Dismissed

Latheefa Beevi v. Union Bank of India

DRT29 Aug 2025SA/709/2024

Case brief

AI extract

What is this about?

In this securitization application under the SARFAESI Act, the applicant challenged the bank's proceedings, citing non-service of demand and possession notices, excessive interest, and failure to register the security interest in CERSAI. The Debts Recovery Tribunal examined the proof of service, default in raising objections, and compliance with statutory requirements. The Tribunal found no illegality causing substantial prejudice, held that the applicant failed to utilize statutory remedies to dispute the claim amount, and dismissed the application as devoid of merit.

What did the court decide?

The Securitization Application No.709/2024 was dismissed without cost in the circumstances of the case.

Latheefa Beevi versus Union 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 29^th day of August, 2025

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SECURITIZATION APPLICATION No.709/2024

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Between

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Latheefa Beevi, Al Aman, House No.351/A, Meleputhanveedu, Koonganmroad, Alancode, Thiruvananthapuram. …Applicant

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And

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Union Bank of India, Attingal Branch, Avittam complex, Kuzhivilom P.O, Attingal, Trivandrum- 6951010. …Defendant

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This Securitization Application having been heard on 22.08.2025

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in the presence of Advocate Swapna S.A for the applicant, Advocate Sreedevi for the defendant 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 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 has filed this SA under S.17(1) of the SARFAESI Act praying to set aside Annexure A2 possession notice and Annexure A6 order

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SA/709/2024

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passed by the Chief Judicial Magistrate under Section 14(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 pleaded that she and her husband availed Rs.20,00,000/- credit facility from the defendant bank by mortgaging the subject matter property of an extent of 2.43 Ares having with residential building. She was separated from her husband due to some family discord and her husband is not paying any maintenance for which a case is sub judice before the Family Court, Thiruvananthapuram.

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2.2. It is further pleaded that she was regularly repaying the loan but due to her ill health, the EMI could not be repaid in time. The bank classified the loan account as NPA without informing her. The calculation of the interest is exorbitant and arbitrary hence; the defendant is not entitled to recover the claim amount.

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2.3. The applicant approached the Hon’ble High Court of Kerala in WP(C) No.17062/2022 challenging the classification of the loan as NPA. The Hon’ble High Court of Kerala permitted the applicant to repay the loan in installments. But the applicant could not comply the direction due to some financial constraint.

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2.4. The defendant issued a demand notice followed by a possession notice under Section 13(4) of the SARFAESI Act. The same

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SA/709/2024

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was not duly served on the applicant and also on her husband. The possession notice was not published or affixed as per the statutory requirement. Hence, the securitization proceeding is vitiated.

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2.5. On 23.08.2024, the defendant issued a sale notice of E- auction of the secured asset and subsequently the bank has filed an application bearing MC No.960/2024 before the Chief Judicial Magistrate, Thiruvananthapuram under Section 13(1) of the SARFAESI Act. The learned counsel for the Chief Judicial Magistrate passed an illegal order in appointing an Advocate Commissioner to take possession of the secured asset. All the statutory requirement are not duly followed in obtaining such order. So also, the amount paid by the applicant is not adjusted in the loan account. Hence, the SA is filed in challenging the securitization measure starting from the stage of classification of the loan as NPA.

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3.1 The defendant filed written statement denying the averments in the SA and claimed interalia that the applicant availed housing loan of Rs.22.5 lakhs by mortgaging the subject matter property. Due to default in repayment, the loan was classified as NPA on 08.03.2024. The demand notice was duly served on the applicant. The demand notice issued to her husband was returned unserved. Accordingly, the same was served on him by paper publication and

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affixture as per the statutory requirement. The relevant documents are also filed in support of compliance of the statutory requirement.

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3.2. Due to non-recovery of the amount, possession notice was issued and subsequently the measure under Section 14(1) of the SARFAESI Act was initiated before the Chief Judicial Magistrate. All the statutory measures are duly complied. The applicant was granted indulgence by the Hon’ble High Court of Kerala in WP(C) 17062/2022 but she did not comply the direction. In absence of any illegality, the SA, being devoid of any merit, is liable to be dismissed.

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From the respective case of the applicants and defendant,

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the following points are emerged for adjudication in this case:

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(i) Whether the securitization proceeding initiated by defendant 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 proceeding?

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FINDINGS:

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Point Nos.(i) & (ii):

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Admittedly the applicant and her husband availed the loan by mortgaging the subject matter property and due to default, the securitization proceeding was initiated. During argument stage, the learned counsel for the applicants did not dispute the loan. It is only contended that the defendant has charged exorbitant and arbitrary

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SA/709/2024

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interest in the loan account which the applicant is not liable to pay and the claim in the demand notice is not correct. It is also contended that the demand notice was not served on all the borrowers. In absence of due service of demand notice, the securitization proceeding is not maintainable. So also, possession notice under Section 13(4) of the SARFAESI Act was also not duly served and the measure taken under Section 14(1) of the SARFAESI Act is not as per the statutory requirement. Lastly, it is contended that the security interest is not registered in the CERSAI portal and hence, the securitization proceeding is not sustainable.

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Per contra , the learned counsel for the defendants refuted the contentions of the learned counsel for the applicants and contended that there is no illegality in the securitization proceeding. The amount claimed in the demand notice is not challenged by the applicant nor any objection was raised after receipt of the demand notice under Section 13 (3-A) of the SARFAESI Act. In absence of the same, contention regarding claim amount and the classification of the loan as NPA is not legally sustainable. All the statutory measures are duly followed while issuing the possession notice under Section 13(4) of the SARFAESI Act. So also, the statutory requirements are duly followed in the application under Section 14 of the SARFAESI Act. No substantial

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prejudice was caused to the applicants in any measure taken by the defendants. CERSEAI certificate is already filed in this case. The contention on this aspect is not sustainable. In absence of any illegality, the SA is liable to be dismissed.

