Dismissed

Shahar Abdul Jabbar v. South Indian Bank

DRT29 Jul 2025SA/74/2024

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal heard an application challenging securitization proceedings initiated under the SARFAESI Act. The Tribunal held that all statutory requirements were duly followed, observed no substantial prejudice, and dismissed the application, awarding costs to the bank.

What did the court decide?

The Securitization Application and the impledoor measures taken by the Chief Judicial Magistrate are dismissed with costs of Rs. 20,000 to be paid by applicants.

Shahar Abdul Jabbar versus South Indian Bank — 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 July, 2025

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SECURITISATION APPLICATION NO.74/2024

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Between

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Shahar Abdul Jabbar, Proprietor, M/s. Kollam Traders, VP VIII 391, Nilakkamukku, Vakkom, Kadakkavur, Thiruvananthapuram – 695 306.

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Also at : A J House, Kolloorvila Nagar, 115, Thekkevila, Eravipuram P.O., Kollam – 691 011.

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Also at : Nizam Manzil, Kolloorvila Nagar, Thekkevila, Eravipuram P.O., Kollam – 691 011.

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Sherin A., 462, West Kulangara, Parayil, Edava P.O., Varkala, Thiruvananthapuram – 695 311.

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SA 74/2024

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Also at: A J House, Kolloorvila Nagar, 115, Thekkevila, Eravipuram P.O., Kollam – 691 011.

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Also at : Nizam Manzil, Kolloorvila Nagar, 115, Thekkevila, Eravipuram P.O., Kollam – 691 011. …Applicants

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And

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The South Indian Bank Ltd., Kadakkavur Branch, Door No.8/251 A, Chekalavilakam, P.O. Kadakkavur, Thiruvananthapuram – 695 306, Represented by its Manager.

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Authorized Officer, The South Indian Bank Ltd., Regional Office, Thiruvananthapuram, 3^rd Floor, YWCA Building, Spencer Junction, M.G. Road, Thiruvananthapuram – 695 001. …Defendants

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This Securitization Application having been heard on 17.06.2025 in the presence of Advocate M/s. P.Shrihari & Mary Nithiya K.J. for the applicants and Advocate Shri. Anto Thomas Adipuzha for the defendants stood over to this day for

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consideration, the Tribunal delivered the following:

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SA 74/2024

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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 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 applicants have 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, it is pleaded by the applicants that the first applicant being the Proprietor of M/s. Kollam Traders availed CCOL Limit of Rs.2.50 Crores from the first defendant on 08.06.2020 on the primary security of hypothecation of stock-in-trade of M/s. Kollam Traders and the 2^nd applicant stood as a guarantor for the said loan.

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2.2 Subsequently during spread of Covid-19 pandemic, the business of the applicants was affected. They availed 2 other ECLGS loans from the first defendant, which were adjusted towards the interest and arrears. Due to non-repayment of the loans in time, the loan was classified as ‘NPA’ on 28.05.2023 followed by issuance of demand notice under Section 13(2) of the SARFAESI Act. It is claimed that the said notice is not in accordance with the statutory

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SA 74/2024

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requirement and in violation of Section 13(3) of the SARFAESI Act. After receipt of the demand notice, an objection was submitted by the applicants disputing the claim amount on 02.09.2023. The 2^nd defendant gave a reply without meeting the contentions raised in the objection. The issuance of possession notice is not in accordance with the statutory requirement. So also the measure taken under Section 14 of the SARFAESI Act before the Chief Judicial Magistrate Court, Thiruvananthapuram is not as per the statutory requirement. The declaration made by the Authorized Officer is also in violation of Clause (1) to the proviso to Section 14(1) of the SARFAESI Act. Hence based upon the said illegal Order of the Chief Judicial Magistrate Court, Thiruvananthapuram the Advocate Commissioner cannot take physical possession of the secured asset. Hence this SA is filed to set aside the entire measures taken from the stage of issuance of demand notice and the Order passed by the Chief Judicial Magistrate, Thiruvananthapuram in M.C. No.1012/2023.

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3.1 The defendants filed written statement denying the averments in the SA and claimed inter alia that, there is no illegality or irregularity in the securitization measures taken by the defendants. The loan was classified as ‘NPA’ as per the RBI

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SA 74/2024

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guidelines. Due to non-repayment of the loan by the applicants, a demand notice under Section 13(2) of the SARFAESI Act was issued on 02.07.2023 calling the applicants to pay total outstanding amount of Rs.3,22,84,815.58 within the statutory period. After receipt of the demand notice, the applicants submitted objection on 02.09.2023 without any valid reason and the reply was given meeting all the objections raised by the applicants.

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3.2 The symbolical possession of the secured asset was taken on 10.10.2023 after following all the statutory requirements. Being unable to take physical possession of the secured asset, application under Section 14 of the SARFAESI Act was filed before the Chief Judicial Magistrate, Thiruvananthapuram after following the statutory requirements. The learned Chief Judicial Magistrate passed a valid Order on 23.12.2023, appointing an Advocate Commissioner to take possession of the secured asset. In absence of any illegality challenging the securitization measure by the applicants is not warranted and hence the SA, being devoid of any merit, may be dismissed.

