Dismissed

V Subbiah v. City Union Bank Limited

DRT28 Jul 2026SA/606/2024

Case brief

AI extract

What is this about?

This tribunal dismissed connected applications challenging loan recovery proceedings under the SARFAESI Act. It held the borrowing account's NPA classification valid, the service of notices and the CJM order for possession lawful, and the auction sale regular. The bank followed mandatory procedures.

What the court decided

AI extract

V Subbiah versus City Union Bank Limited — Contract and Commercial Disputes | DRT (2026)

¶1

SA No.606/2024 &

¶2

Connected SA No.640/2024, 665/2024 & 779/2024

¶3

Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI

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DATED THIS 28^th DAY OF JULY 2026

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PRESENT: SEEMA SINHA

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[PR. DISTRICT & SESSIONS JUDGE - Retd]

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PRESIDING OFFICER

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SA No.606/2024 & Connected SA No.640/2024, 665/2024 & 779/2024

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Mr. V. Subbiah S/o S.P Venkatraman, No.1/121, Kovil Street, TWAD Colony, Thiruppalai, Madurai-625014. ---- Applicant

¶11

¶12

The Authorised Officer, City Union Bank, Credit Recovery and Management Department, Administrative Office, No. 24-B,

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Gandhi Nagar, Kumbakonam -612 001.

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The Authorised Officer City Union Bank Madurai Main Branch, No.82A, Tamil Sangam Road, Madurai 625001. ---- 1^st & 2^nd Defendant Bank

¶15

Appearance of Advocates: Mr.R.Manoharan ---- Counsel for the Applicant Mr.P.Madhan Alexander ---- Counsel for the 1^st & 2^nd Defendants Bank

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SA No.606/2024 & Connected SA No.640/2024, 665/2024 & 779/2024

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M/S. V CARE WASH Represented by its Proprietor Mr. S. Nambirajan No. 7-3-58/1, A.I.B.E.A Nagar, Kurinji Street, A Colony, Paravai, Madurai- 625402. ---- Applicant

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Page 1 of 38

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SA No.606/2024 &

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Connected SA No.640/2024, 665/2024 & 779/2024

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¶22

The Authorised Officer, City Union Bank, Credit Recovery and Management Department, Administrative Office, No. 24-B, Gandhi Nagar, Kumbakonam -612 001.

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The Authorised Officer City Union Bank Madurai Main Branch, No.82A, Tamil Sangam Road, Madurai 625 001.

¶24

---- 1^st & 2^nd Defendant Bank

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Mrs. Adline Stella Bessie No. 5-12/1, Annai Theresa Street, Valluvar Colony, VOC Nagar, Ananiyur, Madurai – 625 017.

¶26

---- Auction purchaser

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Appearance of Advocates: Mr.M.Nirmalkumar ---- Counsel for the Applicant Mr.P.Madhan Alexander ---- Counsel for the 1^st & 2^nd Defendants Bank

¶28

Defendant - 3 sets Ex-parte on 18.10.2024

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SA No.606/2024 & Connected SA No.640/2024, 665/2024 & 779/2024

¶30

Mr. V. Subbiah S/o S.P Venkatraman, No.1/121, Kovil Street, TWAD Colony, Thiruppalai, Madurai-625014. ---- Applicant Vs

¶31

The Authorised Officer, City Union Bank, Credit Recovery and Management Department, Administrative Office, No. 24-B, Gandhi Nagar,

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Kumbakonam -612 001.

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The Authorised Officer City Union Bank Madurai Main Branch, No.82A, Tamil Sangam Road,

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Page 2 of 38

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SA No.606/2024 &

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Connected SA No.640/2024, 665/2024 & 779/2024

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Madurai 625 001. ---- 1^st & 2^nd Defendant Bank

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Mrs. Adline Stella Bessie No. 5-12/1, Annai Theresa Street, Valluvar Colony, VOC Nagar, Ananiyur, Madurai – 625 017.

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---- Auction purchaser

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P.Subatharshini, Advocate (Advocate Commissioner), No.2/1d, Gandhi Nagar First Street, Near Union Office, Melur Town, Madurai – 625 020. ---- Formal Party

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Appearance of Advocates: Mr.R.Manoharan ---- Counsel for the Applicant Mr.P.Madhan Alexander ---- Counsel for the 1^st & 2^nd Defendants Bank Mr.K.Giriprazath ---- Auction purchaser /

¶42

3^rd Defendant

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These SAs were heard together in the presence of the Counsels for the Applicant, the 1^st & 2^nd Defendant Bank, and the 3^rd Defendant /Auction Purchaser. These SAs have been taken up together for passing the final order before me, as these cases arose out of the same cause of action. Upon hearing the arguments of the Counsels and having reserved the matters for consideration, this Tribunal delivers the following:

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O R D E R

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1 . a. SA No. 606/2024: To set aside the Sale Notice dated 07.08.2024 fixing the auction sale on 18.09.2024 and all further proceedings of the respondent Bank as illegal, arbitrary, and unlawful, and thus render justice.

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Further in

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b. SA No. 640/2024: To set aside the auction held on 18.09.2024 vide Sale Notice dated 07.08.2024 and all further proceedings of the respondent Bank as illegal, arbitrary, and unlawful, and thus render justice.

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Page 3 of 38

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SA No.606/2024 &

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Connected SA No.640/2024, 665/2024 & 779/2024

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c. SA No.665/2024: To set aside the auction held on 18.09.2024 vide Sale Notice dated 07.08.2024 and all further proceedings of the respondent Bank as illegal, arbitrary, and unlawful, and thus render justice.

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d. SA No. 779/2024: To Set aside the impugned Order dated 30.09.2024 in Crl.M.P. No. 4297 of 2024 and the same was issued by the Advocate commissioner dated 15.11.2024 and all further proceedings of the respondent Bank as illegal, arbitrary, and unlawful, and thus render justice.

¶53

2 . The brief averments of the Application filed by the Applicants are as follows:-

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a) The Counsel for the Applicants submitted that, he is a guarantors for the loan facilities availed by M/s. V CARE WASH, a company engaged in providing personal services, including laundry services, salons, beauty parlours and portrait studios. The Borrower predominantly provides laundry services to hotels, hostels, schools, and colleges. At the request of the Borrower, the Respondents sanctioned an overdraft facility of Rs. 82,82,000/- (Rupees EightyTwo Lakhs Eighty-Two Thousand only) in the year 2019, carrying interest at the rate of 11% per annum, to meet its business requirements. The Applicant executed a guarantee in respect of the said loan facility and offered the properties described in the Schedule as security for the due repayment of the loan amount.

¶55

b) It is further submitted that, the loan transaction was formalized through the execution of the necessary documents between the Borrower and the Respondents. The Applicant executed a Guarantee Agreement dated 30.09.2019 and registered a Memorandum of Extension of Equitable Mortgage dated 13.12.2019.

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c) It is further submitted that, within six months of availing the loan, i.e., during the 12-month moratorium period, the Applicant repaid a

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Page 4 of 38

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SA No.606/2024 &

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Connected SA No.640/2024, 665/2024 & 779/2024

¶60

sum of Rs. 37,00,000/- (Rupees Thirty-Seven Lakhs only) to the Respondent Bank towards the loan. This clearly demonstrates the Applicant's bona fide intention and commitment to repay the dues owed to the Respondent Bank.

¶61

d) It is further submitted that, the Borrower encountered severe financial difficulties following the outbreak of the COVID-19 pandemic. The pandemic had a direct and substantial impact on the Borrower's business, as the hospitality sector, including hotels, schools, and colleges, remained closed during the lockdown imposed to contain the spread of COVID-19. Consequently, the Borrower's business operations were severely disrupted, resulting in significant financial hardship and an inability to make timely repayments. Therefore, the default in repayment was neither deliberate nor wilful, but was solely due to circumstances beyond the Borrower's control.

¶62

e) It is further submitted that, due to the alleged delay in repayment, the Respondents classified the loan account as a Non-Performing Asset (NPA) on 18.04.2024. It is pertinent to note that, in the Demand Notice, the date of NPA is mentioned as 30.09.2019, whereas the loan was sanctioned to the Applicant only on 29.09.2019. However, before classifying the account as an NPA, the Respondents failed to comply with the mandatory provisions of the Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises (MSMEs) issued by the Central Government. Such non-compliance renders the classification of the loan account as an NPA unsustainable in law. The Respondents proceeded to classify the account as an NPA despite the Applicant's repeated requests for restructuring of the loan.

