Dismissed

Skaria Johnson v. Union Bank of India

DRT19 Feb 2026SA/479/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed an application by borrowers challenging the Union Bank of India's SARFAESI proceedings. The court found no illegality in demand notices, the equitable mortgage agreement, the sale process, or the fixation of reserve prices, rejecting arguments on procedural technicalities.

What did the court decide?

The application seeking to declare bank proceedings illegal and set aside sale notices is dismissed. No order as to costs.

Skaria Johnson versus Union Bank of India — Specific Performance | DRT (2026)

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL - 1 AT ERNAKULAM

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DATED THIS 19^th DAY OF FEBRUARY, 2026

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PRESENT: Su. WILLYAHM, B.Sc., M.L. [DISTRICT JUDGE - Retd] PRESIDING OFFICER

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S.A No. 479 of 2023

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Between

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Skaria Johnson,

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S/o Johnson Skaria, Parackal House, Kidangoor P.O Angamaly, Kochi -683 572.

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Rosa Johnson, D/o Johnson Skaria, Parackal House, Kidangoor P.O Angamaly, Kochi -683 572.

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Johnson Skaria, S/o P.Y. Skaria, Parackal House, Kidangoor P.O Angamaly, Kochi -683 572.

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--- Applicants

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And

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Authorized Officer,

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Union Bank of India, Angamaly Branch, Jacob’s Arcade, Near LF Hospital, T.B. Road, Angamaly, Ernakulam-683 572.

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SA No.479 of 2023

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Union Bank of India, Angamaly Branch,

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Jacob’s Arcade,

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Near LF Hospital, T.B. Road, Angamaly, Ernakulam-683 572, Represented by its Senior Manager.

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Karumakkattu Mohammed Ali Farook (Lead Member), Karumakkattu House, Onnam Mile, Perumbavoor – 683 542.

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Puthuykkadan Sulaiman Asharaf, Puthukkadan House, Perumbavoor – 683 542.

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K.K. Veera Sahib, Liji Manzil, Ernakulam-683 545.

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Saidahamed K.A. Haroon Manzil, Perumbavoor-683 542.

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Shoukathali K.M. Karumakkattu House, Perumbavoor – 683 542.

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Ashraf K.P. Karakunnan House, Perumbavoor – 683 542.

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Karumakkat Muhammed Ali Kabeer, Karumakkat House, Perumbavoor – 683 542.

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K.M. Shaji, Konnamkudy House, Perumbavoor – 683 542.

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Vaseem Sajjad, Karumakkattu House, Perumbavoor – 683 542.

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Muhammed Faseeh Ali, Karumakkattu House, Perumbavoor – 683 542.

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Nazar K.M. Konnamkudy House, Perumbavoor – 683 542.

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SA No.479 of 2023

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P.M. Shamsudeen, Puthenpeedikayil House, Perumbavoor – 683 542.

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K.M. Iqbal, Karumakkattu House, Perumbavoor – 683 542.

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Nizar Puthukkadan Hameed, Puthukkadan, Perumbavoor – 683 542.

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Shiyas, Parely, Perumbavoor – 683 542.

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--- Defendants

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This Securitization Application coming on 14.01.2026 and 16.01.2026 for final hearing before me in the presence of Mr.P.Shrihari, Counsel appearing for the Applicants and Mr.C.Muralikrishnan Counsel appearing for the defendants 1 and 2 and Ms. Sreelakshmi Pradeep, representing the Counsel for D3 to D17 and upon hearing arguments of learned Counsels for all the parties and upon perusing the material on records, this Tribunal delivered the following:

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O R D E R

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This Securitisation Application was filed on 01.09.2023 seeking to declare that Annexures-A1, A4, A10, A11, A13, A14, A15, A16, A19, A20 and A21 notices are illegal and that the proceedings initiated by the Bank are illegal and are not in compliance with the provisions of the SARFAESI Act 2002 and the Rules made there under and to declare that the defendants 1 and 2 are not entitled to charge into the account of the applicants in respect of the expenses incurred for initiating the proceedings against them and to declare that Annexures-A21 notice, A24 application, A25 affidavit and A26 Order are in violation of the provisions under SARFAESI Act 2002 and the Rules made there under and to set aside the same and to direct the defendants 1 and 2 to pay the compensation and cost of this proceedings to the applicants.

