Allowed

P Senthil Kumar v. Bank of Baroda

DRT6 Mar 2026SA/559/2024

Case brief

AI extract

What is this about?

Debts Recovery Tribunal quashed a Possession Notice issued by a bank under the SARFAESI Act. The Tribunal held that the Demand Notice was invalid as it was issued eight years after the loan was classified as Non-Performing Asset, making it barred by law and limitation. Consequently, no legal chain of possession had been established.

What did the court decide?

Possession Notice dated 02.08.2024 set aside; expenditures for issuance excluded from loan account; bank at liberty for fresh action.

P Senthil Kumar versus Bank of Baroda — Cheque Dishonour | DRT (2026)

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SA No.559/2024

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI

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DATED THIS 06^th 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. 559/2024

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P. Senthil Kumar, No. 2/81, Vellala Street, Kudi Theru, Valadi, Lalgudi, Trichy District. --- Applicant

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-Vs-

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The Authorized Officer, Bank of Baroda, Lalgudi Branch, No. 91, Main Road Lalgudi, Trichy – 621 601. --- Defendant Bank

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Appearance of Advocates: Mr. P. Sathish Kumar ---- Counsel for the Applicant Mr. R. Pandivel ---- 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 quash the Possession Notice dated 02.08.2024 issued by the Defendant Bank.

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Page 1 of 8

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SA No.559/2024

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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 is a businessman. The Applicant availed the loan facility from the Defendant Bank for construction of a residential house to the tune of Rs. 35,00,000/- thereby they constructed a residential building. In security for the repayment of the said loan they mortgaged the property with residential building. Further it is stated that he paid the said monthly installments regularly, but due to sudden medical issues, the Applicant got loss in business. Since Applicant failed to pay the installments periodically and subsequently, they communicated the issue to the Bank Manager and requested for time to pay the outstanding amount.

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It is further submitted that the Applicant approached the Defendant Bank for sorting out the issue by way of amicable settlement by selling another property and will close the entire loan within 5 months lapsing period. But the Defendant Bank fails to hear his obligation and thereafter, the Bank had issued a Possession Notice dated 02.08.2024. It is submitted that the said action on the part of the Defendant Bank in respect of the said properties is illegal and without jurisdiction. Besides, the Defendant Bank has charged the interest on the unpaid loan at an exorbitant rate and that they are asked to pay more than what they are liable to pay. It is further submitted that they will be put to irreparable loss and hardship if the unit is sold and the Applicant do not have any other recourse other than approaching this Hon'ble Tribunal. The Possession Notice is liable to set aside on the following amongst other grounds,

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Main Grounds :-

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The Defendant Bank failed to consider that the property is the Applicant’s only house and they are presently residing in the said house.

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It is illegal that the Defendant has taken possession to the entire property worth more than Rs. 90,00,000/- for recovering a loan of Rs. 60,45,010.75p.

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The Applicant now has recovered the family circumstances and have made a concrete plan to repay the loan ought to have provided an opportunity to repay the loan in installments.

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The Defendant Bank has not followed the prescribed rules and Act of the SARFAESI Act. Hence, the Possession Notice dated 02.08.24 is liable to be set aside.

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Page 2 of 8

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SA No.559/2024

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SCHEDULE OF PROPERTY Details of mortgaged securities

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Tiruchirappalli District, Ariyalur Registration District, lalgudi Sub Registration District, Lalgudi Taluk, Valady Village, Natham Old SF No. 43/B1 the land measuring Ac 4.23 cents out of this the house site measuring East West 130 feet X North South 37-1/2 feet = 00475 Square meter within the following boundaries,

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North by Pichaya Pillai house, South by Sornamanickathammal house, East by Balachandran Nanja Land West by North South Street, Out of this

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Item No. 1: abutting street the site measuring East West 43-1/2 Feet X North South 37-1/2 feet = 1631-1/4 Square Feet = 00151.54 Square Meter comprised in natham New SF No. 202/1,

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Item No. 2 The middle portion the site measuring East West 43-1/2 Feet x North South 37-1/2 feet = 1631-1/4 Square Feet = 00151.54 Square Meter comprised in Natham New SF No. 202/1,

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Four boundaries: North by pichaiya Pillai house, South by Sornamanickathammal house, East by Madhubala site (item No. 3), West by Muthulakshmi site (Item No. 1), Item No. 3: The East portion the site measuring East West 43-1/2 Feet x North South 37-1/2 feet = 1631-1/4 Square Feet=00151.54 Square Meter comprised in Natham New SF No. 202/1,

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Item Nos. 1 to 3 totally measuring 4893 Square feet of vacant site at Kuditheru, valady Village, lalgudi Taluk and RCC building constructed thereon,

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Situated within the limits of valady Village panchayat and Lalgudi Panchayat Union.

