Dismissed

Anil Kumar G v. State Bank of India

DRT29 Jul 2025SA/80/2025

Case brief

AI extract

What is this about?

In SA 80/2025, the Debts Recovery Tribunal, Kerala dismissed the applicant's challenge to securitization proceedings initiated by State Bank of India. The applicant alleged illegal NPA classification and non-compliance with statutory requirements. The court found no specific illegality proved and denied relief.

What did the court decide?

The Applicant's Securitization Application challenging the securitization proceedings and NPA classification was dismissed without costs.

Anil Kumar G versus State 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 July, 2025

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SECURITISATION APPLICATION NO.80/2025

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Between

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Mr. Anilkumar G., Aged 44 years, S/o. Gopinathan Pillai, Sole proprietor of M/s. Santhas Beverages, Anitha Bhavan, Kottarakkara, Kollam – 695 108.

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…Applicant

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And

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State Bank of India, Represented by the Authorized Officer, SARB, LMS compound, Opp: Museum West Gate, Vikas Bhavan P.O., Thiruvananthapuram, Kerala. …Defendant

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This Securitization Application having been heard on 08.07.2025 in the presence of Advocate M/s. John Prakash B.J., Sooraj M.S. & Varsha Vijayakumar Nair for the applicant and Advocates M/s. Tom K.Thomas & Bini Das for the defendant stood over to this day for consideration, the Tribunal delivered the following:

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SA 80/2025

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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/borrower has filed this SA under S.17(1) of the SARFAESI Act seeking relief to declare the entire securitization proceeding as illegal.

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Brief facts of the case :

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2.1 In the SA, the applicant has claimed that the applicant

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had availed credit facilities aggregating to Rs.1,14,00,000/- from the respondent bank, vide letter of arrangement dated 23.06.2021 for the business Unit of the applicant, namely, M/s.Santhas Beverages which is registered as MSME. After availing the loan, the applicant suffered severe and unexpected liquidity crisis, which was brought to the notice of the defendant. The same was referred to the MSME Committee and the resolution passed by the Committee is produced in this case as Annexure-A4. In spite of payments made by the applicant, the loan was classified as ‘NPA’ illegally by the defendant without considering the decision of the MSME Committee.

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2.2 The applicant approached the Hon’ble High Court of Kerala in Writ Petition © No.29742/2024 challenging the illegal

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SA 80/2025

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classification of ‘NPA’ which was disposed of by a Judgment dated 03.10.2024. The applicant filed Writ Appeal No.2114/2024 before the Hon’ble High Court of Kerala. During pendency of the case the present application is filed challenging the securitization proceeding including illegal classification of the loan as ‘NPA’.

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2.3 On receipt of the demand notice under Section 13(2) of the SARFAESI Act, the applicant submitted objection but no reply was given by the defendant. Thereafter the defendant proceeded in taking measure under Section 13(4) of the SARFAESI Act followed by filing an application before the Chief Judicial Magistrate Court, Kollam vide M.C. No.384/2024 seeking assistance in taking physical possession of the secured asset. In the SA it is claimed that the order passed by the CJM is not in accordance with the law. The statutory requirements are not duly followed and the notice issued by the Advocate Commissioner to take possession of the secured asset is illegal. Hence the applicant has prayed to declare the entire securitization measures starting from the stage of issuance of the demand notice under Section 13(2) of the SARFAESI Act till the issuance of the notice by the Advocate Commissioner as illegal and not sustainable.

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3.1 The defendants filed written statement denying all averments in the SA and claimed, interalia, that, there is no

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SA 80/2025

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illegality in classifying the loan as ‘NPA’. The loan account of the applicant was referred to the MSME Committee for revival and rehabilitation of the MSME Unit of the applicant in furtherance to the guidelines issued by the Reserve Bank of India. But the Committee found that the Unit has not even started to function in its full capacity and is unable to generate income. Applicant informed the Committee that he is unable to repay or regularize the account. Consequently, as per the guidelines of the RBI, the loan was classified as ‘NPA’ and the securitization proceeding was initiated. All the statutory measures are duly followed. There is no illegality or irregularity in the proceeding to interdict with the same.

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3.2 In the additional written statement, it is stated that

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the Writ Appeal filed by the applicant was dismissed due to suppression to material facts by the applicant. It is also claimed that the notice issued by the Advocate Commissioner to take possession of the secured asset cannot be interfered. Hence there is no illegality and hence the defendant prays for dismissal of the SA.

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From the respective case of both the parties, the

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following points are emerged for adjudication in this case:

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(i) Whether the securitization proceeding initiated by the defendant suffers from any illegality?

