Dismissed

Neroth Marakkar v. Punjab National Bank

DRAT10 Oct 2025MISC APPEAL/43/2025

Case brief

AI extract

What is this about?

Appeals filed under Section 18 of SARFAESI Act were dismissed. The court held that the appellant failed to claim the agricultural land exemption during the demand notice stage and lacked documentary proof. Appeals against dismissal of protectorate applications were also rejected.

What did the court decide?

Appeals dismissed; underlying applications (IA 181/2022 and IA 3625/2023) confirmed; costs awarded to respondent.

Neroth Marakkar versus Punjab National Bank — Banking and Recovery | DRAT (2025)

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IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT CHENNAI

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Dated the 10^th of October 2025

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PRESENT: Hon’ble Mr. Justice G. Chandrasekharan

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CHAIRPERSON

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MA (SA) 42/2025 & MA (SA) 43/2025

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(Arising out of IA 181/2022 and IA 3625/2023 in SA 65/2022 on the file of DRT-I, ERNAKULAM)

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MA (SA) 42/2025 & MA (SA) 43/2025

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Between

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Neroth Marakkar, S/o Moidheen Kutty Haji, Nihma House, Neroth P.O., Mangad, Unnikkulam, Kozhikode 673 574.

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.. Appellant

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And

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Punjab National Bank, Kozhikode Branch, Rep. by its Authorised Officer, Circle SASTRA Centre, Shathabdi Bavan, Mini Bye-Pass Road, Govindapuram, Kozhikode 673 016. .. Respondent

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Counsel for the Appellant : M/s. P. Meghana Nair Counsel for the Respondent : M/s M.L. Ganesh

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COMMON ORDER

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These two appeals are filed under Section 18 of the SARFAESI Act,

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2002 viz., MA 42/2025 is filed against the order passed in IA 181/2022 in SA 65/2022 and MA 43/2025 is filed against the order passed in IA 3625/2023 in SA 65/2022 by the learned Presiding Officer, DRT-I, Ernakulam.

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The appellant filed SA 65/2022 to set aside Annexure 12 e-

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auction notice; to declare Annexures A5, A6, and A7 demand notice issued

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under Section 13 (2) of the SARFAESI Act as illegal and to pay compensation of Rs.5 lakhs.

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When the said application is pending, IA 181/2022 was filed to

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depute an Advocate Commissioner to inspect the secured asset and report the

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lie and the nature of the property and IA 3625/2023 was filed to stay all further proceedings in pursuance of Annexures A5, A6, A7 and A13. Both the applications had been dismissed. Aggrieved against the dismissal of these applications, the aforesaid appeals are filed.

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Learned counsel for the appellant submitted that the property

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described in the securitization application is an agricultural property. The applicant availed Kisan credit card loan to the tune of Rs. 7 lakhs from the respondent/Bank on 29/03/2018. It is an established fact that the appellant is an agriculturist and the property is an agricultural property. Section 31(i) of SARFAESI Act 2002 exempted any proceedings against the agricultural property under the SARFAESI Act. Therefore, initiation of SARFAESI Proceedings against the appellant property is illegal. To prove that the property is an agricultural property, it is necessary for appointment of an Advocate Commissioner to visit the property, note down the physical features, agricultural operations and to file a report. Without considering the appellant’s case, the applications filed for appointment of Advocate Commissioner and the Stay of all further proceedings had been unjustly dismissed.

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In reply, the learned counsel for the respondent/Bank

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submitted that the property is not an agricultural property. There was no reply

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or objection sent to 13(2) demand notice stating that the property is an agricultural property. The appellant availed commercial loan i.e. cash credit

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loan of Rs.75 lakhs and term loan of Rs.5 lakhs for M/s. Skiller Marketing. At

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the time of availing the loans, equitable mortgage was created by deposit of

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title deeds. At no point of time, appellant claimed that the property is an

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agricultural property. The appellant approached this Tribunal with unclean hands. As per the orders passed under Section 14 of the SARFAESI Act, possession was taken. However, the appellant had again taken illegal possession of the property, for which, a criminal complaint was given. Possession was taken when the appellant failed to comply with the order passed by the Hon’ble High Court of Kerala in OP (DRT) 312/2024. Even, if the Advocate Commissioner is appointed, the Advocate Commissioner will be in a position to note the physical features as on today. The Advocate Commissioner cannot file any report as to the physical features available when the mortgage was executed in 2021. The appellant has not produced any document in support of his case to the effect that the property is an agricultural property. Without challenging the order passed under Section 14 of the SARFAESI Act, the appellant challenged the notice issued by the Advocate Commissioner and that is not legally permissible.

