Dismissed

Muthulakshmi Rajendran v. Icici Bank Limited

DRT10 Aug 2026SA/681/2024

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal dismissed the Securitization Application challenging a Section 14 possession order. The court held the order was valid as the bank complied with statutory notice requirements and noted the non-justiciability of Section 14 applications per Supreme Court precedent.

What did the court decide?

SA No.681/2024 stands dismissed; interim orders, if any, are vacated; no order as to cost.

Muthulakshmi Rajendran versus Icici Bank Limited — Banking and Recovery | DRT (2026)

SA No.681/2024

10.08.2026

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 10^th day of August, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SARFAESI APPLICATION No. 681 of 2024

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Muthulakshmi Rajendran Flat No. 2 GF, Door No. 1 Lotus Street, Rajesh Nagar, 5th Main Road Extn, Narayanapuram, Pallikaranai, Chennai -600100. ….Applicant

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-Vs-

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The Authorized Officer, M/s. ICICI BANK LIMITED Having its Corp. Office at: Plot No.24, south Phase, Ambattur Industrial Estate, Block No. 1, Ambatur, Chennai-600 058. ….Respondent

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Counsels on record / appeared:

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Counsel for Applicant : M/s. J. Prince, K. Gayathri & R. Kannan

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Counsel for respondent : M/s. Acuity Law Associates, S. Krishnaa,

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M. Anthony Moses, A. Alexander

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ORDER ON SA 681/2024

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The present Securitization Application [SA] is filed on 27.09.2024 under sub section [1] of S.17 of the Securitization And Reconstruction of Financial Asset and Enforcement of Security Interest Act,2002 (for short the ‘Act’) challenging the action and the measure taken by the secured creditor under the Security Interest Enforcement Rules, 2002 [for short the Rules].

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The applicant has challenged the Sec.14 order dated 02.05.2024 in C.M.P. No.7510 of 2023 passed by Chief Judicial Magistrate, Chengalpat and the outstanding amount due as per Sec.14 order is Rs.22,18,365/-

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The applicant availed a Home Loan of Rs.24,78,705/- from the respondent bank on 29.01.2015, subsequently availed a top-up loan of Rs.6,00,000/- on 30.10.2017. The applicant is the co-applicant in respect of the said loan and had also offered the schedule mentioned property as collateral security.

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3.1 It is submitted that the borrower was making remittance promptly to the loan as contemplated under loan agreement on due date without any delay and default and never allowed their loan account to become NPA without any default for the statutory period so as to classify the loan account as NPA.

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3.2 The applicant has paid the EMIs up to the current month and, towards the overdue amount, remitted a sum of Rs.1,20,000/- during the month of June. As on the date of this application, the applicant has paid a total sum of more than Rs.27 Lakhs towards the loan account. The respondent did not properly adjust the amounts paid by the borrower and charged interest and penal interest in violation of the RBI guidelines.

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3.3 The applicant was made to sign many blank papers, contents of which are not known to the applicant and same are not binding on the applicant. The respondent suddenly issued a Possession Notice to the applicant claiming to have issued a Demand Notice 02.01.2022 to the applicant

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calling upon to pay the due amount within 60 days from the date of notice. But the demand notice has not been served to all the parties.

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3.4 It is mandatory on the part of the respondent to classify the loan account as NPA as per Section 2(o) of the SARFAESI Act and in accordance with the RBI guidelines. The respondent does not have any authority to enforce their security interest over the schedule mentioned property. Without even proper demand made by the applicant, respondent issued possession notice in a mechanical manner without issuing Sec.13(2) Demand Notice to all the parties. The applicant contends that the Demand Notice has not been affixed.

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3.5 The applicant apprehends that, pursuant to the possession notice, the respondent may at any time take forcible possession of the secured assets. The borrower is making efforts to mobilize funds to settle the outstanding account with the respondent.

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3.6 It is evident from the possession notice that the applicant made substantial payments even after the alleged demand notice dated 02.01.2022 and all the measures taken by the respondent, including taking possession without issuing a demand notice to the applicant, are contrary to law and the principles of justice.

