Dismissed

Shri K Senapathy v. Punjab National Bank

DRT23 Jan 2026SA/484/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal dismissed the Securitization Application challenging a Section 14 possession order. The court held that Sections 13(2) and 13(4) notices were validly issued and served, and that Section 14 proceedings are ministerial, rendering the challenge without merit under Section 17.

What did the court decide?

Application dismissed; interim stay order granted earlier is vacated.

Shri K Senapathy versus Punjab National Bank — Banking and Recovery | DRT (2026)

SA No.484/2023

23.01.2026

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

¶5

Dated this the 23^rd day of January, 2026

¶6

Present: SMT. S.V. GOWRAMMA Presiding Officer

¶7

SARFAESI APPLICATION No. 484 of 2023

¶8

Shri. K. Senapathy, Son of J. Kumar, Proprietor of M/s. K.S. Traders, No.263, OyaliammanKoil Street, Tiruneermalai, Chennai -600 044. ….Applicant

¶9

-Vs-

¶10

Pujab National Bank, Represented by its, Chief Manager/Authorised Officer, Shri MuniswamyVelayutham, Circle Sastra Centre, Spencer Plaza, Anna Salai, Chennai -600 002 .….Respondent

¶11

Counsels on record / appeared:

¶12

Counsel for Applicant : M/s. K.A. Ramakrishnan Counsel for respondent : M/s. Rahul Jain

¶13

ORDER ON SA 484/2023

¶14

The present Securitization Application [SA] is filed on 07.09.2023 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].

¶15

The applicant has challenged the Sec.14 order dated 02.08.2023 in C.M.P. No.5194 of 2023 passed by Chief Judicial Magistrate, Chengalpattu and the outstanding amount due as per Sec.14 order is Rs.39,98,406.55/-

SA No.484/2023

23.01.2026

Pleadings of the applicant:

¶20

The applicant is the proprietor of M/s. K.S. Traders, availed housing loan facility to the tune of Rs.34 Lakhs during the year 2018, which is repayable in 180 installments with monthly EMI of Rs.32,300/- per month and he had also availed Over Draft Credit Facility to the tune of Rs.1,85,00,000/- from respondent bank, by mortgaging the schedule mentioned property and was regular in repayment of installments without any delay or default.

¶21

However, owing to Pandemic Covid -19 situation, applicant suffered loss in business and committed default in repayment of instalments, however has made several payments, but respondent bank without considering the payments made had classified the loan account as NPA and issued demand notice followed by possession notice.

¶22

It is submitted that the above notices were not served to applicant and the respondent bank proceeded further and issued sale notice dated 06.02.2023, which was challenged in SA No.121 of 2023 before this Tribunal and the same was disposed on 10.08.2023. It is further submitted that applicant had approached respondent for OTS which was sanctioned for Rs.1,45,00,000/- lakhs and as per the OTS sanction, applicant deposited Rs.67,47,000/- Lakhs in to the OD loan account, but could not remit the balance amount in time and therefore the respondent bank has cancelled the OTS approval.

¶23

The respondent bank had approached Ld. CJM, Chengalpattu for taking physical possession of the property, under section 14 without

SA No.484/2023

23.01.2026

following the provisions of SARFAESI Act and Rules made thereunder. Applicant filed Memo vide SR No.12476/23 dated 20.09.2023 expressing applicant’s readiness to deposit Demand Draft for an amount of Rs.5 Lakhs, vide DD No.590949 dated 08.09.2023 (copy of DD is enclosed), to prove their bonafides and prayed for interim stay from this Tribunal.

¶28

In the circumstances, the Tribunal granted stay as applicant is willing to discharge their debt and cause payments to the credit of borrowers loan account, applicant was permitted to deposit the demand draft to the credit of borrower’s loan account and on compliance of the same, there shall be an order of status quo as on the date and time of compliance. Applicant also directed to deposit another 10% within four weeks thereafter and on compliance of second part of conditional order, there shall be an order of interim stay of all further proceedings under SARFAESI. Non-compliance of any of the above conditions would entitle respondent bank to proceed further in accordance to law.

¶29

The applicant after availing Housing Loan of Rs.34 Lakhs was regularly repaying the loan without any default. However, the bank has proceeded and have filed Sec.14 application before the CJM at Chengalpattu for taking physical possession of the property which came to be allowed vide order dated 02.08.2023 in C.M.P.No.5194 of 2023/CNR No.TNKP030040002023.

¶30

In the grounds, it is contended that the measure against the applicant’s property is illegal and unjust and demanding a sum of Rs.39,98,406.55/- in the sec.14 application is contrary to statement of

SA No.484/2023

23.01.2026

account and also to the sec.13(2) demand notice dated 08.07.2021. Bank has charged interest over interest and have claiming an amount of Rs.39,98,406.55 as on 07.07.2021. The bank has violated Rule 8(1) and have failed to serve the demand notice and possession notice and have demanding an amount which were is Se.13(2) and Sec.14 application.

