Allowed

Kathiravan alias Amalraj v. Can Fin Homes Ltd.

DRT11 Mar 2026SA/770/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an application challenging a possession notice under the SARFAESI Act. The court held that since the borrower died before notices were issued, the creditor must bring all legal heirs on record and initiate fresh measures, vacating the interim order if granted.

What did the court decide?

The Securitization Application is allowed; interim order is vacated; respondent directed to initiate fresh measures after bringing legal heirs on record.

Kathiravan alias Amalraj versus Can Fin Homes Ltd. — Civil Procedure and Limitation | DRT (2026)

SA No.770/2024

11.03.2026

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 11^th day of March, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SA No. 770 of 2024

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Mr. S. Kadhiravan /2024 Amalraj, Son of late Selvaraj No.28, II Cress, Thirumudi Nagar Puducherry 605 001. Applicant /3^rd Party -Vs-

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Can Fin Homes Ltd., Rep.by its Authorized Officer, Door No.115, First Floor, Vysial Street, Puducherry 605 001. …Respondent

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Counsels on record / appeared:

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Counsel for Applicant : Mr. M. Arunachalam Counsel for Respondent : Mr. Anavarathan S.

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ORDER ON SA 770 /2024

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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 applicant has challenged the Possession Notice dated 02.09.2024 and the outstanding amount due as per Possession Notice is Rs.31,36,362/-

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3. Pleadings of the applicant:

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3.1 The Applicant claims to be brother of the deceased borrower Kanagasabai who have availed housing loan for the construction of

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residential house building at Puducherry Revenue Village, Thirumudi Nagar, First Street, Puducherry comprised in Ward-C, Block, No.4, T.S.No.91, R.S.No.257/3Pt, measuring an extent of 1100 sq.ft. In consideration of the loan availed by the deceased borrower, he had executed necessary documents and has created an equitable mortgage favoring the respondent bank.

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3.2 It is contended that the borrower lived separately and died as a bachelor and he had repaid the loan regularly till he was alive, subsequently committed suicide on 05.03.2020. The borrower and the applicant’s parents are predeceased to him and hence the borrower died interstate leaving the applicant and 6 other brothers and sisters to inherit his estate as co-sharers.

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3.3 The applicant caused the legal notice to the respondent on 24.06.2020 through his advocate intimating the death of the borrower without properly adding all the legal heirs and the bank acknowledged the death of the borrower. However, the Respondent Bank has issued Demand notice dated 28.05.2022 followed by possession notice dated 19.11.2022.

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3.4 The notices are not issued to the legal heirs and the applicant approached the respondent for negotiated settlement of loan of the deceased borrower. However, the negotiation of the settlement did not materialized and the respondent bank without considering the negotiated settlement, have issued possession notice dated 02.09.2024 alleging to have issued Demand Notice dated 18.06.2024.

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11.03.2026

3.5 The demand notice is not served to all legal heirs of the deceased borrower, however have mentioned the names of the legal heirs of Kanagasabai and continued to issue the possession notice which are illegal and improper. In the grounds, it is contended that the possession notice dated 02.09.2024 is not issued to any one of the legal heir of the deceased borrower.

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3.6 The bank has failed to publish the possession notice dated 02.09.2024 in two leading newspapers as per Rule 8(2) of Security Interest (Enforcement) Rules. Hence the applicant prays to set aside the possession notice dated 02.09.2024 issued by the Respondent Bank.

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4. Objections of the respondent bank:

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4.1 The allegations raised by the applicant is denied by the Respondent Bank, contending that one Mr.S.Kanagasabai had availed a Housing Loan for a sum of Rs.30,00,000/- (Rupees thirty lakhs only) from the respondent for the construction of a residential house at Thirumudi Nagar, Pondicherry. The applicant claims to be one of the brother of deceased borrower Mr.S.Kanagasabai, which the respondent bank is not aware off, since no Legal Heirship Certificate of the deceased S.Kanagasabai was produced before the respondent bank. The borrower had secured the loan and created an equitable mortgage and executed a Memorandum of Deposit of Title Deeds in favour of the Respondent Bank.

