The Debt Recovery Appellate Tribunal (DRAT) in Chennai has dismissed an appeal filed by E. Kumar, a loan guarantor, challenging an order of the Debt Recovery Tribunal (DRT) that favored Kotak Mahindra Bank. The DRAT confirmed that the bank had correctly followed the securitization procedures under the SARFAESI Act, 2002. Kumar had raised several contentions, including that the bank failed to properly inform him about the assignment of the loan and that notices were not served correctly or published in widely circulated newspapers.
However, the DRAT found that Kumar had been duly informed about the loan assignment through multiple communications and had even admitted to receiving the demand notice in his own securitization application. The counsel for the respondent/bank submitted that the SARFAESI measures had been taken by following the procedures as contemplated under the SARFAESI Act. The DRAT noted that Kumar’s grounds were taken as an “afterthought” since they were not raised at the first available opportunity.
The DRAT also clarified that while the DRT had made an observation about using widely circulated papers in the future, it had not made a specific finding that the newspapers in question were not widely circulated. Without specific circulation data, the DRAT concluded that it could not be said that the bank had failed in this regard. Consequently, the DRAT found no merit in Kumar’s arguments and confirmed the DRT’s order dismissing the securitization application.
The case, E. Kumar vs The Authorised Officer, was heard on October 16, 2025, with M/s. V. Venkatesan representing the appellant and M/s. Ramalingam Associates representing the respondent. The DRAT’s decision highlights the importance of following proper procedures under the SARFAESI Act and the need for loan guarantors to raise any objections or contentions at the first available opportunity.
The DRAT’s judgment also emphasizes the need for widely circulated newspapers to be used for publication, but notes that without specific circulation data, it cannot be determined whether the newspapers used were widely circulated or not. The decision is a significant win for Kotak Mahindra Bank and sets a precedent for similar cases in the future. Overall, the DRAT’s judgment demonstrates the importance of following proper procedures and raising objections in a timely manner in debt recovery cases.