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

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SA 74/2024

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(i) Whether the securitization proceeding initiated by defendants suffer from any illegality or defect or irregularity to intervene with the same?

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(ii) Whether the applicants are 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 applicants 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 amount. It is submitted that the claim in the demand notice is not correct. Hence an objection was raised disputing the claim. The reply given did not meet the objection and vague reply was given. It is also submitted that in the possession notice issued by the applicants in the 2^nd item of property, the building is not stated. In absence of the same, the Advocate Commissioner cannot take possession of the same. It is also contended that possession notice was published in “Business line”, which is not a widely circulated daily newspaper, which vitiates the securitization proceeding. So also the affidavit filed by the authorized officer before the Chief Judicial Magistrate

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does not comply the statutory requirement. The aggregate amount outstanding as on the date of filing of the application is not stated.

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SA 74/2024

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In absence of the same, the Order passed by the Chief Judicial Magistrate is illegal and the Advocate Commissioner cannot take possession of the secured asset based upon such illegal Order. Hence all the securitization proceedings may be set aside.

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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 applicants in the objection submitted by them. A general averment is stated in the objection that the amount claimed in the demand notice is not correct. No specific illegality in the account statement or the demand notice is pointed out by the applicants to appreciate the same. 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. As they are under construction of a commercial building of the 2^nd schedule property, building is not stated. It does not vitiate the proceeding under Section 14 of the SARFAESI Act and the measure taken under Section 13(4) of the SARFAESI Act. No substantial prejudice was caused to the

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SA 74/2024

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applicants in any measure taken by the defendants. In absence of any illegality, the SA is liable to be dismissed.

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From the contentions of both sides the claim of the applicants in challenging the securitization measure is based upon the following points :

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i. The demand notice issued by the defendants under Section 13(2) of the SARFAESI Act is not in accordance with the statutory requirement as contained under Section 13(3) of the SARFAESI Act.

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ii. The objection raised against the demand notice is not properly addressed by the defendants, which vitiates the proceeding.

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iii. The possession notice issued by the defendants under Section 13(4) of the SARFAESI Act is illegal due to non-compliance of the statutory requirement, i.e., the possession notice was not published in widely circulated newspaper in the locality. Existence of the building having not stated over the schedule property, the securitization proceeding is also not legally maintainable.

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iv. The affidavit filed by the Authorised Officer before the Chief Judicial Magistrate in the measure under Section 14 of the SARFAESI Act is in violation of the statutory requirement as contained under the proviso to Section 14(1) of the SARFAESI Act. The aggregate

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SA 74/2024

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amount outstanding on the date of application having not stated, the Order passed by the Chief Judicial Magistrate renders illegal.

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Receipt of demand notice by the applicants is not disputed,

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which is marked as Annexure-A2 in this case. It is seen from the said demand notice, the details of the loan particulars are stated showing the balance outstanding as on 02.07.2023. It is also stated that the interest and the penal interest to be charged over the outstanding as on 02.07.2023. It is also seen from the demand notice the details of the secured asset are stated in Schedule-A and Schedule-B. Out of which, Schedule-B property are immovable properties mortgaged for securing the loan which are described in the schedule with their survey number, area with the boundaries and the date of acquisition of the properties by the mortgagers. In item No.1 of the Schedule-B, it is specifically stated that the land admeasuring 20.106 cents along with building and all other constructions, improvements, easementary rights existing and appurtenant thereon. In the item No.2 of the Schedule-B the property is described with details of all constructions, improvements, easementary rights etc. In the objection submitted under Section 13 (3A) of the SARFAESI Act by the applicants, such

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SA 74/2024

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issues are not raised, nor the applicants have stated any ambiguity in the demand notice causing difficult to understand the claim.

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In the objection or representation only vague submissions are made regarding charging of excess amounts more than the aggregate contractual rates. It is also seen from the document Annexure-A3, i.e., account statement is provided to the applicants showing details of the interest charged and the total outstanding. In the reply marked Annexure-A5 it is also specifically mentioned that the bank had already provided copies of account statement to the applicants which they requested for the same. In such premises, nothing illegality was committed by the defendants either in issuing demand notice or the reply given under Section 13(3A) of the SARFAESI Act.

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In the possession notice issued under Section 13(4) of the SARFAESI Act, the same properties are described. It is also seen that the possession notice was published on 12.10.2023 in “Business line” daily and “Deepika daily”, both in English and vernacular language. The purpose of issuing the possession notice in widely circulated newspaper is to caution the general public that the subject matter properties are mortgaged, the securitization proceeding is initiated and the possession of the mortgaged

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SA 74/2024

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property is already taken. The borrower or guarantor has nothing to do with issuance of such notice and the contentions raised on this aspect by the learned counsel for the applicants is also not sustainable.

