Dismissed

Sreekumar N v. Kerala State Co-Operative Bank Ltd.

DRT3 Jul 2026SA/148/2025

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed an application seeking to set aside securitization proceedings under the SARFAESI Act. The court held that the applicant failed to prove the mortgaged land was exclusively agricultural at the time of the loan, rejecting the claim of exemption. Additionally, the court found no illegality in the proceedings or the possession notice.

What did the court decide?

Securitization Application No.148/2025 dismissed without cost.

Sreekumar N versus Kerala State Co-Operative Bank Ltd. — Banking and Recovery | DRT (2026)

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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 03^th day of July,2026

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Securitization Application No.148/2025

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Between

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Sreekumar. N, Ambalappadu House, Muniyara P.O., Churuli,

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Idukki. …Applicant.

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And

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Kerala State Cooperative bank, Kambilikandam branch,

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Idukki. …. Defendant.

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This Securitization Application having been heard on

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11.06.2026 in the presence of Advocate Swapna for the applicant

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and Advocate Deepa Varma for the defendant 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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This SA is filed by the applicant under S.17(1) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to

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SA/148/2025

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as ‘the SARFAESI Act’) praying to set aside the entire securitization proceeding.

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Brief facts of the case :

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2.1. The applicant, the borrower, has filed this application challenging the securitization measures initiated by the defendant u/s 17(1) of the SARFAESI Act with a prayer to set aside the entire proceeding including the order passed by the Chief Judicial Magistrate.

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2.2 In the SA, the applicant has pleaded that he availed various credit facilities from the defendant bank by mortgaging 36.20 Hectors of land, described in details in the SA. He could not repay the loan regularly and approached the defendant for restructuring. But the defendant did not consider the same and classified the loan as NPA. The demand notice U/S 13(2) of the SARFAESI Act is issued on 18.12.2022 calling applicants to repay the outstanding.

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2.3 It is claimed in the SA that the secured asset is agricultural land having cultivation of cardamom, coffee, pepper, Cocoa, nutmeg and also various agricultural activities are performed over the said property which is exempted under the

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SA/148/2025

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provisions of the SARFAESI Act, the defendant cannot proceed against agricultural land.

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2.4 It is also claimed by the applicant in the SA, that possession notice was not duly served as per the statutory requirement and possession notice was notice also published in widely circulated newspapers. The defendant initiated a proceeding u/s 14 of the SARFAESI Act bearing MC.No.365/2024 before the Chief Judicial Magistrate, Thodupuzha in which an advocate commissioner was appointed to take physical possession of the secured asset. After receiving the notice from the advocate commissioner, the applicant has filed this SA praying to set aside the securitization proceeding including the notice issued by the advocate commissioner.

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3.1 The defendant filed written statement denying the averments in the SA and claimed, inter alia, that there is no illegality in the securitization proceeding and hence the SA is not sustainable. The applicant availed cash credit loan of Rs.15 Lakhs on 31.10.2018 by mortgaging the schedule property. As he failed to adhere the terms and conditions of the repayment, the loan was classified as NPA on 02.04.2020, followed by issuance of demand notice u/s 13(2) of the SARFAESI Act.

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SA/148/2025

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3.2 The defendant has also issued possession notice after complying all the statutory requirements. As the secured creditor felt difficulty in taking physical possession of the secured asset, it filed MC. No. 365/2024 u/s 14 of the SARFAESI Act before the Chief Judicial Magistrate, Thodupuzha to take physical possession of the secured asset.

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3.3 The secured asset is not an agricultural land; the claim of the applicant is totally untenable and baseless. In absence of any illegality, the SA is liable to be dismissed.

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

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i. Whether secured asset agricultural land exempted under SARFAESI Act?

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ii. Whether the securitization proceeding initiated by the defendant suffers from any illegality or irregularity?

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iii. Whether the applicant is entitled to get any relief in this SA?

