Dismissed

Shyamala Murali v. State Bank of India

DRT1 Sept 2025SA/717/2024

Case brief

AI extract

What is this about?

A Securitization Application seeking to set aside SARFAESI demand and possession notices was dismissed. The Debts Recovery Tribunal held that the borrower failed to object within the stipulated time, the provisions regarding affidavit filing were complied with, and no illegality was found in the measures taken under the Act.

What did the court decide?

No order as to costs; Applicant's reliefs set aside.

Shyamala Murali versus State Bank of India — Contract and Commercial Disputes | DRT (2025)

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL - 1 AT ERNAKULAM

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DATED THIS 1^st DAY OF SEPTEMBER, 2025

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

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S.A No. 717 of 2024

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Between

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Shyamala Murali, w/o. Murali T.V., Proprietrix of M/s. Thoppil Cocos, Thoppil House, Chelamattom, Perumbavoor, Ernakulam-683 550.

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--- Applicant

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And

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State Bank of India,

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SME Branch – Perumbavoor, A.M. Road, Pullikkallumpurath, Tower, Perumbavoor, Ernakulam - 683 542 Represented by its Manager.

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Authorized Officer, State Bank of India, SARB, 7^th Floor, Vankarath Towers, Palarivattom Byepass Junction, Ernakulam -682 020.

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--- Defendants

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SA No.717 of 2024

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This Securitization Application coming on 17.06.2025 for final hearing before me in the presence of Mr. P. Shrihari, Counsel appearing for the Applicant and Mr. Thomas T. Varghese, Counsel appearing for the defendants and upon hearing arguments of learned Counsels for both the parties and upon perusing the material on records, this Tribunal delivered the following:

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O R D E R

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This Securitisation Application was filed on 30.09.2024 seeking to set aside Annexure-A1 demand notice, A2 and A3 possession notices, A6 Order and A8 notice issued by the Advocate Commissioner and to direct the defendants to restore the possession of the property described in Annexure-A1 demand notice and to direct the defendants to produce the entire detailed statement of account and to direct the defendants to pay the costs of the proceedings and compensation to the applicant.

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The applicant is the proprietrix of M/s.Thoppil Cocors. There is no dispute with regard to credit facilities by the applicant from the defendant bank and that the credit facilities were secured by hypothecation of entire stocks, receivables and assets purchased using the funds granted by the 1^st defendant bank and also by creation of mortgage over the immovable properties belonging to the 1^st applicant, in favour of the 1^st defendant bank.

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The applicant has omitted to aver in the SA as to whether she was prompt in repayment of the outstanding loan due to the 1^st defendant bank. However, it is revealed from the perusal of the written statement of the defendants that since she defaulted in repayment of the loans, her loan accounts were classified as NPA on 30.04.2023.

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Therefore, Annexure A1 demand notice dated 03.05.2023 was issued to the applicant calling upon her to pay the outstanding loan due within the period of 60 days from the date of receipt of the demand notice. Admittedly, the applicant neither sent any objection/representation to the demand notice nor did she clear off her liability due to the 1^st defendant bank.

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Hence, Annexures A2 and A3 possession notices dated 07.08.2023 were issued by the 2^nd defendant for symbolically taking physical possession of the secured assets. The applicant did not challenge the aforesaid possession notices.

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Subsequently, the defendants approached the Chief Judicial Magistrate Court, and filed application Annexure A4 and affidavit Annexure A5 under Section 14(1) of the SARFAESI Act, 2002. The

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SA No.717 of 2024

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matter was made over to the Additional Chief Judicial Magistrate Court, (MPs/MLAs) Ernakulam for disposal. Annexure A6 order dated 21.06.2024 came to be passed in MC No.143/2024 appointing Advocate Commissioner for taking physical possession of the secured assets. The Advocate Commissioner issued Annexure A8 notice dated 04.09.2024 to the applicant informing her that he would take possession of the petition scheduled properties after 14 days of receipt of the notice. The applicant having aggrieved against the aforesaid measures has filed this SA seeking for reliefs stated supra.