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The 1^st applicant availed credit facility of Rs.25,00,000/- on 14.03.2018 from the 2^nd defendant bank. The 2^nd applicant availed credit facility of Rs.1,00,000/- on 14.10.2015 and Rs.25,00,000/- on 18.04.2018 from the 2^nd defendant bank. The 3^rd applicant stood as guarantor for the availment of the aforesaid credit facilities,

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mortgaging his immovable property, admeasuring 5.47 Ares comprised in Re. Sy. No.10 Part in Block No.124 of Perumbavoor Village as the collateral security, by deposit of his title deeds with the 2^nd defendant bank.

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Due to default in repayment the outstanding loan due, the loan account No.338105030001064 of the 1^st applicant came to be classified as Non-Performing Asset on 27.06.2020. Demand notice dated 17.05.2022 was issued to the applicants 1 and 3 calling upon them to repay the outstanding loan due within a period of 60 days from the date of receipt of the demand notice. Subsequently the above demand notice was withdrawn due to certain defects and fresh demand notice dated 15.03.2023, Annexure-A1 was issued to the applicants 1 and 3 calling upon them to repay the outstanding loan due within a period of 60 days from the date of receipt of the demand notice. The 3^rd applicant sent objection dated 18.05.2023 AnnexureA2 to the 1^st defendant. The 1^st defendant sent reply dated 03.06.2023 Annexure-A3 to the 3^rd applicant. However, applicants 1 and 3 did not discharge their liability to the 2^nd defendant bank.

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Since the applicants 2 and 3 defaulted in repayment of the outstanding loan due, their account No.338105030001073 came to be classified as Non-Performing Asset on 28.07.2020. Demand notice dated 17.5.2022 was issued to them to repay the outstanding loan due within a period of 60 days from the date of receipt of the demand notice. Due to certain mistake the above demand notice was subsequently withdrawn and fresh demand notice dated 28.03.2023 Annexure-A4 issued to applicants 2 and 3 them to repay the outstanding loan due within a period of 60 days from the date of receipt of the demand notice. Applicants 2 and 3 neither sent any objection/representation to the demand notice nor did they clear off their liability due to the 2^nd defendant bank.

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Thereafter, Annexure-A10 possession notice dated 15.07.2023 in respect of the loan account of the 1^st applicant and Annexure-A11 possession notice dated 15.07.2023 in respect of the loan account of the 2^nd applicant were issued for symbolically taking physical possession of the secured asset.

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Thereafter the defendants 1 and 2 approached the Additional Chief Judicial Magistrate Court (MPs/MLAs), Ernakulam and filed Annexure-A25 petition and A26 affidavit u/s 14 (1) of the SARFAESI Act 2002. Annexure-A27 order dated 08.12.2023 came to be passed in MC No. No.816/2023 appointing Advocate Commissioner for taking physical possession of the secured asset. The Advocate Commissioner issued Annexure-A21 notice dated 14.12.2023 to the applicants informing them that he would take physical possession of the secured

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asset after the expiry of 14 days from the date of issuance of the notice.

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Annexure-A13 sale notice dated 16.08.2023 was issued for sale of the secured asset in respect of the credit facility availed by the 1st applicant. Annexure-A14 sale notice dated 16.08.2023 was issued for sale of the same secured asset in respect of the credit facility availed by the 2nd applicant. Sale was not fructified for want of bidders.

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Therefore, Annexure-A15 sale notice dated 06.10.2023 was issued in respect of the loan availed by the 1st applicant. AnnexureA16 sale notice dated 06.10.2203 issued in respect of the credit facility availed by the 2nd applicant. Sale was not fructified for want of bidders.

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Hence, Annexure-A19 sale notice dated 06.11.2023 was issued in respect of the credit facility availed by the 1st applicant and Annexure-A20 sale notice dated 06.11.2023 was issued in respect of the credit facility availed by the 2nd applicant. In the auction held on 29.11.2023, the secured asset was sold to the highest bidders, who are the defendants 3 to 17 herein.

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The applicants having aggrieved against the aforesaid measures have filed this SA seeking for the reliefs stated supra.

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Argument advanced by both sides’ counsels was heard. Written argument notes filed on behalf of the applicants and defendants 1 and 2 and material records were perused.

