Disposed

T Neelavathi v. State Bank of India

DRT23 Mar 2026SA/530/2024

Case brief

AI extract

What is this about?

The Tribunal dismissed a Fresh Suit under the SARFAESI Act filed by a spouse to set aside a sale notice. While the bank followed most procedures, the Tribunal found a procedural lapse regarding newspaper publication of the sale notice and directed the bank to exclude related expenditures from the dues.

What did the court decide?

The application was disposed of with a direction to the Defendant Bank not to include all expenditures incurred in issuing the impugned Sale Notice in the loan account.

T Neelavathi versus State Bank of India — Banking and Recovery | DRT (2026)

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SA No.530/2024

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI

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DATED THIS 23^rd DAY OF MARCH, 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. 530/2024

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T. Neelavathi, W/o. Thangadurai, Door No. 35/3-29, Kollapatti, Kethaiyurumbu, Karur Road, Dindigul – 624 619. --- Applicant -Vs-

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The Authorized Officer, State Bank of India, Stressed Assets Recovery Branch, No.8, Dr. Ambedkar Road, Vinayaga Nagar Branch, 1^st Floor, Madurai – 625 020. --- Defendant Bank

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Appearance of Advocates: Mr. R. Sevugaraja ---- Counsel for the Applicant Mr. P. Pethu Rajesh ---- Counsel for the Defendant Bank

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This SARFAESI Application was heard in the presence of Counsels for the Applicant and the Defendant Bank 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 pass an Order to set aside the Sale Notice dated 24.06.2024 issued by the Defendant Bank under SARFAESI Act, 2002.

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Page 1 of 8

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SA No.530/2024

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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 Applicant submitted that the Applicant's husband Mr. K. Thangadurai has availed Housing Term Loan and he was doing financial business and agriculture and the Applicant filed this Application only as 3^rd party because her husband is in coma stage and he is being bed ridden. The Applicant is a house wife and is having two minor children. The Applicant’s husband availed Housing Term Loan for a sum of Rs. 10,00,000/, Home Equity Loan for a sum of Rs. 18,00,000/- and Suraksha loan for a sum of Rs. 15,510/- in the year of 2013 from the Defendant Bank. Earlier he has repaid the loan amount regularly upto the month of August 2021. However, due to the huge spread of Covid-19 Pandemic, he incurred heavy loss in his business.

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It is further submitted that the borrower due to heavy blood pressure and his brain tube burst, he became unconscious from 24.08.2021 and he is continuing in coma stage and they spent several lakhs for his treatment getting out side from Applicant’s close relatives and friends. Due to the reason, the Applicant’s husband unable to repay the loan amount. Thereafter, the Defendant Bank allegedly declared the Applicant’s husband as NPA on 04.06.2023, the Bank has also issued Demand Notice U/s. 13(2) of SARFAESI Act. After the receipt of the Demand Notice, the Applicant and her father-inlaw approached the Defendant Bank and requested to regularize the loan account. But the Defendant failed to consider the request of the Applicant. The Applicant and her father-in-law also asked about the insurance loan which was taken by the Defendant for the death, accident and any other further disability, but they did not answer anything to them. But, at the same time even without answering them the Defendant is continuing to issue a notice to an unconscious man resulted the current Impugned notice dated 24.06.24, which is not legally valid.

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It is further submitted that in these circumstances, to the great shock and surprise, the Defendant has sent Possession Notice dated 15.02.2024 u/s. 13(4) of SARFAESI Act for a sum of Rs. 36,82,691/-. The Applicant also made oral representation to the Defendant Bank and requested for grant of some more time for further payment of loan which were not considered by the Defendant Bank. Even though the Applicant explained her situation and requested the Defendant’s Bank consider the husband’s ill health. But the Defendant has not considered her bonafide request and issued Sale Notice on 24.06.2024. Further it is stated that the Defendant Bank has not properly followed the procedure prescribed under the SARFAESI Act while issuing the impugned Possession Notice. Now the Defendant Bank is taking hectic steps

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Page 2 of 8

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SA No.530/2024

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to sale of the Schedule Mentioned Property. If the Defendant Bank is allowed to do so the Applicant will be put to irreparable loss and hardship.

