Partly allowed

Shahar Abdul Jabbar v. Tata Capital Housing Finanace Limited

DRT23 Dec 2025SA/342/2023

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed the application in part, setting aside a property sale and sale certificate due to defective valuation by the secured creditor, directing fresh proceedings with proper valuation and return of bid amount.

What did the court decide?

Sale held on 14.07.2023 and sale certificate set aside; defendants to proceed afresh with fresh notice after proper valuation; bid amount returned to purchaser with interest.

Shahar Abdul Jabbar versus Tata Capital Housing Finanace Limited — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

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PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

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Dated this the 23^rd day of December, 2025

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SECURITIZATION APPLICATION No.342/2023

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Between

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Shahar Abdul Jabbar, S/o.Abdul Jabbar, House No.391, Annavila House, Puthenveedu, Pallimukku, Nilakkamukku P.O., Vakkom, Kadakkavur, Thiruvananthapuram – 695 306.

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Sherin A., W/o.Shahar Abdul Jabbar, House No.391, Annavila House, Puthenveedu, Pallimukku, Nilakkamukku P.O., Vakkom, Kadakkavur, Thiruvananthapuram – 695 306. …Applicants

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And

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The Authorised Officer, TATA Capital Housing Finance Ltd., T.C.No.9/2284 (3), Cheruvilakom Buildings, Sasthamangalam, Thiruvananthapuram – 695 010.

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TATA Capital Housing Finance Ltd., Registered Office, 11^th Floor, Tower A, Peninsula Business Park, Ganapatrao Kadam Marg, Lower Parel, Mumbai – 400 013. …Defendants

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SA 342/2023

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Salin Jos, S/o.Jos K.K., Koothur Vellattukara House, Vakayil Road, Chiyyaram, Thrissur – 680 026. …Additional 3^rd defendant

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[Additional 3^rd defendant was impleaded as per order dated 30.10.2023 in IA No.2940/2023]

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This Securitization Application having been heard on

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06.11.2025 in the presence of Advocate Sri.P.Shrihari for the applicants, Advocate Sri.Paulochan Antony P. for defendants 1 and 2 and Advocate Sri.Bijoy P.Pulipra for the additional 3^rd defendant and stood over to this day for consideration, the Tribunal delivered the following:

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F I N A L O R D E R

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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 applicants/borrowers have filed this SA under S.17(1) of the SARFAESI Act seeking relief to set aside the sale notice marked Annexure-A1 issued by the defendants. By way of amendment, the applicants prayed to set aside the sale held on 14.07.2023 and the sale certificate issued to the auction purchaser.

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SA 342/2023

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Brief facts of the case :

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The applicants availed a housing loan from the defendants by mortgaging the subject matter property of an extent of 05.43 Ares of land with a residential building measuring 1300 sq.ft. Due to default in repayment of the loan, the defendants classified the loan as NPA and issued demand notice under S.13(2) of the SARFAESI Act on 09.03.2022 calling the applicants to repay the amount, followed by possession notice under S.13(4) of the SARFAESI Act. After taking symbolic possession of the secured asset, the defendants issued sale notice dated 22.06.2023 putting the subject matter property for sale on 14.07.2023. The sale was materialized on 14.07.2023 which is impugned in the SA with the following grounds:

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(i) The sale notice was issued by the defendants on 22.06.2023. There was no gap of 30 days between the date of receipt of notice by post and the date of sale on 14.07.2023 and hence the entire proceeding is vitiated.

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(ii) The sale was conducted without proper valuation of the property and reserve price was fixed in collusion with the auction purchaser. In absence of proper valuation, the sale is vitiated.