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The 3rd applicant sent objection dated 18.05.2023 for Annexure-A1 demand notice to the 1st defendant. The 1st defendant sent Annexure-A3 reply dated 03.06.2023 to the 3rd applicant. The provision of Sec.13 (3A) of the SARFAESI Act 2002 stipulates that if the borrower makes any representation or raises any objection, the secured creditor shall communicate within 15 days after receipt of such representation or objection, the reasons for non-acceptance of the representation or objection to the borrower. It is seen from perusal of Annexure-A3, reply was sent on 03.06.2023. If the duration is calculated it will come around to 16 days. Though Annexure-A2 objection is dated as 18.05.2023, the applicants have not averred in the SA as to on which date it was despatched to the 1st defendant. No postal record has been produced to show that on which date Annexure-A2 was despatched. Therefore, it cannot be ascertained as to on which date the 1st defendant received Annexure-A2. Therefore this Tribunal does not find any force in the submission of the counsel for the applicants that the reply was sent beyond the mandatory period of 15 days. Further there is no specific averment in the S.A as

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to what prejudice was be caused to the applicants on account of sending reply by delay of one day.

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A perusal of Annexure-A3 reply sent by the 1st defendant to the 3rd applicant shows that all the issues raised by the 3rd applicant in Annexure-A2 has been suitably answered by the 1st defendant. In Annexure-A1 demand notice, it is specifically stated that the 3rd applicant has executed documents on 13.03.2018 creating security interest by way of mortgage of immovable property described in the notice. In Annexure-A3 reply it is clarified that 1st applicant and the 3rd applicant have executed necessary documents and that credit facility has been secured by way of creating valid mortgage over the property which is mentioned in the description of the demand notice. It is not at all necessary or relevant for the Authorized Officer to state the period of limitation for a valid equitable mortgage in the demand notice. Therefore, this Tribunal does not find any force in the submission of the counsel for the applicants that Annexure-A3 reply failed to address the critical objections regarding the non-creation of a valid equitable mortgage.

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The counsel appearing for the applicants submitted that the loan account of the 1st applicant was classified as Non-Performing Asset on 27.06.2020, which is within the moratorium period protected by the judgment of the Hon’ble Supreme Court delivered in Gajendra Sharma Vs. UOI [W.P (C) No.825/2020] and that by order dated 03.09.2020 the Hon’ble Supreme Court directed that the accounts which were not declared as Non-Performing Asset till 31.08.2020 shall not be declared as Non-Performing Asset till further orders and that therefore, the classification of loan account of the applicants as NonPerforming Asset is in virtual contempt of the judicial process.

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There is no dispute with regard to the direction passed by the Hon’ble Supreme Court in the aforesaid judgment and order. What has been ordered in the above judgment is interest for the credit facilities shall not be charged during the moratorium period. Classification of loan account as Non-Performing Asset cannot be considered as a coercive measure. The loan account of the 1st applicant and the 2nd applicant were classified as Non-Performing Asset on 28.07.2020. Indisputably, Annexure-A1 and A4 demand notices were not issued during the above said moratorium period or after passing of the order dated 10.09.2020 by the Hon’ble Supreme Court. It has been ordered by the Hon’ble Supreme Court in the above order that the accounts which were not declared NonPerforming Asset till 31.08.2020 shall not be declared Non-Performing Asset till further orders. The date of classification of the loan account of the 1st and 2nd applicants is 28.07.2020, which is prior to passing of the above order. Therefore, this Tribunal does not find any substance in the submission of the counsel for the applicants that

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classification of loan account as Non-Performing Asset on 27.6.2020 was non est in the eye of law.

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It is submitted by the counsel for the applicants that there is no valid security interest over the SA subject matter of the property and that there was no intention on the part of the 3rd applicant to create equitable mortgage and that the 3rd applicant denies the deposit of title deeds with intention to create mortgage over his property and that possession of the deeds by the bank does not automatically imply a mortgage. He further submitted that there is no reference in Annexure-A6 hypothecation agreement with regard to creation of mortgage over the immovable property.

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Per contra, it is submitted by the counsel appearing for the defendants 1 and 2 that the 3rd applicant guaranteed the credit facilities availed by the applicants 1 and 3 mortgaging his immovable property as described in Annexure-A1 demand notice by deposit of his title deeds with the 2nd defendant bank and that the moments title deeds are deposited with intention to create security the mortgage is created and that there is no explanation of applicants as to what purpose title deeds were deposited with the Bank and that creation of mortgage and extension of mortgage by the 3rd applicant is specifically averred in O.A. No.52/2021 filed against the defendants 1 and 2 who are the applicants 1 and 3 herein and that copies of documents pertaining to mortgage were sent to the defendants along with copy of the O.A and that they have not denied the creation of mortgage by filing their written statement.

