M S K Rameshraj vs INDIAN OVERSEAS BANK on 15 September 2026

IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI

IA 1347/2026 (Urgent) in IA 1348/2026(Waiver) in A.IR:2499/2026

M S K Rameshraj& 2ors V/S Indian Overseas Bank & 3 Ors 15/09/2026

Considering the reasons stated in the affidavit filed in support of the application, this urgent application is allowed. IA 1348/2026 (Waiver) : This appeal is filed against the interim order passed by the learned Presiding Officer, DRT-II, Chennai in IA1480/2025 in SA 507/2024. SA 507/2024 has been filed to set aside the auction sale dated 29.07.2024 in pursuance of the sale notice dated 09.07.2024. This sale notice, according to the learned counsel for the petitioners, was challenged before the Hon’ble High Court of Madras in WP 21019/2024. While admitting the writ petition, the Hon’ble High Court, on 25.07.2024, observed that the Hon’ble High Court is not inclined to give any interim protection. However, petitioner was given liberty to avail the opportunity to settle to the respondent-Bank through OTS. This writ petition was dismissed on 25.06.2026 as withdrawn in view of the order passed in WP No. 11417/2026. WP 11417/2026 has been filed by the petitioners seeking a Certiorarified Mandamus, to call for the records on the file of Chief Judicial Magistrate in Crl.M.P.No.3875/2025 dated 07.03.2026 and quash the same and consequently forbear the respondents from interfering with the peaceful possession and enjoyment of the properties described in detail. The said writ petition was disposed with certain observations. The observation was that the Tribunal has to dispose the SA 507/2024 within a period of three months from the date of receipt of a copy of the order. After observing with regard to delaying tactics adopted by any of the petitioner, especially the petitioners herein, it was indicated that the DRT shall proceed and decide the matter. Further, the DRT-III, Chennai was mandated to decide the issue as to whether the lands in question are agricultural or not apart from any other issue raised in the SARFAESI Application. Till the disposal of the SA 507/2024, the order passed under Section 14 of the SARFAESI Act, 2002 was ordered to be kept in abeyance. This order was passed on 23.03.2026. Meanwhile, the petitioner filed SA 507/2024 for the relief as aforesaid, which was taken up for the first time on 08.08.2024.

The learned counsel for the respondents sought time to file reply in the said application and therefore, the matter was adjourned to 22.08.2024 for filing reply and the Bank was directed to maintain status quo. SA 507/2024 is still pending. In the pending SA 507/2024, IA 1480/2025 is filed for amending the main securitization application for inclusion of pleadings, grounds and prayer as detailed in the application. This IA 1480/2024 came to be dismissed by the learned Presiding Officer, DRT-III, Chennai on 05.08.2026 and that is the cause for filing this appeal. Learned counsel for the petitioners brought to the notice of this Tribunal that the reason given for dismissal recorded in para-17 of the order, which reads as follows:- “ the petitioners, by their conduct, have clearly waived their right to challenge the sale proceedings at the appropriate stage. The present S.A., instituted only after the sale held on 29.07.2024, is manifestly vitiated by delay and laches and is nothing but an afterthought. Having allowed the respondent Bank and the successful auction purchasers to alter their position on the basis of the concluded sale, the petitioners are estopped from questioning the sale at this belated stage. The challenge in the IA, therefore deserves to be rejected”. It is the submission of the learned counsel for the petitioners that when the main issue raised in the securitization application are yet to be adjudicated, especially, (1) The issue of agricultural land, (2) The loan was sanctioned by NAPARD (3) The OA filed for recovery of the claim amount was dismissed for non-prosecution (4) the property worth about Rs.80 crores was sold for the amount of Rs.12 crores without proper valuation prior to the sale. When these grounds are not adjudicated, the aforesaid observation made by the learned Presiding Officer amounts to pre judging the issue raised in the securitization application. It is further submitted by the learned counsel for the petitioners that this appeal is filed only against order passed in the IA 1480/2024 and therefore, there is no need for making pre-deposit. No other ground is raised for waiver of pre-deposit. Learned counsel for the respondents 1 & 2 submitted that the land in question is not an agricultural land. The loan was availed for the purpose of construction of industrial buildings i.e. to put up agricultural godown under the NAPARD scheme. Only a part construction was made and therefore NAPARD recalled the facility and the Bank has re-paid Rs.39,00,000/- paid as subsidy to the petitioners. Therefore, the claim raised by the petitioners that the properties are agricultural land is not correct. Petitioners filed writ petition before the Hon’ble High Court of Madras for registering a criminal complaint against the Bank officials by the CBI and that writ petition was dismissed. The civil suit in C.S.No. 282/2025 was also filed and the same is still pending. The petitioners also filed civil revision petition before the Hon’ble High Court in CRP No. 5358/2026 against the dismissal of the IA 1480/2025 in SA 507/2024 and later it was dismissed as withdrawn giving liberty to approach the Tribunal.

There is also an observation for exclusion of the period spent in prosecuting these cases, under Section 14 of the Limitation Act. Pre-deposit is mandatory for entertaining this appeal. Learned counsel for the respondents seeks time to produce details of the amount due without considering the sale price. Therefore, post the matter on 22.09.2026.

Sd/-

Chairperson