Partly allowed

Anish Anakkal Balan v. Idbi Bank

DRT16 Jun 2025SA/504/2024

Case brief

AI extract

What is this about?

The DRT set aside two orders appointing an Advocate Commissioner for physical possession under the SARFAESI Act due to mechanical execution and procedural irregularities, while dismissing pleas to set aside the demand and possession notices.

What did the court decide?

Set aside Annexure-A5 and Annexure-A6 orders; dismissed prayer to set aside Annexure-A2 and Annexure-A3 notices.

Anish Anakkal Balan versus Idbi 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 16^th DAY OF JUNE, 2025

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

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S.A No. 504 of 2024

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Between

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Anish Anakkal Balan, S/o. Balan, Proprietor, Anico International, Plot No.2, Sreenivasa Pillai Nagar, Mel Ayanambakkam, Amabattur, Chennai -600 095, residing at M15/1, Lake View Residency, TNHB Phase I and II, Ayapakkam, Chennai-600007, Tamilnadu State.

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--- Applicant

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And

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Authorized Officer, IDBI Bank Limited, PNB Towers, Panampilly Nagar, Kochi – 682 036.

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IDBI Bank Limited, PE VE Plaza, No:9, Laxmi Nagar, Arcot Road, Porur, Chennai – 600 116, Taminadu State, Rep. by its Branch Manager.

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--- Defendants

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SA No.504 of 2024

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This Securitization Application coming on 15.05.2025 for final hearing before me in the presence of Mr. C. Sivadas, Counsel appearing for the Applicant and Mr. Santhosh Kumar K., 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 12.07.2024 seeking to set aside Annexure-A3 possession notice and A5 Order in CMP No.1636/2023 on the file of Chief Judicial Magistrate Court, Manjeri and allow costs to the applicant.

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The applicant has admitted availment of cash credit limit of Rs.40,00,000/- from the 2^nd defendant bank. Though the applicant has admitted the creation of charge under hypothecation on all fixed and current assets of the unit for manufacturing of drilling and pilling equipment, towards the primary security, he has denied the creation of Equitable mortgage of his immovable property, in favour of the 2^nd defendant bank which is the SA subject matter of the property.

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The applicant has himself produced copy of the memorandum of deposit of title deed as Annexure-A1. There is clear recital in Annexure-A1 which reads as follows :

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“Whilst making the deposit of the said title deeds, the Executant stated that he is doing so on his personal capacity with intent to thereby create Equitable Mortgage in favour of the bank by way of Deposit of title Deeds of his immovable property more particularly described in the Schedule – B here under written to secure due repayment, discharge and redemption made to M/s ANICO International, a proprietorship firm having its registered office at Plot No:02, Srinivasa Pillai Nagar, Mel Ayanambakkam, Mogappair West, Chennai -600095.”

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The applicant having executed Annexure-A1 is estopped from contending now that the mortgagor did not sign the Equitable mortgage register and mortgagee did not send the acknowledgment letter containing the format to confirm the mortgage.

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The applicant has admitted his default in repayment of the outstanding loan due to the 2^nd defendant bank. Hence the loan account of the applicant came to be classified as Non-performing Asset on 2.5.2018 and demand notice dated 25.09.2019 Annexure-A2 was issued to the applicant calling upon him to repay the outstanding loan due within a period of 60 days from the date of receipt of the

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Page 2 of 7

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SA No.504 of 2024

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demand notice. The applicant neither sent any objection/ representation to the demand notice nor did he clear off their liability due to the defendant bank.

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Annexure-A3 possession notice dated 29.12.2021 Annexure-A3 was issued for taking physical possession of the secured asset. The defendants have produced Annexure-B1 copies of paper publication in order to show that the possession notice was published in The New Indian Express Kozhikode edition dated 01.01.2022 and in Madhyamam daily dated 01.01.2022. The applicant did not challenge the possession notice within the period of 45 days from the date of issuance of the possession notice. This SA was filed only on 12.07.2024. Therefore, the applicant is not entitled to contend now that possession notice is illegal and that it is liable to be set aside.

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The defendants approached the Chief Judicial Magistrate Court Manjeri and filed Annexure-A4 application and affidavit under Section 14 (1) of the SARFAESI Act, 2002. Annexure-A5 Order dated 18.05.2023 came to be passed in CMP No.1636/23 appointing Advocate Commissioner for taking physical possession of the secured asset.

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It is seen from the perusal of the SA that the learned Chief Judicial Magistrate, Manjeri after having passed Annexure-A5 order passed another order dated 04.05.2025 in MC No.475/2024 for the same outstanding amount as mentioned in Annexure-A5 for taking physical possession of the secured asset. The Advocate Commissioner issued Annexure-A7 notice dated 25.06.2024 to the applicant informing him that he would take physical possession of the secured asset on 24.07.2024. The applicant having aggrieved against the above measures filed this SA seeking for the reliefs stated supra.

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The counsel appearing for the applicant submitted that Annexure-A5 order does not provide the details of the secured asset which has to be taken possession and that after having passed Annexure-A5 order, the learned Chief Judicial Magistrate Manjeri surprisingly passed Annexure-A6 order appointing another Advocate Commissioner to take physical possession of the same secured asset. Though, one Advocate Mr. P.T. Shibi was named as the Advocate Commissioner, Annexure-A7 notice was issued by another Advocate, Shibimol Pulikkathara and that Annexure-A5 order is in a printed format and that therefore, the SA may be allowed as prayed for.