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f) It is further submitted that, the Respondent Bank could not have classified the loan account of the Borrower, an MSME, as a Non-

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Page 5 of 38

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SA No.606/2024 &

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Connected SA No.640/2024, 665/2024 & 779/2024

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Performing Asset (NPA) without complying with the procedure prescribed under the Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises (MSMEs), issued vide Notification dated 29.05.2015 by the Ministry of Micro, Small and Medium Enterprises in exercise of the powers conferred under Section 9 of the Micro, Small and Medium Enterprises Development Act, 2006. The said Notification, together with the subsequent instructions and directions issued by the Central Government and the Reserve Bank of India, was intended to facilitate the promotion, development, and competitiveness of MSMEs. Compliance with the said framework was mandatory. Consequently, the Respondent Bank's failure to adhere to the mandatory procedure before classifying the loan account as an NPA renders the classification illegal and vitiates the subsequent measures initiated under the SARFAESI Act, which are therefore liable to be declared illegal and void ab initio.

¶68

g) It is further submitted that, as on date, the Applicant has repaid a total sum of approximately Rs. 56,11,633/- (Rupees Fifty-Six Lakhs Eleven Thousand Six Hundred and Thirty-Three only) towards the loan account. It is further submitted that the Respondent Bank has levied exorbitant interest and other charges amounting to approximately Rs. 31,83,092.16/- (Rupees Thirty-

¶69

One Lakhs Eighty-Three Thousand Ninety-Two and Paise Sixteen only) on the Borrower. The levy of such excessive interest and charges is arbitrary and contrary to the provisions of the SARFAESI Act and the guidelines issued by the Reserve Bank of India (RBI).

¶70

h) It is further submitted that, in addition to the financial hardship caused by the COVID-19 pandemic, the Applicant's father suffered from a serious illness and was hospitalized, resulting in substantial

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Page 6 of 38

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SA No.606/2024 &

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Connected SA No.640/2024, 665/2024 & 779/2024

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medical expenses and further aggravating the Applicant's financial difficulties. The Applicant's father, Mr. Subbarayalu, passed away on 05.08.2024, and the said fact was duly intimated to the Respondent Bank. The Applicant came to know that the Respondent Bank had issued a Demand Notice dated 18.04.2024 and a Possession Notice dated 30.07.2024. However, neither of the said notices was served upon the Applicant. The failure to effect proper service of the statutory notices is contrary to the principles of natural justice and vitiates the subsequent proceedings initiated by the Respondent Bank.

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i) It is also submitted that, the Respondents forwarded a copy of the Tender-cum-Auction Sale Notice dated 07.08.2024 under the SARFAESI Act, 2002 to the Borrower through a WhatsApp message on 07.09.2024. It is pertinent to submit that the Sale Notice was not served upon the Applicant in the manner prescribed by law. The Sale Notice stated that the Respondent Bank intended to recover a sum of Rs.67,17,647/(Rupees Sixty-Seven Lakhs Seventeen Thousand Six Hundred and Forty-Seven only) . It further fixed the reserve price of the secured asset at Rs.55,00,000/- (Rupees FiftyFive Lakhs only) , which is grossly inadequate and does not reflect the true market value of the property. The reserve price appears to have been fixed without conducting a proper and lawful valuation of the secured asset. The Applicant made several requests to the Respondent Bank seeking the valuation report of the secured asset, based on which the value of the property was fixed at Rs.55,00,000/- (Rupees Fifty-Five Lakhs only) . However, the Respondent Bank did not furnish the same to the Applicant. It is pertinent to note that the market value of the property is between Rs.1,00,00,000/(Rupees One Crore only) and Rs.1,20,00,000/- (Rupees One Crore Twenty Lakhs only) . The independent valuation obtained by the Applicant assessed the value

and

Page 7 of 38

SA No.606/2024 &

Connected SA No.640/2024, 665/2024 & 779/2024

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of the secured asset at Rs. 1,10,01,500/- (Rupees One Crore Ten Lakhs One Thousand Five Hundred only) . This clearly shows that the property was grossly undervalued, and hence, the sale is liable to be set aside.

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j) It is further submitted that, the outstanding dues have been computed without adhering to the guidelines and regulatory framework issued by the Reserve Bank of India (RBI) for borrowers affected by the COVID-19 pandemic. Further, the Borrower is an MSME, and the Respondents have failed to comply with the mandatory guidelines and special framework governing the initiation of SARFAESI proceedings against MSME borrowers. Such noncompliance vitiates the measures initiated by the Respondents under the SARFAESI Act.

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k) It is further submitted that, the Respondent Bank failed to follow the mandatory procedure prescribed under the SARFAESI Act and the Security Interest (Enforcement) Rules, 2002 before initiating the impugned SARFAESI proceedings. Thus, the Sale Notice proposing to auction the Schedule Property on 18.09.2024 was issued without complying with the procedure established by law, rendering the impugned sale proceedings illegal and unsustainable.

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l) It is further submitted that, he received the impugned communication dated 18.09.2024 informing the Borrower that Ms. Adline Stella Bessie, residing at No. 5-12/1, Annai Theresa Street, Valluvar Colony, VOC Nagar, Anaiyur, Madurai – 625017, had purchased the Schedule Property for a sum of Rs.55,10,000/(Rupees Fifty-Five Lakhs and Ten Thousand only) in the auction conducted by the Respondent Bank. It is pertinent to note that the Schedule Property was mortgaged in the year 2019 as security for the loan facility of Rs.82,82,000/- (Rupees Eighty-Two Lakhs

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Page 8 of 38

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SA No.606/2024 &

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Connected SA No.640/2024, 665/2024 & 779/2024

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Eighty-Two Thousand only) with a primary security margin of 25%. The present market value of the property is more than Rs.1,80,00,000/- (Rupees One Crore Eighty Lakhs only) , whereas the reserve price fixed in the Sale Notice was only Rs.55,00,000/(Rupees Fifty-Five Lakhs only) . Consequently, the property was sold for a grossly inadequate consideration of Rs.55,10,000/-, which is far below its prevailing market value. The fixation of such an unreasonably low reserve price and the sale of the property for a grossly undervalued amount raise serious doubts regarding the fairness and transparency of the auction proceedings. The Applicant therefore submits that the auction sale is liable to be set aside as being arbitrary, illegal, and contrary to the provisions of the SARFAESI Act and the Security Interest (Enforcement) Rules, 2002.

¶88

m) It is further submitted that, the representatives of the Respondent Bank are deceiving the Applicant and the Borrower for unlawful gain. It is pertinent to note that the Borrower was called by the Bank for an OTS on 19.09.2024, after the sale was conducted on 18.09.2024, and the Applicant sent an email agreeing to settle a sum of Rs.50,00,000/immediately with the Bank. However, the Respondent Bank sent an email dated 21.09.2024 seeking that the OTS amount be enhanced to Rs. 65,00,000/-, to be paid on or before 02.10.2024. The Borrower agreed to pay the said sum but requested some time to make payment of the entire amount after selling his ancestral properties. However, on 03.10.2024, the Borrower was shocked to receive a communication from the Bank dated 03.10.2024 in a completely different tone. The Respondent Bank in the said communication stated that , “... the remaining outstanding dues after the sale of property has to be discharged by you for which your offer is too low as compared with the present outstanding and the requested time is too long, so you are advised to submit a revised negotiated settlement letter with specific timelines…”

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Page 9 of 38

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SA No.606/2024 &

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Connected SA No.640/2024, 665/2024 & 779/2024

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n) It is further submitted that, the above communication dated 03.10.2024 is a clear indication of the deceptive manner in which the Applicant's property is being fraudulently seized by the Respondent Bank in collusion with the 3rd Respondent/Auction Purchaser.

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o) It is further submitted that, meanwhile, the Respondent Bank had simultaneously initiated proceedings under Section 14 of the SARFAESI Act before the Chief Judicial Magistrate, Madurai, in Cr.M.P. No. 4297 of 2024, without issuing notice to the Applicant or the Borrower, seeking to take physical possession of the property. The Hon'ble Magistrate appointed Advocate Subatharshini as the Advocate Commissioner to assist in taking physical possession of the property. The said Advocate Commissioner issued a notice dated 15.11.2024, which was received by the Applicant and the Borrower on 16.11.2024.

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p) It is further submitted that, the principles of natural justice were not followed by the Respondent Bank, and the procedure prescribed under the SARFAESI Act and the Rules was not duly followed by the Respondents. Hence, the auction held on 18.09.2024 pursuant to the Sale Notice dated 07.08.2024 and all consequential proceedings are liable to be set aside.

