Dismissed

Ibrahim Kallatra v. South Indian Bank

DRT25 Mar 2026SA/205/2024

Case brief

AI extract

What is this about?

This Securitization Application was dismissed after the Tribunal found that the secured asset was not agricultural land and the applicant volunteered the mortgage for a non-agricultural purpose, thus barring immunity under the SARFAESI Act.

What did the court decide?

Securitization Application No.205 of 2024 standing dismissed with no order as to costs.

Ibrahim Kallatra versus South Indian Bank — Contract and Commercial Disputes | DRT (2026)

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL - 1 AT ERNAKULAM

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DATED THIS 25^th DAY OF MARCH, 2026

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

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S.A No. 205 of 2024

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Between

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Ibrahim Kallatra, S/o.Kallatra Abdul Khader Haji, Jannath, Koovathody, Chemnad, Kasaragod, Kerala – 671 217.

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--- Applicant

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And

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South Indian Bank Ltd.

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Uduma Branch, Door No.16/496,

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Yempees Complex, Main Road,

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Palakkunnu, Uduma,

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Bakel P.O. – 671 318, represented

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By its Branch Manager.

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South Indian Bank Ltd.

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Regional Office, Kannur, SIB House, Chalad-Alavil Road,

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Chalad P.O., Kannur-670 014, Represented by its Chief Manager & Authorized Officer.

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--- Defendants

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This Securitization Application coming on 10.03.2026 for final hearing before me in the presence of Mr. Vinod Jabar, Counsel appearing for the Applicant and Mr. Ananthu V. Lal, 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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SA No.205 of 2024

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O R D E R

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This Securitisation Application was filed on 05.03.2024 seeking to set aside Annexure-A8 demand notice, A15 possession notice and A18 physical possession notice and to declare that the secured property is an agricultural land and to direct the 1st defendant bank to refund the amount which was arbitrarily and illegally charged by the 1st defendant bank towards interest and penal interest towards the loan account and to grant compensation and costs of this application.

¶24

The applicant is the Director of M/s. Kallatra Parivar Pvt Ltd. He availed OD facility for a limit of Rs.7,00,00,000/- (Rupees Seven Crores only) from the 1st defendant bank. Equitable mortgage has been created over the immovable property of the applicant and his brothers as the collateral security for the aforesaid availment of the credit facility.

¶25

Due to default in repayment of the outstanding loan due, the loan account of the applicants came to be classified as Nonperforming Asset on 28.7.2023. Annexure-A8 demand notice dated 19.08.2023 was issued to the applicant and other guarantors calling upon them to repay the outstanding loan due within a period of 60 days from the date of receipt of the demand notice. The applicant sent Annexure-A9 letter in response to the demand notice to the 1st defendant bank. The 2nd defendant sent Annexure-A10 reply. Subsequently, the applicant sent another letter dated 03.10.2023, Annexure-A11 to the 2nd defendant.

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Since the applicant and the guarantors failed to respond to the terms of the demand notice, Annexure-A15 Possession Notice dated 17.11.2023 was issued for symbolically taking physical possession of the secured assets.

¶27

Subsequently, the defendants approached the Chief Judicial Magistrate Court Kasaragode and filed application and affidavit under Section 14 (1) of the SARFAESI Act, 2002. Annexure-A19 Order dated 08.02.2024 came to be passed in CMP No.538/2024 appointing Advocate Commissioner for taking physical possession of the secured asset. The Advocate Commissioner issued Annexure-A18 notice dated 26.02.2024 to the applicant and other guarantors informing them that he would take physical possession of the secured asset on 26.02.2024. The applicant having aggrieved against the above measures, filed this S.A seeking for the reliefs stated supra.