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The counsel appearing for the applicant submitted that since there is no valid security interest in respect of movable and immovable properties including the buildings therein was not registered with the Central Registry, the defendants cannot invoke the SARFAESI measures, including the issuance of the demand notice. The classification of the loan account as NPA is illegal as it was not done in adherence to the guide lines issued by the RBI, the amounts demanded in the demand notice is not correct. The mere failure of the applicant to send any objection to the demand notice does not give license to the secured creditor to diverse Section 13(3) of the SARFAESI Act, 2002 in respect of furnishing the details of the claim showing the progressive total of the claim and details of the secured assets, in the demand notice.

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It is submitted further by the counsel appearing for the applicant that Annexure A2 and Annexure A3 possession notices were invalid, since these notices were not issued in adherence to Rule 8 and that description of the properties in Annexures A2 and A3 is incorrect. Both Annexure A4 application and Annexure A5 affidavit are in the writing of one Beena, Kottakandy who claims to be the authorised officer of the 1^st defendant bank. An application under Section 14 of the Act can only be filed by the secured creditor in its writing and such application shall be supported by an affidavit sworn by the authorised officer of the secured creditor. Since Annexure A4 application and Annexure A5 affidavit are in the writing of the one under the same person, these are illegal. It is a well established principle of natural justice that no person shall be a judge in his own cause and this principle is applicable in the matter of filing application in the writing of the secured creditor and filing of the affidavit by the authorised officer.

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It is submitted further by the counsel for the applicant that item No. 5 of the property mentioned in Annexure A1 demand notice is situated in Kuttampuzha Village, Kothamangalam Taluk, Ernakulam District and there is no Kuttampuzha Village and Devikulam Taluk in Ernakulam District and that therefore, Annexure A1 and Annexure A5 are invalid and illegal and that the learned Additional Chief Judicial Magistrate, without considering the above aspect passed an invalid

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SA No.717 of 2024

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and illegal order. In Annexure A5 affidavit dated 09.01.2024, the amount due as on 03.01.2024 is stated as Rs.3,43,94,485/- whereas in paragraph 1(d) to Annexure R1 affidavit dated 07.06.2024 the amount due as on 03.01.2024 is stated as Rs.3,43,94,485/-. Therefore, Annexure A5 affidavit is invalid, as it was not filed in compliance of the 1^st proviso to Section 14 (1) of the Act.

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The counsel for the applicant submitted further that the date of demand notice is differently stated in Annexure A5 affidavit and Annexure R1 additional affidavit and that there is no declaration in Annexure A5 affidavit as to whether the secured interest was created over the properties mentioned in Annexure R1. CERSAI reports of all the properties were not produced and declared in Annexure A5 affidavit. The learned Additional Chief Judicial Magistrate Court, Ernakulam without verifying the contents of Annexure A4 application and Annexure A5 affidavit passed order. Annexure A8 notice issued by the Advocate Commissioner is illegal. Therefore, SA may be allowed as prayed for.

¶33

The counsel appearing for the defendants submitted that in Annexure A1 demand notice, the details of the credit facilities availed security documents executed, details of the secured assets and balance amount outstanding in the loan accounts were furnished and that the applicant did not send any objection/representation to the demand notice and that therefore, the contention raised by the applicant belatedly in respect of Annexure A1 demand notice cannot be entertained. The contention of the applicant that demand notice and possession notice are not in compliance of the provisions of the SARFAESI Act is baseless.

