Allowed

A Nagammal v. Chief Judicial Magistrate

DRT1 Jan 2026SA/650/2024

Case brief

AI extract

What is this about?

A debt recovery tribunal quashed a possession notice and impugned order directing physical possession of mortgaged property issued against a deceased borrower. The bank failed to serve notices or obtain possession from the legal heirs, rendering the recovery action illegal and arbitrary.

What did the court decide?

The possession notice dated 09.08.2024 is set aside; the impugned order directing physical possession is quashed; expenditures incurred are to be excluded from the loan account.

A Nagammal versus Chief Judicial Magistrate — Banking and Recovery | DRT (2026)

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SA No.650/2024

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL AT MADURAI

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DATED THIS 01^st DAY OF JANUARY, 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. 650/2024

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Mrs. A. Nagammal, W/o. Late. Mr. J. Mohan, 5-278, Anaikkaraippatti, Vandari, Madurai – 625 705.

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--- Applicant

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-Vs-

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Ld. Chief Judicial Magistrate, Madurai District Court Complex, Madurai.

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Tata Capital Housing Finance Limited, Rep. through its Authorized Officer, 1^st Floor, Sairaj Valagam,

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Sattur Road, Kattayapuram,

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Virudhunagar-626 001. --- 2^nd Defendant FI

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Appearance of Advocates: Mr. S. Pranav Kumar ---- Counsel for the Applicant D-2 Ex-parte.

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This SARFAESI Application was heard in the presence of Counsel for the Applicant and since there was no representation for the 2^nd Defendant FI, they were made ex-parte and fixed for passing final order before me and upon hearing the arguments of the Counsel for the Applicant and having stood over for consideration till this day, this Tribunal delivered the following:

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SA No.650/2024

O R D E R

1. This application has been filed under Sec.17(1) of the SARFAESI Act 2002 by the Applicant praying to quash the Order of Ld. CJM passed in Cr.M.P.No. 4135 of 2024 dated 20.09.2024 as the same is illegal and arbitrary.

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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 and her late husband herein has approached the 2^nd Defendant for grant of financial assistance to the tune of Rs. 15,00,000/- (Rupees Fifteen Lakhs only) as housing Term Loan for construction of their house during the year 2015. The Applicant further submitted that her Husband Late Mr. Mohan is the borrower and the Applicant is the Co-borrower as per the terms of the Housing Loan and mortgaged the Schedule Mentioned Property which stood in the name of Late Mr. J. Mohan in favour of the 2^nd Defendant as collateral security for the credit facility granted by the 2^nd Defendant.

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It is further submitted that her husband late Mr. Mohan was paying the interest regularly and maintaining the loan. Her husband Mr. Mohan was expired due to health issues on 05.06.2023 to which the Applicant informed the 2^nd Defendant Bank in the year 2023. Thereafter, the Applicant made the payments as per the terms of the agreement. Despite considering all the said circumstances, the 2^nd Defendant with a view to harass the Applicant has declared the Applicant’s loan account as NPA without following the procedures established under law. Subsequently, the 2^nd Defendant has issued the Demand Notice through registered post to the both Applicant as well as her late husband on 24.05.2024. And, when the postmaster inquired regarding the same, the Applicant has duly informed that Mr. J. Mohan was deceased and the registered post was returned. Thereafter, the 2^nd Defendant has issued Possession Notice through registered post dated 09.08.2024 to her deceased husband despite the knowledge of the demise of her husband.

