Dismissed

Hari Hara Sudhan Kn v. Cholamandalam Investment and Finance Company Limited

DRT24 Jun 2026SA/906/2024

Case brief

AI extract

What is this about?

This Debts Recovery Tribunal disclosed the application filed by the Applicants under Section 17 of the SARFAESI Act challenging the Section 14 order passed by the Chief Judicial Magistrate. The Court held the Section 14 order an execution order, not requiring quasi-judicial adjudication, rendering the challenge infructuous as physical possession had already been taken.

What did the court decide?

Application SA No.906/2024 dismissed as infructuous; interim order vacated; IA No.2229/2025 disposed of.

Hari Hara Sudhan Kn versus Cholamandalam Investment and… — Banking and Recovery | DRT (2026)

SA No.906/2024

24.06.2026

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 24^th day of June, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SARFAESI APPLICATION No. 906 of 2024

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Mr. Hari Hara Sudhan K.N. Son of (Late) K.R. Narasimhan Residing at Old No.50, New No. 109 Amman Koil Street, Chennai - 600001.

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Mrs. Bhuvaneshwari N. Wife of (Late) K.R. Narasimhan Residing at Old No.50, New No. 109 Amman Koil Street, Chennai - 600001.

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Mrs. Rajinipriya H Wife of Hari Hara Sudhhan K.N. Residing at Old No.50, New No. 109 Amman Koil Street, Chennai - 600001. ….Applicants

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-Vs-

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The Authorized Officer

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Cholamandalam Investment and Finance Company Limited Dare House, 2, N.S.C. Bose Road

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Parrys, Chennai - 600001. ….Respondent

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Counsels on record / appeared:

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Counsel for Applicant : M/s. S. Vedhavel

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Counsel for respondent : M/s. Kishore Balasubramanian

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ORDER ON SA 906/2024

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The present Securitization Application [SA] is filed under sub section

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[1] of S.17 of the Securitization And Reconstruction of Financial Asset and

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Enforcement of Security Interest Act,2002 (for short the ‘Act’) challenging

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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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SA No.906/2024

24.06.2026

The applicants has challenged the Sec.14 order dated 20.09.2024 in Crl.M.P. No.4183 of 2023 passed by Chief Judicial Magistrate, Tiruvallur and the outstanding amount due as per Sec.14 order is Rs.75,51,396.91/-

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The 1^st applicant’s father and the 2nd applicant obtained a home loan of Rs.37,00,000/- vide loan account No. LBCHE00004674414 from M/s. ICICI Bank in July 2018 and purchased the property in the names of the 1st applicant’s father, Mr. K.R. Narasimhan, and the 2nd applicant herein.

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3.1 On 31.10.2019, the home loan was transferred from M/s. ICICI Bank to the 1st respondent, Cholamandalam Investment and Finance Company Limited, and restructured by the 1st respondent vide Loan Account No. XXOHEENN00003297133 for a sum of Rs.65,00,000/-and the 3rd applicant was added as a co-borrower at the time of sanction.

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3.2 Further the 1st respondent granted a top-up loan vide Loan Account No. HE02ENN00000001827 on 21.09.2020 for a sum of Rs.12,93,000/-, which was equal to 20% of the outstanding loan amount based on the 1st applicant’s business prospects and the assured rental income from the property at that time. Subsequently, the 1^st applicant’s father passed away on 16.10.2020, and the entire burden of repaying the loans fell upon the 1st and 2nd applicants.

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3.3 It is submitted that all the EMIs paid to the 1st respondent were autotransferred by the 1st and 2nd applicants vide bank account No. 02342011001958 maintained with Punjab National Bank, Madras Branch.

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Due to the adverse effects of the COVID-19 pandemic, the applicants could not transfer the EMIs for the months of April to July 2023.

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3.4 The applicants had initially received a demand notice under Section 13(2) of the SARFAESI Act, dated 12.04.2022, followed by a second demand notice dated 26.11.2022, calling upon them to pay a sum of Rs.75,51,396.91 to the respondent bank within sixty days from the date of receipt of the notice. The said notices did not mention the payments made by the applicants after the account was declared as NPA by the respondent.

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3.5 On receipt of the demand notice, the applicants met the officers of the respondent to discuss the payments made after April 2022 and assured that future payments would be made without delay, hence did not submit a written reply to the said notice.

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3.6 Further, the applicants restarted regular payments towards both loans from September 2023 onwards and to their shock and surprise the 1st respondent communicated that the said loan accounts had already been classified as NPA as early as April 2022, vide collection agents who visited the applicants’ address and thereafter through multiple postal communications.

