Dismissed

Mr P Babu v. India Resurgence Arc Pvt. Ltd.

DRT20 May 2026SA/515/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed the applicant's application challenging the Section 14 order passed by the Chief Judicial Magistrate. The Tribunal held that the Section 14 power is ministerial and non-adjudicatory, relying on Supreme Court precedents, and found the respondent complied with the SARFAESI Act requirements post-assignment of debt.

What did the court decide?

Application dismissed; respondent directed to handover household articles within 10 days.

Mr P Babu versus India Resurgence Arc Pvt. Ltd. — Banking and Recovery | DRT (2026)

SA No.515/2022

20.05.2026

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 20^th day of May, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SARFAESI APPLICATION No. 515 of 2022

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Mr. P. Babu, (M/50) S/o. Parasuraman, Old No.15B New No.55, TS. No.903, Narayanapalayam Street, Kancheepuram-631 501. ….Applicant

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-Vs-

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India Resurgence ARC Pvt Ltd., Rep. by its Authorized Officer, Mr. S. Mathew Arun, No.304, Piramal Towers, Peninsula Corporate Marg,

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Lower Parel, Mumbai-400 013. ….Respondent

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Counsels on record / appeared:

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Counsel for Applicant : M/s. J.J.R. Edwin, C. Seemon, C. Obed John. Counsel for respondent : M/s. V. Balasubramani, V. Vadivelan, M. Umamaheshwari, R. Kalaivani, K. Indhumathi.

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ORDER ON SA 515/2022

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The present Securitization Application [SA] is filed on 16.11.2022 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.515/2022

20.05.2026

The applicant has challenged the Sec.14 order dated 06.06.2022 in C.M.P. No.4100 of 2022 passed by Chief Judicial Magistrate, Chengalpet and the outstanding amount due as per Sec.14 order is Rs.2,16,58,600.72/-

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The applicant had availed an SME loan for a sum of Rs.95,00,000/-, under Account No. XMORSA100054663 from Religare Finvest Limited against the applicant’s property. The applicant executed a Memorandum of Deposit of Title Deeds (MODT) in favour of Religare Finvest Limited with respect to the schedule-mentioned property. The applicant submits that, so far, a sum of Rs.9,00,000/- has been paid, leaving an outstanding balance of Rs.86,00,000/-.

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3.1 It is submitted that the applicant had borrowed money only from Religare Finvest Limited and not with the respondent India Resurgence ARC Pvt. Ltd., and that the applicant had handed over all the original documents to Religare Finvest Limited without marking or written permission from the applicant or proper court order.

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3.2 The applicant submits a Onetime settlement (OTS) was entered between the Religare Finvest Limited and the applicant for a sum of Rs.80,00,000/- for which the Religare Finvest Limited, have also agreed. Meanwhile the Religare Finvest Limited sold the liabilities to India Resurgence ARC Pvt. Ltd. for a sum of Rs.30,00,000/- without issuing any notice to the applicant , handed over all the original documents to the India Resurgence ARC Pvt. Ltd., did not give loan of even Rs.1/- to the applicant.

SA No.515/2022

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3.3 However, the applicant is willing to settle the amount of Rs.90,00,000/- only with Religare Finvest Limited, in whose favour the Mortgage Deed bearing Document No.5808 of 2014 was executed by the applicant, the respondent India Resurgence ARC Pvt. Ltd., has no rights, whatsoever in the properties of the applicant.

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3.4 The India Resurgence ARC Pvt. Ltd., has issued a notice to the applicant without even giving Rs.1/- as loan and hence the notice issued is invalid before the court of law. The brutal and fraudulent claim of Rs.2, 16,58,600.72/- is a clear loot by the unconnected company the India Resurgence ARC Pvt. Ltd., by takeover /fraudulent act and swallowed many such properties. The loan balance amount has been increased to Rs.2,16,58,600.72/- by the illegal claim of the India Resurgence ARC Pvt. Ltd.

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3.5 Suddenly, the India Resurgence ARC Pvt. Ltd., have claimed a sum of Rs.2,16,58,600.72/- and demanded the applicant to pay the same immediately and underestimated the property value to Rs.2,16,58,600.72/- are trying to sell the property.

