Dismissed

Prakash Kumar C v. South Indian Bank

DRT30 Oct 2025SA/418/2023

Case brief

AI extract

What is this about?

The Tribunal dismissed an application to set aside a securitization proceeding and possession notice. It held that the secured land, though partly agricultural, was not exclusively used for agriculture to attract Section 31(i) exemption, and no illegality was found in the bank's Section 14 proceedings.

What did the court decide?

Securitization application dismissed; applicants to pay costs of Rs.20,000 to respondents.

Prakash Kumar C versus South Indian Bank — 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 30^th day of October, 2025

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SECURITIZATION APPLICATION No.418/2023

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Between

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Prakash Kumar C., Aged 60 years, S/o. Kumaran Nair, Chitiath Nandavanam House, Chenathunadu, Chalakkudy P.O., Thrissur – 680 307.

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Madhura Meenakshi A.V. Aged 55 years, W/o. Prakash Kumar C., Chitiath Nandavanam House, Chenathunadu, Chalakkudy P.O., Thrissur – 680 307. …Applicants

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And

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The Authorised Officer, South Indian Bank Ltd., Regional Office, Platinum Jubilee Building, Civil Line Road, Ayyanthole, Thrissur District, PIN 680 003.

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South Indian Bank Ltd., Mission Quarters Branch, Opp: All Saints Church, Main Road, Mission Quarters, Thrissur District, PIN – 680 001. …Defendants

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SA 418/2023

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This Securitization Application having been heard on 27.10.2025 in the presence of Advocate Mr. Zakir Hussain for the applicants and Advocate Shri. C. Ajith Kumar & Rajeevu L.G. for the defendants 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 proceeding 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 have filed this SA under S.17(1) of the SARFAESI Act praying to set aside the said proceeding.

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Brief facts of the case :

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2.1 In this case, the applicants challenged Annexure-A5 possession notice issued under Section 13(4) of the SARFAESI Act. Subsequently the defendants/secured creditors filed application under Section 14 of the SARFAESI Act before the Chief Judicial Magistrate Court, Thrissur to take physical possession of the secured asset, which is challenged by the applicants by amending the SA.

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SA 418/2023

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2.2 The main contention is raised by the applicants in this

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SA are as follows:-

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(i) The secured asset having an extent of 21.95 Ares of land comprised in Survey No.604/2 of Kizhakke Chalakkudy Village as agricultural land for which securitization measure is not maintainable. Though there is a residential house over 4 cents of land out of the said property, the balance land is used for agriculture, ie., for cultivation of vegetables and other seasonal crops. Hence the applicants cannot be dispossessed in the securitization proceeding in view of the bar contained under the provision of SARFAESI Act.

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(ii). The affidavit filed by the Authorised Officer before the Chief Judicial Magistrate Court in the proceeding under Section 14 of the SARFAESI Act is not as per the statutory requirement as contained under Section 14(1) of the proviso of the SARFAESI Act. Hence in this SA the defendants cannot evict the applicants by obtaining the Order in an illegal proceeding. Hence the applicants claim for setting aside Annexure-A5 possession notice as well as the Order passed by the Chief Judicial Magistrate Court, Thrissur in CMP No.7562/2023 including the notice issued by the Advocate Commissioner to take possession of the secured asset.

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The defendant bank contested the claim by denying the

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claim advanced by the applicants. It is contended that the applicants availed financial assistance in the year 2017 by way of KCC Crop Finance by furnishing security of 128.75 Acres of land of

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SA 418/2023

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Mankada Village and also the applicants furnished collateral security of the subject matter property of an extent of 21.95 Ares of land along with the residential building thereon measuring an extent of 3500 sq. ft. and other things thereto. The defendants are proceeding in respect of the 21.95 Ares of land in this securitization proceeding which is used as residential building of the applicants. The applicants have furnished declaration at the time of availing the loan that the properties are used as residential building. Hence the contrary claim in respect of the said land is not acceptable and tenable also. All the measures in the securitization proceeding are taken as per the statutory requirement. The relevant documents are filed. Hence the SA, having no merit, is liable to be dismissed.

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From the respective case of the applicants and defendants, the following points are emerged for adjudication in this case:

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

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

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

SA 418/2023

FINDINGS

Point No.(i):-

In the course of argument, the learned counsel for the applicants raised the similar contention in support of his case and contended that the securitization proceeding is not maintainable in respect of agricultural land under Section 31(i) of the SARFAESI Act. Merely because there is a building over the subject matter property, status of the land cannot be changed. It is used as agricultural land by the applicants since long. Hence the proceeding is not sustainable.

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It is also contended that the proceeding under

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Section 14 of the SARFAESI Act is not as per the provision contained in the SARFAESI Act. Where the affidavit in support of the declaration by the Authorised Officer is not duly submitted. Hence the order passed by the Chief Judicial Magistrate is vitiated.

