Applicants challenged securitization proceedings and recovery measures under SARFAESI Act, claiming secured land was agricultural and thus exempt. Tribunal held applicants failed to prove agricultural use at time of loan, dismissed application.
Securitization application dismissed; no relief to applicants.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM
PRESENT: SRI. SOVAN KUMAR DASH PRESIDING OFFICER
Dated this the 30th day of January, 2026
SECURITIZATION APPLICATION No.223/2025
Between
And
SA 223/2025
2
This Securitization Application having been heard on 13.01.2026 in the presence of Advocate Mr. Zakir Hussain for the applicants and Advocate Ms. K.V. Rashmi for the defendants and stood over to this day for consideration, the Tribunal delivered the following:
F I N A L O R D E R
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/borrowers have filed this SA under S.17(1) of the SARFAESI Act seeking relief to set aside the entire securitization proceeding including the measure taken by the defendants under Section 14 of the SARFAESI Act.
Brief facts of the case :
2.1 Applicant Nos.1 and 2 availed two agricultural loans of an amount of Rs.74,56,000/- and Rs.53,30,000/- for cultivation over the agricultural land and the said loans were secured by depositing their title deeds. Further it is claimed that the mortgaged property is a fertile piece of agricultural land which was cultivated with paddy and agricultural operations are carried out over the same.
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2.2 The applicants claim further that after availing the loan they were repaying the loan regularly. But due to natural calamities, the agricultural operations were affected and the loan could not be repaid in time which was not intentional nor the applicants have done any willful latches.
2.3 The defendants classified the loan as ‘NPA’ and issued demand notice under Section 13(2) of the SARFAESI Act calling the applicants to repay the outstanding in the loan. After receiving the same the first applicant approached the defendant bank to settle the loan by remitting overdue amount. But the bank did not take any positive decision nor considered the grievance of the applicants. Possession notice under Section 13(4) of the SARFAESI Act was issued on 12.02.2025. The securitization proceeding in respect of the agricultural land is barred under Section 31(i) of the SARFAESI Act. In spite of the same, the defendants proceeded further with the securitization proceeding by filing application under section 14(1) of the SARFAESI Act bearing MC No.752/2025 before the Additional Chief Judicial Magistrate Court, Ernakulam to take physical possession of the secured asset.
2.4 It is claimed in the SA that the learned Additional Chief Judicial Magistrate passed an illegal order without applying mind to the materials placed on record. The statutory provision was not duly complied which renders the securitization proceeding illegal.
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Hence the SA may be allowed by setting aside the entire securitization proceeding including the measure taken by the defendants under Section 14 of the SARFAESI Act.
3.1 The defendants filed written statement denying the averments and claimed inter alia that this SA is filed with the sole intention to delay the recovery measure. The applicants availed the loan by creating equitable mortgage in depositing the title deeds of the subject matter property on 26.10.2017. The secured asset is not agricultural land. The applicants have a residential building over the said property. The contrary claim of the applicant is not sustainable.
3.2 Due to non-repayment of the loan the defendants classified the loan as ‘NPA’ and proceeded with the securitization measure by issuing a demand notice under Section 13(2) of the SARFAESI Act calling the applicants to pay the outstanding dues of Rs.2,59,23,918.30 and Rs.1,00,41,690.52 respectively aggregating to Rs.3,59,65,608.82 within the statutory period of 60 days. But no step was taken to repay the same. Consequently, possession notice under Section 13(4) of the SARFAESI Act was issued after following the statutory requirements. There is no illegality or irregularity in any manner in the securitization proceeding.
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3.3 As the defendants could not take physical possession of the secured asset, they filed an application under Section 14 of the SARFAESI Act before the learned Additional Chief Judicial Magistrate, Ernakulam. After being satisfied with the materials the learned ACJM passed an order in appointing an Advocate Commissioner to take physical possession of the secured asset. In absence of any illegality, interference with the securitization proceeding is not warranted. Hence the SA, being devoid of any merit, may be dismissed.
