Dismissed

Indira K v. versus South Indian Bank

DRT23 Feb 2026SA/397/2024

Case brief

AI extract

What is this about?

In this Securitization Application, the Debt Recovery Tribunal examined challenges against a bank's securitization measures under the SARFAESI Act. The applicants contested the service of notices and the validity of the Court Magistrate's order for taking possession. The Tribunal found no illegality in the service of notices or the seizure proceedings, applying the doctrine of substantial complian

What did the court decide?

The Securitization Application was dismissed with costs of Rs.20,000/- payable by the applicants.

Indira K v versus South Indian Bank — 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 23^rd day of February, 2026

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Securitization Application No.397/2024

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Between

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Indira K.V., Akshaya Nikunjam, Veloor P.O., Kottayam, PIN - 686 003.

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Deepak Dilip, Akshaya Nikunjam, Veloor P.O., Kottayam, PIN - 686 003.

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Radhika Padmakumar, Akshaya Nikunjam, Veloor P.O., Kottayam, 686 003. …Applicants

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And

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The South Indian Bank Ltd., Represented by its Branch Manager, Kumarakom Branch, Door No.5B., Attamangalam Arcade, Opposite Attamangalam Church, Kumarakom P.O., Kottayam, PIN – 686 563.

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The Authoirsed Officer, South Indian Bank Limited, Regional Office, 1^st Floor, Regency Square, K.K. Road, Collectorate P.O., Kottayam – 686 002. …Defendants

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SA/397/2024

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This Securitization Application having been heard on 01.01.2026 in the presence of Advocate Peer Mohammed Khan for the applicants and Advocate Sunil Shankar for the defendants and 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 applicants under S.17(1) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘the SARFAESI Act’) praying to set aside the entire securitization proceedings including the order passed by the Chief Judicial Magistrate Court, Kottayam.

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Brief facts of the case :

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2.1 The first applicant availed KCC facility of Rs.99 lakhs by mortgaging the joint property of the applicant Nos.1 and 2 of an extent of 10.85 Ares in Kottayam District consists of residential building and also another piece of land having extent of 8.09 Ares in Alappuzha District. The defendant bank classified the loan as ‘NPA’ hastily and issued a demand notice under Section 13(2) of the SARFAESI Act dated 01.09.2023 calling the applicants to pay

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SA/397/2024

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an amount of Rs.1,29,21,838.71. It is claimed in the SA that the demand notice was not served on all the parties to the loan and the interest calculation is not correct.

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2.2 Despite such illegality in the demand notice the defendants issued possession notice under Section 13(4) of the SARFAESI Act dated 16.05.2024 which was also not served on all the parties and all the prescribed statutory measures are not duly followed. The applicants filed this SA in challenging such possession notice. During pendency of the SA the defendants initiated proceedings under Section 14 of the SARFAESI Act before the Chief Judicial Magistrate Court, Kottayam for taking physical possession of the secured asset. The learned Chief Judicial Magistrate, Kottayam appointed an Advocate Commissioner to take possession of the secured asset. After getting notice the applicants challenged such proceeding by amending the SA. It is claimed that the proviso to Section 14(1) of the SARFAESI Act is not duly complied. Hence the securitization proceeding is vitiated. The defendants cannot proceed with the securitization proceeding based upon illegal order of the learned CJM. Hence the SA may be allowed by setting aside the securitization proceeding.

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SA/397/2024

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3.1 The defendants filed written statement denying the averments and claimed inter alia that all the securitization measures are duly complied as per statutory provision. 1^st and 2^nd applicants availed KCC OD loan of Rs.49 lakhs on 18.12.2015 which were renewed on 20.10.2018 and the limit was enhanced to Rs.99 lakhs on 18.06.2019. The 3^rd applicant is the guarantor to the said credit facility. The 1^st and 2^nd applicants created security interest over the residential property having an extent of 10.85 Ares of land in Kottayam District and also the 1^st applicant created security interest over 8.09 Ares of land in Alappuzha District to secure the loan. Both the properties are registered in the CERSAI Portal as shown in Annexure-B1.

