2024, published in newspaper on 31.05.2024 and received by the applicant on 01.06.2024.

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3.6 Further the respondent bank has not classified the loan account as NPA as per the RBI guidelines and MCLR Overnight rates are also applicable from the date of default. In spite of several demands made by the applicant, respondent bank has failed to furnish the statement of accounts which shows the date of default and penal interest charged.

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3.7 It is submitted that there is no description of the building and Flat which was bought by the applicant, only the details of land are mentioned in the Section 13(2) Demand Notice. The applicants are ready and willing to repay the entire outstanding amount if the respondent bank has produced the statement of accounts.

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3.8 Though the applicant has not made any payment after the issuance of the Section 13(2) Demand notice and prays to restrain the respondent bank from taking any measures under the Section 13(4) of the Act. The

SA No.389/2024

23.01.2026

respondent bank has failed to furnish the correct date of NPA and there is no proper description of the property. The possession notice is served to the applicant after affixing on the property which has to be served along with the affixture of the Possession Notice.

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3.9 In the grounds it is contended that the classification of loan account as NPA is in violation of RBI guidelines and also failed to furnish the statement of accounts to the applicant. The respondent bank has failed to furnish the details of the flat which has been offered as collateral security. The total outstanding amount of Rs.18.00 lakhs claimed in the Section 13(2) Demand notice is higher than the sanctioned amount and also made a payment of Rs.20,00,000/- towards the loan amount of Rs.15.70 lakhs.

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3.10 The Possession notice is served to the applicant after affixing on conspicuous part of the property. The respondent bank has threatened the lease hold tenant that the physical possession would be taken on 03.06.2024 which is in violation. Though the applicant is ready to settle the loan account within a period of 6 months and the respondent bank has violated the RBI guidelines. Therefore, the applicant prays to set aside the Section 13(4) Possession Notice dated 28.05.2024.

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4. Objections of the respondent bank:

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4.1 The respondent bank has filed a detailed counter inter alia contending that the allegations made by the applicant is not maintainable and liable to be dismissed in limine. In fact, the respondent bank has sanctioned a Term Loan of Rs.15.00 lakhs on 13.03.2014 with certain

SA No.389/2024

23.01.2026

Terms and conditions. The total outstanding amount in the loan account is Rs.16,03,106/- as on 20.05.2025 and the applicant also executed security documents, mortgaged his property as collateral security and personal guarantee to the repayment of the credit facilities availed by the applicant Mr. C. Shrinivas.

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4.2 The applicant has created Equitable mortgage for the schedule mentioned properties by way of Memorandum of Deposit of Title Deeds dated 13.03.2014 (11.03.2014) which is registered as Doc.No.2126 of 2014. The applicant has purchased the collateral security by way of registered Settlement Deed dated 19.08.2013 in Doc.No.5987 of 2013 on the file of Sub Registrar, Pallavaram.

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4.3 Further the applicant was irregular in the repayment which resulted in classification of the loan account as NPA on 30.06.2019 in accordance with the RBI guidelines. The total outstanding amount due to be paid by the applicant is Rs.16,03,106/- as on 20.05.2025. The respondent bank has issued the Section 13(2) Demand Notice dated 12.02.2024 and the same is acknowledged by the applicant on 19.02.2024. The applicant has failed to discharge the entire liabilities within a period of 60 days from the date of receipt of the notice.

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4.4 The respondent bank has proceeded further and issued Section 13(4) Possession Notice dated 28.05.2024 which was acknowledged by the applicant on 01.06.2024. The Possession notice was affixed on the conspicuous part of the property and also published in Tamil and English

SA No.389/2024

23.01.2026

Newspapers on 31.05.2024. The respondent bank has created security interest over the secured property with the Central Registry as per the Section 26B of the SARFAESI Act.

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4.5 The respondent bank has classified the loan account as NPA as per the Section 2(o) of the Act. Further the applicant has also obtained an interim order on 03.07.2024 before the Hon’ble Tribunal which was not complied by the applicant here in. The applicant has also filed an appeal against the orders in IA No.1102 of 2024 for stay of the proceedings in AIR (SA) 1212 of 2024 arising out of IA No.1102 of 2024 in SA No.289 of 2024 which has been dismissed for non-compliance of deposit and the Appeal in AIR No.1212 of 2024 by giving effect to the conditional order dated 29.01.2025.

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4.6 The respondent bank has a secured creditor has duly followed all the procedures as contemplated under the Act and prays for dismissal of the present SA.

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

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5.1 It is discernible from the records that the applicant has availed Loan against property for a sum of Rs.15.70 lakhs which is not disputed by the applicant herein. Further, there is no dispute regarding execution of several security documents to secure the repayment of the credit facilities availed and also created equitable mortgage by way of Memorandum of Deposit of

SA No.389/2024

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Title Deeds dated 11.03.2014 which is registered as Doc.No.2126 of 2014

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in the file of SRO, Pallavaram.

