Dismissed

J J Diamonds Represented by Its Partner Ms Shrenik Chand Nahar v. Bank of Maharashtra

DRT29 Apr 2026SA/598/2024

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal dismissed a Securitization Application filed by M/s. J J Diamonds challenging possession and sale notices by Bank of Maharashtra. The court held the application became infructuous as the stay order was complied with, preventing the sale from taking place, and the applicant failed to prove NPA classification errors.

What did the court decide?

The SARFAESI Application was disposed of as infructuous. The interim order granted stands vacated. Pending IAs are disposed of in terms of this final order.

J J Diamonds Represented by Its Partner Ms Shrenik Chand… — Execution and Attachment | DRT (2026)

SA No.598/2024

29.04.2026

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 29^th day of April, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SARFAESI APPLICATION No. 598 of 2024

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M/s. J J Diamonds

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Represented by its Partner Mr.Shrenik Chand Nahar No.85, G N Chetty Road, near Jeeva Park T. Nagar, Chennai 600 017. ….Applicant -Vs-

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Bank of Maharashtra Represented by its Authorized Officer T. Nagar Branch No.14 Sivagnanam Street Thyagaraya Nagar, Chennai 600 017. .….Respondent

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Counsels on record / appeared:

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Counsel for Applicant : M/s. B. Gurumurthy, D. Thanigaivel Counsel for respondent : M/s. T. Ravichandran, Shree Law Services

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ORDER ON SA 598/2024

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The present Securitization Application [SA] is filed on 04.09.2024 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].

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The applicant has challenged the Sale held on 06.09.2024 between 01.00 p.m to 05.00 p.m pursuant to E-Auction Sale Notice dated 24.07.2024 and the outstanding amount due as per Sale Notice is Rs.3,19,98,577.56/-

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The applicant is the borrower has filed the present SA challenging the possession notice dated 11.06.2024 in SA.594/2024 and SA.598/24, challenging the sale notice dated 24.07.2024 fixing the sale on 06.09.2024 for recovery of an amount of Rs.3,19,98,577.56.

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It is seen from the records that the Tribunal vide proceeding dated 05.09.2024 considering the IA.1655 of 2024 for stay has observed that the applicant is a registered unit under MSMED Act for which the certificate is produced at one of the Annexures.

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The case of the applicant is that they have responded to the demand notice and had sought for certain re-working of the five loans (the loan of MSME Unit including). The bank instead of considering the request had issued the possession notice dated 11.06.2024 and sale notice dated 24.07.2024 which are challenged.

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The Ld. Counsel for the applicant relies on the latest ruling of the Hon'ble Supreme Court Pro Knits Vs. Board of Directors of Canara Bank and Ors in 2024 SCC Online SC 1864 to urge that the guidelines issued must be followed in so far as the identification of "Incipient Stress". These guidelines are to be followed by constituting a committee by the banks in terms of Sec.9 of MSMED Act and the Sections 21 and 35 of the Banking Regulations Act.

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The Ld. Counsel submits that, in both the cases, the applicant had made out a prima facie case seeking stay of the proceedings. The Tribunal has granted an interim order of Stay directing the respondent bank to stay Uploaded on 29.04.2026 at 14:50 hours

SA No.598/2024

29.04.2026

the sale which was schedule to be held on 06.09.2024 con condition that the Applicant depositing 5% of the amount of due on or before 12.00 Noon on 06.09.2024; and 5% of the amount due within one week and 10% of the amount due within 45 days', thereafter.

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The Ld. Counsel submits that applicant complied with the payment of the Interim Order and has filed the memo on 04.03.2026 reporting the compliance of the interim order and bank did not proceed with the auction sale fixed on 06.09.2024 and the sale did not take place.

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It is further submitted that the prayer sought in the SA does not survive and the SA has become infructuous. Memo filed by the applicant was taken on record however, the counsel for the respondent bank submitting that though the SA has become infructuous sough time to file the written arguments.

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According the respondent bank has filed written arguments contending that the Tribunal granted a conditional order of stay on the basis of judgment of the Supreme Court in Pro Knits Vs. Board of Directors of Canara Bank reported in 2024 SCC Online SC 1864.

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It is submitted that the judgment is not applicable to the facts and circumstances of this case as there is no challenge to the classification of the account as NPA as per the RBI guidelines, further there is no challenge made to classification of the account as NPA except for a statement of para K, as there was no specific challenge to the classification of the account as NPA. The applicant has relied on paragraph 17 had held as under: -

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"Suffice it to say, when it is mandatory or obligatory on the part of the Banks to follow the instructions/directions issued by the Central Government and the Reserve Bank of India, with regard to the framework for revival and rehabilitation of MSMEs it should equally incumbent on the part of the concerned MSMEs to be vigilant enough to follow the process laid down under the said framework and bring to the notice of the concerned banks by producing authenticated and verifiable documents/material to show its eligibility to get the benefit of the said framework.".

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Though the applicant had relied on the judgment had not produced a piece of evidence to show that the Applicant had produced any authenticated documents to show its eligibility under the circular.

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The applicants replied to the SARFAESI notice dated 16.05.2024 which is produced at pg. 63 of the SA reflects that the reply was not issued by the applicant but by various individuals with address of JJ Diamonds. Even in the said reply there was no challenge to the classification of the account as NPA.

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Further the respondent bank has countered the applicant averments made with regard to the sale notice contending that the sale notice was not bad in law as it is described the property correctly as per the MODT executed by the applicant.