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3.2 Due to default in repayment, securitization proceeding was initiated after classifying the loan as ‘NPA’. Demand notice followed by possession notice were duly served to the applicants. The relevant acknowledgement cards are produced in this case. The compliance of the statutory requirement regarding publication in the two newspapers in English and Malayalam language having with wide circulation in the locality and the affixture of notice are produced. As the defendants could not take physical possession of the secured asset, approached the CJM, Kottayam in MC No.493/2024 by filing application under section 14 of the

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SA/397/2024

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SARFAESI Act to take physical possession of the secured asset. So also, another MC No.459/2024 was filed before the Chief Judicial Magistrate Court, Alappuzha to take possession of the 2^nd item of secured asset. All the statutory procedures are duly complied. The applicants have no basis to challenge the securitization proceeding and hence the SA, being devoid of any merit, may be dismissed.

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From the respective case of the applicants and the

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defendants, the following points are emerged for adjudication in this case:

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(i) Whether the securitization proceeding initiated by the defendants suffers from any illegality or irregularity?

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(ii) Whether the applicants are entitled to get any relief in this SA?

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FINDINGS:

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Point Nos.(i) & (ii)

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The main contention is raised in the SA by the applicants that the demand notice was not served on all the applicants. In absence of the same, they cannot proceed with the securitization proceeding. The learned counsel for the defendants contended that the demand notices were duly served and the postal AD cards showing service of the demand notices on the applicants are produced. Hence the contention is not acceptable.

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On careful consideration of the submission of both sides and perusal of the materials it is discernible that the demand

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SA/397/2024

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notices were duly served on the applicants. Hence the contention of the learned counsel for the applicants has no force. Further it appears from Annexure-B3 produced by the defendants that the applicant Nos.1 and 2 approached the bank praying for releasing the property by accepting Rs.80 lakhs by March 15^th which was accepted by the defendants under certain terms and conditions. The defendant bank asked the applicants to deposit Rs.80 lakhs before 15.03.2024 for releasing the properties as asked by the applicants. But the same was not complied. Hence the step under Section 13(4) of the SAARFAESI Act was taken. The same was also duly served on the applicants and the statutory requirements in compliance of the statutory provision in issuing the possession notice, i.e., publication in two newspapers, out of which, one in vernacular language was complied. The same was also affixed on the conspicuous part of the residential house of the applicants. No illegality is noticed in compliance of such measure by the defendant.

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In respect of the proceeding under Section 14 of the SARFAESI Act, applicants amended the SA and claimed that the impugned order is not proper due to non-application of mind. So also, the declaration made by the Authorised Officer at the time of filing the application does not indicate in compliance of clause (i)

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SA/397/2024

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to (ix) of Section 14(1) of the SARFAESI Act. In the affidavit the declining of the objection to the demand notice is not stated and also regarding substantial payment in the loan account is not stated which renders the declaration as invalid. Based upon such illegal order of the CJM, the defendants cannot take possession of the same.

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On the other hand, the learned counsel for the defendants contended that there is absolutely no illegality in such proceeding. All the statutory measures are duly followed. In the application it is specifically stated about the outstanding in the loan account as on 01.07.2024 and also in the affidavit the details are mentioned stating the amount due as on 01.07.2024. Hence the applicants, having failed to comply the direction of the Hon’ble High court, have no bonafide in challenging the securitization proceeding.

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This is not a case that no affidavit is filed by the authorized officer in filing the application under section 14 of the SARFAESI act. It is seen from the declaration filed by the Authorised Officer in the form of affidavit before the Chief Judicial Magistrate that the amount outstanding as on 01.07.2024 is stated but the application is filed in the court on 05.07.2024. The relevant documents in support of securitization proceeding are

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SA/397/2024

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also attached to the application. The requirement of the statute is substantially complied. Merely because the Authorized Officer has stated the outstanding in the loan account four days before filing the application, it does not invalidate the entire proceeding.