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It is further submitted that the 2^nd Defendant has not taken any steps to issue notice to the legal heirs of her late husband. Hence, in the above said circumstances the recovery action initiated by the 2^nd Defendant stands vitiated and the 2^nd Defendant cannot continue with the recovery action initiated on the basis of issuance of Demand Notice and Possession Notice to a dead person. Further it is submitted that the 2^nd Defendant has been repeatedly sending goondas under the guise of recovery agents and they have started threatening to evict her from the dwelling house. Further, the officials

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Page 2 of 8

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SA No.650/2024

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and agents of the 2^nd Defendant have abused and humiliated the Applicant. Despite repeated requests to grant sufficient time, the 2^nd Defendant has not granted any time for the Applicant to settle the loan outstanding. And, the 2^nd Defendant has approached the 1^st Defendant and obtained an order in Cr.M.P.No. 4135 of 2024 to take Physical Possession of the dwelling house. The Applicant further submitted that the Possession Notice and the consequential recovery action initiated by the 2^nd Defendant are highly illegal and arbitrary and hence the same is liable to be set aside for the following amongst other: -

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Main Grounds:-

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The Demand Notice dated 24.05.2024 issued by the 2^nd Defendant to a dead person is arbitrary and illegal and the same has to be declared as null and void.

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The 2^nd Defendant has not substituted with the legal heirs of the deceased person even after knowledge of the fact that the person is deceased when issuing notice u/s. 13(2) of the SARFAESI Act.

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The 2^nd Defendant has subsequently issued Possession Notice u/s. 13(4) of the SARFAESI Act to the deceased borrower and as such the recovery action is vitiated and is void ab initio.

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The Bank has not published the Possession Notice in two newspapers within the specified time limit.

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The Bank has not served the Possession Notice on the legal heirs of the borrower.

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The Bank has not handed over the Statement of Account to the Applicant despite repeated requests.

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The Bank by concealing the fact that the borrower/husband of the Applicant was deceased has filed a petition before the 1^st Defendant to take Physical Possession of the property in Cr.

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M. P. No. 4135 of 2024 is gross misrepresentation, deception and illegal. The claim amount mentioned in the Demand Notice is highly inflated one, the Bank has charged penal rate of interest and other charges in the loan and capitalized the same.

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The order pronounced by the 1^st Defendant against a deceased person in Cr. M. P. No. 4135 of 2024 is prima facie illegal and is liable to be set aside.

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SA No.650/2024

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DESCRIPTION OF IMMOVABLE PROPERTY

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In Madurai South Registration District, Periyur Sub Registration District, Vandari Village hamlet of A. Lakshminarayanapuram Village S.No. 117/2 Punja house site land measuring about 0.27.00 acres i.e. 67 cents out of which Western side part of land measuring 0.04.15 Acres within which land admeasuring East West and South North 54 x 83 all measuring 4482 Sq.ft. and in which Western part of land measuring about 1494 Sq.ft. i.e.138.79sq.mt area in bounded on :

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North : East West Street East : Executor balance part of land South : Muthaiah part of land West : Chellandi Punja lands

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Within the boundaries having linear measurement of East West on the North 18ft on the South 18ft and on the South North on the East 83 ft on the West 83 ft all measuring about 1494 sq.ft. i.e.138.79 meter area of land thereto.

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The Applicant has submitted the following List of documents in support

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of her claim in the SA, which are as follows:

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S.No.	Date	Particulars
1.	24.05.2024	Demand Notice
2.	09.08.2024	Possession Notice
3.	20.09.24	CJM Order
4	13.06.23	DeathCertificate of LateMr.J.Mohan

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3. On the other hand, there is no representation in respect of the 2^nd Defendant FI in spite of service of notice. Hence, the 2^nd Defendant FI sets Exparte vide this Tribunal’s Order dated 29.04.2025.

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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 available on records, I find that the Applicant and her late husband herein has availed the housing Term Loan to the tune of Rs. 15,00,000/- (Rupees Fifteen Lakhs only) from the 2^nd Defendant FI for construction of their house during the year 2015. The Applicant’s Husband Late Mr. Mohan is the

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SA No.650/2024

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borrower and the Applicant is the Co-borrower and as per the terms of the Housing Loan their mortgaged the Schedule Mentioned Property which stood in the name of Late Mr. J. Mohan in favour of the 2^nd Defendant as collateral security for the credit facility granted by the 2^nd Defendant FI. It is further submitted that her husband late Mr. Mohan was paying the interest regularly and maintaining the loan. Her husband Mr. Mohan was expired due to health issues on 05.06.2023, which the Applicant informed the 2^nd Defendant Bank in the year 2023. Thereafter, the Applicant made the payments as per the terms of the agreement.

