Dismissed

Maria Ruby Silviya S v. South Indian Bank

DRT18 Feb 2026SA/501/2023

Case brief

AI extract

What is this about?

In this SARFAESI application, applicants sought to set aside a possession notice issued by the bank regarding a housing loan secured by a property under construction by a third-party builder. The bank cited potential structural instability and EMI defaults. The Tribunal found the procedural requirements met but noted a compliance payment made by the applicants under an interim stay order.

What did the court decide?

The SARFAESI Application stood dismissed with no costs awarded.

Maria Ruby Silviya S versus South Indian Bank — Cheque Dishonour | DRT (2026)

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SA No.501/2023

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI

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DATED THIS 18^th DAY OF FEBRUARY, 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. 501/2023

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Mrs. Mariya Ruby Silviya S, 281/41 C, Madhava Nair Colony, Therespuram, Tuticorin – 628 001.

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Mr. Jesu P, 281/41 C, Madhava Nair Colony, Therespuram, Tuticorin – 628 001. --- Applicants -Vs-

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The Authorized Officer, South Indian Bank, Regional Office: Madurai, First Floor, YMCA Building, Oppo Astoria Hotels, 70, Feet Road, Ellis Nagar, Madurai – 625 016.

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The Branch Manager, South Indian Bank, Tuticorin Branch, Office at 40,41, Pereira Street, Tuticorin - 628 001. --- 1^st & 2^nd Defendants Bank

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Mr. Deepak, S/o. A. Sagayaraj, Proprietor of Deepak Builders, 86, Guruspuram, Tuticorin – 628 001. --- 3^rd Defendant

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Page 1 of 10

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SA No.501/2023

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Appearance of Advocates: M/s. S. Balaji ---- Counsel for the Applicant Mr. R. Pandivel ---- Counsel for the 1^st & 2^nd Defendants Bank No representation for D-3.

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This SARFAESI Application was heard in the presence of Counsels for the Applicant and the 1^st & 2^nd Defendant Banks and no representation for 3^rd Defendant and fixed for passing final order before me and upon hearing the arguments of 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(1) of the SARFAESI Act, 2002 by the Applicant praying that this Hon'ble Tribunal may be pleased to set aside the Possession Notice dated 10.08.2023 issued by the 1^st Defendant Bank.

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

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The Counsel for the Applicants submitted that the 1^st Applicant is the wife of 2^nd Applicant. The Schedule Property belongs to the 1^st Applicant. The 1^st Applicant is an Office Assistant in a private school and the 2^nd Applicant is working in a private company and they are residing in a rental premises. The Applicants decided to construct a small house in the schedule property and they approached the Defendant Bank and applied for Housing Loan for a sum of Rs. 17,23,000/- on 18.02.2019. They have executed a Memorandum of Deposit of Title Deeds in respect of the Schedule Mentioned Property in favour of the Defendant Bank on 18.02.2019. The 1^st Applicant is the Principal Borrower and the 2^nd Applicant is the Co-Applicant and guarantor. After scrutiny of the loan documents, a sum of Rs. 12,05,638/- was disbursed by the Bank. Though a sum of Rs. 17,23,000/- was sanctioned, the Defendant Bank disbursed a sum of Rs. 12,05,638/- to the Applicants.

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It is further submitted that as per the reference made by the Bank Manager, Tuticorin of the 2^nd Defendant Bank they entered into a construction agreement dated 13.01.2019 with the 3^rd Defendant. The 3^rd Defendant is a builder and he is the Proprietor of Deepak Builders. The 3^rd Defendant agreed to construct the house building of Applicants for an extent of 850 sq. ft ground floor with water tank. Total construction costs are Rs. 14,19,500/-. After execution of construction agreement, the 3^rd Defendant

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Page 2 of 10

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SA No.501/2023

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started the construction on 13.01.2019 and the Applicants have paid a sum of Rs. 11,70,000/- to the 3^rd Defendant on several dates. In the meantime, the Applicants came to know that the ground floor building was constructed with poor quality materials and the structural stability of their house is unstable and unsafe. The 3^rd Defendant violated the terms of construction agreement and there is a great flaw in construction of basement foundation itself. Hence, immediately they made a complaint to the 3^rd Defendant and the 3^rd Defendant did not rectify the mistakes in the construction, instead he demanded more money from the Applicants.