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Page 2 of 11

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SA No.205 of 2024

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The applicant has contended in the SA that the original interest rate agreed was only 10.80% per annum for the OD facility availed and that the 1st defendant bank has raised the rate unilaterally. The rival contention of the defendants in their written statement is that the rate of interest charged is as per the agreement and that it is flouting rate and subject to change. In Annexure-B1 sanction letter it is mentioned that the effective rate of interest is 10.80% per annum. W.M.R and that however the applicable RoI will be based on the appropriate MCLR on the date of first disbursement, loading the same spread. The applicant has signed in Annexure-A1. Hence the applicant having aggrieved for the flouting rate of interest which is subject to change is not entitled to raise the above contention.

¶31

The counsel appearing for the applicant submitted that description of the property in Annexure-A15 possession notice is incorrect and that the description of property includes the land acquired by Government. A perusal of Annexure-A15 shows that the description of the secured asset is correct. The applicant has not pointed out as to how the description of the property is incorrect. No material has been produced to show that the land which has been acquired by the Government has been included in Annexure-A15. Be that as it may, Annexure-A15 possession notice was issued as early as on 17.11.2023. SA was not filed challenging Annexure-A15 within a period of 45 days. This SA was filed on 05.03.2024, which is beyond the period of limitation. Therefore, the applicant is not entitled to raise any contention in respect of Annexure-A15 on the aforesaid ground alone.

¶32

The main contention raised by the applicant in the SA is that secured asset is agricultural land and that therefore, the defendants are not entitled to initiate any measures under the SARFAESI Act 2002 and the Rules made there under in respect of the secured asset.

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The rival contention of the defendants is that secured asset is not agricultural land and that it is residential property and that the applicant is not an agriculturist by profession and that he has not eking out his livelihood from and out of the income of the agricultural property.

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The petitioner relies upon Annexures-A2 to A6 in order to substantiate his claim that secured assets are agricultural lands. In Annexure-A2, which is copy of field survey, there is no reference with regard to nature of the properties. In Annexure-A3 is the award passed by Special Tahsildar (Land Acquisition) Kasaragod for granting compensation to the land owners, whose lands had been acquired under the Land Acquisition Act. There is no specific reference in Annexure-A3 that the property belonging to the petitioner is

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Page 3 of 11

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SA No.205 of 2024

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agricultural land. Further, the property of the petitioner mentioned in Annexure-A3 is not the secured asset. Hence Annexure-A3 document does not support the contention of the applicant that the secured assets are agricultural lands. Annexure-A4 is the copy of the certificate issued by the Field Officer, Krishi Bhavan, Kanhangad wherein it is stated that Sri. Mahin K., Mubaraq Mazil, Meleparambu is a true coconut farmer and that he has 500 coconut trees in the land located in Sy. Nos.75/2, 76/4 within the jurisdiction of Kanhangad Krishi Bhavan. The name of the petitioner is Ibrahim Kallatra. Hence it is evident that his name is not reflected as a coconut farmer in Annexure-A4. Further, it is seen that the Agricultural Field Officer issued the above certificate without making personal inspection to the secured assets. Hence no reliance can be relied upon Annexure-A4 to accept the contention of the petitioner that the secured assets are agricultural lands. Annexure-A5 receipt is titled as “the receipt of house tax of Thandaperu”. Hence it is evident that the above receipt has been issued for payment of house tax. In any event, there is no mention or reference in Annexure-A5 receipt with regard to cultivation of coconut trees. Annexure-A6, copy of consumer profile issued by the KSEB does not reflect the existence of coconut cultivation in the secured asset. A perusal of Annexure-B9 partition deed shows that item No.II, Sl. No.iv, v, vi, vii, viii and ix of Schedule-A property allotted to the petitioner and the guarantors comprises of residentialcum-commercial buildings numbering about 21 and college building and five other buildings and that door numbers for each and every building is mentioned. It is pertinent to mention herein that there is no reference with regard to existence of 500 coconut trees in the above said properties. In Annexure-B10 valuation report dated 04.01.2022 produced by the respondents, the characteristic of the land is described as residential area. The properties are not described as agricultural lands in Annexure-B10 and the existence of office buildings is mentioned in Annexure-B10.

