Dismissed

Sri Sai Aqua Industries v. Karur Vysya Bank

DRT5 Aug 2026SA/664/2023

Case brief

AI extract

What is this about?

Securitization Application dismissed. The Chennai DRT upheld the validity of the bank's Section 13(2) Demand Notice and subsequent Section 13(4) Possession Notice, finding full compliance with the SARFAESI Act and Rules regarding service, publication, and affixture.

What did the court decide?

Securitization Application dismissed; Section 13(2) Demand Notice and Section 13(4) Possession Notice upheld as valid.

Sri Sai Aqua Industries versus Karur Vysya Bank — Banking and Recovery | DRT (2026)

SA No.664/2023

05.08.2026

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 05^th day of August, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SA No. 664 of 2023

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M/s. Sri Sai Aqua Industries Rep. by its Sole Proprietrix Mrs. S. Poornima W/o Mr. S. Mohana Krishnan Old No.38, New No.2/39 As per Corporation Records, No.2/38, Ground Floor, Block No.2, Vachinathan 1^st Street, Earlier Joseph Franswa Street, Perambur, Chennai – 600 011.

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Mrs. S. Poornima

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W/o Mr. S. Mohan Krishnan Old No.38, New No.2/39 As per Corporation Records, No.2/38, Ground Floor, Block No.2, Vanchinathan 1^st Street, Earlier Joseph Franswa Street, Perambur, Chennai – 600 011.

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Mr. S. Mohanakrishnan S/o Mr. M. Sukumaran, Old No.38, New No.2/39, As per Corporation Records, No.2/38, Ground Floor, Block No.2, Achinathan 1^st Street, Earlier Joseph Franswa Street, Perambur, Chennai – 600 011.

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…Applicants

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-Vs-

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The Authorised Officer, Karur Vysya Bank Ltd., Asset Recovery Branch, No.1, Padmavathiyar Road, 2^nd Floor, (Off Peters Road) Gopalapuram, Chennai – 600 086.

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…Respondent

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SA No.664/2023

05.08.2026

Counsels on record / appeared:

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Counsel for Applicant	: Mr. K.C. Krishnamoorthy
Counsel for Respondent	: Mr. S. Sathiyanarayanan

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ORDER ON SA 664 /2023

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The present Securitization Application [SA] is filed under sub section [1] of S.17 of the Securitization and Reconstruction of Financial Asset and Enforcement of Security Interest Act,2002 (for short the ‘Act’) challenging the action and the measure taken by the secured creditor under the Security Interest Enforcement Rules, 2002 [for short the Rules].

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The 1^st applicant is the firm engaged in the business of water treatment plant and 2^nd applicant is the principal borrower and 3^rd applicant is the co-borrower who have challenged the Section 13(4) Possession notice dated 19.09.2023 contending that respondent bank has sanctioned OD facility of Rs.10,00,000/- to which the 2^nd applicant has mortgaged the property by way of deposit of title deeds in favor of the respondent bank.

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Due to Covid-19 pandemic, the business of the applicants collapsed and failed to maintain the repayment of the loan account. Further, the respondent bank has allegedly issued Section 13(2) Demand Notice dated 08.02.2022 to repay the balance outstanding amount of Rs.12,86,904.09/to be paid within a period of 60 days.

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The 2^nd applicant has approached the respondent bank for regularizing the loan account within the period of 6 months and without considering the request the respondent bank has issued the impugned

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SA No.664/2023

05.08.2026

Section 13(4) Possession Notice dated 19.09.2023 which was served to 1^st applicant and failed to serve with 2^nd and 3^rd applicants herein.

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In the grounds, it is contended that the respondent bank has failed to serve Section 13(2) Demand Notice dated 08.02.2022, failed to publish the Possession notice in two Newspapers as per Rule 8(2) of SIE Rules, failed to affix the notice on the property as per Rule 8(1) of SIE Rules. Further, the description of the property is different and on these grounds the applicants pray to set aside the Possession Notice dated 19.09.2023.