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SA 342/2023

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(iii) The sale was held on 14.07.2023 and one Salin Jos, S/o.Jos K.K. was the successful bidder at a consideration of Rs.76,60,000/- as against the reserve price of Rs.76,50,000/-. The sale was confirmed in his favour on 14.07.2023 after remittance of 25% of the bid amount. The balance 75% was not remitted by the auction purchaser within the statutory period in violation of sub-rules (3) to (6) of Rule 9 of the Security Interest (Enforcement) Rules and hence the sale including issuance of sale certificate is void and the auction purchaser did not derive any title or interest over the subject matter property. Hence the applicants sought relief to set aside the sale notice dated 22.06.2023 and the sale held on 14.07.2023 with some ancillary relief.

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3.1 The defendants 1 and 2 filed written statement denying

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the averments and claimed inter alia that there is no illegality in the sale proceeding. The sale was materialized on the 10^th sale notice issued by the defendants. It is not true that the sale notice was issued for the first time in putting the property for sale on 14.07.2023. In view of the proviso to R.9(1) of the Security

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SA 342/2023

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Interest (Enforcement) Rules, 15 days’ notice is sufficient for the subsequent sale and the contention of the applicants that the sale is vitiated due to absence of 30 days’ notice is not acceptable. It is also averred in the written statement that before putting the property for sale by way of public auction, valuation of the property was taken from its approved valuer M/s.Stiffners Property Valuers & Consultants marked Annexure-D2 dated 15.06.2022. The first sale notice was issued on 27.06.2022 proposing to sell the property on 05.08.2022 at a reserve price of Rs.1,38,20,000/- but no bidder participated. So also, the subsequent sale notices were issued from time to time as mentioned in details in paragraph 3.xi of the written statement but the sale did not fructify.

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3.2 The 10^th sale notice was issued on 22.06.2023 fixing the date of sale on 14.07.2023 by reducing the reserve price to Rs.76,50,000/- and the 3^rd defendant being the successful bidder in such sale. All the statutory measures are duly complied. The sale was already confirmed and sale certificate was issued after receiving the consideration amount. After deposit of the initial amount, extension was given to the 3^rd defendant/auction purchaser to deposit the balance consideration and he complied the

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SA 342/2023

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same within the statutory period and there is no illegality in such sale proceeding. Hence the SA may be dismissed.

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The 3^rd defendant filed written statement denying the averments and has made pleadings similar to the pleading of defendants 1 and 2. It is contended that he is the bonafide purchaser by paying the full consideration amount and there is no illegality in such sale proceeding. In absence of the same, contention of the applicants is not sustainable and the SA may be dismissed.

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From the respective case of both the parties, the

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following points are emerged for adjudication in this case:

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(i) Whether the sale held on 14.07.2023 in favour of the 3^rd defendant and issuance of sale certificate in his favour suffer from any illegality?

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(ii) Whether the applicants are entitled to get any relief in this proceeding?

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FINDINGS:

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Point Nos.(i) and (ii):

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In the SA in ground G, the applicants have challenged the valuation obtained by the defendants before putting the secured asset for sale and it is specifically stated as follows:

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SA 342/2023

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“In this case it is evident that the defendant bank has not obtained a valuation certificate as required under Rule 8(5) of the Rules and to that extent Annexure A1 notice is illegal and liable to be set aside.”

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On the other hand, the defendants in the written statement in paragraph 3.xi it is stated that the valuation report dated 15.06.2022 marked Annexure-D2 was obtained from the approved valuer viz., M/s.Stiffners Property Valuers & Consultants and reserve price was fixed based on such valuation.

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The main question raised in this case whether valuation of the property was properly taken before putting the property for sale as required under R.8(5) of the Security Interest (Enforcement) Rules. Normally the Tribunal does not interfere with the sale conducted by the secured creditor unless there is clear violation of any of the statutory requirements or the sale was conducted collusively, fraudulently, inadequate pricing or underbidding. 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 , it is held as follows:

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“218 . Any sale by auction or other public procurement methods once already confirmed or concluded ought not to be setaside 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

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SA 342/2023

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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.”

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Keeping the ratio in view, it requires evaluation of the materials to find out whether the sale conducted by the defendants in favour of the 3^rd defendant is sustainable.