¶38

The Advocate Commissioner inspected the secured asset pursuant to the warrant issued to him in order to ascertain the lie and nature of the property. He inspected the property on 19.09.2025 in the presence of both the parties and submitted his report before this Tribunal on 09.01.2026.

¶39

The Advocate Commissioner has stated in his report that nearly 450 or more coconut trees aged about 25 years had been planted in the property and that he assessed the age of the property on the basis of the leaf scars on the trees. He has also stated that there were 18 labour quarters and that one Mr. Mohammed had been employed as a caretaker of the property and cultivation and that there was a concrete water tank in the middle of the property.

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Page 4 of 11

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SA No.205 of 2024

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The defendants have filed their objection to the Commissioner’s report stating that the finding of the Advocate Commissioner with regard to the cultivation of the coconut trees is highly disputable and that a large extent of property comprises of several buildings including staff quarters and offices and that finding of the Advocate Commissioner with regard to the age of the coconut trees is unscientific and is based on certain assumptions. The Advocate Commissioner has not stated anything about the height or width of the coconut trees.

¶43

It is pertinent to mention that the Advocate Commissioner has not specifically stated in his report as to whether he witnessed any signs of the agricultural activities being carried on in the property during his visit. He has also not stated in his report as to on what basis he ascertained the age of the coconut trees. There is no mention as to whether the coconut trees were fruit bearing or not. It is stated in his report that one person Mr. Mohammed has been employed as caretaker of the property and cultivation of the property. If it is so, what is the necessity to construct 18 labour quarters in the property instead of one quarter for the occupation of the above said person. Therefore, this Tribunal is not inclined to agree with the finding of the Advocate Commissioner.

¶44

The Hon’ble Supreme Court has laid down in Indian Bank Vs. K. Pappireddiyar (Civil Appeal No.6641 of 2018 with Civil Appeal No6645 of 2018) as follows :

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“9. The classification of land in the revenue records as agricultural is not dispositive or conclusive of the question whether the SARFAESI Act does or does not apply. Whether a parcel of land is agricultural must be deduced as a matter of fact from the nature of the land, the use to which it was being put on the date of the creation of the security interest and the purpose for which it was set apart.”

¶46

The Hon'ble High Court of Kerala referring to the above cited judgment of the Hon'ble Supreme Court and also another judgment of Hon'ble Supreme Court rendered in K.Sreedhar Vs. Raus Constructions Pvt. Ltd. (2023 SCC online SC 13) has observed in paragraph 12 of its judgment delivered in Kaningat Ramachandra Menon Vs. State Bank of India OP (DRT) No.216/2023 as follows:

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“12. A reading of the above principles laid down by the Hon'ble Supreme Court undoubtedly shows that the pertinent question to be decided, when a contention that

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Page 5 of 11

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SA No.205 of 2024

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the property is an agricultural land, is to ascertain whether the land is agricultural or not on the date of creation of the security interest for the purpose of taking the loan.

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The applicant has not produced any material before this Tribunal to show that the secured asset was agricultural property on the date of creation of security interest over the same.

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Even assuming for argument sake that the secured asset agricultural property (without admitting), as contended by the applicant, the applicant having voluntarily created equitable mortgage over the property with the 1st defendant bank is not entitled to contend that since secured asset is agricultural property, it is exempted u/s 31 (i) of SARFAESI Act 2002. In ITC Limited Vs. Bluecoast Hotels Pvt. Ltd. & others [2018 (15) SCC] the Hon'ble Supreme Court has held as follows :

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“ Obviously, since no security interest can be created in respect of agricultural lands and yet it was so created, goes to show that the parties did not treat the land as agricultural land and that the debtor offered the land as security on this basis .”

¶54

Therefore, in the light of the dictum laid down in the above case, the applicant is not entitled to invoke the provisions of Sec 31 (i) of the SARFAESI Act 2002.