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It is further submitted that immediately they have lodged a police complaint for cheating the Applicants and constructing the building in unsafe manner after the directions by Judicial Magistrate, FIR was registered against the 3^rd Defendant in Crime No. 600/2020. It is further submitted that the Tuticorin Municipal Corporation issued a demolition notice dated 01.03.2022 to the Applicants, since the house building under construction of 3^rd Defendant is unsafe and dangerous. The Applicants also filed a consumer complaint before the District Consumer Commission in CC.No. 128 of 2022, seeking compensation for the deficiency in service and it is pending before the Thoothukudi District Consumer Forum. The 3^rd Defendant without constructing the building in a proper manner, falsely claimed that the Applicants have not paid the amount as agreed in the Construction Agreement and the 3^rd Defendant has filed a suit against the Applicants for recovery of money, in C.O.S. No. 3 of 2022 before the Principal District Judge, Thoothukudi and the Applicants have filed Written Statement and the suit is pending.

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It is further submitted that the above said problem in the construction was communicated to the 2^nd Defendant Bank. Due to the poor quality in construction, their house building became uninhabitable and the Applicants were constrained to stop the construction activity at 80% of construction level and they approached the 2^nd Defendant Bank and explained the situation and also started to repay the EMI till April 2023 without any default. The Applicants have not defaulted in repayment of loan and till August, 2023 EMI is paid and the next EMI falls on 19.09.2023. Further, it is submitted that the 1^st Defendant Bank had issued a letter dated 10.02.2023 and 20.03.23 recalling the entire loan for a sum of Rs. 11,33,514.02p, since they were not able to complete the construction in 4 years. Immediately the Applicants have approached the 1^st and 2^nd Defendant Banks and explained the dispute between the Applicants and 3^rd Defendant builder and continued to pay the EMI without any default and also made a request not to proceed further as the Applicants were regular in repaying the installments without any default clause.

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Page 3 of 10

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SA No.501/2023

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It is further submitted that the delay in completing the house building is not attributable to the Applicants. The builder/3^rd Defendant did not construct the house building as per the standards and the construction put up by the 3^rd Defendant is unsafe and unstable. On obtaining the Housing Loan of about Rs. 12.00 Lakhs, the Applicants have paid a sum of Rs. 11,70,000/- to the 3^rd Defendant for constructing their house. Because of the deficiency in service and due to the poor quality in construction made by 3^rd Defendant, the house was not able to be completed. Therefore, there is no fault on the Applicants. The Applicants have paid huge money to the 3^rd Defendant for construction and they are not able even to enter into their own house.

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It is further submitted that in spite of the request made by the Applicants, the 1^st Defendant had issued a Demand Notice dated 17.04.2023 u/s. 13(2) of the SARFAESI Act for a sum of Rs. 10,91,697.62p as on 15.04.2023 from the housing loan account and illegally declared the Housing Loan account as NPA on 03.03.2023. The said Demand Notice was challenged before the Hon'ble High Court of Madras (Madurai Bench) in W.P.(MD) No. 11746 of 2023 and the same was disposed by order dated 10.05.2023. Thereafter, the Applicant made a reply to the Demand Notice vide a letter dated 03.06.2023 and requested the 1^st Defendant Bank not to proceed further under SARFAESI Act as the Applicants were repaying the monthly instalments regularly. The Applicants further submitted that in fact, they made a representation through a letter dated 01.07.2023 to the 1^st Defendant Bank to disburse the balance loan amount for a sum of Rs. 5,17,362/- as the Applicants have availed only Rs. 12,05,638/- out of the total loan sanction of a sum of Rs. 17,23,000/-.

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It is further submitted that after the receipt of the reply letter dated 03.06.2023, the 1^st Defendant Bank issued a Possession Notice dated 10.08.2023 through post without following procedures prescribed under the SARFAESI Act and taken symbolic possession of the Schedule Mentioned Property in the Possession Notice. The Applicants have not defaulted in repayment of EMI towards the loan availed from the Defendant Bank and they are paying their monthly EMI even after the issuance of Possession Notice and a sum of Rs. 14,922/- is debited on 19^th of every month towards EMI for loan repayment. Under such circumstances, aggrieved by the said Possession Notice dated 10.08.2023, the present Application was filed amongst the following other grounds:-

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Main Grounds :-

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The Authorized Officer failed to follow the provisions of the SARFAESI Act.

