Partly allowed

Biji Ullas v. Union Bank of India

DRT14 Jul 2026SA/452/2024

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed the securitization application in part. The Bank's Section 14 application before the Chief Judicial Magistrate was set aside due to non-compliance with section 14 proviso requirements, preventing possession. However, the Tribunal held the subsequent e-auction sale notice was valid and granted no relief against the sale.

What did the court decide?

The order under Section 14 of the SARFAESI Act passed by the Chief Judicial Magistrate was set aside without costs. The sale notice is upheld as valid. The Bank may file a fresh application under Sect

Biji Ullas versus Union Bank of India — 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 14^th day of July, 2026

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SECURITIZATION APPLICATION No.452/2024

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Between

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Biji Ullas, W/o. Ullas K.A., Residing at Karnamkot House, Anjoor P.O., Kunnamkulam, Thrissur – 680 523. …Applicant.

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And

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Union Bank of India, Kunnamkulam (UBI) Branch, Ground Floor, Croos View Building, Guruvayoor Road, Kunnamkulam represented by its Chief Manager/ Authorised Officer. ….1^st Defendant 2. Rajitha, residing at Kandiringath House, Anjoor Kunnu, Anjoor, Kunnamkulam, Thrissur, Kerala 680 523. …Addl. 2^nd defendant

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(Addl. 2^nd defendant- auction purchaser was impleaded as per Order in I.A.2955/2025 dated 22.08.2025)

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SA 452/2024

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This Securitization Application having been heard on 12.06.2026 in the presence of Advocate Mr. Santhosh Peter for the applicant and Advocate Ms. Sreedevi B for the defendant No.1 and Advocate Ms. Athulya Vaishnavi representing counsel for Advocate Mr.Raghul Sudheesh for the defendant No.2 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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Challenging the securitization proceedings initiated by the 1^st defendant 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 applicant/borrower has filed this SA under S.17(1) of the SARFAESI Act seeking relief to set aside the notice of the Advocate Commissioner to take possession of the secured asset and sale notice issued by the defendant.

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Brief facts of the case :

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2.1 The applicant and her husband Ullas K.A. availed a housing loan from the 1^st defendant in the year 2016 with a repayment period of 20 years by mortgaging 4.45 Ares of land together with residential building over the same. Due to delay in

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SA 452/2024

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repayment of the loan from the year 2022, the defendant bank initiated recovery proceedings under the provisions of SARFAESI Act.

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2.2 Initially, the applicant challenged Annexure-A1 and Annexure-A2 sale notices issued on 20.06.2024 and 21.05.2024 for sale of the secured assets. But the same did not fructify. Subsequently, the applicant amended the SA in challenging Annexure-A8 notice dated 20.05.2025 and Annexure-A9 E Auction Sale Notice dated 02.06.2025. It is claimed in the SA that the mandatory provision in filing the application u/s.14 of the SARFAESI Act vide CMP No.2959 of 2025 in the Court of Chief Judicial Magistrate, Thrissur is not complied and the learned CJM passed a mechanical order without application of mind to the materials on record. It is also averred in the application that the newly appointed Advocate Commissioner took physical possession of the property on 26.08.2025 without issuing any notice. It is also claimed that the sale notice dated 02.06.2025 was issued by the Authorised Officer scheduling the sale on 26.06.2025 without obtaining proper valuation report and non-compliance of the statutory requirement. The property was sold to the 2^nd defendant in an illegal manner which is not sustainable. Hence the applicant claimed for setting

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SA 452/2024

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aside the Advocate Commissioner notice marked Annexure A8 and the sale notice marked Annexure A9.

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3.1 The 1^st defendant filed written statement and additional written statement, denying the averments in the SA and claimed inter alia that the applicant availed a housing loan by mortgaging the subject matter property of an extent of 4.45 Ares described in detail in paragraph 2 of the written statement. Due to default in repayment, the loan account was classified as Non-Performing Asset (NPA) on 29.11.2022, followed by the issuance of a demand notice on 02.12.2022.

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3.2 It is averred in the written statement that the demand notice was duly served on the applicant and the acknowledgment card evidencing service are produced as Annexure-R1B. The applicant did not take any interest in repaying the loan. Consequently, the first defendant initiated securitization proceedings in accordance with the law. Thereafter, sale notices were duly issued to the applicant in respect of the secured asset with the residential building which cannot be said illegal in any manner which did not materialize.