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It is further submitted that the District Differently abled welfare officer, Dindigul has issued 100% disability certificate to the principal borrower. The Applicant further submitted that she filed Writ Petition as against the Defendant Bank before the Hon'ble High Court of Madras (Madurai Bench) in W.P. No. 16733 of 2024, the High Court had given liberty to file an appeal before this Hon'ble Tribunal. Further it is stated that her father-in-law already filed SA No. 477/2024 before this Tribunal and obtained a stay order with conditions, however, the Applicant is not in a position to pay without selling the house. In order to clear the entire loan, she asked the Defendant Bank with OTS proposal.

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It is further submitted that all notices issued in the name of the husband of the Applicant were received only by the father of the borrower. Even after knowing the borrower is a coma patient, the Defendant Bank continuing the actions including auction notice which are all legally invalid from the beginning. The Applicant further submitted that the Defendant has undervalued the property and brought the same for sale which is against principles of natural justice. Further the Defendant Bank has not furnished the complete Statement of Account as the details of certain credits to the account are not reflected. Hence, this SARFAESI Application is preferred on the followings among other

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Main Grounds :-

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The action of the Defendant Bank is arbitrary, unreasonable as against the principles of natural justice.

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The Defendant Bank failed to consider the sincerity of the Applicant to repay the loan and charged penal interest against the provision of Sec.34 of the Civil Procedure Court.

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The Demand Notice and Possession Notice are not at all issued to the Applicant and failed to serve the notices to all parties concerned as per the Security Interest Enforcement Rules, 2002.

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The Defendant Bank did not consider the RBI guidelines towards Covid-19 and lockdown while classifying the Loan account as NPA.

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The Defendant Bank failed to issue the impugned Sale Notice in daily newspaper in English and Tamil languages.

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The Defendant has charged excessive rate of interest than the agreed rate of interest.

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The Defendant failed to consider the fact that the Schedule Mentioned Property is the only dwelling house of the Applicant where the entire family members of the Applicant are residing.

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Page 3 of 8

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SA No.530/2024

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Even after knowing that the husband of the Applicant is a coma patient, the Defendant Bank continuing the actions including auction notice which are legally invalid from the beginning.

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Description of the Immovable Property

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Dindigul District, Palani Registration District, Oddanchatram Sub Registration District, Oddanchatram Taluk, Kethaiarumbu Village, Oddanchatram Municipal Limit, Survey No. 303/2A, Door No. 2/340, and to the entent of 1100 Sq.ft out of 2200 Sq.ft with plot measurement of East-West on the both sides 50 feet and South-North on the both sides 22 feet, Totally 1100 Sq.ft and R.C.C. Roof house building is constructed in an area of measuring 740 Sq.ft.

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Boundaries:

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North	:	Muthammal’s House
South	:	Kuppusamy House
East	:	Gurusamy Cheddiar’s Land
West	:	Main Road running North South

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The Applicant has submitted the following List of documents in support of her claim in the SA, which are as follows:

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INDEX FILED ON THE SIDE OF THE APPLICANT

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S.No.	Date	Particulars
1	24.06.24	E-AuctionSaleNotice
2	24.07.24	Hon'bleHighCourt Order in WP No. 16733 OF2024
3	16.07.24	Disability Certificate
4	---	OTSProposal
5	25.07.24	Rejection Letter
6	---	Photo copies

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3 . On the other hand, the Counsel for the Defendant Bank appeared before this Tribunal and filed Vakalat, Written Statement & Typed set of papers in which they submitted that the husband of the Applicant Thangadurai and her father-in-law T.Kandasamy availed Home Loan on 19.12.2013 to the tune of Rs. 10,00,000/- with Suraksa Loan to the tune of Rs. 15,510/- from the 3^rd Defendant Bank. Subsequently both of them availed Home Top up loan to the tune of Rs. 18,00,000/- on 04.11.2015 from State Bank of India, Oddanchatram Branch. As a security for the credit facilities availed, the Applicant’s husband Thangadurai mortgaged his property.

