Dismissed

A Gnanamary v. Indian Bank

DRT11 Aug 2026SA/538/2022

Case brief

AI extract

What is this about?

The DRT dismissed the Securitization Application filed by applicants challenging a bank's sale notice and auction as infructuous. The court held that the challenge to the Demand and Possession notices was barred by limitation under Section 17 of the SARFAESI Act and that no illegality was established.

What did the court decide?

The Securitization Application was dismissed as infructuous; interim order granted is vacated.

A Gnanamary versus Indian Bank — Insolvency and Bankruptcy | DRT (2026)

SA No.538/2022

11.08.2026

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 11^th day of August, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SA No. 538 of 2022

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Mrs. A. Gnanamary S/o Anbarasan, No.59, Sowri Street, Alandur, Chennai – 600 016.

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Mr. B. Anbarasan S/o Balasundaran No.59, Sowri Street, Alandur, Chennai – 600 016. …Applicants

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-Vs-

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Indian Bank, Guindy Branch, No.131, SIDCO Building, GST Road, Guindy, Chennai – 600 032. Rep. by Authorized Officer. …Respondent Counsels on record / appeared: Counsel for Applicant : Mr. J. Selvarajan Counsel for Respondent : Mr. S. Arun

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ORDER ON SA 538 /2022

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The present Securitization Application [SA] is filed under sub section [1] of S.17 of the Securitization and Reconstruction of Financial Asset and

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Enforcement of Security Interest Act,2002 (for short the ‘Act’) challenging

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the action and the measure taken by the secured creditor under the Security Interest Enforcement Rules, 2002 [for short the Rules].

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The applicant has challenged the Sale notice dated 24.11.2022 fixing the sale on 28.12.2022 and the outstanding amount due as per Sale notice is Rs.7,95,097/-.

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It is submitted that applicants are husband and wife, 2^nd applicant is the owner of residential property had approached the respondent bank in the year 2017, availed Mortgage Loan of Rs.12,00,000/- for renovation of the schedule property which was sanctioned on 19.05.2017, agreeing to repay the loan amount in 84 EMIs of Rs.22,350/- and also executed MODT on 19.05.2017.

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It is contended that the applicants made total payment of Rs.10,01,920/- as on 19.01.2022 and due to Covid-19 pandemic applicants have defaulted in the repayment. The respondent bank has classified the loan account as NPA on 19.07.2019 and issued Section 13(2) Demand Notice dated 19.12.2019 for recovery of Rs.9,75,667/- as on 18.12.2019. Further, the respondent bank has taken possession of the property on 20.07.2021 under Section 13(4) and the applicants have paid Rs.4,00,000/- to the loan account. Despite the payments made by the applicants, respondent bank has issued Sale notice dated 24.11.2022 for recovery of Rs.7,95,097/-.

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It is submitted that the respondent bank has fixed the reserve price at Rs.36,50,000/- and fixed the auction sale to be held on 28.12.2022, the

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applicants have made several representations to the respondent bank and without considering the same has conducted the auction sale on 28.12.2022. It is contended that the respondent bank has failed to comply with RBI guidelines in classifying the loan account as NPA and failed to reply the representations made by the applicants. In the grounds, it is contended that the respondent bank has failed to consider the Mortgage loan which requires 180 days for overdue as per the RBI guidelines.

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After the issuance of Section 13(2) Demand Notice dated 19.12.2019 applicants have paid amount of Rs.9,00,000/- and sent reply to the demand made which was not considered by the respondent bank which is in violation of decision in Hon’ble Apex Court in AIR 2024 before Hon’ble Supreme Court Page 2371. Further, the respondent bank has failed to provide 60 days before the issuance of Possession notice which is in violation of Section 13(4). Hence, on these grounds the applicants prayed to set aside the Sale notice dated 24.11.2022 scheduling the sale to be held on 28.12.2022.