FINDINGS:
Point No.(i) to (iii):-
Act and the defendants cannot proceed in respect of the said property. In order to establish such plea the applicants have
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produced certificates of Agricultural Officer stating that there are coconut trees, arecanut trees, plantain, nut mug, tapioca and other trees over the subject matter property, situated at Angamaly. So also learned counsel for the applicants produced certain photographs and placed report of the Advocate Commissioner, who visited the spot on 20.11.2025. In the said report he has described the details of the plants and trees etc. in existence over the said properties.
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properties as agricultural land, the securitization proceeding cannot be barred in respect of such properties. Hence the contention of the learned counsel for the applicants has no force and the SA may be dismissed.
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Indian Bank & another vs. K.Pappireddiyar & another, held as
follows:-
“7.1 The purpose of enacting Section 31(i) of the SARFAESI Act has been considered by this Court in the case of Blue Coast Hotels Ltd. (Supra) in paragraph 36, which reads as under:
“36. The purpose of enacting Section 31(i) and the meaning of the term “agricultural land” assume significance. This provision, like many others is intended to protect agricultural land held for agricultural purposes by agriculturists from the extraordinary provisions of this Act, which provides for enforcement of security interest without intervention of the Court. The plain intention of the provision is to exempt agricultural land from the provisions of the Act. In other words, the creditor cannot enforce any security interest created in his favour without intervention of the court or tribunal, if such security interest is in respect of agricultural land. The exemption thus protects agriculturists from losing their source of livelihood and income i.e. the agricultural land, under the drastic provision of the Act. It is also intended to deter the creation of security interest over agricultural land as defined in Section 2(1)(zf)35. Thus, security interest cannot be created in respect of property specified in Section 31.”
7.2 Thus, as per the law laid down by this Court in the aforesaid two decisions, only in a case where the secured property is actually put to use as agricultural land and solely on the basis of the revenue records / Pattadar and once the secured property is put as a security by way of mortgage etc. meaning thereby the same was not treated as agricultural land, such properties cannot be said to be exempted from the provisions of the SARFAESI Act under Section 31(i) of the SARFAESI Act. Applying the law laid down in the aforesaid two decisions to the facts of the case on hand and when no evidence was led at all on behalf of the borrowers that the secured properties in question were actually put to use as agricultural land and/or any agricultural activity was going on, the High Court has committed an error in applying Section 31(i) of the SARFAESI Act and quashing and setting aside the entire Possession Notice, Auction Notice as well as Sale etc.”
Keeping in view of this ratio decided and principle laid down
by the Hon’ble Apex Court it requires to consider whether the applicants succeeded in establishing their plea as advanced in this
case.
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mere plantation or existence of trees over the subject matter properties, which is very common in the Kerala State, would not establish the nature of the land as agricultural to get exemption under SARFAESI Act. The applicants, having failed to establish the secured asset as agricultural land on the date of availing the loan, the contention raised in this case cannot be accepted. No other defect or illegality in the securitization proceeding was pointed out by the learned counsel for the applicant to interdict with the SARFAESI proceeding. All the points framed in this case are answered against the applicants and they are not entitled to get any relief.
Hence it is ordered:-
ORDER
(Dictated to my PA, corrected and pronounced by me in the open Tribunal on this the 30th day of January, 2026).