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q) It is further submitted that, the Respondents have not complied with the provisions of the SARFAESI Act. The Applicant offered to regularize the loan account, but the same was not considered by the Respondents. Further, he has filed S.A. No. 606 of 2024 challenging the Sale Notice dated 07.08.2024 and S.A. No. 640 of 2024 challenging the auction sale held on 18.09.2024 pursuant to the Sale Notice dated 07.08.2024, along with stay applications seeking to stay the proceedings pending disposal of the said applications. The said

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Page 10 of 38

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SA No.606/2024 & Connected SA No.640/2024, 665/2024 & 779/2024

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applications were pending before this Hon'ble Tribunal without any order being passed on the stay applications. Consequently, the Applicant would be put to grave prejudice and hardship if possession of the property is taken.

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r) It is further submitted that, The Applicant challenges the impugned Order dated 30.09.2024 passed in Crl.M.P. No. 4297 of 2024 on the file of the Hon'ble Chief Judicial Magistrate, Madurai, on the following grounds.

¶100

The action of the Respondents sending the impugned Sale notice by a whatsapp message dated 07.09.2024 to the Borrower is illegal and contrary to the procedure established by law.

¶101

The Respondent Bank has wrongly classified the Account in to NPA without following the guidelines issued by the Reserve Bank of India. The Respondent bank has classified the account as NPA on 30.09.2019 when the loan ticket was issued only on 29.09.2019.

¶102

The Respondents have failed to follow the RBI guidelines issued during Pandemic and the guidelines for rehabilitation of MSMEs.

¶103

The Respondent ought to have considered that the schedule property is a residential property and grave injustice would be caused to the property is auctioned, especially so when the procedure under the SARFAESI Act was not followed by the Respondent Bank.

¶104

The Respondent Bank have not issued SARFAESI Notices in accordance with the Security Interest (Enforcement) Rules since Publications has not been made in leading newspapers out of which one in vernacular language as mandated in the Act.

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Page 11 of 38

¶106

SA No.606/2024 &

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Connected SA No.640/2024, 665/2024 & 779/2024

¶108

The Respondents failed to note that the Applicant is willing to repay the loan. No prejudice will be caused to the respondents by permitting the applicant to settle the account. On the other hand, grave prejudice and irreparable loss would be caused to the applicant and his family members if the order dated 30.09.2024 to take physical possession of the secured asset in Crl.MP. 4297/2024 is not set aside.

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SCHEDULE OF IMMOVABLE PROPERTIES

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All that piece and parcel of land and building and the superstructure to be put thereon in future at Madurai district, Madurai north Registration district, Chokkikulam Sub registrar office, Madurai North taluk, thiruppalai village, Re-Survey No.138/3, an extent of 96 cents in which southern 77 cents now subdivision survey no 138/3B and other lands clubbed together and forming layout approved by Madurai west panchayat union commissioner, dated on 01-06-1981 K.Dis No.4351/B1-A-2. ReSurvey No.138/3B, Plot No.45, House Site and constructed building bearing Door No.1/121, Assessment No. 672120, TWAD colony, 8th street within the following boundaries: North-Plot No 44, East- 20 feet wide South-North Road, South-Plot No 46. West Land in Survey No.138/1. Measuring: East-West-Northern side 55 feet, Southern side 59 feet. SouthNorth-Eastern side 40 feet, Western side 40 1/4 feet. Total 2,287 sq.ft and left out for Road Area 535 sq.ft. in total 2,822 sq.ft. or 6 Cents 206 sq.ft. Corporation Ward No.24, New Subdivision Survey No. 138/3B1A1.

¶111

The Applicant has submitted the following consolidated typed set of papers in support of his claim in the SA, which is as follows: (SA No. 606 of 2024)

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S.No.	Date	Nature of Documents
1.	07.08.2024	Impugned Sale Notice(paper Publication)

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Page 12 of 38

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SA No.606/2024 &

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Connected SA No.640/2024, 665/2024 & 779/2024

¶116

The Applicant has submitted the following consolidated typed set of papers in support of his claim in the SA, which is as follows: (SA No. 640 of 2024)

¶117

S.No.	Date	Nature of Documents
1.	18.09.2024	Impugned Sale proceedings
2	07.08.2024	Impugned SaleNotice (paper Publication)

¶118

The Applicant has submitted the following consolidated typed set of papers in support of its claim in the SA, which are as follows: (SA No. 665 of 2024)

¶119

Sl. No.	Date	Description
1.	18.09.2024	Impugned Sale Proceedings
2.	07.08.2024	Sale Notice
3.	09.09.2024	Proof of Sale Notice sent by the Bank through WhatsApp
4.	14.11.2014	MSME Application Acknowledgement
5.	29.09.2019	Loan Sanction Letter
6.	17.04.2020	RBI Prudential Norms – COVID-19
7.	06.08.2020	RBI Prudential Norms – COVID-19(MSME)
8.	05.05.2021	RBI Prudential Norms – MSME
9.	18.03.2024	In-Patient Medical Bill
10.	20.08.2024	Death Certificate(Date of Death: 05.08.2024)
11.	23.09.2024	^{Web Copy of the Encumbrance Certificate of the} Secured Property

¶120

The Applicant has submitted the following consolidated typed set of papers in support of his claim in the SA, which are as follows: (SA No. 779 of 2024)

¶121

Sl. No.	Date	Description
1.	30.09.2024	Impugned Order in Crl.M.P. No. 4297/2024
2.	14.11.2014	MSME Application
3.	29.09.2019	Loan Sanction Letter
4.	13.12.2019	Memorandum of Extension of Equitable Mortgage by Wayof Deposit of Title Deeds
5.	17.04.2020	RBI Prudential Norms – COVID-19
6.	06.08.2020	RBI Prudential Norms – COVID-19(MSME)
7.	05.05.2021	RBI Prudential Norms – MSME

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Page 13 of 38

¶123

SA No.606/2024 &

¶124

Connected SA No.640/2024, 665/2024 & 779/2024

¶125

Sl. No.	Date	Description
8.	18.03.2024	In-Patient Medical Bill of the Borrower's Father
9.	18.04.2024	Demand Notice
10.	30.07.2024	Possession Notice
11.	07.08.2024	Sale Notice alongwith Clean Copy
12.	20.08.2024	Death Certificate of the Borrower's Father (Date of Death: 05.08.2024)
13.	09.09.2024	Screenshot of Sale Notice Sent by the Bank through WhatsApp
14.	09.09.2024	Government G.O. No. 617 Declaring a Public Holiday on 17.09.2024 instead of 16.09.2024 for Milad-un- Nabi Festival
15.	18.09.2024	^{Letter Issued by the Bank Informing that the Secured} Asset was Sold
16.	20.09.2024	^{OTS Letter Submitted to the Respondent Bank by the} Borrower
17.	21.09.2024	Email Communication from the Respondent Bank SeekingEnhancement of the OTS Amount
18.	30.09.2024	Order in Crl.M.P. No. 4297/2024
19.	03.10.2024	Letter Issued bythe Bank Rejectingthe OTS Proposal
20.	15.11.2024	Advocate Commissioner Notice

¶126

3 . On the other hand, the learned Counsel for the Defendant Bank appeared before this Tribunal and filed Reply Statement, Typed Set, Additional Typed set and Original Common Typed Set along with Written Argument, in which it is submitted that the Applicant, under the heading "Facts of the Case," has categorically admitted the availing of the loan, execution of the loan documents, creation of the mortgage, default in repayment, and receipt of the SARFAESI notices in the Securitisation Application.

¶127

a) It is further submitted that, the Defendant Bank issued the Sale Notice to the Applicant as per the procedure contemplated under the SARFAESI Act and the Rules, and the action of the Defendant Bank was neither against law, nor arbitrary, nor illegal. The Order passed by the Hon'ble Chief Judicial Magistrate was neither contrary to law

¶128

Page 14 of 38

¶129

SA No.606/2024 &

¶130

Connected SA No.640/2024, 665/2024 & 779/2024

¶131

nor to the facts of the case. The said Order was passed in accordance with the provisions of Section 14 of the SARFAESI Act. The Defendant Bank served the Sale Notice on the Applicant as per the procedure contemplated under Rule 8(6) of the Security Interest (Enforcement) Rules, and the service of the Sale Notice through WhatsApp was effected as per Rule 8(2A) of the Security Interest (Enforcement) Rules which extracted herewith.

¶132

8. Sale of immovable secured assets.

¶133

(2A) [All notices under these rules may also be served upon the borrower through electronic mode of service, in addition to the modes prescribed under sub-rule (1) and sub-rule (2) of rule 8.] [Inserted by Notification No. G.S.R. 1046 (E), dated 3.11.2016 (w.e.f. 20.9.2002).]