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

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Index to List of documents

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S.No.	Date	Description of Documents
1	02.08.2024	Possession Notice

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Page 3 of 8

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SA No.559/2024

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3. On the other hand, the Counsel for the Defendant Bank appeared before this Tribunal and filed Vakalat, Reply Statement, typed set of papers & Addl. Typed sets of papers in which they submitted that under the heading “Facts of the Case” of the SARFAESI Application the Applicant has categorically admitted the borrowing of loan & execution of loan documents & creation of mortgage & default in payment & receipt of the SARFAESI Notices. The Defendant Bank strongly & vehemently & specifically denies each & every allegation under the heading “Facts of the case” & “Grounds” of the SARFAESI Application. The Applicant is put to strict proof of every one of the said allegations with valid & acceptable evidence. Most of the allegations are unwarranted so far as the matter-in-issue is concerned.

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It is further submitted that the reasons so stated by the Applicant for non-repayment of loan are not acceptable. Despite having sufficient means the Applicant has not repaid the loan. Bank has never asked the Applicant to pay more than what they are liable to pay. The actions taken by the bank is neither illegal nor without jurisdiction. It is further stated that the bank has charged interest only as per contractual rate and never charged interest at an exorbitant rate. It is not correct to allege that the property is worth Rs. 90 Lakhs. The Applicant is liable for a sum of Rs. 60 Lakhs & odd as mentioned in the Possession Notice with subsequent interest & cost. The mortgaged property is a house site & buildings constructed thereon and that bank cannot take possession of portion of mortgaged property and the bank has to take possession of entire mortgaged property.

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It is further submitted that now the bank has issued only Possession Notice and so the question of fixation of upset price does not & will not arise at all and that the allegation raised by the Applicant with regard to upset price is unwarranted one. The Possession Notice is in accordance with Rules & it is legally valid one. The Bank has followed all the procedure as prescribed under Act & Rules. So, the Possession Notice is not liable to be set aside. The Defendant Bank has issued Demand Notice and the same was also duly served on the Applicant. The Bank has taken symbolic possession of the property & issued Possession Notice and the Possession Notice was duly served on the Applicant and affixed the Possession Notice on the conspicuous part of the property and the Possession Notice was also published both in Tamil daily & in English daily in time. It is further submitted that the Applicant has admitted the receipt of the Possession Notice. Further it is stated that the Applicant has not sent any reply to the 13(2) Demand Notice. Non sending reply to 13(2) Demand Notice is fatal to his case.

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The Defendant Bank further submitted that there is no procedural irregularity on the part of the Defendant Bank in issuing the Demand Notice

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Page 4 of 8

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SA No.559/2024

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& taking possession & issuing Possession Notice under the SARFAESI Act & Rules and that the alleged procedural irregularity mentioned in the SARFAESI Application are not factually & legally correct and that the Defendant Bank has issued the Demand Notice & Possession Notice only as per the provisions & procedures of the SARFAESI Act & Rules. Hence, if the Possession Notice is set-aside, the Defendant Bank will be put to untold hardships and irreparable loss & injury; on the other hand no prejudice will be caused to the Applicant. The balance of convenience is only in favour of the Defendant Bank.

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It is further submitted that the Applicant is a willful & Chronic Defaulter. He willfully, wantonly & deliberately not repaying the loan amount despite his sufficient means to repay the loan and that the main intention of the Applicant is only to drag on the proceedings without making any payment and to defeat & delay & defraud the valuable rights of the Defendant Bank. The only remedy available to the Applicant is to re-pay the entire dues to the Defendant Bank in order to stop the sale as per section 13(8) of the SARFAESI Act.

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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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Main Typed set filed on the side of the Defendant Bank

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S.No.	Date	Particulars
1	23.05.24	Demand Notice
2	02.08.24	Possession Notice
3	02.08.24	Possession Notice Original Paper Publication in English daily ‘Indian Express’published on 03.08.24
4	02.08.24	Possession Notice Original Paper Publication in Tamil daily ‘Dinamani’published on 03.08.24
5	02.08.24	Original Photography showing affixture of Possession Notice

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Additional Typed set filed on the side of the Defendant Bank

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S.No.	Date	Particulars
1	---	AD cards for Demand Notice dated23.05.24
2	---	AD Cards for Possession Notice dt.02.08.24

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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

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Page 5 of 8

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SA No.559/2024

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available on records, this Tribunal find that the Applicant has availed Loan facility for a sum of Rs. 35,00,000/- (Rupees Thirty-Five Lakhs only) for construction of a residential house and mortgaged the property with residential building. The Applicant further stated that he was regular in repayment of monthly instalments however, due to sudden medical issues, the Applicant got loss in business and hence, he failed to pay the installments periodically. Thereafter the Applicant approached the Bank Manager and requested for further time of 5 months to repay the outstanding amount. However, the Defendant Bank has not accepted the Applicant’s request.