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5.2 The applicant has raised a specific contention that there is no proper description of the mortgaged flat in the statutory notices issued by the respondent bank. On perusal of the MODT produced by the respondent bank at Page No.42 of their counter, the properties being mortgaged is being reflected as:

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Item No.I: All that piece and parcel of land bearing plot No.9 Part, Door No.2, Part Shankarlal Jain Street, Nehru Nagar, Chrompet, Hasthinapuram Village, comprised in Paimash No.230 and 231, Survey No 6/11-B2, measuring 2800 Sq.ft thereabouts, and bounded on the :

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North : By Plot belonging to Mrs. Rajalakshmi

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South : By Old Plot No.10

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East : By Balance portion of plot No.9, belonging to P.K.Muthukrishnan of Shankarlal Jain Street

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West : By Land belonging to Mr. M.K. Srinivasachariar

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Admeasuring

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East to West on the Northern side : 60 feet

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East to West on the Southern side : 60 feet

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North to South on the Eastern side : 34 feet 4 inches

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North to South on the Western side: 34 feet 4 inches

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Together with a passage of “10”-“4” wide by “80” length in all measuring 2880 Sq.ft. thereabouts

SA No.389/2024

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Item No.II: All that piece and parcel of measuring 1920 Sq.ft. bearing Plot No.9 Part, Door No.2 part, Shankarlal Jain Street, Nehru Nagar, Chrompet, Hasthinapuram Village, comprised in paimash No. 230 and 231, Survey No.6/11-B2 and bounded on the :

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North : By Plot belongings to Mrs. Rajalaksmi

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South : By passage to the vacant land belonging to Mr. D. Balaji

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East : By Shankarlal Jain Street

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West : By Vacant land belonging to Mr. D. Balaji

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Admeasuring

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East to West on the Northern side : 80 feet

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East to West on the Southern side : 80 feet

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North to South on the Eastern side : 24 feet

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North to South on the Western side: 24 feet

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In all admeasuring 1920 Sq.ft., thereabouts the above said two items are totally measuring 4800 Sq.ft. and situated within the Registration District of Chennai South and Sub Registration District of Pallavaram.

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SCHEDULE – B (Property Settled by Deed)

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All that piece and parcel of 586.127 sq.ft., undivided share of land out of 4800 sq.ft., bearing Plot No.9, Part, Door No.2 Part, together with a residential RCC Flat in first floor, named as ‘Marudham Villa’ having a plinth area of 845 sq.ft., in 6920 sq.ft., including common area including Electric Service connection with Security Deposit, attached latrine bathroom, 1/10^th share in Borewell, 1/10^th share in compound wall, 1/10^th share in 1 H.P. Motor Connection, 1/10^th share in septic tank, therein

SA No.389/2024

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situated at Old Village No.160 & 127, New Village No.101, Hasthinapuram village, Shakarlal Jain Street, Nehru Nagar, comprised in Paimash No.230 and 231, S.No.6/11-B2 in Alandur Taluk, Kancheepuram District, within the registration of Chennai south and sub registration district of pallavaram.

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5.3 As the applicant has defaulted in the repayment which resulted in classification of the loan account as NPA on 30.06.2019. After, classifying the loan account as NPA, the respondent bank has proceeded further and issued Section 13(2) Demand Notice dated 12.02.2024 and the properties described in the Demand Notice as follows:

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North: By Plot belonging to Mrs. Rajalakshmi

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South: By Old Plot No.10

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East: By Balance portion of plot No.9, belonging to P.K.Muthukrishnan of Shankarlal Jain Street

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West: By Land belonging to Mr. M.K. Srinivasachariar

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Admeasuring

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East to West on the Northern side: 60 feet

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East to West on the Southern side: 60 feet

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North to South on the Eastern side: 34 feet 4 inches

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North to South on the Western side: 34 feet 4 inches

SA No.389/2024

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Together with a passage of “10”-“4” wide by “80” length in all measuring 2880 Sq.ft. thereabouts

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North: By Plot belongings to Mrs. Rajalaksmi

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South: By passage to the vacant land belonging to Mr. D. Balaji

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East: By Shankarlal Jain Street

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West: By Vacant land belonging to Mr. D. Balaji

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Admeasuring

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East to West on the Northern side : 80 feet

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East to West on the Southern side : 80 feet

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North to South on the Eastern side : 24 feet

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North to South on the Western side : 24 feet

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5.4 In fact, the sanction letter dated 13.03.2014 produced by the respondent bank clearly reflects that the loan facilities were secured by the Residential property situated at 1^st Floor Marutham Villa Block A Plot No.9 Old Door No.2 New Door No.3 Shankarlal Jain Street Nehru Nagar Chrompet, Chennai – 600 044, Tamil Nadu, held by Mr. C. Shrinivas. Hence,

SA No.389/2024

23.01.2026

it is clear that the applicant has availed the credit facilities by mortgaging the Flat property only and the respondent bank has failed to describe the flat property in Demand Notice and Possession Notice which is not in accordance with Section 13(3) of the SARFAESI Act, which reads as under:

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Section 13(3):

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The notice referred to in sub-section (2) shall give details of the amount payable by the borrower and the secured assets intended to be enforced by the secured creditor in the event of non-payment of secured debts by the borrower.