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The learned counsel for the defendants would contend in rebutting the contention of the learned counsel for the applicants that at the time of availing the loan, the applicants furnished B1 and B2 letters admitting the land used for residential purpose. Now the contrary claim is not sustainable and the applicants are not entitled to any protection. All the relevant documents showing

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SA 418/2023

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compliance of statutory requirements are filed. Hence the SA, being devoid of any merit is liable to be dismissed.

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Admittedly the applicants availed the agriculture loan from the defendants by creating security interest in respect of the two items of property having an extent of 21.95 Ares of land in Chalakkudy Village and 128.75 Ares of agricultural land of Mankada Village. The applicants also did not dispute about the existence of a residential building of 3500 sq. ft. over the land of an extent of 21.95 res of land for which the securitization proceeding is initiated. It is also not disputed by the applicants that they defaulted in repaying the loan, resulting classifying the loan as ‘NPA’ and the securitization measure was taken by the defendants under the provision of SARFAESI Act.

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The law is very well settled on the point that the person claiming exemption under the provision of SARFAESI Act on the ground of agriculture nature of the secured asset, the burden lies on him to establish the same. Mere claiming the loan as agriculture without any supporting material such benefit cannot be given to the claimant.

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

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SA 418/2023

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Constructions Pvt. Ltd. & others by referring its earlier two judgments reported in 2018 (4) SCC 793 and 2018 (18) SCC 252 in the case of ITC Limited vs. Blue Coast Hotels Ltd. & others and

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Indian Bank & another vs. K.Pappireddiyar & another, held as

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follows:-

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“7.1 The purpose of enacting Section 31(i) of the SARFAESI Act has been considered by this Court in the case of Blue Coast Hotels Ltd. (Supra) in paragraph 36, which reads as under:

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“36. The purpose of enacting Section 31(i) and the meaning of the term “agricultural land” assume significance. This provision, like many others is intended to protect agricultural land held for agricultural purposes by agriculturists from the extraordinary provisions of this Act, which provides for enforcement of security interest without intervention of the Court. The plain intention of the provision is to exempt agricultural land from the provisions of the Act. In other words, the creditor cannot enforce any security interest created in his favour without intervention of the court or tribunal, if such security interest is in respect of agricultural land. The exemption thus protects agriculturists from losing their source of livelihood and income i.e. the agricultural land, under the drastic provision of the Act. It is also intended to deter the creation of security interest over agricultural land as defined in Section 2(1)(zf)35. Thus, security interest cannot be created in respect of property specified in Section 31.”

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7.2 Thus, as per the law laid down by this Court in the aforesaid two decisions, only in a case where the secured property is actually put to use as agricultural land and solely on the basis of the revenue records / Pattadar and once the secured property is put as a security by way of mortgage etc. meaning thereby the same was not treated as agricultural land, such properties cannot be said to be exempted from the provisions of the SARFAESI Act under Section 31(i) of the SARFAESI Act. Applying the law laid down in the aforesaid

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SA 418/2023

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two decisions to the facts of the case on hand and when no evidence was led at all on behalf of the borrowers that the secured properties in question were actually put to use as agricultural land and/or any agricultural activity was going on, the High Court has committed an error in applying Section 31(i) of the SARFAESI Act and quashing and setting aside the entire Possession Notice, Auction Notice as well as Sale etc.”

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In view of this ratio the burden lies on the parties to establish agriculture nature of the secured asset at the time of availing the loan claiming exemption under Section 31(i) of the SARFAESI Act.

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The Hon’ble Apex Court is also held by relying the earlier Judgment of the Hon’ble Apex Court in ITC Limited vs. Blue Coast Hotels Limited & Others and Indian Bank & another vs. K.Pappireddiyar and Another (2018) 15 SCC 99 : 2018 Legal Eagle (SC) 189 it was held that the borrower having led no evidence that the secured properties in question were actually put to use as agriculture land, exemption under Section 31(i) of the SARFAESI Act cannot be given to the borrower.

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Here in this case, the applicants admitted that there is a residential building over 21.95 Ares of land. No evidence is relied that at the time of creation of security interest the said land is used exclusively for agricultural purpose. After receipt of the demand notice under Section 13(2) of the SARFAESI Act, no objection was also raised under Section 13(3-A) of the SARFAESI Act claiming

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SA 418/2023

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exemption of the subject matter property on the ground of agricultural nature. Mere producing a xerox copy of a report issued by the Agricultural Officer, marked Annexure-A1 dated 31.10.2019, the burden is not discharged by the applicants. Further the said certificate relates to other land of Mankada Village. The applicants have miserably failed to establish the secured asset as agriculture land on the date of availing the loan. In absence of any concrete material, the subject matter property cannot be held agricultural land exempted under Section 31(i) of the SARFAESI Act and hence this issue is answered against the applicants.