¶55

In Dhanalaxmi Bank Ltd. (M/s) and others Vs. M/s.Sharada Flour Products Pvt. Ltd. and others [2018 KHC 4647] which has been cited by the counsel for the defendants, the Hon'ble High Court of Kerala has held that Sec. 31 (i) of the SARFAESI Act 2002 intends to protect the agricultural land held for agricultural purposes by agriculturists. It has been specifically held in paragraph 53 to 55 of the above judgment as follows:

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“53. Regrettably, the borrower Companies have miserably failed to measure up to the exceptions engrafted in Blue Coast Hotels, to claim immunity for their property from the SARFAESI Act.

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54. To sum up, Thekkemukkalil Company (a) does not answer the description of an agriculturist; (b) does not cultivate the land; (c) derives no income from agriculture; (d) does not have agriculture as on object; and (e) did not inform the Bank that the secured asset is an agricultural land. So it does not fit into the niche Blue Coast Hotels created to protect genuine agriculturists.

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Page 6 of 11

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SA No.205 of 2024

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55. I may, to conclude, hold that the debtor’s last gasp effort to save the property with endless excuses and plethora of pleas should wilt in the judicial gaze. A salutary provisions aimed at protecting poor peasants cannot aid corporate concerns camouflaged as agriculturists. Here, the companies induced the Bank to lend, offered property, kept the Bank in dark about the alleged nature of the property, bargained with the Bank, borrowed time, and finally, driven to wall, cried foul.

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Meritless, the writ petition stands dismissed.”

¶62

There is no specific pleading or averment in the SA that the applicant is the agriculturist by profession and that the credit facility availed by him was for the purpose of carrying on agricultural activities in the secured asset. The applicant has admitted that he is the Director of M/s. Kallatra Pvt. Ltd. which is a private limited company incorporated under the Companies Act and that the company is engaged in the business of infrastructure development and that credit facility was availed to undertake a project from KITCO for the purpose of construction of academic block and allied works for Government Medical College, at Badiadka. Hence, it is evident that the aforesaid company is not at all engaged in any agricultural activities as contended by the defendants.

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The dictum laid down in the above cited judgment is squarely applicable to the facts of the present case. The applicant having voluntarily offered his property for creating security interest in order to avail a huge credit facility of Rs.7 Crores is not entitled to claim protection u/s 31 (i) of the SARFAESI Act 2002 against the measures initiated by the defendants.

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The applicant has not pleaded in the SA as to whether the defendants failed to comply with the statutory requirements contemplated under Clause (i) to (ix) to the provisions of Section 14 (1) of the SARFAESI Act 2002 in respect of filing of application and affidavit in CMP No.534/2024 before the Chief Judicial Magistrate Court, Kasaragode. A perusal of Annexure-A19 order shows that the learned Chief Judicial Magistrate Kasaragode after having perused the contents of the affidavit and the documents produced along with the affidavit and after having satisfied over the same, appointed Advocate Commissioner to take physical possession of the secured asset. This Tribunal does not find any infirmity in the above order.

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This Tribunal does not find any illegality or procedural irregularity in respect of the measures initiated by the defendants on the classification of the loan account of the applicant as Non-

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Page 7 of 11

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SA No.205 of 2024

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Performing Asset, issuance of Annexure-A8 demand notice, AnnexureA15 possession notice and Annexure-A19 order.

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The applicant has failed to prove his case so as to get the reliefs sought for in the SA. In view of the foregoing reasons, this Tribunal holds that the applicant is not entitled to get the reliefs sought for in this S.A.

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Resultantly, S.A No.205/2024 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 pronounced by me in the open court on this the 25^th day of March, 2026.

