Dismissed

Thresiamma Philip v. South Indian Bank

DRT8 Aug 2025SA/309/2024

Case brief

AI extract

What is this about?

Debts Recovery Tribunal dismissed a Securitization Application challenging the sale of agricultural land under SARFAESI Act. The court held the asset was non-agricultural due to the borrower's declaration and refused restoration of possession or setting aside the sale for lack of proven illegality.

What did the court decide?

Application dismissed with costs of Rs.10,000/- payable by the applicant.

Thresiamma Philip versus South Indian Bank — Banking and Recovery | DRT (2025)

¶1

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

¶2

PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER . Dated this the 8^th day of August, 2025

¶3

SECURITISATION APPLICATION No.309/2024

¶4

Between

¶5

Thresiamma Philip, W/o. Philip, Aged 74 years, Moozhiyankal House, Perunilam, Poonjar P.O., Kottayam – 686 581. Also at: Kavumkal House, Kanjirappally P.O., Kottayam – 686 581. …Applicant

¶6

And

¶7

Authorised Officer, The South Indian bank Ltd.,

¶8

1^st Floor Regency Square,

¶9

K.K. Road, Collectorate P.O.,

¶10

Kottayam – 686 002.

¶11

Mr. Abdul Fathah Ibrahim, Aged 50 years, S/o. P.C. Ibrahim, Ayappara Parambil, Anithottam,

¶12

Kanjirappally, Kottayam – 686 507. …Defendants

¶13

This Securitization Application having been heard on 04.08.2025 in the presence of Advocate M/s. Baby Thomas,

¶14

¶15

SA 309/2024

¶16

George T.J., Mariamma Joseph, Indrajith S.Kaimal, Alicia Jose, Aiswaryaraj & Johny George for the applicant and Advocate M/s. John Prakash B.J. & Varsha Vijayakumar Nair for the 1^st defendant and Adv. Peer Mohammed Khan and stood over to this day for consideration, the Tribunal delivered the following:

¶17

F I N A L O R D E R

¶18

Challenging the securitization proceedings initiated by the defendants under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘the SARFAESI Act’), the applicant/guarantor has filed this SA under S.17(1) of the SARFAESI Act seeking relief to declare the entire securitization proceeding as illegal.

¶19

Brief facts of the case :

¶20

2.1 The applicant, being a guarantor to the loan availed by M/s. Green Flour Mills from the defendant bank, has filed this SA challenging the securitization measure mainly on the ground that the secured asset is an agricultural land having cultivated with coconut trees, nutmeg trees, arecanut, banana plants, coffee, cocos, rubber etc. and the securitization proceeding is not maintainable in respect of such land. It is further pleaded by the applicant that due to default committed by the borrower, the loan account was classified as ‘NPA’ on 19.12.2021 and a demand notice

¶21

¶22

SA 309/2024

¶23

under Section 13(2) of the SARFAESI Act was issued on 19.02.2022 calling the applicant and the borrower to pay the outstanding amount of Rs.59,54,142.74. On receipt of the said demand notice, the applicant approached the defendant bank stating that the land is agricultural land and the securitization proceeding is not maintainable. In spite of the same the bank issued a possession notice under section 13(4) of the SARFAESI Act dated 07.07.2022, marked Annexure A4, which is in violation of Section 31(i) of the SARFAESI Act.

¶24

2.2 The defendant proceeded in MC No.524/2022 before the Chief Judicial Magistrate Court, Kottayam to take possession of the secured asset. An Advocate Commissioner, appointed by the Chief Judicial Magistrate Court, Kottayam, issued a notice on 11.11.2022 to take physical possession of the secured asset. Despite protest of the applicant, the defendant has taken physical possession of the secured asset in pursuance to the order passed by the Chief Judicial Magistrate, Kottayam.

