Dismissed

Navas M K v. Urban Co. operative Bnak Ltd.

DRT25 Jun 2025SA/700/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed the applicant's challenge to the execution sale proceedings initiated by the bank under Section 14 of SARFAESI Act. The Tribunal held that the absence of the claim amount as on the date of application in the affidavit before the Chief Judicial Magistrate did not cause substantial prejudice and was not a material defect to interdict the proceeding.

What did the court decide?

The Securitization Application was dismissed without costs.

Navas M K versus Urban Co. operative Bnak Ltd. — 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 25^th June, 2025

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SECURITIZATION APPLICATION No.700/2024

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Between

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Navas M.K., S/o. Muhammed, Aged 53, Kavanaparambil House, Thodupuzha P.O., Olamattom kara, Thodupuzha Village, Thodupuzha Taluk – 685 584. …Applicant

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And

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The Thodupuzha Urban Co-operative Bank Ltd. No.394, Represented by Authorised Officer, Thodupuzha, Kerala – 685 582. …Defendant

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This Securitization Application having been heard on 16.06.2025 in the presence of Advocates M/s. Dipu James & Soorya B.Chandran for the applicant and Advocate M/s.Sajeev Kumar K.Gopal & Aswathy Babu for the defendant, and stood over to this day for consideration, the Tribunal delivered the following:

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SA 700/2024

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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 defendant 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/borrower has filed this SA under S.17(1) of the SARFAESI Act.

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Brief facts of the case :

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2.1 In the SA, the applicant has admitted about availing loan of Rs.10,00,000/- on 26.10.2017 from the defendant. After availing the loan, he defaulted in repayment. Hence the securitization proceeding was initiated by the defendant after classifying the loan as ‘NPA’ and issued a demand notice under Section 13(2) of the SARFAESI Act calling the applicant to pay the outstanding amount of Rs.11,65,000/-.

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2.2 Due to non-compliance, the defendant bank proceeded further by filing application under Section 14 of the SARFAESI Act before the Chief Judicial Magistrate Court, Thodupuzha. An order was passed by the Chief Judicial Magistrate on 24.08.2024 in M.C. No.272/2024 appointing an Advocate Commissioner to take possession of the secured asset. The Advocate Commissioner issued

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SA 700/2024

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notice on 12.09.2024 to take possession of the secured asset. Hence this SA is filed by the applicant claiming that the application filed under Section 14 of the SARFAESI Act and the declaration made by the authorized officer is not as per the statutory requirement, which vitiates the entire securitization proceeding. Hence the applicant has claimed to set aside all the proceedings in pursuance of measure under Section 14 of the SARFAESI Act with some ancillary reliefs.

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3.1. The defendant filed written statement denying the averments in the SA and claimed inter alia that the applicant availed the loan by creating mortgage over the subject matter property, but did not take any interest to repay the loan. Consequently, the loan was classified as ‘NPA’ and securitization measure was taken by issuing demand notice, marked Annexure-B1, which was duly received by the applicant.

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3.2 Thereafter step was taken in taking measure under Section 13(4) of the SARFAESI Act. After following all the statutory requirements, symbolical possession was taken. The relevant documents are filed. As the defendant faced difficulty in taking physical possession of the secured asset, an application under Section 14 of the SARFAESI Act was filed before the Chief Judicial

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SA 700/2024

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Magistrate Court, Thodupuzha to take physical possession of the secured asset. There is no illegality or error in any manner in such application and the order passed by the Chief Judicial Magistrate. Hence this SA, being devoid of any merit in challenging such proceeding, may be dismissed.

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

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(i) Whether the securitization proceeding suffers from any illegality or defect or irregularity to intervene with the same?

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(ii) Whether the applicant is 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 applicant availed the loan from the defendant by creating security interest over the subject matter property. Due to non-repayment of the loan, demand notice followed by possession notice was issued. Subsequently the defendant initiated proceeding under Section 14 of the SARFAESI Act, before the Chief Judicial Magistrate Court, Thodupuzha, which is impugned in this proceeding.