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It is further submitted that the appellant is trying to protract the proceedings by initiating various litigations. Now, the Advocate Commissioner issued notice for taking possession. To oppose this attempt, appellant’s wife, filed a suit in O.S.138/2025 filed before the Munsif Court,

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Koyilandy and an interim injunction was granted in IA 2/2025. The learned

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District Munsif, passed an order of interim injunction without considering that the suit is barred under Section 34 of the SARFAESI Act. The learned Presiding

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Officer has rightly dismissed the applications and he prayed for dismissal of these appeals.

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In reply, the learned counsel for the appellant submitted that

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the appeal was filed on 14/11/2024. Learned counsel for the respondent filed

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vakalath on 18/03/2025. There was no representation for the learned counsel for the respondent on 26/03/2025 and on 03/04/2025 possession was claimed

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to have been taken. However, possession was never taken from the appellant. The appellant had also not forcibly taken possession. Criminal complaint is an evidence created as an after thought. The Advocate Commissioner will aid the

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Tribunal to come to the right conclusion and thus, reiterated to set aside the

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order of the learned Presiding Officer, DRT-I, Ernakulam.

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Considered the rival submissions and perused the records.

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It is seen from the submissions of the learned counsel for the

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appellant that the appellant claims that the property offered as a security

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interest is an agricultural property. The first opportunity to raise this plea was

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the opportunity to give reply/ file objection to the demand notice issued under Section 13(2) of the SARFAESI Act. It is seen that the demand notice dated 23.07.2018 was served on the appellant. There is no dispute with regard to service of demand notice. The appellant has not sent any reply/objection raising the plea that the property is an agricultural property and exempted from the SARFAESI Proceedings under Section 31(i) of the SARFAESI Act. Even in this appeal, there is no document produced to show that the property is an agricultural property and agricultural operations were going on at the time of creation of mortgage and the agricultural operations are continuing till today. What is important is the intension of the parties. If the intention of the parties is to create mortgage in respect of the agricultural property then protection under Section 31 (i) of the SARFAESI Act cannot be sought. There must be evidence produced in support of agricultural operations at the time of creation of mortgage and continuance of agricultural operations till today. There must be records produced to show that lands are classified as agricultural lands and it generates income from the agricultural operations. None of these documents are produced in these appeals.

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As rightly pointed out by the learned counsel for the respondent that

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the Advocate Commissioner would note only the physical features exists today

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and not the physical features when the security interest was created in 2021.

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There is every possibility of conversion of bare land into an agricultural land during the interregnum period. Therefore, the appointment of Advocate Commissioner and his report is not a solution to resolve the issues. Primarily, the issue of the character of the land as to whether the land is an agricultural land or not has to be decided on the basis of the documentary evidence. When absolutely there is no document produced to substantiate the claim that the property is an agricultural property, the Tribunal finds that IA 181/2022 filed for appointment of Advocate Commissioner was rightly dismissed by the learned Presiding Officer.

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It is pertinent to refer the police complaint dated 06.04.2025 given by the authorized officer of the respondent/Bank. It needs that on taking possession of the property on 03.04.2025, a group of persons had trespassed into the property at about 10.00p.m. on 05.04.2025, broke open the house and driven away the security from the premises. They were engaged by the appellant. The complaint was received by the Balussery Police Station and in acknowledgement there of, a receipt was issued. If the complaint allegations are true, it goes without saying that the appellant had taken possession of the property illegally. The suit in O.S. 138/2025 filed by the appellant’s wife Mrs.Nadheera, shows that the appellant wants to protract the proceedings to

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take possession of the property by hook or by crook. These acts of the

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appellant cannot be appreciated.

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There is no infirmity shown as to the order passed by the learned

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Chief Judicial Magistrate, Kozhikode, under Section 14 of the SARFAESI Act.

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Thus, this Tribunal finds that the learned Presiding Officer has rightly dismissed

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the IA 181/2022 and IA 3625/2025 and the orders are confirmed. In this view

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of the matter, these appeals are dismissed with the costs of the respondent.

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Learned Presiding Officer is directed to dispose the SA 65/2022 as

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expeditiously as possible.

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In the result, these appeals are dismissed with the costs of the respondent.

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Learned Presiding officer is directed to dispose the SA 65/2022 as expeditiously as possible.

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Pending IAs., if any, shall stand closed.

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(Dictated to Steno (ra), transcribed by her, corrected and signed by me in open Court this 10^th of October 2025)

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Sd/-

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(JUSTICE G. CHANDRASEKHARAN)

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CHAIRPERSON

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Neroth Marakkar v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

Neroth Marakkar v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

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Case details

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