¶25

2.3 Thereafter the defendant bank issued sale notice on 12.03.2024, marked Annexure-A7 to sell the secured asset at a price of Rs.75,29,000/- fixing the date of sale on 26.04.2024. It is claimed by the applicant that the property is not properly valued and the fixation of the reserve price is also erroneous. In respect of the agricultural land, all the steps taken by the defendant is illegal

¶26

¶27

SA 309/2024

¶28

and bad under the provisions of Section 31(i) of the SARFAESI Act. Hence the SA is filed challenging the sale notice and seeking restoration of the possession of the secured asset. Sale notice Annexure-A7 did not fructify.

¶29

2.4 Thereafter the defendant issued another sale notice Annexure-A8 for auction of the secured asset on 04.06.2024, fixing the sale on 03.09.2024. All the statutory requirements are duly complied and the defendant No.2, being the successful bidder, sale certificate was issued after depositing all the entire bid amount and the physical possession is already handed over to the same, which is challenged by the applicant by amending the SA and prayed to set aside the entire securitization proceeding.

¶30

3.1 The defendant No.1 filed written statement denying the averments and claimed, interalia, that there was no illegality in the securitization proceeding. All the statutory measures are duly followed while issuing possession notice under Section 13(4) of the SARFAESI Act and also in taking physical possession of the secured asset with the help of Commissioner. The same is not challenged in this proceeding within the statutory period. Hence the SA is not maintainable in challenging such measure.

¶31

3.2. The claim of the applicant that the secured asset is

¶32

agricultural land is not true. At the time of availing the loan, the applicant has furnished a declaration on 24.09.2019 stating that the

¶33

¶34

SA 309/2024

¶35

mortgaged immovable property is non-agriculture in nature and usage and was continued to be non-agriculture until the full tenure of the loan.

¶36

3.3 The sale notice under challenge in this proceeding did not fructify. Thereafter fresh sale notice was issued after obtaining the valuation report. The sale is complete and the 2^nd defendant is the auction purchaser in whose favour sale certificate is already issued. Physical possession of the secured asset is already handed over. There is no illegality in any manner in the sale proceeding and hence the contention of the applicant is not legally maintainable. In absence of proof of any illegality in the securitization proceeding, the SA is liable to be dismissed.

¶37

3.4 Defendant No.2/Auction Purchaser has filed a separate written statement denying the averments in the SA and claimed interalia that he has purchased the property by investing huge amount. Annexure-A9 sale certificate was issued in his favour after completion of the sale proceeding. The claim in respect of the sale is not legally sustainable. Hence the SA, being devoid of any merit, may be dismissed.

¶38

From the respective case of both the parties, the following points are emerged for adjudication in this case:

¶39

(i) Whether the secured asset is agricultural land, exempted under the provisions of SARFAESI Act?

¶40

¶41

SA 309/2024

¶42

(ii). Whether there is any illegality or defect in the sale proceeding?

¶43

(iii) Whether the applicant is entitled to get any relief in this case?

¶44

FINDINGS:

¶45

Point No.(i):

¶46

Admittedly the applicant stood as a guarantor by mortgaging the subject matter property in favour of the defendant bank for securing the loan availed by the borrower. At the time of availing the loan, in the affidavit filed Annexure-D1 submitted by the applicant, he has specifically stated that the secured asset, having with building described in schedule-B, is non-agricultural in nature and shall continue to be non-agricultural until the full tenure of the loan. Despite such declaration by the applicant, claiming the secured asset by her as agricultural land is not acceptable in view of the ratio decided by the Hon'ble High Court of Kerala reported in

¶47

MANU/KE/4077/2022 in the case titled Rahiya.P v. Authorised Officer, The South Indian Bank Ltd. & others where in it was held that once the applicant has made a declaration that the secured asset is not an agricultural land, he cannot turn around and contend later that the said undertaking is contrary to law. The relevant portion of the judgment is reproduced herein below:

¶48

“3) ……….. The purpose of taking an undertaking in the form of Ext.R1(b) is to ensure that there is no argument taken at a later point in time that the land in question is agricultural land to which the provisions of the SARFAESI Act do not apply. If borrowers are permitted to contend that

¶49

¶50

SA 309/2024

¶51

the land in question is agricultural land even after giving an undertaking in the form of Ext.R1(b), it would defeat the purpose for which an undertaking in the form of Ext.R1(b) has been obtained. As I have already found that Ext.R1(b) is not hit by the provisions of Section 23 of the Contract Act, it does not lie in the mouth of the petitioner to now seek to establish that the land in question is agricultural land by the appointment of an Advocate Commissioner to determine the nature of the land.”