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3.7 The applicants made payments, including the interest and penalties levied by the 1st respondent without any delay. However, applicants were shocked and surprised to learn from the tenant residing in the premises that the 2nd respondent had affixed a notice dated 08.10.2024 on the

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property, calling upon the applicants and the tenant to vacate and hand over possession of the premises within a period of 3 days.

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3.8 The 2nd applicant is an aged widowed homemaker who has visibility issues, therefore unable to work, the 3rd applicant is a homemaker. Therefore, the continuing occupation of the present tenant, and any future tenancy of the property, is vital for the day-to-day survival of the applicants and in the event that the property is alienated and sold, the same shall result in the financial hardship of the applicants.

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3.9 One these grounds, the applicant prays to set aside the Sec.14 order 20.09.2024 in Crl.M.P. No.4183 of 2023 passed by Chief Judicial Magistrate, Tiruvallur.

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The respondent has filed counter, inter alia, contending that the Applicant, along with the other co-applicants availed a home loan transfer aggregating to a sum of Rs.77,93,000/- under Loan Account Nos. XOHEENN0003297133 and HE02ENN00000001827, which was duly sanctioned, and loan agreements dated 31.10.2019 and 21.09.2020 were also executed between the parties.

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4.1 The Borrowers had also created equitable mortgages in respect of two properties by depositing the original title deeds as security for the repayment of the aforesaid loans availed by the Applicants, and the same were duly registered.

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4.2 However, as the Borrowers were highly irregular in the repayment of the loan defaulted in the payment of EMIs, and the loan accounts was

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classified as NPA on 06.04.2022 in accordance with RBI guidelines which was communicated to the Applicants vide letter dated 07.04.2022.

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4.3 The Applicants created two security interests in respect of these loans, the details of which are provided at page 4. (Wherein Security Interest No. 1 pertains to the schedule property, which is the subject matter of the present SA). The Respondent had issued demand notices under S.13(2) of the Act and Possession Notice under S.13(4) of the Act, in respect of each of these two security interests. The respondent bank initiated SARFAESI measures in respect of the Schedule Property viz., Security interest No. 1 which is the subject matter of the present SA.

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4.4 The Respondent issued a Demand Notice dated 12.04.2022 U/s. 13(2) of the SARFAESI Act and the Rules framed thereunder, calling upon the Applicants to pay the outstanding dues, failing which the Respondent would be constrained to take possession of the Schedule Property.

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4.5 The Demand Notices issued to Applicant Nos. 1 and 2 and to Mr. Narasimhan K.R. returned with the endorsement “No Such Person”. The Demand Notice issued to Applicant No. 3 was duly served, whereas the Demand Notice issued to M/s. KRN Business Centre was returned with an endorsement "Door Locked."

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4.6 Therefore, the Respondent effected paper publications of the demand notice in two newspapers one in English “The New Indian Express” and another one in Tamil “Dinamani” both dated 22.04.2022, and also affixed

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the Demand Notice in accordance with the procedure prescribed under the law.

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4.7 As the Borrowers failed to pay the outstanding dues within the stipulated time contemplated in the Demand Notice, the Respondent issued a Possession Notice dated 20.07.2022 U/s.13(4) of the SARFAESI Act, and the Rules framed thereunder, thereby taking symbolic possession of the Schedule Property, viz., Security Interest No. 1.

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4.8 The Possession Notices issued to Applicant Nos. 1 and 2 and to Mr. Narasimhan K.R. returned with the endorsement "No Such Person." The Possession Notice issued to Applicant No. 3 was duly served, whereas the Possession Notice issued to M/s. KRN Business Centre was returned with the endorsement “Door Locked”.

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4.9 The Respondent also affixed the possession notice at a conspicuous place on the security interest as per Rule 8(1) of the SARFAESI Rules and effected paper publications in two daily newspapers one in “The New Indian Express” and another one in “Dinamani” both dated 22.07 2022.

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4.10 Therefore, the Respondent filed a petition under Section 14 of the SARFAESI Act seeking to take physical possession of the Schedule Property, which was allowed by the Ld. CJM, Tiruvallur, by order dated 20.09.2024. Accordingly, the Ld. Advocate Commissioner took physical possession of the Schedule Property on 04.12.2024. The Applicant has preferred to initiate the present proceedings challenging the Order dated 20.09.2024 passed by the Ld. CJM, Tiruvallur.

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4.11 The respondent denies the averments in the SA as the sanction of loan and execution of loan agreement are categorically admitted by the Applicants and executed by the borrowers out of free will and consent. However, the Respondent had assured rental income and top-up as per business prospects are vehemently denied as false. Moreover, the obligation of all borrowers is joint and several in terms of the loan agreement, even during the lifetime of other borrowers.