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(Su. WILLYAHM) PRESIDING OFFICER

Mj/

Page 8 of 11

SA No.205 of 2024

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

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Sl. No.	Date	Particulars
1.	04.01.2017	True copy of the sanction letter issued by the1^st defendant.	Annexure-A1
2.	23.02.2024	True coy of the field survey correlation statement of Balla Village issued by the Village officerto theapplicant.	Annexure-A2
3.	---	English translation of Annexure-A2	Annexure- A2(a)
4.	30.12.2016	True copy of the award passed under Sec.30 of RFCTLARR Act, 2013.	Annexure-A3
5.	20.02.2024	True copy of the certificate issued by the Agricultural Field Officer, Krishi Bhavan, Kanhangad.	Annexure-A4
6.	---	English translation of Annexure-A4	Annexure- A4(a)
7.	18.07.2023	True copy of the land tax receipt issued from Village Office Balla.	Annexure-A5
8.	---	English translation of Annexure-A5	Annexure- A5(a)
9.	26.02.2024	True copy of the consumer profile issued by KSEB to the applicant	Annexure-A6
10.	25.01.2023	True copy of the interim order in W.P. (C) No.37517/2022 of Hon'ble High Court of Kerala.	Annexure-A7
11.	19.08.2023	True copy of the demand notice issued by the 2^nd defendant to the applicant	Annexure-A8
12.	31.08.2023	True copy of reply letter issued by the company to the 2^nd defendant	Annexure-A9
13.	06.09.2023	True copy of the letter issued by the 2^nd defendant to the company.	Annexure-A10
14.	03.10.2023	True copy of reply letter issued by the company to the 2^nd defendant.	Annexure-A11
15.	06.10.2023	True copy of the judgment in W.P. (C) No.32901/2023 of the Hon'ble High Court of Kerala.	Annexure-A12
16.	06.10.2023	True copy of the letter issued by the 2^nd defendant to the company.	Annexure-A13
17.	06.11.2023	True copy of the letter issued by the 2^nd defendant to the company.	Annexure-A14

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SA No.205 of 2024

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18.	17.11.2023	True copy of the symbolic possession notice issued by the 2^nddefendant to the applicant	Annexure-A15
19.	---	True copy of the loan account statement of the company.	Annexure-A16
20.	08.01.2024	True copy of the judgment of the Hon'ble High Court of Kerala in W.P. (C) No.36523/2023.	Annexure-A17
21.	26.02.2024	The original of the notice issued by the Advocate Commissioner in CMP No.534/2024to theapplicant.	Annexure-A18
22.	08.02.2024	True copy of the order in CMP No.534/2024 passed by the Chief Judicial Magistrate Courtkasaragod.	Annexure-A19

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List of documents filed by the defendants along with the written statement

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Sl.	Date	Particulars
No.
1.	06.01.2017	Copy of the sanction letter of the defendant bank.	Annexure-B1
2.	19.08.2023	Copy of demand notice	Annexure-B2
3.	---	Copy of postal receipts evidencing issuance ofdemandnotice.	Annexure-B3
4.	---	Copy of acknowledgment cards evidencing the receipt of demand notice by the borrower, applicant and other co-obligants	Annexure-B4
5.	06.10.2023	Copy of reply letter made by the defendant bank to the principal borrower	Annexure-B5
6.	17.11.2023	Copy of the possession notice	Annexure-B6
7.	---	Copy of postal receipts evidencing the issuance ofpossession notice	Annexure- B6(a)
8.	21.11.2023	Copy of the publication of possession noticemadein TheNew Indian Express	Annexure-B7
9.	21.11.2023	Copy of the publication of possession notice made in vernacular Malayalam dailyMangalam.	Annexure- B7(a)
10.	---	Photographs evidencing the affixture of possession notice.	Annexure-B8
11.	26.03.2005	Copy of partition deed No.6799/2005 of SROMangalore City.	Annexure-B9

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Page 10 of 11

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SA No.205 of 2024

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12.	04.01.2022	Copy of the valuation report	Annexure-B10
13.	04.10.2023	Copy of W.P. (C) No.32901/2023 filed	Annexure-B11
		by the applicant before the Hon'ble High Court of Kerala.

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(Su. WILLYAHM) PRESIDING OFFICER

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Mj/

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Page 11 of 11

Ibrahim Kallatra v. South Indian Bank

Case brief

What is this about?

What did the court decide?

Ibrahim Kallatra v. South Indian Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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