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In respect of the measure taken under Section 14 of the SARFAESI Act it is contended by the learned counsel for the applicants that the aggregate amount of financial assistance granted and the total claim of the bank is on the date of the filing of the application is not stated, which is in violation of clause (i) of the proviso to Section 14(1) of the SARFAESI Act. So also, the details of the properties are not stated which also violates clause (ii) and (iii) of the proviso to Section 14 of the SARFAESI Act. On perusal of affidavit marked Annexure-A8 filed before the Chief Judicial Magistrate, the total liability as on 17.11.2023 is specifically stated and the affidavit was sworn on 29.11.2023. Merely because the interest for the period of 12 days is not stated, the affidavit of the Authorised officer cannot be said illegal. The properties are also described as per the schedule given in the demand notice and the possession notice. Merely because existence of building in one item of property is not stated, it does not vitiate the securitization proceeding and the

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SA 74/2024

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Order passed by the Chief Judicial Magistrate cannot be said illegal.

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The intention of the statute to file declaration with affidavit by the Authorised Officer along with the application under Section 14 of the SARFAESI Act is to give a clear picture of the proceeding to the Authority to pass an Administrative Order in taking possession of the secured asset. Any material error or omission in such affidavit 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. The contention raised by the learned counsel for the applicants have no legs to stand. Here in this case filing of fresh affidavit is not necessary as there is no material error or omission in the declaration filed by the Authorized officer causing substantial prejudice to the applicants. In absence of any illegality or defect in the securitization proceeding, the applicants are not entitled to get any relief. Hence both the points are answered against the applicants.

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SA 74/2024

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Hence it is ordered: -

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O R D E R

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In view of the foregoing reasons, this SA, being devoid of any merit, is hereby dismissed with costs. Since the applicants had delayed the securitization proceeding without any valid reason, they are liable to pay cost of Rs.20,000/- (Rupees twenty thousand only) to the defendants.

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

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[SOVAN KUMAR DASH] PRESIDING OFFICER

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SA 74/2024

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Documents on the part of the applicants

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Annexures	Date	Particulars of documents
Annexure-A1	19.05.2023	True copy letter issued by the Regional Manager MSME Vertical, Trivandrum of 1^stdefendant.
Annexure-A2	03.07.2023	True copy of demand notice issued by the 2^nddefendant.
Annexure-A3		Certified copy of statement of accounts relating to (i) CCOL Limit A/c.
		No.0191083000000127; (ii) ECLGS-I A/c. No.0191656000000229 and (iii) ECLGS A/c. No.0191656000000241.
Annexure-A4	02.09.2023	True copy of certified copy of objection issued by the applicants through Advocate.
Annexure-A5	14.09.2023	Certified copy of reply received from the 2^nddefendant.
Annexure-A6	18.10.2023	True copy of reply letter issued by the applicants through Advocate.
Annexure-A7	10.10.2023	Certified copy of possession notice issued by the 2^nddefendant.
Annexure-A8		Certified copy of Section 14 application and affidavit in MC No.1012/2023 on
		the file of CJM Court, Thiruvananthapuram.
Annexure-A9	23.12.2023	Certified copy of Section 14 Order in MC No.1012/2023 on the file of CJM Court, Thiruvananthapuram.

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SA 74/2024

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Documents on the part of the defendants

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Annexures	Date	Particulars of documents
Annexure-B1	28.08.2020	True copy of the Loan sanction letter of ECLGS-I credit facility.
Annexure-B2	23.02.2022	True copy of the Loan sanction letter of ECLGS-II credit facility.
Annexure-B3	18.11.2023	True copy of Reply Letter issued by the 2^nddefendant to the applicants.
Annexure-B4	12.10.2023	True copies of postal receipts issued from the Postal Department evidencing the dispatch of possession notice.
Annexure-B5		True copy of the acknowledgment cards addressed to the applicants.
Annexure-B6	12.10.2023	True copy of the possession notice published in the Business Line Daily.
Annexure-B7	12.10.2023	True copy of the possession notice published in Malayalam Daily.
Annexure-B8		True copy of the photograph showing the affixture of possession notice on the secured asset.
Annexure-B9	08.01.2024	True copy of the redemption notice issued by the 2^nddefendant to the applicants.

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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 July, 2025

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S A No.74/2024

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Between

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Shahar Abdul Jabbar, Proprietor, M/s. Kollam Traders, VP VIII 391, Nilakkamukku, Vakkom, Kadakkavur, Thiruvananthapuram, PIN – 695 306 & Another.

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... Applicants

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And

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The South Indian Bank Ltd., Kadakkavur Branch, Door No.8/251 A, Chekalavilakam, P.O. Kadakkavur, Thiruvananthapuram – 695 306 Represented by its Manager & Another.

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.…Defendants

Shahar Abdul Jabbar v. South Indian Bank

Case brief

What is this about?

What did the court decide?

Shahar Abdul Jabbar v. South Indian Bank

Case brief

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