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The applicants have produced document No.1 along with memo in ID No.7407/25 consisting of copies of summons, list of documents, O.A. etc. which was sent to the applicants. The defendants have also produced copy of memorandum of deposit of title deeds Annexure-B1, copy of letter of extension of mortgage deed, Annexure-B2, certified copies of OA No.52/2021, Annexure-B13 and O.A. No.46/2021, Annexure-B15. It has been specifically averred in the O.A. that the 2nd defendant (3rd applicant herein) offered collateral security of 05.47 Ares of land in Re. Sy. Nos.10/4 and 161/3E/1 in Perumbavoor Village, Kunnathunadu Taluk, Ernakulam District which has already been mortgaged to the credit facility of his son as security to the cash credit facility of the 1st defendant also (1st applicant herein). It is also averred in the O.A with regard to execution of extension of equitable mortgage on 19.05.2018 by the 2nd defendant for the credit facility of the 1st defendant. The copies of extension of mortgage deed of guarantee had also been sent to the 1st and 3rd applicants. It is pertinent to mention that the applicants 1 and 3, who are the defendants 1 and 2 in the above O.A did not bother to file the written statement in the above OA refuting the creation of mortgage by the 3rd applicant.

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A perusal of Annexure-B1, B12 evidences the creation of security interest over the 3rd applicant’s immovable property for the credit facility availed by the 1st applicant and execution of letter of extension of mortgage for the credit facility availed by the 2nd applicant. The applicants have not stated any convincing reason in the SA as to how the title deeds of the 3rd applicant were slipped into the hands of the 2nd defendant bank. It is not the case of the applicants that the title deeds of the 3rd applicant were stolen and handed over to the 2nd defendant bank. There is no convincing explanation from the applicants as to for what purpose the 3rd applicant handed over his title deeds to the 2nd defendant bank. The voluntary deposit of title deeds by the 3rd applicant pertaining to his immovable property with the 2nd defendant bank coupled with execution of Annexure-B1 and B12 in favour of the 2nd defendant bank falsifies and disproves the contention of the applicants that there is no valid security interest over the S.A subject matter of the property and that there was no intention to create equitable mortgage over the property.

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Annexure-A6 is the hypothecation agreement executed by the 1st applicant in favour of the 2nd defendant bank for hypothecating the crops as the primary security. There is no necessity or mandatory to mention the creation of mortgage over the immovable property of the 3rd applicant in Annexure-A6. Therefore, this Tribunal holds that valid security interest has been created by the 3rd applicant as the collateral security for the credit facilities availed by the applicants 1 and 2, in favour of the 2nd defendant bank.

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It is the submission of the counsel for the applicants that Annexure-A25 application was signed and filed by the Authorized Officer and not the secured creditor and that it is falsely declared in Annexure-A26 affidavit that no objection was received from the borrowers despite the bank having received Annexure-A2 objection sent by the 3rd applicant.

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Rule 2 (a) of the Security Interest (Enforcement) Rules 2002 defines the Authorized Officer “as an officer not less than a Chief Manager of a Public Sector Bank or equivalent as specified by the Board of Directors or Board of Trustees of the secured creditor or any other person or authority exercising powers of Superintendents, direction and control of the business or affairs of the secured creditor, as the case may be, to exercise the rights of the secured creditor under the Act.” Section 13 (12) of the SARFAESI Act 2002 reads that the rights of a secured creditor under this Act may be exercised by one or more of his officers authorized in this behalf in such manner as may be prescribed. Annexure-A25 application was filed by the Union Bank of India, which is the 2nd defendant herein through its

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Authorized Officer. It is clearly stated in paragraph 1 of Annexure-A25 that the petitioner is represented through the Authorized Officer appointed under Rule 2 (a) of the Security Interest (Enforcement) Rules 2002. Annexure-A26 affidavit was filed by the Authorized Officer who is the 1st defendant herein. It is stated that Girish is the Authorized Officer of the Union Bank of India, which is the 2nd defendant herein.

