IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT CHENNAI Dated the 25th of March, 2025 Justice PRESENT: Hon’ble Mr. G. Chandrasekharan CHAIRPERSON R.A (SA): 115/2019 (SA 158/2018 on the file of DRT -I, Chennai)

Between Harinandan Palihi Reddy, S/o Palthilap Reddy, Galaxy Apts, Flat No.204, Plot No.26, Sector -01, Navi Mumbai.

Maharashtra- 400 705 … Appellant And

1. The Authorised Officer, Indian Overseas Bank, Arakkonam Branch, No.179, Gandhi Road, Stuartpet, Arakkonam – 031 001.

2. Mr. R. Janarthanam, S/o M. Ramalingam.

3. Mrs. E. Devaki, W/o R. Janarthanam, Respondents Nos. 2 and 3 are residing at No.8, Sarojini Street, Arakkonam 631 001.

…Respondents Counsel for Appellant : M/s. G. Jeremiah and S. Gowri Shankar Counsel for 1^st Respondent : Mr. P.Annal Counsel for Respondents 2 and 3 : Mr. G.Sanjeevi

ORDER

1. This Appeal is filed against the order passed in SA

158/2018 by DRT-I, Chennai, on 24.04.2019.

2. The Securitisation Application in SA 158/2018 was filed by Respondents 2 and 3, challenging the Sale Notice dated 01.10.2018 for the sale of the property in public auction on 30.10.2018 and to set aside the sale held on 30.10.2018. After contest, this Application was allowed. Therefore, this Appeal is filed by 2^nd Respondent before the Tribunal, the Auction Purchaser.

3. Learned Counsel for Appellant submitted that the Securitisation Application in SA 158/2018 was allowed on the sole ground that the Demand Notice issued under Section 13(2) of SARFAESI Act, 2002, by the 1st Respondent Bank, was not served on the borrowers. The 2nd Respondent herein, availed credit facility from 1st Respondent Bank for running the proprietary concern namely M/s. Murugan Automobiles, for which, Respondent No.3, his wife, offered her property as security. The case of the 1st Respondent Bank was that all the measures had been properly taken following the procedures under SARFAESI Act, 2002. The Bank had also filed all the necessary documents in support of the measures taken including the service of Demand Notice. It is seen from the findings recorded by Learned Presiding Officer in para 6.14 of the impugned order that the 1st Respondent dispatched three Demand Notices addressed i) to M/s. Murugan Automobiles, Proprietor R. Janarthanam,; ii) to R. Janarthanam, the borrower and iii) to Mrs. E. Devaki, the guarantor. The Demand Notice sent to M/s. Murugan Automobiles, was acknowledged by Respondent No.3, Mrs. E. Devaki. It was found that there was no service of Demand Notice on Respondent No.3 and that the Bank failed to produce returned postal covers sent to Respondents 2 and 3 for proving the service of notices.

4. It is his further submission that in the Securitisation Application filed, Respondents 2 and 3 had clearly admitted the receipt of Demand Notice issued under Section 13(2) of the SARFAESI Act, 2002, dated 27.02.2014, but in the grounds No.2, contradicted by saying that Notice under Section 13(2) of SARFAESI Act, 2002, was not properly issued. Further, Learned Counsel for Appellant submitted the Respondents 2 and 3 challenged the sale after completion of sale. In the said circumstances, he submitted that the finding recorded by Learned Presiding Officer that the Demand Notice was not property served, and therefore, measures taken under SARFAESI Act has to fail is not justified. Thus, he prayed for setting aside the order of Learned Presiding Officer by allowing this Appeal.

5. Learned Counsel for 1^st Respondent Bank submitted that 1st Respondent Bank had not filed any Appeal against the order impugned. After the order was passed on 24.04.2019, the borrowers had paid the entire loan amount on 26.08.2019, after receiving the loan amount, his original documents were returned on 27.08.2019. On 13.06.2019, the entire sale consideration paid by the Appellant, Auction Purchaser was repaid to him. Necessary endorsement had been made in the Sub-Registrar’s office with regard to discharge of MODT.

6. Learned Counsel for Respondents 2 and 3 submitted that after di