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The counsel appearing for the defendants submitted that the objections raised against Annexure A4 application and affidavit is without any basis. Annexure A4 application filed by the secured creditor is duly supported by the affidavit of the authorised officer and it contains all the particulars required by the provisions of the Act. Annexure R1 additional affidavit has been filed including the description of the secured asset which are sought to be taken possession. Original documents produced by the defendants were verified by the learned Additional Chief Judicial Magistrate, Ernakulam before passing Annexure A6 order. There is no infirmity or defect in Annexure A4 application or Annexure A5 affidavit. The details of the registration of the creation of the secured interest with the Central Registry is stated in Annexure A4 application, as Annexure R2 to R9. The allegation that mortgaged properties were not properly registered with the Central Registry is false.

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SA No.717 of 2024

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It is submitted further by the counsel for the defendants that item No. 5 property in Annexure D1 demand notice was covered by sale deed No.1467/1993 of SRO Devikulam and it was situated in Idukki District till the village was added to Ernakulam district on 01.01.1997. Though this property is mortgaged with the 1^st defendant, it was not included in Annexure A4 application for the reason that it was not proposed to be taken along with other mortgaged properties at that point of time. There is no legal requirement that all mortgage properties should be taken possession together. The proceedings initiated by the defendants under the SARFAESI Act under Rules thereunder are legal and proper. The applicant is not entitled to get any of the reliefs sought for in the SA. Therefore, SA may be dismissed with costs to the defendants.

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The applicant having created equitable mortgage over her immovable property by deposit of title deeds with 1^st defendant bank is estopped from contending now that there is no valid security interest created in respect of the immovable property including the buildings therein. Annexure-R3 to R9 ID based Asset search report produced by the defendants shows that security interest over item Nos.1 to 6 of the properties has been registered with the Central registry.

¶39

It cannot be disputed that the mere failure of the borrower to sending any objection to the demand notice does not give license to the secured asset to diverse Sec.13 (3) of the SARFAESI Act 2002 as submitted by the counsel for the applicant. But if the applicant had sent representation to the defendants asking for the details pertaining to the progressive total of the claim, the defendants would have furnished the same to her. The applicant having failed to do so now cannot find fault with the defendants in respect of the alleged failure to furnish the details of the claim showing the progressive total of the claim.

¶40

The object of issuance of the demand notice to the borrower is to inform him that since he committed default in repayment of the outstanding loan, his loan account has been classified as NonPerforming Asset and to call upon him to pay the outstanding loan due within a stipulated period, and if he fails to comply with the above terms of the demand notice, the property over which he has created security interest will be brought for sale. It is not the case of the applicant that she was not aware of the details of her property which has been mortgaged with the 1^st defendant bank. Therefore, the contention of the applicant that details of the secured asset was not furnished in Annexure-A1 demand notice is untenable. However, in Annexure-A1 demand notice, the details of the secured assets of all the items of the properties has been furnished.

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SA No.717 of 2024

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Annexure-A2 and A3 possession notices were issued as early as on 7.8.2023. The applicant chose not to challenge the aforesaid notices by filing the SA within the period of 45 days from the date of publication of the notice. Now the applicant is challenging AnnexureA2 and A3 in this SA which was filed on 30.09.2024. Challenging the measures initiated by the defendants in MC No.143/2024 cannot be considered as a continuous cause of action to the issuance of Annexure-A2 and A3 possession notices for the sole reason that the defendants can approach the Chief Judicial Magistrate Court, u/s 14 (1) of the SARFAESI Act 2002 without resorting to the measures u/s 13 (4) of the SARFAESI Act 2002. Therefore, the challenge made by the applicants in respect of Annexure-A2 and A3 at this stage is unsustainable. Be that it may so, a perusal of Annexure-A2 and A3 possession notices shows that the details of the secured assets as furnished in Annexure-A1 demand notice, are furnished. Further, details of the secured assets are furnished with reference to the description of the property mentioned in the title deeds which are deposited with the defendant bank. Hence, a secured creditor cannot imaginatively furnish the details of the secured asset in the demand notice, possession notice and sale notice. Hence, this Tribunal does not find any substance in the contention of the applicant that description of the properties in Annexure-A2 and A3 is incorrect.