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The Hon’ble High Court of Andhra Pradesh passed in Writ Petition No.3950 of 2022 in the case of Mogali Durga Devi & Ors. v. Union of India & Ors., at paragraph 10, it is held as follows:-

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“10. From the above, it is very clear that the respondent bank has clearly specified the total amount due as on 16.07.2021 including interest w.e.f. 17.07.2021, but failed to mention only about the outstanding amount due as on the date of filing of the application i.e. 27.01.2022. Mere non mentioning of the total outstanding amount due as on the date of filing of the application cannot be a ground to say that the respondent-bank has violated the mandatory requirements as provided in clauses (i) to (ix) of the proviso to sub-section (1) of Section 14 of the SARFAESI Act and also a ground to stall the entire proceedings initiated under Section 14 of the SARFAESI Act, such as taking of physical possession of property on 09.02.2022 and on 16.02.2022.”

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So also in another Division Bench judgment of the Hon’ble

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Telangana High Court reported in 2019 KHC 3959 in the case of Tulsi Rocks Pvt. Ltd., Secunderabad & others v. Bank of

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India & Anr., at paragraph 17 it is held as follows:-

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“17. Therefore, wherever this Court finds that the parameters indicated in Clauses (i) to (ix) of the first proviso to Section 14 (1) of the Act are broadly complied with, the Court is bound to invoke the doctrine of ‘substantial compliance’. It must be remembered that Clauses (i) to (ix) of the first proviso to Section 14 (1) of the Act merely provide the form in which the essential averments for an application under Section 14 of the Act are to

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SA/397/2024

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be made. Therefore, what is important, is the substance and not the form.”

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The Hon'ble Apex Court in the judgment reported in (2023) 1

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SCC 675 in the case of M/s. R.D.Jain and Co. v. Capital First

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Ltd. & others had held as follows:-

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“8.1 …………Thus, we reiterate that the step to be taken by the CMM/DM under Section 14 of the SARFAESI Act, is a ministerial step. While disposing of the application under Section 14 of the SARFAESI Act, no element of quasi-judicial function or application of mind would require. The Magistrate has to adjudicate and decide the correctness of the information given in the application and nothing more. Therefore, Section 14 does not involve an adjudicatory process qua points raised by the borrower against the secured creditor taking possession of secured assets.”

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It is noticed from the affidavit that the statutory requirement in complying the proviso of section 14 (1) of the SARFAESI is materially and broadly complied with. No prejudice has been caused to the applicants. In view of the above ratio, if the requirement in filing the affidavit is substantially complied, even if there is some omission or addition or error in swearing such affidavit, the order passed by the Chief Judicial Magistrate cannot be said as illegal. So also, the learned Chief Judicial Magistrate, having applied mind to the materials on record, the proceeding under Section 14 of the SARFAESI Act cannot be said as illegal in any manner in view of the ratio decided by the Hon’ble Apex Court.

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SA/397/2024

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Lastly, it is contended by the learned counsel for the applicants that interest is charged in the loan account arbitrarily, which is also not acceptable. No such claim is raised by the applicants after receipt of the demand notice in disputing the claim. So also, in their letter issued to the defendants, marked Annexure-B2, they have not disputed the demand rather they offered to pay Rs.80 lakhs by March, 15^th and hence the contention regarding excessive charge of interest is totally an afterthought, which is not acceptable.