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The counsel appearing for the defendants submitted that the learned Chief Judicial Magistrate, Manjeri after having satisfied the contents of Annexure-A4 application and affidavit passed order for taking physical possession of the secured asset and that due to personal inconvenience, the Advocate Commissioner appointed earlier

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Page 3 of 7

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SA No.504 of 2024

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was not able to execute the warrant and that therefore another Advocate Commissioner was appointed to take physical possession of the secured asset and that hence the SA may be dismissed with costs to the defendants.

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Clause (i) to the provision of Sec.14 (1) of the SARFAESI Act 2002 mandates the Authorized Officer to declare in the affidavit the total claim of the Bank as on the date of filing of the application. On perusal of Annexure-A4 affidavit, it is noticed that the outstanding amount payable by the applicants as on 13.04.2023 is Rs.80,41,953.79. But the application and affidavit was filed before the Chief Judicial Magistrate Court, Manjeri, only on 15.05.2023. Therefore, it is evident that Clause (i) to the provision of Sec.14 (1) of the SARFAESI Act 2002 was not complied with by the defendants. On this ground alone, Annexure-A4 application and affidavit is not sustainable.

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A perusal of Annexure-A5 order clearly establishes the fact that it is an order prepared in a printed format. The date of order, CMP No., cause title, the name of the bank, amount as on the date are written in ink. Therefore, it is evident that the learned Chief Judicial Magistrate, Manjeri mechanically passed the above order by filling up the blanks.

¶35

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

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Page 4 of 7

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SA No.504 of 2024

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the Chief Judicial Magistrate Court, Manjeri in MC No.929/2023.”

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Hence Annexure-A5 order is liable to be set aside in the light of the observation made by the Hon'ble High Court of Kerala in the above cited judgment and on the above said reasons.

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Annexure-A5 order was passed on 18.05.2023 appointing Advocate Commissioner to take physical possession of the secured asset. But surprisingly, as rightly contended by the counsel appearing for the applicants, the learned Chief Judicial Magistrate, Manjeri passed Annexure-A6 order in MC No.475/24 appointing another Advocate Commissioner to take physical possession of the secured asset. It is pertinent to mention herein that the outstanding amount and the date on which the amount is outstanding as mentioned in Annexure-A5 order is mentioned in Annexure-A6 order also. There is no reason in Annexure-A6 order as to whether Annexure-A5 order was recalled prior to passing of Annexure-A6 order or as to why AnnexureA6 order was passed for the same purpose of taking physical possession of the same secured asset. The provision under Section 14(1) of the SARFAESI Act 2002 does not provide any provision for passing another order by the Chief Judicial Magistrate Court, to take physical possession of the secured asset after having passed an earlier order for the same purpose. This Tribunal considers that both Annexure-A5 and A6 orders are illegal and are against the provisions of Section 14 (1) of the SARFAESI Act 2002. In the above said circumstances, both Annexure-A5 and A6 orders are liable to be set aside.

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However, this Tribunal does not find any illegality or irregularity in respect of issuance of Annexure-A2 demand notice and A3 possession notice.

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In view of the foregoing reasons and discussions, this Tribunal holds that the defendants are not entitled to take physical possession of the secured asset pursuant to Annexure-A5 and A6 orders passed.

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Resultantly, S.A No.504 of 2024 stands partly allowed in respect of the relief sought for setting aside Annexure-A5 and A6 orders and SA stands partly dismissed in respect of the relief sought for setting Annexure-A2 demand notice and A3 possession notice.

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Page 5 of 7

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SA No.504 of 2024

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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 for taking physical possession of the secured asset by filing petition and affidavit afresh under Section 14 (1) of the SARFAESI Act 2002.

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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 pronounced by me in the open court on this the 16^th day of June, 2025.

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(Su. WILLYAHM) PRESIDING OFFICER

Mj/

Page 6 of 7

SA No.504 of 2024

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

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Sl.	Date	Particulars
No.
1.	06.01.2025	True copy of Memorandum of deposit of title deeds by the applicant.	Annexure-A1
2.	25.09.2019	True copy of demand notice issued by 2^nd defendant.	Annexure-A2
3.	29.12.2021	True copy of possession notice issued byKozhikodeBranchofdefendant bank	Annexure-A3
4.	15.05.2023	True copy of application, CMP No.1636/2023 filed by the 1^stdefendant before the Chief Judicial Magistrate Court,Manjeri.	Annexure-A4
5.	18.05.2023	True copy of the order in CMP No.1636/2023 on the file of the Chief Judicial Magistrate Court,Manjeri.	Annexure-A5
6.	04.05.2025	True copy of the order in MC No.475/2024 of Chief Judicial Magistrate Court,Manjeri	Annexure-A6
7.	25.06.2024	True copy of the notice issued by the Advocate Commissioner in MC No.475/2024 of Chief Judicial Magistrate Court,Manjeri.	Annexure-A7

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List of documents filed by the defendants along with the written

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statement

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Sl.	Date	Particulars
No.
1.	01.01.2022	True copies of the news paper	Annexure-B1
		publications in The New Indian Express Kozhikode edition and in Madhyamam daily.

(Su. WILLYAHM)

PRESIDING OFFICER

Mj/

Page 7 of 7

Anish Anakkal Balan v. Idbi Bank

Case brief

What is this about?

What did the court decide?

Anish Anakkal Balan v. Idbi Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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