¶44

Annexure-A4 application is filed by the secured creditor, i.e., 1^st defendant bank which is represented by its Manager. Annexure-A5 affidavit has been filed by the Authorized Officer, ie. the 2^nd defendant who also happens to be the Chief Manager of the secured creditor. Neither the provisions of the SARFAESI Act 2002 nor the Rules made there under does not impliedly or explicitly prohibit the Chief Manager of the secured creditor to act as the Authorized Officer of the secured creditor. The principle of no man shall be a judge in his own cause is not applicable to the measures initiated under the SARFAESI Act 2002 and the Rules made there under. Hence, this Tribunal does not find any force in the submission of the counsel for the applicant that this principle is applicable in the matter of filing application and affidavit u/s 14 (1) of the SARFAESI Act 2002.

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The defendants have given proper and convincing explanation in their written statement that item No1 property mentioned in Annexure-D1 demand notice was covered by Sale Deed No.146/1993 of SRO Devikulam and that it was situated in Idukki District till the village was added to Ernakulam district on 01.01.1997. However, it is contended in the written statement that item No.5 property was not included in Annexure-A4 application for the reason that it was not proposed to be taken along with other mortgaged properties at that point of time. Therefore, this Tribunal does not find any merit in the submission of the counsel for the applicant that item No.5 of the

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SA No.717 of 2024

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property is situated in Kuttampuzha village and that there is no Kuttampuzha Village and Devikulam Taluk in Ernakulam district.

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The details of the registration of security interest with the Central Registry is clearly stated in paragraph 11 of the Annexure-A4 application. It is declared in Annexure-A5 affidavit that defendants 1 to 3 have created security interest over the petition schedule properties and that the bank is holding a valid and subsisting security interest over the properties.

¶50

Admittedly, in paragraph 1 (d) of Annexure-A5 affidavit, the outstanding amount due as on 03.01.2024 is stated as Rs.3,43,94,485/- and in paragraph 1 (s) of Annexure-A5 affidavit, the outstanding amount due as on 08.01.2024 is stated as Rs.3,43,94,485/- and in Annexure-R1 additional affidavit, it is stated as above, as rightly pointed out by the counsel for the applicant. It is discernable that the date 03.01.2024 has been mentioned in both Annexure-A5 affidavit and Annexure-R1 additional affidavit due to typographical error. Therefore, this Tribunal does not find any force in the submission of the counsel for the applicant that Annexure-A5 affidavit is not valid since the date of outstanding is differently stated in Annexure-A5 affidavit and Annexure-R1 additional affidavit.

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In Annexure-A5 affidavit, the date of issuance of the demand notice is mentioned as 02.05.2023. In Annexure-R1 additional affidavit, the date of demand notice is stated as 03.05.2023. Annexure-A1 demand notice is dated 03.05.2023. Copy of the demand notice has been enclosed along with Annexure-A5 affidavit as document No.16. Therefore, it is prima facie shows that due to typographical error, the date of demand notice is wrongly mentioned as 02.05.2023 instead of 03.05.2023 and that the learned Additional Chief Judicial Magistrate (MPs/MLAs), Ernakulam would have noticed the above mistake by perusing the copy of the demand notice which had been enclosed along with Annexure-A5 affidavit.

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In Annexure-A5 affidavit, the details such as the aggregate amount of financial assistance granted to the respondents, the total outstanding as on 08.01.2024, creation of security interest by the respondents 1 to 3 by deposit of title deeds in respect of the petition schedule properties, properties being free of tenancy, default in repayment of the outstanding loan due, classification of loan account as Non-Performing Asset on 30.04.2023, issuance of demand notice to the respondents, receipt of the demand notice by the respondents, non-submission of objection/representation to the demand notice, failure of the respondents to repay the outstanding loan due, issuance of possession notice and its publication, registration of the security interest in respect of the petition schedule properties with the Central registry, have been furnished. Hence, it is evident that all the

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SA No.717 of 2024

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statutory requirements contemplated under Clause (i) to (ix) to the provisions of Section 14 (1) of the SARFAESI Act 2002 has been complied with by the defendants.

