Securitization Application challenging a sale notice and possession taken under the SARFAESI Act. The Tribunal examined compliance with notice periods, valuation reports, and auction procedures, ultimately dismissing the challenge as inadmissible and the measures as valid.
The Securitization Application was dismissed; interim orders were vacated and the sale measure was upheld.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
SA No.523/2023
30.01.2026
1
IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI
Dated this the 30th day of January, 2026
Present: SMT. S.V. GOWRAMMA
Presiding Officer
SA No. 523 of 2023
All residing at:
No.39, Habibullah Salai, T.Nagar, Chennai – 600 018.
…Applicants
-Vs-
Counsels on record / appeared:
| Counsel for Applicant |
: Ms. Ananda Gomathy |
|---|---|
| Counsel for1stRespondent | : Mr. E. Hariharan |
| Counsel for 2ndRespondent | : Mr. K. J. Parthasarathy |
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ORDER ON SA 523 /2023
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 the action and the measure taken by the secured creditor under the Security Interest Enforcement Rules, 2002 [for short the Rules].
3. Pleadings of the applicant:
3.1 The applicants availed a loan against rent receivables from the respondent bank for a sum of Rs.19,40,00,000/- along with 7 loans out of which one of the loan accounts has been closed and two loan accounts are standard and four loan accounts were classified as NPA. The respondent bank has issued Demand Notice dated 04.03.2019 without mentioning the date of classification of loan account as NPA.
3.2 In spite of repayments made, the respondent bank has filed a C.M.P.No.4884 of 2020 on 06.07.2019 under Section 14 of the SARFAESI Act before the Chief Metropolitan Magistrate, Egmore, Chennai – 600 008. and the Ld. CMM has appointed an Advocate Commissioner to take the physical possession of the property situated at: Door No.105, Dr. Radhakrishnan Salai, Mylapore, Chennai and Door No.103, P.S. Sivasamy
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Salai. Though the applicants had made a payment of Rs.6.00 crores to the respondent bank vide order dated 14.02.2020
3.3 The applicants filed an SA No.50 of 2021 before the Hon’ble DRT-I challenging the taking of physical possession of the property with the existing tenants and rents are paid to the respondent bank till date. The respondent bank proceeded further and issued sale notice dated 17.03.2021 and sale notice dated 10.05.2021 which were challenged by the applicants before the Hon’ble DRT-I Chennai in SA No.149 of 2021 and SA No.169 of 2021 and the same came to be disposed for want of bidder in both the auction sale notices.
3.4 The respondent bank has issued another sale notice dated 04.08.2021 which has been challenged before the Hon’ble DRT-II Chennai in SA No.250 of 2021 which came to be allowed with cost. Further the respondent bank has issued a Sale notice dated 13.09.2021 which has been challenged before theHon’ble DRT-II Chennai, in SA No.332 of 2021 and the same came to be dismissed as there were no bidders for the auction sale.
3.5 As the respondent bank has issued another sale notice dated 03.02.2022 which has been challenged before the Hon’ble DRT-II Chennai which was transferred to Hon’ble DRT-III, Chennai and renumbered as TSA No.537 of 2023 and the TSA came to be dismissed as infructuous. It is contended that the respondent bank has issued Sale notice dated 19.09.2023 without following provisions of the Act and the present SA has
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been filed challenging the sale notice dated 19.09.2023 fixing the sale to be held on 12.10.2023.
3.6 In the grounds, the sale notice is challenged contending that the unsecured properties were mentioned in the Demand Notice i.e., Item Nos. 1 and 2 and applicants have the secured property at Item No.3 and 4 of the Demand Notice. The sale notice has been issued without complying Rule 8(1) and Rule (9) of the Security Interest (Enforcement) Rules; the sale notice is also not affixed on the conspicuous part of the property.
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applicants had purchased it at Rs.36,89,62,895/- in the year 2011. At the time of sanction of loan, applicant has taken a valuation report wherein the Open Market value is Rs.73,57,00,000/- Fair Market value Rs.70,06,60,000/- and Distress Sale value Rs.69,17,48,020/- which the respondent bank has fixed a Reserved price of Rs.37,59,00,000/-.