¶52

In view of this ratio contention of the applicant claiming contrary of

¶53

the declaration is not acceptable.

¶54

The applicant has not placed any evidence on record that at the time of mortgaging the secured asset, the subject matter property was used exclusively by her for agriculture and she was depending on the income derived from the same. Mere based upon

¶55

the report of the agriculture officer and the revenue receipts of the year-2022, it cannot be presumed that at the time of availing the loan the secured asset is an agricultural land.

¶56

The Hon'ble Apex Court in the judgment reported in 2023 KHC 6012 in case of K.Sreedhar v. M/s.Raus Constructions Pvt.

¶57

Ltd. & others has held that “ When it was the case on behalf of the borrowers that in view of Section 31(i) of the SARFAESI Act, the properties were agricultural lands, the same were being exempted from the provisions of the SARFAESI Act, the burden was upon the borrower to prove that the secured properties were agricultural lands and actually being used as agricultural lands and/or agricultural activities were going on. In view of this judgment the burden lies on the applicant to prove that at the time of availing the

¶58

¶59

SA 309/2024

¶60

loan the secured asset is agricultural land which she failed to establish in this case. In absence of any material the claim of agricultural character of the land is not legally sustainable. Hence the point is answered against the applicant.

¶61

Point Nos.(ii) and (iii):-

¶62

Admittedly the physical possession of the secured asset is already taken by the defendants with the help of an Advocate Commissioner. The same was not challenged within the statutory period of 45 days. Hence the claim for restoration of the subject matter property is not legally sustainable. So also in absence of proof any illegality in the securitization proceeding by the applicant, she is also not entitled to get any relief for restoration of possession on merit.

¶63

The sale notice under challenge in this proceeding is Annexure A-7 did not fructify. Thereafter sale notice marked Annexure A-8 was issued. The defendant has produced all the relevant documents regarding compliance of the statutory requirements. The 2^nd defendant, being the successful bidder deposited the bid amount and the sale certificate was issued in his favour. In the amended SA the applicant has not raised any specific illegality in the sale proceeding. It is only contended that the secured asset is presently having a valuation of more than 2 Crores

¶64

¶65

SA 309/2024

¶66

and the reserve price fixed is erroneous. No valuation report is produced by the applicant to establish the valuation of the secured asset. Rather the defendant has produced the valuation report based upon which the reserve price was fixed. In absence of any material placed by the applicant it cannot be said that the reserve price fixed by the defendant in putting the secured asset for sale is erroneous in any manner.

¶67

The Hon'ble Apex Court in the judgment reported in 2024 SCC Online SC 3727 in the case of Celir LLP vs. Sumati Prasad Bafna & others held as follows:-

¶68

“218 . Any sale by auction or other public procurement methods once already confirmed or concluded ought not to be set-aside or interfered with lightly except on grounds that go to the core of such sale process, such as either being collusive, fraudulent or vitiated by inadequate pricing or underbidding. Mere irregularity or deviation from a rule which does not have any fundamental procedural error does not take away the foundation of authority for such proceeding. In such cases, courts in particular should be mindful to refrain entertaining any ground for challenging an auction which either could have been taken earlier before the sale was conducted and confirmed or where no substantial injury has been caused on account of such irregularity.”

¶69

The applicant has failed to establish any of the grounds as pointed out by the Hon’ble Apex Court to interdict with the sale proceeding. In absence of proof of any illegality or material defect in the sale proceeding and also in absence of material showing the valuation report obtained by the defendant as erroneous, the

¶70

¶71

SA 309/2024

¶72

applicant is not entitled to get any relief against the sale conducted in favour of the 2^nd defendant. Hence both the points are answered against the applicant.

¶73

Hence it is ordered:-

¶74

ORDER

¶75

In view of the foregoing reasons, this SA, being devoid of any merit, is hereby dismissed with cost of Rs.10,000/- (Rupees Ten Thousand only) payable by the applicant to the defendant No.1 for raising untenable and vexatious contentions.