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Page 4 of 8

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SA No.530/2024

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It is further submitted that after availing the said credit facility, the Applicant’s husband Thangadurai and her father-in-law failed to service the same properly and the payments towards the same was defaulted. Since, the loan accounts are not serviced properly and the same become NPA on 04.06.2023. Thereafter, the Defendant Bank had issued Demand Notice dated 13.12.23 and the same was served on 15.12.23. Possession Notice was issued on 15.02.24 by the Defendant Bank and the same was served on 17.02.24. Possession Notice was affixed in the mortgaged premise by the Authorized Officer of the Bank on 16.02.24. Paper Publication of Possession Notice was issued by the Defendant Bank in English and Tamil dailies on 18.02.24. Thereafter, Sale Notice was issued on 24.06.24 by the Defendant Bank and the same was served on 25.06.24. Paper Publication of the Sale Notice was issued by the Defendant Bank in Both English and Tamil dailies on 27.06.24.

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It is further submitted that even after receipt of the Demand Notice, Possession Notice and Sale Notice, the borrowers remained silent. In fact, there is no reply to the Demand Notice as on date disputing the contents or the measures initiated under the SARFAESI Act by the Defendant Bank. Further, it is stated that the only reason adduced by the Applicant for nonpayment of the due in the loan account is loss suffered by the borrowers due to Covid-19 Pandemic and her husband’s ill health. The said ground cannot be taken into consideration for the reason that the Loan was availed in the year 2013 and 2015, the same become NPA on 04.06.23. Further, it is stated that viewed from any angle in fact as well in Law there is no ground available to entertain the present appeal and the same is liable to be dismissed.

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

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Typed set filed by the Defendant Bank

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S.No.	Date	Particulars
1	---	CERSAI Registration details of the Schedule Mentioned Property
2	13.12.23	Demand Notice sent by the Defendant Bank to the borrowers
3	15.02.24	Possession Notice with AD Card
4	16.02.24	Photograph showingaffixture of the Possession Notice
5	18.02.24	Paper Publication in Tamil and English for the Possession Notice
6	24.06.24	Sale Notice with AD Card
7	25.06.24	Photograph showingaffixture of the Sale Notice
8	27.06.24	Paper Publication in Tamil and English for the Sale Notice

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Page 5 of 8

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SA No.530/2024

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

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WHETHER THE APPLICANT IS ENTITLED TO GET THE RELIEFS AS PRAYED FOR?

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5 . Having heard the parties and after going through the entire documents available on the records, this Tribunal find that there is no dispute between the parties with regard to the availment of loan facilities by creating equitable mortgage on their property. In this case, the Applicant contended that initially the Applicant's husband, the original borrower has repaid the monthly installments regularly. However, due to COVID-19 Pandemic and lock down, the original borrower incurred heavy loss of his business and also, he suffered with heavy blood pressure and brain tube burst and they are giving treatment till now, but from 24.08.21 he has been in coma stage and they have to spend several lakhs of rupees for his treatment. Since, the borrower failed to repay the EMI amount, the loan account become NPA on 04.06.2023.

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Thereafter, the Defendant Bank issued Demand Notice dated 13.12.2023, U/s.13(2) of SARFAESI Act for a sum of Rs. 35,24,347/- (Rupees Thirty Five Lakhs Twenty Four Thousand Three Hundred and Forty Seven only). The Applicant stated that she did not receive the Demand Notice in her averments. I find that in Typed set of papers, the Defendant Bank has filed AD Cards (at page nos. 9 to 12 of Bank's typed set of papers) for having sent the copies of Demand Notice dated 13.12.2023 to the Borrowers. However, the Applicant has not sent any reply/representation to the Demand Notice dated 13.12.2023 U/s. 13(3-A) of SARFAESI Act.

