Madras High Court
Srm Institute Of Science And Technology vs Peri Educational And Charitable Trust on 20 July, 2026
CMP No. 17887 of 2026 in
CRP SR No. 108410 of 2026
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 20-07-2026
CORAM
THE HONOURABLE MR. SUSHRUT ARVIND DHARMADHIKARI,
CHIEF JUSTICE
AND
THE HONOURABLE MR.JUSTICE G.ARUL MURUGAN
CMP No. 17887 of 2026
and
CRP SR No. 108410 of 2026
SRM Institute of Science and Technology
Represented by Group Director
V.Parthasarathy,
No.3, Veerasamy Street,
West Mambalam,
Chennai 600 033.
..Petitioner(s)
Vs
1. M/s.PERI Educational and Charitable Trust
Represented by its Chairman,
Saravanan Periasamy,
Peri Knowledge Park,
Mannivakkam, Chennai 600 048.
2. Indian Overseas Bank
Represented by its Authorized Officer,
M.P.Vinuraj,
Asset Recovery Management Branch
Chennai, 3rd Floor, Annexure Building,
736, Anna Salai, Chennai 600 002.
3. Indian Overseas Bank
Irugattukottai Branch,
Large Advances Branch,
SIPCOT Industrial Park,
Irungattukottai,
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Sriperumbudur,
Kanchipuram 602 117.
..Respondent(s)
Civil Miscellaneous Petition filed under Section 151 of Code of
Civil Prosedure, to Grant Leave to file the above Civil Revision Petition and
pass such further or other orders as this Honourable Court may deem fit
and proper.
For Appellant(s): Mr.Zaffarullah Khan
ORDER
[Order of the Court was made by G.Arul Murugan J.]
The Civil Miscellaneous Petition is filed seeking to grant leave to the
petitioner to file Civil Revision Petition to strike off S.A.No.493 of 2025
pending on the file of the Debts Recovery Tribunal-III, Chennai.
2. The 1st respondent/borrower availed financial assistance from the
respondents 2 and 3/Bank and due to defaults in repayment of the dues,
the loan account of the 1st respondent was declared as a Non-Performing
Asset (NPA) and proceedings were initiated under the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest
Act, 2002 [hereinafter referred to as ‘SARFAESI Act’].
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3. It is stated that the Bank being the secured creditor, instituted
proceedings against the 1st respondent/borrowers and guarantors before
the Debts Recovery Tribunal-III, Chennai, in O.A.No.972 of 2019 under
Section 19(1) of the Recovery of Debts and Bankruptcy Act, 1993, which
has now been renumbered to T.A.No.49 of 2023 and pending before the
Debts Recovery Tribunal-III, Chennai.
4. Pursuant to an auction sale notice dated 30.06.2025, the
properties were brought to sale and the petitioner was declared as the
successful bidder. On payment of the entire auction amount, the sale
certificate dated 23.07.2025 was executed in favour of the petitioner.
5. The 2nd respondent/Bank filed an application under Section 14 of
the SARFAESI Act before the Chief Judicial Magistrate, Chengalpattu to
secure possession of the property. The Chief Judicial Magistrate on
07.07.2025 passed orders in favour of the secured creditor/Bank for
securing possession. Challenging the order passed under Section 14, the
1st respondent/borrower filed S.A.No.493 of 2025 before the Debts
Recovery Tribunal-III, Chennai, in which interim orders have been
passed. Admittedly, the same is still pending.
6. Now the auction purchaser has filed the present Civil Revision
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Petition seeking to strike off Securitisation Application No. 483 of 2025
filed by the first respondent borrower, along with a petition for grant of
third-party leave to file the revision.
7. The learned counsel for the petitioner contended that a
Securitisation Application under Section 17 of the SARFAESI Act before
the DRT can be maintained only by challenging the measures taken under
Section 13(4), and that a challenge to orders passed under Section 14
would not be maintainable before the DRT under Section 17. Therefore, it
is submitted that the entire Securitisation Application is not maintainable
and is liable to be struck off. It is further submitted that the petitioner,
being an auction purchaser who has paid a huge amount, is unable to
take possession of the property, in view of the pendency of the
Securitisation Application, which is not maintainable, and seeks for grant
of leave.