3.9 As per the settled law the valuation report of an immovable property is valid for a period of 4 years with the exception of gold and the action of Authorized officer is highly prejudicial to the interest of borrower. The respondent bank has failed to include the encumbrances as per Rule 8(7) of the Act and also failed to disclose that some portions of the property were sealed by CMDA and also in possession of Greater Chennai Corporation.
3.10 The payments made by the applicants were not duly given credit to the applicant’s loan accounts and also charged legal expenses of Rs.26,91,274/- as reflected in the terms and conditions of the sale notice. The Authorized officer cannot decide on the bidding between the bidders as per the Term No.17, 21, 23, 28, 29, 30 which is deviation of statutory provision. Hence the Sale notice dated 19.09.2023 is illegal and liable to set aside.
3.11 During the pendency of the present SA, applicants have filed an IA No.1841/2023 on 29.11.2023 to prevent any changes or alteration in the physical possession of the schedule property contending that the auction purchaser has paid the final sale consideration only on
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09.11.2023 and the sale certificate is also issued on 09.11.2023. Further, the schedule property was locked and sealed by Corporation of Chennai for tax dues of the property, however the auction purchaser has cleared the tax dues only on 14.11.2023.
3.12 It is pertinent to note that Corporation of Chennai had broken their own seal and started exhibiting the movable properties on 20.10.2023 and 21.10.2023 before the auction purchaser cleared the tax dues of property which were also challenged before the Hon’ble High Court of Madras in W.P.No.31134 of 2023. Though, the respondent bank failed to produce proper list of inventories taken at the schedule property and the Hon’ble High Court of Madras has granted one week time to applicants to take the movables from the schedule property.
3.13 Further the auction purchaser being a developer has started demolition process and the physical possession has been altered, hence if the structure of buildings is altered would cause great hardship to the applicants and prays for prevention of any physical changes to the schedule property and to set aside the Sale notice dated 19.09.2023.
4. Objections of the respondent bank:
4.1 The respondent bank has filed a detailed counter inter alia contending that each and every allegation made by the applicant is denied. The respondent bank has served the impugned sale notice dated 19.09.2023 to the applicants, the allegations that the sale notice does not
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contain vital details and not issued under the provisions of the SARFAESI Act does is not sustainable.
4.2 The unsecured properties are mentioned in the Demand Notice as additional securities to the loan availed by applicant’s group of companies and the same is evident from the sanction letter dated 19.01.2015. The Respondent bank has complied with the Rule 8 & 9 of the S.I.E. Rules, as the sale notice dated 19.09.2023 was delivered on 22.09.2023 and acknowledgement cards are produced. The Sale notice is duly affixed on the schedule property on 26.09.2023 and also published in two Newspapers, one in “Times of India” (English) and another in “Dinakaran” (Tamil) both dated on 26.09.2023.
4.4 The respondent bank has obtained valuation report as per the order passed by this Tribunal in TSA No.537 of 2023 directing to obtain two sets of valuation report and to issue fresh sale notice. The respondent has obtained valuation reports dated 27.07.2023 and 11.08.2023 from an approved valuer and present sale notice required only 15 days clear notice to be issued to borrowers and guarantors.
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4.5 In fact the respondent bank has mentioned all encumbrances in the schedule property and the lock and seal of CMDA is not an encumbrance to the scheduled as it is a tax collecting effort, the encumbrance will only affect the auction purchaser and not the borrower nor guarantors. Hence the borrower or guarantor are not prejudiced in any manner.
Objection of the Auction Purchaser:
4.8 The 2nd Respondent is the Auction purchaser adopts the objections of the 1st respondent bank vide proceedings dated 29.10.2024. However, the 2nd respondent has filed their counter to IA No.1841 of 2023 filed by the applicants to prevent any physical modifications to the schedule property contending that IA filed by the applicants is liable to be dismissed on maintainability as the removal of the movables is almost completed and also obtained permission from concerned authorities to demolish the superstructure of the building.
