Dismissed

Jose George v. State Bank of India

DRT26 Nov 2025SA/61/2024

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal dismissed an applicant's application challenging a bank's seizure and sale of mortgaged land under the SARFAESI Act. The Tribunal rejected claims that the land was agricultural property exempt from severance, relying on a prior affidavit declaring it residential. It also upheld the validity of the auction sale at the reserve price, finding no illegality in the recovery p

What did the court decide?

Application dismissed with costs of Rs.20,000/- payable by the applicant.

Jose George versus State Bank of India — 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 26^th day of November, 2025

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SECURITIZATION APPLICATION No.61/2024

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Between

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Jose George, S/o.Georgekutty, Ambalakkulam House, Athirampuzha P.O., Kottayam – 686 562. …Applicant

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And

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State Bank of India, Stressed Assets Recovery Branch, RS Building, M.G.Road, Ernakulam - 682 011.

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M/s.Mereena Trading and Exports, 50/130, Mareena Arcade, Ponevazhy Cross Road, Edappally, Kochi – 682 026.

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Xavier Kutty K.J., S/o.Joseph James, Managing Partner, Mereena Trading and Exports, BMRA-4, Balakrishna Menon Road, Edappally, Kochi – 680 024.

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Sony James, S/o.Joseph James, Partner, M/s.Mereena Trading and Exports, 25/51, Flat No.24, Puthethu House, Poovatha P.O., Vaikom, Kottayam – 686 562.

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SA 61/2024

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Alice Xavier,

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W/o.Xavier Kutty, Balakrishna Menon Road, Edappally, Kochi – 682 024. …Defendants

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Shajimon M.K., S/o.Kuttappan, Peroor Kara, Peroor Village, Perooor P.O., Kottayam – 686 537.

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K.P.Kuruvila, Kanaattu House, Peroor Village, Perooor P.O., Kottayam – 686 537.

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Joy Abraham, Cheruparambil, Kanakkari P.O., Kottayam – 686 632. …Additional defendants

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[Additional defendants 6 and 7 were impleaded as per order dated 23.02.2024 in IA No.760/2024 and additional 8^th defendant was impleaded as per order dated 23.02.2024 in IA No.799/2024]

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This Securitization Application having been heard on 30.10.2025 and 21.11.2025 in the presence of Advocate Sri.V.Philip Mathews for the applicant, Advocate Sri.M.Jithesh Menon for the 1^st defendant and Advocate Sri.Paul Abraham Vakkanal for additional defendants 6 to 8 and stood over to this day for consideration, the Tribunal delivered the following:

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SA 61/2024

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F I N A L O R D E R

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Challenging the sale notice issued by the defendant bank 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 applicant/guarantor has filed this SA under S.17(1) of the SARFAESI Act seeking relief to set aside Annexure-A14 sale notice issued by the 1^st defendant. By way of amendment, the applicant challenged the proceeding initiated before the CJM, Kottayam under S.14 of the SARFAESI Act with a prayer to set aside the same.

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Brief facts of the case :

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2.1 The applicant and defendants 3 to 5 stood as sureties to the cash credit limit of Rs.250 lakhs, letter of credit of Rs.450 lakhs and credit exposure limit for FBC of Rs.24 lakhs, totaling to Rs.724 lakhs availed by the 2^nd defendant partnership firm constituted by defendants 3 and 4. The said loans were sanctioned in the year 2010. Due to default in repayment by defendants 2 to 4, securitization proceeding was initiated and OA No.245/2020 was also filed by the 1^st defendant for recovery of the outstanding amount.

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SA 61/2024

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2.2 The applicant claims that the property mortgaged by him for the loans availed by defendants 2 to 4 is agricultural land exempted under S.31(i) of the SARFAESI Act. In support of his claim, the applicant has produced certificates dated 30.11.2023 issued by the Village Officer and Agricultural Officer marked Annexures-A6 and A7 and some photographs. Further, it is averred in the SA that the defendant bank, in collusion with the 3^rd defendant (brother of his wife) obtained various documents from the applicant and he was compelled to renew the loans. After 2017, the applicant refused to renew the loans and the guarantee. The defendant bank has assured that his property will not be the subject matter of the securitization proceeding but they did not keep up their promise and proceeded against the same.

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2.3. The defendant bank issued sale notice on 06.01.2024 for e-auction of the secured asset of the applicant on 30.01.2024 showing the total dues as Rs.4,93,00,649.69 and the upset price was fixed at Rs.1.80 crores. The securitization proceeding, being barred in respect of the agricultural land, the entire sale proceeding is illegal. Hence this SA is filed praying to set aside the sale notice marked Annexure-A14 with some consequent relief.

