Dismissed

Thomas Kannookadan v. Tata Capital Ltd.

DRT23 Dec 2025SA/739/2025

Case brief

AI extract

What is this about?

The Tribunal dismissed the applicant's securities application challenging a securitization proceeding. It held the SA was not maintainable as the applicant lacked standing under Section 58(c) of the Transfer of Property Act due to missing re-conveyance endorsement, and the DRT lacked jurisdiction to decide title issues.

What did the court decide?

The securities application challenging the securitization proceedings is dismissed without costs.

Thomas Kannookadan versus Tata Capital Ltd. — Company and Corporate | 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 23^rd day of December, 2025

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SECURITIZATION APPLICATION No.739/2025

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Between

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Thomas Kannookadan, Aged 80 years, S/o. Devassy Kannokadan, Kannokadan House, Muringoor, Thekkummuri, Koratty, Thrissur – 680 308. …Applicant

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And

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Tata Capital Ltd., Ist Floor, Puthuran Plaza, KPCC Junction, M.G. Road, Cochin – 11, Represented by its Authorised Officer.

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M/s. Immaculate Agro Spices Pvt. Ltd., Kanjiravelil House, Pazhamthottam P.O., Pattimattom, Ernakulam, PIN – 683 565, Represented by its Managing Director.

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M/s. Kan Agro Spices,

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XIV/125, Kanjiravelil, Pulinchode, Pazhamthottam P.O., Ernakulam, PIN – 683 565, Represented by its Partner.

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SA 739/2025

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Jenny Varghese, Aged 50, S/o. Varghese, Kanjiravelil House, Pazhamthottam P.O., Kunnathunad Taluk, Ernakulam District, PIN – 683 565.

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Jinu Varghese, S/o. Varghese, Kanjiravelil House, Pazhamthottam P.O., Kunnathunad Taluk, Ernakulam District, PIN – 683 565.

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Geeba Jenny, W/o. Jenny, Kanjiravelil House, Pazhamthottam P.O., Kunnathunad Taluk, Ernakulam District, PIN – 683 565. …Defendants

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This Securitization Application having been heard on 28.11.2025 in the presence of Advocate Rajeesh K.G. for the applicant and Advocate Anju represented Advocate Renjith R. for the 1^st 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 proceedings 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/3^rd party has filed this SA under S.17(1) of the

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SA 739/2025

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SARFAESI Act praying to set aside the securitization proceeding with some consequential reliefs.

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Brief facts of the case :

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2.1 The applicant , a 3^rd party to the proceeding had filed this SA claiming that he is in possession of the subject matter property having with a building there on. Due to Covid-19 pandemic the business of his younger son was affected. Defendant No.4 expressed his willingness to extend helping hand to the applicant and his son by advancing lump sum amount on execution of a sale deed in respect of the subject matter property as security for such loan. Accordingly, the applicant executed a sale deed in respect of the subject matter property in favour of the 4^th respondent for securing the repayment which is executed with the intention to guarantee the repayment of the borrowed amount advanced by the 4^th respondent.

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2.2. An agreement was executed on 10.10.2023 between the applicant and 4^th defendant who agreed to execute the deed of re-conveyance on repayment of the entire loan amount. It is claimed that the sale deed was not acted upon and the 4^th defendant did not derive any interest over the same. The applicant approached 4^th defendant to execute a re-conveyance deed on receiving the loan amount. But the 4^th defendant avoided to

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SA 739/2025

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execute the same and accordingly a civil suit bearing No.190/2025 was filed by the applicant before the Sub Court, Irinjalakkuda.

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2.3 Subsequently on receiving a notice from the Advocate Commissioner, being appointed by the Chief Judicial Magistrate Court, Thrissur in Crl. M.P. No.10897/2025 to take physical possession of the secured asset, it came to the knowledge of the applicant that the 4^th defendant fraudulently obtained loan by furnishing security of the property of the applicant. No consent was given by the applicant for obtaining loan by the 4^th defendant along with other defendants from the defendant bank. So the SARFAESI measures in respect of the property of the applicant is not sustainable. Hence the SA is filed praying to set aside the securitization proceeding with some consequential reliefs.

