Usha Enterprises vs IDBI BANK on 22 October 2026

IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI

IA 1564/2026 (Urgent) in IA 1565/2026 (Waiver) in A.IR:3005/2026

M/s. Usha Enterprises & 5 Ors V/S The AO, IDBI BANK Limited 22/10/2026

This appeal is filed against the order passed by the learned Presiding Officer, DRT- III, Chennai in IA 2353/2026 in SA 693/2026 on 14.10.2026. The aforesaid SA 693/2026 has been filed to set aside the sale notice dated 15.09.2026 fixing the e-auction sale on 22.10.2026 by the respondent-Bank. IA 2353/2026 has been filed for staying further proceedings. IA 2353/2026 was allowed subject to following conditions:- The petitioners are directed to remit a sum of Rs.15 cores in two instalments, first instalment of Rs.10 crores on or before 10.30 a.m. on 22.10.2026 and the second instalment of Rs.5 crores on or before 22.11.2026. On compliance of the payment of Rs.10 crores, there shall be an order of interim stay of Sale Notice dated 15.09.2026. In the event of non-compliance of the first instalment, the interim order of stay stands automatically vacated without any further orders from the Tribunal. The respondent bank is at liberty to proceed with the sale scheduled on 22.10.2026, however is directed not to confirm the sale, without the express leave of this Tribunal”. Aggrieved against this order, the present appeal is filed. It is the submission of the learned counsel for the petitioners that at the time of availing loan, petitioners have created mortgage only in respect of 6.88 crores as shown in the second schedule attached to the memorandum of deposit of title deeds. However, the impugned sale notice was issued on 15.09.2026 including certain other properties, which were not mortgaged though documents had been deposited with the Bank in respect of those properties. Though items A to G properties shown as mortgaged in the annexure to the sale notice, items A,D,F and Item G were not mortgaged. It is also submitted that the Bank had filed an application for attachment of entire 12.63 acres of land including 5.71 acres of land, which was not mortgaged with the Bank. Though this application is not numbered, the admissions made in this application is admissible in evidence as per Order XXII, Rule 6 of CPC.

All these factors would to show that the Bank has proceeded against 5.71 acres of land, which was not mortgaged. Therefore, issuance of sale notice is questionable. It is further submitted that the Bank has filed TA 1127/2023, TA 1480/2023 and TA 1550/2023 claiming a sum of Rs.19,93,91,340.59p., Rs.15,13,48,721/- and Rs.15,45,18,770/- respectively. In all these claim applications, petitioners filed submit to decree memo and to reduction of interest from 6 to 9%. Those memos have not been disposed. TA 1127/2023 was dismissed for non-prosecution. In an appeal filed before this Tribunal in MA 71/2025 against the order passed in MA 66/2024 in TA 1127/2023, this Tribunal allowed restoration application in MA 66/2024 subject to payment of costs of Rs.5000/- to the DRT & DRAT Bar Association Library fund. There was a further direction to the learned Presiding Officer, DRT-III, Chennai to pass appropriate orders on the memo filed by the respondents therein(petitioners) for submitting decree, on merits and in accordance with law as expeditiously as possible. Those memos have not been adjudicated yet. It is further submitted that when TA 1127/2023 dismissed for default, the very claim amount shown as due in the sale notice issued under SARFAESI Act is not correct and proceeding further on the basis of the said sale notice is impermissible. The claim made in the original application is Rs.50,10,59,127/-. Petitioners made payment of Rs.66,46,12,648/- so far. Only the interest component has to be decided in the memo filed by the petitioners in the original application pending before the Tribunal. All these grounds had been taken up before the learned Presiding Officer, DRT-III, Chennai, but the Tribunal has not addressed the grounds in right perspective. All these grounds are not considered or wrongly considered. The sale is scheduled today. On these grounds, learned counsel for the petitioners prays for waiver of pre- deposit. No other ground urged for waiver of pre-deposit. Objecting the submissions of the learned counsel for the petitioners, learned senior counsel for the respondent submitted that it is not correct to say that all the properties shown in the sale notice had not been mortgaged. The memorandum of deposit of title deeds clearly shows in the first schedule that original sale deeds relate to 12.63 acres were produced for creation of mortgage by deposit of title deeds. The omission to mention the description of the properties would not invalidate the mortgage created by deposit of title deeds. It has been clearly stated in the counter affidavit that properties on which mortgage was created. Merely because, the application was filed by mistake, which is not numbered, the pleadings made in the affidavit filed in the application cannot be used against the respondent. There is no question of application of Order XXII, Rule 6 of CPC because to satisfy the application of Order XXII, Rule 6 of CPC, certain aspects have to be satisfied. The admissions should be clear and unambiguous and therefore that admission cannot be used against the respondent-Bank.

It is further submitted that in OA, which was dismissed for default, conditional order was passed for restoration on payment of costs. There is some delay in paying the costs and the application filed for condonation of delay is pending. The application for condonation of delay is repeatedly adjourned so far. Pre-deposit is mandatory for entertaining this appeal. Considered the rival submissions. The following issues raised on facts and law with regard to mortgage of properties by deposit of title deeds :

(i) as to whether it covers the total extent of 12.63 acres or only 6.88 acres;

(ii) as to whether there is a omission to describe certain items of properties, which were included in the sale notice, in the memorandum of deposit of title deeds and its effect on the validity of the mortgage in respect of 5.71 acres;

(iii) as to whether the dismissal of OA and pendency of its restoration, payments made to the tune of Rs.66,46,12,648/- and its effect on the issuance of sale notice;

(iv) as to whether the admissions made in the application filed for attachment would have effect on the mortgage and issuance of sale notice; and

(v) Other issues canvassed by the learned counsel for the parties will be considered in the main appeal. Pre-deposit is mandatory for entertaining the appeal. It is the submission of the learned senior counsel for the respondent that after giving credit to all the payments made, still there is a due of Rs.25.18 crores. This Tribunal finds valid grounds to the challenge made with regard to creation of mortgage in respect of 12.63 acres in view of omission to describe certain items in MODT. When OA filed for recovery of the amount was dismissed for default and not yet restored, it has direct impact on the amount claimed in the sale notice as per second proviso to Section 18 (1) of the SARFAESI Act. Taking all these facts into consideration, this Tribunal direct the petitioners to make pre-deposit of 25% of Rs.25,18,00,000/- which comes to Rs.6,29,50,000/-. Learned counsel for the petitioners submitted that she is ready with the demand drafts for Rs.3,15,00,000/- and the same will be deposited today itself. She also submitted that since the sale is scheduled today, the same may be deferred. From the aforesaid amount of Rs.6,29,50,000/-, after deducting the amount of Rs.3,15,00,000/-which is to be deposited today, the balance amount of Rs.3,14,50,000/- shall be deposited in two equal instalments within a period of four weeks from today. First instalment of Rs.1,57,25,000/- shall be deposited on or before 05.11.2026 and the second instalment of Rs.1,57,25,000/- shall be deposited on or before19.11.2026 failing which, this appeal would stand rejected.

The said pre-deposit should be paid 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. Learned counsel for the respondent is not able to get instructions from the authorized officer, who is in-charge for conducting the sale as to the conduct of the sale today. Thus, this Tribunal directs the respondent not to proceed with the sale if the sale is not held as of 11.38 a.m. today. If the sale is held already, the confirmation of sale is to be deferred till next hearing. This order will not bar the auction purchaser from depositing the balance sale consideration as per the Security Interest (Enforcement) Rules 2002, if the sale is held before 11.38 a.m. today. Post the matter on 23.11.2026 for reporting compliance. Sd/-

Chairperson