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The respondent bank has filed a detailed counter, inter alia denying the allegations and averments made by the applicants in the present SA, contending that the applicants have availed Rs.10,00,000/- and 2^nd applicant has created equitable mortgage by way of MODT dated 20.02.2018 registered as Doc.No.649 of 2018 in favor of the respondent bank. The applicants were irregular in the repayment which resulted in classification of loan account as NPA on 23.03.2021 as per the RBI guidelines. Further, the respondent bank has issued Section 13(2) Demand Notice dated 08.02.2022 which was served to applicants on 09.02.2022.

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Despite the opportunities given by the bank, the applicants failed to repay the outstanding loan amount and the bank has issued Section 13(4) Possession Notice dated 19.09.2023 and took symbolic possession of the property on 19.09.2023. The Possession notice was served on the applicants on 23.09.2023 which is affixed on the property on 19.09.2023.

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SA No.664/2023

05.08.2026

Further, the Possession notice was published in English and Tamil Newspapers as per Rule 8(2) of SIE Rules. The respondent bank has countered the contentions raised by the applicant’s para wise and ground wise. Hence, the respondent bank prays for dismissal of the present SA.

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Heard both sides of the Counsels and perused the records of the case.

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It is discernible from the records that the applicants have availed credit facilities and also created equitable mortgage to secured the credit facilities by way of MODT dated 20.02.2018 registered as Doc.No.649 of 2018 in favor of the respondent bank which is undisputed fact by the applicants.

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Due to default in the repayments, the respondent bank has classified the loan account into NPA on 23.03.2021 as per the RBI guidelines which is not disputed by the applicants. After, classifying the loan account as NPA, the respondent bank has issued Section 13(2) Demand Notice dated 08.02.2022 to the applicants herein.

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Further, the applicants even on receipt of Demand Notice have failed to discharge their entire liabilities, hence, the respondent bank has proceeded further and issued Section 13(4) Possession Notice dated 19.09.2023 which is challenged by the applicants herein.

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The challenge to the impugned Possession notice dated 19.09.2023, Firstly is , that the respondent bank has failed to issue Section 13(2) Demand Notice dated 08.02.2022 which is contrary to the documents

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SA No.664/2023

05.08.2026

produced by the respondent bank. The respondent bank has duly sent the Demand notice through RPAD and the applicants have received the same as per the acknowledgment cards produced at Page No.5 of respondent’s counter. Hence, the contention of the applicants that the respondent bank has failed to serve Demand notice to the applicants fails.

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Secondly, the respondent bank has failed to issue impugned Section 13(4) Possession Notice to all the applicants herein which is disproved by the respondent bank by producing the Section 13(4) Possession Notice dated 19.09.2023 acknowledgment cards produced at Page No.9 of respondent’s counter received by applicants. Hence, the contention of the applicant that the respondent bank failed to issue Possession notice to all applicants fails.

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Thirdly, the respondent bank has failed to publish the Section 13(4) Possession Notice dated 19.09.2023 in two Newspapers as per Rule 8(2) is contrary to the documents produced by the bank which reflects that the respondent bank has published the contents of Section 13(4) Possession Notice dated 19.09.2023 in two Newspapers, one in “Business Standard” (English) and another in “Dinakaran” (Tamil) both dated on 19.02.2023 as per Rule 8(2) of SIE Rules.

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Fourthly, the applicant has raised contention that the Possession notice dated 19.09.2023 issued by the officer who is not authorized officer cannot sustain as the notice is issued by the authorized officer who is empowered by the Power of Attorney dated 04.08.2021. Further, it is seen

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SA No.664/2023

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that the impugned Possession notice dated 19.09.2023 is duly signed and seal affixed by the Authorized officer/ Chief manager as per Rule 2(a) of SIE Rules which is extracted hereunder for better adjudication:

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Rule 2(a):

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"Authorized officer" means an officer not less than a chief manager of a public sector bank or equivalent, as specified by the Board of Directors of Board of Trustees of the secured creditor or any other person or authority exercising powers of superintendence, direction and control of the business or affairs of the secured creditor, as the case may be, to exercise the rights of a secured creditor under the [Act]

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Hence, the impugned Section 13(4) Possession notice dated 19.09.2023 is issued by the authorized officer and the contention of the applicants fails.

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Fifthly, it is contended that the respondent bank has failed to affix

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the Possession notice dated 19.09.2023 on the property as per Rule 8(1) is unsustainable as the bank has duly affixed the Possession notice dated 19.09.2023 on the conspicuous place of the property as per Rule 8(1) and the same is evident from photograph of affixture produced at Page No.11 and 12 of respondent’s counter.