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3.3 The applicant filed WP(C)No.22093/2023 before the Hon’ble High Court of Kerala which was disposed of directing the

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SA 452/2024

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applicant to repay the amount in installments, but the same was not complied. There is no illegality in the securitization proceedings. All the securitization measures were taken in accordance with the law. The security interest was registered in the CERSAI Portal. In absence of any illegality in the proceeding u/s.14 of the SARFAESI Act, the defendant claims for dismissal of the SA.

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3.4 In the additional written statement, the 1^st defendant has specifically stated that a sale notice dated 03.07.2023 was issued putting the property for e-auction on 10.08.2023, marked as Annexure R1F after compliance of all the statutory requirements. The relevant documents are produced in this case but the sale did not rectify. Physical possession of the secured asset is taken by the Advocate Commissioner on 26.08.2025. But the applicant forcibly entered into the house by breaking the lock and illegally took possession of the property, for which a criminal case has been registered.

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3.5 A sale notice dated 02.06.2025 was issued fixing the sale on 26.06.2025 after obtaining a fresh valuation report from the approved valuer marked as Annexure-R1K. The 2^nd defendant, being the highest bidder, the property was sold to him on receipt of the consideration amount. There is no illegality in the sale

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SA 452/2024

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proceedings and hence the SA, being devoid of any merit, may be dismissed.

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From the respective contention of the applicant and

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

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(i) Whether there is any illegality or defect in the securitization proceeding and in the proceeding u/s.14 of the SARFAESI Act?

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(ii) Whether the sale held in pursuance to sale notice Annexure-A9 dated 02.06.2025 suffers from any illegality?

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(iii) Whether the applicant is entitled to get any relief in this case?

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FINDINGS:

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Point No.(i):

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Admittedly, the applicant and her husband availed

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housing loan in the year 2016 by mortgaging the subject matter property which was classified as NPA on 29.11.2022. The defendant No.1 issued a demand notice dated 02.12.2022 calling the applicant to repay the outstanding within the statutory period. After receiving the demand notice, no objection or representation was submitted

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SA 452/2024

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by the applicant in disputing the claim amount. During argument stage, the learned counsel for the applicant claims that the loan was illegally classified as NPA without following the guidelines of the RBI and raised the illegality in the securitization proceeding as follows:

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(i) The demand notice was not duly served to the husband of the applicant. In absence of the same the securitization proceeding is illegal.

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(ii) The measure u/s.13(4) and the proceeding u/s 14 of the SARFAESI Act was not duly complied as per the statutory requirement.

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(iii) Taking of physical possession of the secured asset in the securitization proceeding by the Advocate Commissioner without issuing any notice to the applicant is illegal and not sustainable.

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On the other hand, learned counsel for the defendant

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would contend that there is no illegality in the classification of the NPA and account statement is produced along with the additional written statement showing non-repayment of any amount by the applicant before the loan was classified as NPA. The demand notice was served to the applicant, which is produced as Annexure-R1B.

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SA 452/2024

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Relevant document is filed regarding service of demand notice on the husband of the applicant. It is also submitted that the Advocate Commissioner has taken physical possession of the secured asset in pursuance to direction of the CJM which cannot be said illegal in any manner. Hence no interference in the securitization proceeding is warranted.

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Admittedly, due to default in repayment, securitization proceeding was initiated after classifying the loan as NPA. The applicant claims generally in this SA that the NPA classification of the account by the 1^st defendant was illegal when she was continuing in repayment of the loan account. There is no material on record showing continuous repayment of the loan made by the applicant as per terms and conditions of the loan agreement before the date of classification of the loan as NPA. After receipt of the demand notice, the applicant did not raise any contention in challenging the classification of the loan as NPA and the demand. Hence raising any contention against such classification of NPA is not legally sustainable. Learned counsel for the applicant submitted that before the date of classification of the loan as NPA on 29.11.2022, the applicant remitted amount on 31.08.2022 and 29.11.2022 which is apparent from the account statement filed in