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Thereafter, I find that the Defendant Bank had issued Possession Notice U/s. 13(4) of SARFAESI Act on 15.02.2024. The Applicant in her averment stated that she did not receive the Possession Notice issued by the Bank. I find that the Defendant Bank has filed AD Cards as a proof for having sent the copy of Possession Notice to the Applicant by Post vide the Typed set at page nos. 14 to 17. I also find that the Bank has produced the xerox copies of Paper Publication of Possession Notice in two newspapers one in English

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Page 6 of 8

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SA No.530/2024

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and another in Tamil (Bank's Typed set of papers at page nos. 21 to 24). Further, the bank has filed photos of affixture of Possession Notice at page nos. 18 to 20 of Bank's Typed set of papers. Thus, I do not find any irregularity in issuance of Possession Notice dated 15.02.2024 by the Defendant Bank and the bank has strictly followed the SARFAESI procedures, while issuing Possession Notice to the Applicant.

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I also find that thereafter the Defendant Bank had issued the Impugned Sale Notice dated 24.06.2024 and sale was fixed on 02.08.2024. The Applicant in her averment stated that the Bank has failed to issue the Impugned Sale Notice in Newspapers. I perused the documents filed by the Defendant Bank and I find that the Defendant Bank has filed the copy of Sale Notice dated 24.06.2024 along with AD Cards (page nos. 25 to 27 of Bank's typed set). I also find that the Defendant Bank has filed the xerox copy of affixture of Sale Notice on the property (page nos. 28 to 31 of Bank's typed set). I also find that the Bank has produced the xerox copies of Paper Publication of Sale Notice in two newspapers one in English and another in Tamil (page nos. 32 to 34 of Bank's typed set). But the copy provided in respect of English Paper Publication at page no. 32(a) do not pertain to the loan account of the Applicant’s husband. The Bank has produced the copy of Paper Publication which is not pertains to this case. Hence, the Bank has not produced the evidence for Paper Publication of the Impugned Sale Notice dated 24.06.2024 in respect of English daily. Thus, I find that the Defendant Bank has not followed the Rule 8(6) of the Security Interest (Enforcement) Rules 2002, which clearly says that,

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"Rule 8(6) in the Security Interest (Enforcement) Rules, 2002:-

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"( 6 ) The authorized officer shall serve to the borrower a notice of thirty days for sale of the immovable secured assets, under sub-rule (5):

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[Provided that if the sale of such secured asset is being effected by either inviting tenders from the public or by holding public auction, the secured creditor shall cause a public notice in the Form given in Appendix IV-A to be published in two leading newspapers including one in vernacular language having wide circulation in the locality.]"

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Page 7 of 8

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SA No.530/2024

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Further, I perused the documents and I find that the Defendant Bank has not filed the Valuation Report obtained before issuance of the Impugned Sale Notice dated 24.06.2024. Also, during the adjudication, the Counsel for the Defendant Banks has informed this Court on 06.11.2025 that Sale was not held for want of bidders in respect of the impugned Sale Notice dated 24.06.2024 and he has filed a memo dated 29.10.24 to this effect.

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However, in this case sale was not held for want of bidders. Hence, this SA No. 530 of 2024 is disposed of with direction to the Defendant Bank not to include all the expenditures incurred in issuance of Impugned Sale Notice dated 24.06.2024 in the loan account of the Borrower/Co-borrower.

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The Defendant Bank is at liberty to initiate fresh action against the Borrower/Co-borrower as per the SARFAESI Acts & Rules. 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 23^rd March, 2026.

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sd/- (SEEMA SINHA) PRESIDING OFFICER

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Dictated & corrected by me sd/-

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(SEEMA SINHA) PRESIDING OFFICER

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Uploaded on 26.03.26

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Page 8 of 8

T Neelavathi v. State Bank of India

Case brief

What is this about?

What did the court decide?

T Neelavathi v. State Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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