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SA 61/2024

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The 1^st defendant appeared on 05.02.2024 and submitted that the Kottayam property of the applicant is already sold and the sale is confirmed. The auction purchasers were impleaded as parties to this case. After hearing both sides, an order was passed on 05.04.2024 permitting the 1^st defendant to issue sale certificate, which is subject to the outcome of the SA. Subsequently, when the measure under S.14 of the SARFAESI Act was taken by the 1^st defendant/secured creditor before the CJM, Kottayam, the said proceeding was challenged by amending the SA. Considering the entire materials on record and keeping in view of the direction of the Hon'ble High Court of Kerala, the stay application was rejected. Since no stay was granted, physical possession of the secured asset was taken and the same was handed over to the auction purchasers.

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An Advocate Commissioner was appointed by the Tribunal to know about the present status of the subject matter property and the commissioner submitted a report. Subsequently, the applicant has prayed that a restraint order may be passed against the auction purchasers not to construct any new house over the purchased property. However, such prayer was refused considering the substantial amount deposited by the auction

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SA 61/2024

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purchasers but a direction was given to them to furnish an undertaking before the Tribunal that in the event the applicant will succeed in the SA, the auction purchasers will restore status quo of the land as on the date of taking possession by them at their cost within a reasonable period of two months without claiming any equity for such construction. The said order was challenged by the auction purchasers before the Hon'ble High Court of Kerala in O.P.(DRT) No.47/2025, which was disposed by judgment dated 13.06.2025 directing this Tribunal to dispose the SA within a period of three months from the date of receipt of a copy of the judgment and the direction to give an undertaking by the auction purchasers shall not be enforced. Accordingly, all the pending IAs are taken into consideration and orders were passed therein. As the SA could not be disposed within the stipulated time as fixed by the Hon'ble High Court, further extension was sought and the Hon'ble Court granted two months’ time from 15.10.2025 for disposal of the SA.

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In the SA the applicant has raised the following main contentions:

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(i) The secured asset having planted with high yield rubber trees is an agricultural land exempted under the provision of S.31(i) of the SARFAESI Act.

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SA 61/2024

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(ii) The applicant has not renewed the guarantee after 2017 and hence taking the securitization measures in respect of his property is not sustainable.

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(iii) All the statutory measures for sale of the secured asset are not taken which vitiates the sale proceeding.

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(iv) Secured asset was not properly valued by the Authorized officer keeping in view of the market price at the relevant time and reserve for the E-auction was not properly fixed which vitiates the entire sale proceeding.

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(iv) Physical possession of the secured asset was taken in violation of the statutory requirements and the order passed by the CJM, having not been proper and valid, taking possession is also illegal.

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6.1 The 1^st defendant filed written statement denying the

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averments and claimed inter alia that the sale was held pursuant to Annexure-A14 sale notice and confirmed the same and sale certificate was issued to the auction purchasers. There is no illegality or legal infirmity in the procedure adopted in the securitization proceeding at the stage of putting the property for sale as well as taking possession of the secured asset with the assistance of the Advocate Commissioner appointed by the CJM,

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SA 61/2024

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Kottayam. Due to default in repayment by defendants 2 to 5, the loan was classified as NPA on 27.09.2018 and demand notice under S.13(2) of the SARFAESI Act was issued on 10.06.2020 calling the borrowers and guarantors to repay the outstanding but no step was taken to redeem the loans. Consequently, symbolic possession of the property was taken on 05.03.2022 under S.13(4) of the SARFAESI Act by following all the statutory provisions under the SARFAESI Act and the Rules framed thereunder.

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6.2 It is also claimed that the property was put on sale four times earlier but did not fructify. The 5^th sale notice was issued on 06.01.2024 marked Annexure-A14 putting the property of an extent of 42.90 Ares of land of the applicant who acquired the same vide sale deed No.1435/1981 and gift deed No.2243/1981. The sale notice was duly served on the applicant and acknowledgement card is produced along with the counter affidavit filed in IA No.323/2024. The sale notice was also affixed at the conspicuous part of the immovable property and the same was also published in two widely circulated newspapers of the locality on 09.01.2024 as per statutory requirement and all the relevant documents are produced. The sale was fructified on 30.01.2024 and defendants 6 to 8 purchased the property at a sale price of Rs.1.80 crores. The sale was confirmed

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SA 61/2024

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on 30.01.2024. The physical possession of the secured asset was taken and the same was handed over to the auction purchasers and they are in possession of the same.