¶76

(Dictated to my PA, corrected and pronounced by me in the open Tribunal on this the 8^th day of August, 2025).

¶77

[SOVAN KUMAR DASH] PRESIDING OFFICER

¶78

¶79

SA 309/2024

¶80

Documents on the part of the applicant

¶81

Annexures	Date	Particulars of documents
Annexure-A1		True copy of the Land Tax receipt English translation also is produced)
Annexure-A2		True copy of the certificate issued by the agricultural officer.
Annexure-A3		True copy of 13(2) notice issued by the defendant bank.
Annexure-A4		True copy of the 13(4) notice issued by the defendant bank.
Annexure-A5		True copy of the advocate Commissioner’s notice.
Annexure-A6		True copy of online status of M.C. No.524/2022 in CJM Court, Kottayam.
Annexure-A7		True copy of sale notice issued by the defendant bank.
Annexure-A8	04.06.2024	True copy of the sale notice.
Annexure-A9	01.08.2024	True copy of the sale notice.

¶82

Documents on the part of 1^st defendant

¶83

Annexures	Date	Particulars o	f documents
Annexure-D1	24.09.2019	True copy of De duly signed by the	ed of Declaration applicant.
Annexure-D2	13.07.2022	True copy of the made in “Deep Newspaper) and Express” (English defendant bank	paper publication ika” (Malayalam “The New Indian Newspaper by the with respect to
		Annexure-A4 pos along with the	session notice acknowledgment
		cards showing	due service of
		Annexure-A4 not borrowers and the	ice on all the applicant herself.

¶84

¶85

SA 309/2024

¶86

Annexure-D3 03.08.2024	True copy of the paper publication made in ‘Mathrubhumi’ (Malayalam newspaper) and the ‘Hindu’ (English Newspaper) Kottayam edition by the defendant bank with respect to Annexure–A8 sale notice.
Annexure-D4	True copy of the CERSAI report with respect to property in Annexure-A3 demand notice.
Annexure-D5	True copy of the statement of the statement of account with respect to the CCOL credit facility availed by the applicant vide loan Account No.0761083000000007.
Annexure-D6	True copy of the statement of account with respect to the Term Loan facility availed by the applicant vide loan Account No. 0761652000000096.
Annexure-D7	True copy of the statement of account with respect to the ECLGS facility availed by the applicant vide loan Account No. 0761656000000099.
Annexure-D8	True copy of the statement of account with respect to OA/151/2023 filed by the defendant before the Hon’ble Tribunal with A/c. No.076158000000209.

¶87

Documents on the part of 2^nd defendant .. NIL

¶88

PRESIDING OFFICER

¶89

¶90

SA 309/2024

¶91

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

¶92

PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

¶93

Dated this the 8^th day of August, 2025

¶94

S A No.309/2024

¶95

Between

¶96

Thresiamma Philip, W/o. Philip, Aged 74 years, Moozhiyankal House, Perunilam, Poonjar P.O., Kottayam – 686 581 Also at: Kavumkal House, Kanjirappally P.O., Kottayam – 686 581. ... Applicant

¶97

And

¶98

Authorised Officer, The South Indian bank Ltd., 1^st Floor Regency Square, K.K. Road, Collectorate P.O., Kottayam–686 002 & Anr.

¶99

…Defendants

¶100

F I N A L O R D E R

Thresiamma Philip v. South Indian Bank

Case brief

What is this about?

What did the court decide?

Thresiamma Philip v. South Indian Bank

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Joy M P versus Muvattupuhza Urban Co. Operative Bank Ltd.

Pm Sasi versus State Bank of India

Canara Bank versus M/S Fine Foot Care Rep by Its Proprietrix Mrs. Asha Banu

Sri Narayan Chandra Pramanik Prop of Ms Birbhum Engineering Works versus Bank of India

Punjab National Bank (Oriental Bank of Commerce) versus Harbinder Singh

Union Bank of India versus M/S Magan Enterprises