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On careful evaluation of the materials and contentions of both sides, the main dispute relates to the non-service of demand notice and the classification of the loan as NPA. To counter such contention, defendant produced the relevant documents R1B postal AD showing service of demand notice on the applicant. The demand notice issued to the husband of the applicant was returned unserved. Hence, step was taken for service of the demand notice by paper publication and affixture. Such documents are also produced by the defendant. In such premises, it cannot be said that the demand notice was not served on the husband of the applicant.

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Admittedly, after receipt of the demand notice, the applicant did not raise any objection or submitted any representation in disputing the demand amount under Section 13(3-A) of the SARFAESI Act. The Hon'ble High Court of Kerala in the judgment reported in 2022 (3) KLT 645 in the case titled AGP City Gas Private Limited v. M/s.Lynx Properties & Developers & others had held as follows:-

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“21. Once the notice of demand is served, the mandate of the Act, as evident from section 13(3)-A, is the availability of an opportunity to the borrower to raise any objection against the notice issued. This statutory notice enables the borrower to raise an objection on any of the grounds available to him, including the objection regarding the quantum specified in the demand notice.

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22. In the instant case, admittedly no objection was raised by the borrower or guarantor on the quantum specified in the demand notice issued under section 13(2) of the Act. Therefore, the opportunity available to the borrower as well as the guarantor, to object to the quantum mentioned in the demand notice was not availed by them. Hence, they cannot thereafter, turn around and question the quantum mentioned in the demand notice to contend that the notice is bad in law. ……”

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In view of this ratio, the applicants are not legally entitled to raise any dispute against the demand notice issued by the defendant bank and they cannot turn around and claim that the demand notice as illegal. Besides the same, in the Writ Application filed by the applicant, the installment in repayment of the demanded amount is given. No dispute was raised regarding the excessive claim at that time. The direction of the Hon’ble High Court of Kerala is also not complied by the applicant. Raising such issue at this stage is only to protract the securitization proceeding which is not acceptable.

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The defendant bank also produced the documents relating to compliance of statutory requirement in issuing the possession notice. So also, the defendant bank produced the CERSAI certificate marked As Annexure R1K showing the registration of the security interest prior to issuance of the demand notice. The contention on this aspect by the learned counsel for the applicant is also not sustainable.

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SA/709/2024 8

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No specific illegality in the proceeding under Section 14 of the SARFAESI Act is pointed out by the learned counsel for the applicant. Even if there is any error or omission in the affidavit filed by the authorized officer before the Chief Judicial Magistrate, it can be cured by filing fresh affidavit and the same is not a ground to set aside the order passed by the CJM in view of 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 222. In absence of proof of any illegality or defect in the securitization proceeding causing substantial prejudice to the applicant, she is not entitled to get any relief in this proceeding. 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 cost.

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(Dictated to my steno, corrected and pronounced by me in the open Tribunal on this the 29^th day of August, 2025)

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[SOVAN KUMAR DASH] PRESIDING OFFICER

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SA/709/2024

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Documents on the part of the Applicant

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Annexures

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Particulars of documents

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Annexure-A1 Hon’ble High Court of Kerala order dated 26.05.2022 Annexure-A2 Possession notice dated 17.07.2024 Annexure-A3 Sale notice dated 23.08.2024 Annexure-A4 Letter and Postal receipts dated 10.09.2024 Annexure-A5 Section 14 application dated 04.09.2024 Annexure-A6 CJM order dated 24.09.2024 Annexure-A7 Advocate Commissioners notice dated 29.09.2024

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Documents on the part of the Defendant

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Annexures Particulars of documents

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Annexure R1A True copy of the demand notice dated 16.04.2024 issued to the applicant

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Annexure R1B True copy of the postal acknowledgment cards evidencing the service of R1A notice to the applicant

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Annexure R1C True copy of returned notice in the name of the coborrower and guarantor

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Annexure R1D True copy of the paper publication of the demand notice in Deepika daily dated 05.05.2024

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Annexure R1E True copy of the paper publication of the demand notice in The New Sunday Express daily dated 05.05.2024

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Annexure R1F True copy of photograph evidencing affixture of Annexure R1A

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Annexure R1G True copy of the postal receipts evidencing the issuance of Annexure A2 notice

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Annexure R1H True copy of the paper publication of the A2 notice in Deepika Daily dated 22.07.2024

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Annexure R1I True copy of the paper publication of the A2 notice in Business line English daily dated 22.07.2024

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SA/709/2024

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Annexure R1J True copy of the paper publication of the A2 notice in Business line English daily dated 22.07.2024

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Annexure R1K A true copy of the CERSAI registration certificate with respect to the property in the demand notice

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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 this the 29^th day of August, 2025

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SECURITIZATION APPLICATION

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No.709/2024

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Between

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Latheefa Beevi, Al Aman, House No.351/A, Meleputhanveedu, Koonganmroad, Alancode, Thiruvananthapuram. …Applicant

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And

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Union Bank of India, Attingal Branch, Avittam complex, Kuzhivilom P.O, Attingal,Trivandrum-6951010.

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…Defendant

Latheefa Beevi v. Union Bank of India

Case brief

What is this about?

What did the court decide?

Latheefa Beevi v. Union Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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