Dismissed

Saravana Rajan M v. Canara Bank

DRT14 Jan 2026SA/468/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed an application challenging securitization proceedings under the SARFAESI Act. The applicant alleged illegal issuance of notices and possession due to procedural flaws. The Tribunal found no substantial prejudice or illegality, quashing claims regarding notice defects and holding possession steps valid.

What did the court decide?

The Securitization Application was dismissed as devoid of merit without costs.

Saravana Rajan M versus Canara 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 14^th day of January, 2026

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SECURITIZATION APPLICATION No.468/2024

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Between

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Saravana Rajan M., S/o.K.Madhavan, S.R.Bhavan, Ezhukone P.O., Kollam – 691 505.

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…Applicant

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And

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Canara Bank, Cheerankavu Branch, Yes Vee Pee Complex, Near Cheerankavu Junction, Ezhukone P.O., Kollam – 691 505, Represented by Manager.

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The Authorised Officer, Canara Bank, Cheerankavu Branch, Yes Vee Pee Complex, Near Cheerankavu Junction, Ezhukone P.O., Kollam – 691 505. …Defendants

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This Securitization Application having been heard on 28.11.2025 in the presence of Advocate Sri.P.Shrihari for the

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applicant and Advocate Smt.Saraswathi P. for the defendants and

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SA 468/2024

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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 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 applicant/borrower has filed this SA under S.17(1) of the SARFAESI Act seeking relief to set aside all the measures taken by the defendants including the sale notice marked Annexure-A7. By way of amendment, the applicant sought to declare the step taken under S.14 of the SARFAESI Act as illegal with a prayer to restore possession of the secured asset to the applicant.

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Brief facts of the case :

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2.1 The applicant availed an OCC limit of Rs.30 lakhs on 20.01.2016 and MSME-guaranteed emergency credit limit of Rs.6 lakhs on 09.07.2021 from the defendants. Due to irregular repayments, the 2^nd defendant classified the loans as NPA on 07.08.2023 and issued demand notice under sec.13(2) of the SARFAESI Act on 30.08.2023 to the applicant calling him to clear the outstanding amount of Rs.35,98,327.81. Due to non-

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SA 468/2024

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repayment, possession notice under S.13(4) of the SARFAESI Act was issued on 19.01.2024 and symbolical possession of the secured asset was taken. In the SA the applicant claims that the demand notice was issued not as per the statutory requirement. The required details are not stated in the demand notice which vitiates the proceeding.

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2.2 The defendants issued sale notice marked Annexure-A7 putting the property for sale but the sale did not fructify. Subsequently, the defendants approached the CJM, Kollam under S.14 of the SARFAESI Act to take physical possession of the secured asset without following the statutory requirements. In such proceedings, physical possession of the secured asset was taken on 14.02.2025. The applicant amended the SA claiming the action of the defendant in taking of possession of the secured asset as illegal due to non-compliance of all the statutory measures.

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2.3. It is also claimed in the SA that the secured asset was

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not registered in the CERSAI portal and hence the entire securitization proceeding is illegal. With these averments, the applicant claims to set aside the securitization proceedings starting from the stage of issuance of demand notice with additional prayer to restore possession of the secured asset.

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SA 468/2024

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The defendants filed written statement claiming inter alia that that there is no illegality in any manner in the securitization proceeding and all the measures are taken as per the statutory requirements. Relevant documents are also filed in compliance of all the statutory measures. Physical possession of the secured asset was already taken with the assistance of the Advocate Commissioner appointed by the CJM in accordance with the law. In absence of any illegality, interference with the securitization proceeding is not at all warranted. Hence the SA, being devoid of any merit, may be dismissed.

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From the respective case of the applicant and defendants, the following points emerged for adjudication in this case:

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(i) Whether the securitization proceedings initiated by the defendants suffer from any illegality to intervene with the same?

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

SA 468/2024

FINDINGS:

Point Nos.(i) & (ii):

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For the sake of convenience, both the points, being interlinked with each other, are taken up together for adjudication. In the SA the applicant has admitted availing of loans from the defendant bank by creating security interest in the subject matter property. Due to default in repayment, securitization proceeding was initiated. At the time of filing of the SA the applicant challenged the sale notice dated 26.06.2024 which did not fructify. By amending the SA, the applicant has challenged the measure taken under S.14 of the SARFAESI Act. In the said proceeding, physical possession of the secured asset was taken by the secured creditor with the assistance of the Advocate Commissioner appointed by the CJM, Kollam.