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Sixthly, the applicants have raised contention that the description of the property is different in the impugned Possession notice dated 19.09.2023 and is not as per the Appendix IV of SIE Rules and on perusal of the description of the property in Demand Notice dated 08.02.2022 and

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SA No.664/2023

05.08.2026

Possession Notice dated 19.09.2023 there is no difference in the description of the property and the notices are issued in compliance of prescribed formats. Hence, the contention of the applicants that the description of the property is different is not sustainable and fails.

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On perusal of the records, it is seen that the respondent bank as a secured creditor has classified the loan accounts as NPA on 23.03.2021 and proceeded to issue Demand Notice 08.02.2022 which is received by the applicants. In spite of receipt of Section 13(2) Demand notice, the applicants have failed to liquidate the liability within a period of 60 days.

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The respondent bank has proceeded further in issuing the Possession notice dated 19.09.2023 which is duly served to the applicants herein as per the acknowledgement cards produced by the respondent, affixed on the conspicuous part of the property, published in two Newspapers as mandated under the Act. Thus, the respondent bank has established the compliance of procedures in initiating the measure under the Act. On the other hand, the applicants failed to point out any illegalities in issuance of impugned Section 13(4) Possession Notice dated 19.09.2023.

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For the forgoing reasons, the present SA is only to be dismissed upholding the Section 13(2) Demand notice dated 08.02.2022 and Section 13(4) possession notice dated 19.09.2023 as valid notices.

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SA No.664/2023

05.08.2026

Resultantly the present SA is dismissed. Interim Order granted, if any

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stands vacated, pending IAs are disposed of in terms of this final order. No order as to cost.

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

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(Dictated to Steno (Mogesh), transcribed by him, corrected, signed and pronounced by me on this the 05^th day of August, 2026)

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ANNEXURES

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LIST OF DOCUMENTS PRODUCED BY THE APPLICANT

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Sl.	Description of Documents	Document
No.		No.
1.	Possession Notice dated 19.09.2023	A-1

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LIST OF DOCUMENTS PRODUCED BY THE RESPONDENTS

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Sl. No.	Description of Documents	Document No.
1.	Demand Notice under Section 13(2) of SARFAESI Act 2002 dated 08.02.2022	R-1
2.	Acknowledgment card of Demand Notice under Section 13(2) of SARFAESI Act, 2002 dated 09.02.2022	R-2
3.	Possession Notice under Section 13(4) of SARFAESI Act 2002 dated 19.09.2023	R-3
4.	Acknowledgment card of Possession Notice under Section 13(4) of SARFAESI Act, 2002 dated 23.09.2023	R-4
5.	Possession Notice affixture photo dated 19.09.2023	R-5
6.	Newspaper Publication – English dated 19.09.2023	R-6

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SA No.664/2023

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7.	Newspaper publication–Tamil dated 19.09.2023	R-7
8.	Power of Attorney dated 04.08.2021	R-8

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SCHEDULE OF PROPERTY

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All that piece and parcel of undivided shar of land measuring 300 square feet out of total extent of 1118 sq.ft., along with residential flat measuring an extent of about 1100 sq.ft., super build up area (including the common area) along with right in the common passage leading to ground floor, stair case, overhead water tank, electricity line comprised in S.F.No.27/1, R.S.No.27/E, T.S.No.49 Part, Block No.2, Old Door No.38 New No.2/39, (As per corporation Franswa street, Perambur, Siruvallur Village, Puraswalkam taluk, Chennai and within the Registration District of Chennai North and Sub Registration District of Sembium within the following boundaries:

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North by: Land and Building owned by the Settler South by: Vanchinathan 1^st Street East by: 6 feet common passage West by: Property of Kathirvelu Mudaliyar

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Measuring

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East to West on the Northern Side 25 feet East to West on the Southern Side 18 feet North to South on the Eastern Side 52 feet Noth to South on the Western Side 52 feet

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

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Sri Sai Aqua Industries v. Karur Vysya Bank

Case brief

What is this about?

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Sri Sai Aqua Industries v. Karur Vysya Bank

Case brief

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