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Page 4 of 10

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SA No.501/2023

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The Authorized Officer erred in issuing Demand Notice u/s. 13(2) of SARFAESI Act to the Applicants when they have not defaulted in paying the monthly EMI. On the date of issuing the Demand Notice dated 17.04.2023, the Applicants have paid the EMI without any default and till date the Applicants are continuing in paying the EMI regularly. Under such circumstances, declaring the Applicants’ loan account as NPA and initiating proceedings under SARFAESI Act is illegal.

¶37

The letter of 1^st Defendant Bank dated 10.02.23 and 20.03.23 recalling the entire loan is arbitrary.

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The Authorized Officer erred in declaring the Housing Loan account as NPA as the Applicants were regular in repaying the EMI towards Housing Loan repayment.

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The 3^rd Defendant has constructed the building in an unsafe and dangerous manner and the stability of the building is in poor condition. The consumer complaint filed against the 3^rd Defendant in CC. No. 128 of 2022 and the FIR registered by Police against the 3^rd Defendant in Crime No. 600/2020, establishes that the delay is not on the part of the Applicant. Under such circumstances, recalling the loan is unwarranted.

¶40

The Authorized Officer failed to affix the Possession Notice in the Schedule Mentioned Property as per rule 6 of SARFAESI Act.

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The Authorized Officer failed to deduct the payment made by the Applicant after issuance of the Demand Notice.

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SCHEDULE OF PROPERTY

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All that part and parcel of land admeasuring 1301.17 sq.ft (ie 2.987 cents) (out of 1 Acre, 52 cents in Sy.No.14/1A1 in it Southern area 18.02 cents in it Southern in it Western area 2.987 cents plot) along with all construction, improvements, easementary rights existing and appurtenant thereon situated in Sy.No. 14/1A1(part), Corporation ward no. 17 of Tuticorin Village, Tuticorin Taluk, Tuticorin District and owned by Mrs. Maria Ruby Silviya S, morefully described in the Sale Deed No. 3070/2017 dated 23.10.2017 Sub Registrar Office Keelur and bounded on North : above mentioned 18.02 cents in it Northern Bresila Jose held plot, East : above mentioned 18.02 cents in it Southern it middle in it Bresila Jose held plot, South: East – West 20 feet road and West : Sundaram plot.

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Page 5 of 10

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SA No.501/2023

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The Applicants have submitted the following List of documents in support of their claim in the SA, which are as follows:

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Index to List of documents

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S.No.	Date	Particulars
1	13.01.2019	Construction agreement between the Applicants and 3^rd Defendant with translation
2	18.02.2019	Sanction letter issued bythe2^ndDefendant Bank
3	21.07.2022	Status of the CC.474 of 2022 on the file of Chief Judicial Magistrate Court,Thoothukudi filed against 3^rdDefendant
4	24.06.2022	Status of Consumer complaint No. 128 of 2022 filed against 3^rdDefendant with translation
5	28.06.2022	OS No. 3 of 2022 filed by the 3^rdDefendant against the Applicants
6	01.03.2022	Demolition Notice issued against the scheduled property with translation
7	10.02.2023	Recall Notice issued by 2^ndDefendant Bank
8	20.03.2023	Recall Notice issued by1^stDefendant Bank
9	17.04.2023	Demand Notice issued bythe 1^stDefendant Bank
10	10.05.2023	Final Order in W.P. (MD) No. 11746 of 2023 before the Hon’ble Madurai Bench of Madras High Court
11	03.06.2023	Replyto the Demand Notice bythe Applicant
12	16.06.2023	Reply given bythe 1^stDefendant Bank
13	01.02.2019 to 18.08.2023	Statement of Account for the Housing Loan availed by the Applicant
14	01.07.2023	Letter issued bythe Applicants to the 1^stDefendant Bank
15	10.08.2023	Impugned Possession Notice issued bythe 1^stDefendant Bank

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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 Vakalat, Reply Statement, Written Arguments, Typed set of papers & Addl. Typed sets of papers in which they submitted that the Defendant Bank strongly & vehemently & specifically denies the allegations under the heading "Facts of the case" & "Grounds" of the SARFAESI Application. The Applicant is put to strict proof of every one of the said allegations with valid & acceptable evidence. Most of the allegations are unwarranted so far as the matter-in-issue is concerned.