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3.6 The applicant is seeking for one time settlement (OTS) on the SME Loan account Nos. XMORSA100054663 is willing to pay Rs.90,00,000/- for the discharge of legal liability and the applicant is also trying to sell the property to clear the loan liability.

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3.7 The applicant submits that the Religare Finvest Limited is running the business finance in all the parts of the country fraudulently dispatching the

SA No.515/2022

20.05.2026

documents of the applicant on the pretext of takeover. The respondent finance company did not paste the earlier possession notice on the outdoor or any other part of the schedule of property and without following the Rules and regulation of the SARAESI Act.

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3.8 Due to Corona Pandemic the income of the applicant became less and the applicant is struggling with health issues which led to stoppage of interest payment for 4 or 5 months even then the applicant had already paid Rs.9,00,000/- leaving a balance of Rs.86,00,000/-.

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3.9 It is contended that the respondent's finance company India Resurgence ARC Pvt Ltd., threatened the applicant to take physical possession by Order dated 06.06.2022 passed by Special Judge/CJM, Chengalpat in CMP. No. 4100 of 2022, who has appointed Ms. A. Mappilai Meeran as the advocate commissioner.

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3.10 In the grounds, it is contended the applicant strongly opposed the amount outstanding due as per S.14 order dated 06.06.2022 as the respondent finance company did not properly give credits and respondent willfully violated rule, regulations and guidelines of RBI by imposing the unnecessary interest towards his account when the applicant has paid Rs.9,00,000/- leaving a balance of Rs.86,00,000/-.

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3.11 The entire proceedings initiated by the respondent are illegal, unjust, arbitrary, and not in accordance with the provisions of the said Rules, and therefore unsustainable in law.

SA No.515/2022

20.05.2026

3.12 The respondent finance company failed to properly classify the applicant’s account as a Non-Performing Asset (NPA) and did not mention the date of NPA in the possession notice or sale notice, which is in violation of RBI guidelines. The respondents have not published the demand notice in two leading newspapers one in English and another in a vernacular language having sufficient circulation in the locality which is in violation of Sub-Rule (6) of Rule 8 of the said Rules.

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3.13 After the enactment of the SARFAESI Act, banks and financial institutions have been invoking Section 13 of the Act without judicial intervention and in an arbitrary manner, which is against the principles of natural justice.

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3.14 The demand notice is in violation of sub-rule (5) of Rule 8, which mandates that before effecting the sale of the property, the Authorized Officer shall obtain a valuation from an approved valuer and, in consultation with the borrower, fix the upset price of the property.

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3.15 The respondents’ finance company has no power to take action under securitization act against the applicant as they are not borrowed any money from respondent and the same has been violative of the said Act and Rule. One these grounds, the applicant prays to set aside the Sec.14 order passed by Hon’ble CJM, Chengalpat.

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The respondent bank has filed a counter contending that the applicant availed a loan of Rs.95,00,000/- from the original lender, M/s. Religare Finvest Limited, and Original Lender assigned the applicant’s

SA No.515/2022

20.05.2026

account vide Deed of Assignment bearing Document No. 3330 of 2020 dated 05.11.2019 in favour of the assignee, M/s. India Resurgence ARC Private Limited (the respondent).

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4.1 The applicants failed to adhere to the terms of the loan agreement and defaulted in payment of the monthly installments. As a result, the respondent classified the applicants’ account as NPA on 31.07.2015 within the meaning of Section 2(o) of the Act and issued a statutory notice under Section 13(2) of the Act on 22.06.2020, calling upon the applicants to discharge their liabilities in full within 60 days from the date of receipt of the demand notice. The notice was duly sent to the applicants, and the postal receipt and the same was acknowledged by the applicants.

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4.2 The Applicants despite knowledge of the statutory notice, fully aware of the consequences and their statutory obligation towards the Respondent had failed to discharge their liability within the statutory period.