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Indisputably, it is stated in paragraph 9 of Annexure-A26 affidavit that no objection or representation in reply to the notice was received by the petitioner from the respondents. It is also an admitted fact that for Annexure-A1 demand notice, the 3rd applicant sent Annexure-A2 objection to the 1st defendant and that the 1st defendant in turn sent Annexure-A3 reply to the 3rd applicant. If the 1st defendant had not sent reply to the objection sent by the 3rd applicant, then the omission to mention the non-receipt of objection/ representation from the applicants, in Annexure-A26 affidavit will amount to suppression of material fact and also non compliance of Section 14 (1) Clause (vii) of SARFAESI Act 2002. Therefore, it is evident that the omission to mention the above receipt of objection/ representation in Annexure-A26 affidavit could not have been wanton or wilful on the part of the 1st defendant. Therefore, the contention of the applicants that Annexure-A25 and A26 are nullity is liable to be rejected.

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A perusal of Annexure-A26 affidavit shows that all the statutory requirements contemplated under Clauses (i) to (vi) and (viii) and (ix) to the provisions of Section 14 (1) of the SARFAESI Act 2002 has been substantially complied with. In Tulsi Rocks Pvt. Ltd. and Ors Vs. Bank of India and Ors. [MANU/TL/0034/2019] the Hon'ble High Court of State of Telungana has held as follows:

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“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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The dictum laid down in the above judgment is squarely applicable to the facts of the present case. Therefore, this Tribunal does not find any illegality in Annexure-A26 affidavit and as such, the contention of the applicants that Annexure-A26 is nullity is liable to be rejected.

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A perusal of Annexure-A27 order shows that Additional Chief Judicial Magistrate Court (MPs/MLAs), Ernakulam after having perused the contents of the affidavit and the documents produced along with the affidavit and after having satisfied over the same, appointed Advocate Commissioner to take physical possession of the secured asset. This Tribunal does not find any infirmity or procedural irregularity in the above order.

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It is the submission of the counsel for the applicants that Annexure-A7 ( wrongly mentioned in the written argument note as the CERSAI search report instead of Memorandum of deposit of title deed relied on by the defendants 1 and 2 reveals a limited secured amount and crucially excludes the residential building situated in the property. The 3rd applicant deposited the title deeds which are referred to in Annexure-A7 as sale deed and settlement deed in respect of his immovable property as a token of creation of mortgage with the 2nd defendant bank. Annexure-B2 is the sale deed No.1725/2008 of SRO, Perumbavoor. It is mentioned in the description of the property all that part and parcel of landed property. Parcel of landed property means all superstructures including the building on the land. Further, since there is no clear specific description in Annexure-B2 with regard to the existence of building, the defendants 1 and 2 cannot be expected to add the word ‘building’ in Annexure-B1 memorandum of deposit of title deeds. The defendants 1 and 2 have established that Annexure-B1 was executed by the 3rd applicant. Therefore, this Tribunal does not find any merit in the above submission of the counsel for the applicants.

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It cannot be disputed that sale of the secured asset was not fructified for want of bidders pursuant to issuance of sale notices Annexure-A13 to A16. Finally sale was fructified pursuant to issuance of the sale notice dated 06.11.2023 Annexure-A19 and sale notice dated 06.11.2023 Annexure-A20. The defendants 3 to 17 are the successful bidders in the sale held on 29.11.2023.

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The defendants 1 and 2 have produced Annexure-B5 and B6 in order to show that the sale notices were published in two leading newspapers one in Mathrubhoomi edition dated 12.11.2023 (vernacular language) and another in The Hindu edition dated 12.11.2023. Annexure-B10 photographs evidences the affixture of sale notice on the conspicuous part of the secured asset. AnnexureB11 which are copies of postal acknowledgment cards evidences the service of sale notice by the applicants 2 and 3. However, the receipt of the above sale notices Annexure-A19 and A20 by the applicants is not refuted.

