Sree Selvaganapathy Agro Industries vs PUNJAB NATIONAL BANK on 16 September 2026

IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI

IA 1339/2026 (Waiver) in A.IR:2476/2026

Sree Selvaganapathy Agro Industries & 4 Ors V/S Pnb Housing Finance Ltd 16/09/2026

Learned Counsel for both sides are present.

These appeals are filed against the common order passed by the learned Presiding Officer, DRT, Coimbatore in SA 370/2023 and SA 620/2024, on 13.07.2026.

SA 370/2023 has been filed to set aside the order passed by the learned Chief Judicial Magistrate, Erode, dated 13.04.2023 in Crl.M.P.No.4801/2023 under Section 14 of the SARFAESI Act.

SA 620/2024 has been filed to set aside and quash the possession notice dated 18.01.2023 issued under Section 13 (4) of the SARFAESI Act.

Both the securitization applications have been together and a common order was passed dismissing both the securitization application on 13.07.2026. Aggrieved against the order passed in SA 370/2023, appeal in AIR 2476/2026 is filed and aggrieved against the order passed in SA 624/2024, appeal in AIR 2478/2026 is filed.

Learned counsel for the petitioners submitted that the respondent issued four demand notices. The last of which. was issued on 11.10.2022. The demand notice issued on 11.10.2022 to the petitioners/appellants shows that this demand notice was signed by the authorized officer Mr. Kumaresan, R., whereas, the respondent filed demand notice dated 11.10.2022 and it shows that it was signed by the authorized officer Mr.R.Naveen. This discrepancy is not explained. Despite raising this ground during the course of the arguments, to the effect that which demand notice is valid, it has not been considered by the DRT.

He further brought to the notice of this Tribunal to the amount claimed at Rs.1,66,08,261/- in schedule-I of the demand notice. It is his further submission that this amount reflects the capitalization of the penal interest When this Tribunal pointed out to the learned counsel for the petitioners that the afore said sum does not confine to penal interest alone, but, it includes park/penal/bounced and other charges, learned counsel for the petitioners re-iterated the submission that penal interest and other charges are capitalized and it is illegal.

In the possession notice dated 18.01.2023 the signature of the authorized officer is not found and only the seal of the respondent-financial institution is found.

He also submitted that after receiving the possession notice, as per the direction of Hon’ble High Court of Madras in WP No23173/2023, petitioners made payment of Rs.2,87,00,000/-. On these grounds, learned counsel for the petitioners seeks waiver of pre-deposit. No other ground is urged.

Learned Counsel for the Respondent Financial Institution submits that the demand notice was signed by the authorised officer Mr. R. Kumaresan. The receipt of the demand notice is not disputed by the Petitioners. No objection/reply sent to the demand notice. Therefore, the ground raised with regard to demand notice signed by the authorised officer Mr. Naveen was rejected by the DRT on the ground that it is a hyper-technical ground. It is further submitted that the contents of the demand notice are not disputed in the Securitization Application.

There is no capitalisation of penal interest involved in this case. Whatever charged was inclusive of park/penal/bounce and other charges. The omission to sign in possession notice dated 18.1.2023 is a mistake, and the ground taken in this regard is hyper-technical ground and that was rejected by the DRT. It is admitted that Petitioners made a payment of Rs.2,87,00,000/-, as per the order of the Hon’ble High Court of Judicature at Madras. Pre-deposit is mandatory to entertain this appeal.

In reply, Learned Counsel for the Petitioners submitted that reply to the demand notice was sent on 13.1.2023, of course, beyond the period of 60 days. The reply mainly canvassed the OTS. The Respondent Financial Institution has not produced any statement of accounts even before this Tribunal towards this claim.

Considered the rival submissions and perused the records.

As narrated above, these appeals are filed against the common order passed in SA No. 370 of 2023 and SA No. 620 of 2024. The parties to this litigation are the same parties and the litigation arose out of common demand notice in respect of the two loan transactions. Except the payment of Rs.2,87,00,000/-, as ordered by the Hon’ble High Court of Judicature at Madras, no other payment was made by the Petitioner. As per the demand notice, and possession notice issued in this case, the outstanding claimed was Rs.11,59,94,978/-, with further interest, as on 11.10.2022. We are in 2026. As per the submission of the Learned Counsel for the Respondent Financial Institution, the current outstanding is Rs.16,02,47,465.85p, after considering all the payments made by the Petitioners.

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.

In the said situation, this Tribunal, with a view to give an opportunity to the Petitioners to pay the loan amount and save the property from being sold, directs the Petitioners to make a pre-deposit of 25% of Rs.16,02,47,465.85p in two equal instalments within a period of four weeks from today, failing which this appeal would stand rejected.

25% of Rs.16,02,47,465.85p comes to Rs.4,00,61,866.46p, rounded off to Rs.4,00,61,866/-. The first instalment of Rs.2,00,30,933/- to be made on or before 30.9.2026, and the second instalment of Rs.2,00,30,933/- to be made on or before 14.10.2026.

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 16.10.2026 for reporting compliance. Sd/-

Chairperson