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3.7 Further the respondent had hastily filed petition U/s.14 before the Hon’ble CJM, Chengalpat using back door method to evict the lawful possession of the property from the applicant through the order Hon’ble CJM, Chengalpat. Without serving the Demand Notice and Possession

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Notice and without complying with the statutory requirements, the respondent ought not to have invoked the under Sec.14 of the Act.

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3.8 The schedule mentioned property is the primary security with regard to the loan availed by the applicant and the respondent does not have any authority to enforce their security interest in over the schedule mentioned property.

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3.9 The applicant contended that the respondent can initiate the measures under the SARFAESI Act only after the registration of the security interest before the Central Registry and as the respondent have not registered the charge in the Central Registry they cannot proceed under the SARFAESI Act.

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3.10 The respondent has not affirmed Point No(ix) of S.14 of SARFAESI Act in affidavit being filed by the Authorized Officer of the secured creditor that all the sections of the Act, are mandatorily complied before District Magistrate/Chief Metropolitan Magistrate.

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3.11 It is contended that the respondent did not serve the Sec.13(2) notice there by impaired the statutory rights vested with the applicant under Sec.13(3-A) of the Act, The respondent will fully suffocated the right of the applicant under Sec.13(3-A). The Authorised Officer of the respondent has not served, affixed or published the possession notice. The respondent bank has failed to satisfy the statutory requirements under the SARFAESI Act and the relevant rules framed there under. Hence, applicant prays to set aside the Sec.14 order passed by the Ld. CJM, Chengalpat.

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The respondent has filed counter along with typed set of documents contending that the applicant, being a co-applicant, along with borrower had availed a Home Loan Facility of Rs.24,78,705/-, which was sanctioned on 29.01.2015 vide Loan A/c. No. LBCHE00002339741. The applicant had also availed a Top-Up Loan Facility for a sum of Rs.6,00,000/-, which was sanctioned on 30.10.2017 vide Loan Account No. LBCHE00004036687 from the respondent bank.

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4.1 At the time of availing the said loan facilities, the Applicant offered the Schedule Mentioned Property as security and created an equitable mortgage by way of Memorandum of Deposit of Title Deeds was duly executed and registered as Document No. 11689 of 2017, dated 03.11.2017, in the Registration District of Central South and the SubRegistration District of Joint-I, Saidapet, in favour of the Respondent Bank. Subsequently, the security interest was duly registered with CERSAI.

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4.2 The present SA has been filed by the Applicant seeking to set aside the Sec.14 order dated 02.05.2024 passed by the Ld. CJM, Chengalpattu, in C.M.P. No. 7510 of 2023 is not maintainable either on facts or in law, and all the allegations made therein are categorically denied.

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4.3 The Respondent submits that the Borrower's loan account was classified as NPA on 09.08.2021 in accordance with RBI guidelines. Thereafter, the Respondent Bank duly issued U/s.13(2) demand notice dated 02.01.2022 under the SARFAESI Act, to all the parties, calling upon

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them to discharge the outstanding dues within the prescribed period, in compliance with the provisions of the Act and the Rules framed thereunder.

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4.4 Even after issuance of the demand notice, the Applicant did not come forward to settle the outstanding dues. Consequently, the Respondent Bank effected paper publication in two newspapers one in English “The New Indian Express” and another one in Tamil “Dinamani” both dated 31.07.2022, thereby calling upon the Borrower to repay the outstanding dues.

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4.5 The Respondent Bank denies the applicant’s allegations regarding the non-issuance and non-affixture of the possession notice. It is submitted that the possession notice was duly issued and affixed by the Respondent Bank in accordance with the provisions of the Act. The Respondent Bank complied with all statutory requirements prescribed under law, and possession notice was property served and affixed at a conspicuous part of the secured asset, as mandated under the Act. The Applicant's allegations to the contrary are false and baseless.