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The counsel appearing for the applicants submitted further that 30 days’ clear notice was not given in Annexure-A13 to A16, A19 and A20 sale notices. The Hon’ble Supreme Court has now clarified in Rajendran M. Vs. KPK Oils and Protiens India Pvt. Ltd. (2025) that these different steps – serving the borrower, affixing the notice on the property, publishing it in newspapers and uploading it to the website – are merely “ part and parcel of one single composite intended ‘notice of sale’”. The mandatory 30 day gap (or 15 days for subsequent sales) required before the auction takes place does not start from the date, the notice is printed or mailed. Instead, the 30 day period begins only after the last of these modes is completed. The counsel for the applicants further argued that since the “publication” is defined as the completion of the “Composite Notice”, if the Bank failed to complete any one part (e.g proper affixation or correct vernacular publication) or failed to maintain the gap, the notice is defective. Therefore, right to redeem never extinguished and the sale conducted while this right subsisted is void.

¶91

The counsel appearing for the applicants submitted that the secured asset has been undervalued and that the reserve price shown in Annexure-A13 to A16, A19 and A20 sale notices is much lesser than the actual market value of the property and that the property shall fetch more than what is shown in the sale notices and that the actual market value of the property is more than Rs.2 Crores even according to the valuation report filed by the defendants 1 and 2 and that did not take proper valuation of the secured asset before fixing the reserve price.

¶92

The counsel appearing for the defendants 1 and 2 submitted that the value of the property was not reduced drastically and that Annexure-B7 and B8 sale deeds which are pertaining to the properties situated near to the mortgaged property are abutting the PWD road and that the secured asset is not abutting any PWD road. The value shown in Annexure-B7 and B8 proves that the value for which the secured asset was sold for higher value and that the contention of the applicants that the property was sold for lesser value is incorrect. The value of the property will not be static after spread of Covid-19 pandemic on account of the market slow down in the value of the properties. However, the secured asset had good value corresponding to the market rate.

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The counsel appearing for the defendants 1 and 2 submitted further that Annexure-B18 valuation report establishes the proper fixation of reserve price. The property covered under Annexure-B7 is having an extent of 3.91 Ares (1.62 + 1.62 + 0.67) and the sale consideration is Rs.25,86,000/-. Therefore the value per Are is Rs.6,61,381/-. The property covered under Annexure-D8 is 96 Sq Mtr (0.96 Are) with building. The land value shown in the deed is

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Rs.6,50,000/- and value for building is Rs.3,50,000/-. The total consideration including building is Rs.10,00,000/-. The mortgaged property was sold in auction on 29.11.2023 for Rs.76,24,000/-. Therefore, the value per Are is Rs.13,93,784.27. The mortgaged property is not abutting the PWD road. The value per Are of the properties covered under Annexure-B7 and B8 is below the value per Are of the property sold in auction. The value per Are of Annexure-B7 property is Rs.6,61,381/-. Thus it is evident that the value of the mortgaged property is not undervalued and reserve price was fixed properly.

¶97

The defendants 3 to 17 have contended in their written statement that the averment of the applicants with regard to fixation of the value of the property as 1/3rd of the market value of the property is incorrect and that the reserve price for the property was fixed at the best rate prevailing in the locality where secured asset is situated and that secured asset is lying behind the Juma Masjid, Onnam Mile and that the access to the plot is in between the Mosque and the Lab and the way to the parties only having 8 feet and that hence the applicants cannot claim that the value of the plot is high. The defendants 3 to 17 have also denied the allegation of the applicants that they never approached the applicants for purchase of the property and that they never permitted the applicants from selling the property to third parties.

¶98

Annexure-A19 and A20 sale notices were issued on 06.11.2023 and were served to the applicants on 11.11.2023 as evidenced from the perusal of Annexure-B11 postal acknowledgment cards. The sale notices were published in newspapers on 12.11.2023 as evidenced from the perusal of Annexure-B5 paper publications. The latest date of measure in respect of sale of the secured asset is 12.11.2023 from which date 15 days has to be calculated to consider the date of sale of the secured asset. The date of sale is 29.11.2023. Therefore, it is clearly evident that 15 days period has been given for sale of the secured asset. Hence, the above submission of the counsel for the applicants does not hold good and the judgment of the Hon’ble Supreme Court relied on by him has no application to the facts of the present case.