¶134

b) It is further submitted that, with proper application of mind, the Defendant Bank issued the Sale Notice, which was neither contrary to law nor violative of the principles of natural justice. Considering that the property was residential and in view of the Applicant's conduct, the Defendant Bank provided sufficient opportunity to the Applicant to settle or regularize the loan account, but the Applicant failed to avail himself of the opportunity granted.

¶135

c) It is further submitted that, the Defendant Bank classified the Applicant's loan account as a Non-Performing Asset (NPA) in accordance with Section 2(o) of the SARFAESI Act and the RBI Master Circular No. UBD.BPD(PCB).MC.No.3/09.14.000/2011-12 dated 01.07.2011. The Defendant Bank further submitted that, it complied with the RBI guidelines and the MSME Rehabilitation Framework in terms of the directions of the Hon'ble Supreme Court in M/s. Pro Knits v. The Board of Directors of Canara Bank (2024 INSC 565) .

¶136

Page 15 of 38

¶137

SA No.606/2024 &

¶138

Connected SA No.640/2024, 665/2024 & 779/2024

¶139

d) It is further submitted that, the Defendant Bank issued the Sale Notice, and the same was duly served upon the Applicant. The Sale Notice was also affixed in a conspicuous part of the secured asset and published in two leading newspapers in compliance with Rules 8(6) and 8(7) of the Security Interest (Enforcement) Rules, 2002. The Defendant Bank further submitted that, the Applicant's allegation regarding his willingness and readiness to settle the loan account is nothing but a story based on imaginary thoughts.

¶140

e) It is further submitted that, the Defendant Bank fixed the reserve price of the property after obtaining a proper valuation report from an approved valuer, and the value of the property was determined in accordance with the RBI guidelines. Further, the Defendant Bank auctioned the property after complying with all the procedures prescribed under the SARFAESI Act. The Applicant has failed to adduce any evidence to establish that the property would fetch more than Rs. 180 lakhs in the open market. The Defendant Bank further submits that it obtained a proper valuation report from its panel valuer before the auction of the property in compliance with Rule 8(5) of the Security Interest (Enforcement) Rules, 2002.

¶141

f) It is further submitted that, the Defendant Bank issued the Demand Notice, which was duly served on the Applicant. The same was also published in two leading newspapers. With regard to the allegation of non-service of notice on the other concerned persons, the same is denied.

¶142

g) It is further submitted that, the Defendant Bank took symbolic possession of the secured asset and issued the Possession Notice. The Possession Notice was duly served on the Applicant, affixed in a conspicuous part of the property, and published in both a Tamil daily and an English daily.

¶143

Page 16 of 38

¶144

SA No.606/2024 &

¶145

Connected SA No.640/2024, 665/2024 & 779/2024

¶146

h) It is also submitted that, the Applicant did not send any reply to the Demand Notice issued under Section 13(2) of the SARFAESI Act. The failure to send a reply to the said Demand Notice is fatal to the Applicant's case.

¶147

i) It is further submitted that, the Applicant has not challenged the Possession Notice. The failure to challenge the Possession Notice is fatal to the Applicant's case.

¶148

j) It is also submitted that, the Defendant Bank issued the Sale Notice, which was duly served on the Applicant, affixed in a conspicuous part of the property, and published in both a Tamil daily and an English daily and the property was sold to the 3rd Defendant, Tmt. Adline Stella Bessie, who participated in the public auction and was declared the successful bidder. Subsequently, the sale was confirmed, and the Sale Certificate was issued upon payment of the entire sale consideration. The Defendant Bank further submitted that it complied with all the measures prescribed under the SARFAESI Act, including the classification of the loan account as NPA, issuance of the Demand Notice, Possession Notice, and Sale Notice, conduct of the auction sale, confirmation of the sale, and issuance of the Sale Certificate.

¶149

k) It is also submitted that, the Applicant has not raised any serious allegation in the grounds with regard to the obtaining of the order passed by the Hon'ble Chief Judicial Magistrate. The Applicant has, however, raised allegations regarding the valuation of the property in S.A. Nos. 606 of 2024, 640 of 2024, and 665 of 2024, but in none of those applications has the Applicant produced any evidence to establish the value of the property. Further, S.A. No. 640 of 2024 was posted on 29.11.2024 for filing of the Reply Statement and Typed Set by the Defendant Bank. The Defendant Bank filed its

¶150

Page 17 of 38

¶151

SA No.606/2024 &

¶152

Connected SA No.640/2024, 665/2024 & 779/2024

¶153

Reply Statement and Typed Set on 29.11.2024 in S.A. No. 640 of 2024, as well as in S.A. Nos. 606 of 2024 and 665 of 2024, after serving copies on the other side. In the said Reply Statement, the Defendant Bank denied the Applicant's allegations regarding the valuation of the property, contending that such allegations cannot be sustained without proper evidence. After receiving the Reply Statement and Typed Set, the Applicant filed a valuation report in the present Securitisation Application, S.A. No. 779 of 2024, which is nothing but an afterthought. Further, in S.A. Nos. 606 of 2024, 640 of 2024, and 665 of 2024, the prayers are identical without any variation, giving rise to serious doubt as to how three Securitisation Applications could be filed on the same cause of action seeking identical reliefs. It is only after the filing of the Defendant Bank's Reply Statement that the Applicant produced the valuation report, contrary to the stand taken in the earlier Securitisation Applications. Moreover, in the present Securitisation Application, which challenges the proceedings under Section 14 of the SARFAESI Act, the Applicant ought to confine the challenge to the procedure adopted in obtaining the order of the Hon'ble Chief Judicial Magistrate rather than raising allegations regarding the valuation of the property. This Hon'ble Tribunal may also take note of the conduct of the Applicant in filing four Securitisation Applications after the sale of the property, issuance of the Sale Certificate, and at the stage of taking physical possession. As per the amended provisions of Section 13(8) of the SARFAESI Act, the Applicant has lost the right of redemption upon publication of the Sale Notice.

¶154

l) It is further submitted that, there was no procedural irregularity on its part in issuing the Demand Notice, Possession Notice, Sale Notice, and Sale Certificate, or in obtaining the order of the Hon'ble Chief Judicial Magistrate under the SARFAESI Act and the Rules. The alleged procedural irregularities referred to in the Securitisation

¶155

Page 18 of 38

¶156

SA No.606/2024 &

¶157

Connected SA No.640/2024, 665/2024 & 779/2024

¶158

Application are neither factually nor legally sustainable. The Defendant Bank issued the Demand Notice, Possession Notice, Sale Notice and Sale Certificate strictly in accordance with the provisions and procedure prescribed under the SARFAESI Act and the Rules. Hence, if the Sale Notice and the auction sale are set aside, the Defendant Bank will be put to untold hardship and irreparable loss and injury, whereas no prejudice will be caused to the Applicant. The balance of convenience is entirely in favour of the Defendant Bank.

¶159

In written submission, the learned counsel for the Defendant Bank further submitted that,

¶160

m) The Defendant Bank issued all the notices under the SARFAESI Act, namely the Demand Notice, Possession Notice, and Sale Notice, to the Applicant, and all the said notices were duly served upon the Applicant, as evidenced by the Defendant Bank's Typed Set. In the present case, the Defendant Bank has sold the property, issued and registered the Sale Certificate, and taken physical possession of the secured asset. Further, the Applicant approached this Hon'ble Tribunal only after the auction sale had been conducted and physical possession had been taken.

¶161

n) To evidence the said facts, the details of service of notices and the reply notice sent by the Applicant are mentioned below.

