Dismissed

Mohanan C M v. South Indian Bank

DRT24 Apr 2026SA/47/2026

Case brief

AI extract

What is this about?

Debts Recovery Tribunal dismissed the applicant’s application challenging securitization measures initiated by the bank. The court held that as a guarantor, the applicant’s liability is co-extensive with the principal debtor under the SARFAESI Act and Indian Contract Act, rejecting claims of irregularity.

What did the court decide?

Application for setting aside securitization proceedings dismissed; pending stay application closed.

Mohanan C M versus South Indian Bank — Company and Corporate | DRT (2026)

¶1

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

¶2

PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

¶3

Dated this the 24^th day of April, 2026

¶4

SECURITIZATION APPLICATION No.47/2026

¶5

Between

¶6

Mohanan C.M., Aged 68 years, S/o. Madhavan, Chelithadathil, Mudiyoorkonam, Pandalam, Pathanamthitta, District, PIN – 689 501. …Applicant

¶7

And

¶8

The Authorised Officer,

¶9

South Indian Bank,

¶10

^nd floor, TMJ Complex,

¶11

MC Road, Ramanchira, Muthoor,

¶12

Thiruvalla, Pathanamthitta,

¶13

PIN 689 107.

¶14

The South Indian Bank,

¶15

^nd floor, TMJ Complex, M.C Road,

¶16

Ramanchira, Muthoor, Thiruvalla,

¶17

Pathanamthitta, Pin Code - 689 10,

¶18

Represented by its authorized officer.

¶19

M/s. S.N Silks and Sarees,

¶20

Represented by its partners,

¶21

is located at No XVI 621A BCDEF,

¶22

Market junction, K S R T C Road,

¶23

Pandalam, Pathanamthitta - 689 501.

¶24

Mrs. Swapna Krishnan C R,

¶25

SA 47/2026

¶26

¶27

Partner of M/s. S.N Silks and Sarees, Resides at chelithandathil House, Mundiyoorkonam P. O, Pandalam, Pathanamthitta 689 501.

¶28

Mrs. Anandavally P.R, lives at Chelithandathil, Mudiyoorkonam, Pandalam, Pathanamthitta 689 501.

¶29

Mr. Radhakrishnan C.K, Son of Kunjikrishnan, Partner of M/s. S.N Silks and sarees, and proprietor of M/s. R B Traders, is at market junction, KSRTC Road, Pandalam, Pathanamthitta 689 501.

¶30

Mr. Balakrishnan R, son of Ramakrishnan, lives at Perumbral Vadakkethil Veedu, Parakkara P.O, Edamali, PandalamThekkekkara, Pathanamthitta 691 525.

¶31

Mrs. Jalaja Balakrishnan, wife of Balakrishnan, Resides at Perumbralvadakkethi Veedu, Edamali P O, Pandalam, Parakara, Pathanamthitta 691 525.

¶32

Mrs. Halitha Soman,

¶33

wife of Swaroop Krishnan C.R, is at chelithadathil, Aathil Mukku, Mudiyoorkonam P.O Pandalam, Pathanamthitta 689 501.

¶34

Mr. Swaroop Krishnan C.R Proprietor of M/s. S N Bakers and Super Bazar, is located at

¶35

VI 634 ABCD 1455,1456,1457, Lekshmi Commercial Building. …Defendants

¶36

SA 47/2026

¶37

¶38

This Securitization Application having been heard on 26.03.2026 in the presence of Advocate Ms. Shaniba counsel for the applicant and Advocate Ms. Varsha V Nair for the defendants and stood over to this day for consideration, the Tribunal delivered the following:

¶39

F I N A L O R D E R

¶40

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 filed this SA under S.17(1) of the SARFAESI Act praying to set aside entire Securitization measures including the order passed by the Chief Judicial Magistrate and the notice issued by the Advocate commissioner.

¶41

Brief facts of the case :

¶42

2.1 The applicant, being guarantor to the loan of M/s. S.N Silks and sarees, controlled and managed by respondent Nos.3 to 10. Out of the same, the respondent Nos. 3 to 6 are the partners of the firm and borrowers of the impugned loan transactions. The applicant and other defendants stood as guarantors by mortgaging their properties to secure the loan availed by the said proprietorship firm, M/s S.N Silks and Sarees.