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It is further submitted that despite considering all the said circumstances the 2^nd Defendant with a view to harass the Applicant has declared the Applicant’s loan account as NPA without following the procedures established under law. Subsequently, the 2^nd Defendant has issued the Demand Notice through registered post to both Applicant as well as her late husband on 24.05.2024. And, when the postmaster inquired regarding the same, the Applicant has duly informed that Mr. J. Mohan was deceased and the registered post was returned. Thereafter, the 2^nd Defendant has issued Possession Notice through registered post on 09.08.2024 to her deceased husband despite the knowledge of the demise of her husband.

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I also find that the Applicant has filed the death certificate dated 13.06.2023, wherein the date of death is mentioned as 05.06.2023 (Page no. 22 of Main SA). The Applicant has also filed the copies of Demand Notice dated 24.05.2024 & Possession Notice dated 09.08.2024 issued by the 2^nd Defendant FI and the Ld. CJM, Madurai Order dated 20.09.2024 in Cr.M.P.No. 4135/2024, wherein I find that the Defendant FI has addressed to Mr. Mohan J, who is the late husband of the Applicant. It shows that the FI has no knowledge of the borrower, whether he is alive or not and he had issued Demand Notice, Possession Notice & also obtained the Order from the 1^st Defendant for taking Physical Possession of the property. Moreover, the 2^nd Defendant FI also not appeared before this Tribunal and failed to prove that they have strictly followed the procedures which is mandated as per SARFAESI Act & Rules and also failed to adduce any evidence to rebut the allegations of the Applicant.

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SA No.650/2024

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Further, I find that during the pendency of the case, this Tribunal had granted a conditional stay order dated 08.10.2024 for a sum of Rs. 1,76,000/(Rupees One Lakh Seventy-Six Thousand only) to be paid in two installments by the Applicant. The Applicant has also complied with the conditional order and proved her bona-fide.

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It is well settled law that a bank can take possession of a mortgaged property of a deceased borrower if the loan amount isn't settled by his legal heirs, but they must follow proper legal procedures by substituting the legal heirs of deceased before taking possession. In this case, the Defendant Banks have very much Knowledge about the allegation made by the Applicant, but inspite of sufficient opportunity and time given to them they failed to file any evidence to rebut the allegation of the Applicant as such I find that the Applicant has been able to prove her case. As such the order passed by the Ld. CJM, Madurai in Cr.M.P.No. 4135/2024 dated 20.09.2024 for taking Physical Possession is not sustainable in the eye of law.

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In the result ,

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SA No. 650/2024 is allowed. No costs. Accordingly, the Possession Notice dated 09.08.2024 issued by the 2^nd Defendant FI is hereby set aside and Defendant FI are directed not to include the expenditure incurred in issuance of Possession Notice dated 09.08.2024.

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The Impugned Order passed by the Ld. Chief Judicial Magistrate, Madurai District in Cr.M.P.No. 4135/2024 dated 20.09.2024 is also hereby set aside.

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All the expenditures incurred in obtaining the Impugned Order Passed by the Ld. Chief Judicial Magistrate, Madurai District in Cr.M.P.No. 4135/2024 dated 20.09.2024 shall not be included in the loan account of the Applicant by the Defendant Bank.

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The 2^nd Defendant FI is at liberty to initiate fresh action against the

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SA No.650/2024

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Applicant for recovery of loan amount following the Rules & Act strictly. 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 1^st January 2026.

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sd/-

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(SEEMA SINHA) PRESIDING OFFICER

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Dictated & corrected by me

sd/-

(SEEMA SINHA)

PRESIDING OFFICER

Typed by me

(D. Krishnaveni, PA)

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Uploaded on 06.01.2026

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SA No.650/2024

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A Nagammal v. Chief Judicial Magistrate

Case brief

What is this about?

What did the court decide?

A Nagammal v. Chief Judicial Magistrate

Case brief

What is this about?

What did the court decide?

What the court decided

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