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6.3 The mortgage was created by the applicant on 04.12.2010. At the time of sanction of loans, no document was produced to show that the secured asset was used exclusively for agricultural purpose. The 1^st defendant furnished one indemnitycum-affidavit dated 25.07.2014 filed along with counter affidavit in IA No.323/2024 wherein the applicant declared that the mortgaged property is a residential plot which is not an agricultural land and rubber trees are commonly seen in almost all the properties in the locality which can be removed for construction of the residential buildings at any time. The applicant has also confirmed the right of the bank to invoke the provisions of the SARFAESI Act against the said land in case the borrower commits any default in repayment of the loan. So also, at the time of creation of security interest, possession certificate was obtained from the Village Officer which shows that the secured asset is a ‘purayidom’ i.e., homestead which also falsifies the claim of the applicant. Having no illegality in any of in the sale proceeding as well as taking of physical possession of the secured asset, the SA is liable to be dismissed.

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SA 61/2024

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The defendants 6 to 8/auction purchasers filed separate written statements denying the claim of the applicant and reiterated similar contentions averred by the 1^st defendant. Their main contention is that they, being the highest bidders at the public auction and having deposited the entire consideration amount and possession of the property was handed over to them by the secured creditor, claim of the applicant is liable to be dismissed.

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The applicant filed replica on 22.04.2025 denying the contentions raised by the defendants but no contention was raised against the indemnity-cum-affidavit executed by him in the year 2014 declaring the secured asset as a residential land.

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From the respective case of both the parties, the

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following points emerged for adjudication in this case:

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(i) Whether the secured asset is agricultural land exempted under the provision of S.31(i) of the SARFAESI Act?

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(ii) Whether the securitization proceeding including the sale proceeding suffers from any illegality to interdict with the same?

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SA 61/2024

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(iii) Whether the applicant is entitled to get any relief in this proceeding?

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FINDINGS:

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Point No.(i):

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The applicant claims that the secured asset is an agricultural land having with rubber plantation which was described in the letter of arrangement dated 30.07.2014 issued by the defendant bank. In the said document, out of the collaterals furnished, two items of properties i.e., item Nos.(iv) and (v) are described as follows:

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(iv) 24.28 Ares (60 cents) of yielding Rubber plantation in Athirampuzha Panchayat, Kottayam Taluk in Sy.No.809/4 B1 in the name of Mr.Jose George.

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(v) 18.62 Ares (46 cents) of yielding Rubber plantation in Athirampuzha Panchayat, Kottayam Taluk in Sy.No.809/4 Re-Sy.No.384/2 in the name of Mr.Jose George .

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So also, in the subsequent document i.e., letter of arrangement dated 27.11.2015, the properties are described in the similar line. In order to strengthen his case, the applicant has relied upon a certificate issued by the Village Officer on 30.11.2023 stating that total extent of 42.54 Ares of property is cultivated with rubber trees which is in possession of the applicant. But the certificate does not

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show from which date the rubber trees are in existence over the property, age of the trees and the surroundings of the land. The

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SA 61/2024

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applicant has also produced similar certificate from one Agricultural Officer indicating that rubber is being cultivated over 42.54 Ares of land but the said report is also silent on which date the rubber trees are planted and whether the applicant planted the rubber trees treating the property as agricultural land on the date of availing the loan in the year 2014.

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The main contention of the applicant is that the sanction letters indicate existence of yielding rubber trees over the properties and thus he established that at the time of availing the loans, the secured assets were treated by the lender as rubber yielding lands. To meet the situation, the defendant bank has produced an indemnity-cum-affidavit executed by the applicant on 25.07.2014 at the time of creation of security interest over the subject matter property. In the said affidavit, the applicant has stated as follows:

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“1. That I am guarantor to Rs.3,75,00,000/- (Rs. Three Crore Seventy Five lakhs only) loan provided to M/s.Mereena Trading and Exports, and I am in possession and enjoyment of the landed property owned by me admeasuring 60 Cents in Sy.No.809/4 B1, Athirampuzha Village, Kottayam Taluk, Kottayam District with right of way thereto which has been offered as security for the credit facilities (referred to hereafter as the ‘said land’).

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2. I confirm that the said land is a residential plot with proper access through road and is not an agriculture land. Rubber trees are commonly seen in almost all the properties in the

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SA 61/2024

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locality and even in the surroundings of the houses. In the said land also rubber trees are planted, which shall be removed for construction of residential buildings at any time. It may be noted that this a holding of 60 cents of land only with two sides tarred public road and there are houses in the nearly plots.