¶43

SA 47/2026

¶44

¶45

2.2 Due to default in repayment the 1^st respondent issued a demand notice u/s 13(2) of the SARFAESI Act calling upon the borrowers and guarantors to discharge the liability in various loans availed by the business concern. After receipt of the demand notice the applicant raised objection against the demand notice stating that he has no active role in the operation of the business nor he derived any financial benefit of the business. The partners of the firm are intentionally attempting to shift the financial burden to him and asked the defendant bank to take actions against the actual responsible persons. The defendant issued a reply to the said objections on 23.03.2025 stating that all the borrowers/guarantors are jointly and severally liable to pay the outstanding dues and hence the contention is not acceptable.

¶46

2.3 Due to default in repayment of the loan, the possession notices u/s 13(4) of the SARFAESI Act was issued on 20.08.2025 and took symbolic possession of the secured asset. The defendant had also issued a notice in terms of Sec.13 (8) of the SARFAESI Act stating that due to non-repayment of the loan the secured asset will be sold by inviting tenders/ by public auction/ by private treaty in accordance with the provisions of the SARFAESI Act.

¶47

2.4 The defendant has also approached the Chief Judicial Magistrate, Pathanamthitta u/s 14 of the SARFAESI Act bearing

¶48

SA 47/2026

¶49

¶50

M.C.No.580/2025 to take physical possession of the secured asset. An Advocate commissioner is appointed to take physical possession of the secured asset, who issued notice on 08.01.2026 to take possession of all the secured asset including the properties of the applicant which is impugned in this SA. The applicant seeks relief to set aside the Securitization measures including the order passed by the Chief Judicial Magistrate and the notice issued by the Advocate commissioner.

¶51

The defendants filed written statement denying the averments and claimed inter alia that there are no illegality and irregularity in the Securitization proceeding to interdict. The defendant has initiated securitization proceeding against all the secured assets not only against the property of the applicant. The application u/s 14 SARFAESI Act was also filed before the Chief Judicial Magistrate to take possession of all the secured assets. The claim of the applicant, having no force, the SA may be dismissed.

¶52

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

¶53

(i) Whether the securitization proceeding initiated by the defendants suffer from any illegality or defect or irregularity to intervene with the same?

¶54

SA 47/2026

¶55

¶56

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

¶57

FINDINGS:

¶58

Point Nos.(i) & (ii):-

¶59

Admittedly, the applicant stood as a guarantor in respect of the loan availed by M/s. S.N Silks and Sarees from the defendant nos.1 and 2 by creating security interest over the subject matter property. During hearing of the SA, learned counsel for the applicant would contend that the defendant Nos. 1 and 2 can realize outstanding amount from the properties mortgaged by the partners of the defendant No.3 and other family members who created security interest in respect of their properties. The defendant Nos.1 and 2, instead of proceeding against proper person, are taking step to take physical possession of the properties of the applicant only which is prejudicial. Hence, the defendant Nos.1 and 2 may be directed not to take any coercive step against the property of the applicant. She didn’t raise or point out any illegality or irregularity in the securitization proceeding.

¶60

Per contra , the learned counsel for the defendant would contend that the contention of the learned counsel for the applicant has no force. In fact, due to default in repayment of the entire loan amount, the defendant Nos.1 and 2 have initiated securitisation

¶61

SA 47/2026

¶62

¶63

proceeding in respect of all the items of secured asset including the property of the applicant. Possession notice of the proceeding u/s 13(4) of the SARFAESI Act and the proceeding under section 14 of the SARFAESI Act are initiated in respect of the Secured assets. The applicant has no legal right seeking exclusion of his property from the Securitization proceeding. The applicant and borrowers and the other guarantors are jointly and severally liable for the outstanding in the loan account. Hence, the SA being devoid of any merit, may be dismissed.

¶64

In fact, the securitization proceeding was initiated in respect of all the items of properties mortgaged to secure the loan which is apparent from the demand notice marked Annex. A1, possession notice marked as Annex.A4 and the proceeding initiated before the Chief Judicial Magistrate, Pathanamthitta in MC.No.580.2025.

¶65

Sec.128 of the Indian Contract Act postulates as follows:-

¶66

‘‘ 128. Surety’s liability.—The liability of the surety is co- extensive with that of the principal debtor, unless it is otherwise provided by the contract.’’