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Though the applicants have filed W.P.No.31134 of 2023 where the Hon’ble Madras High court has considered the inventories produced by both the applicants and 1st respondent bank and passed orders which the 2nd respondent is not concerned, hence contentions in IA does not have any scope to the present SA challenging the Sale notice issued by the 1st respondent.
4.9 The 2nd respondent has invested a sum of Rs.43 crores and the applicants also have failed to comply with the conditional order passed by this Tribunal, hence the 2nd respondent is the successful bidder in the auction conducted by the 1st respondent and the sale certificate is also registered in favor of the auction purchaser, prays for dismissal of the present SA.
Heard both sides of the Counsels and perused the records of the case.
5.1 It is discernible from the records that the applicants admit the availing of 7 loans in which one loan account has been closed and two loan accounts became standard and four loan accounts are declared as NPA (Non-Performing Assets). There is no disputation about mortgage of property as security towards the credit facilities and that due to default in repayment the loan accounts are classified as NPA.
5.2 The challenge to sale notice dated 19.09.2023, is firstly that the demand notice issued by the respondent does not contain the date of NPA, the said contentions was raised by the applicant in SA 250/2021
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before DRT-II and the same is already adjudicated in para 9 and 10 of the Order dated 30.09.2021 and the relevant para of the Order is reproduced as under:
“9. The first and foremost contention of the applicant is
that the demand notice issued by the respondent does not contain the date of NPA, this contention is refuted by Ld. Counsel for the respondent taking resort to Section 13(3) of the SARFAESI Act and contents that there is no mandatory requirements that the date of NPA should clearly mentioned in demand notice. In reference to the said contention, it will be appropriate to reiterate Section 13(3) of the Act.
Section 13(3): 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.
Hence, by virtue of the above provision, the contention of the applicant that non mentioning of the date of NPA vitiates the demand notice is legally unsustainable.”
5.3 Additionally in para 10 of the Order it is clarified that the respondent bank originally classified the loan accounts as NPA on 20.04.2018 and consequent to the payments made by applicants, the loan account was regularized. Further, the loan account was again
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classified as NPA on 18.02.2019 due to default made in the repayments. As the contention of applicant that non mentioning of date of NPA vitiates the demand notice is already considered and answered in the Order dated 30.09.2021, hence the said contention does not require any further consideration and the said contention is nothing but replication of pleading and is liable to be rejected as legally unsustainable.
5.4 After classifying the loan account as NPA, respondent bank has proceeded further and issued Section 13(2) Demand Notice dated 04.03.2019 to the applicants which is not disputed. As the applicant did not discharge their entire liabilities within a period of 60 days, the respondent bank has proceeded further and issued Section 13(4) Possession Notice dated 19.06.2019 to the applicants here in which the receipt is not disputed nor has challenged the possession notice within the period of 45 days, hence any contentions/ averments to S.13[4] notice is barred by limitation under S.17 of the Act.
5.5 It is matter of record that the applicant has challenged the Section 14 order in SA 50 of 2021 which was transferred from Hon’ble DRT – I to Hon’ble DRT – II and renumbered as TSA 261 of 2023 and the same dismissed on 08.08.2023.
