Dismissed

Asma Beevi v. South Indian Bank

DRT30 Jul 2025SA/656/2024

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal dismissed the applicants' securitization application challenging the bank-initiated proceedings under the SARFAESI Act. The court held that statutory measures for possession notice were complied with, and defects in the Section 14 affidavit were not material.

What did the court decide?

The Securitization Application was dismissed; proceedings and possession order were upheld.

Asma Beevi versus South Indian Bank — Banking and Recovery | DRT (2025)

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SA 656/2024

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IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA

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AT ERNAKULAM

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PRESENT: SRI. SOVAN KUMAR DASH PRESIDING OFFICER

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Dated this the 30^th day of July, 2025

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SECURITIZATION APPLICATION No.656/2024

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Between

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Asma Beevi, Aged 61 years, W/o. late Muhammed Haneefa, Anakkaru Veedu, Kumily, Labbakandam, Idukki – 685 509.

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Muhammed Rasheed, Aged 42 years, S/o. late Muhammed Haneefa, Anakkaru Veedu, Kumily, Labbakandam, Idukki – 685 509.

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Muhammed Rafeeq, Aged 40 years, S/o. late Muhammed Haneefa, Anakkaru Veedu, Kumily, Labbakandam, Idukki – 685 509.

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Sharaffudeen, Aged 35 years, S/o. late Muhammed Haneefa, Anakkaru Veedu, Kumily, Labbakandam, Idukki – 685 509.

…Applicants

SA 656/2024

And

South Indian Bank Ltd., Regional Office, Kottayam, 1^st Floor, Regency Square, K.K. Road, Collectorate P.O., Kottayam – 686 002.

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Authorised Officer, South Indian Bank Ltd., Regional Office, Kottayam, 1^st Floor, Regency Square, K.K. Road, Collectorate P.O., Kottayam – 686 002. …Defendants

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This Securitization Application having been heard on 24.06.2025 in the presence of Advocates M/s. S.T. Balamurugan, Jayan Joseph, Stephy K. Regi & Thahseem A. for the applicants and Advocate Shri. Anto Thomas Adipuzha 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 borrowers/guarantors have filed this SA to set aside the entire

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SA 656/2024

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measures under the provision of SARFAESI Act including the Order passed by the Chief Judicial Magistrate under Section 14 of the SARFAESI Act and the notice issued by the Advocate Commissioner.

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Brief facts of the case :

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2.1 The applicants, being the legal heirs of late Mr. Mohammed Haneefa, Proprietor of M/s.Periyar Birds Nido had filed this SA. It is pleaded in the SA that their predecessor Mohammed availed loan from the defendant bank by creating security interest over the subject matter property on 22.03.2018 which was restructured from time to time. Mr. Mohammed Haneefa expired on 31.12.2018. After his death, loan was restructured in the name of the applicants. After such reconstruction of the loan, the applicants were repaying the loan regularly. But due to some financial crisis due to covid-pandemic as well as the disastrous floods, the loan could not be serviced in time. Consequently, the loan was classified as ‘NPA’ with effect from 29.01.2021. Substantial amount was paid by the applicants. But the same was not considered and the amount was not adjusted in the loan account.

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2.2 Thereafter the defendants issued a notice under Section 13(2) of the SARFAESI Act calling the applicants to pay an amount of Rs.2,48,07,244.41 followed by possession notice under Section

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SA 656/2024

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13(4) of the SARFAESI Act. It is claim that all the statutory measures in issuing the possession notice are not duly followed, which vitiates the securitization proceeding.

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2.3 The defendants have also filed MC No. No.151/2023 under Section 14 of the SARFAESI Act before the Chief Judicial Magistrate Court, Thodupuzha to take physical possession of the secured asset. The statutory measures as prescribed in section 14 of the SARFAESI Act are not followed. The learned Chief Judicial Magistrate passed an mechanical Order on 14.03.2023 without looking in to material defects in the application and hence such order is illegal and the same cannot be enforced.

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2.4 After issuance of notice by the Advocate Commissioner, a proposal for settlement was initiated and the applicant deposited Rs.93,00,000/- to close the loan account. The account statement evidencing the payment is shown in Annexure-A3. In spite of deposit of the amount for regularizing the loan, the defendants proceeded with the securitization measures, by filing restoration application before the CJM. The learned Chief Judicial Magistrate allowed restoration of the application under Section 14(1) of the SARFAESI Act and appointed an Advocate Commissioner to take possession of the secured asset, which is impugned in this SA.