¶162

Notice	Served On	Not Served On	Reason for Non- Service
	Thiru. V. Subbaiah,	M/s. V Care Wash,
Demand	No. 1/121, Kovil	Thiru. V. Subbaiah, 5th	N Sh
Notice dated 18.04.2024	Street, TWAD Colony, Tiruppalai,	Street, AIBEA Nagar, ‘A’ Colony, Paravai,	o uc Addressee
	Madurai – 625 014	Madurai – 625 402

¶163

Page 19 of 38

¶164

SA No.606/2024 &

¶165

Connected SA No.640/2024, 665/2024 & 779/2024

¶166

Notice	Served On	Not Served On	Reason for Non- Service
Possession Notice dated 30.07.2024	Thiru. V. Subbaiah, No. 1/121, Kovil Street, TWAD Colony, Tiruppalai, Madurai – 625 014	M/s. V Care Wash, Thiru. V. Subbaiah, 5th Street, AIBEA Nagar, ‘A’ Colony, Paravai, Madurai – 625 402	No Such Addressee
Sale Notice dated 07.08.2024	*****	M/s. V Care Wash, Thiru. V. Subbaiah, 5th Street, AIBEA Nagar, ‘A’ Colony, Paravai, Madurai – 625 402; Thiru. V. Subbaiah, No. 1/121, Kovil Street, TWAD Colony, Tiruppalai, Madurai – 625 014	No Such Addressee Unclaimed

¶167

o) It is further submitted that, in both the Demand Notice and Possession Notice, the notices were served at the Applicant's Tiruppalai address, but the Sale Notice sent to the same address was returned with the endorsement "Unclaimed". All the notices sent to the Applicant's Paravai address were returned with the endorsement "No Such Addressee". However, the Applicant replied to the Advocate Commissioner's notice through his reply letter dated 09.12.2024 (Page 62 - Original Common Typed Set) and sent another reply to the Defendant Bank's notice through his reply letter dated 21.10.2025 (Page 105 - Original Common Typed Set) from the Paravai address. The said reply letters have been filed by the Respondent Bank in the Typed Set of Papers. The conduct of the Applicant can be understood from the service of notices and the reply letters sent by him. While the SARFAESI notices sent to the Tiruppalai address were returned with the endorsement "No Such Addressee", the Applicant sent his reply notices from the same address. Further, the address mentioned by the Applicant in the Cause Title of the S.A. is the very same address (Paravai and Tiruppalai) to which the SARFAESI notices

¶168

Page 20 of 38

¶169

SA No.606/2024 &

¶170

Connected SA No.640/2024, 665/2024 & 779/2024

¶171

were issued. On this ground alone, the Securitisation Application filed by the Applicant is liable to be dismissed.

¶172

p) It is further submitted that, the property was sold to Tmt. Adline Stella Bessie, who participated in the public auction and was declared the successful bidder. Subsequently, the sale was confirmed, and the Sale Certificate was issued after payment of the entire sale consideration. Further, the Defendant Bank has followed all the measures prescribed under the SARFAESI Act, including the declaration of NPA, issuance of Demand Notice, Possession Notice, and Sale Notice, conduct of sale, confirmation of sale, and issuance of Sale Certificate. Therefore, it is not necessary for the Defendant Bank to explain the lethargic attitude of the Applicant from the date of declaration of the account as NPA till the filing of written arguments. A Division Bench of the Hon'ble Supreme Court, in Celir LLP v. Bafna Motors (Mumbai) Pvt. Ltd. and Ors., held that

¶173

“….held that a borrower only has right of mortgage redemption till the publication of auction notice under Section 13(8) of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act ("SARFAESI Act"). The Hon'ble Supreme Court analyzed orders passed by various Hon'ble High Courts in interpreting the provisions of Section 13(8) of the SARFEASI Act, post the amendment in 2016 ("Amendment") and the intent of the Amendment…”

¶174

q) It is further submitted that, the Applicant approached this Hon'ble DRT through the present Securitisation Application only after the sale was completed, the property was sold, and the Sale Certificate was issued. This clearly shows that the Applicant was aware of the entire SARFAESI proceedings, from the declaration of NPA till the issuance of the Sale Certificate, but failed to come forward to redeem the property before the auction was concluded. This clearly indicates that the Applicant had waived his right of redemption. In support of the same, the Defendant Bank places reliance on Arce Polymers Pvt.

¶175

Page 21 of 38

¶176

SA No.606/2024 &

¶177

Connected SA No.640/2024, 665/2024 & 779/2024

¶178

Ltd. v. Alpine Pharmaceuticals Pvt. Ltd. & Ors., reported in (2022) 2 SCC 221.

¶179

r) It is further submitted that, the Defendant Bank has appropriated all payments made by the Applicant in his loan account, and the Defendant Bank classified the Applicant's account as NPA in accordance with the RBI guidelines relating to asset classification. Further, the Defendant Bank charged interest as per the agreed contractual terms and in accordance with the RBI guidelines, which provide that the interest payable by the Borrower shall be subject to changes in interest rates made by the Reserve Bank from time to time. Further, banks are bound by the Reserve Bank's directives on interest rates on loans and advances, as per Sections 21 and 35A of the Banking Regulation Act, 1949. In terms of the said directives, banks are obliged to give effect to any revision of interest rates, whether upwards or downwards, for all existing advances from the date on which the directives/revised interest rates (change in BPLR and Spread) come into force, unless the directives specifically provide otherwise. Therefore, the interest charged by the Defendant Bank is in accordance with the RBI guidelines, and the Applicant, having accepted the conditions while obtaining the credit facility from the Defendant Bank, is now estopped from questioning the same.

¶180

s) It is further submitted that, after receipt of the Reply Statement and Typed Set for the first three S.As., the Applicant has filed a valuation report in the fourth Securitisation Application, S.A. No. 779 of 2024, which is nothing but an afterthought. Further, in S.A. Nos. 606 of 2024, 640 of 2024, and 665 of 2024, all the prayers are the same without any changes, and it is seriously doubtful as to how three Securitisation Applications were filed for a common cause of action with identical prayers, which amounts to res judicata. After filing of the Defendant Bank's Reply Statement in the said three S.As., the

¶181

Page 22 of 38

¶182

SA No.606/2024 &

¶183

Connected SA No.640/2024, 665/2024 & 779/2024

¶184

Applicant has produced the valuation report in the 4th S.A. No. 779 of 2024, which is contrary to the stand taken in the earlier Securitisation Applications. Moreover, in the present S.A. filed with regard to the proceedings under Section 14 of the SARFAESI Act, the Applicant has to challenge the procedure adopted for obtaining the CJM Order rather than raising allegations regarding the value of the property. Further, this Hon'ble Tribunal may take note of the conduct of the Applicant in filing four Securitisation Applications after the sale of the property, issuance of the Sale Certificate, and after taking physical possession. As per the amended Section 13(8) of the SARFAESI Act, the right of redemption is lost upon publication of the Sale Notice. Further, the same has been held in Rajendran v. KPK Oils & Proteins India Pvt. Ltd., Civil Appeal No. 12174 of 2025 .

¶185

t) It is further submitted that, the valuation report filed by the Applicant in S.A. No. 779 of 2024 (Over Page Nos. 102–109) was not prepared by a registered valuer as per Sections 34AB to 34AE of the Wealth Tax Act, 1957 (prior to 2016) or as per Section 247 of the Companies Act, 2013 (after 2016). Therefore, the valuation report filed by the Applicant may not be taken into consideration, as the same was obtained contrary to the due process of law.

¶186

u) It is further submitted that, the Defendant Bank obtained the CJM Order in Crl.M.P. No. 4297 of 2024 dated 30.09.2024 (Page Nos. 56– 59 of the Original Common Typed Set) against the Applicant, and physical possession of the property was taken on 22.01.2025 (Page Nos. 65–70 of the Original Common Typed Set). Pursuant to the taking of physical possession, the Advocate Commissioner locked and sealed the premises, and the same was handed over to the Authorized Officer. However, on the very next day, i.e., 23.01.2025, the Applicant broke open the lock and committed trespass over the Defendant Bank's property. Despite the said act of the Applicant, the

¶187

Page 23 of 38

¶188

SA No.606/2024 &

¶189

Connected SA No.640/2024, 665/2024 & 779/2024

¶190

Defendant Bank sent a criminal complaint dated 23.01.2025 (Page Nos. 71–74 of the Original Common Typed Set) through registered post to the Thiruppalai Police Station and also filed an online complaint before the concerned police station. However, the police officials did not take any action on the complaint lodged by the Defendant Bank. Subsequently, the Defendant Bank visited the police station on 07.02.2025, 19.02.2025, and 03.03.2025 (Page Nos. 75–91 of the Original Common Typed Set) and submitted written complaints to the police officials, but no proper response was received. Aggrieved by the inaction of the police officials, the Defendant Bank filed a complaint before the Commissioner of Police, Madurai, against the Applicant for criminal trespass and requested restoration of possession from the Applicant's control. However, the Commissioner of Police orally directed the Defendant Bank to obtain a further order from the Hon'ble Chief Judicial Magistrate, Madurai.

¶191

v) It is further submitted that, with no other alternative, the Defendant Bank filed another application under Section 14 of the SARFAESI Act before the Hon'ble Chief Judicial Magistrate, Madurai, and obtained an order in Crl.M.P. No. 5444 of 2025 dated 08.09.2025 (Page Nos. 92–95 of the Original Common Typed Set) against the Applicant. Pursuant to the said order, the Defendant Bank once again took physical possession of the same property on 16.10.2025 (Page Nos. 96–102 of the Original Common Typed Set). Subsequent to taking physical possession, the Defendant Bank sent an intimation letter to the Applicant to remove the household articles, for which the Applicant sent a reply notice dated 21.10.2025 from his Paravai address (Page Nos. 105–106 of the Original Common Typed Set). It is pertinent to note that initially all the SARFAESI notices were returned with the endorsement "No Such Addressee". Considering the conduct of the Applicant in filing four Securitisation Applications after completion of the sale and taking of physical

¶192

Page 24 of 38

¶193

SA No.606/2024 &

¶194

Connected SA No.640/2024, 665/2024 & 779/2024

¶195

possession, deliberately refusing to receive the SARFAESI notices, while sending replies from the same address, and committing trespass over the property after physical possession was handed over by the Advocate Commissioner, all the four Securitisation Applications are liable to be dismissed with costs.