5.6 The respondent bank has proceeded further and issued 05 Sale notices which was challenged by applicants in SA along with the reserved price is detailed as under:
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5.7 In fact the applicant has challenged the 06th sale notice dated 19.09.2023 in the present SA. The second contention as raised by the applicants is that applicant’s tenants are paying rent to the respondent bank as per the Order in SA 50/2021 is a matter of record and does not require any consideration as the same is considered in TSA 537/2023 where the 5th sale notice dated 03.02.2022 was challenged. Further the Tribunal in the Order dated 15.07.2023 has considered the issue of tenants and payment of rent in para 3 which is as under:
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3. It is the case of the applicants that the property…………the valuation certificate obtained by respondent bank at the time of sanction of the loan has valued the property at Rs.59.52 crores (copy furnished at Pg.No.77 of applicants’ typed set), which is now being put up for sale at Rs.32.70 crores. Ld. Counsel submits that respondent bank is fallacious in reducing the reserve price for no fault of the borrower/applicants herein and that reduction in the price for want of bidders is not explained anywhere by the respondent bank as secured creditor. Ld. Counsel further submits that all the three properties mortgaged to the respondent bank are rental earning properties and in fact, the loan is against lease rentals. However respondent bank had not entered into any tripartite agreement with the proposed tenants. Owing to severe covid impact and its effect on businesses drastically, the tenants have defaulted in their rental payments due to which the account of applicants has become default. Ld. counsel for applicants vehemently submits that applicants are ever ready and willing to negotiate with the respondent bank and discharge the entire amount due and payable into their loan account and in fact, had been extending proposals since April 2023, which all facts are known to respondent bank herein. Ld. counsel further submitted that it is not as though applicants had not demonstrated their bonafides, as after approaching this Tribunal, in compliance of this Tribunal’s directions from time to time, applicants had remitted close to Rs.2 crores and are further willing to deposit moneys as and when received from their proposed purchasers. Ld. counsel submits that they had furnished a letter received from one of the joint venture developers, who is a reputed builder in Chennai city and who has undertaken to discharge the entire amount due to respondent bank, in about 15 days.
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Hence, the contention of the applicant that the tenants are paying rents to respondent bank is a matter of fact and records which requires further consideration.
5.8 Further contention that the respondent bank has mentioned unsecured properties in the Section 13(2) Demand Notice is duly countered by the respondent bank contending that the unsecured properties were shown as additional securities of the loan sanctioned to the Applicants’ group of company and there is no prejudice caused to the applicant in mentioning the unsecured properties in the demand notice. In fact, if applicant is aggrieved in mentioning the unsecured securities in the S.13[2] demand notice has not raised any such objection on receipt of Section 13(2) Demand Notice.
5.9 Thirdly , it is specific contention that there is no 30 days clear notice as per Rule 8(6) of the SIE Rules in issuing the 6th sale notice dated 19.09.2023 scheduling the sale to be held on 12.10.2023 is not legally sustainable and does not require 30 days clear notice as per R 9[1] which is extracted as under:
Rule 9(1)
No sale of immovable property under these rules, in first instance shall take place before the expiry of thirty days from the date on which the public notice of sale is published in newspapers as referred to in the proviso to sub-rule (6) of rule 8 or notice of sale has been served to the borrower:
Provided Further: that if sale of immovable property by any one of the methods specified by sub-rule (5) of rule 8 fails and sale is required to be conducted again, the authorized officer shall serve, affix and publish
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notice of sale of not less than fifteen days to the borrower for any subsequent sale.
5.10 The records clearly reflects that the impugned notice dated 19.09.2023 is duly served to the applicants as per Rule 9(1) as evident from the acknowledgment cards and postal tracking reports produced at page No.15 to 20 of respondent’s counter and is duly affixed on the property as per Rule 8(7) and the same is reflected from the photograph of affixture produced at Page No.22 to 24 of their counter. Further the sale notice is also published in two Newspapers as per Rule 8(6) which is evident from the paper publications produced at Page No.21 of respondent’s counter. Hence, the action of respondent bank in issuing the Sale notice dated 19.09.2023 scheduling the sale to be held on 12.10.2023 are in accordance with Rule 8 and Rule 9 of SIE Rules.
5.11 The fourth contention as raised by the applicant is that there is no proper valuation and it is considered by the Tribunal in TSA No.537 of 2023 which came to dismissed on 15.07.2023 with a direction to obtain two fresh valuation reports from the approved valuer and to issue a fresh sale notice which reads as under:
“In the result, SA stands dismissed, however without costs. Respondent bank is directed to obtain afresh, two sets of valuation as on date and then issue a fresh sale notice if the default of the borrower continues beyond 26.07.2023.”