¶35

It is contended that the secured asset is s not registered with the central registry and hence bank cannot proceed further. On these grounds the applicant prays to set aside the Sec.14 order dated 02.08.2023.

¶36

Objections of the respondent bank:

¶37

The bank in their counter submits that the applicant had availed Housing Loan of Rs.34.79 Lakhs and Overdraft Housing Loan of Rs.3.60 Lakhs in the year 2018 and having failed to service the principal interest the loan account had slipped to NPA on 23.05.2021.

¶38

Subsequent to classification of the loan account as NPA, the bank have issued the Sec.13(2) demand notice on 08.07.2021 demanding an amount of Rs.36,98,406.55 due as on 07.07.2021 as the applicant failed to repay, bank issued Sec.13(4) possession notice on 30.11.2022 and have taken the symbolic possession of the property by following the Rules and have affixed the possession notice and published in the two newspapers one in “The New Indian Express” and another one in “Dinamani” both dated 02.12.2022.

SA No.484/2023

23.01.2026

Subsequently bank has filed Sec.14 in C.M.P.No.5194 of 2023 and have obtained an order dated 02.08.2023 permitting the bank to take the physical possession. The bank has filed the Sec.14 application along with the all relevant documents including the statement of account to substantial the outstanding amount due and the applicant is due and liable to pay a sum of Rs.24,31,068.33 as on 31.01.2024. The demand notice 08.07.2021 is received and acknowledged by the application on 15.07.2021 and has failed to liquated the liability bank have issued Sec.13(4) Possession Notice following all the procedures.

¶43

The bank denies the averment in the grounds and submits that they have followed all the mandatory provisions as contemplated in sec.14 of the Act. The guarantor Smt. K. Lalitha had earlier filed SA.No.121.2023 challenging the sale notice dated 06.02.2023 in respect of the Cash Credit loan account for recovery of Rs.2,14,67,183.43/- as on 30.04.2023 and the Tribunal has dismissed the SA on 10.08.2023.

¶44

Despite providing sufficient opportunity the applicant failed and neglected to pay the outstanding amount due of Rs.24,31,068.33/- as on 31.01.2024 in respect of the Housing loan account and the applicant has filed the present SA with malafied intention to frustrate the procedures. Hence, the respondent bank prays for dismissal of the SA.

SA No.484/2023

23.01.2026

Heard both sides of the Counsels and perused the records of

¶49

the case

¶50

It is manifest from the records that the applicant had availed Term Loan Housing of Rs.34,79,000/- and Overdraft Housing Loan of Rs.3,60,000/- and due to continues default the account was classified as NPA as per the RBI guidelines.

¶51

It seen from the Sec.13(2) Demand Notice that the applicant had created the mortgage of the property bearing flat F1 measuring an extent of 1217 sq.ft together with super build up area on the 1^st floor along with the car parking No.4 which was developed on Plot bearing No.1 and Plot bearing No.3 in the layout known as “Subbaraya Nagar”.

¶52

The applicant is the proprietor of Mr. K.S. Traders do not dispute the availing of the credit facility, mortgage of the properties as collateral security. Further, it is an admitted fact by the applicant in the averment of the SA that they defaulted in the repayment resulting in the classification of the loan account as NPA. Subsequent to classification of the account as NPA, the bank has issued Sec.13(2) Demand Notice dated 08.07.2021, demanding an amount of Rs.36,98,406.55/- due as on 07.07.2021 along with other charges.

¶53

It is specific case of the applicant that he has not receive the S.13(2) Demand Notice is countered by the respondent bank by producing the copy of the Sec.13(2) Demand Notice from Pg.1 to 4 and it is seen that the applicant has received the demand notice personally and

SA No.484/2023

23.01.2026

has affixed the signature on the Sec.13(2) Notice as is evident from Page. 4 of the counter.

¶58

Additionally the acknowledgment card is produced at Pg.5 where it seen that the applicant as proprietor has received the 13(2) Demand Notice. Hence, the contention that S.13(2) notice was not served cannot sustain and the same fails.

¶59

As the borrower did not liquated the liability as demanded in the Sec.13(2) Demand Notice within the period of 60 days, the bank has proceeded further and have issued Sec.13(4) Possession Notice dated 30.11.2022 which was also sent by RPAD and the applicant has received the S.13(4) Possession Notice on 30.11.2022 personally and have affixed the signature on the copy of the notice as is evident from pg.6 of the 13(4) Possession Notice. Further as per the procedures the bank has affixed the possession notice on the flat and have also published in the two newspapers as required under the Act.

¶60

Thus it is evident that the bank have initiated the measures after classifying the account as NPA and also by following the measures as required under the Acts and Rules and have produced the supporting documents in support of the procedures followed.