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3. I do hereby confirm the right of the Bank to invoke the provisions of the SARFAESI Act, 2002 against the said land in case the borrower, M/s.Mereena Trading and Exports, commit any default in repayment of the loan with interest in accordance with the terms and conditions of the loan contained in the loan documents executed in favour of the Bank.

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4. I am aware that the Bank has considered sanction of the loan to M/s.Mereena Trading and Exports on the basis of the declaration as aforesaid made by me. I confirm that I am bound by my declaration and I am stopped from claiming otherwise. I do hereby agree and undertake to indemnify the Bank against any claim, loss or damage that the Bank may suffer or is likely to suffer on account of sanction of loan to M/s.Mereena Trading and Exports on the strength of my declaration.

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5. I declare that whatever is stated by me herein is true to the best of my knowledge, information and belief.”

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In view of the affidavit, the applicant has declared the secured land as residential property and the rubber trees are commonly seen in almost all the properties of the locality. It is also stated that in the event of default, the secured creditor can invoke the provisions of the SARFAESI Act and he is bound by the declaration and he would not claim otherwise in future.

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In the SA at the initial stage, the applicant has not

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whispered anything about this claim till the affidavit was filed along

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SA 61/2024

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with counter affidavit in IA No.323/2024 by the defendant bank on 20.02.2024. Based upon the said document, an order was passed in dismissing the stay application by referring the judgment of the Hon'ble High Court of Kerala reported in MANU/KE/4077/2022 in the case of Rahiya.P v. Authorised Officer, The South Indian

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Bank Ltd. & others and the said order is not set aside by any forum. After the lapse of more than one year on 02.08.2025, the applicant filed amendment application claiming that he has never executed or sworn any affidavit and he filed a criminal case against the defendants. After such amendment, the defendant bank filed additional written statement denying such claim and reiterated about execution of the affidavit by the applicant voluntarily while tendering the properties as security for the loans. No evidence is led by the applicant to prove the contentions in such document is erroneous and he has not stated the same. The document was executed in the year 2014. Filing of criminal case against the said document after the lapse of ten years and disputing the same in this proceeding is purely afterthought which is purely dilatory tactics intended to create hurdle in the securitization measures initiated by the 1^st defendant.

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SA 61/2024

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The Tribunal has limited jurisdiction, and it cannot adjudicate fraud or forgery in execution of any documents and civil court is the competent forum to adjudicate the same. The Hon'ble Apex Court in the order dated 09.01.2025 in Civil Appeal No.1876/2016 in the case of Central Bank of India & another

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vs. Prabha Jain & others it is held as follows:

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“18. Further, the SARFAESI Act is enacted essentially to provide a speedy mechanism for recovery of debts by banks and financial institutions. The SARFAESI Act has not been enacted for providing a mechanism for adjudicating upon the validity of documents or to determine questions of title finally. The DRT does not have the jurisdiction to grant a declaration with respect to the mortgage deed or the sale deed as sought by the Plaintiff. The jurisdiction to declare a sale deed or a mortgage deed being illegal is vested with the civil court under Section 9 of the Code of Civil Procedure.”

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In view of this ratio, the Tribunal cannot adjudicate such controversy in this summary proceeding. The applicant has liberty to claim against the said document in proper forum instead of raising such contention in this proceeding.

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The law is well settled on the point that when a person claiming exclusion of secured asset from the purview of securitization measures on the ground of agricultural nature, it is his bounden duty to establish that at the time of availing the loan the secured asset was exclusively used for agriculture purpose and he has intention to retain such agriculture nature even if he creates

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SA 61/2024

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mortgage over the same. No such evidence is available on record nor the applicant has taken step to establish the same.

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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 Constructions Pvt. Ltd. & others had held that “ When it was the case on behalf of the borrowers that in view of Section 31(i) of the SARFAESI Act, the properties were agricultural lands, the same were being exempted from the provisions of the SARFAESI Act, the burden was upon the borrower to prove that the secured properties were agricultural lands and actually being used as agricultural lands and/or agricultural activities were going on.” In another judgment reported in 2018 (4) SCC 793 in the case of ITC Limited vs. Blue Coast Hotels Ltd. & others , the Hon'ble Apex Court held at paragraph 38 as follows:

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“38 . 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

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SA 61/2024

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Section 2 (zf) 36. Thus, security interest cannot be created in respect of property specified in Section 31.”

