Dismissed

Challani Ranka Jewellery v. Indian Overseas Bank

DRT5 Mar 2026SA/541/2025

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal rejected two interlocutory applications filed by borrowers challenging sale notices under the SARFAESI Act. The Court refused to allow amendments to bring in preliminary challenges regarding NPA classification and denied a blanket restraint on future state recovery measures, holding that specific statutory remedies exist for subsequent notices and the original applicatio

What did the court decide?

Both the application to amend the Securitisation Application and the Interlocutory Application to make the interim stay absolute were dismissed as not maintainable.

Challani Ranka Jewellery versus Indian Overseas Bank — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL – II AT CHENNAI

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Dated this 5^th day of March, 2026

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PRESENT: SHRI SHARANG DHAR UPADHYAY Presiding Officer

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IA Dy No.3050 of 2025 in SA No.541 of 2025

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M/s Challani Ranka Jewellery Rep. by its Partner Mr. R.J. Anandmul No.119, NSC Bose Road, First Floor Sowcarpet, Chennai – 600 079

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Mr. R.J. Anandmul S/o Jawarilal Jain No.2, Ritherdon Road 2^nd Street, Ritherdon Avenue Vepery, Chennai – 600007

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Mr. Sumti A Challani Son of Mr. R.J. Anandmul No.2, Ritherdon Road 2^nd Street, Ritherdon Avenue Vepery, Chennai – 600007 …Petitioners / Applicants

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Versus

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The Authorised Officer Indian Overseas Bank Asset Recovery Management Branch 3^rd Floor, Annexe Building Central Office Building

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763, Anna Salai, Chennai – 600 060 …Respondent / Respondent

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ORDER

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This un-numbered Interlocutory Application has been filed by the Petitioners / Applicants praying to set aside the impugned sale notice dated 04.09.2025 and, in view of the defective and contradictory NPA classification and irregular demand notices forming the foundation of

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the impugned measure, to grant such consequential reliefs as may be necessary, without in any manner touching or reopening the possession proceedings already under challenge before the competent Tribunal.

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The Registry of this Tribunal has raised the following objections:-

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“1. Prayer of affidavit and petition are contrary.

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2. Applicant to clarify, How this prayer of the affidavit to amend relief is maintainable. Since the same relief has been prayed for in SA as well.”

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In reply, the Ld. Counsel for the applicant has stated as follows: -

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“ Earlier relief was confined to sale notice. Now the challenge is to the root NPA classification, with sale relief consequentially framed. It is not duplication.”

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The brief facts as stated in the affidavit are as follows: -

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(i) The above SA is filed challenging the sale notice dated 04.09.2025 issued by the respondent bank.

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and a further 20% within fifteen days thereafter. The said conditions are fully complied with and proof of such deposits is also filed.

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(iii) Due to the compliance of the interim order the sale did not take place. But for such compliance, the auction would have proceeded as scheduled. Therefore, the question of interim relief grant becoming infructuous or ineffective does not arise at all. The nonoccurrence of sale reinforces the necessity of continuing protection and preventing any fresh coercive steps.

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(iv) Despite full compliance of the conditional order the respondent has proceeded to issue subsequent sale notice dated 05.11.2025.

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(v) The subsequent sale notice is challenged in SA No.790 of 2025 before the Tribunal having territorial jurisdiction. In the order dated 24.11.2025, the Tribunal has recorded that the petitioner had paid a cumulative amount of Rs.10.8 crores in the loan account across various proceedings, that the outstanding at the time of original Section 13(2) notice was Rs.11.6 crores and that the respondent has issued two different demand notices bearing two different and contradictory NPA dates viz., 22.6.2021 and 30.9.2020. These inconsistencies reveal serious infirmities in the foundation of the SARFAESI proceedings.

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(vi) The impugned sale notice dated 4.9.2025 is rooted in the same defective foundation arising from contradictory NPA classification and irregular demand notices and the subsequent judicial findings in SA No.790 of 2025 further substantiate the illegality of the base action on which the present impugned measure rests.

