K Keasavan vs INDIAN OVERSEAS BANK on 1 September 2026

Common Order:

Appeal AIR (SA) 2111/2026 is filed against the order passed in SA No.346/2026 by Ld. Presiding Officer, DRT-III, Chennai dated 2.11.2026. SA 346/2026 was filed to set aside the sale held on 7.2.2025 and consequently the Sale Certificate dated 28.2.2025.

Appeal AIR (SA) 2112/2026 is filed against the order passed in SA 61/2026 by Ld. Presiding Officer, DRT-III, Chennai dated 2.7.2026. SA 61/2026 was filed challenging the Section 14 Order dated 12.11.2025 passed in Crl.MP.No.615/2025 passed by the Ld. CJM, Tiruvarur.

Since this matter has been taken on urgent mentioning, Learned Counsel for the appellant submitted that appellant is the guarantor for the loan availed by his sister’s daughter, Ms. G.K. Aarthy for the purpose of education. Educational loan of Rs.8.00 lakhs was availed by Ms. G.K. Aarthy from the 1st Respondent-Bank. Appellant had offered his property as security and created mortgage for the due repayment of the loan amount. Appellant is working in Dubai and he was not served notice issued under Section 13(2) and 13(4) of the SARFAESI Act, 2002, and including the sale notice. The demand notice had been returned as “left India”. Without affixing the demand notice as required under Rule 3 of the Security Interest (Enforcement) Rules, 2002, the 1st Respondent Bank proceeded with further measures. The order under Section 14 of the SARFAESI Act, 2002, passed on 12.11.2025, directs the Learned Advocate Commissioner to execute the warrant within 60 days from the date of issuance of the order. However, Learned Advocate Commissioner executed the warrant only on 23.4.2026, beyond the stipulated period of 60 days and without obtaining any extension of the warrant from the Learned Chief Judicial Magistrate, Tiruvarur. Sale was also not done properly by giving requisite time to the appellant, as stipulated under the Security Interest (Enforcement) Rules, 2002. He further submitted that his movables are still lying in the secured premises.

In the said background, the 1st Respondent Bank issued a notice on 10.8.2026 asking the appellant to remove the movables from the secured premises immediately. Thus, he seeks protection.

Learned counsel for the respondent-Bank opposes these petitions on the ground that the petitioner has not challenged either the sale notice or the sale held in pursuance of the sale notice. Only after 300 days of sale, the sale certificate alone is challenged. Therefore, the very filing of securitization application in SA 346/2026 to set aside the sale and sale certificate is barred by limitation. Sale notice taken to the petitioner was refused, but, sale notice was affixed. In the photograph produced to prove the affixure of sale notice, his wife is also seen. Petitioner’s wife is the power agent of the petitioner. Therefore, petitioner cannot contend that the petitioner is not aware of the sale proceedings. Physical possession of the secured asset was already taken. Sale held and sale certificate was also issued. Physical possession could not be delivered to the auction purchaser for the reason that certain movables of the petitioner are lying in the secured premises and they are objecting/ obstructing the handing over of the physical possession to the auction purchaser.

Heard the submissions of the learned counsel for the parties and perused the records.

From the submissions of the learned counsel appearing for the parties, it can be gathered that the sale was over, physical possession of the secured asset was also taken. Third party interest has been created. Despite service of notice to the auction purchaser, auction purchaser is not present today.

As per the demand notice dated 06.11.2023, the amount demanded as due was Rs.19,91,263.35p. as on 31.10.2023. The sale notice dated 20.01.2025 was issued claiming the due amount of Rs.24,32,495.43p. The property was sold for Rs.29,97,000/-. Thus, by the sale of the property, the debt is fully discharged. When sale certificate is challenged, the amount mentioned in the sale certificate is the basis for considering the pre-deposit.

In view of the facts elicited above, creation of third party interest and taking of physical possession of the secured asset by the Bank, this Tribunal directs the petitioner to make pre-deposit of 30% of Rs.29,97,000/-, which comes to Rs.8,99,100/-. It is the submission of the learned counsel for the petitioner that the petitioner has already deposited Rs.7,50,000/- plus Rs.6,08,375/- totalling Rs.13,58,375/- towards pre-deposit. It is more than 45% of the sale amount. Therefore, this Tribunal is of the view that the amount deposited by the petitioner would satisfy the requirement of the SARFAESI Act for entertaining the appeals.

Therefore, Registry is directed to number both the appeals, if they are otherwise in order and post the same on 08.10.2026 after completion of service if any pending and pleadings.

Petitioner is directed to take notice to the auction purchaser in the meantime.

Interim order, if any already granted, is extended till then.

Sd/-

Chairperson