Dismissed

Basil Co. v. Kerala Gramin Bank

DRT24 Nov 2025SA/376/2023

Case brief

AI extract

What is this about?

The Tribunal dismissed the applicant's Securitization Application challenging an order for physical possession of secured agricultural assets. The court held that the applicant failed to establish a justifiable reason for loan default, that insurance claim refusal was not a valid excuse, and that Section 14 relief could be sought independently of Section 13(4) proceedings.

What did the court decide?

Dismissed the Securitization Application as the applicant failed to prove his case and is not entitled to the reliefs sought.

Basil Co. versus Kerala Gramin Bank — Banking and Recovery | DRT (2025)

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL - 1 AT ERNAKULAM

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DATED THIS 24^th DAY OF NOVEMBER, 2025

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PRESENT: Su. WILLYAHM, B.Sc., M.L. [DISTRICT JUDGE - Retd] PRESIDING OFFICER

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S.A No.376 of 2023

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Between

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Basil C.O., S/o. Ouseph, Chovvaran House, Kalady P.O, Ernakulam – 683 574.

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--- Applicant

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And

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Kerala Gramin Bank, Rep. by the Authorized Officer, Regional Office, Ernakulam, Coastal Towers, Samskara Jn, Palarivattom, Ernakulam-682025.

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--- Defendant

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This Securitization Application coming on 13.08.2025 and 27.08.2025 for final hearing before me in the presence of Mr.K.Madhusoodanan, Counsel appearing for the defendant and the counsel for the applicant having failed to appear and advance argument and upon hearing argument of learned Counsel for the defendant and upon perusing the material on records, this Tribunal delivered the following:

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O R D E R

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This Securitisation Application was filed on 04.07.2023 seeking to set aside the order passed by the Additional Chief Judicial Magistrate Court (MPs/MLAs) Ernakulam in MC No. No.381/2022 declaring the same as illegal and improper.

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SA No.376 of 2023

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The applicant and his wife Mini Basil availed MSRCC loan of Rs.10,00,000/- on 09.12.2016 and HLG loan of Rs.8,00,000/- on 30.03.2018 from the defendant bank upon creation of equitable mortgage by deposit of title deed in respect of the immovable property admeasuring an extent of 4.86 Ares of land together with building comprised in Sy. No.455/4 in Kalady village, Aluva Taluk, Ernakulam District. The applicant had availed the insurance policy from the New India Assurance Co. Ltd. against any damage or loss in respect of the stock kept by the applicant.

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Default in repayment of the outstanding loan due is admitted by the applicant in the SA. Therefore, the loan account of the applicant was classified as Non-Performing Asset and Annexure-A3 demand notice dated 16.09.2019 was issued to the applicant and his wife calling them to repay the outstanding loan due within a period of 60 days from the date of receipt of the demand notice. Annexure-B1 and B2 which are postal acknowledgment cards evidences the service of the demand notice on the applicant and his wife. It cannot be disputed that they neither sent any objection/representation to the demand notice nor did they clear off their liability due to the defendant bank.

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Since the applicant and his wife failed to respond to the terms of the demand notice, Possession Notice dated 09.01.2020 Annexure-A4 was issued for symbolically taking physical possession of the secured asset. Subsequently, the defendant approached the Additional Chief Judicial Magistrate Court (MPs/MLAs), Ernakulam and filed application and affidavit. Order came to be passé in MC No.381/2022 appointed Advocate Commissioner for taking physical possession of the secured asset. The Advocate Commissioner issued Annexure-A6 notice to the applicant and his wife informing them that he would take physical possession of the secured asset on any day after the expiry of 14 days from the date of issuance of the notice. The applicant having aggrieved against the above measures filed this SA seeking for the reliefs stated supra.

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It is contended by the applicant that due to the massive floods and rain fall occurred in the year 2018, the applicant’s property and stock of spices stored in the property were damaged and that though the applicant had taken insurance policy with the New India Assurance Co. Ltd. as per Annexure-A1, the claim of the applicant was not considered by the above said company, citing vague reasons in Annexure-A2 letter dated 31.03.2019 and that due to the aforesaid reason, the applicant could not make repayment towards the outstanding loan due.

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Page 2 of 6

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SA No.376 of 2023

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it is contended further by the applicant that the request of the applicant for restructuring his loan account was not considered by the defendant and that possession notice Annexure-A4 was not published in news papers and was not affixed on the secured asset and that applicant who is not a wilful defaulter is willing to clear the entire liability due to the defendant bank and that exorbitant rate of interest and penal interest has been charged. Section 14 proceedings is erroneous and the Additional Chief Judicial Magistrate (MPs/MLAs) Court, Ernakulam, erred in concluding the requirements of Sec. 14 of the SARFAESI Act 2002. Proper affidavit and petition was not filed before the Additional Chief Judicial Magistrate Court (MPs/MLAs), Ernakulam. Therefore, Annexure-A6 notice issued by the Advocate Commissioner is invalid. Hence the SA may be allowed as prayed for.