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SA 452/2024

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this case. The mere deposit of certain amounts by violating the terms and conditions of the loan agreement, the secured creditor bank cannot be debarred to classify the loan as NPA. In such premises, the contention of the applicant has no force and is not accepted. Further it is contended by the learned counsel for the applicant that the demand notice was not served to the husband of the applicant who is a co-borrower. The defendant No.1 has produced all documents showing issuance of the demand notice to the husband of the applicant at the address furnished by him at the time of availing the loan but the same could not be served. The postal receipt is also produced by the defendant, in dispatch of the demand notice to the husband of the applicant. The defendant No.1 published the demand notice in two daily newspapers of the locality in English and vernacular language and also the same was affixed. In such premises contention of the learned counsel for the applicant that demand notice was not duly issued to the husband of the applicant is not acceptable.

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The defendant has also produced materials showing compliance of the statutory requirement in issuing possession notice u/s.13(4) of the SARFAESI Act, which cannot be said illegal in any manner. The applicant has also challenged the proceeding

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SA 452/2024

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u/s.14 of the SARFAESI Act initiated by the defendant bank before the CJM, Thrissur. It is noticed from the materials on record that the declaration in the form of affidavit filed by the Authorised Officer before the CJM in such proceedings is not in accordance with the first proviso to Section 14(1) of the SARFAESI Act. The clause (i) to (ix) of the proviso to Section 14(1) of the SARFAESI Act, having not duly complied by the Authorised Officer, it renders the proceeding and the order passed by the learned Chief Judicial Magistrate as illegal. The learned CJM has not considered such aspect and passed a mechanical order without applying mind to the declaration made by the Authorised Officer. Hence the order passed by the CJM renders illegal and the defendant cannot proceed to take possession of the secured asset based upon such invalid order. Learned counsel for the defendant contended that after taking physical possession of the secured asset with the help of the advocate commissioner, the applicant forcibly entered into the premises and is in illegal possession of the secured asset. It is found that the declaration with affidavit sworn by the Authorised Officer is not as per the statutory requirement. In such premises, it is concluded that the proceeding initiated by the defendant under Section 14 of the SARFAESI Act, having not complied the statutory

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SA 452/2024

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requirement, is not sustainable. This point is answered accordingly but the statutory requirement in issuing the demand notice and the possession notice u/s.13(4) of the SARFAESI Act, being duly complied as per the statutory provisions, the applicant has no valid right in challenging such measures.

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The applicant has amended the SA in challenging the e- auction sale notice dated 02.06.2025 issued by the 1^st defendant marked as Annexure A9. In the SA in paragraph 17A, it is only stated that the valuation of the property is taken illegally but any illegality in the sale proceeding is not raised by the applicant in the SA. The defendant No.1 has produced the valuation report dated 23.05.2025 marked as Annexure R1K. In the said valuation report, the approved valuer obtained the guideline rate from the Registrar’s Office as ₹1,18,800/- per Are and the prevailing market value is ascertained as ₹4,50,000/- to ₹5,50,000/- per Are and the adopted valuation is ₹3,70,000/- per Are. Accordingly, the valuation of the land and building is assessed as ₹30,68,000/-, the realizable value is ₹27,61,000/- and the distress/forced sale value of the property is ₹24,54,000/-. Accordingly, Ext.A9 sale notice was issued fixing the Reserve price as ₹26,10,000/- and the 2^nd defendant, being the

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SA 452/2024

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successful and highest bidder, the sale was confirmed who deposited the entire bid amount.

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Though the applicant has challenged the valuation report of the defendant stating undervaluation of the property, no step was taken by the applicant to disproof the same. No valuation report or any material is produced showing the valuation report of the defendant No.1 as erroneous to discard the same. The applicant, having not challenged any other illegality in the sale proceedings or non-compliance of the statutory requirements, interference with the sale proceeding is not at all warranted. Hence, it is concluded that the sale of the secured asset in favour of Addl. defendant No.2 is valid and applicant is not entitled to get any relief in setting aside the same. Hence point No.2 is answered against the applicant. The applicant is entitled the limited relief in setting aside the proceeding u/s.14 of the SARFAESI Act and the point no.3 is answered accordingly. It is further clarified that the defendant no.1 may proceed afresh by filing proper application under section 14 of the SARFAESI Act to take physical possession of the secured asset in accordance with the law to hand over possession of the same to the auction purchaser and the learned CJM has jurisdiction to pass fresh order based upon such application.