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The above judgments are referred to at the time of adjudication of the stay application and it was held that the applicant has failed to establish that the secured asset was agriculture land at the time of availing the loans. Further, in view of the indemnity-cum-affidavit sworn by the applicant, he cannot turn around and raise contrary in view of the judgment passed by the Hon'ble High Court of Kerala in the case of Rahiya.P v. Authorised Officer, The South Indian

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Bank Ltd. (supra). The applicant has failed to establish the secured asset as agriculture land or he has intention to retain the agriculture nature of the property. In view of the indemnity-cumaffidavit, he is estopped from claiming contrary in this proceeding.

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During pendency of the case, an Advocate Commissioner was appointed to find out the present status of the secured land. The photograph produced by the commissioner shows that there is a big residential house over the subject matter property which situates by the side of the public road and also the Advocate commissioner found indication of cutting of some trees. The commissioner has also stated that the said land is situated within the residential area. Even if the report is accepted as correct, it goes against the claim of the applicant. Mere existence of some

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SA 61/2024

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rubber trees, the land cannot be treated as agricultural in absence of proof of intention of the applicant to retain the agricultural nature of the land by plantation of rubber trees, which is not established in this case. Mere existence of rubber trees over the subject matter property, which is very common in the state of Kerala, would not establish the claim of the applicant in seeking exemption on the ground of agricultural land under the provision of the SARFAESI Act. Existence of rubber trees over any land may be treated as agricultural land under any general law or special law but for the purpose of SARFAESI Act it is necessary to establish certain additional essential points as decided by the Hon’ble Apex Court as referred earlier which the applicant has failed to establish in this case and also by his conduct he is not entitled to claim any exemption under SARFAESI Act. Hence the commission report is also not helpful to the applicant to establish his claim. Hence point No.(i) is answered against the applicant.

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Point Nos.(ii) & (iii):

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Claim of Non-extension of guarantee:

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In the SA the applicant has claimed in paragraph 7 that the 3^rd defendant is none other than brother of his wife, and he was made to believe that the security created is only for a limited period

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SA 61/2024

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and that the same shall be released soon. The loan was renewed in the year 2014. Subsequently, he issued a letter marked AnnexureA9 dated 03.05.2017 expressing his intention in not renewing the guarantee in respect of the loan availed by the 3^rd defendant. On perusal of Annexure-A9, it appears that the said letter was issued by M/s.Mereena Trading and Exports praying to release two items of properties of the applicant on furnishing of equal amount of collateral security. No material is placed showing that the 3^rd defendant produced any collateral security for the same, rather the subsequent arrangement letter marked Annexure-A10 dated 21.06.2017 would show that the loan was renewed and the parties including this applicant had signed over the same. Hence the contention on this aspect is not sustainable.

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Claim against the proceeding under section 14 of the SARFAESI Act:

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During pendency of the SA, the applicant has challenged the subsequent measure taken by the 1^st defendant. The Advocate Commissioner being appointed by the CJM, Kottayam issued notice dated 10.05.2024 marked Annexure-A21 for taking possession of the secured asset. In such amendment, nothing illegality in the order passed by the CJM in the proceeding under

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SA 61/2024

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S.14 of the SARFAESI Act is whispered. In the course of arguments, learned counsel for the applicant contended that since the secured asset is an agricultural land, order of the CJM in MC No.208/2024 in appointing an Advocate Commissioner to take possession of the secured asset is illegal. Already it is found that the secured asset is not exempted under S.31(i) of the SARFAESI Act and the applicant also failed to establish that the secured asset was an agricultural land at the time of creation of security interest. In view of such finding, the order passed by the CJM, which is purely administrative in nature, cannot be said as illegal and hence interference with the same is not at all warranted. The physical possession of the secured asset is already taken by the secured creditor and handed over to the auction purchasers. In absence of substantial prejudice to the applicant, he is not entitled to get any relief against the measure taken under S.14 of the SARFAESI Act.