8. Heard the learned counsel for the petitioner and considered the
materials available on record.
9. It is not in dispute that the 1 st respondent is the borrower who
availed financial assistance from the 2 nd and 3rd respondent/Bank. Due to
default in repayment of the dues, proceedings were initiated under the
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SARFAESI Act. Pursuant to the issuance of the demand notice under
Section 13(2), the possession notice under Section 13(4) came to be
issued on 04.04.2019.
10. For the purpose of securing possession of the mortgaged
property, the 2nd respondent/Bank filed an application under Section 14 of
the SARFAESI Act before the Chief Judicial Magistrate, Chengalpattu. The
said application was disposed of by order dated 07.07.2025, allowing the
application for securing possession of the property by the secured
creditor.
11. The 1st respondent/borrower thereafter filed Securitisation
Application No.493 of 2025 on the file of Debts Recovery Tribunal-III,
Chennai, challenging the order of the Chief Judicial Magistrate dated
07.07.2025 under Section 14 of the SARFAESI Act. Admittedly, interim
orders have been passed, and the appeal filed challenging the order under
Section 14 is still pending.
12. It is the vehement contention of the learned counsel for the
petitioner that the order passed under Section 14 would not fall within the
measures taken under Section 13(4) of the SARFAESI Act, and, therefore,
would not be amenable before the DRT under Section 17 of the Act. We
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are unable to accept such a contention.
13. Once the possession notice under Section 13(4) is issued, the
borrower or any other aggrieved person can file an application before the
DRT under Section 17. The remedy to approach DRT is not only limited to
possession notice under Section 13(4) that can be challenged before the
Tribunal, but any measures undertaken by the secured creditor/Bank,
including orders passed under Section 14 for securing possession, can be
assailed before the DRT.
14. In this regard, useful reference can be made to the following
decisions of the Hon’ble Supreme Court of India:
14.1. In the case of Kanaiyalal Lalchand Sachdev and Others
vs. State of Maharashtra and Others 1, the Hon’ble Supreme Court
held as under:
“20. The 2002 Rules, enacted under sub-section (1) and
clause (b) of sub-section (2) of Section 38 read with sub-sections (4),
(10) and (12) of Section 13 of the Act, set down the procedure for
enforcing a security interest. Rule 4 of the 2002 Rules deals with the
possession of movable assets, whereas Rule 8 deals with the
possession of immovable assets. It is manifest that Rule 4 has no1
(2011) 2 SCC 782__________
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CMP No. 17887 of 2026 in
CRP SR No. 108410 of 2026application to the facts of the instant case, as contended by the
learned counsel for the State.
21. In Indian Overseas Bank v. Ashok Saw Mill [(2009) 8 SCC
366] the main question which fell for determination was whether the
DRT would have jurisdiction to consider and adjudicate post Section
13(4) events or whether its scope in terms of Section 17 of the Act will
be confined to the stage contemplated under Section 13(4) of the Act?
On an examination of the provisions contained in Chapter III of the
Act, in particular Sections 13 and 17, this Court held as under: (SCC
pp. 375-76, paras 35-36 & 39)
“35. In order to prevent misuse of such wide powers and to
prevent prejudice being caused to a borrower on account of an error
on the part of the banks or financial institutions, certain checks and
balances have been introduced in Section 17 which allow any
person, including the borrower, aggrieved by any of the measures
referred to in sub-section (4) of Section 13 taken by the secured
creditor, to make an application to the DRT having jurisdiction in
the matter within 45 days from the date of such measures having
taken for the reliefs indicated in sub-section (3) thereof.
