The Debts Recovery Tribunal dismissed an application to set aside securitization measures initiated by a bank against an applicant who failed to repay a housing loan, finding no illegality in notice service or NPA classification.
The application was dismissed with costs of Rs.20,000/- payable by the applicant.
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 27th day of April, 2026
Securitization Application No.408/2024
Between
Shaji C.C., Aged 49 years, Chenthuruthi House, Mala P.O., Pallippuram, Thrissur, PIN – 680 732. …Applicant
And
This Securitization Application having been heard on 26.03.2026 in the presence of Advocate Mr. Praveen K.Joy for the applicant and Advocate Mr. Saju N.A. 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
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 as ‘the SARFAESI Act’) prayed to set aside the entire securitization measure including the order passed by the Chief Judicial Magistrate and the notice issued by the Advocate Commissioner.
Brief facts of the case:
2.1 The applicant availed housing loan from the defendant bank. But due to non-repayment securitization proceeding was initiated in respect of the mortgaged property of an extent of 8.09 Ares of land along with a residential building standing thereon described in the SA. It is claimed that the demand notice under Section 13(2) of the SARFAESI Act and the possession notice under Section 13(4) of the SARFAESI Act was not served on him.
2.2 An Advocate Commissioner appointed by the Chief Judicial Magistrate Court, Thrissur in Crl. M.P. No.4875/2024 on 13.05.2024 issued notice to take possession of the subject matter property on 28.05.2024.
2.3. It is claimed that the applicant and the family members
are residing over the same. In case of dispossession, they will face hardship. All the statutory measures are not duly complied. So also
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the classification of the loan as ‘NPA’ is against the guidelines of RBI and hence the entire securitization proceeding renders illegal. Hence the applicant has prayed to set aside the entire securitization measure including the order passed by the Chief Judicial Magistrate and the notice issued by the Advocate Commissioner.
3.1. The defendants filed written statement denying the averments and claimed inter alia that after availing the loan of Rs.16 lakhs on 27.03.2018 the applicant did not repay the same. Consequently, the loan was classified as NPA. Demand notice dated 16.07.2018 was issued by registered post with acknowledgment card to the applicant, which was received by him. Relevant documents regarding service of the demand notice are produced. The possession notice was also issued in accordance with the law.
3.2. A sale notice dated 17.01.2022 was issued in compliance of the statutory requirement. The applicant challenged the same before the Hon’ble High Court of Kerala by filing Writ Petition No.3739/2022. The same was disposed permitting the applicant to remit the overdue amount in instalments. But the same was not complied.
3.3. In this SA, the applicant has also filed an application to stay the proceeding, which was considered and dismissed on merit. The applicant filed OP (DRT) No.223/2024 before the Hon’ble High Court of Kerala, which was disposed directing to pay 25% of the
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outstanding. But the same was also not complied. All the statutory measures are duly complied. In absence of any illegality and irregularity, the SA being devoid of any merit, may be dismissed.
the following points are emerged for adjudication in this case:
FINDINGS:
Point Nos.(i) & (ii):-
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same, having not challenged within the statutory period, now raising issue against the same by the applicant is also not legally sustainable.
loan was taken by the applicant on 27.03.2018 but he did not take any interest to repay the same. Consequently, as per the master circular issued by the RBI the loan was classified as NPA. The applicant has never challenged such classification of the loan as NPA after receipt of the demand notice and possession notice. So
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also, in this SA nothing is raised in challenging the classification of the loan as NPA. Raising the issue at argument stage by the applicant is not legally permissible and the same may be rejected.
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“ 8.4 Classification of borrower accounts as SMA as well as NPA shall be done as part of day-end process for the relevant date and the SMA or NPA classification date shall be the calendar date for which the day end process is run. In other words, the date of SMA/NPA shall reflect the asset classification status of an account at the day-end of that calendar date.
Example: If due date of a loan account is March 31, 2022, and full dues are not received before the bank runs the dayend process for this date, the date of overdue shall be March 31, 2022. If it continues to remain overdue, then this account shall get tagged as SMA-1 upon running day-end process on April 30, 2022 i.e. upon completion of 30 days of being continuously overdue. Accordingly, the date of SMA-1 classification for that account shall be April 30, 2022.