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Claim against the Sale:

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Due to default in repayment and non-recovery of the outstanding amount, securitization proceedings were initiated. No step was taken by the borrower and guarantors to redeem the loan. The 1^st defendant issued two separate sale notices on 06.01.2024 putting item Nos.1 to 3 properties of the letter of arrangement

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dated 21.06.2017 marked Annexure-A10 and another sale notice in respect of item Nos.4 and 5 of the present applicant at a reserve price of Rs.1.80 crores. In Annexure-D1(d) valuation report dated 26.10.2023 obtained from an approved valuer, it is stated that the total extent of land considered for valuation in Re-Sy.No.384/2 is 42.54 Ares (105 cents). The guideline rate for the property is Rs.1,11,157.89 per cent, prevailing market rate on local enquiry is Rs.2 lakhs per cent and assessed/adopted rate of valuation is Rs.1.80 lakhs per cent. Based upon the same, estimated value of the land is determined as Rs.1,89,19,800/-. It is mentioned that total realizable value of the property is Rs.1.70 crores and distress value is Rs.1.50 crores. Based upon such valuation, reserve price for e-auction of the property was fixed at Rs.1.80 crores. The defendants 6 to 8 became the successful bidders in the sale held on 30.01.2024 and sale certificate was issued in their favour for the entire land of 42.54 Ares on 15.04.2024.

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The sale was challenged by the applicant on the

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following grounds:

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(i) All the statutory provisions are not duly complied in issuing the sale notice and sale certificate.

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(ii) The property is not properly valued.

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SA 61/2024

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To substantiate the claim and to refute the valuation report produced by the secured creditor, the applicant has produced a valuation report obtained from one Chartered Engineer viz., P.M.Subrahmanian wherein the valuation is shown as Rs.3.94 crores by fixing the market rate at Rs.3.75 lakhs per cent. It is only a single line statement, and it is not mentioned in the valuation report from which source the market value was obtained, and guideline rate of the Government is also not taken. In such premises, the valuation report produced by the applicant is not at all helpful to him to prove the valuation placed by the 1^st defendant as incorrect. On this aspect also, the contention of the applicant is not sustainable.

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The applicant has challenged the proceeding about noncompliance of the statutory requirements. The 1^st defendant has produced acknowledgement cards evidencing receipt of AnnexureA14 sale notice marked Annexure-R1(d). The photograph also produced showing affixture of the sale notice on the secured asset marked Annexure-R1(e) and two paper publications dated 09.01.2024 in Mathrubhumi in vernacular language and in Hindu in English language. There is no dispute that the sale was fructified on 30.01.2024. It is not the first sale notice and hence there was clear

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SA 61/2024

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15 days’ notice in issuing the sale notice by registered post to the applicant, publication in two widely circulated newspapers and affixture of the same on the secured asset. Compliance of all the statutory requirement is well established in the case by the secured creditor by placing all relevant documents.

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Annexure-A14 sale notice dated 06.01.2024 was issued scheduling the e-auction on 30.01.2024 in respect of the property of an extent of 42.54 Ares (42.54 Ares as per revenue documents and 42.9 Ares as per title deed) at a reserve price of Rs.1,80,00,000/-. The sale certificate marked Annexure-R1(a) produced along with counter affidavit in IA No.1756/2025 on 14.07.2025 shows that the property was sold to defendants 6 to 8 who offered the highest bid of Rs.1,80,00,000/- equivalent to the reserve price as per the sale notice.

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The question arises whether the Authorised Officer has committed any illegality in selling the property to defendants 6 to 8 at a price similar to the reserve price of Rs.1,80,00,000/-. In the SA the applicant has not raised any question of illegality on this point. But keeping in view of R.9(2) of the Security Interest Enforcement Rules, this Tribunal considers to decide the said legal point. Accordingly, both sides were given sufficient opportunity to argue

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on the legal points. R.9(2) of the Security Interest Enforcement

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Rules reads as follows:

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(2) The sale shall be confirmed in favour of the purchaser who has offered the highest sale price in his bid or tender or quotation or offer to the authorized officer and shall be subject to confirmation by the secured creditor:

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Provided that no sale under this rule shall be confirmed, if the amount offered by sale price is less than the reserve price, specified under sub-rule (5) of Rule 8:

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Provided further that if the authorized officer fails to obtain a price higher than the reserve price, he may, with the consent of the borrower and the secured creditor effect the sale at such price .

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The second proviso says that if the authorised officer fails to obtain a price higher than the reserve price, he may, with the consent of the borrower and the secured creditor effect the sale at such price. In view of this provision, discretion is given to the Authorised Officer to sell the property.