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4.2 The applicant came to be the sole legal heir of the deceased borrower is denied and no legal heir ship certificate is produced. Even assuming

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without admitting that the applicant is claiming to be the Legal heir based upon the surviving legal heirs of late Selvaraj, who are entitled, all the surviving Class-II Legal heirs of late S.Kanagasabai are entitled for a share in the mortgage asset.

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4.3 The respondent further stated that the borrower Mr.S.Kanagasabai who is now deceased, at the time of availing loan had not disclosed the details of his relatives, particularly the applicant’s name herein in the loan documents. In fact the borrower had furnished the details of his friend Mr.Krishna Raj. P & Mr.Selvakumar G.R. as guarantor to the loan proposal. Further, the issuance of the Demand Notice and Possession Notice is not disputed by the applicant.

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4.4 The respondent further stated that the applicant is one of the ClassII Legal heir of late S.Kanagasabai and he had already applied for the Legal heir ship Certificate before he District Munciff Court, Puducherry in O.S.No.320/2023 and the same is pending. As the borrower failed to repay the loan regularly till his death, the borrower’s loan account was classified as NPA (Non-Performing Asset) on 29.12.2021 and issued Demand Notice under Sec.13(2) of SARFAESI ACT on 28.05.2022 and consequently issued Sec 13(4) possession notice on 19.11.2022.

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4.5 The respondent further states that the bank had complied with all statutory requirement under the SARFAESI Act and has taken symbolic possession of the property by effecting the notice on the mortgage property. As the demand notice is not evoked, the bank has taken physical

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SA No.770/2024

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5 11.03.2026

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possession. The possession notice was published in Two newspapers which his vide circulation in local within the prescribed time as per SARFAESI Act. False and frivolous application seeking for an interim order and Tribunal granted the interim order dated 04.11.2024 directing the applicant to pay 10% within 15 days from the date of order and on compliance, the respondent bank was directed to maintain Status quo. The applicant had complied with the conditional order and there are no procedural lapse committed by the bank in the SARFAESI Proceedings which is not even disputed by the applicant. Hence, the respondents prays for dismissal of the present SA.

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

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the case.

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5.1 The applicant claims to be the brother of the borrower late S.Kanagasabai, has filed the present SA challenging Section 13(4) Possession Notice dated 02.09.2024.

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5.2 It is seen from the S.13(4) notice that the bank have issued the notice to the legal heirs of late S.Kanagasabai, Son of Mr.Selvaraj and guarantors Shri.Krishnaraj and Shri G.R. Selvakumar. The applicant claims to be the brother of the borrower late S.Kanagasabai, has produced the death certificate of S.Kanagasabai which reflects the date of death of the borrower as 05.03.2020.

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5.3. It is the specific contention of the applicant that they have brought it to the notice of the secured creditor through the advocate vide notice dated

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SA No.770/2024

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6 11.03.2026

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09.09.2024 which is produced at Page No.20 of this S.A. On perusal of the letter, it reflects that the borrower died as a bachelor and lived separately in the mortgaged property leaving behind his brothers and sisters namely Velmurugan, Pazhni @ Anandraj, Baskar @ Annamalai, Jothi @ Senthamamizselvi, Maheswari @ Mangavarathammal, Prabavathi as his legal heirs. Though the applicant through his counsel claims to have legal notice through Mr.Ganesh, Advocate dated 19.06.2020 which was received by the respondent is not being supported by any of the documents.