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R.8(5) of the Security Interest Enforcement Rules reads

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as follows:

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(5) Before effecting sale of the immovable property referred to in sub-rule (1) of Rule 9, the authorised officer shall obtain valuation of the property from an approved valuer and in consultation with the secured creditor, fix the reserve price of the property and may sell the whole or any part of such immovable secured asset by any of the following methods:-

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(a) by obtaining quotations from the persons dealing with similar secured assets or otherwise interested in buying the such assets; or

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(b) by inviting tenders from the public;

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(c) by holding public auction including through e-auction mode; or

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(d) by private treaty.

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Here in this case, the defendants produced valuation report dated 15.06.2022 with the heading ‘TATA CAPITAL’ and at the bottom of the same, name of the valuation agency is mentioned as “Stiffners Property Valuers and Consultants” and the date of inspection is 15.06.2022. During pendency of the case, valuation report of

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SA 342/2023

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“Stiffners Property Valuers and Consultants” was produced by the defendants along with a memo on 04.11.2025. On perusal of the said report, it appears that valuation of the subject matter property is shown as Rs.1,24,38,630/- and distress value as Rs.93,28,973/-. In the said report, nothing is stated how the approved valuer “Stiffners Property Valuers and Consultants” ascertained the valuation of the property. Nothing is mentioned about the Government rate and prevailing market rate of land in the area. No document is also obtained from the locality showing any transaction of selling similar nature of property to ascertain the valuation of the subject matter property. Based upon such defective valuation report, reserve price was fixed and ultimately the property was sold on 14.07.2023 i.e., after one year from the date of obtaining valuation report. The secured creditor is a trustee of the property mortgaged and it cannot sell the same as per its whim. Proper procedure is to be followed in obtaining the valuation report, otherwise it will cause prejudice to the interest of the borrower.

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The Hon'ble Apex Court in the judgment reported in CDJ 2012 SC 454 in the case of Ram Kishun & others vs. State of U.P. & others at paragraph 17 it is held as follows:

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“17. In view of the above, it is evident that there must be an application of mind by the authority concerned while

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SA 342/2023

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approving/accepting the report of the approved valuer and fixing the reserve price, as the failure to do so may cause substantial injury to the borrower/guarantor and that would amount to material irregularity and ultimately vitiate the subsequent proceedings.”

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In the said judgment, the Hon'ble Apex Court has referred its another judgment reported in AIR 1972 SC 1816 in the case of

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State of Orissa & others vs. Harinarayan Jaiswal & others

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wherein it is held that “ a highest bidder in public auction cannot have a right to get the property or any privilege, unless the authority confirms the auction sale, being fully satisfied that the property has fetched the appropriate price and there has been no collusion between the bidders .”

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On perusal of the valuation report, it appears that no proper method was followed by the valuer in determining the valuation of the property. The secured creditor has arbitrarily fixed the reserve price without applying his mind to the valuation report which is not proper. The sale conducted by the defendants in favour of the 3^rd defendant is against the interest of the borrower. The sale was conducted in arbitrary manner without obtaining proper valuation of the property. Even if the sale is confirmed and sale certificate is issued, due to non-obtaining of proper valuation of the

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SA 342/2023

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secured asset, the sale is illegal and the same is liable to be set aside.

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Some other points are raised by the applicants that the sale consideration amount was not deposited within the statutory period and there is no clear 30 days’ notice. The defendants have produced one document marked Annexure-D9 by which the time for deposit of the balance bid amount is extended up to 14.10.2023 and hence the contention on this aspect is not sustainable. So also, as the sale was held on the 10^th sale notice, there is no necessity to issue 30 days’ notice to the applicants. No other illegality is found in the sale proceeding except defective valuation and hence the sale is liable to be set aside. Both the points are answered accordingly.