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It is further submitted that the Defendant Bank has not referred and not introduced/recommended any builder or the 3^rd Defendant to the Applicants and whereas the Applicants themselves have chosen the 3^rd Defendant builder for their construction and that the Applicants have defaulted in repayment of loan and that the Bank was not hostile towards the Applicants, whereas the Bank has rightly declared the account as NPA and that the declaration of NPA & action of bank is neither illegal nor bad in law and that the bank has followed all the provisions of the SARFAESI Act & Rules and that the notice issued by bank recalling the entire loan is neither arbitrary

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Page 6 of 10

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SA No.501/2023

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nor illegal nor against the interest of justice and that the Bank is entitled to recall the entire loan and that merely because there is a dispute between the Applicants & the 3^rd Defendant builders and that merely because the 3^rd Defendant builder was committed mistakes, the bank cannot abstain from recalling the entire loan since there is a violation of Terms and Conditions of sanction and that the bank has affixed the Possession Notice and the Bank deducted all the payments made by the Applicants and issued notices and the bank has followed all the statutory provisions of the Act & Rules and so the notices issued by the bank is not liable to be set aside.

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It is further submitted that in the entire SARFAESI Application the Applicants made allegations only against the 3^rd Defendant builder. As seen from the SARFAESI Application already criminal case is pending against the 3^rd Defendant builder on the foot of the complaint lodged by the Applicants & the same is pending and further the Applicants have filed case against the builder in the consumer court & the same is also pending and that the 3^rd Defendant builder has filed a suit against the Applicants in the Civil Court and the same is also pending. The disputes between the Applicants & the 3^rd Defendant builder have to be resolved by themselves only and that the Applicants should not find fault on the bank and that the bank is no way connected for the disputes between the Applicants & the 3^rd Defendant builder and that the bank is not responsible for the same.

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It is further submitted that the bank has recalled the entire loan and that declared the account as NPA for the following reasons,

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a. Violation of Terms and Conditions in the sanction,

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b. Building is constructed in unsafe manner

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c. Already corporation has issued notice for demolishing

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d. There is erosion on the value of the security

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It is further submitted that the Bank has issued Demand Notice dated 17.04.2023 and the same was also duly served to the Applicants on 19.04.2023. The Bank has taken symbolic possession of the property on 10.08.2023 & issued Possession Notice and the Possession Notice was duly served on the Applicants on 16.08.2023 and affixed the Possession Notice on the conspicuous part of the property and the Possession Notice was also published both in Tamil & in English Newspapers on 12.08.2023. There is no procedural irregularity on the part of the Defendant Banks in issuing the Demand Notice & Possession Notice and the alleged procedural irregularities mentioned in the SARFAESI Application are not factually & legally correct and that the Defendant Bank has issued the Demand Notice & Possession Notice only as per the provisions & procedures of the SARFAESI Act & Rules.

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Page 7 of 10

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SA No.501/2023

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It is further submitted that the Applicants are a willful & chronic defaulter. The Applicants willfully & wantonly & deliberately not repaying the loan amount despite having sufficient means to repay the loan amount. The only remedy available to the Applicants is to re-pay the entire dues to the Defendant Bank in order to stop the sale as per section 13(8) of the SARFAESI Act. The SARFAESI Application is not maintainable either in law or on facts.

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

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Typed set filed on the side of the 1^st & 2^nd Defendants Bank

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S.No.	Date	Particulars
1	17.04.23	Demand Notice withpostal receipts & AD cards
2	03.06.23	Representation bythe defaulters for Demand Notice
3	16.06.23	Reply by bank for the representation of defaulters with postal receipts & AD Cards
4	10.08.23	Possession Notice with postal receipt & AD Cards
5	10.08.23	Possession Notice Paper Publication in English daily “The New Indian Express”published on 12.08.23
6	10.08.23	Possession Notice Paper Publication in Tamil daily “Dinamani” published on 12.08.23
7	10.08.23	Photographyshowingaffixture of Possession Notice
8	01.03.22	Notice issued to the Applicants byTuticorin Corporation
9	17.03.22	Letter issued by the Applicants to builder and Inspector of Police Tuticorin

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1^st Additional Typed set filed on the side of the 1^st & 2^nd Defendants Bank

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S.No.	Date	Particulars
1	18.02.19	Sanction letter
2	---	RBI Circular for NPA Classification

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2^nd Additional Typed set filed on the side of the 1^st & 2^nd Defendants Bank

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S.No.	Date	Particulars
1	10.08.23	Possession Notice Paper Publication in English daily “The New Indian Express”published on 12.08.23 Original Paper enclosed
2	10.08.23	Possession Notice Paper Publication in Tamil daily “Dinamani” published on 12.08.23 Original Paper enclosed
3	10.08.23	Photography showing affixture of Possession Notice Original Photos enclosed

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4. ON THE BASIS OF ABOVE PLEADINGS, THE POINT WHICH ARISES FOR CONSIDERATION IS: -

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WHETHER THE APPLICANTS ARE ENTITLED TO GET THE RELIEFS AS PRAYED FOR?