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5.4. It is RBI's Framework for MSME Rehabilitation the contention that the applicant had issued notice dated 03.01.2023 and 27.05.2023 which was received by the second respondent is also not supported by any documents. Further the legal notice issued by the applicant in Page No.22 clearly reflects that the applicant had obtained the Legal heir certificate from the Government of Puducherry and has filed and also filed the case for obtaining legal heir certificate through proper court of law and the same was pending before the II Additional District Munisif Court at Puducherry in O.S.No.320/2023.

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5.5. It is an admitted fact that the applicant has not obtained legalheir certificate of late S.Kanagasabai and he cannot claim right without the legalheirship certificate from the appropriate authority or from the competent court of law. Though the averments made in the counter filed by the respondent bank in S.A., it is the admitted fact that the respondent have issued the possession notice addressed to his legalheirs of

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S.Kanagasabai without mentioning the legalheirs of the deceased borrowers.

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5.6 Further, it is seen from the possession notice dated 19.11.2022 under sec.13(4) under SARFAESI Act which is produced at Page No.15 and subsequently the another possession notice dated 02.09.2024 which is produced at Page No.19 and it is seen from the 13(4) possession notice dated 02.09.2024 which is address to all legalheirs of Kanagasabai without mentioning the names of the legalheirs.

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5.7. On perusal of the records, it is evident that the death of the borrower is on 05.03.2020 and the S.13(2) Notice is issued on 28.05.2022 which is subsequent to the death of the borrower and the issuance of the two legal notices after the death of borrower on 05.03.2020. In the instant matter, as the borrower has died as bachelor, the legal heirship certificate is to be obtained from the appropriate Court of Law and the Legal heir of the borrower is directed to render the legalheirship to the respondent enabling them to initiate fresh measures under the SARFAESI Act.

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5.8. Admittedly, the measure initiated by the respondent and the classification of the bank account of the borrower are consequent after the death of the borrower.

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5.9. For the foregoing reasons, the respondent has to initiate fresh measures, bringing the legalheirs on records and to proceed under the SARFAESI Act. Hence the present S.A. is only to be allowed.

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

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

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order as to cost. Sd/-

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

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(Dictated to Steno (P. Mabel Christy), transcribed by her, corrected, signed and pronounced by me on this the 11^th day of March, 2026)

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ANNEXURES

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LIST OF DOCUMENTS PRODUCED BY THE APPLICANT

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29.12.2021 Death Certificate of S. Rajamani 2. 15.03.2020 Death Certificate of S.Kanagasabai 3. 20.10.2022 Legal Heirship Certificate of R.Selvaraj

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28.05.2022 Demand Notice u/s 13(2) of SARFAESI Act.

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19.11.2022 Possession Notice 6. --Ration Card of applicant with Translation 7. 02.09.2024 Possession Notice

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09.09.2024 Legal Notice sent by Applicant

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to respondent with postal tracking report.

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-- Aadhar Card of Applicant.

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28.09.2024 Vakalat of Applicant

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17.10.2024 Change of Vakalat of Applicant.

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LIST OF DOCUMENTS PRODUCED BY THE RESPONDENT -NIL

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SCHEDULE OF PROPERTY

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Puducherry Registration District, Puducherry Sub-Registration District, Puducherry Municipal Limits, Puducherry Commune, Puducherry

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Revenue Village, Thirumudi Nagar, First Street, Puducherry, land comprised

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in Ward-C, Block No.4, T.S.No.91, R.S.No.257/3pt, Cad No.98pt, Patta No.1949, measuring to an extent of east to west 50 ft, north to south 22 ft., having a total extent of 1100 sq.ft in Plot No.10 with RCC built up house including electricity service, water connection in Door No.17.

Bounded on the:

East of 2nd land

West of 1st Street

North of house belongs to Maria Fransuvas Anyshain Mars

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South of house belongs to Sethuramasamy Chettiar.

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Sd/-

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

Kathiravan alias Amalraj v. Can Fin Homes Ltd.

Case brief

What is this about?

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Kathiravan alias Amalraj v. Can Fin Homes Ltd.

Case brief

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