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(vii) The repeated issuance of sale notices in the same loan account during the pendency of the SA defeats the purpose of the conditional protection granted by this Tribunal, causes multiplicity of proceedings, and threatens to render the adjudication of this SA nugatory.

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(viii) The petitioner had already challenged the possession notice before DRT-III Chennai and is not seeking any relief in this SA concerning the said measure and confines solely to the impugned sale notice dated 4.9.2025 and the defective foundational actions leading thereto, so that no issue of res judicata or overlapping adjudication may arise.

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(ix) The relief sought by way of amendment is necessary to properly determine the legality of the impugned sale notice and its foundation and is purely consequential in nature and the same does not introduce any new cause of action but only reflects subsequent events and clarifies the scope of the original challenge. Hence the

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present application is being filed to substitute the main relief in the SA.

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Heard the Ld. Counsel for the Petitioners / Applicants and the Ld. Counsel appearing on behalf of the Respondent Bank

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The Ld. Counsel for the Applicants submits that the amendment is necessary to properly adjudicate the legality of the sale notice and that the challenge to the foundational actions is consequential in nature. The Ld. Counsel for the Respondent Bank opposes the application contending that the amendment seeks to enlarge the scope of the proceedings and introduces new causes of action.

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It is evident that the grounds now sought to be introduced by way of amendment relate to the classification of the loan account as NPA and the validity of the demand notice issued under Section 13(2) of the Act. These are foundational statutory measures under the SARFAESI framework and any grievance with respect to them constitutes an independent and substantive cause of action.

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It is also brought to the notice of this Tribunal that in SA No. 790 of 2025 pending before DRT–III, Chennai, the Applicants have already advanced these very submissions relating to contradictory NPA dates and alleged infirmities in the demand notice. The proceedings dated 24.11.2025 of DRT–III, Chennai merely record the submissions made

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by the Applicants. There are no judicial findings rendered on those issues. Thus, what is sought to be introduced here are not subsequent adjudicatory findings, but the very same submissions already urged by the Applicants in another pending proceeding.

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In such circumstances, this Tribunal is unable to appreciate the necessity for seeking amendment in the present Securitisation Application. If the Applicants have already raised these foundational grounds before DRT–III, Chennai in SA No. 790 of 2025, and the same are under consideration therein, there is no justification to duplicate the very same contentions in the present proceedings, which were originally confined only to the challenge against the sale notice dated 04.09.2025.

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The challenge to NPA classification and demand notice cannot be treated as a mere incidental or consequential ground to a sale notice. They are distinct statutory steps giving rise to independent causes of action. The present attempt is not to bring on record any new judicial development, but only to incorporate submissions already advanced elsewhere. Permitting such amendment would result in parallel adjudication of identical foundational issues before coordinate Tribunals, with a real possibility of conflicting outcomes, which is impermissible in law.

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Further, having consciously elected to pursue a remedy before a different Tribunal in respect of that measure, the Applicants cannot now seek to reopen or indirectly reagitate the same issue in the present proceedings. Permitting such amendment would inevitably result in overlapping adjudication before coordinate Tribunals in respect of the same loan account and statutory measures, giving rise to the possibility of conflicting findings and defeating principles of judicial discipline and procedural propriety.

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Further, the amendment would fundamentally alter the character and scope of the original Securitisation Application. What was initially a limited challenge to a sale notice would be converted into a comprehensive challenge to the entire SARFAESI process commencing from NPA classification. Such enlargement at this stage amounts to introduction of new and independent causes of action and cannot be permitted under the guise of amendment.

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The present Securitisation Application, as framed, is confined to the sale notice dated 04.09.2025. The proposed amendment would substantially enlarge its scope and convert it into a broader challenge to foundational statutory measures that are already the subject matter of submissions before another Tribunal. Such duplication is neither warranted nor maintainable.

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In view of the foregoing, this Tribunal holds that the proposed amendment is not maintainable. The grounds now sought to be introduced are already raised by way of submissions in SA No. 790 of 2025 before DRT–III, Chennai, and cannot be permitted to be replicated in the present proceedings.