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SA 700/2024

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During argument, the learned counsel for the applicant contended that the declaration filed by the authorized officer before the Chief Judicial Magistrate is not at par with the statutory requirement contained in the SARFAESI Act. The amount due on the date of filing application is not stated in the affidavit, which vitiates the proceeding and based upon such illegal order passed by the Chief Judicial Magistrate, the defendant cannot take any possession of the secured asset.

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On the other hand, the learned counsel for the defendant contended that application under section 14 of the SARFAESI Act was filed on 22.07.2024 and the amount due as on 01.06.2024 is stated in paragraph 9 of the application and also in paragraph 12 of the affidavit. The interest is not calculated up to filing of the application and hence the same is not added in the claim amount. The same may not be treated as an illegality to interdict with the proceeding under Section 14 of the SARFAESI Act. Hence the SA, having no merit, may be dismissed.

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This is not a case that no declaration in the form of affidavit was filed before the Chief Judicial Magistrate Court, Thodupuzha as per proviso of section 14(1) of the SARFAESI Act. It is only contended by the learned counsel for the applicant that

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SA 700/2024

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the amount due as on the date of application is not stated in the affidavit. It is seen from the application under Section 14 of the SARFAESI Act and also in the declaration in the form of affidavit the total amount due Rs.20,33,681/ as on 01.06.2024 is stated. The applicant has never disputed the claim amount nor filed any representation or objection after receipt of the demand notice. Merely because the amount, as on the date of application is not stated, no substantial prejudice was caused to the applicant.

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The law is well settled that the Chief Judicial Magistrate has no authority to adjudicate the claim among the parties on merit. His function is in the capacity of administrative in nature. All the statutory requirements and relevant documents are produced for the satisfaction of the Chief Judicial Magistrate and being satisfied, the Chief Judicial Magistrate passed the Order on dated 24.08.2024 in MC No.272/2024, marked Annexure A4 in this case. Unless the failure to comply the procedural requirement in any proceeding causes any substantial prejudice to a party, interference with the said proceeding is not warranted. Even if there is any error or omission in the affidavit, the same cannot be a ground to set aside the order of the Chief Judicial Magistrate and the same can be rectified by filing fresh affidavit by the secured creditor in view of

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SA 700/2024

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the ratio decided by the Hon'ble High Court of Kerala in the case of Shibu George vs. State of Kerala & another , reported in 2016 (1) KLJ 22.

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Here in this case only the amount as due on the date of application is not stated. The same cannot be treated as material defect to interdict with the securitization proceeding nor there is any necessity to file any fresh affidavit before the Chief Judicial Magistrate. In absence of any illegality in the securitization proceeding, the applicant is not entitled to get any relief and hence both the points are answered against the applicant.

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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 25^th day of June, 2025).

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[SOVAN KUMAR DASH] PRESIDING OFFICER

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SA 700/2024

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Documents on the part of the applicant

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Annexures	Date	Particulars of documents
Annexure-A1	30.08.2019	True copy of the order of the 13(2) demand notice.
Annexure-A2		True copy of the Section 14 petition filed as MC No.272 of 2024 before the Hon’ble Chief Judicial magistrate Court, Thodupuzha.
Annexure-A3		Affidavit filed in support of Annexure- A2.
Annexure-A4	24.08.2024	True copy of the Order by the Hon’ble CHIEF JUDICIAL MAGISTRATE Court appointing Advocate Commissioner.
Annexure-A5	12.09.2024	True copy of the Advocate Commissioners notice.

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Documents on the part of the defendant

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Annexure-B1	30.08.2019	True copy of the demand notice issued under Section 13(2) of the Act.
Annexure-B2		True copy of the acknowledgment card regarding the service of notice under Section 13(2) of the Act.
Annexure-B3		True copy of the notice issued under Section 13(4) of the SARFAESI Act r/w. Rule 8 of the Security Interest (Enforcement) Rules, 2002 along with the English translation.
Annexure-B4		True copy of the acknowledgment card regarding service of notice under Section 13(4) of the Act.

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SA 700/2024

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Annexure-B5	05.08.2024	True copy of the Sale Notice published by the Authorised Officer of the bank in Deshabhimani daily.
Annexure-B6	05.08.2024	True copy of the sale notice published by the Authorised officer of the bank in Business Line daily.
Annexure-B7		True copy of the photographs showing the affixture regarding the possession notice.