[SOVAN KUMAR DASH] PRESIDING OFFICER
SA 223/2025
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Documents on the part of the applicants
| Annexures | Date | Particulars of documents |
|---|---|---|
| Annexure-A1 | 24.07.2023 | True copy of the Tax receipt in respect of 72.71 Ares of property in Re. Sy. No.489/4-2, 489/8, 489/9-2, 489/4, No.489/5-1, No.489/2-2 and 447/8-2 of Angamaly Village. |
| Annexure-A1(a) | True English translation of Annexure-A1. |
|
| Annexure-A2 | 27.02.2024 | True copy of the tax receipt in respect of 10.65 Ares of property in Re. Sy No.489/12-2 & 489/13-1 of Angamaly Village. |
| Annexure-A2(a) | True English translation of Annexure-A2. |
|
| Annexure-A3 | 05.09.2024 | True copy of the Tax Receipt in respect of 11.20 Ares of property in Re. Sy No.473/1-2 of Angamaly Village. |
| Annexure-A3(a) | 28.02.2017 | True English translation of Annexure-A3. |
| Annexure-A4 | 05.09.2024 | True copy of the Tax Receipt in respect of 10 Ares of property in Re.Sy.No489/6 & 489/7 of Angamaly Village. |
| Annexure-A4(a) | True English translation of Annexure-A4. |
|
| Annexure-A5 | 12.02.2025 | True copy of the possession notice affixed by the 1stdefendant. |
| Annexure-A6 | True copy of the petition MC 752/2025 filed by the first defendant before the Additional Chief Judicial Magistrate Court, Ernakulam. |
|
| Annexure-A7 | True copy of the affidavit filed by the first defendant, before the Additional Chief Judicial Magistrate Court, Ernakulam in MC 752/2025. |
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Annexure-A8 21.08.2025 True copy of the order in MC No.752/2025 of the Additional Chief Judicial Magistrate Court, Ernakulam.
Documents on the part of the defendants
| Annexures | Date | Particulars of docum | ent | s |
|---|---|---|---|---|
| Annexure-B1 | Photographs of the m properties. |
ortg | aged | |
| Annexure-B2 | 28.11.2024 | Demand notice issued defendant to the 1stapplica |
by nt |
the |
| Annexure-B3 | 12.02.2025 | Possession notice issued defendant to the applicants |
by . |
the |
| Annexure-B4 | True copy of publication Hindu” newspaper. |
in | “The | |
| Annexure-B4(a) | True copy of publication “Mathrubhumi” newspaper. |
in |
the |
PRESIDING OFFICER
SA 223/2025
13
IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM
PRESENT: SRI. SOVAN KUMAR DASH PRESIDING OFFICER
Dated the 30th day of January, 2026
SA No.223/2025
Between
K.P. Paul, S/o. K.O. Poulose, Aged 52 years, Kodiyan House, Mala, Thrissur District – 680 734 & Anr. …Applicants
And
The Authorised Officer, The South Indian Bank Ltd., Regional Office, Irinjalakkuda, AKP Centre, Christ College Road, Christ Nagar, Irinjalakkuda,
Thrissur District – 680 125 & Anr. …Defendants
F I N A L O R D E R
3 issues framed by the court
Whether there is any illegality or defect in the securitization proceeding to interdict with it?
Whether the secured asset is agricultural land exempted under the provision of the SARFAESI Act?
Whether the applicants are entitled to get any relief in this proceeding?
Colour shows how this judgement treated each authority
K.Sreedhar v. M/s.Raus Constructions Pvt. Ltd. & othersExplained¶49
_2023 KHC 6012_ in the case of **_K.Sreedhar v. M/s.Raus Constructions Pvt. Ltd. & others_**
ITC Limited vs. Blue Coast Hotels Ltd. & othersApplied¶49
_2018 (4) SCC 793_ and _2018 (18) SCC 252_ in the case of **_ITC Limited vs. Blue Coast Hotels Ltd. & others_**
Indian Bank & another vs. K.Pappireddiyar & anotherApplied¶49
_Indian Bank & another vs. K.Pappireddiyar & another_
5 provisions across 1 enactments
K.P. Paul
Sandhya Paul
Authorised Officer, The South Indian Bank Ltd.
The South Indian Bank Ltd.
SOVAN KUMAR DASH
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
SOVAN KUMAR DASH
Parties & counsel