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4.12 Further, the borrowers admittedly defaulted in repayment of the Loan amount from February 2022, the dues remain unpaid even until date and due to COVID-19 is totally unacceptable and baseless. The borrowers defaulted in payment of 3 consecutive EMIs i.e. 05.02.2022, 05.03.2022 and 05.04.2022. Hence, as per the RBI norms, the loan accounts of the borrowers were declared as NPA and same was duly notified to the borrowers.

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4.13 The certain payments were made after the classification of NPA does not automatically entitle the borrowers to regularization of the loan account. Even after taking into account all payments made as on date, the balance dues stand at Rs.54,58,738/- even as on date. All penalties and interest were also deducted in terms of the loan agreement.

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4.14 The Applicants failed to pay the dues even after the period stipulated in the demand notice and hence the Respondent was constrained to issue possession notice and take symbolic possession of the Security interest No.

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Thereafter, by Order dated 20.09.2024, the Ld. CJM, Tiruvallur,

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appointed an advocate commissioner to take physical possession of the security interest and consequently, the property were taken physical possession on 04.12.2024. The Respondent has only sought to enforce the security interest in the manner known to law and there is no sustainable ground raised by the Applicants to challenge the same. The respondent bank denies all the averments 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 the case

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It is manifest from the records that the applicants, along with other co-applicants, had availed of a home equity loan of Rs.65,00,000/- and Rs.12,93,000/-, totaling Rs.77,93,000/-, vide Loan A/C Nos. XOHEENN0003297133 and HE02ENN00000001827, which were duly sanctioned pursuant to the loan agreements dated 31.10.2019 and 21.09.2020.

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5.1 Admittedly, the borrowers had created equitable mortgage in respect of two properties by way of Memorandum of Deposit of Title Deeds as collateral security towards the Credit facilities. The equitable mortgages were registered with the Central Registry in 2019 and 2020, and the respondent Bank has filed the CERSAI report duly evidencing registration of the security interest with the Central Registry, which is produced at pg.113–126 of the counter.

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5.2 The borrower and the co-borrowers defaulted in the repayment, the loan accounts was classified as NPA on 06.04.2022 as per the RBI guidelines. The respondent issued U/s.13(2) demand notices and U/s.13(4) possession notices, in respect of each of these two security interests. The respondent bank initiated SARFAESI measures in respect of the schedule property, security interest No.1 (Which is the subject matter of the present SA).

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5.3 Subsequent to classification of the account as NPA, the bank has issued S.13(2) Demand Notice dated 12.04.2022, where the notice clearly describes the types of loan availed, the nature of facility and the documents executed by the borrowers. Further the description of the properties is clearly mentioned in the S.13(2) demand notice.

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5.4 The demand notice was sent by RPAD, and the notices addressed to

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the 1st and 2nd applicants, as well as to Mr. Narasimhan K.R., were returned with the endorsement “No Such Person,” as evidenced by the tracking consignment produced at pg.67–72. The demand notice issued to Applicant No. 3 was duly served, as reflected in the tracking consignment produced at page 75, whereas the notice issued to M/s. KRN Business Centre was returned with the endorsement “Door Locked,” as per the tracking consignment produced at page 73.

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5.5 The demand notice is also published in two newspapers one in English “The New Indian Express” and another one in Tamil “Dinamani” both dated 22.04.2022 and affixture of demand notice is produced at pg.79 and 80.

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Thus the service of demand notice is complete as contemplated under the Act and Rules made thereunder.

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5.6 In spite of service of demand notice, the borrowers neither raised any objection to the demand made under S.13[3A] nor liquidated the entire liability within 60 days, hence the respondent issued the Sec.13(4) Possession Notice on 20.07.2022 sent through Registered Post with Acknowledgment. The notices addressed to the 1st and 2nd applicants, as well as to Mr. Narasimhan K.R., were returned with the endorsement “No Such Person”. The demand notice issued to Applicant No. 3 was duly served, whereas the notice issued to M/s. KRN Business Centre was returned with the endorsement “Door Locked,” as per the tracking consignment which is produced at Pages.84-93 of respondent bank typed set.

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5.7 The possession notice is also published in two newspapers one in English “The New Indian Express” and another one in Tamil “Dinamani” both dated 22.07.2022 and affixture of possession notice is produced at pg.96-98 of counter. Thus the service of possession notice is complete as contemplated under the Act and Rules made thereunder.

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5.8 It is seen that the e-auction sale notice issued by the respondent, along with the panchnama and inventory issued by the respondent, and photographs evidencing physical possession taken by the bank which is produced at Pages.99–112 of the counter.

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5.9 The respondent bank has filed an application u/s.14 in Crl.M.P.No.4183.2023 along with the affidavit and supporting documents The Ld. CJM vide order dated 20.09.2024 allowed the application and appointed the Advocate Commissioner to take the physical possession of the property which has been challenged in the present SA.