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The counsel appearing for the defendant submitted that the possession notice was served, affixed and published in news papers and that demand notice and possession notice was served to the coborrower, who is the wife of the applicant and that the loans were availed during the year 2016 and 2018. Hence the rain fall and floods are not the only reasons for the failure of the applicant to pay the outstanding loan due. The claim of the applicant with regard to the claim of the insurance had to be dealt with by the New India Assurance Co. Ltd. Proper affidavit and application were filed in MC No.381/2022. The learned Additional Chief Judicial Magistrate (MPs/MLAs), Ernakulam after having fully convinced with the averments of the application and affidavit and verification of all the relevant documents passed order appointing Advocate Commissioner to take physical possession of the secured asset. The security interest has been registered with the Central registry as per Annexure-B5. Therefore, the SA may be dismissed with cost of the defendant.

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The defendant has produced Annexure-B3 and B4 in order to show that Annexure-A4 possession notice was published in The Indian Express edition dated 15.01.2020 and Deepika edition dated 15.01.2020. Though the possession notice was issued as early as on 09.01.2020, the applicant did not file SA challenging the same. This SA was filed only on 04.07.2023. Hence the challenge made by the applicant with regard to the alleged non-affixture of the possession notice on the secured asset is unsustainable. Be that as it may, the Hon’ble Supreme Court has held in Standard Chartered Bank Vs. Noble Kumar and Others ( (2013) 9 SCC 620 ) that Section 14 of the SARFAESI Act can be invoked even without initiating proceedings under Section 13 (4) of the SARFAESI Act.

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The alleged refusal of the aforesaid Insurance Co. to sanction the claim made by the applicant cannot be considered as a justifiable reason in making repayment towards outstanding loan due. Further it is revealed from the perusal of the averment of the written statement

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Page 3 of 6

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SA No.376 of 2023

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of the defendant that though both credit facilities were availed in the year 2016 and 2018, no substantial payment was made by the applicant even prior to the alleged floods which occurred in the year 2018.

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The applicant has not specifically pointed n the SA as to how the exorbitant interest and penal interest has been charged in the account of the applicant. Annexure-B5 copy of ID based search report evidences the registration of the security interest with the central registry.

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The applicant has not produced copy of the application and affidavit filed in MC No.381/2022 before the Additional Chief Judicial Magistrate Court (MPs/MLAs), Ernakulam. He has also not produced copy of the order passed in MC No.381/2022 before the Additional Chief Judicial Magistrate Court (MPs/MLAs), Ernakulam. Therefore, the contention of the applicant that the defendant failed to comply with the statutory requirements under Clauses (i) to (ix) to the provisions of Section 14 (1) of the SARFAESI Act 2002 and the Additional Chief Judicial Magistrate Court (MPs/MLAs), Ernakulam passed order without verifying the contents of the affidavit is liable to be rejected.

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The applicant has failed to prove his case so as to get the relief sought for in the SA. In view of the foregoing reasons, this Tribunal holds that the applicant is not entitled to get the reliefs sought for in this SA.

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Resultantly, S.A No.376 of 2023 stands dismissed. However, there shall be no order as to costs.

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Dictated to Steno, taken down, transcribed, typed by him, corrected and pronounced by me in the open court on this the 24^th day of November, 2025.

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(Su. WILLYAHM) PRESIDING OFFICER

Mj/

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SA No.376 of 2023

S C H E D U L E

All that part and parcel of the land having an extent of 4.86 Ares of land comprised in Sy. No.455/4 in Kalady village, Aluva Taluk, Ernakulam District with building bearing No.XII/582 situated therein.

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(Su. WILLYAHM) PRESIDING OFFICER

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Page 5 of 6

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SA No.376 of 2023

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List of documents filed by the Applicant along with the S.A.

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Sl. No.	Date	Particulars
1.	---	True copy of policy document issued by theinsurance company.	Annexure-I
2.	31.03.2019	True copy of the letter issued by the insurance company to the applicant with regard to the closure ofthe claim.	Annexure-2
3.	16.09.2019	True copy of the Demand Notice issued by the defendant.	Annexure-3
4.	09.01.2020	True copy of the Possession Notice issued by the defendant.	Annexure-4
5.	25.05.2023	True copy of the Advocate Commissioner notice.	Annexure-5
6.	---	True copy of notice dated nil issued by the Advocate Commissioner in MC No. No.381/2022.	Annexure-6

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List of documents filed by the defendant along with the written statement

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Sl. No.	Date	Particulars
1.	---	Copy of postal Acknowledgment card of DemandNotice ofapplicant.	Annexure-B1
2.	---	Copy of postal Acknowledgment card of DemandNotice served toMini Basil.	Annexure-B2
3.	15.01.2020	Copy of the Indian Express daily.	Annexure-B3
4.	15.01.2020	Copy of the Deepika daily.	Annexure-B4
5.	---	Copy of the Search report evidencing CERSAI registration.	Annexure-B5

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(Su. WILLYAHM) PRESIDING OFFICER

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Mj/

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Page 6 of 6

Basil Co. v. Kerala Gramin Bank

Case brief

What is this about?

What did the court decide?

Basil Co. v. Kerala Gramin Bank

Case brief

What is this about?

What did the court decide?

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