¶196

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

¶197

Typed set filed by the Defendant Bank (SA No.606/2024)

¶198

S. No.	Date	Particulars
1	18.04.2024	Demand Notice with AD Cards & Return Covers
2	30.05.2024	Paper Publication of Demand Notice in English Daily
3	30.05.2024	Paper Publication of Demand Notice in Tamil Daily
4	30.07.2024	Possession Notice with AD Cards & Return Covers
5	30.07.2024	^{Original Photographs showing Affixture of Possession} Notice
6	03.08.2024	^{Original Paper Publication of Possession Notice dated} 30.07.2024 in English Daily
7	03.08.2024	^{Original Paper Publication of Possession Notice dated} 30.07.2024 in Tamil Daily
8	07.08.2024	Sale Notice with AD Cards & Return Covers
9	07.08.2024	Original Photographs showingAffixture of Sale Notice
10	08.08.2024	^{Original Paper Publication of Sale Notice dated} 07.08.2024 in English Daily
11	08.08.2024	^{Original Paper Publication of Sale Notice dated} 07.08.2024 in Tamil Daily
12	18.09.2024	Sale Certificate
13	05.08.2024	Valuation Report
14	—	Statement of Accounts

¶199

Typed set filed by the Defendant Bank (SA No.640/2024)

¶200

S. No.	Date	Particulars
1	18.04.2024	Demand Notice with AD Cards & Return Covers
2	30.05.2024	Paper Publication of Demand Notice in English Daily
3	30.05.2024	Paper Publication of Demand Notice in Tamil Daily

¶201

Page 25 of 38

¶202

SA No.606/2024 &

¶203

Connected SA No.640/2024, 665/2024 & 779/2024

¶204

S. No.	Date	Particulars
4	30.07.2024	Possession Notice with AD Cards & Return Covers
5	30.07.2024	^{Original Photographs showing Affixture of Possession} Notice
6	03.08.2024	^{Original Paper Publication of Possession Notice dated} 30.07.2024 in English Daily
7	03.08.2024	^{Original Paper Publication of Possession Notice dated} 30.07.2024 in Tamil Daily
8	07.08.2024	Sale Notice with AD Cards & Return Covers
9	07.08.2024	Original Photographs showingAffixture of Sale Notice
10	08.08.2024	^{Original Paper Publication of Sale Notice dated} 07.08.2024 in English Daily
11	08.08.2024	^{Original Paper Publication of Sale Notice dated} 07.08.2024 in Tamil Daily
12	18.09.2024	Sale Certificate
13	05.08.2024	Valuation Report
14	—	Statement of Accounts

¶205

Typed set filed by the Defendant Bank (SA No.665/2024)

¶206

S. No.	Date	Particulars
1	18.04.2024	Demand Notice with AD Cards & Return Covers
2	30.05.2024	Paper Publication of Demand Notice in English Daily
3	30.05.2024	Paper Publication of Demand Notice in Tamil Daily
4	30.07.2024	Possession Notice with AD Cards & Return Covers
5	30.07.2024	^{Original Photographs showing Affixture of Possession} Notice
6	03.08.2024	^{Original Paper Publication of Possession Notice dated} 30.07.2024 in English Daily
7	03.08.2024	^{Original Paper Publication of Possession Notice dated} 30.07.2024 in Tamil Daily
8	07.08.2024	Sale Notice with AD Cards & Return Covers
9	07.08.2024	Original Photographs showingAffixture of Sale Notice
10	08.08.2024	^{Original Paper Publication of Sale Notice dated} 07.08.2024 in English Daily
11	08.08.2024	^{Original Paper Publication of Sale Notice dated} 07.08.2024 in Tamil Daily
12	18.09.2024	Sale Certificate
13	05.08.2024	Valuation Report
14	—	Statement of Accounts

¶207

Page 26 of 38

¶208

SA No.606/2024 &

¶209

Connected SA No.640/2024, 665/2024 & 779/2024

¶210

Typed set filed by the Defendant Bank (SA No.779/2024)

¶211

S. No.	Date	Particulars
1	18.04.2024	Demand Notice with AD Cards & Return Covers
2	30.05.2024	Paper Publication of Demand Notice in English Daily
3	30.05.2024	Paper Publication of Demand Notice in Tamil Daily
4	30.07.2024	Possession Notice with AD Cards & Return Covers
5	30.07.2024	^{Original Photographs showing Affixture of Possession} Notice
6	03.08.2024	^{Original Paper Publication of Possession Notice dated} 30.07.2024 in English Daily
7	03.08.2024	^{Original Paper Publication of Possession Notice dated} 30.07.2024 in Tamil Daily
8	07.08.2024	Sale Notice with AD Cards & Return Covers
9	07.08.2024	Original Photographs showingAffixture of Sale Notice
10	08.08.2024	^{Original Paper Publication of Sale Notice dated} 07.08.2024 in English Daily
11	08.08.2024	^{Original Paper Publication of Sale Notice dated} 07.08.2024 in Tamil Daily
12	18.09.2024	Sale Certificate
13	05.08.2024	Valuation Report
14	—	Statement of Accounts
15	30.09.2024	Chief Judicial Magistrate order

¶212

Typed set filed by the Defendant Bank (SA No.779/2024)

¶213

SI.No	Date	Description
1	23.12.2024	Photo Copy: Affixed byAdvocate Commissioner

¶214

Original Common Typed set filed by the Defendant Bank (SA No.606, 640,665 & 779/2024)

¶215

S. No.	Date	Particulars
1	18.04.2024	Demand Notice
2	28.05.2024	^{Original Photographs showing Affixture of Possession} Notice
3	30.05.2024	^{Original Paper Publication of Demand Notice in English} Daily

¶216

Page 27 of 38

¶217

SA No.606/2024 &

¶218

Connected SA No.640/2024, 665/2024 & 779/2024

¶219

S. No.	Date	Particulars
4	30.05.2024	^{Original Paper Publication of Demand Notice in Tamil} Daily
5	30.07.2024	Possession Notice with AD Cards & Return Covers
6	30.07.2024	^{Original Photographs showing Affixture of Possession} Notice
7	03.08.2024	^{Original Paper Publication of Possession Notice dated} 30.07.2024 in English Daily
8	03.08.2024	^{Original Paper Publication of Possession Notice dated} 30.07.2024 in Tamil Daily
9	07.08.2024	Sale Notice with AD Cards & Return Covers
10	07.08.2024	Original Photographs showingAffixture of Sale Notice
11	08.08.2024	^{Original Paper Publication of Sale Notice dated} 07.08.2024 in English Daily
12	08.08.2024	^{Original Paper Publication of Sale Notice dated} 07.08.2024 in Tamil Daily
13	05.08.2024	Valuation Report
14	18.09.2024	Completion of Sale Intimation Letter to Applicant
15	18.09.2024	^{Completion of Sale Intimation Letter to Auction} Purchaser
16	04.10.2024	Sale Certificate
17 18	30.09.2024 15.11.2024	CJM Order for Appointment of Advocate Commissioner ^{Intimation Letter issued by Advocate Commissioner to} the Applicant
19	09.12.2024	^{Reply Letter issued by the Applicant to the Advocate} Commissioner
20	—	Request Letter issued by Advocate Commissioner for Police Protection
21	22.01.2025	Handing Over of Physical Possession by Advocate Commissioner to the Defendant Bank Authorized Officer
22	22.01.2025	Panchanama & Inventory
23	23.01.2025	^{Police Complaint Letter against the Applicant for} BreakingOpen of the Locked Premises with AD Card
24	07.02.2025	Complaint Letter regarding Breaking Open of the Locked Premises before Police Inspector, Thiruppalai (Tamil & English Version)
25	19.02.2025	Complaint Letter regarding Breaking Open of the Locked Premises before Commissioner of Police, Madurai(Tamil & English Version)
26	03.03.2025	2nd Complaint Letter regarding Breaking Open of the Locked Premises before Commissioner of Police, Madurai(Tamil & English Version)

¶220

Page 28 of 38

¶221

SA No.606/2024 &

¶222

Connected SA No.640/2024, 665/2024 & 779/2024

¶223

S. No.	Date	Particulars
27	08.09.2025	^{2nd CJM Order for Appointment of Advocate} Commissioner
28	16.10.2025	Handing Over of Physical Possession by Advocate Commissioner to the Defendant Bank Authorized Officer
29	16.10.2025	Panchanama & Inventory
30	16.10.2025	^{Notice to the Applicant to Remove the Household} Articles
31	21.10.2025	ReplyLetter Issued bythe Applicant
32	08.12.2025	^{Final Notice to the Applicant to Remove the Household} Articles

¶224

4. The learned Counsel for the 3rd Defendant/Auction Purchaser appeared before this Tribunal and filed a Reply Statement, wherein it is submitted that, since the 3rd Defendant is only an auction purchaser and entered the fray only after the issuance of the Auction Sale Notice in respect of the secured asset, she is unaware of the averments contained in paragraphs 1 to 10 of the facts of the case.