¶61

Though the applicant does not dispute the loan and the mortgage and the default in repayment have challenged the Sec.14 order only on 2 grounds one being the demand notice issued under Sec.13(2) demand notice is not served is countered and established by the respondent bank.

SA No.484/2023

23.01.2026

It is the specific case of the applicant that the amount demanded in the sec.13(2) Demand Notice is Rs.36,98,406.55/- and in Sec.14 applicant at Pg.41-46 and in the S.13(4) Possession Notice are different. Hence, there is discrepancy in the amount claimed cannot sustain as the amount demanded is evidenced by the statement of account. Further the applicant never had any dispute with regard to the amount due and mentioned S.13(2) and S.13(4) never raised any objection taking such a contention that the amount mentioned all the notices is different in spite of receipt of S.13[2] demand notice.

¶66

However, admits that there is an outstanding amount of Rs.36,98,406.55/- Lakhs due as on 07.07.2021 which is a categorical admission. Hence, the discrepancy in mentioning the amount due could not sustain when the measures taken by the secured creditor more so when the applicant voluntarily submitted to settle the liability and also availed an OTS with the respondent bank having failed to comply with the OTS term the applicant cannot have any grievance with regard to the mentioning of the outstanding amount due which can be sorted across the table when the applicant intends to settle the liability.

¶67

Thus the respondent bank has established that Sec.13(2) Demand Notice dated 08.07.2021 and 13(4) Possession Notice dated 30.11.2022 are issued in accordance with the procedures as prescribed under the Act and the same is uphold as valid notices under the Act. Though the applicant has challenged S.14 Order has failed to make out a case of any

SA No.484/2023

23.01.2026

infirmity in the S.14 applcaiton or in the affidavit or in the S.14 Order dated 02.08.2023 passed by CJM, at Chengalpattu.

¶72

Now considering the challenge to S.14 Order, it is appropriate to mention the declaration of The Hon’ble Supreme Court and various Hon’ble High Courts in various judgments has held that the power of Designated Court under Section 14 SARFAESI Act, 2002 is ministerial and non- adjudicatory in nature and the process to be followed under Section 14 does not involve any element of quasi-judicial function nor it requires any application of mind.

¶73

Furthermore, the Hon’ble Supreme Court in the matter of Kotak

¶74

Mahindra Bank vs Girnar Corrugators Pvt. Ltd. & Others , held that while exercising power under Section 14 of the SARFAESI Act, even the District Magistrate has no jurisdiction and/or District Magistrate and/or even the Chief Metropolitan Magistrate has no jurisdiction to adjudicate the dispute between secured creditor and debtor.”

¶75

The Hon’ble Bombay High Court in the matter of Phoenix ARC Pvt. Ltd. Vs. The State of Maharashtra has held that Court is only required to verify the affidavit of Secured Creditor filed in pursuance of the proviso to Section 14 and nothing more. The above Bombay High Court judgment has since been confirmed by the Hon’ble Supreme Court by its judgment dated 26.09.2022 in the matter of Balakrishna Ram Tarle v. Phoenix ARC (P) Ltd. as under:

SA No.484/2023

23.01.2026

“Thus, the powers exercisable by CMM/DM Under Section 14 of the SARFAESI Act are ministerial step and Section 14 does not involve any adjudicatory process qua points raised by the borrowers against the secured creditor taking possession of the secured assets. In that view of the matter once all the requirements Under Section 14 of the SARFAESI Act are complied with/satisfied by the secured creditor, it is the duty cast upon the CMM/DM to assist the secured creditor in obtaining the possession as well as the documents related to the secured assets even with the help of any officer subordinate to him and/or with the help of an advocate appointed as Advocate Commissioner. At that stage, the CMM/DM is not required to adjudicate the dispute between the borrower and the secured creditor and/or between any other third party and the secured creditor with respect to the secured assets and the aggrieved party to be relegated to raise objections in the proceedings Under Section 17 of the SARFAESI Act, before Debts Recovery Tribunal”.

¶80

Additionally, Section 14(3) of the SARFAESI Act statuses that no action taken by the Chief Metropolitan Magistrate or District Magistrate (or any officer authorized by them) under S.14 can be challenged in court or before any other authority. This provision ensures that the authority of these officials in enforcing security interests is final and not subject to further review.

¶81

31. T hus, the Sec.14 order passed by the Ld. Section 14 order dated 02.08.2023 in C.M.P. No.5194/2023 passed by CJM, Chengalpattu is after due consideration of the application, affidavit in support of compliance of procedures along with documents is an execution Order issued where no adjudication is required. The Order is passed considering the due compliance of the provisions of the S. 14 [i-ix].