SA 452/2024

ORDER

In view of the foregoing reasons and with the above observation, the SA is allowed in part. The order passed by the learned Chief Judicial Magistrate, Thrissur under Section 14 of the SARFAESI Act in Crl.M.P No.2959/2025 is hereby set aside but in the circumstances without costs.

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(Dictated to my Steno, corrected and pronounced by me in the open Tribunal on this the 14^th day of July, 2026).

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[SOVAN KUMAR DASH] PRESIDING OFFICER

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SA 452/2024

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Documents on the part of the applicant

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Annexures	Date	Particulars of documents
A1	20.06.2024	Copy of the sale notice issued by the defendant bank.
A2	21.05.2024	Copy of the sale notice issued by the defendant bank.
A3	23.06.2023	Copy of the possession notice.
A4	07.07.2023	Copy of the judgement in W.P.(C)No.22093/2023 by the Hon’ble High Court of Kerala.
A5	-	Copy of the receipts showing the payment made by the applicant.
A6	24.07.2023	Copy of the judgment in Writ Appeal No.1291/2023 of the Hon’ble High Court of Kerala.
A7	26.06.2023	Copy of the account statement issued by the defendant bank for
		the period of 10.08.2016 to 26.06.2023.
A8	20.05.2025	Copy of the notice issued by the Advocate Commissioner.
A9	02.06.2025	Copy of the E auction Sale Notice
A10	30.03.2025	Copy of the CMP No.2959/2025
		filed before the CJM Court, Thrissur.
A11	30.03.2025	Copy of the affidavit filed by the bank in support of the CMP
		No.2959/2025 before the CJM Court, Thrissur.

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SA 452/2024

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A12	25.08.2025	Copy of the Orde No.2959/2025	r in Crl.MP
A13	-	Photostat copy of showing break open caused to the d residential house.	photographs and damage oor of the
A14	27.08.2025	Copy of the complain applicant before Kunnamkulam Police its English translation	t filed by the the SHO, Station with
A15	28.08.2025	Acknowledgement iss Office of the Circle Police, Kunnamkul Station.	ued from the Inspector of am Police
	Documents on th	e part of the 1^stdefe	ndant

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Annexures	Date	Particulars of document
R1A	02.12.2022	Copy of demand notice issued to the applicant.
R1B	-	Copy of Postal Acknowledgement cards evidencing the service of demand notice to the applicant.
R1C	23.06.2023	Copy of the valuation report.
R1D	-	Copy of CERSAI Certificate with respect to the property in the demand notice.
R1E	10.03.2026	Statement of account with respect
		to the loan account from 03.08.2016 to 09.03.2026

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SA 452/2024

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R1F	03.07.2023	Copy of the 30 days prior notice of sale scheduling the e-auction on 10.08.2023.
R1G	06.07.2023	Copy of paper publication of Sale notice in Mangalam Malayalam daily.
R1H	06.07.2023	Copy of paper publication of Sale notice in The New Indian Express daily.
R1I	-	Copy of photograph showing affixture of Sale notice.
R1J	11.09.2025	Copy of the FIR No.1091 before the SHO Kunnamkulam.
R1K	23.05.2025	Copy of the valuation report taken for sale conducted on 26.06.2025.

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PRESIDING OFFICER

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IN THE DEBTS RECOVERY TRIBUNAL2, KERALA AT ERNAKULAM

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PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

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Dated the 14^th July, 2026

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SA No.452/2024

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Between

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Biji Ullas, W/o. Ullas K.A., Residing at Karnamkot House, Anjoor P.O., Kunnamkulam, Thrissur – 680 523 ...Applicant

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And

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Union Bank of India, Kunnamkulam (UBI) Branch, Ground Floor, Croos View Building, Guruvayoor Road, Kunnamkulam represented by its Chief Manager/ Authorised Officer & another. …Defendants

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F I N A L O R D E R

Biji Ullas v. Union Bank of India

Case brief

What is this about?

What did the court decide?

Biji Ullas v. Union Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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