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The learned counsel for the 1^st defendant cited a judgment of the Hon'ble High Court of Kerala reported in 2010 (4) KHC 537 in the case of Varghese Ukken & another vs. State Bank of India & others wherein second proviso to R.9(2) of the Security Interest Enforcement Rules was considered. The Hon'ble High Court explained the proviso and held that this provision is applicable in case the sale is held lesser than the reserve price and in such circumstance, consent of the borrower and secured creditor

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is necessary. In selling the property at the same price of the reserve price fixed for sale, consent of the borrower is not necessary. The learned counsel has also referred a judgment of the Hon'ble High Court of Delhi reported in (2022) 1 HCC (Del) 292 in the case of Mahipal Singh Yadav vs. Union Bank of India

¶155

and another wherein similar view was expressed by the Hon'ble Court by referring the judgment of the Hon'ble High Court of Kerala in the Varghese Ukken case supra.

¶156

In the above judgments, the Hon'ble High Court of Kerala and Hon'ble Delhi High Court have referred the Division Bench judgment of the Hon'ble Madras High Court reported in AIR 2010 Madras 93 in the case of K.Ramaselvam vs. Indian Overseas Bank wherein the Madras High Court held contrary to the conclusion arrived by the Hon'ble High Courts of Kerala and Delhi that in respect of the sale at a price equal to the reserve price, consent of the borrower/defaulter was essential and accordingly sale was intercepted as it is violative of the second proviso to R.9(2) of the Security Interest (Enforcement) Rules. But this Tribunal being situated within the jurisdiction of the Hon'ble High Court of Kerala, as a precedent the principle laid down in the judgment of Varghese Ukken case (supra) is binding on this

¶157

SA 61/2024

¶158

¶159

Tribunal wherein the intention of the statute was explained. Based upon the same, it is concluded that the Authorised Officer has not committed any illegality by selling the property to defendants 6 to 8 at a price similar to the reserve price fixed by the 1^st defendant.

¶160

In view of the discussions made above, no illegality was

¶161

found in the sale held by the 1^st defendant in respect of the impugned item of property in pursuance to Annexure-A14 sale notice dated 06.01.2024 in favour of defendants 6 to 8. In absence

¶162

of any illegality, the applicant is not entitled to get any relief and both the points are answered against the applicant.

¶163

Hence it is ordered:-

¶164

ORDER

¶165

In view of the foregoing reasons, the SA, being devoid of any merit, is hereby dismissed with costs of Rs.20,000/- (Rupees twenty thousand only) payable by the applicant to the defendant bank for causing unnecessary delay in the securitization proceedings.

¶166

(Dictated to my PA, corrected and pronounced by me in the open Tribunal on this the 26^th day of November, 2025)

¶167

[SOVAN KUMAR DASH] PRESIDING OFFICER

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SA 61/2024

¶169

¶170

Documents on the part of the applicant

¶171

Annexures	Date	Particulars of documents
Annexure-A1	03.05.2020	Copy of relevant portion of No.245/2022 filed before DRT-1.	OA
Annexure-A2	13.04.2012	Copy of letter of arrangement issued the defendant bank.	by
Annexure-A3	28.03.2014	Copy of letter of arrangement issued the defendant bank.	by
Annexure-A4	30.07.2014	Copy of letter of arrangement issued the defendant bank.	by
Annexure-A5	27.11.2015	Copy of letter of arrangement issued the defendant bank.	by
Annexure-A6	30.11.2023	Copy of certificate issued by the Vill Officer, Athirampuzha.	age
Annexure-A7	30.11.2023	Copy of certificate issued by Agricultural Officer, Athirampuzha.	the
Annexure-A8	…	Copy of photographs showing current status of property.	the
Annexure- A8(a)	…	Copy of photograph showing the curr status of property.	ent
Annexure- A8(b)	…	Copy of photograph showing the curr status of property.	ent
Annexure- A8(c)	…	Copy of photograph showing the curr status of property.	ent
Annexure-A9	03.05.2017	Copy of letter issued to the defend bank for release of two items properties.	ant of
Annexure-A10	21.06.2017	Copy of letter of arrangement issued the defendant bank.	by
Annexure-A11	21.06.2017	Copy of revival letter executed by borrower and guarantors.	the
Annexure-A12	23.11.2023	Copy of account statement showing payment.	the

¶172

SA 61/2024

¶173

¶174

Annexure-A13 28.11.2023 Copy of reply issued to the applicant by the Village Officer, Thalayazham.

¶175

Annexure-A14 06.01.2024 Copy of sale notice issued by the defendant bank.

¶176

Annexure-A15 02.01.2004 Copy of certificate of registration under the price stabilization fund scheme of Rubber Board, Kottayam.

¶177

Annexure-A16 21.11.2019 Copy of latex test certificate issued by Rubber Board.

¶178

Annexure-A17 08.12.2020 Copy of latex test certificate issued by Rubber Board.