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The main contentions raised by the applicant in the SA

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are as follows:

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(i) Demand notice was not issued as per the statutory requirement. The detailed details of the loans and the secured asset are not furnished as required under S.13(3) of the SARFAESI Act.

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SA 468/2024

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(ii) The reply given to the objection raised by the applicant is not proper. All the points raised by the applicant in the objection under S.13(3-A) of the SARFAESI Act were not properly addressed and hence the proceeding is vitiated.

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(iii) The possession notice was not duly served and the same was not published in widely circulated newspapers.

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(iv) The measure under S.14 of the SARFAESI Act is not in accordance with the statutory requirement. The affidavit furnished by the Authorized Officer is against the statute and did not comply clauses (i) to (iii) of the first proviso to S.14(1) of the SARFAESI Act. Hence the taking of physical possession is illegal and the possession may be restored.

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(v) The CERSAI registration certificate did not indicate the building standing over the secured asset which also vitiates the proceeding.

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Per contra , learned counsel for the defendants would

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contend that there is no illegality in the securitization proceeding. The contentions raised by the applicant are intended to delay the

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SA 468/2024

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securitization proceeding. The possession notice was issued as per the statutory requirements, which was not challenged by the applicant within the statutory period. Raising any contention against the possession notice after the statutory period is not legally sustainable. It is further contended that there is no illegality in the proceedings initiated by the Authorised Officer before the CJM and the declaration was made as per the statutory requirement. In absence of any substantial prejudice to the applicant, he is not entitled to get any benefit. Physical possession of the secured asset is already taken. Hence the SA, being devoid of any merit, may be dismissed.

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Admittedly, the applicant received the demand notice marked Annexure-A1 dated 30.08.2023. After receiving the same, no objection was raised by the applicant within the statutory period of 60 days. After expiry of the statutory period of 60 days of issuance of the demand notice, possession notice under S.13(4) of the SARFAESI Act was issued on 19.01.2024. Almost nearly one month after issuance of the possession notice i.e., on 18.02.2024, the applicant raised objection against the demand notice. The reply was given by the 2^nd defendant vide Annexure-A4. Such objection raised by the applicant after issuance of the possession notice

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SA 468/2024

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cannot be treated as an objection under S.13(3-A) of the SARFAESI Act. Further, the possession notice was not challenged by the applicant within the statutory period of 45 days. In absence of the same, raising contention at this juncture is not maintainable and sustainable. No other material illegality is found in issuance of the possession notice. All the statutory measures are duly complied. Hence the claim of the applicant challenging the possession notice is legally not maintainable.

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Regarding the measure taken under S.14 of the SARFAESI Act, learned counsel for the applicant contended that the application was not filed by the secured creditor and the Authorised Officer is not the secured creditor. The application was filed by an Advocate which is not permissible. Hence the entire proceeding is vitiated.

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The Authorised Officer is defined in Rule 2(a) of the Security Interest (Enforcement) Rules, 2002 who is competent to exercise the rights of a secured creditor under the SARFAESI Act. By filing application under S.14 of the SARFAESI Act by the Authorised Officer by engaging an Advocate cannot be said as illegal. The contention raised by the learned counsel for the applicant has no legal force to accept the same.

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SA 468/2024

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It is also contended by the learned counsel for the applicant that the affidavit furnished by the Authorised Officer before the CJM does not indicate the outstanding amount on the date of application which violates the statutory provision. On perusal of such affidavit marked Annexure-A10 it is noticed that in paragraph 14, the Authorised Officer has specifically stated the outstanding in various loan accounts as on 14.11.2024 and the affidavit was filed on that day, which contradicts the submission advanced by the learned counsel for the applicant.

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In a Division Bench judgment of the Hon’ble Telangana High Court reported in 2019 KHC 3959 in the case of Tulsi Rocks Pvt. Ltd., Secunderabad & others v. Bank of 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 be made. Therefore, what is important, is the substance and not the form.”

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In view of the judgement, substantial compliance of the provision is essential. Here in this case, the Authorised Officer has complied the statutory provision substantially keeping in view of the clauses (i) to (ix) of the first proviso to S.14 (1) of the SARFAESI Act. Even if

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SA 468/2024

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there is any omission or error, the same cannot be a ground to interdict with such measure keeping in view of the ratio decided by the Hon'ble Telangana High Court. Further, no substantial prejudice was also caused to the applicant in passing of such order by the CJM.