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A perusal of Annexure-A6 order shows that the learned Additional Chief Judicial Magistrate (MPs/MLAs), Ernakulam after having perused the contents of the affidavit and the documents filed in support of the affidavit and having satisfied over the same, passed order appointing Advocate Commissioner to take physical possession of the secured asset. This Tribunal does not find any infirmity or illegality in the above order.

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In view of the foregoing reasons and discussions, this Tribunal holds that the applicant is not entitled to get the reliefs sought for in this SA.

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Resultantly, S.A No.717 of 2024 stands dismissed. However, there shall be no order as to costs.

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Dictated to Steno, taken down, transcribed, typed by him, corrected and

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pronounced by me in the open court on this the 1^st day of September, 2025.

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(Su. WILLYAHM) PRESIDING OFFICER

Mj/

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SA No.717 of 2024

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

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Sl.	Date	Particulars
No.
1.	03.05.2023	True copy of demand notice issued by the 2^nd defendant.	Annexure-A1
2.	07.08.2023	True copy of possession notice issued by the 2^nd defendant.	Annexure-A2
3.	07.08.2023	True copy of possession notice issued by the 2^nd defendant.	Annexure-A3
4.	09.01.2024	True copy of application in MC No.143 of 2024 on the file of Additional Chief Judicial Magistrate Court (for MPs and MLAs)Ernakulam.	Annexure-A4
5.	09.01.2024	True copy of affidavit in MC No.143 of 2024 on the file of Additional Chief Judicial Magistrate Court (for MPs and MLAs)Ernakulam.	Annexure-A5
6.	21.06.2024	True copy of Order in MC No.143 of 2024 on the file of Additional Chief Judicial Magistrate Court (for MPs and MLAs)Ernakulam.	Annexure-A6
7.	31.08.2024	True copy of letter issued by the applicant to the 2^nd defendant	Annexure-A7
8.	04.09.2024	True copy of the notice issued by the Advocate Commissioner	Annexure-A8

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List of documents filed by the defendants along with the IA No.2361/2025

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Sl.	Date	Particulars
No.
1.	---	Certified copy of the additional affidavit filed by the Authorized Officer, SBI in MCNo.143/2024.	Annexure-R1
2.	---	Certified copy of the additional list of documents filed by the Authorized Officer,SBI in MC No.143/2024.	Annexure-R2
3.	---	Printout ofCERSAI registration report	Annexure-R3

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SA No.717 of 2024

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		showing	CERSAI security Interest ID of
		Item No.2000	No.1 property bearing 0974591.
4.	---	Printout showing Item No.2000	of CERSAI registration report CERSAI security Interest ID of No.2 property bearing 55803988	Annexure-R4
5.	---	Printout showing Item No.2000	of CERSAI registration report CERSAI security Interest ID of No.3 property bearing 07735938.	Annexure-R5
6.	---	Printout showing Item No.2000	of CERSAI registration report CERSAI security Interest ID of No.4 property bearing 07736084 (16.60 ares)	Annexure-R6
7.	---	Printout showing Item No.2000	of CERSAI registration report CERSAI security Interest ID of No.4 property bearing 76519996 (1.80 ares)	Annexure-R7
8.	---	Printout showing Item No.2000	of CERSAI registration report CERSAI security Interest ID of No.5 property bearing 07735759	Annexure-R8
9.	---	Printout showing Item No.2000	of CERSAI registration report CERSAI security Interest ID of No.6 property bearing 07736322.	Annexure-R9

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(Su. WILLYAHM) PRESIDING OFFICER

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Mj/-

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Shyamala Murali v. State Bank of India

Case brief

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Shyamala Murali v. State Bank of India

Case brief

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