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4.6 Subsequent to the loan accounts being classified as NPA, the Respondent Bank took several steps and issued repeated intimations to the Borrower and Co-borrower for recovery of the outstanding dues. However, despite the opportunities provided, the Applicant failed to take any meaningful steps towards repayment or settlement of the liability. The Applicant inaction clearly demonstrates negligence and a disregard for the lawful demands raised by the Bank.

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4.7 The respondent bank had duly issued u/s.13(2) demand notice, specifying the outstanding liability and calling upon the borrower to discharge the same with the statutory period. Upon the failure of the borrower to comply with the said demand, the bank in accordance with law, proceeded to issue and publish the possession notice u/s.13(4) of the Act, thereby effecting symbolic possession of the secured asset. The Bank has scrupulously adhered to the statutory procedure, and the borrower's plea is nothing more than an attempt to evade lawful recovery proceedings.

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4.8 It is contended that the Respondent denies the allegations made by the Applicant that the possession notice does not contain the proper measurements of the secured asset. The Respondent further submits that the measurements and full description of the schedule-mentioned property have been correctly and clearly stated in the possession notice, in strict compliance with the provisions of Rule 8 of the SIE Rules, framed under the SARFAESI Act.

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4.9 The respondent bank denies all the allegations made in the present SA and also followed all the measures as required. Hence, the respondent bank prays for dismissal of the SA.

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Heard both sides of the Counsels and perused the records of

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the case

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It is evident from the records that the applicant, being a co-applicant, along with borrower had availed a Home Loan Facility of Rs.24,78,705/-,

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SA No.681/2024 8 10.08.2026 which was sanctioned on 29.01.2015 vide Loan A/.c No. LBCHE00002339741. The applicant had also availed a Top-Up Loan Facility for a sum of Rs.6,00,000/-, which was sanctioned on 30.10.2017 vide Loan A/c. No. LBCHE00004036687.

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5.1 The applicant had agreed to repay the loan as per the terms and conditions of sanction and also mortgaged the property as security towards the credit facility availed. In order to secure the loan, the Applicants deposited the title deeds vide Sale Deed No. 8043/2012 dated 07.11.2012 and created an equitable mortgage by way of a registered Memorandum of Deposit of Title Deeds vide Doc. No. 11689 of 2017 dated 03.11.2017 which is produced at Pg.58-71 of counter.

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5.2 The equitable mortgage is registered before the Central Registry dated 07.02.2026, and the respondent bank had filed CERSAI report duly evidencing registration of the security interest with the central registry which is produced at Pg.91-94 of counter.

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5.3 The contention that the applicant was made to sign blank papers would not come to aid of the applicant, as the applicant admits loan availed, mortgage of the property by deposit of title deeds and execution of loan documents. The applicant did not complain to authorities of the bank about signing of blank papers and no evidence is produced in support of such a contention.

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5.4 In fact the applicant does not dispute the availing of the facilities and the mortgage of the property, including the default in the repayment. Due

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to continuous default in the repayment, the loan account of the applicant was classified as NPA on 09.08.2021, in accordance with RBI guidelines.

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5.5 Subsequent to classification of the account as NPA, the bank has issued two Demand Notices U/s.13(2) of the Act, dated 13.12.2021 and 02.01.2022. The said demand notices clearly set out the types of loans availed by the borrowers, the nature of the credit facilities extended, and the loan documents executed by them. Further, the schedule and description of the secured properties are specifically and clearly mentioned in the Sec.13(2) demand notice.

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5.6 The Sec.13(2) Demand Notice dated 02.01.2022, in respect of the Balance Transfer of Home Loan, was sent by Speed Post to the Applicant and the borrowers, as evidenced by the tracking reports produced at Pg.77 and 78 of the counter. Similarly, the Sec.13(2) Demand Notice dated 13.12.2021, in respect of the Top-Up Home Loan, was sent by Speed Post to the Applicant and the borrowers, as evidenced by the tracking reports produced at Pg.84 and 85 of the counter. As the Demand Notices could not be served by post, therefore the Demand Notice was published in two newspapers one in English “The New Indian Express” and another one in Tamil “Dinamani” both dated 31.07.2022.

