Partly allowed

Devassia K T v. State Bank of India

DRT12 Sept 2025SA/477/2024

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal applied Section 14 of the SARFAESI Act, setting aside a Chief Judicial Magistrate's printed format order for appointing an advocate commissioner and the subsequent possession notice, following High Court precedent, while dismissing challenges to NPA classification and initial demand notices.

What did the court decide?

Annexure-A4 order appealed against and Annexure-A5 notice are set aside; NPA classification, demand notice, and possession notices are upheld.

Devassia K T versus State Bank of India — 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 12^th DAY OF SEPTEMBER, 2025

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

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S.A No. 477 of 2024

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Between

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K.T. Devassia, S/o.Thomas, Kadaprayil House,

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Nilambur – 679 330.

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Chinnamma K.J.,

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W/o. Devassia K.T., Kadaprayil House,

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Nilambur – 679 330.

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Nithin K. Devassia, S/o. Devassia K.T., Kadaprayil House, Nilambur – 679 330.

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--- Applicants

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And

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The Authorized Officer, State Bank of India,

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Stressed Assets Management Branch, 1112, Raja Plaza, Avinashi Road,

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Coimbatore -641 037, Tamil Nadu.

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State Bank of India, S.M.E. Malappuram Branch, Nechikkad Building, Up Hill P.O., Malappuram-676505

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Rep. by its Branch Manager.

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--- Defendants

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SA No.477 of 2024

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This Securitization Application coming on 29.08.2025 for final hearing before me presence of Mr. Susmith Kumar, Counsel appearing for the applicants and Mr. Tom K. Thomas, Counsel appearing for the defendants and upon hearing arguments of learned Counsels for both the parties 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 01.07.2024 seeking to set aside Annexure-A1 demand notice and Annexure-A2, A2(a), A2(b) and A2 (c) possession notices and Annexure-A5 notice issued by the Advocate Commissioner and to declare that Annexure-A3 application and Annexure-A4 Order are infirmity and allow the cost to the applicants.

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The applicants have admitted the availment of various credit facilities from the 2^nd defendant bank upon creation of equitable mortgage over their immovable properties as the collateral security in favour of the 2^nd defendant bank.

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The applicants have averred in the SA that both loan accounts were serviced regularly without any default. The applicants have not produced any material in order to prove their above contention. However, it is revealed from the perusal of the written statement of the defendants that since the applicants failed to regularize their loan accounts, their loan accounts were classified as Non-Performing Asset on 17.01.2023 in accordance with the guidelines issued by the RBI.

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Therefore, Annexure-A1 demand notice dated 08.06.2023 Annexure-A1 was issued to the applicants calling upon them to repay the outstanding loan due within a period of 60 days from the date of receipt of the demand notice. The receipt of the demand notice was admitted by the applicants. The applicants 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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Therefore, Annexure-A2, 2(a), 2(b) and 2(c) possession notices were issued for symbolically taking physical possession of the four items of the secured assets. The defendants have produced Annexure-B1 to B3 copies of photographs in order to prove their contention that Annexure-A2, 2(a), 2(b) and 2(c) possession notices were affixed on the conspicuous parts of the secured assets. Annexure-B5 and B6 copies of paper publications produced by the defendants evidences the publication of the aforesaid possession

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Page 2 of 7

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SA No.477 of 2024

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notices in The Hindu edition dated 03.12.2023 and in Malayala Manorama edition dated 03.12.2023.

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Subsequently, the defendants approached the Chief Judicial Magistrate Court, Manjeri and filed Annexure-A3 application and affidavit under Section 14 (1) of the SARFAESI Act, 2002. AnnexureA4 Order dated 17.04.2024 came to be passed in MC No.439/24 appointing Advocate Commissioner for taking physical possession of the secured assets. The Advocate Commissioner issued Annexure-A5 notice dated 27.05.2024 to the applicants informing them that he would take physical possession of the secured asset after 15 days from the date of receipt of the notice. The applicants having aggrieved against the above measures filed this SA seeking for the reliefs stated supra.

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The counsel appearing for the applicants submitted that since item Nos.3 and 4 of the secured assets are agricultural properties, these properties are exempted u/s 31 (i) of the SARFAESI Act 2002. Item No.1 of the secured asset is situated in Nilambur Village and the 2^nd item of the secured asset is situated in Mampad Village and the 3^rd and 4^th items of the secured assets are situated in Pullipadam village. Hence, Annexure-A4 order passed directing the Advocate Commissioner to seek assistance of the Village Officer of Nilambur to take possession of all the items of the secured assets is illegal. He further submitted that since Annexure-A4 order is a printed format order, it is illegal and is liable to be set aside.

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The counsel appearing for the defendants submitted that item Nos.3 and 4 of the secured assets are not agricultural properties. Annexure-A6 and A7 certificates issued by the Village Officer, Pullipadam village are not the reliable documents to prove that these properties were the agricultural properties on the date of creation of security interest over the same. The learned Chief Judicial Magistrate, Manjeri after having perused the contents of the affidavit and the relevant documents and after having satisfied over the same, passed Annexure-A4 order. Therefore, Annexure-A4 order is legal and valid. It does not suffer from any infirmity or illegally. Therefore, A5 notice issued by the Advocate Commissioner is legal and valid. The fact that properties are situated in different villages does not vitiate Annexure-A4 order. Hence SA may be dismissed with cost to the defendants.

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The applicants having received Annexure-A1 demand notice did not send any objection/representation stating that item Nos. 3 and 4 are agricultural properties. A perusal of Annexure-A6 and A7 certificates shows that the Village Officer, Pullipadam issued the certificates without making personal inspection to the properties. Further, there is no mention in the above certificates that these

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Page 3 of 7

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SA No.477 of 2024

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properties were the agricultural properties on the date of creation of security interest over the same. Hence, the certificates which are self serving documents cannot be relied upon to prove the contention of the applicants that these properties are the agricultural properties.