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The respondent bank has filed a counter and submits that the applicants have availed IND Mortgage loan of Rs.12,00,000/- and to secure the repayment of the credit facilities, 2^nd applicant has created equitable mortgage by way of MODT dated 15.05.2017 registered as Doc.No.2034 of 2017 SRO, Alandur in favor of the respondent bank. It is submitted that the applicants were irregular in the repayment and the loan account was classified as NPA on 30.11.2019 as per the RBI guidelines.

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Further, the respondent bank has issued Section 13(2) Demand Notice dated 19.12.2019 and Section 13(4) Possession Notice dated 20.07.2021 for Mortgage Loan A/c. No.6529485458. It is submitted that the applicants have failed to produce any reply and representation to the demand made in the Demand Notice dated 19.12.2019. The respondent bank has published the Possession Notice in two Newspapers as per Rule 8(2) of SIE Rules.

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The respondent bank has classified the loan account as NPA as per the Master Circular No.RBI/2015-16/101 DBR No.BP.BC.2/21.04.048/2015-16 dated 01.07.2015 with prudential norms on income recognition, Asset classification and Provisioning pertaining to Reserve Bank of India, the applicants were irregular in the repayment for a period of 90 days and the bank has classified the loan account as NPA on 30.11.2019. Further, the applicants have failed to make payment to regularize the loan account from NPA. Hence, the respondent bank has proceeded further and issued the Sale notice dated 24.11.2022 scheduling the sale to be held on 28.12.2022. The respondent bank prays for dismissal of the present SA.

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Heard both sides of the Counsels and perused the records of the case.

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It is admitted fact that the applicants approached the respondent bank and availed IND Mortgage Loan of Rs.12,00,000/- to renovate their house. To secure the repayment of the credit facilities, 2^nd applicant has mortgaged his property as collateral security by way of MODT dated 15.05.2017 registered as Doc.No.2034 of 2017 before the SRO, Alandur in

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favor of the respondent bank. Further, the availing of credit facilities, creation of equitable mortgage is undisputed fact by the applicants herein.

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Due to default in the repayment the respondent bank has classified the loan account as NPA on 30.11.2019 and also issued the Section 13(2) Demand Notice dated 19.12.2019 to the applicants herein. Further, the respondent bank has issued Section 13(4) Possession Notice dated 20.07.2021. It is seen that the applicants have challenged the auction sale notice dated 24.11.2022 scheduling the sale to be held on 28.12.2022 and the contentions of the applicants with regard to the issuance of Section 13(2) Demand Notice and Section 13(4) Possession Notice is not sustainable as the same is not challenged within the period of 45 days from the date of measure as required under Section 17 of the Act and the same are barred by limitation.

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Further though the applicant has contended that the bank has not replied to the objections raised to the demand notice is not supported by any letter. Applicant has failed to produce the copy of the objections raised under Section 13[3A] as contended in ground f, g and h of the present SA, hence the same is not countered by the bank nor the said contentions is supported by any documents which does not need any consideration.

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Further, the respondent bank has issued Sale notice dated 24.11.2022 scheduling the sale to be held on 28.12.2022 which is challenged by the applicants herein. On perusal of the records, it is seen that the Tribunal had granted Interim order of stay on 21.12.2022 on

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conditional payment and on 26.04.2023 it is stated by the respondent bank that no auction sale has taken place in view of the interim order complied by the applicants.

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It is pertinent to note that the applicants have also produced the Demand Draft bearing No.072415 for Rs.1,00,000/- by way of affidavit. Further, on 06.09.2023 it is seen that the applicants have complied with the Interim order and the matter was referred to Lok Adalat for settlement between the parties. After Lok Adalat, applicants sought time for settlement vide proceedings dated 31.10.2023 and it is seen form the case records that none represented the matter on 20.12.2023, 04.03.2024, 03.04.2024, 05.02.2025, and on 28.02.2025 the respondent bank has represented the matter and none represented the applicant, hence the matter stood adjourned to 04.03.2025 for arguments finally.