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

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The defendants have produced all relevant documents including the CERSAI certificate, which is not disputed by the applicants. There is no pleading about any illegality in the proceeding under Section 14 of the SARFAESI Act. In absence of any material it cannot be said that the Order passed by the Chief Judicial Magistrate suffers from any illegality to interdict with the same. The Authorised Officer filed the affidavit as per the statutory requirement stating the details. In paragraph 11 it is specifically stated that as on 21.08.2023 an amount of Rs.9,08,47,596.41 is due. Being satisfied with the materials, the learned Chief Judicial

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SA 418/2023

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Magistrate passed the order in appointing an Advocate Commissioner to take possession of the secured asset, which cannot be said illegal in any manner to interdict with the same. No material defect in the proceeding under Section 14 of the SARFAESI Act causing any substantial prejudice to the applicants is found to hold the proceeding as illegal. In absence of any proof of illegality in the securitization proceeding, the applicants are not entitled to get any reliefs. Hence both the points are answered against the applicants.

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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 above observation, this SA, being devoid of any merit, is hereby dismissed with costs of Rs.20,000/- (Rupees Twenty Thousand only) payable by the applicants to the defendants, due to causing unnecessary delay in the securitization proceeding.

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(Dictated to my PA, corrected and pronounced by me in the open Tribunal on this the 30^th day of October, 2025).

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[SOVAN KUMAR DASH] PRESIDING OFFICER

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SA 418/2023

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Documents on the part of the applicants

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Annexures	Date	Particulars of documents
Annexure-A1	31.10.2019	True copy of the certificate issued by the Village Officer, Mankada.
Annexure-A2	14.03.2023	True copy of the notice issued under Section 13(2) of the SARFAESI Act.
Annexure-A3		True copy of the Loan Account Statement.
Annexure-A4	23.09.2022	True copy of the renewal sanction issued by the 2^nddefendant bank.
Annexure-A5	03.07.2023	True copy of notice issued by the defendant under Section 13(4) of the SARFAESI Act to the applicants.
Annexure-A6	05.07.2023	True copy of the email sent by the 1^st applicant to the defendants.
Annexure-A7	11.07.2023	True copy of the letter submitted by the applicants before the 1^stdefendant.
Annexure-A8	27.07.2023	True copy of the reply received from the 1^st defendant.
Annexure-A9	27.09.2023	True copy of the notice issued by the Advocate Commissioner.
Annexure-A10	25.07.2024	True copy of the Judgment in OP (DRT) No.241/2024 of the Hon’ble High Court of Kerala.
Annexure-A11	22.08.2023	True copy of the Crl. M.P. No.7562/2023 filed by the Authorised Officer of the 1^st defendant bank before the Chief Judicial Magistrate Court, Thrissur.
Annexure-A12		True copy of the affidavit filed by the Authorised Officer of the 1^stdefendant bank before the Chief Judicial Magistrate Court, Thrissur in Crl. M.P. No. 7562/2023.
Annexure-A13	11.09.2023	True copy of the Order in Crl. M.P. No. 7562/2023 of the Chief Judicial Magistrate Court, Thrissur.

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SA 418/2023

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Documents on the part of the defendants

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Annexure-B1	10.11.2017	True copy of the letter evidencing deposit of title deeds executed by the
		1^st applicant in favour of the defendants.
Annexure-B2	10.11.2017	True copy of the letter evidencing deposit of title deeds executed by the
		1^st applicant in favour of the defendants.
Annexure-B3		True photocopy of the affixture of Annexure-A5.
Annexure-B4	05.07.2023	True photocopy of the paper publication of Annexurwe-A5 in Hindu daily.
Annexure-B5	05.07.2023	True photocopy of the paper publication of Annexurwe-A5 in Deshabimani daily.
Annexure-B6		True copy of the CERSAI registration of the secured asset.
Annexure-B7		True copy of the loan account statement of the 1^st applicant maintained with defendants pertaining to KCC Crop Finance.
Annexure-B8		True copy of the loan account statement of the 1^st applicant maintained with defendants pertaining to Agri Short Term Loan.

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PRESIDING OFFICER

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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 the 30^th October, 2025

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SA No.418/2023

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Between

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Prakash Kumar C., Aged 60 years, S/o. Kumaran Nair, Chitiath Nandavanam House, Chenathunadu, Chalakkudy P.O., Thrissur – 680 307 & Anr. …Applicants

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And

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The Authorised Officer, South Indian Bank Ltd., Regional Office, Platinum Jubilee Building, Civil Line Road, Ayyanthole, Thrissur District, PIN 680 003 & Anr. …Defendants

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F I N A L O R D E R

Prakash Kumar C v. South Indian Bank

Case brief

What is this about?

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Prakash Kumar C v. South Indian Bank

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