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The intention of S.14 of the SARFAESI Act is only to assist the Authorised Officer by the CJM or DM to take physical possession of the secured asset and the CJM or DM has statutory obligation to comply the same. The CJM shall apply his mind to the documents produced and pass necessary orders, which is purely administrative in nature, to take proper steps for delivery of possession of the secured asset to the secured creditor. On perusal of the order passed by the learned CJM, it appears that the learned CJM has perused the affidavit and verified the documents and passed the order by applying his mind to the same which cannot be said as illegal in any manner. Physical possession of the secured asset is already taken.

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The Hon'ble Apex Court in the judgment reported in (2023) 1 SCC 675 in the case of M/s.R.D.Jain and Co. vs. Capital First 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

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SA 468/2024

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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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In view of this ratio, the contention raised by the learned counsel for the applicant is not sustainable and the applicant is not entitled to get any relief in this case. Both the points are answered against the applicant.

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Hence it is ordered:-

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ORDER

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In view of the foregoing reasons and with the above

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observation, the SA, being devoid of any merit, is hereby dismissed but in the circumstances without costs.

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

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[SOVAN KUMAR DASH] PRESIDING OFFICER

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SA 468/2024

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Documents on the part of the applicant

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Annexures Date Particulars of documents

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Annexure-A1	30.08.2023	True copy of Demand Notice issued by the 2^nddefendant.
Annexure-A2	19.01.2024	True copy of possession notice issued by the 2^nddefendant.
Annexure-A3	18.02.2024	True copy of Section 13 (3A) objection sent by the applicant.
Annexure- A3(A)	…	True copy of acknowledgment card relating to Annexure-A2 Section 13(3A) objection.
Annexure-A4	26.02.2024	True copy of reply to Annexure-A3 issued by the 2^nddefendant.
Annexure- A4(A)	28.02.2024	True copy of postal envelope relating to Annexure A4.
Annexure-A5	16.12.2023	True copy of statement of account relating to MSME-OD/OCC limit.
Annexure-A6	16.12.2023	True copy of statement of account relating to Guaranteed Emergency Credit loan.
Annexure-A7	26.06.2024	True copy of sale notice issued to the applicant by the 2^nddefendant.
Annexure- A7(A)	26.06.2024	True copy of postal envelope relating to Annexure-A7 sale notice.
Annexure- A7(B)	02.07.2024	True copy of postal track report relating to annexure-A7 sale notice.
Annexure-A8	30.06.2024	True copy of sale notice published in Kollam edition of Malayala Manorama daily.
Annexure- A8(A)	30.06.2024	True copy of enlarged area of relevant portion of sale notice published in Kollam edition of Malayala Manorama daily.

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SA 468/2024

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Annexure-A9	30.06.2024 True copy of sale notice published in Thiruvananthapuram edition of The Hindu daily.
Annexure- A9(A)	30.06.2024 True copy of enlarged area of relevant portion of sale notice published in Thiruvananthapuram edition of The Hindu daily.
Annexure-A10	14.11.2024 True copy of Section 14 application filed before the CJM Court, Kollam.
Annexure-A11	24.12.2024 True copy of order in MC No.1268/2024 passed by the CJM Court, Kollam.

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Documents on the part of the defendants

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Annexure-B1	30.08.2023 True copy of the S.13(2) notice issued by the defendant along with acknowledgment card.
Annexure-B2	19.01.2024 True copy of S.13(4) notice issued to the applicant.
Annexure-B3	19.01.2024 True copy of the paper publication of possession notice.
Annexure-B4	19.01.2024 True copy of photograph showing affixture of the possession notice.
Annexure-B5	18.02.2025 True copy of objection submitted to the Authorised Officer of the defendant bank by the applicant.
Annexure-B6	10.02.2016 True copy of CERSAI registration report.

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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 January, 2026

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SA No.468/2024

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Between

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Saravana Rajan M., S/o.K.Madhavan, S.R.Bhavan, Ezhukone P.O., Kollam – 691 505.

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And

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Canara Bank, Cheerankavu Branch, Yes Vee Pee Complex, Near Cheerankavu Junction, Ezhukone P.O., Kollam – 691 505, Represented by Manager & another. …Defendants

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F I N A L O R D E R

Saravana Rajan M v. Canara Bank

Case brief

What is this about?

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Saravana Rajan M v. Canara Bank

Case brief

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