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5.12 Accordingly, the respondent bank as a secured creditor has obtained two fresh valuation reports dated 27.07.2023 and 11.08.2023 from the approved valuer before issuing the present sale notice dated 19.09.2023. The relevant portions of valuation reports obtained by the respondent bank is extracted here under:
Valuation report dated 27.07.2023:
Abstract:
Land: Rs.31,45,01,041/-
Building: Rs. 2,89,26,013/-
Amenities: Rs. 60,00,000/-
Total: Rs.34,94,00,000/-
| Fair Market Value | Rs.34,94,00,000/- |
|---|---|
| Distress Value | Rs.27,95,00,000/- |
| Realizable Value | Rs.31,44,00,000/- |
Valuation Report Dated 11.08.2023
Valuation of Land:
Value of Land by Rs.30,87,66,500/Guideline Value
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| Adopted Market for Valuation |
Rate | Rs.28,000/- per Sq.ft., |
|---|---|---|
| Value of land adopting PMR |
by |
Rs.36,78,92,000/- |
Total Abstract:
| Total Fair Market Value of the property |
Rs.40,22,70,550/- |
|---|---|
| Realizable value of the property |
Rs.36,20,43,495/- |
| Distress Value of the property |
Rs.32,18,16,440/- |
After obtaining the two-valuation report as directed by the Tribunal, the
secured creditor has fixed the reserve price at Rs.37,59,00,000/- and have sold the property at Rs. 37,64,00,000/- which is above the reserve price.
5.13 It is pertinent to note that the applicant has obtained a valuation report dated 22.08.2021 produced at Page No.88 to 91, 27.08.2014 produced at Page No.92 to 97 of applicants’ SA, 09.03.2020 produced at Page No.1 to 4, 01.03.2021 produced at Page No.5 to 18, 04.03.2021 produced at Page No.19 to 24 at additional documents produced by the applicant which is older valuation report in respect to the impugned sale notice dated 19.09.2023. Further, the respondent bank has fixed reserve price considering the failure of the earlier 05 sale notices with reserve price which did not fructify. Further it is seen that the present reserve
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price fixed is higher than the earlier reserve price fixed for the 3 sale notices. Further applicant has not produced the recent valuation report obtained from an independent valuer before the auction of the property in support of such a contention and has not specifically pointed out how the reserve price fixed is lower or not in accordance with law. The Tribunal places reliance on the Judgment of Hon’ble DRAT in AO, State Bank of India & Other Vs. Ku. Kalpana Agrawal & Ors., where it is held that:
11. Although the reserve price was fixed below the distress value, but it was above 10% of the government rates. Rule 8(5) of the Rules, 2002 does not prescribe any specific norms for fixing the reserve price and the same is fixed by the authorized officer in consultation with the secured creditor. The reserve price is the only starting point, below which the property cannot be sold. However, the relevant aspect of the sale is the price, for which actually, the property was sold. The reserve price in the present case was not below the government rate and the earlier two auctions could not be materialized, so the Bank has not committed any irregularity in fixing the reserve price below the distress value, as the same was fixed 10% above the government rates.
In the instant matter, the Reserve price is fixed above the guideline value and also more than the earlier Reserve price. Hence, the contention
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of the applicants with regard to the undervaluation of the property cannot sustain and the same is rejected.
5.14 In fact, issue of valuation is also considered in TSA 537/2023 and this Tribunal has made an observation that the properties are grossly undervalued and the applicants were permitted to exercise the right of redemption and granted 15 days’ time as being sought by the applicant to conclude upon their negotiated settlement and to remit the entire outstanding amount of Rs.18.3 crores as claimed in the present Sale notice dated 03.02.2022.
5.15 It is a matter of record that the applicant has challenged the Sale notice dated 19.09.2023 and have raised the similar contentions with regard to the non-mentioning of date of NPA and under valuation of the property which is already adjudicated in SA No.250 of 2021 before Hon’ble DRT – II and TSA 537/2023 before Hon’ble DRT III.