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SA 80/2025

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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 No.(i) & (ii):

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Both the points, being interlinked with each other, are taken up together for adjudication. Admittedly the applicant availed the loan by creating security interest over the subject matter property, to secure the loan availed by him. In this SA the applicant has raised dispute regarding classification of the loan as NPA. It is seen from the resolution of the Committee for revival and rehabilitation of MSME Unit, Annexure-A4, that the applicant informed the Committee members that he is unable to repay or regularize the account, as the production is yet to start. Accordingly, the Committee has advised the Proprietor to remit a minimum amount of Rs.50,000/- to prevent the slippage of account. But the applicant did not comply the same and consequently the loan was classified as ‘NPA’.

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The learned counsel for the applicant strenuously contended that the classification of the loan as NPA is illegal and against the guidelines of the RBI prescribed for MSME Units.

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SA 80/2025

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Whereas the learned counsel for the defendant submitted that the loan was classified as problematic loan account (SMA-I) from 01.02.2023, (SMA-2) from 03.03.2023 and (SMA-3) from 02.04.2023. Thereafter the loan was classified as ‘NPA’ on 29.05.2023. The applicant, having failed to comply the resolution of the MSME Committee, the loan was classified as ‘NPA’, which cannot be said illegal in any manner.

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The learned counsel for the applicant claimed that he raised objection to the demand notice. But no such material is placed. The defendant has produced all the relevant documents showing compliance of the statutory requirements. The learned CJM has also passed an order appointing an Advocate Commissioner to take possession of the secured asset. Any specific illegality in any of securitization proceeding is not pointed out by the learned counsel for the applicant except raising general contentions. In absence of proof 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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SA 80/2025

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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 29^th day of July, 2025).

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[SOVAN KUMAR DASH] PRESIDING OFFICER

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SA 80/2025

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Documents on the part of the applicant

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Annexures	Date	Particulars of documents
Annexure-A1		True copy of the Udyam Registration Certificate.
Annexure-A2	23.06.2021	True copy of the letter of arrangement issued by the defendant bank describing the
		nature of facility, terms and conditions etc.
Annexure-A3	17.03.2016	True copy of the Master Circular.
Annexure-A4	29.04.2023	True copy of the minutes by the MSME Committee.
Annexure-A5		True copy of the relevant pages of statement of account of the applicant for the period from 01.03.2022 to 26.09.2024.
Annexure-A6	03.10.2024	True copy of the Judgment in WP © No.29742/2024.
Annexure- A6(a)	03.10.2024	True copy of proceeding in W.A No.2114/2024 dated 08.01.2025.
Annexure-A7	25.08.2023	True copy of the possession notice.
Annexure-A8		True copy of the affidavit and the petition filed under Section 14 of the SARFAESI Act in MC No.384/2024 of the Hon’ble Chief Judicial Magistrate Court, Kollam.
Annexure-A9	26.12.2024	True copy of the Asset Based Search Report.
Annexure-A10		True copy of the Debtor Based Search Report from the CERSAI Portal.

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SA 80/2025

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Annexure-A11	12.07.2024	True copy of the Order in
		MC No.384/2024.
Annexure-A12	02.12.2024	True copy of the notice issued by the Advocate commissioner appointed by the Hon’ble Chief Judicial Magistrate
		Court at Kollam vide MC No.384 of
		2024.

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Documents on the part of the defendant

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Annexures	Date	Particulars of documents
Annexure-B1		True copy of the CERSAI Certificate evidencing registration of the secured asset.
Annexure-B2	30.05.2023	True copy of the notice under Section 13(2) of the SARFAESI Act.
Annexure-B3		True copy of postal acknowledgment card evidencing receipt of the notice of the applicant.
Annexure-B4	25.08.2023	True copy of the notice under Section 13(4) of the SARFAESI Act.
Annexure-B5		True copy of the photograph showing the affixture of notice on the secured asset.
Annexure-B6	26.08.2023	True copy of the newspaper publication published in Kerala Kaumudi.
Annexure-B7	26.08.2023	True copy of the newspaper publication published in Indian Express.

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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.80/2025

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Between

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Mr. Anilkumar G., Aged 44 years, S/o. Gopinathan Pillai, Sole proprietor of M/s. Santhas Beverages, Anitha Bhavan, Kottarakkara, Kollam – 695 108.

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And

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State Bank of India, Represented by the Authorized Officer, SARB, LMS compound, Opp: Museum West Gate, Vikas Bhavan P.O., Thiruvananthapuram, Kerala. …Defendant

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F I N A L O R D E R

Anil Kumar G v. State Bank of India

Case brief

What is this about?

What did the court decide?

Anil Kumar G v. State Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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