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A perusal of Annexure-A4 order passed in MC No.439/24 by the learned Chief Judicial Magistrate, Manjeri shows that the date of passing of the order, names of the petitioner and the respondents is written in ink. The date of the outstanding liability and the outstanding amount is also written in ink. Even the date of passing of order is also written in ink. The name of the Advocate Commissioner and the name of the Village Office and the Station House Officer is also written in ink. Therefore, it is evident that the aforesaid particulars were filled in an already prepared printed format order.

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The Hon'ble High Court of Kerala has held in The South Indian Bank Ltd. Vs. Jahfer M. [judgment dated 18.03.2025 in OP (DRT) No.336 of 2024] has held as follows :

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“Though the exercise of jurisdiction by the Magistrate under Section 14 of the SARFAESI Act does not involve any adjudication, the act of the Magistrate in passing orders in printed form by filling in necessary details in blank spaces cannot be justified under any circumstances. It cannot be forgotten that the power under Section 14 of the SARFAESI Act involves drastic consequences and that is why the Parliament conferred the power to take action under Section 14 of the SARFAESI Act on high officials such as District Magistrate or the Chief Judicial Magistrate Court. While it may not be necessary to examine the correctness of the averments in the affidavit filed by a bank/financial institution in support of the application for orders under Section 14 of the SARFAESI Act, the Magistrate must clearly apply his mind to the averments in the application and determine as to whether procedure contemplated has been followed before passing an order under Section 14 of the SARFAESI Act. Therefore, I have no doubt in my mind that the Tribunal was justified in setting aside the order of the Chief Judicial Magistrate Court, Manjeri in MC No.929/2023.”

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Therefore, it is doubtful as to whether the learned Chief Judicial Magistrate, Manjeri would have applied his judicial mind to the contents of Annexure-A3 application and affidavit and the documents filed in MC No.439/24. In the above said circumstances, AnnexureA4 order passed in MC No.439/24 by the learned Chief Judicial Magistrate, Manjeri is liable to be set aside. Consequently, Annexure-

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Page 4 of 7

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SA No.477 of 2024

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A5 notice issued by the Advocate Commissioner to take physical possession of the secured asset is also liable to be set aside.

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However, this Tribunal does not find any procedural irregularity in respect of classification of loan accounts as NPA and issuance of Annexure-A1 demand notice and possession notices Annexure-A2, A2(a), 2(b), and 2(c). Therefore, the above said measures are not liable to be set aside.

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In view of the foregoing reasons and discussions, S.A. No.477/2024 stands partly allowed in respect of the relief pertaining to Annexure-A4 Order and Annexure-A5 notice issued by the Advocate Commissioner and S.A. partly stands dismissed in respect of the reliefs pertaining to other measures initiated by the defendants under SARFAESI Act 2002 and the Rules made there under.

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However, it is made clear that there shall be no bar for the defendants to approach the Chief Judicial Magistrate Court, Manjeri, again for taking physical possession of the secured asset in accordance with law.

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There shall be no order as to costs.

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Dictated to Steno, taken down, transcribed, typed by him, corrected and

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pronounced by me in the open court on this the 12^th day of September, 2025.

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(Su. WILLYAHM) PRESIDING OFFICER

Mj/

Page 5 of 7

SA No.477 of 2024

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

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Sl. No.	Date	Particulars
1.	08.06.2023	True copy of the demand notice	Annexure-A1
2.	29.11.2023	True copy of the possession notice issuedin Item No.1property.	Annexure-A2
3.	29.11.2023	True copy of the possession notice issuedin Item No.2 property.	Annexure-A2a
4.	29.11.2023	True copy of the possession notice issuedin Item No.3 property.	Annexure-A2b
5.	29.11.2023	True copy of the possession notice issuedin Item No.4property	Annexure-A2c
6.	---	True copy of the affidavit and application in MC No.439/2024 before the Chief Judicial Magistrate Court, Manjeri.	Annexure-A3
7.	17.04.2024	True copy of the order in MC No.439/2024 before the Chief Judicial Magistrate Court,Manjeri.	Annexure-A4
8.	27.05.2024	True copy of the notice issued by the Advocate Commissioner	Annexure-A5
9.	28.01.2023	True copy of the certificate No.90/2023 issued by Village Officer, Pullipadam village.	Annexure-A6
10.	28.01.2023	True copy of the certificate No.89/2023 issued by Village Officer, Pullipadam village.	Annexure-A7

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

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Sl. No.	Date	Particulars
1.	---	Copy of Photograph showing affixture of Annexure-A2 possession notice on the secured assets.	Annexure-B1
2.	---	Copy of Photograph showing affixture of Annexure-A2(a) possession notice on the secured assets.	Annexure-B2
3.	---	Copy of Photograph showing affixture of Annexure-A2(b) possession notice on the secured assets.	Annexure-B3

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Page 6 of 7

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SA No.477 of 2024

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4.	---	Copy of Photograph showing affixture of Annexure-A2(c) possession notice on the secured assets.	Annexure-B4
5.	03.12.2023	True copy of news paper publication published in The Hindu.	Annexure-B5
6.	03.12.2023	True copy of news paper publication published in Malayala Manorama	Annexure-B6

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(Su. WILLYAHM) PRESIDING OFFICER

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Mj/

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Page 7 of 7

Devassia K T v. State Bank of India

Case brief

What is this about?

What did the court decide?

Devassia K T v. State Bank of India

Case brief

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