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5.10 It is seen from the records the bank has taken the physical possession of the property on 04.12.2024 and the prayer in the SA has been rendered infructuous, nothing survives for further adjudication and the other challenges to the measures is not within the period of 45 days as required under S.17 of the Act.

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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 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 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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5.13 T hus, the Sec.14 order dated 20.09.2024 in Crl.M.P. No.4183/2023 passed by the Hon’ble CJM, Tiruvallur 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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5.14 For the foregoing reasons, the present SA is only to be dismissed. Accordingly, SA stands disposed as infructuous. Interim Order granted, if any stands vacated, IA.No.2229.2025 filed for disobedience stands disposed of along with 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 24^th day of June, 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.	Communication SARFAESI/NPA/2022 issued to the applicants by the 1^strespondent dated 07.04.2022.	A-1
2.	Demand Notice issued by the 1^strespondent under section 13(2) of SARFAESI Act, 2002 dated 12.04.2022.	A-2
3.	Possession Notice issued by the 1^strespondent to the applicants dated 20.07.2022.	A-3
4.	Demand Notice issued by the 1^strespondent under section 13(2) of SARFAESI Act, 2002 dated 26.11.2022.	A-4

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5.	Certified Copy of Petition filed by the 1^st respondent Under section 14 of SARFAESI Act, 2002 on the file of Chief Judicial Magistrate, at Thiruvallur in Crl. M.P.No.4183 of 2023 dated 08.12.2022.	A-5
6.	E-Auction Sale notice issued by 1^strespondent dated 30.05.2023.	A-6
7.	Certified Copy of order passed by the Chief Judicial Magistrate, at Thiruvallur in Crl.M.P.No.4183 of 2023 dated 20.09.2023.	A-7
8.	Photo copy of applicants Aadhar card.	A-8

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LIST OF DOCUMENTS PRODUCED BY THE RESPONDNET

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Sl. No.	Description of Documents	Documents No.
1.	Sanction Letter and Loan Agreements executed between the Applicants and the Respondent dated 31.10.2019 and 21.09.2020.	R-1
2.	Memorandum of Deposit of Title Deeds by the Applicant.	R-2
3.	Demand Notice issued under Section 13(2) of the SARFAESI Act, along with the proof of dispatch dated 12.04.2022.	R-3
4.	Paper publication of Demand Notice in two newspapers & Affixtures of Demand Notice in the Schedule Property dated 22.04.2022.	R-4
5.	Possession Notice issued under Section 13(4) of the SARFAESI Act, along with the proof of dispatch and delivery dated 20.07.2022.	R-5
6.	Paper publication of Possession Notice in two newspapers and Affixture of Possession Notice in the Schedule Properly dated 22.07.2022.	R-6
7.	First E-Auction Sale Notice issued by the Respondent dated 15.02.2023.	R-7
8.	Panchama and lnventory issued by the Respondent dated 04.12.2024.	R-8
9.	Photo evidencing physical possession taken bv the Respondent dated 04.12.2024.	R-9
10.	CERSAI Registration dated 2019 &2020.	R-10
11.	Statement of Accounts and Foreclosure statement dated 2019 to 2025.	R-11

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LIST OF DOCUMENTS PRODUCED BY THE RESPONDNET in

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IA.No.2229.2025

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Sl. No.	Description of Documents	Documents No.
1.	Conditional order of stay in SA.No.906 of 2024 dated 24.12.2024.	R-1
2.	Conditional order of stay in SA.No.3 of 2025 dated 01.01.2025.	R-2
3.	Memo filed by the applicant in SA.No.906 of 2024.	R-3
4.	Memo Filed by the applicant in SA.No.3 of 2025.	R-4
5.	Statement of Accounts and Foreclosure statement dated 18.09.2025.	R-5
6.	Proof of Service dated 07.10.2025.	R-6

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SCHEDULE OF PROPERTY

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All that piece and parcel of the property being Land measuring an extent of 765 sq.ft., together with a building thereon, comprised in survey nos.80/2, 425/25, bearing Door No.34A, Langakara Street, Thiruvallur situated at Thiruvallur Village, Thiruvallur Taluk, Tiruvallur District, and bounded on the:

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North by: Parthasarathy Naidu and Janarthana Naidu's House

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South by: Sambandam Chettiar's House

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East by: Langakara Street

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West by: Gunabooshammal's House.

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Situated within the registration district of Kancheepuram and subregistration district of Tiruvallur.

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

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Hari Hara Sudhan Kn v. Cholamandalam Investment and Finance Company Limited

Case brief

What is this about?

What did the court decide?

Hari Hara Sudhan Kn v. Cholamandalam Investment and Finance Company Limited

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

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