¶179

Annexure-A18 29.01.2021 Copy of latex test certificate issued by Rubber Board.

¶180

Annexure-A19 02.08.2021 Copy of test certificate issued by Manimalayar Rubbers Pvt. Ltd.

¶181

Annexure-A20 21.01.2022 Copy of test certificate issued by Manimalayar Rubbers Pvt. Ltd.

¶182

Annexure-A21 10.05.2024 Copy of notice issued by the Advocate Commissioner appointed by the CJM, Kottayam.

¶183

Annexure-A22 17.02.2024 Copy of MC No.208/2024 filed by the 1^st defendant before the CJM, Kottayam.

¶184

Annexure-A23 11.03.2024 Copy of order in MC No.208/2024 of the CJM, Kottayam.

¶185

Documents on the part of the 1^st defendant [Documents produced along with written statement]

¶186

Annexure- D1(a)	13.02.2024	Copy of judgment of the Hon'ble High Court of Kerala in W.P.(C) No.4926/2024.
Annexure- D1(b)	12.12.2013	Copy of possession certificate issued by the Village Officer, Athirampuzha.
Annexure-	04.10.2023	Copy of valuation report of the
D1(c)		secured asset in respect of 42.54 Ares.

¶187

SA 61/2024

¶188

¶189

Annexure26.10.2023 Copy of valuation report of the D1(d) secured asset.

¶190

[Documents produced along with counter affidavit in IA No.759/2024]

¶191

Annexure- R1(a)	25.07.2014	Copy of indemnity-cum-affidavit shown by the applicant before a Notary Public.
Annexure- R1(b)	25.07.2014	Copy of indemnity-cum-affidavit shown by the applicant.
Annexure- R1(c)	12.12.2013	Copy of possession certificate issued by the Village Officer, Athirampuzha.
Annexure- R1(d)	…	Copy of acknowledgement card signed by the applicant.
Annexure- R1(e)	11.01.2024	Copy of photograph evidencing affixture of sale notice on the secured asset.
Annexure- R1(f)	09.01.2024	Copy of publication of sale notice in Mathrubhumi daily.
Annexure- R1(g)	09.01.2024	Copy of publication of sale notice in The Hindu daily.

¶192

[Document produced along with counter affidavit in IA No.1756/2025]

¶193

Annexure-	15.04.2024	Copy of sale	certificate issued to
R1(a)		defendants 6 to	8.

¶194

Documents on the part of defendants 6 to 8

¶195

Annexure-	14.05.2024	Copy of Thandaper account issued by
R(a)		the Village Officer, Athirampuzha.
Annexure-	14.05.2024	Copy of land tax receipt issued by the
R(b)		Village Officer, Athirampuzha.
Annexure-	14.05.2024	Copy of possession certificate issued
R(c)		by the Village Officer, Athirampuzha.

¶196

SA 61/2024

¶197

¶198

Annexure-	02.07.2024	Copy of report	filed by	the Ad	vocate
R(d)		Commissioner Kottayam.	before	the	CJM,

¶199

PRESIDING OFFICER

¶200

IN THE DEBTS RECOVERY TRIBUNAL2, KERALA AT ERNAKULAM

¶201

PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

¶202

Dated the 26^th November, 2025

¶203

SA No.61/2024

¶204

Between

¶205

Jose George, S/o.Georgekutty, Ambalakkulam House, Athirampuzha P.O., Kottayam – 686 562. …Applicant

¶206

And

¶207

State Bank of India, Stressed Assets Recovery Branch, RS Building, M.G.Road, Ernakulam - 682 011 & 7 others. …Defendants & additional defendants

¶208

F I N A L O R D E R

¶209

SA No.61/2024 21.11.2025

¶210

Advocate V Philip Mathews learned counsel for the applicant is present. Advocate Jithesh Menon learned counsel for the defendant nos.1 and 2 and Advocate Paul Abraham Vakanal learned counsel for the defendant Nos.6,7 and 8 are also present. Heard arguments from both sides. List the case for Judgment on 26.11.2025.

¶211

Presiding Officer

¶212

SA No.61/2024 26.11.2025

¶213

.............. In view of the foregoing reasons, the SA, being devoid of any merit, is hereby dismissed with costs of Rs.20,000/(Rupees twenty thousand only) payable by the applicant to the defendant bank for causing unnecessary delay in the securitization proceedings (vide separate final order).

¶214

Presiding Officer

Jose George v. State Bank of India

Case brief

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Jose George v. State Bank of India

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