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SA 656/2024

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3.1 The defendants filed written statement denying the averments and claimed inter alia that the predecessor of applicants, Mohammed Haneefa availed the loan by creating equitable mortgage over the subject matter property and also hypothecation of movable assets. After the death of Haneefa/original borrower, the loans were restructured with the applicants. But due to default in repayment by them, the loan was classified as ‘NPA’ on 24.03.2021. All the securitization measures were taken as per the statutory requirement and the demand notice followed by issuance of possession notice were issued. No objection was raised by the applicants in disputing the demanded amount. Since the defendants faced difficulty in taking possession of the secured asset, application under Section 14 of the SARFAESI Act, bearing MC No.151/2023 was filed before the CJM, Thodupuzha to take physical possession of the secured asset. The CJM passed Order on 14.03.2023 appointing an Advocate Commissioner to take possession of the secured asset.

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3.2 After passing of such Order at the request of the applicants, bank had granted facility of settlement to the applicants and separate memo is filed before the CJM for closing the above MC No.151/2023 with liberty to revive the application in the event of non-compliance or default by the applicants.

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SA 656/2024

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3.3 As the applicants did not comply the terms of settlement, a CMP was filed for revival of the MC. Accordingly, the CJM revived the MC and appointed an Advocate Commissioner to take possession of the secured asset. Accordingly, the defendants had taken possession of the secured asset on 16.10.2024 with the assistance of the Advocate commissioner. All the statutory measures are duly followed and the applicants have no right to challenge the securitization proceeding. Hence the SA, being devoid of any merit, may be dismissed.

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From the respective case of the applicants and

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defendants, the following points are emerged for adjudication in this case:

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(i) Whether the securitization proceeding initiated by the defendants suffers from any illegality?

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(ii) Whether the applicants are entitled to get any relief in this case?

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FINDINGS:

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Point Nos.(i) & (ii):

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Admittedly the predecessor of the applicants

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Mohammed Haneefa availed loan from the defendant bank by creating security interest over the subject matter property. The applicants also stood as guarantors for the said loan. After the

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SA 656/2024

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death of Mohammed Haneefa, the loan was restructured with the applicants. Due to default committed by them in repaying the loan, the defendants classified the loan as ‘NPA’ and proceeded with the securitization measure.

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Admittedly after receipt of the demand notice, the defendants issued possession notice under Section 13(4) of the SARFAESI Act. No objection or representation was submitted by the applicants in disputing the claim amount and also they never raised any objection disputing the classification of the loan as ‘NPA’ as illegal in any manner. In the SA, there is no whisper about any illegality in taking measure under Section 13(4) of the SARFAESI Act. It is only claimed in general that the statutory measures in issuing the possession notice was not duly followed. The defendants produced all relevant documents showing compliance of the statutory requirement in issuing the possession notice to the applicants, publication of the same in two widely circulated daily newspapers both in English and vernacular language and also photographs showing affixture of the possession notice at the secured asst.

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After taking symbolical possession of the secured asset, the applicants submitted representation vide Annexure-B8. In

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SA 656/2024

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pursuance to such objection the defendants had given reply to the said notice Annexure-B9 asking to close the loan account, failing which, the bank will proceed for the recovery of the ‘NPA’ account. Since the applicants did not take any interest to close the loan the defendants filed an application under Section 14 of the SARFAESI Act in MC No.151/2023 before the Chief Judicial Magistrate to take physical possession of the secured asset. The learned CJM appointed an Advocate Commissioner to take possession of the secured asset. Thereafter on the proposal of the applicants, the claim was settled and a memo was filed before the CJM to close the above MC on 16.01.2024 with the liberty to revive the application in the event of non-compliance of the terms of settlement.

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The applicants, having failed to comply the terms of the settlement, the defendants filed application before the learned Chief Judicial Magistrate, Thodupuzha to restore the MC and an Advocate Commissioner was appointed to take possession of the secured asset. In pursuance to the direction of the CJM, physical possession of the secured asset was taken on 16.10.2024.

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After taking possession of the secured asset, the applicants filed IA No.4445/2-24 seeking for restoration of

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SA 656/2024

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possession. The applicants voluntarily offered to deposit Rs.25,00,000/- in the loan account, which was recorded by proceeding dated 02.12.2024. But they did not comply the same. Consequently, the SA was taken up for hearing.

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Even the physical possession is already taken by the defendants, the same is not challenged in this proceeding by the applicants by the amending the SA. The learned counsel for the applicants submitted that there is no provision for restoration of the application under Section 14 of the SARFAESI Act. Hence the Order passed by the learned CJM in the revival application is not legal and also appointing an Advocate Commissioner in such proceeding to take possession of the secured asset is also illegal. It is also contended that the requirements of proviso to Section 14 of the SARFAESI Act is not followed by the Authorised Officer in filing the declaration before the Chief Judicial Magistrate.