5.16 It is also a matter on record that the applicants sought time to redeem the property and also for negotiation for settlement and have failed miserably to liquidate their entire liability even as on today where the applicant’s outstanding amount due is more than Rs.19 crores as per the Sale notice and the applicants disputed the claim for Rs.80 crores as it is recorded on 15.07.2023 in TSA 537/2023. In fact, it is an admitted fact that the applicant admits the outstanding amount due to be Rs.80.00 crores and has not come forward to repay the same even as on the year 2025. Hence, the contention as raised in the present SA challenging the
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Sale notice dated 19.09.2023 is nothing but repetition / reiteration of the averments which has already been considered by this Tribunal. Therefore, the said contention stands rejected.
5.17 The Fifth contention of the applicant that the respondent bank failed to disclose that the CMDA orders to lock, seal and demolish the schedule property is duly countered by the 1st respondent bank that it is only tax collecting effort and there is no prejudiced caused to the borrower and guarantors. Further it is also pertinent to note that the 2nd respondent who is the highest bidder has paid a sum of Rs.1,56,31,000/to Greater Chennai Corporation and the locks, seals have been removed. The applicants have failed to point out how the charge is prejudiced when the auction purchaser admittedly has paid the due to CMDA. Thus, the contention of the applicant with regard to encumbrance of CMDA is untenable and the same fails.
5.18 The Sixth contention of the applicant that the Authorized officer has culled out certain Terms and conditions which are not found in the SARFAESI Act is duly countered by the respondent stating that the Authorized officer has not culled out terms and conditions and the sale process is not vitiated by any unfair practices and the applicants are put to strict proof thereof. Hence, the contention of the applicant that the Authorized officer has culled out the terms and conditions which is not in accordance with SARFAESI Act fails.
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5.19 On perusal of the records it is seen that applicant has filed an IA No.1841/2023 to prevent any changes to the schedule property and 2nd respondent has filed counter affidavit contending that the removal of movables is completed and it was covered in W.P.No.31134 of 2023 vide order dated 24.11.2023 and in the process of demolishing of the existing building.
5.20 The respondent bank as a secured creditor has duly followed all the procedures in issuing the statutory notices and also obtained afresh two valuation reports dated 27.07.2023, 11.08.2023 as directed by the Tribunal and issued the impugned Sale notice dated 19.09.2023 scheduling the sale to be held on 12.10.2023. Further the 2nd respondent herein as emerged as the successful bidder for a bid amount of Rs.37,64,00,000/- and also cleared Greater Chennai Corporation arrears for Rs. 1,56,31,000/-, paid the Stamp duty and Registration charges for Rs.4,14,04,000/-, Hence, the 1st respondent bank has issued Sale certificate in favor of the 2nd respondent on 22.11.2023 which is registered as Doc.No.4522 of 2023 in the SRO, Mylapore.
5.21 On perusal of the records it is seen that the respondent bank has duly issued the impugned sale notice dated 19.09.2023 which is served to the applicants as per the Acknowledgment cards and Postal tracking report produced at Page No.15 to 20 of respondent’s counter as per Rule 9(1) and also affixed on the conspicuous part of the property as per Rule 8(7) which is evident from the photograph of affixture produced at Page
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No.22 to 24 of respondent’s counter. Further the Sale notice dated 19.09.2023 is also published in two Newspapers as per Rule 8(7) which is evident from the paper publications produced at Page No.21 of respondent’s counter.
5.22 The Seventh contention as raised by the of the applicant that the respondent bank has not given due credit to the payments made by the applicant and also charged legal expenses of Rs.26,91,274.00. The Tribunal feels it apt to refer to Section 13(7) of the SARFAESI Act which reads as under:
Section 13(7):
Where any action has been taken against a borrower under the provisions of sub-section (4), all costs, charges and expenses which, in the opinion of the secured creditor, have been properly incurred by him or any expenses incidental thereto, shall be recoverable from the borrower and the money which is received by the secured creditor shall, in the absence of any contract to the contrary, be held by him in trust, to be applied, firstly, in payment of such costs, charges and expenses and secondly, in discharge of the dues of the secured creditor and the residue of the money so received shall be paid to the person entitled thereto in accordance with his rights and interests.