¶225

a) It is further submitted that, the 1st Defendant invoked Section 14 of the SARFAESI Act and filed Crl.M.P. No. 4297 of 2024 before the Hon'ble Chief Judicial Magistrate, Madurai. It is submitted that no notice is required to be issued to the Borrower when an application is filed under Section 14 of the SARFAESI Act by the 1st Defendant. Moreover, the Hon'ble Supreme Court has held that no notice is required to be given to the Borrower or any third party before deciding an application under Section 14 filed by the secured creditor. Accordingly, no notice was required to be issued to the Borrower. The Hon'ble Chief Judicial Magistrate, after thoroughly scrutinizing the application filed by the 1st Defendant, passed an order under Section 14 of the SARFAESI Act. There is no illegality or violation in the order passed by the Hon'ble Chief Judicial Magistrate, Madurai. It is true that the Hon'ble Chief Judicial

¶226

Page 29 of 38

¶227

SA No.606/2024 &

¶228

Connected SA No.640/2024, 665/2024 & 779/2024

¶229

Magistrate appointed Ms. Subatharshini, Advocate, as the Advocate Commissioner to assist in taking physical possession of the property.

¶230

b) It is further submitted that, the entire bid amount was paid by this Defendant within the stipulated time, and the Sale Certificate has also been issued by the 1st Defendant Bank in favour of this Defendant.

¶231

c) It is further submitted that, this Defendant is a bona fide auction purchaser. She invested her hard-earned money, paid the entire bid amount, and purchased the property. Hence, the rights of this Defendant deserve to be protected.

¶232

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

¶233

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

¶234

WHETHER THE APPLICANTS ARE ENTITLED TO GET THE RELIEFS AS PRAYED FOR?

¶235

6. Having heard the parties, I perused the record alongwith entire documents available on record, I find that, the Applicant had availed a CUB OSL TERM EMI-BR loan facility for a sum of Rs.82,82,000/- (Rupees

¶236

Eighty-Two Lakhs Eighty-Two Thousand only) in the year 2019 by creating an equitable mortgage over the Schedule property. In the present case, Mr. V. Subbiah is the guarantor for the loan facility availed by M/s. V Care Wash from the Defendant Bank. The Applicant executed a Guarantee Agreement dated 30.09.2019 in respect of the said loan facility and offered the Schedule property as security for the due repayment of the

¶237

Page 30 of 38

¶238

SA No.606/2024 &

¶239

Connected SA No.640/2024, 665/2024 & 779/2024

¶240

loan amount. Subsequently, a Memorandum of Extension of Equitable Mortgage was registered on 13.12.2019.

¶241

6.1 It is further stated by the Applicants that, they were initially regular in repaying the loan in accordance with the terms agreed upon with the Defendant Bank. However, the Applicants have admitted in their pleadings that, due to the COVID-19 pandemic, they were unable to repay certain loan dues. Consequently, the Defendant Bank classified the loan account as a Non-Performing Asset (NPA) and initiated proceedings under the SARFAESI Act.

¶242

6.2 The Applicant has contended that the Respondent Bank classified the loan account as NPA on 18.04.2024. It is pertinent to note that the Demand Notice mentions the date of NPA as 30.09.2019, even though the loan was sanctioned only on 29.09.2019. On the other hand, the Defendant Bank has neither filed any reply nor offered any explanation regarding this discrepancy.

¶243

6.3 A perusal of the Demand Notice dated 18.04.2024 reveals that the date of NPA has been incorrectly mentioned as 30.09.2019. However, the Statement of Account, annexed at Page No. 55 of the Defendant Bank's typed set of papers, clearly shows that the loan account was classified as NPA on 29.03.2024 . Thus, it is evident that the Defendant Bank has erroneously mentioned the date of NPA in the Demand Notice.

¶244

6.4 In view of the above, this Tribunal finds that the incorrect mention of the date of NPA in the Demand Notice is a clerical error and does not invalidate the actual classification of the loan account as NPA. Accordingly, this Tribunal holds that there is no illegality in the classification of the loan account as a Non-Performing Asset.

¶245

Page 31 of 38

¶246

SA No.606/2024 &

¶247

Connected SA No.640/2024, 665/2024 & 779/2024

¶248

7. Thereafter, the Defendant Bank issued a Demand Notice dated 18.04.2024 under Section 13(2) of the SARFAESI Act to the borrowers, demanding payment of a sum of Rs.64,39,256/- (Rupees Sixty-Four Lakhs Thirty-Nine Thousand Two Hundred and Fifty-Six only) as on 07.04.2024.

¶249

7.1 I also perused the documents filed by the Defendant Bank. The Defendant Bank has produced copies of the Demand Notice along with the postal acknowledgment receipts, which are annexed at Pages 1 to 7 of the Bank's original common typed set of papers.

¶250

7.2 The Applicant has contended that the Demand Notice was not served upon him. On the other hand, the Defendant Bank submitted that the Demand Notice was duly served on the Applicant and that the same was also published in two leading newspapers. The Defendant Bank has further denied the allegation regarding non-service of notice on the other concerned persons.

¶251

7.3 Upon perusal of the records, I find that the Defendant Bank has produced postal acknowledgment (AD) cards as proof of service on the Applicant and the borrower. The acknowledgment card pertaining to Mr. V. Subbiah, the Applicant herein, bears his signature acknowledging receipt of the Demand Notice. In respect of the remaining addressees, the postal covers were returned with the endorsement , "No such address." Therefore, the contention regarding non-service of the Demand Notice is liable to be rejected as the Defendant Bank has also effected substituted service of the Demand Notice dated 18.04.2024 by publishing the same in "The New Indian Express" (English Daily) and "Dinamani" (Tamil Daily), copies of which are annexed at Pages 12 and 13 of the Bank's original common typed set of papers.

¶252

Page 32 of 38

¶253

SA No.606/2024 &

¶254

Connected SA No.640/2024, 665/2024 & 779/2024

¶255

7.4 Further, the Applicant has not produced any material to show that he had submitted any representation or objection to the Demand Notice under Section 13(3A) of the SARFAESI Act after receipt of the notice issued under Section 13(2) of the Act.

¶256

8. Thereafter, the Defendant Bank issued a Possession Notice dated 30.07.2024 under Section 13(4) of the SARFAESI Act to the borrowers, demanding a sum of Rs.67,00,266/- (Rupees Sixty-Seven Lakhs Two Hundred and Sixty-Six only) as on 29.07.2024.

¶257

8.1 The Applicant has contended that the Possession Notice was not served upon him and that the Defendant Bank failed to effect proper service of the statutory notice. On the other hand, the Defendant Bank submitted that the Possession Notice was duly served on the Applicants.

¶258

8.2 In support thereof, the Defendant Bank has produced copies of the Possession Notice, postal acknowledgment (AD) cards, original photographs evidencing the affixture of the Possession Notice on the Schedule-mentioned property, and copies of the newspaper publications in one English daily and one Tamil daily, which are annexed at Pages 14 to 25 of the Defendant Bank's original common typed set of papers.

¶259

8.3 Upon perusal of the records, this Tribunal finds that the Defendant Bank has produced postal acknowledgment (AD) cards as proof of service on the Applicant and the borrower. The acknowledgment card pertaining to Mr. V. Subbiah, the Applicant herein, bears his signature acknowledging receipt of the Possession Notice. In respect of the remaining addressees, the postal covers were returned with the endorsement, “No such address.”

¶260

8.4 This Tribunal further finds that the Possession Notice was published in “Dinathanthi” (Tamil Daily) and “The New Indian Express” (English Daily) on 03.08.2024. The Defendant Bank has also produced original

¶261

Page 33 of 38

¶262

SA No.606/2024 &

¶263

Connected SA No.640/2024, 665/2024 & 779/2024

¶264

photographs evidencing the affixture of the Possession Notice on the conspicuous part of the secured asset.