36. The intention of the legislature is, therefore, clear that
while the banks and financial institutions have been vested with
stringent powers for recovery of their dues, safeguards have also
been provided for rectifying any error or wrongful use of such
powers by vesting the DRT with authority after conducting an
adjudication into the matter to declare any such action invalid and
also to restore possession even though possession may have been
made over to the transferee.
39. We are unable to agree with or accept the submissions
made on behalf of the appellants that the DRT had no jurisdiction to
interfere with the action taken by the secured creditor after the
stage contemplated under Section 13(4) of the Act. On the other
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hand, the law is otherwise and it contemplates that the action taken
by a secured creditor in terms of Section 13(4) is open to scrutiny
and cannot only be set aside but even the status quo ante can be
restored by the DRT.”
22. We are in respectful agreement with the above enunciation
of law on the point. It is manifest that an action under Section 14 of
the Act constitutes an action taken after the stage of Section 13(4),
and therefore, the same would fall within the ambit of Section 17(1) of
the Act. Thus, the Act itself contemplates an efficacious remedy for
the borrower or any person affected by an action under Section 13(4)
of the Act, by providing for an appeal before the DRT.”
14.2. In the case of Standard Chartered Bank vs. V.Noble
Kumar and Others2, the Hon’ble Supreme Court observed as follows:
“27. The “appeal” under Section 17 is available to the
borrower against any measure taken under Section 13(4). Taking
possession of the secured asset is only one of the measures that can
be taken by the secured creditor. Depending upon the nature of the
secured asset and the terms and conditions of the security agreement,
measures other than taking the possession of the secured asset are
possible under Section 13(4). Alienating the asset either by lease or
sale, etc. and appointing a person to manage the secured asset are
some of those possible measures. On the other hand, Section 14
authorises the Magistrate only to take possession of the property and
forward the asset along with the connected documents to the
borrower (sic the secured creditor). Therefore, the borrower is always
entitled to prefer an “appeal” under Section 17 after the possession of2
(2013) 9 SCC 620__________
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13(4)(a) declares that the secured creditor may take possession of the
secured assets. It does not specify whether such a possession is to be
obtained directly by the secured creditor or by resorting to the
procedure under Section 14. We are of the opinion that by whatever
manner the secured creditor obtains possession either through the
process contemplated under Section 14 or without resorting to such a
process obtaining of the possession of a secured asset is always a
measure against which a remedy under Section 17 is available.”14.3. In Phoenix ARC (P) Ltd. v. Vishwa Bharati Vidya
Mandir3, the Hon’ble Supreme Court emphatically held that the remedy
against an order passed under Section 14 of the Act is under Section 17
of the Act before the Debts Recovery Tribunal and a writ petition is not
maintainable. The observations of the Supreme Court are extracted
herein below:
“10. In United Bank of India v. Satyawati Tondon, (2010) 8
SCC 110, it was observed and held by this Court that the
remedies available to an aggrieved person against the
action taken under Section 13(4) or Section 14 of
the SARFAESI Act, by way of appeal under Section 17, can
be said to be both expeditious and effective. On
maintainability of or entertainability of a writ petition
under Article 226 of the Constitution of India, in a case
where the effective remedy is available to the aggrieved
person, it is observed and held in the said decision in paras 43
to 46 as under : (SCC pp. 123-24)3
(2022) 5 SCC 345__________
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CMP No. 17887 of 2026 in
CRP SR No. 108410 of 2026‘43. Unfortunately, the High Court [Satyawati
Tondon v. State of U.P., 2009 SCC OnLine All 2608]
overlooked the settled law that the High Court will
ordinarily not entertain a petition under Article
226 of the Constitution if an effective remedy is
available to the aggrieved person and that this
rule applies with greater rigour in matters
involving recovery of taxes, cess, fees, other
types of public money and the dues of banks and
other financial institutions. In our view, while
dealing with the petitions involving challenge to
the action taken for recovery of the public dues,
etc. the High Court must keep in mind that the
legislations enacted by Parliament and State
Legislatures for recovery of such dues are a code
unto themselves inasmuch as they not only
contain comprehensive procedure for recovery of
the dues but also envisage constitution of quasi-
judicial bodies for redressal of the grievance of
any aggrieved person. Therefore, in all such
cases, the High Court must insist that before
availing remedy under Article 226 of the
Constitution, a person must exhaust the
remedies available under the relevant statute.