5.23 Thus, is clear from Section 13(7) of the Act that the charges and expenses incurred by secured creditor in initiating the measures under the Act has to be paid by the borrower and it is a matter of fact that the applicant have challenged the Section 14 order in SA 50 of 2021 which
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was transferred from Hon’ble DRT – I to Hon’ble DRT – II in TSA No.261 of 2023 and stands dismissed on 08.08.2023 and also challenged the 5 sale notices, where the secured creditor has incurred the expenses and their incidental charges in initiating the measures. Thus, the respondent bank has charges legal charged of Rs.26,91,274.00 which are legally recoverable under the Act and Same is not sustainable as per Section 13(7) of the SARFAESI Act.
5.24 Though the applicant has challenged the 6th sale notice dated 19.09.2023 as raised similar contentions in TSA 537/2023 and also challenged the Section 14 order in SA 50 of 2021 has failed to establish any infirmities/irregularities in issuance of the statutory notices, Sale notices, procedures in conducting the auction sale, issuance of Sale certificate.
5.25 On the other hand, the respondent bank as a secured creditor has enforced the security available to them under the SARFAESI Act by following all the procedures as contemplated under the Acts and Rules, and the Tribunal under Section 17(4) of the SARFAESI Act concludes the measure taken by the respondent bank in issuance of issuance of Section 13(2) Demand Notice dated 04.03.2019 and Section 13(4) Possession notice dated 19.06.2019 are held as valid notices and the sale notice dated 19.09.2023; sale held on 12.10.2023; and sale certificate dated 22.11.2023 issued favoring 2nd respondent are in accordance with the
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procedures as required under the Act and Rules made there under and same are held as valid measures.
Sd/(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI
(Dictated to Steno (Mogesh), transcribed by him, corrected, signed and pronounced by me on this the 30th day of January, 2026)
ANNEXURES
LIST OF DOCUMENTS PRODUCED BY THE APPLICANT
| Sl. No. |
Description of Documents | Document No. |
|---|---|---|
| 1. | Appeal U/s. 17(1) of the SARFAESI Act dated 09.10.2023 |
A-1 |
| 2. | Demand Notice issued by the respondent bank dated 04.03.2019 |
A-2 |
| 3. | Reply to 13(3A) dated 04.05.2019 | A-3 |
| 4. | Petition in Crl.M.P.No.4884 of 2020 filed before the Hon’ble Chief Metropolitan Magistrate, Egmore, Chennai |
A-4 |
| 5. | Copy of the SA No.50 of 2021 filed before DRT – I Chennai dated 17.02.2021 |
A-5 |
| 6. | Copy of the SA No.149 of 2021 filed before DRT – I Chennai dated 26.04.2021 |
A-6 |
| 7. | Copy of the SA No.169 of 2021 filed before DRT – I Chennai dated 16.06.2021 |
A-7 |
| 8. | Copy of the SA No.250 of 2021 filed before DRT – II Chennai dated 18.08.2021 |
A-8 |
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| 9. | Copy of the SA No.332 of 2021 filed before DRT – II Chennai dated 20.10.2021 |
A-9 |
|---|---|---|
| 10. | Copy of the TSA No.537 of 2023 filed before DRT –III Chennai dated 05.03.2022 |
A-10 |
| 11. | Valuation report dated 22.08.2021 | A-11 |
| 12. | Valuation report dated 27.08.2014 |
A-12 |
| 13. | CMDA Letter dated 03.10.2023 | A-13 |
| 14. | Terms and Conditions of sale notice | A-14 |
| 15. | Impugned Sale notice issued by the respondent bank dated 19.09.2023 |
A-15 |
| 16. | Vakalat dated 09.10.2023 | A-16 |
| Additional Documents | ||
| 17. | 1stSale notice issued by the respondent bank dated 17.03.2021 |
A-17 |