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The 1^st defendant filed written statement denying the averments and claimed inter alia that the applicant has no locus standi to file the SA, which is not maintainable both under law and facts. The 2^nd defendant firm as principal borrower and defendant Nos.3 to 6 as co-borrowers and guarantors obtained loan of Rs.4,00,00,000/- (Rupees four crores only) by executing loan agreement dated 27.11.2023 and creating security interest over the subject matter property. The Memorandum of Deposit of Title Deed was also executed by 4^th defendant regarding deposit of the

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SA 739/2025

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original sale deed in token of creation of the equitable mortgage. There is no illegality in the securitization proceeding. Further as per Section 58(c) of the Transfer of Property Act as there is no endorsement in the document the impugned sale deed cannot be treated as a mortgage deed and applicant has no locus standi to claim the same. This Tribunal has also no jurisdiction to adjudicate the same. Hence the SA, being devoid of any merit, may be dismissed.

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

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(i) Whether the applicant has any right to challenge the securitization proceeding initiated by the 1^st defendant?

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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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Both the points being interlinked with each other are taken up together for consideration. The borrower and the guarantor for the loan availed from the defendant No.1 have not challenged the securitization proceeding. The applicant claims that he executed a sale deed towards taking of loan from the 4^th

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SA 739/2025

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defendant which is not a sale deed. But it is a document created for security of the loan. The 4^th defendant executed an agreement to re-convey the property after receiving the loan amount. But without executing the re-conveyance sale deed the 4^th defendant along with others created security interest over the said property which is not binding on the applicant. Hence the SA is filed for setting aside the securitization proceeding.

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During hearing the learned counsel for the 1^st defendant contended that as per Section 58(c) of the Transfer of Property Act a mortgage by conditional sale shall be accepted unless the condition is embodied in the document which effects or purports to effect the sale. The Hon'ble Apex Court in the Judgment dated 18.08.2023 in Civil Appeal No.706 of 2015 in the case of Prakash (Dead) By Lr. Vs. G.Aradhya & Ors. Civil Appeal No.706 of 2015 it is held as follows:

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“25.3. A perusal of the aforesaid paras of the judgment shows that the proviso was added in Section 58(c) of the Act vide Act No.20 of 1929, so as to put at rest the conflicting decisions on the issue. A deeming fiction was added in the negative that a transaction shall not be deemed to be a mortgage unless the condition for reconveyance is contained in the document which purports to effect the sale”.

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Admittedly there is no such endorsement over the impugned

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sale deed. In view of the statutory provision and the ratio held by the Hon’ble Apex Court the applicant cannot claim the sale deed

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SA 739/2025

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executed by him as a document for securing the loan. Further a civil suit is already filed by the applicant against such document which is competent to adjudicate the same. The applicant has no valid ground in challenging the securitization proceeding initiated by the 1^st defendant against the borrowers and the guarantors.

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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

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India & another 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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So in view of the ratio, this Tribunal has very limited jurisdiction. It has no jurisdiction to decide any claim regarding the documents mortgaged for obtaining the loan. Hence this SA is not at all maintainable and the applicant is not entitled to get any relief. Both the points are answered against the applicant.

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SA 739/2025

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Hence it is ordered:-

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ORDER

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In view of the foregoing reasons, the 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 23^rd day of December, 2025).

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[SOVAN KUMAR DASH] PRESIDING OFFICER

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Documents on the part of the applicant

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Annexures	Date	Particulars of documents
Annexure-A1	10.10.2023	True copy of re-conveyance agreement executed between the applicant and 4^thdefendant.
Annexure-A2		True copy of the OS No.190 of 2025 filed before the Sub Court, Irinjalakkuda.
Annexure-A3	09.09.2025	True copy of Commission Report in IA No.4/2025 in OS No.190/2025 of Sub Court, Irinjalakkuda.
Annexure-A4	04.11.2025	True copy of notice issued by the Advocate Commissioner in CMP No.10897/2025 of the Chief Judicial Magistrate Court, Thrissur.
Annexure-A5	05.08.2025	True copy of the S.13(4) notices issued by the 1^stdefendant to the defendant Nos.2 to 6.
Annexure-A6	05.08.2025 Documents on	True copy of the S.13(4) notices issued by the 1^stdefendant to the defendant Nos.2 to 6. the part of the 1^stdefendant
Annexures	Date	Particulars of document
Annexure-B1	27.11.2023	True copy of the Loan Agreement (Loan Account No.21881370)
Annexure-B2	27.11.2023	True copy of the Loan Agreement (Loan Account No.2188138)
Annexure-B3	09.10.2023	True copy of the Sale Deed No.2660/2023 along with English translation.
Annexure-B4	29.11.2023	True copy of the Memorandum of Deposit of Title Deed evidencing the mortgage of the original Sale Deed with the 1^stdefendant NBFC as collateral security.
Annexure-B5	13.11.2025	Copy of the Judgment passed by the Hon’ble High Court of Kerala in WP(C) No.41810 of 2025.