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All the contentions raised in the grounds is not sustainable as the sale has not taken place and the prayer as sought for in the SA has become

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infructuous. It is pertaining to note that the applicant has obtained the interim order and has complied with the interim order and on compliance the sale notice could not take place.

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Subsequently, the applicant has filed the memo and noting the service the SA the sale has become infructuous. Hence, the respondent bank prays to dismissal of the SA, as the applicant has failed to establish any illegality in the classification of the account as NPA.

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As the prayer in the SA has become infructuous, nothing survives for further adjudication and the other challenges to the measures is not within the period of 45 days as required under S.17 of the Act.

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Accordingly, SA stands disposed as infructuous. Interim Order granted 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 (Suriya), transcribed by him, corrected, signed and pronounced by me on this the 29^th day of April, 2026)

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ANNEXURES

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LIST OF DOCUMENTS PRODUCED BY THE APPLICANT

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Sl. No.	Description of Documents	Documents No.
1.	UDYAM Certificate for applicant company dated 28.08.2020.	A-1
2.	Supplemental Memorandum of Deposit of Title Deeds registered as Doc.No.137/2021 dated 22.01.2021.	A-2
3.	Sanction letter for restructure dated 29.06.2021.	A-3

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4.	Valuation report dated 30.06.2023.	A-4
5.	Letter for restructure and Realignment dated 17.07.2023.	A-5
6.	Request for the NOC and Realignment of Credit Exposure dated 05.03.2024.	A-6
7.	Demand Notice dated 18.03.2024.	A-7
8.	Reply Objection sent by the applicant firm dated 16.05.2024.	A-8
9.	Possession Notice dated 11.06.2024.	A-9
10.	Original Sale Notice along with postal cover (Impugned Notice) dated 24.07.2024.	A-10
11.	One Time Settlement request given by the applicant firm dated 22.08.2024.	A-11

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LIST OF DOCUMENTS PRODUCED BY THE RESPONDNET

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Sl. No.	Description of Documents	Documents No.
1.	Reply to notice issued by the defendant under section 13(3A) dated 16.05.2024.	R-1
2.	Reply to letter dated 22.08.2024 issued by the defendant rejecting the OTS proposal dated 28.08.2024.	R-2
3.	Paper Publication of Demand Notice published in English and Tamil Newspaper dated 03.04.2024.	R-3
4.	Paper publication of possession notice published in English and Tamil Newspaper dated 16.06.2024.	R-4
5.	Photograph of the possession notice affixed on the applicant’s property.	R-5
6.	Paper publication of sale notice published in English and Tamil newspaper dated 02.07.2024.	R-6
7.	Photograph of the sale notice affixed on the applicant’s property.	R-7
8.	Statement of accounts.	R-8

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SCHEDULE OF PROPERTIES

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(As mention in the Possession Notice Dated: 24.07.2024)

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Property-1: Belongs to Chandra

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In the Registration District of Pondicherry sub Registation District of Thirukkanur Village No.8, Mannadipet commune Panchayat, Thirubuvanai Revenue Village at R.S. No.151/14, Cadaster No.494/3/3, total extent of

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land 16 ares in which portion of Western side land to an extent of 10 Ares, 50 centiares and building thereat bounded on the;

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North : Krishnappan land

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South : Road

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East : SPIRO Industrial plastics West : (Rs. No.151/14 pt, Dilip Kumar M land) Manohara Udaiyar land.

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Property 2: Belongs to Dilipkumar

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In the Registration District of Pondicherry Sub Registration District of Thirukkanur Village No.8, Thirubuvanai Revenue Village, Mannadipet Commune Panchayat, R.S.No.151/14, Vinayagar Koil Street, Cadaster No.494/3/3, Pondicherry district extent of land 5 ares 50 centaires

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North : Krishnappan land

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South : Road

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East : Rahothaman Muthaliyar land West Manohara Udaiyar Land and Chandra

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Property 3: Belongs to Mrs. Kamala Nahar

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Registration District of Pondicherry Sub Registration District of Olugaret village No.38, Saram Revenue Village, within Oulgaret Municipality, at R.S.No.220/3B, CAD No.398 pt, Krishna Nagar Plot No.29, Olugarpet SRO, Pndicherry Total extent of land is 1800 sq.ft., property is standing the name of Mrs. Kamalabai Nahar

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Bounded on the

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North : Property sold by Neelakanda Naicker South : New Pathway East : Plot No.30

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West : New Pathway and others land

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Measuring:

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East West : 30 ft.

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North South: 60 ft.

Property 4: Belongs to Late Mr. J. Jawaharlal Nahar

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Schedule A:

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All that piece and parcel of land together with two storied super structure at Old Door No.11, New Door No.41, R.S.No.41 part T.S.No.4810, New T.S.No.8312, Block No.109, Habibullah Road, T. Nagar, Chennai total extent of land is 11 grounds 126 sq.ft., bounded on the

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North : Habibulah Road South : House and land belonging to T.S. Kesavalu East : House and Ground belongs to MEW Gopal Naidu West : House and land belonging to Vijaya Chamundeewswari

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Schedule B

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House and ground situated in (Door No.12C), Plot No.C, measuring 4120 sq.ft., in the schedule A property bounded on the

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North : Plot No.B South : Plot No.D East : Common passage

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West : Land and house belonging to Vijaya Chamundeeswari.

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Sd/-

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