| 18. | 2ndSale notice issued by the respondent bank dated 10.05.2021 |
A-18 |
| 19. | Paper publication and 3rdsale notice issued by the respondent bank dated 04.08.2021 |
A-19 |
| 20. | 4thSale notice issued by the respondent bank dated 13.09.2021 |
A-20 |
| 21. | 5thSale notice issued by the respondent bank dated 03.02.2023 |
A-21 |
| 22. | 6thSale notice issued by the respondent bank dated 19.09.2023 |
A-22 |
| Additional Documents | ||
| 23. | Valuation report of JKS Associates dated 09.03.2020 |
A-23 |
| 24. | Valuation report of Dr. Shoba dated 01.03.2021 | A-24 |
| 25. | Valuation report of Adroit Technical Service Pvt Ltd dated 04.03.2021 |
A-25 |
| 26. | Order passed in RCOP No.196 of 2015 dated 15.11.2016 |
A-26 |
| 27. | Order passed in RCA No.71 of 2017 dated 20.11.2017 |
A-27 |
| 28. | Order passed in C.M.P.No.20252 of 2017 by the Hon’ble High Court of Madras dated 26.04.2022 |
A-28 |
LIST OF DOCUMENTS PRODUCED BY THE RESPONDENTS
| Sl. | Description of Documents | Document |
|---|---|---|
| No. | No. | |
| 1. | Counter Affidavit filed on behalf of the respondent bank dated 18.11.2023 |
R-1 |
| 2. | Sale notice dated 19.09.2023 | R-2 |
| 3. | Sanction letter 19.01.2015 | R-3 |
SA No.523/2023
30.01.2026
26
| 4. | Postal receipts, Acknowledgment cards and Postal tracking reports dated 22.09.2023 |
R-4 |
|---|---|---|
| 5. | Photo of Sale notice affixed on the subject property dated 26.09.2023 |
R-5 |
| 6. | Paper publication effected in English and Tamil Newspapers dated 26.09.2023 |
R-6 |
| 7. | Order passed in TSA No.537 of 2023 dated 15.07.2023 |
R-7 |
| 8. | Valuation report dated 27.07.2023 | R-8 |
| 9. | Valuation report dated 11.08.2023 | R-9 |
| Documents produced by 2ndRespondent | ||
| 10. | Sale Certificate dated 22.11.2023 | R-10 |
SCHEDULE OF PROPERTY
Item No.1:
All that piece and parcel of land and building admeasuring an extent of 3 ½ grounds at Old Door No.58, New Door No.103, Dr. Radhakrishnan Salai, Mylapore, Chennai comprised in R.S.No.1705/4, Mylapore Sub Registration district, Chennai Central Registration District and is bounded as follows:
North by: Dr. Radhakrishnan Salai,
South by: Property comprised in R.S.No.1705/1.
East by: Property belonging to M/s. AVM Charities and
West by: P.S. Sivaswamy Road.
Item No.2:
All that piece and parcel of land and building admeasuring an extent of 1 ground and 2339 sq.ft. and Old Door No.58/2, New Door No.105, P.S. Sivaswamy Road, Mylapore Village, Chennai comprised in
SA No.523/2023
30.01.2026
27
R.S.No.1705/1, Mylapore Sub Registration District, Chennai Central Registration District and is bounded as follows
North by: Property comprised in Re survey No.1705/4
West by: Property belonging to M/s. AVM Charities and
East by: P.S. Sivaswamy Road.
Assets owned and mortgaged by R P Rajrajan Associates.
Sd/(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI
2 issues framed by the court
Whether the disputed sale notice was issued in compliance with notice periods and valuation rules under the SARFAESI Act and related Rules.
Whether the conduct of the auction sale and the charging of legal expenses to the borrower were legal under the statute.
Colour shows how this judgement treated each authority
AO, State Bank of India & Other Vs. Ku. Kalpana Agrawal & Ors.Relied on¶157
Hon’ble DRAT in AO, State Bank of India & Other Vs. Ku. Kalpana Agrawal & Ors.
4 provisions across 2 enactments
R. Parthiban and others
The Authorised Officer, M/s IDBI Bank Limited
M/s Varya Developer (P) Ltd
S.V. Gowramma
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
S.V. Gowramma
Parties & counsel