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Besides the same, this Tribunal is concerned with any illegality or irregularity in the securitization proceeding and charging of excess interest by the bank is beyond the scope of this Tribunal. In the Full Bench judgement of the Hon'ble Madras High Court in the case of M/s.Lakshmi Shankar Mills (P) Ltd. & others vs. The Authorised Officer/Chief Manager, Indian

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Bank & others [judgement dated 15.04.2008 in W.P.Nos.37148 & 37534/2007] , at paragraph 21 it is held as follows:

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“21. …………. However, we hasten to add that while considering the question of validity of the action of the bank, it is not necessary for the Tribunal to adjudicate the exact amount due to the secured creditors. In other words, the purpose of an application under Section 17 is not the determination of the quantum of claim per se as the Tribunal is concerned with the issue of the validity of the measures

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SA/397/2024

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taken by the banks/financial institutions under Section 13(4). In our opinion, the judgment of the Division Bench in Mison Leathers Ltd., lays down the law correctly and does not require any reconsideration .”

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In view of this Judgment, the contention of the learned counsel for

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the applicants is also not sustainable. The applicants, having failed to establish any illegality in the securitization proceeding, are not entitled to get any relief and both the points are answered against them.

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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

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of any merit, is hereby dismissed with cost of Rs.20,000/- (Rupees Twenty Thousand only) payable by the applicants to the defendants for causing unnecessary delay in the securitization proceeding.

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(Dictated to my steno, corrected and pronounced by me in the open Tribunal on this the 23^rd day of February, 2026).

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[SOVAN KUMAR DASH] PRESIDING OFFICER

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SA/397/2024

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Documents on the part of the applicants

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Annexures	Date	Particulars of documents
Annexure-A1	01.09.2023	True copy of the Sec.13(2) notice issued by the defendants.
Annexure-A2	16.05.2024	True copy of the possession notice issued by the defendant bank.
Annexure-A3	03.07.2019	True copy of the request submitted by the applicants through e-mail.
Annexure-A4		True copy of the petition along with affidavit filed by the defendant bank under Section 14 of the SARFAESI Act.
Annexure-A5	17.07.2024	True copy of the order in MC No.493/2024 on the file of CJM Court, Kottayam.
Annexure-A6		True copy of the Notice issued by the Advocate Commissioner.
Annexure-A7		True copy of the petition along with affidavit filed by the defendant bank under Section 14 of the SARFAESI Act.
Annexure-A8		True copy of the Order in MC 459/2024 on the file of CJM Court, Alappuzha.

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Documents on the part of the defendants

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Annexure-B1	True copy of report.	the	CERSAI registration
Annexure-B2 01.09.2023	True copy of acknowledgmen	the t car	demand notice and ds.
Annexure-B3 27.02.2024	True copy of applicants to the	the ban	letter sent by the k.
Annexure- B3(a) 06.03.2024	True copy of Authorised Offic	the er.	letter issued by the
Annexure-B4	True copy of th acknowledgmen	e po t car	ssession notice and its ds.

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SA/397/2024

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Annexure- B4(a)	18.05.2024	True copy of paper publication in the Malayala Manorama newspaper, Alappuzha and Kottayam editions.
Annexure- B4(b)		True copy of the affixed photographs.
Annexure-B5		True copy of Section 14 petition and affidavit filed in MC No.493/2024 filed before the Chief Judicial Magistrate Court, Kottayam.
Annexure-B6	09.12.2024	True copy of the Judgment in the OP (DRT) No.365/2024 of the Hon’ble High Court of Kerala.
Annexure- B6(a)	09.01.2025	True copy of the Order in IA No.1 of 2024 OP (DRT) No.365/2024 of the Hon’ble High Court of Kerala.

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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 23^rd day of February, 2026

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SA No.397/2024

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Between

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Indira K.V., Akshaya Nikunjam, Veloor P.O., Kottayam, 686 003 and 2 Others. …Applicants

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And

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The South Indian Bank Ltd., Represented by its Branch Manager, Kumarakom Branch, Door No.5B., Attamangalam Arcade, Opposite Attamangalam Church, Kumarakom P.O., Kottayam – 686 563 & Anr. …Defendants

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F I N A L O R D E R

Indira K v. versus South Indian Bank

Case brief

What is this about?

What did the court decide?

Indira K v. versus South Indian Bank

Case brief

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