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The applicants, having not challenged taking of physical possession of the Secured asset, have no right to raise any objection against the same. The defendants filed application in closing the MC in pursuance to settlement. When the settlement failed the said MC was restored on the application of the defendants. No prejudice in any manner was caused to the

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SA 656/2024

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applicants by restoring this Section 14 application at the request of the defendants. Hence the Order passed by the CJM cannot be said illegal in any manner. It is only stated that on the date of filing application, the quantum of loan outstanding is not stated. For that reason alone the said Order passed by the CJM cannot be said illegal in any manner which is not a material defect. Even if there is any defect in the affidavit filed by the Authorised Officer in such proceeding, it can be corrected by filing fresh affidavit but the same is not a ground to hold the entire proceeding as illegal. The defendants can correct the mistake, if any, by filing a corrected affidavit in view of the ratio decided by the Hon’ble High Court of Kerala in Shibu George vs. State of Kerala & another , reported in 2016 (1) KLJ 22. In this case the defect pointed out is not a material defect causing any substantial prejudice to the applicants and in absence of the same filing of fresh affidavit is not necessary.

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Further in absence of challenge of taking physical possession of the secured asset, the applicants have no right to raise any issue against such measure in this securitization proceeding. Both the points are answered against the applicants and they are not entitled to get any relief.

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SA 656/2024

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Hence it is Ordered:-

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ORDER

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In view of the foregoing reasons, this SA, being devoid of any merit, is hereby dismissed. But in the circumstances, without costs.

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

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[SOVAN KUMAR DASH] PRESIDING OFFICER

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SA 656/2024

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Documents on the part of the applicants

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Annexures	Date	Particulars of documents
Annexure-A1		True copy of the petition filed by the defendants under Section 14 of the SARFAESI Act as MC No.151/2023 along with supporting affidavit before the Chief Judicial Magistrate Court, Thodupuzha.
Annexure-A2	14.03.2023	True copy of Order in MC 151 of 2023 of the Chief Judicial Magistrate Court, Thodupuzha.
Annexure-A3		True copy of the Account statement evidencing the payment of Rs.93,00,000/-
Annexure-A4		True copy of CMP No.4646 of 2024 in MC No. 151 of 2023 from the Chief Judicial Magistrate Court, Thodupuzha.
Annexure-A5	31.08.2024	True copy of the Advocate Commissioner notice with the English Translation.
Annexure-A6	31.08.2024	True copy of the reply notice from the defendant bank.
D	ocuments on	the part of the defendants
Annexure-B1	25.05.2021	True copy of postal receipts of 13(2) demand notice.
Annexure-B2	19.05.2021	True copy of the office copy of demand notice wherein the borrowers acknowledged the receipt of 13(2) demand notice.
Annexure-B3	11.10.2021	True copy of the possession notice issued by the 2^nddefendant to the applicants.
Annexure-B4	18.10.2021	True copy of the postal receipts issued by the postal department while issuing possession notice.

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SA 656/2024

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Annexure-B5		True copy of the acknowle cards of the possession addressing the applicants.	dgment notice
Annexure-B6	14.10.2021	True copy of the possession published in the Deepika Daily.	notice
Annexure-B7	14.10.2021	True copy of the possession published in the New Indian Daily.	notice Express
Annexure-B8		Photographs showing the affi the possession notice on the asset.	xture of secured
Annexure-B9	03.02.2022	True copy of the letter sent applicants.	by the
Annexure-B10	18.02.2022	True copy of the reply letter is the 2^nddefendant to the applica	sued by nts.
Annexure-B11	15.05.2022	True copy of the redemption	notice
series		issued by the defendant applicants, its postal receip acknowledgment cards.	to the ts and
Annexure-B12		True copy of the CERSAI Certifi	cate.
Annexure-B13	10.08.2024	True copy of the notice issued S.T. Balamurugan.	by Adv.
Annexure-B14		True copy of the statement of of Term Loan No.0805652000000042.	account Account
Annexure-B15		True copy of the statement of of Term Loan (Restructured) No.0805655000000036.	account Account
Annexure-B16		True copy of the statement of of Term Loan (Restructured) No.0805655000000048.	account Account

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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 July, 2025

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SA No.656/2024

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Between

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Asma Beevi, Aged 61 years, W/o. late Muhammed Haneefa, Anakkaru Veedu, Kumily, Labbakandam, Idukki – 685 509 & 3 Others.

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And

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South Indian Bank Ltd., Regional Office, Kottayam, 1^st Floor, Regency Square, K.K. Road, Collectorate P.O., Kottayam – 686 002 & Anr.

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…Defendants

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F I N A L O R D E R

Asma Beevi v. South Indian Bank

Case brief

What is this about?

What did the court decide?

Asma Beevi v. South Indian Bank

Case brief

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