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14. In the result, the following:

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ORDER

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This Interlocutory Application stands rejected as it substantially changes the nature of the original proceedings introduces distinct causes of action, and results in impermissible jurisdictional overlap with proceedings admittedly pending before another Tribunal. No order as to costs.

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Sd/(SHARANG DHAR UPADHYAY) PRESIDING OFFICER DRT-II CHENNAI

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(Dictated to PS, who typed in the system directly, corrected, signed and pronounced by me in Open Court, on this 5^th day of March, 2026)

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IN THE DEBTS RECOVERY TRIBUNAL – II AT CHENNAI

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Dated this 5^th day of March, 2026

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PRESENT: SHRI SHARANG DHAR UPADHYAY Presiding Officer

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IA Dy No.3051 of 2025 in SA No.541 of 2025

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M/s Challani Ranka Jewellery Rep. by its Partner Mr. R.J. Anandmul

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No.119, NSC Bose Road, First Floor Sowcarpet, Chennai – 600 079

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Mr. R.J. Anandmul S/o Jawarilal Jain No.2, Ritherdon Road 2^nd Street, Ritherdon Avenue Vepery, Chennai – 600007

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Mr. Sumti A Challani Son of Mr. R.J. Anandmul No.2, Ritherdon Road 2^nd Street, Ritherdon Avenue Vepery, Chennai – 600007 …Petitioners / Applicants

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Versus

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The Authorised Officer Indian Overseas Bank Asset Recovery Management Branch 3^rd Floor, Annexe Building Central Office Building

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763, Anna Salai, Chennai – 600 060 …Respondent / Respondent

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ORDER

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This un-numbered Interlocutory Application has been filed by the Petitioners / Applicants praying to make the interim order dated 22.09.2025 absolute until disposal of this SA, consequently, to direct the Respondent that no further measure under the SARFAESI Act shall be initiated or proceeded within the subject loan account during the pendency of this SA, without prior leave of this Tribunal.

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The Registry of this Tribunal has raised the following objections:-

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“ As per par no. 5 of this affidavit applicant stated that respondent has proceeded to initiate further SARFAESI measures in the same loan

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account by issuing a fresh sale notice dated 05.11.2025 in respect of another secured asset.

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Applicant to clarify. How this prayer is maintainable since, the sale notice dated 05.11.2025 is a fresh cause of action. Hence this petition may be returned for compliance.”

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In reply, the Ld. Counsel for the applicant has stated as follows: -

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“ The petitioner sought is only to protect the prayer, the prayer sought for in the IA does not alter the nature of challenge nor introduce new cause of action. Since the petitioner filed the present petition. Since the matter is subjudice, and petitioner comply the condition duly, therefore it is maintainable.”

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The brief facts as stated in the affidavit are as follows: -

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(i) The above SA is filed challenging the sale notice dated 04.09.2025 issued by the respondent bank.

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(ii) This Tribunal by its order dated 22.09.2025 was pleased to grant an interim stay of the proposed sale subject to the condition that the petitioner deposits 20% of the dues on or before 23.09.2025 and a further 20% within fifteen days thereafter. The said conditions are fully complied with and proof of such deposits is also filed.

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(iii) After full compliance of the conditional order, the petitioner was bonafide under impression that the respondent would maintain status quo and await adjudication of this SA. However, during the pendency of this SA and despite full compliance of the conditional order the respondent has proceeded to issue subsequent sale notice dated 05.11.2025 in respect of another secured asset..

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(iv) The subsequent sale notice is challenged in SA No.790 of 2025 before the Tribunal having territorial jurisdiction. In the order dated 24.11.2025, the Tribunal has recorded that the petitioner had paid a cumulative amount of Rs.10.8 crores in the loan account across various proceedings, that the outstanding at the time of original Section 13(2) notice was Rs.11.6 crores and that the respondent has issued two different demand notices bearing two different and contradictory NPA dates viz., 22.6.2021 and 30.9.2020. These inconsistencies reveal serious infirmities in the foundation of the SARFAESI proceedings.

