VARALAKSHMI vs INDIAN BANK on 16 September 2026

IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI

IA 1336/2026 (Waiver) in A.IR:2441/2026

Varalakshmi V/S The Ao,Indian Bank

16/09/2026

Learned Counsel for both sides are present.

This appeal is filed against the final order passed by the Learned Presiding Officer, DRT-III, Chennai in SA No. 529 of 2025 on 10.8.2026.

SA No. 529 of 2025 has been filed to set aside the order passed by the Learned Chief Judicial Magistrate, Egmore, Chennai, in Crl. M.P. No. 2719 of 2025 on 8.4.2025.

It is the submission of the Learned Counsel for the Petitioner that Petitioner had made payments to the tune of Rs.50.00 lakhs prior to issuance of the demand notice on 21.2.2024. Without giving credit to these payments, the impugned demand notice was issued by wrongly classifying the account as NPA. Petitioner earlier challenged the sale in SA No.171 of 2025. When this Securitization Application was pending, the Respondent Bank issued impugned order under Section 14 of the SARFAESI Act, 2002. No account statement was produced before the DRT to justify the amount claimed in the demand notice. On these grounds, the order passed under Section 14 of the SARFAESI Act,2002 was challenged. Without considering those grounds, the Learned Presiding Officer, DRT-III, Chennai, dismissed the Securitization Application and, thus, this appeal. On these grounds, the Learned Counsel for the Petitioner seeks waiver of pre-deposit. No other ground is urged in support of the waiver of pre- deposit.

Responding to these submissions, Learned Counsel for the Respondent Bank submitted that in the SARFAESI pleadings it is averred that after receiving the demand notice, Petitioner approached the Respondent Bank to grant reasonable time to settle the loan account. There is no pleading taken with regard to not adjusting the amount of Rs.50.00 lakhs said to have been paid, and the wrong classification of the account as NPA. It is further submitted that Petitioner earlier challenged the interim order passed by the Learned Presiding Officer, DRT-III, Chennai before this Tribunal in MA (SA) 64 of 2025. That MA (SA) 64 of 2025 was disposed of by giving directions to the Learned Presiding Officer, DRT-III, Chennai to dispose the main Securitization Application. Accordingly, the main Securitization Application was disposed and this appeal is filed.

It is further submitted by the Learned Counsel for the Respondent Bank that Petitioner had challenged the possession notice, and the sale under Section 13(4) of the SARFAESI Act, 2002, in SA No.298 of 2024 and SA No. 171 of 2025, respectively, and they are still pending. The sale is over, and the sale certificate is also issued.

Without apportioning the sale consideration and after giving credit to all the payments made by the Petitioner, the outstanding as on the date of filing this appeal stands at Rs.5,26,06,081/-. Pre-deposit is mandatory for entertaining this appeal.

Considered the rival submissions and perused the records.

It is seen from the submission of the Learned Counsel for the Petitioner that a sum of Rs.50.00 lakhs, paid prior to issuance of demand notice, was not considered by the Respondent Bank, and no accounts statement was produced to justify the amount claimed in the demand notice. Therefore, the classification of the account as NPA is illegal. These grounds, raised on the merits of the appeal, will be considered in the main appeal. Pre-deposit is mandatory for entertaining the appeal under Section 18(1) of the SARFAESI Act, 2002.

On a query as to whether the Petitioner made any payment after the receipt of the demand notice, Learned Counsel for the Petitioner answered in the negative. As per the demand notice dated 21.2.2024, the amount demanded as due was Rs.4,43,17,037/-. In the order obtained under Section 14 of the SARFAESI Act, 2002, it is mentioned that Petitioner is liable to pay a sum of Rs.4,43,17,037/-, as on 20.2.2024, with further interest from 21.2.2024, and penal interest @ 2%. Therefore, there is no surprise that the loan amount has increased now to Rs.5,26,06,081/-.

The debt due is inclusive of interest as per the definition of debt under Section 2(1)(ha) of the SARFAESI Act, 2002, read with Section 2(g) of the RDB Act 1993, which had been settled by the Hon’ble Supreme Court of India in re, M/s. Sidha Neelkanth Paper Industries Private Limited & Another Vs. Prudent ARC Limited & Others (Civil Appeal No. 8969 of 2022, decided on 05.01.2023) reported in 2023 SCC Online SC 12.

Now that the property is sold and third-party interest is created, this Tribunal directs the Petitioner to make a pre-deposit of 30% of Rs.5,26,06,081/- in two equal instalments within a period of six weeks from today, failing which this appeal would stand rejected.

30% of Rs.5,26,06,081/- comes to Rs.1,56,81,824.30p, rounded off to Rs.1,56,81,824/-. First instalment of Rs.78,40,912/- to be made on or before 7.10.2026, and the second instalment of Rs.78,40,912/- to be made on or before 28.10.2026.

The said pre-deposit should be made in the form of Demand Draft in favour of Registrar, DRAT, Chennai, payable at Chennai. In case pre-deposit is made within the stipulated period, Registrar shall invest the same in a Nationalized Bank for a reasonable period and renew it periodically, till further orders are passed.

Post the matter on 30.10.2026 for reporting compliance. Sd/-

Chairperson