¶82

On examination of pleadings and documents produced by respective parties, the Tribunal comes to conclusion that the respondent bank as

SA No.484/2023

23.01.2026

secured creditor has initiated measures under the Act after classifying the

¶87

account as NPA.

¶88

Consequent to classification of account as NPA has issued S.13[2] demand notice followed by possession notice and have complied all the procedures as contemplated under the Act and the Rules with supporting documents. Thus it is held that the demand notice u/s S.13[2] dated 08.07.2021 and S.13[4] possession notice dated 30.11.2022 are held as valid notices issued under the Act.

¶89

For the foregoing reasons, the present SA is dismissed. Interim Order granted, if any stands vacated, pending IAs are disposed of in terms of this final order. No order as to cost. Sd/-

¶90

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

¶91

( Dictated to Steno (Suriya), transcribed by him, corrected, signed and pronounced by me on this the 23^rd day of January, 2026)

¶92

ANNEXURES

¶93

LIST OF DOCUMENTS PRODUCED BY THE APPLICANT

¶94

Sl. No.	Description of Documents	Documents No.
1.	Notice U/s.13(2) of the SARFAESI Act dated 08.07.2021.	A-1
2.	Petition and Affidavit filed by the Respondent bank before Chief Judicial magistrate, Chengalpattu dated 20.04.2023.	A-2
3.	Statement of Accounts.	A-3
4.	Impugned order passed by Chief Judicial Magistrate, Chengalpattu dated 02.08.2023.	A-4

¶95

LIST OF DOCUMENTS PRODUCED BY THE RESPONDNET

¶96

Sl.	Description of Documents	Documents
No.		No.

SA No.484/2023

23.01.2026

1.	Demand Notice under section 13(2) of the act issued by the respondent to the applicant dated 08.07.2021.	R-1
2.	Copy of Acknowledgement Card regarding service of Demand Notice issued by the Postal Authority.	R-2
3.	Possession Notice issued by the Respondent Bank to the applicant dated 30.11.2022.	R-3
4.	Copy of Postal receipts regarding service of Possession Notice.	R-4
5.	Photographs of Affixture of the Possession Notice by the Respondent dated 30.11.2022.	R-5
6.	Publication of the Possession Notice by the Respondent dated 02.12.2022.	R-6
7.	Statement of Accounts.	R-7

¶101

SCHEDULE OF PROPERTY

¶102

SCHEDULE-A

¶103

All that piece and parcel of land bearing Plot No.1 in "Subbaraya Nagar" CMDA approved layout vide PPD/LO No.85/92 Letter No.L1/14241/92 dated 21.07.1992 measuring an extent of 3421 sq.ft. comprised in S.F. No.29/IL part, Patta No.2847, as per patta S.F. No.291/12 of Thiruneermalai Village, Tambaram Taluk (now Pallavaram Taluk), Kancheepuram District (presently Chengalpattu District) and bounded on the:

¶104

North by : Plot No.6 and 7 South by : Thiruneermalai Road, East by : Land in S.F. No.291/1K; West by : Canal.

¶105

Measuring: East to West on the Northern Side: 58 Feet, Southern Side 57 Feet North to South on the Eastern Side: 60 Feet, Western Side 59 Feet.

¶106

SCHEDULE - B

¶107

All that piece and parcel of land bearing Plot No.3 in “Subbaraya Nagar" CMDA approved layout vide PPD/LO No.93/92 Letter No. L1 /17530/92 measuring an extent of 2744 sq.ft. Comprised in S.F. No.29/1K Part and 291/1J Part, patta No.2847, as per patta S.F.

SA No.484/2023

23.01.2026

No.291/11 and 291 /12 of Thiruneermalai Village, Tambaram Taluk (now Pallavaram Taluk), Kancheepuram District (presently Chengalpattu District) and bounded on the:

¶112

North by : Plot No.4 and 5 South by : Thiruneermalai Road, East by : Land in S.F. No.291/1L; West by : Plot No.2.

¶113

Measuring: East to West on the Northern Side: 49 Feet, Southern Side 49 Feet North to South on the Eastern Side: 57 Feet, Western Side 55 Feet.

¶114

SCHEDULE - C

¶115

An Undivided Share (UDS) of 635 sq.ft. of land in the Schedule A and B mentioned property totalling 5415 sq.ft. Along with the Flat No.F-1 in the 1st Floor having built area of 1217 sq.ft with a covered Car parking Slot No.4 along with EB / Water / Sewerage deposits, the common area and all the appurtenances thereon.

¶116

Sd/-

¶117

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

Shri K Senapathy v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

Shri K Senapathy v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Bank of Baroda versus Gowri

Bank of India versus Rajeswara Rao

Mrs S Pankajam versus Central Bank of India

Bank of Baroda versus Kandhan

Canara Bank versus Suresh Kumar

S Subramanian versus Jm Financial Asset Reconstruction Company Limited