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(v) The repeated issuance of sale notices in the same loan account during the pendency of the SA defeats the purpose of the conditional protection granted by this Tribunal, causes multiplicity of proceedings, and threatens to render the adjudication of this SA nugatory by creating third party rights.

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(vi) Unless this Tribunal regulates further action by the respondent during the pendency of the SA, the respondent may continue issuing successive sale notice, defeating the conditional protection already granted. The relief sought is purely consequential to the order dated 22.09.2025 and is necessary to preserve the subject matter of the present SA and ensure that the statutory remedy under Section 17 remains effective.

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(vii) It is only because of the compliance with the interim order dated 22.9.2025 the proposed sale did not take place. But for such compliance, the sale would have proceeded as scheduled. Therefore the question of the interim order becoming infructuous does not arise at all. The non occurrence of the sale is a direct result of compliance and reinforces the need to continue protection, not dilute it.

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Heard the Ld. Counsel for the Petitioners / Applicants and the Ld. Counsel appearing on behalf of the Respondent Bank

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The learned counsel for the Applicants submitted that the relief sought is only consequential in nature, intended to protect the interim order already granted and that it does not introduce any new cause of action. It is further submitted that the Applicants

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have complied with the conditional order dated 22.09.2025 and therefore are entitled to continued protection.

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The learned counsel appearing for the Respondent Bank opposed the application contending that this Tribunal cannot enlarge the scope of the present SA beyond the impugned measure challenged herein.

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I have carefully considered the rival submissions and perused the material placed on record.

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The present SA has been filed challenging the sale notice dated 04.09.2025. This Tribunal, by order dated 22.09.2025, granted interim stay of the proposed sale subject to certain conditions, which the Applicants claim to have complied with. The interim order was thus confined to the specific measure impugned in this SA.

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It is not in dispute that the Respondent Bank has subsequently issued a sale notice dated 05.11.2025 in respect of another secured asset. The Applicants have already challenged the said sale notice by filing SA No.790 of 2025 before the competent Tribunal. Therefore, the legality and validity of the subsequent sale notice is the subject matter of independent proceedings.

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The prayer in the present Interlocutory Application seeks a blanket direction restraining the Respondent from initiating or proceeding with any further measures under the SARFAESI Act in the subject loan account during the pendency of this SA. Such a prayer travels beyond the scope of the present SA, which is confined to challenge against the sale notice dated 04.09.2025.

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Each measure taken under Section 13(4) of the SARFAESI Act gives rise to a distinct and independent cause of action under Section 17 of the Act. If any subsequent measure is taken, the aggrieved person has a specific statutory remedy to challenge the same before the appropriate Tribunal. The Applicants have in fact availed such remedy in respect of the sale notice dated 05.11.2025.

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This Tribunal cannot, in the guise of making the interim order absolute, grant a general restraint order prohibiting the secured creditor from exercising statutory powers in respect of future measures which are not the subject matter of challenge in the present SA. Granting such relief would amount to enlarging the scope of the proceedings and pre-judging measures not yet examined in accordance with law.

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The contention that multiplicity of proceedings would arise cannot be a ground to curtail the statutory powers of the secured creditor, particularly when the Act itself provides a remedy against each measure.

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In view of the above discussion, this Tribunal is of the considered opinion that the present Interlocutory Application is not maintainable in its present form and the relief sought cannot be granted in the present SA.

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Accordingly, the following;

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ORDER

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This unnumbered interlocutory application is dismissed as not maintainable. No order as to costs.

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Sd/(SHARANG DHAR UPADHYAY) PRESIDING OFFICER DRT-II CHENNAI

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(Dictated to PS, who typed in the system directly, corrected, signed and pronounced by me in Open Court, on this 5^th day of March, 2026)

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Challani Ranka Jewellery v. Indian Overseas Bank

Case brief

What is this about?

What did the court decide?

Challani Ranka Jewellery v. Indian Overseas Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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