¶67

In view of this statutory provision the liability of the guarantor is co-extensive with that of the principal debtor. No material is placed by the applicant that, there is any different contract among the borrower and the guarantors. In absence of the same, the

¶68

SA 47/2026

¶69

¶70

applicant cannot claim any exemption or exclusion of his property from the securitization proceeding initiated by the defendant 1 and 2 under SARFAESI Act. No other illegality or irregularity in such proceeding is raised or established by the applicant in this case. Hence the applicant is not entitled to get any relief and both the points are answered against him.

¶71

Hence it is ordered:-

¶72

ORDER

¶73

In view of the foregoing reasons, the SA, being devoid of any merit, is hereby dismissed but in the circumstance without costs. In view of the disposal of the SA on merit, the pending IA praying for stay of the securitization proceeding is closed.

¶74

(Dictated to steno, corrected and pronounced by me in the open Tribunal on this the 24^th day of April, 2026).

¶75

[SOVAN KUMAR DASH] PRESIDING OFFICER

¶76

¶77

Documents on the part of the applicant

¶78

Annexures	Date	Particulars of documents
Annexure-A1	06.01.2025	True copy of the Demand notice issued under Section 13(2) of the Act.
Annexure-A2	03.03.2025	True copy of the said reply submitted under Section 13(3A) of the Act.
Annexure-A3	20.03.2025	True copy of the communication issued by the 1^strespondent under Section 13(3A) of the Act.
Annexure-A4	20.08.2025	True copy of the possession notice evidencing the purported taking of symbolic possession of the secured assets.
Annexure-A5	18.09.2025	True copy of the notice issued under Section 13(8) of the Act.
Annexure-A6	24.12.2025	True copy of the order passed by the Chief Judicial Magistrate, Pathanamthitta, in M.C.No.580/2025 appointing an Advocate
		Commissioner under Section 14 of the Act.
Annexure-A7	..	True copy of the petition filed under S.14 of the Act before the Chief Judicial Magistrate, Pathanamthitta
		and numbered as MC 580/2025 in which Annexure A6 order was passed.
Annexure-A8	..	True copy of the Affidavit filed along with Annexure A7 petition by the defendant.
Annexure-A9	08.01.2026	True copy of the notice issued by the Advocate Commissioner appointed under Annexure A6.

¶79

¶80

Documents on the part of the defendants

¶81

Annexures	Date	Parti	cular	s of documen	ts
Annexure-B1	29.11.2021	True Debt loan 0337 0337	copy and 08300 65200	of acknowled Security with account 0000155 0000829.	gement of respect to no’s and
Annexure-B2	27.12.2022	True Debt loan 0337	copy and 08300	of acknowled Security with account 0000145.	gement of respect to no.
Annexure-B3	27.12.2022	True Debt loan 0337	copy and 08300	of acknowled Security with account 0000146.	gement of respect to No.

¶82

PRESIDING OFFICER

¶83

IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA AT ERNAKULAM

¶84

PRESENT: SRI.SOVAN KUMAR DASH PRESIDING OFFICER

¶85

Dated the 24^th April, 2026

¶86

SA No.47/2026

¶87

Between

¶88

Mohanan C.M., Aged 68 years,

¶89

S/o. Madhavan, Chelithadathil, Mudiyoorkonam, Pandalam, Pathanamthitta, District, PIN – 689 501. … Applicants

¶90

And

¶91

The Authorised Officer, South Indian Bank, 2nd floor, TMJ Complex, MC Road, Ramanchira, Muthoor, Thiruvalla, Pathanamthitta, PIN 689 107. Ors. …Defendants

¶92

F I N A L O R D E R

Mohanan C M v. South Indian Bank

Case brief

What is this about?

What did the court decide?

Mohanan C M v. South Indian Bank

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Rozina Shamshuddin Rana versus Tata Capital Financial Services Ltd. through Authorised Officer

Hdfc Bank versus Nisar Ahmed

Punjab National Bank versus Sukhjinder Kaur

Smt dilla devi versus Can Fin Homes Ltd.

Ms Janta Electricals and others versus Ugro Capital Limited

Sidbi Small Industries Development Bank of India versus State Bank of India