Similarly, if the account continues to remain overdue, it shall get tagged as SMA-2 upon running day-end process on May 30, 2022 and if continues to remain overdue further, it shall get classified as NPA upon running day-end process on June 29, 2022. ”
In view of such guidelines issued by the RBI there is no illegality in classifying the loan as NPA upon running day-end process on 25.06.2018. Hence the contention raised by the learned counsel for the applicant on this aspect has no leg to stand.
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Hence it is ordered:-
ORDER
(Dictated to my PA, corrected and pronounced by me in the open Tribunal on this the 27th day of April, 2026).
[SOVAN KUMAR DASH] PRESIDING OFFICER
9
SA 408/2024
Documents on the part of the applicant
| Annexures | Date |
Particulars of documents | |
|---|---|---|---|
| Annexure-A1 | 24.04.2024 |
True copy of the order in Crl. No.4875/2024 of the Chief Jud Magistrate Court, Thrissur. |
M.P. icial |
| Annexure-A2 | f |
True copy of the MC along with the affi iled before the Chief Judicial Magist Court, Thrissur. |
davit rate |
| Annexure-A3 |
13.05.2024 Documents on |
True copy of the Advocate Commis Notice in Crl. M.P. No.4875/2024 of Chief Judicial Magistrate Court, Thrissur the part of the defendants |
sion the . |
| Annexures | Date | Particulars of documents | |
| Annexure-B1 | 16.07.2018 | True attested photostat copy of demand notice. |
the |
| Annexure-B1A | The true English translation of Anne B1. |
xure | |
| Annexure-B2 | True attested photocopy of the card. |
A/D | |
| Annexure-B3 | 27.11.2019 | True attested photocopy of possession notice. |
the |
| Annexure-B3A | The true English translation of Anne B3. |
xure | |
| Annexure-B4 | True attested photostat copy of relevant page of “Deepika” d 01.12.2019 with advertisement of possession notice dated 27.11.2019 |
the ated the . |
|
| Annexure-B4A | The true English translation of Anne B4. |
xure | |
| Annexure-B5 | True attested photostat copy of relevant page of “The Hindu” d 01.12.2019 with advertisement of possession notice dated 27.11.2019 |
the ated the . |
|
| Annexure-B6 | 17.01.2022 | True attested photostat copy of the notice. |
Sale |
10
SA 408/2024
| Annexure-B6A | The true English translation of Annexure B6. |
|
|---|---|---|
| Annexure-B7 | True attested photostat copy of the relevant page of “Deepika” dated 20.01.2022 with advertisement of the sale notice dated 17.01.2022. |
|
| Annexure-B7A | The true English translation of Annexure B7. |
|
| Annexure-B8 | True attested photostat copy of the relevant page of “The New Indian Express” dated 20.01.2022 with advertisement of the sale notice dated 17.01.2022. |
|
| Annexure-B9 | 04.02.2022 | The true attested photostat copy of the Interim Order in WP(C) No.3739 of 2022. |
| Annexure-B10 | 06.10.2022 | The true attested photostat copy of the Judgment in WP(C) No.3739 of 2022. |
| Annexure-B11 | 11.07.2024 | The true attested photostat copy of the order in OP (DRT) No.223 of 2024. |
PRESIDING OFFICER
11
SA 408/2024
IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM
PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER
Dated the 27th April, 2026
SA No.408/2024
Between
Shaji C.C., Aged 49 years, Chenthuruthi House, Mala P.O., Pallippuram, Thrissur, PIN – 680 732. …Applicant
And
The Authorised Officer, Irinjalakuda Town Co-operative Bank, Head Office, Tana South, Irinjalakuda, Thrissur – 680 121, Represented by T.K. Dileepkumar, Aged 60 years, S/o. Kochukuttan, Thoppil House, Vellanchira & Anr. …Defendants
FINAL ORDER
2 issues framed by the court
Whether the securitization proceeding initiated by the defendants suffer from any illegality, defect, or irregularity warranting interference?
Whether the applicant is entitled to any relief challenging the classification of the loan as NPA and the subsequent enforcement measures?
2 provisions across 1 enactments
Shaji C.C.
The Authorised Officer, Irinjalakuda Town Co-operative Bank
SOVAN KUMAR DASH
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