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On 04.03.2025, 28.08.2025 none represented the matter and even on 10.04.2026, none represented the matter and on oversight it is inadvertently recorded as applicants have not complied with interim order and the matter stood posted to 30.04.2026. Further, on 30.04.2026 none represented the matter and as per the statement of the court master it is inadvertently recorded as the auction sale was held and the matter was reserved for orders. However, on verification of the case papers, the record of proceedings stood corrected as “applicant has complied with the interim order” instead of “applicant has not complied with the interim order” and “sale has not held” instead of “sale has already held”.

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It is seen that the Tribunal vide order dated 21.12.2022 had granted interim order of stay and the respondent bank has submitted that the auction sale did not taken place in view of the interim order complied by the applicants on 26.04.2023 and none represented the matter on several hearings. Therefore, the present SA is challenging the Sale notice dated 24.11.2022 and the auction sale was not taken place on 28.12.2022.

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The contentions as raised by the applicant is countered by the bank with supporting documents in compliance of the measures initiated by the bank under the Act, the sale notice was affixed on the property and published in two Newspapers which is evident from documents produced from Page No.17 to 20 of respondent’s counter and the applicant has failed to point out any illegality in the measures taken by the respondent bank. Hence, nothing survives for further adjudication and for the foregoing reasons SA is only to be dismissed as infructuous.

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Resultantly the present SA is dismissed as infructuous. 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 (Mogesh), transcribed by him, corrected, signed and pronounced by me on this the 11^th day of August, 2026)

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SA No.538/2022

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ANNEXURES

LIST OF DOCUMENTS PRODUCED BY THE APPLICANT

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Sl. No.	Description of Documents	Document No.
1.	Possession Notice issued by the defendant dated 20.07.2021	A-1
2.	Statement of Account of loan account from 19.05.2017 to 23.02.2022	A-2
3.	Notice of intended sale of immovable property by defendant dated 24.11.2022	A-3

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LIST OF DOCUMENTS PRODUCED BY THE RESPONDENTS

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Sl. No.	Description of Documents	Document No.
1.	Demand Notice dated 19.12.2019 issued by the respondent bank to applicants in terms of Section 13(2) of Act dated 19.12.2019	R-1
2.	Possession notice issued as per Rule 8 of SIE Rules dated 20.07.2021	R-2
3.	Photographs showing affixing of possession notice on the outer gate of the secured asset dated 20.07.2021	R-3
4.	Paper publication of possession notice in “New Indian Express” and “Dinamani” dated 23.07.2021	R-4
5.	Notice of intended sale under Rule 6(2) & 8(6) of SIE Rules under the SARFAESI Act dated 24.11.2022	R-5
6.	Photographs showing affixing of sale notice on the outer gate of the secured asset dated 24.11.2022	R-6
7.	Paper publication of Possession notice in “New Indian Express” and “Dinamani” dated 26.11.2022	R-7
8.	Relevant Extracts of Master Circular No.DBR.No.PB.BC.2/21.04.048/2015-16 dated 01.07.2015 issued by RBI for Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances dated 01.07.2015	R-8

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SCHEDULE OF PROPERTY

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All that piece and parcel of the land and building situated at Door No.59/38, (House) measuring 525 Sq.ft., land out of 2546 sq.ft., comprised in R.S.No.24/4A, Sowri Street, Alandur Village, Alandur Taluk, Kanchipuram district, Bounded on the:

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North by: House in Madhavaperumal Koil Street

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South by: Common pathway & Sch B of B. Bagyalakshmi Part leading to main road

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East by: Tmt. Premalatha Part property

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West by: PL Natarajan Property

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Measuring 525 Sq.ft., of land and house with electrical connection and including all liens and 1/5 share of common pathway and situated with in the Sub-Registration District of Alandur and Registration District of Chennai South.

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

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A Gnanamary v. Indian Bank

Case brief

What is this about?

What did the court decide?

A Gnanamary v. Indian Bank

Case brief

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