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5.7 In spite of receipt of Sec.13(2) Demand Notices as the borrower and the guarantor did not liquated the liability, the respondent had issued the symbolic Possession Notice on 12.01.2023, the Possession Notice was published in two newspapers one in English “The New Indian Express” and

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another one in Tamil “Dinamani” both dated 12.01.2023 and affixture of possession notice which is produced at Pg.90 of respondent bank’s typed set.

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5.8 Despite receipt of the Demand Notice and Possession Notice, the applicant failed to come forward to repay the outstanding dues. Consequently, the respondent bank proceeded further under the SARFAESI Act and had approached the Ld. CJM for taking physical possession of the secured asset. The Ld. CJM after perusal of the application and the loan documents produced by the respondent bank allowed the S.14 application on 02.05.2024.

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5.9 Thus, it is evident that the Ld. Magistrate on examination of the pleadings in the S.14 application supported by the documents, have passed an order dated 02.05.2024 directing the Advocate Commissioner to take the possession of the property. Though the applicant has filed the present SA impugning the Sec.14 order dated 02.05.2024 passed by Ld. CJM, Chengalpat has not pointed out any illegality in the measures taken by the respondent herein.

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5.10 On the other hand, it is seen that the statutory notices, the Demand Notice dated 02.01.2022 and 13.12.2021, and the Possession Notice dated 12.01.2023 are issued to the applicants in accordance with the Act and Rule made thereunder.

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5.11 Now considering the challenge to S.14 Order, it is appropriate to mention the declaration of The Hon’ble Supreme Court and various Hon’ble

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High Courts in various judgments has held that the power of Designated Court under Section 14 SARFAESI Act, 2002 is ministerial and nonadjudicatory in nature and the process to be followed under Section 14 does not involve any element of quasi-judicial function nor it requires any application of mind.

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5.12 The Supreme Court in the judgment of Authorized Officer, Indian Bank v D Visalakshi and other, has held that a Chief Judicial Magistrate is equally competent to deal with the application moved by the secured creditor under Section 14 of the SARFAESI Act. Hence, the Sec.14 dated 02.05.2024 in C.M.P. No.7510/2023 passed by the Hon’ble CJM, Chengalpat is a valid Order.

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5.13 Additionally, Section 14(3) of the SARFAESI Act statuses that no action taken by the Chief Metropolitan Magistrate or District Magistrate (or any officer authorized by them) under S.14 can be challenged in court or before any other authority. This provision ensures that the authority of these officials in enforcing security interests is final and not subject to further review.

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5.14 T hus, the Sec.14 order dated 02.05.2024 in C.M.P. No.7510/2023 passed by the Hon’ble CJM, Chengalpat is after due consideration of the application, affidavit in support of compliance of procedures along with documents is an execution Order issued where no adjudication is required. The Order is passed considering the due compliance of the provisions of the

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S. 14 [i-ix].

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5.15 On examination of pleadings and documents produced by respective parties, the Tribunal comes to conclusion that the respondent bank as secured creditor has initiated measures under the Act after classifying the account as NPA.

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5.16 Consequent to classification of account as NPA has issued S.13[2] Demand Notice followed by Possession Notice and have complied all the procedures as contemplated under the Act and the Rules with supporting documents. Thus it is held that the Demand Notice u/s S.13[2] dated 02.01.2022 and 13.12.2021 and the S.13[4] Possession Notice dated

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12.01.2023 are held as valid notices issued under the Act.

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5.17 For the foregoing reasons, the present SA fails and accordingly SA stands dismissed. Interim Order granted, if any stands vacated, pending IAs are disposed of in terms of this final order. No order as to cost.