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5.5 Further the respondent bank has filed a detailed counter and failed to clarify the specific contention as raised by the applicant that the mortgaged flat property is not mentioned in the statutory notices. It is also pertinent to note that the applicant is having only undivided share in Item No.1 and Item No.2 properties mentioned in the statutory notices and the owner of the Flat property of 4800 sq.ft., which is being mortgaged in favor of the respondent as evident from the Memorandum of Deposit of Title Deeds dated 11.03.2014 which is registered as Doc.No.2126 of 2014 produced at Page No.42 of respondent’s counter.

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5.6 Therefore, the respondent bank as a secured creditor has not complied with Section 13(3) while issuing the statutory notices. Thus, the applicant has made out a case that the Flat property being mortgaged is not described in the Section 13(2) Demand Notice and Section 13(4) Possession Notice.

SA No.389/2024

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5.7 For the foregoing reasons, the Section 13(2) Demand Notice dated 12.02.2024 and impugned Section 13(4) Possession Notice dated 28.05.2024 is set aside as the applicant has made a case of non-compliance of the provisions of Acts and Rules made there under in issuing the statutory notices under the SARFAESI Act.

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Resultantly the present SA is allowed. Interim Order granted, if any stands vacated, pending IAs are disposed of in terms of this final order. No order as to cost.

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Sd/(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 23^rd 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. No.	Description of Documents	Document No.
1.	Memorandum of Application 14.06.2024.	A-1
2.	Letter From Respondent Bank 09.12.2015.	A-2
3.	Sec 13(2) Demand Notice 12.02.2024.	A-3
4.	Paper Publication of Sec 13(4) Possession Notice dated 31.05.2024.	A-4
5.	Repayment Schedule	A-5
6.	Vakalath 14.06.2024.	A-6

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LIST OF DOCUMENTS PRODUCED BY THE RESPONDENTS

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Sl.	Description of Documents	Document
No.		No.
1.	Counter Affidavit 23.05.2025.	R-1

SA No.389/2024

23.01.2026

2.	Sanction Letter 13.03.2014.	R-2
3.	Demand Notice issued under Section 13 (2) the Act 12.02.2024.	R-3
4.	Acknowledgement cards and returned covers 19.02.2024.	R-4
5.	Possession Notice issued under Rule 8(1) 28.05.2024.	R-5
6.	Acknowledgement cards and returned covers 01.06.2024.	R-6
7.	Paper Publication in Tamil and English 31.05.2024.	R-7
8.	Affixing of Possession Notice–Photographs.	R-8
9.	Settlement Deed stands in the name of Applicant in Document No.5987 of 2013 dated 19.08.2013.	R-9
10.	Memorandum of Deposit of Title Deeds in Document No. 2126 of 2014 dated 11.03.2014.	R-10
11.	Statement of Account for Loan	R-11
	A/c.No.632706680000026 along with Certificate under Bankers’Book Evidence Act 20.05.2025.
12.	CERSAI Search Report 31.05.2025.	R-12

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SCHEDULE OF PROPERTY

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All that piece and parcel of land bearing plot No.9 Part, Door No.2, Part Shankarlal Jain Street, Nehru Nagar, Chrompet, Hasthinapuram Village, comprised in Paimash No.230 and 231, Survey No 6/11-B2, measuring 2800 Sq.ft thereabouts, and bounded on the :

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North: By Plot belonging to Mrs. Rajalakshmi

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South: By Old Plot No.10

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East: By Balance portion of plot No.9, belonging to P.K.Muthukrishnan of Shankarlal Jain Street

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West: By Land belonging to Mr. M.K. Srinivasachariar

Admeasuring

SA No.389/2024

23.01.2026

East to West on the Northern side: 60 feet

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East to West on the Southern side: 60 feet

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North to South on the Eastern side: 34 feet 4 inches

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North to South on the Western side: 34 feet 4 inches

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Together with a passage of “10”-“4” wide by “80” length in all measuring 2880 Sq.ft. thereabouts.

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All that piece and parcel of measuring 1920 Sq.ft. bearing Plot No.9 Part, Door No.2 part, Shankarlal Jain Street, Nehru Nagar, Chrompet, Hasthinapuram Village, comprised in paimash No. 230 and 231, Survey No.6/11-B2 and bounded on the:

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North: By Plot belongings to Mrs. Rajalaksmi

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South: By passage to the vacant land belonging to Mr. D. Balaji

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East: By Shankarlal Jain Street

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West: By Vacant land belonging to Mr. D. Balaji

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Admeasuring

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East to West on the Northern side: 80 feet

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East to West on the Southern side: 80 feet

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North to South on the Eastern side: 24 feet

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North to South on the Western side: 24 feet

SA No.389/2024

23.01.2026

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

Mr C Shrinivas v. Union Bank of India

Case brief

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Mr C Shrinivas v. Union Bank of India

Case brief

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