…
45. It is true that the rule of exhaustion of alternative
remedy is a rule of discretion and not one of
compulsion, but it is difficult to fathom any reason
why the High Court should entertain a petition
filed under Article 226 of the Constitution and
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pass interim order ignoring the fact that the
petitioner can avail effective alternative remedy
by filing application, appeal, revision, etc. and
the particular legislation contains a detailed
mechanism for redressal of his grievance.
46. It must be remembered that stay of an action
initiated by the State and/or its
agencies/instrumentalities for recovery of taxes, cess,
fees, etc. seriously impedes execution of projects of
public importance and disables them from discharging
their constitutional and legal obligations towards the
citizens. In cases relating to recovery of the dues
of banks, financial institutions and secured
creditors, stay granted by the High Court would
have serious adverse impact on the financial
health of such bodies/institutions, which (sic
will) ultimately prove detrimental to the
economy of the nation. Therefore, the High Court
should be extremely careful and circumspect in
exercising its discretion to grant stay in such
matters. …’
…
12. In Kanaiyalal Lalchand Sachdev v. State of Maharashtra,
(2011) 2 SCC 782, after referring to the earlier decisions of this
Court in Sadhana Lodh v. National Insurance Co. Ltd., (2003) 3
SCC 524, Surya Dev Rai v. Ram Chander Rai, (2003) 6 SCC 675
and SBI v. Allied Chemical Laboratories, (2006) 9 SCC 252
while upholding the order passed by the High Court
dismissing the writ petition on the ground that an
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efficacious remedy is available under Section 17 of
the SARFAESI Act, it was observed that ordinarily relief
under Articles 226/227 of the Constitution of India is not
available if an efficacious alternative remedy is available
to any aggrieved person.”
[emphasis supplied]
15. In view of the aforesaid settled legal position, it is clear that the
borrower or any person aggrieved can maintain an application challenging
the order passed under Section 14, only before the Debts Recovery
Tribunal under Section 17 of the SARFAESI Act.
16. Even though the Chief Judicial Magistrate, Chengalpattu has
passed orders in favour of the 2nd respondent/Bank allowing the
application under Section 14 for securing possession, the 1 st respondent
borrower has rightly approached the DRT by filing S.A.493 of 2025 under
Section 17 of the Act.
17. The petitioner, being the auction purchaser in the sale
conducted by the bank, can only seek to get himself impleaded as a party
in the application pending before the DRT and adjudicate the issues along
with the Bank/secured creditor.
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18. The revision sought to be preferred by the petitioner to strike
off SA No.493 of 2024 filed before the DRT Chennai is totally
misconceived and is unsustainable.
19. In such circumstances, the Civil Miscellaneous Petition filed
seeking to grant leave to file the civil revision petition is dismissed.
Consequently, the Civil Revision Petition stands rejected at the SR stage.
No costs.
(SUSHRUT ARVIND DHARMADHIKARI, C.J.) (G.ARUL MURUGAN J.)
20-07-2026
Jeni
To
1.The Authorized Officer,
Indian Overseas Bank
Asset Recovery Management Branch Chennai,
3rd Floor, Annexure Building,
736, Anna Salai, Chennai 600 002.
2.The Indian Overseas Bank
Irugattukottai Branch,
Large Advances Branch,
SIPCOT Industrial Park,
Irungattukottai, Sriperumbudur,
Kanchipuram 602 117.
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CMP No. 17887 of 2026 in
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THE HON’BLE CHIEF JUSTICE
AND
G.ARUL MURUGAN,J.
Jeni
CMP No. 17887 of 2026
and
CRP SR No. 108410 of 2026
20-07-2026
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