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Sd/-

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

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( Dictated to Steno (Suriya), transcribed by him, corrected, signed and pronounced by me on this the 10^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. No.	Description of Documents	Documents No.
1.	Copy of impugned order passed in C.M.P.No.7510 of 2023 by Hon’ble Chief Judicial Magistrate, Chengalpat dated 02.05.2024.	A-1
2.	Advocate Commissioner Notice & petition dated 25.09.2024.	A-2

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LIST OF DOCUMENTS PRODUCED BY THE RESPONDNET

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Sl. No.	Description of Documents	Documents No.
1.	Sale Cum construction agreement dated 06.10.2012.	R-1
2.	Sale Deed registered as Doc.No.8043 of 2012 on the file of SRO Joint -1 Chennai South dated 07.11.2012.	R-2
3.	Sanction Letter for Home loan facility dated 20.01.2015.	R-3
4.	Loan Agreement for the Home Loan facility bearing loan account No. LBCHE00002339741 dated 28.02.2015.	R-4
5.	Sanction letter for Top up loan facility dated 27.10.2017.	R-5
6.	Loan Agreement for the Top up Loan facility bearing loan account No. LBCHE00004036687 dated 27.10.2017.	R-6
7.	Memorandum of Deposit of Title Deeds registered as Doc No.11689 of 2017 dated 03.11.2017.	R-7
8.	Demand Notice issued under Section 13(2) of SARFAESI Act, 2002 for loan account No. LBCHE00002339741 dated 02.01.2022.	R-8
9.	Demand Notice issued under Section 13(2) of SARFAESI Act, 2002 for loan account No. LBCHE00004036687 dated 13.12.2021.	R-9
10.	Paper publication effected in THE NEW INDIAN EXPRESS dated 31.07.2022.	R-10
11.	Paper publication effected in DINAMANI dated 31.07.2022.	R-11
12.	Paper Publication of Symbolic possession in THE NEW INDIAN EXPRESS dated 12.01.2023.	R-12
13.	Paper Publication of Symbolic possession in DINAMANI dated 12.01.2023.	R-13
14.	Photocopy of affixture of Symbolic possession notice and vacation notice dated 19.12.2023.	R-14
15.	CERSAI Report.	R-15
16.	Affidavit filed on behalf of the Respondent at the time of filing Petition under Section 14 of the SARFAESI Act.	R-16
17.	Statement of Accounts for Loan Account No. LBCHE00002339741 dated 09.02.2026.	R-17
18.	Statement of Accounts for Loan Account No. LBCHE00004036687 dated 09.02.2026.	R-18

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SCHEDULE OF THE PROPERTY-I

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All that piece and parcel of land situated at Old Survey No.90/4, New Survey No.90/4 at A1C, Rajesh Nagar 5th Main Road Extn, Pallikaranai Chennai 100, Measuring 1947 Sq ft with in the Registration District of South Madras and Registration Sub District of Saidapet Joint II.

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Bounded on the:

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North by : Thulasiammal Land in S.No.89, South By : House and Land in S.No.90/3A1 East by : 15 ft Road in S.No.90/4 A1D & Land in S.No.90/4 A1B West by : Land in S.No.90/4 81A & 90/4 B18 Measuring

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East to West on the Northern and Southern side – 29.5 feet

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North to South on the Eastern and Western side - 66 feet

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SCHEDULE –B

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395 Sq ft undivided share of land in the schedule ‘A’ mentioned property.

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SCHEDULE –C

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One Flat No.2 in the ground floor of the proposed building in Schedule-A mentioned property measuring 780 Sq ft including common area and car park as per the specification mentioned in annexure.

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SCHEDULE –II

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As described in the Loan document / property document covering Flat No.2 GF PLOT NO 90/4 90/4A1C DOOR NO 1 LOTUS STREET RAJESH NAGAR 5TH MAIN ROAD EXT, NARAYAPURAM PALLIKARANAI 90 4B 90 4B1 (Admeasuring an area of As per sale deed)

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North: As per Sale deed South: As per Sale deed

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East: As per Sale deed West: As per Sale deed

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