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4.3 The respondent being a secured creditor, upon default by the borrower and after issuance of notice under Section 13(2) of the Act, is entitled to proceed under Section 13(4) of the Act to take possession of the secured asset. Accordingly, the original lender issued a possession notice dated 26.03.2021, which was published in two newspapers one in The New Indian Express (English) and another one in Dinamani (Tamil), and was also affixed on the secured property. Despite the said possession notice, the applicants failed to repay the outstanding dues of Rs.2,16,58,600.72/-

SA No.515/2022

20.05.2026

4.4 The respondent denies the averments in the SA and put the applicant to the strict proof of the same. The respondent submits that the applicant has availed the loan from the Original Lender M/s. Religare Finvest Limited for Rs.95,00,000 who has transferred their rights to recover the liability of the applicant and they have the right to recover the outstanding due.

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4.5 The respondent has not undervalued the property and they have acted upon the valuation report. The applicants were declared has NPA in the year of 2015 itself and for more than seven years they did not attempt to settle the account now with unclean hand and with ill-intention they wanted to settle the loan account.

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4.6 The Respondent have followed the SARFAESI Act and guideline of Reserve bank of India and have obtained the Section 14 Order passed by the Chief judicial Magistrate, Chengalpet in Crl.M.P.4100 of 2022. The respondent has levied the interest as per the agreed terms and conditions of the loan agreement and has not acted against in the eyes of law and the respondent did not suppress any facts.

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4.7 The Respondent submits that they have followed the SARFAESI Act and the applicant has raised the averment with ill-intention and false averment. The demand notice was served to the applicant and well acquainted with fact about the issuance of Demand Notice and Possession Notice. In spite of several request and reminder the applicants failed to adhere the terms and condition of the loan agreement by defaulting the

SA No.515/2022

20.05.2026

monthly installment and the appropriate legal actions were taken against them.

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4.8 Despite of several opportunity given by the Respondent to the applicants to make outstanding due payable to the Respondent, the applicants had not taken any steps to repay the said dues to the Respondent, whereas filed the above appeal with false allegation is nothing but to prolong the measures taken by the respondent to recover their legitimate claim. Hence, the respondent 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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There is no disputation of facts that the applicant availed a loan of Rs.95,00,000/- from the original lender, M/s. Religare Finvest Limited. The said Original Lender assigned the applicant’s account vide Deed of Assignment bearing Document No. 3330 of 2020 dated 05.11.2019 in favour of the assignee, M/s. India Resurgence ARC Private Limited.

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5.1 The applicant has questioned the S.14 Order mainly on two grounds, firstly that the applicant had not borrowed any form the respondent herein, hence they are not liable to repay the same.

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5.2 The applicant admits the availing the loan from original lender, M/s. Religare Finvest Limited who had assigned the debt to the respondent herein, vide Deed of Assignment bearing Document No. 3330 of 2020 dated 05.11.2019 in favor of the assignee, M/s. India Resurgence ARC Private Limited. On assignment, the respondent herein has stepped into the shoe

SA No.515/2022

20.05.2026

of the lender and proceeded under the Act. Hence the contention that the applicant had not borrowed any money from respondent fails.

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5.3 Due to continuous default in the repayment, the loan account of the applicant was classified as NPA on 31.07.2015 in accordance with RBI guidelines. Though applicant contend that the classification of the account as NPA is not as per RBI guidelines have failed to point out the clauses which are violated and how the classification is bad. A mere statement that classification is bad cannot sustain.

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5.4 Subsequent to classification of the account as NPA, the bank has issued S.13(2) Demand Notice dated 11.06.2020, 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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5.5 The Sec.13(2) Demand Notice is sent by RPAD which the applicant have received the Demand Notice as per the tracking report produced at Pg.34-43 of counter. In spite of receipt of Sec.13(2) demand notice as the borrower and the guarantor did not liquated the liability within 60 days and nor raised any objections to the demand made, the respondent bank has proceeded further under the Act.

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5.6 The Respondent issued the possession notice under Section 13(4) on 26.03.2021; the Possession Notice is affixed on the conspicuous place of the property as per the photograph of affixture produced at Page No.45-47 of respondent bank’s typed set.

SA No.515/2022

20.05.2026

5.7 As the applicants failed to repay the entire outstanding amount the bank has approached the CJM, Chengalpat in u/s 14 of the SARFAESI Act. The Hon’ble CJM after perusal of the application and the loan documents produced by the respondent bank allowed the S.14 application on 06.06.2022.