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The defendants may proceed afresh from the stage of sale by issuing fresh sale notice after obtaining proper valuation of the subject matter property by engaging an approved valuer as prescribed under R.8(5) of the Security Interest Enforcement Rules and proceed with the sale of the secured asset in accordance with law. The bid amount received by the 1^st and 2^nd defendants shall be returned to the 3^rd defendant with interest at the rate prescribed for fixed deposit by the nationalized banks during the period the amount was retained within a period of two months from the date

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SA 342/2023

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of passing of this judgment. Further, for the apparent illegality committed by the defendants in putting the property for sale, the expenses incurred for the sale proceeding shall not be claimed from the borrowers. It is further clarified that in the event of any challenge to the securitization measure in future, the applicants shall not be permitted to raise any issue against the securitization measure up to the stage of issuance of fresh sale notice and this judgement will operate as a bar in raising any contention against such measures as in this proceeding the applicants have failed to establish any illegality in the securitization measure up to the stage of issuance of sale notice.

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Hence it is ordered:-

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ORDER

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In view of the foregoing reasons and with the above observation, the SA is allowed in part. The sale held on 14.07.2023 in favour of the 3^rd defendant and the sale certificate issued and registered in his favour is hereby set aside.

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(Dictated to my PA, corrected and pronounced by me in the open Tribunal on this the 23^rd day of December, 2025)

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[SOVAN KUMAR DASH] PRESIDING OFFICER

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SA 342/2023

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Documents on the part of the applicants

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Annexures Date Particulars of documents Annexure-A1 22.06.2023 Copy of sale notice issued to the applicants.

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Documents on the part of defendants 1 and 2

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Annexure-D1	31.07.2017	Copy of report showing creation of security interest in the CERSAI portal.
Annexure-D2	15.06.2022	Copy of valuation report obtained by the defendants.
Annexure-D3	22.06.2023	Copy of sale notice issued by the defendants.
Annexure-D4	23.06.2023	Copy of postal receipts evidencing despatch of sale notice to the borrowers.
Annexure-D5	26.06.2023	Copy of track consignment confirming delivery of sale notice on the 1^st applicant.
Annexure-D6	26.06.2023	Copy of track consignment confirming delivery of sale notice on the 2^nd applicant.
Annexure-D7	…	Copy of photograph showing affixture of sale notice on the secured asset.
Annexure-D8	…	Copy of photograph showing affixture of sale notice on the secured asset.
Annexure-D9	29.09.2023	Copy of correspondence between the defendants and the auction purchaser.

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SA 342/2023

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Documents on the part of additional 3^rd defendant

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Document No.1	07.09.2023	Copy of letter issued by the defendants to the additional 3^rd defendant.
Document No.2	12.10.2023	Copy of sale certificate issued to the additional 3^rddefendant.
Document No.3	02.06.2023	Copy of judgment in W.P.(C) No.19914/2022 of the Hon'ble High Court of Kerala.
Document No.4	29.09.2023	Copy of letter issued to the additional 3^rd defendant by the defendants granting extension of time for making balance payment.

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PRESIDING OFFICER

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IN THE DEBTS RECOVERY TRIBUNAL2, KERALA AT ERNAKULAM

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PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

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Dated the 23^rd December, 2025

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SA No.342/2023

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Between

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Shahar Abdul Jabbar, S/o.Abdul Jabbar, House No.391, Annavila House, Puthenveedu, Pallimukku, Nilakkamukku P.O., Vakkom, Kadakkavur, Thiruvananthapuram & another. …Applicants

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And

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The Authorised Officer, TATA Capital Housing Finance Ltd., T.C.No.9/2284 (3), Cheruvilakom Buildings, Sasthamangalam, Thiruvananthapuram – 695 010 & 2 others. ...Defendants & additional 3^rd defendant

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F I N A L O R D E R

Shahar Abdul Jabbar v. Tata Capital Housing Finanace Limited

Case brief

What is this about?

What did the court decide?

Shahar Abdul Jabbar v. Tata Capital Housing Finanace Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

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