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I also find that the Defendant Bank has filed the copy of Demand Notice dated 23.05.24 issued to the borrowers and guarantor u/s. 13(2) of SARFAESI Act for a sum of Rs. 31,59,873.47p (Rupees Thirty-One Lakhs Fifty-Nine Thousand Eight Hundred Seventy-Three and paise Forty-Seven only), wherein the date of classification of loan account as NPA is mentioned as 25.02.2016. I also find that the Defendant Bank has filed AD Cards as a proof for having delivered the Demand Notice dated 23.05.2024 (Page no. 1 of Bank’s Additional Typed set) to the Borrowers and Guarantor. However, the Applicant has not filed any evidence for having sent a Representation u/s. 13(3A) of SARFAESI Act in response to the Demand Notice dated 23.05.2024. The Applicant also not filed any evidence for having made any payments after the receipt of Demand Notice dated 23.05.2024. However, I find that in this case, the Defendant Bank had classified the Applicant’s loan account as NPA in the year of 2016 and Demand Notice has been issued only on 23.05.2024, i.e. after the lapse of Eight years of classification of NPA, which cannot be considered to be correct and hence, the Demand Notice issued on 23.05.2024 is invalid in the eye of law and also barred by limitation.

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Thereafter, the Defendant Bank had issued Possession Notice dated 02.08.2024 u/s. 13(4) of SARFAESI Act for a sum of Rs. 60,45,010.75p (Rupees Sixty Lakhs Forty-Five Thousand and Ten and paise Seventy-Five only). The Bank has also filed original AD Cards for having sent the copy of Possession Notice dated 02.08.2024 to the Applicants (page no. 2 of Bank’s additional typed set). I also find that in the AD card in respect of Mrs. S.

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Page 6 of 8

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SA No.559/2024

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Kavitha, door no. & address is wrongly mentioned. The Bank has also filed original Paper Publication made in respect of Possession Notice dated 02.08.2024 in both English & Tamil dailies published on 03.08.2024 (Page nos. 8 & 9 of Main Typed set filed by the Defendant Bank). Further, the Defendant Bank has also filed the original photos for having affixed the Possession Notice dated 02.08.2024 on the conspicuous part of the property (Page nos. 10 to 12 of Typed set filed by the Defendant Bank). However, the date of affixture of Possession Notice on the property is not known, but it is handwritten as “Possession Notice affixed on 02.08.2024”. Further, the details of outstanding amount given in the Demand Notice & Possession Notice does not matching. In the Possession Notice, details of Demand Notice are wrongly given. Hence, the particulars given in the Impugned Possession Notice dated 02.08.2024 are not correct. Thus, I do not find that the Defendant Bank has strictly followed the SARFAESI procedures, while issuing Possession Notice to the Applicant. The Rule 8(1) & (2) of the Security Interest (Enforcement) Rules 2002 clearly says:-

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"8. Sale of immovable secured assets.

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(1) Where the secured asset is an immovable property, the authorized officer shall take or cause to be taken possession, by delivering a possession notice prepared as nearly as possible in Appendix IV to these rules, to the borrower and by affixing the possession notice on the outer door or at such conspicuous place of the property."

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(2) The possession notice as referred to in sub-rule (1) shall also be published in two leading newspaper, one in vernacular language having sufficient circulation in that locality, by the authorized officer.

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Moreover, in this case, I also find that this Tribunal had granted an AdInterim Stay Order dated 30.08.2024. The Applicant has also complied with the conditions imposed by this Tribunal and paid a total sum of Rs. 21,16,000/- (Rupees Twenty-One Lakhs and Sixteen Thousand only) and showed his bona-fide. In view of the above facts and circumstances of the case, I find that the Applicant has been able to prove his case.

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In the result,

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(a) SA No. 559/2024 is allowed as prayed for. The Possession Notice dated 02.08.2024 is hereby set aside.

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Page 7 of 8

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SA No.559/2024

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(b) All the expenditures incurred in issuance of Impugned Possession Notice dated 02.08.2024 shall not be included in the loan account of the Applicant.

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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 06^th March, 2026.

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sd/- (SEEMA SINHA) PRESIDING OFFICER

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Dictated & corrected by me

sd/-

(SEEMA SINHA)

PRESIDING OFFICER

uploaded on 13.03.26

Page 8 of 8

P Senthil Kumar v. Bank of Baroda

Case brief

What is this about?

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P Senthil Kumar v. Bank of Baroda

Case brief

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