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5.8 Thus, it is evident that the Ld. Magistrate on examination of the pleadings in the S.14 application supported by the documents, have passed an order dated 06.06.2022 directing the Advocate Commissioner to take the possession of the property. Though the applicant has filed the present SA impugning the Sec.14 order dated 06.06.2022 passed by Ld. CJM, Chengalpat has not pointed out any illegality in the measures taken by the respondent herein.

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5.9 On the other hand, it is seen that the statutory notices, the Demand Notice dated 11.06.2020 and Possession Notice dated 26.03.2021 are issued to the applicants in accordance to law, applicants have waived right to raise any contention with regard to Sec.13(4) Possession Notice within the period of 45 days. Hence any contentions to Sec.13(4) Notice is barred by limitation.

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5.10 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

SA No.515/2022

20.05.2026

under Section 14 does not involve any element of quasi-judicial function nor it requires any application of mind.

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5.11 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:

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“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”.

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5.12 The Supreme Court in the judgment of Authorized Officer, Indian

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Bank v D Visalakshi and other, has held that a Chief Judicial Magistrate is equally competent to deal with the application moved by the secured creditor under Section 14 of the SARFAESI Act. Hence, the Sec.14 dated 06.06.2022 in C.M.P. No.4100/2022 passed by the Hon’ble CJM, Chengalpat is a valid Order.

SA No.515/2022

20.05.2026

5.13 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.

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5.14 T hus, the Sec.14 order dated 06.06.2022 in C.M.P. No.4100/2022 passed by the Hon’ble CJM, Chengalpat 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

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S. 14 [i-ix].

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5.15 On examination of pleadings and documents produced by respective parties, the Tribunal comes to conclusion that the respondent bank as secured creditor has initiated measures under the Act after classifying the account as NPA.

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5.16 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 11.06.2020 and S.13[4] Possession Notice dated 26.03.2021 are held as valid notices issued under the Act.

SA No.515/2022

20.05.2026

5.17 For the foregoing reasons, the present SA is dismissed. IA.No.1520.2022 filed for respondent finance company to open the lock and handover the documents, other basic essentials items of the family was not pressed by the applicant during the pendency of the SA.

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5.18 The respondent is directed to handover the house hold articles and

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other items which are not hypothecated or mortgaged favoring the respondent within 10 days from the date of obtaining this Order. 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 (Suriya), transcribed by him, corrected, signed and pronounced by me on this the 20^th day of May, 2026)

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ANNEXURES

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LIST OF DOCUMENTS PRODUCED BY THE APPLICANT

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Sl.	De	scription of Documents	Documents
No.			No.
1.	Before the	Special Judge / Chief Judicial	A-1
	Magistrate,	Chengalpat in order vide
	CMP.No.4100	of 2022 dated 06.06.2022.

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LIST OF DOCUMENTS PRODUCED BY THE RESPONDNET

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Sl. No.	Description of Documents	Documents No.
1.	Copy of Assignment Agreement dated 05.11.2019	R-1
2.	Copy of 13(2) Notice under SARFAESI Act along with postal receipts and Tracking Consignment dated 11.06.2020	R-2
3.	Copy of 13(4) Notice under SARFAESI Act along with postal receipts dated 26.03.2021	R-3
4.	Copy of affixture photos of possession notice	R-4

SA No.515/2022

20.05.2026

5.	Copy of Chief Judicial Magistrate Order dated	R-5
	06.06.2022
6.	Copy of Board of Resolution dated 31.01.2022	R-6

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SCHEDULE OF PROPERTY

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All that piece and parcel of land building admeasuring 2640 sq.ft., at Plot No.55/15B, Narayanpalayam Street, Kanchipuram Town II division, Kanchipuram comprised in T.S. No.903/3B (Part) Old T.S. No.903 (Part) Kanchipuram Municipality, Kanchipuram Taluk, Kanchipuram District, and lying within the Sub-Registration District of Kanchipuram Joint-IV in the Registration District of Kanchipuram ad Bounded as Follows:- North by : Street, South by : Property belongs to Krishnan Chettiar, East by : Property belongs to Arumuga Naicker, West by : Property belongs to Sriramulu Reddy (alia) Munusamy Chettiar.

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Sd/-

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

Mr P Babu v. India Resurgence Arc Pvt. Ltd.

Case brief

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Mr P Babu v. India Resurgence Arc Pvt. Ltd.

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