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Points Nos.(i)

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The applicant claims the secured asset as agricultural land exempted under the provision of the SARFAESI Act. In the

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SA/148/2025

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paragraph (8) of the SA, it is stated that the applicant uses the subject matter property for cultivation of crops like cardamom, coffee, pepper, nutmeg etc. and other agricultural activities. He depends on the agricultural income derived from the said land. No where in the SA the applicant claims that the secured asset was agricultural land at the time of availing of the loan. Before filing of the case, the applicant obtained a certificate from the Agricultural Officer marked Annexture A5 dated 09.12.2024. In the said certificate the agricultural officer has stated that the present petitioner cultivates cardamom, coffee, pepper, nutmeg etc. over his land. His report also does not show that at the time of availing of the loan, the secured asset was used by the applicant for agricultural purpose.

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To attract Sec 31(i) of the SARFAESI Act it is essential on the part of the claimant to show that at the time of availing of the loan the subject matter property is used exclusively for agricultural purpose and his intention was to retain the property as agricultural even the property is mortgaged to secure the loan. Burden to establish the secured asset as agricultural land at the time of availing of the loan lies on the claimant.

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SA/148/2025

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The Hon'ble Apex Court in the judgment reported in 2023 KHC 6012 in case of K.Sreedhar v. M/s.Raus Constructions Pvt. Ltd. & others has held that

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“ When it was the case on behalf of the borrowers that in view of Section 31(i) of the SARFAESI Act, the properties were agricultural lands, the same were being exempted from the provisions of the SARFAESI Act, the burden was upon the borrower to prove that the secured properties were agricultural lands and actually being used as agricultural lands and/or agricultural activities were going on.”

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In view of this ratio passed by the Hon’ble Apex Court, the applicant has to prove that at the time of availing of the loan the secured asset was used as agricultural land exempted under the provision of the SARFAESI Act. No such evidence is placed on record. In absence of any satisfactory evidence and material, the secured asset cannot be treated as agricultural land exempted under the provision of the SARFAESI Act. Hence, the point no.1 is answered against the applicant.

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Points Nos.(ii) &(iii)

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In the SA the applicant challenged the order passed by

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the Chief Judicial Magistrate, Thodupuzha in the proceeding u/s 14

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SA/148/2025

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of the SARFAESI Act and the other measures taken by the defendant. During argument the learned counsel for the applicant did not point out any illegality in the proceeding u/s 14 of the SARFAESI Act before the Chief Judicial Magistrate, Thodupuzha.

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The learned counsel has also argued that the possession notice was not issued properly as per the statutory requirement and hence, the entire proceeding is illegal. It is seen from the record that the possession notice was issued long back which was not challenged within the statutory period of 45 days. Hence, the contention against such possession notice by the learned counsel for the applicant is also not legally sustainable. Lastly it is contended by the learned counsel for the applicant that the secured asset is not registered in CERSAI Portal. The defendant produced document along with the written statement, showing the secured asset, registered in the CERSAI Portal on 12.08.2021. Applicant has miserably failed to establish any illegality or irregularity in the securitization proceeding to interdict. 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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Hence it is ordered: -

SA/148/2025

ORDER

In view of the foregoing reasons, the SA, being devoid

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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 03^rd day of July, 2026)

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[SOVAN KUMAR DASH]

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PRESIDING OFFICER

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SA/148/2025

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Documents on the part of the applicant

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Annexures Date Particulars of documents Annexure-A1 18.12.2020 True copy of the demand notice. Annexure-A2 22.10.2024 True copy of the M.C affidavit with petition. Annexure-A3 22.11.2024 True copy of the Chief Judicial Magistrate order. Annexure-A4 30.11.2024 True copy of the Advocate commissioner’s notice. Annexure-A5 09.12.2024 True copy of the certificate from Agricultural officer.

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Documents on the part of the defendant

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Annexure-B1	19.09.2018	True copy of the application form submitted by the applicant.
Annexure-B2	..	True copy of the acknowledgment cards signed by the applicant.
Annexure-B3	..	True copy of the photograph of the residential property.
Annexure-B4	..	True copy of the CERSAI registration.