DRAT Chennai Directs Return of Title Deeds to SBI After Final SARFAESI Sale

April 2, 2026 : The Debts Recovery Appellate Tribunal, Chennai has directed the Debts Recovery Tribunal, Madurai to return original title documents to State Bank of India, holding that once a secured asset is sold under the SARFAESI Act and the sale has attained finality, there is no justification for retaining such documents.

The order was passed by Justice G. Chandrasekharan (Chairperson) in M.A. No. 35 of 2024, arising out of recovery proceedings in OA No. 11 of 2008.

The dispute concerned land measuring 1.80 acres (Paimash No. 722/4), which had been mortgaged as a secured asset. During the pendency of recovery proceedings, SBI invoked the SARFAESI Act, 2002 and sold the property to M/s. Tripower Enterprises Limited for ₹66 crore on 09.02.2017. A sale certificate was issued on 29.04.2017.

SBI later sought return of the original title documents from the DRT, Madurai. However, the DRT declined the request citing ongoing disputes regarding title. This refusal was challenged before the Appellate Tribunal.

The DRAT noted that the SARFAESI sale had never been challenged and had attained finality. It also took into account subsequent proceedings before the Supreme Court and the Madras High Court, which ultimately upheld the sale in favour of the auction purchaser. Further, findings of the Commissioner of Land Administration indicated that rival claims over the property were based on fraudulent documents.

Emphasising the legal consequence of a concluded SARFAESI sale, the Tribunal held that once a secured asset is sold, it ceases to be available for recovery in the original application. Any further recovery must be pursued against other assets of the borrower or through personal liability.

The Tribunal observed that retaining the property in the schedule of the original application, or withholding its title documents, serves no legal purpose after the sale has been completed and confirmed.

Setting aside the DRT’s order dated 07.12.2023, the DRAT directed that the original title documents be returned to SBI after obtaining proper acknowledgment. The appeal was allowed with no order as to costs.

Cause Title: State Bank of India v. M/s. Rukmini Mills & Ors.