¶265

8.5 In view of the above, this Tribunal is satisfied that the Defendant Bank has substantially complied with the mandatory requirements of the SARFAESI Act and the Security Interest (Enforcement) Rules, 2002, while issuing and serving the Possession Notice upon the Applicants.

¶266

9. Thereafter, the Defendant Bank issued a Sale Notice dated 07.08.2024 for the sale of the secured asset, demanding a sum of Rs.67,17,647/- (Rupees Sixty-Seven Lakhs Seventeen Thousand Six Hundred and Forty-Seven only) as on 05.08.2024. The auction sale was conducted on 18.09.2024, wherein the secured asset was sold in favour of the Third Defendant.

¶267

9.1 The Applicant has contended that the Sale Notice was not served upon him and that he received it only through a WhatsApp message on 07.09.2024, without compliance with the procedure prescribed under the SARFAESI Act and the Security Interest (Enforcement) Rules, 2002. On the other hand, the Defendant Bank submitted that the Sale Notice was duly dispatched to the Applicant and that service through WhatsApp was effected in accordance with Rule 8(2A) of the Security Interest (Enforcement) Rules, 2002.

¶268

9.2 In support thereof, the Defendant Bank has produced copies of the Sale Notice, postal acknowledgment (AD) cards, photographs evidencing affixture of the Sale Notice on the secured asset, and copies of the newspaper publications, which are annexed at Pages 26 to 36 of the Defendant Bank's original common typed set of papers.

¶269

9.3 Upon perusal of the records, this Tribunal finds that the Defendant Bank has produced postal acknowledgment (AD) cards as proof of dispatch

¶270

Page 34 of 38

¶271

SA No.606/2024 &

¶272

Connected SA No.640/2024, 665/2024 & 779/2024

¶273

of the Sale Notice. The postal cover addressed to Mr. V. Subbiah, the Applicant herein, was returned with the endorsement “Unclaimed.” In respect of the remaining addressees, the postal covers were returned with the endorsement “No such address.” The records further reveal that the Defendant Bank also served the Sale Notice through WhatsApp in addition to the prescribed modes of service. The electronic service through WhatsApp was only an additional mode of service and not the sole mode adopted by the Defendant Bank.

¶274

Rule 8(2A) of the Security Interest (Enforcement) Rules, 2002 provides as follows:

¶275

“8. Sale of immovable secured assets.

¶276

(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.

¶277

(2) The possession notice as referred to in sub-rule (1) shall also be published, as soon as possible but in any case not later than seven day from the date of taking possession, in two leading newspaper, one in vernacular language having sufficient circulation in that locality, by the authorized officer.”

¶278

(2A) [All notices under these rules may also be served upon the borrower through electronic mode of service, in addition to the modes prescribed under sub-rule (1) and subrule (2) of rule 8.]

¶279

9.4 This Tribunal further finds that the Sale Notice was published in “Dinamani” (Tamil Daily) and “The New Indian Express” (English Daily) on 08.08.2024. The Defendant Bank has also produced photographs evidencing the affixture of the Sale Notice on the conspicuous part of the secured asset.

¶280

9.5 In view of the above, this Tribunal finds that the Defendant Bank has complied with the mandatory requirements prescribed under the SARFAESI Act and the Security Interest (Enforcement) Rules, 2002 while issuing and serving the Sale Notice. Accordingly, this Tribunal does not

¶281

Page 35 of 38

¶282

SA No.606/2024 &

¶283

Connected SA No.640/2024, 665/2024 & 779/2024

¶284

find any procedural irregularity or illegality in the SARFAESI measures initiated by the Defendant Bank.

¶285

10. The Applicant further contended that the Defendant Bank fixed the reserve price at Rs.55,00,000/- (Rupees Fifty-Five Lakhs only) , which does not reflect the true market value of the secured asset. It is further contended that the Applicant made several requests to the Defendant Bank seeking a copy of the valuation report of the secured asset; however, the Defendant Bank failed to furnish the same. According to the Applicant, the market value of the property is Rs.1.10 Crore, as assessed by an independent valuer engaged by him.

¶286

10.1 On the other hand, the Defendant Bank submitted that it had obtained a valuation report from its approved panel valuer prior to the auction of the secured asset in compliance with Rule 8(5) of the Security Interest (Enforcement) Rules, 2002. The Defendant Bank further contended that the valuation report relied upon by the Applicant in S.A. No. 779 of 2024 (Over Pages 102 to 109) was not prepared by a registered valuer as contemplated under Sections 34AB to 34AE of the Wealth Tax Act, 1957 (prior to 2016) or under Section 247 of the Companies Act, 2013 (after 2016).

¶287

10.2 Upon perusal of the valuation reports produced by both the Applicant and the Defendant Bank, this Tribunal finds that the valuation report relied upon by the Applicant was not prepared by a registered valuer. On the other hand, the valuation report produced by the Defendant Bank, annexed at Page No. 43 of its original common typed set of papers, was prepared by a registered valuer.

¶288

Page 36 of 38

¶289

SA No.606/2024 &

¶290

Connected SA No.640/2024, 665/2024 & 779/2024

¶291

10.3 Further, a comparison of the Applicant's valuation report at Over Page No. 109 in S.A. No. 779 of 2024 with the Defendant Bank's valuation report at Page No. 49 of its original common typed set of papers reveals that both reports adopt the same guideline value of Rs.700/- per square foot for the property situated in Survey No. 138/3B3. Moreover, the Applicant has not produced any material evidence to establish that he had sought a copy of the valuation report from the Defendant Bank.

¶292

10.4 In view of the above, this Tribunal does not find any irregularity or illegality in the valuation report relied upon by the Defendant Bank or in the fixation of the reserve price based thereon.

¶293

11. Thereafter, the Defendant Bank issued a Sale Certificate dated 04.10.2024 in favour of the Third Defendant pursuant to the Sale Notice dated 07.08.2024 with strictly complying with the mandatory provisions of the SARFAESI Act and the Security Interest (Enforcement) Rules, 2002 and has produced a xerox copy of the Sale Certificate dated 04.10.2024.

¶294

12. Subsequently, the Defendant Bank obtained an order dated 30.09.2024 from the Chief Judicial Magistrate in Cr.M.P. No. 4297 of 2024 for taking physical possession of the secured asset under Section 14 of the SARFAESI Act.

¶295

12.1 The Applicant contended that the said order was passed without issuing notice to him or to the borrower. However, the Applicant has admitted that both he and the borrower received the Advocate Commissioner's notice dated 15.11.2024 on 16.11.2024, informing them that physical possession of the secured asset would be taken on 30.11.2024.

¶296

Page 37 of 38

¶297

SA No.606/2024 &

¶298

Connected SA No.640/2024, 665/2024 & 779/2024

¶299

12.2 It is well settled law that an order passed by the Chief Judicial Magistrate under Section 14 of the SARFAESI Act is an administrative in nature and is intended to facilitate the secured creditor in taking physical possession of the secured asset. The statute does not mandate issuance of prior notice to the borrower before passing such an order.

¶300

12.3 Accordingly, this Tribunal finds that the Defendant Bank has duly complied with the provisions of Section 14 of the SARFAESI Act, and the contention of the Applicant in this regard is devoid of merit.

¶301

13. It is pertinent to note that the secured asset has been sold in favour of the Third Defendant pursuant to the auction conducted by the Defendant Bank. Since this Tribunal has not found any illegality in the statutory measures challenged by the Applicants, namely, the issuance and service of the Demand Notice, Possession Notice, Sale Notice, the valuation of the secured asset, and the proceedings under Section 14 of the SARFAESI Act, no ground is made out to interfere with the consequential sale in favour of the Third Defendant.

¶302

Under the above facts and circumstances of the case, this Tribunal is of the considered view that Applicant has failed to prove his case and on the other hand, I find that the Defendant Bank has followed the procedures strictly for recovery of loan amount under SARFAESI Act as such I do not find any merit in the above SARFAESI Application.

¶303

In the result, S.A. No. 606 of 2024, 640 of 2024, 665 of 2024 and S.A. No. 355 of 2024 stand dismissed. Consequently, all pending I.As., if any, also stand disposed of. No order as to costs.

¶304

Dictated to LDC (KK), taken down, transcribed, typed by him, corrected and pronounced by me in the Open Court in this the 28^th July, 2026.

¶305

Sd/- (SEEMA SINHA) PRESIDING OFFICER

¶306

Uploaded on 04.08.2026

¶307

Page 38 of 38

V Subbiah v. City Union Bank Limited

Case brief

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What the court decided

V Subbiah v. City Union Bank Limited

Case brief

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What the court decided

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