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Page 8 of 10

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SA No.501/2023

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5. Having heard the parties and after going through the entire documents available on records, this Tribunal find that the Applicants have availed a Housing Loan for a sum of Rs. 12,05,638/- (Rupees Twelve Lakhs Five Thousand Six Hundred and Thirty-Eight only) from the 2^nd Defendant Bank for construction of their own House. The 1^st Applicant is the Principal Borrower and the 2^nd Applicant is the Co-Applicant and guarantor. They have executed a Memorandum of Deposit of Title Deeds in respect of the Schedule Mentioned Property in favour of the Defendant Bank on 18.02.2019.

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It is further submitted by the Applicants that there is no default in payment of EMI to the Defendant Bank. However, the Defendant Bank in their Reply Statement stated that the Applicants have defaulted in repayment of loan amount and the hence the loan account has been classified as NPA on 03.03.2023. I also find that the Corporation of Tuticorin District vide letter dated 01.03.2022 (Page no. 34 of Applicant’s main SA) has issued a Demolition Notice to the Impugned Property stating that the building was dangerous to the public as it may fall at any cost and the same is to be removed immediately. I also find that the Defendant Bank has issued two recall notices dated 10.02.2023 (Page no. 36 of Applicant’s main SA) & 20.03.2023 (Page no. 37 of Applicant’s main SA) as a final notice to the Applicants before issuance of Demand Notice dated 17.04.2023. However, the Applicants have not settled the dues to the Defendant Bank.

¶77

Thereafter, the Defendant Bank has issued a Demand Notice dated 17.04.2023 u/s. 13(2) of SARFAESI Act for a sum of Rs. 10,91,697.62p (Rupees Ten Lakhs Ninety-One Thousand Six Hundred Ninety-Seven and paise Sixty-Two only). The Bank has also filed the copies of AD Cards for having served the Demand Notice dated 17.04.2023 to the Applicants. I also find that the Applicants have sent a Representation dated 03.06.2023 u/s. 13(3A) of SARFAESI Act in response to the Demand Notice dated 17.04.2023 (Page nos. 8 to 13 of Bank’s typed set of papers). The Defendant Bank has also sent a reply to the representation of the Applicants vide their letter dated 16.06.2023.

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Page 9 of 10

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SA No.501/2023

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Thereafter, the Defendant Bank had issued Possession Notice dated 10.08.2023 u/s. 13(4) of SARFAESI Act. The Bank has also filed copies of AD Cards for having sent the copy of Possession Notice dated 10.08.2023 to the Applicants (page nos. 21 to 23 of Applicants’ main SA). The Bank has also filed original Paper Publication made in respect of Possession Notice dated 10.08.2023 in both English & Tamil dailies published on 12.08.2023 (Page nos. 1 & 2 of 2^nd Additional typed set filed by the Defendant Bank). Further, the Defendant Bank has also filed the original photos for having affixed the Possession Notice dated 10.08.2023 on the conspicuous part of the property (Page no. 3 of 2^nd Additional typed set filed by the Defendant Bank). Hence, I do not find any irregularity on the issuance of SARFAESI Notices to the Applicants by the Defendant Bank.

¶81

However, in this case, I find that this Tribunal has granted an AdInterim Stay Order dated 27.09.2023. The Applicants have also complied with the conditions imposed by this Tribunal and paid a total sum of Rs. 2,67,000/(Rupees Two Lakhs Sixty Seven Thousand only) to the Defendant Bank and showed their bona-fide.

¶82

In the result,

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SA No. 501/2023 stands dismissed. No costs.

¶84

Consequently, all pending IAs (if any) are also disposed of. No costs.

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Dictated to PA (DK), taken down, transcribed, typed by her, corrected and pronounced by me in the Open Court in this the 18^th February, 2026.

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sd/- (SEEMA SINHA) PRESIDING OFFICER

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Dictated & corrected by me

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sd/-

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(SEEMA SINHA) PRESIDING OFFICER

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Typed by me (D. Krishnaveni, PA)

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Uploaded on 24.02.26

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Page 10 of 10

Maria Ruby Silviya S v. South Indian Bank

Case brief

What is this about?

What did the court decide?

Maria Ruby Silviya S v. South Indian Bank

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

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Case details

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