¶99

The reserve price for the secured asset in Annexure-A19 and A20 sale notices had been fixed at Rs.76,24,000/- and Rs.76,24,000/respectively. Annexure-B18 valuation report was obtained on 11.09.2023 to fix the reserve price in the aforesaid sale notices. Hence, it can be seen that Annexure-B18 valuation report is of the latest report for fixing the reserve price. Rule 8 (5) of the Security Interest (Enforcement) Rules 2002 has been complied with by the defendants 1 and 2. A perusal of Annexure-A18 shows that the approved Valuer after having inspected the secured asset and having

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perused the relevant documents including the village sketch, topography of the property, nature and condition of the property fixed the value of the land and the building at Rs.82,05,000/- and Rs.17,45,000/- respectively. According to the approved Valuer, the present fair market value of the property is Rs.99,50,000/- and the realizable value is Rs.89,55,000/- and the distressed value is Rs.79,60,000/-.

¶103

In Annexure-A13 and A14 sale notices, dated 16.08.2023 the reserve price had been fixed at Rs.84,71,000/- and Rs.84,71,000/respectively. Admittedly, sale was not fructified for want of bidders. Again Annexure-A15 and A16 sale notices were issued on 06.10.2023 fixing the reserve price at Rs.76,24,000/- and Rs.76,24,000/respectively. However, sale was not fructified for want of bidders. It can be seen from the manner in which the reserve price was fixed in the above sale notices that there was not a drastic deduction in the reserve price fixed in subsequent sale notices, ie., Annexure-A15 and A16. The reserve price fixed at Rs.76,24,000/- in the above two sale notices had been fixed in the subsequent sale notices, Annexure-A19 and A20. Therefore, it is evident that the 1st defendant had fixed the reserve price reasonably and that he did not take any attempt to reduce the reserve price Rs.76,24,000/- which had been fixed in Annexure-A15 and A16. Further, this Tribunal can also take judicial fact that though the reserve price had been fixed at Rs.84,71,000/- in the first two sale notices Annexure-A13 and A14, no prospective purchasers came forward to bid the property. Hence this Tribunal considers that the reserve price fixed at Rs.76,24,000/- in AnnexureA19 and A20 sale notices cannot be a low reserve price as contended by the applicants.

¶104

The defendants 1 and 2 have produced Annexure-B7 and B8 copies of sale deeds pertaining to the properties which are situated very near to the secured asset. In order to prove the same, the defendants 1 and 2 have produced copy of the sketch Annexure-B19. A perusal of the same shows that the property belonging to one KMJ Building is situated north of Perumbavoor-Kothamangalam main road and other property belonging to one Baby Sukumaran is situated south of the above said main road. It is also seen that both the aforesaid properties are situated adjoining the main road and whereas the secured asset is situated north of the main road that too, at the rear side of the above said KMJ Building property. Further, the access to the secured asset runs from the main road and in between two properties of different owners. Hence, the contention of the defendants 1 and 2 that the secured asset was not abutting any PWD road is absolutely correct.

¶105

Page 13 of 18

¶106

SA No.479 of 2023

¶107

A perusal of Annexure-B7 and B8 sale deeds strengthens the contention of the defendants 1 and 2 that the property covered under Annexure-B7 is having an extent of 3.91 Ares (1.62 + 1.62 + 0.67) and the sale consideration is Rs.25,86,000/- and that therefore the value per Are is Rs.6,61,381/- and that the property covered under Annexure-B8 is 96 Sq Mtr (0.96 Are) with building and that the land value shown in the deed is Rs.6,50,000/- and value for building is Rs.3,50,000/- and that the total consideration including building is Rs.10,00,000/- and that the mortgaged property was sold in auction on 29.11.2023 for Rs.76,24,000/- and that the value per Are is Rs.13,93,784.27 and that the mortgaged property is not abutting the PWD road and that the value per Are of the properties covered under Annexure-B7 and B8 is below the value per Are of the property sold in auction. Hence, this Tribunal rejects the contention of the applicants that reserve price fixed for the secured asset is very low, when compared with the actual market value of the secured asset which is to a tune of more than Rs.2 Crores.

¶108

The Hon’ble Supreme Court has recently explained the circumstances under which a sale of the property by auction or other means under the SARFAESI Act can be set aside after its confirmation in its judgment delivered in Celir LLP Vs. Ms Sumati Prasad Bafna and others [2023 INSC 838] . The relevant observation of the Hon’ble Supreme Court is extracted here under:

¶109

“The mere procedural irregularities or deviation from rules are not grounds to set aside a confirmed sale unless such errors are fundamental in nature, such as fraud, collusion, inadequate pricing or under bidding.”

¶110

“In such cases, Courts in particular should be mindful to refrain entertaining any ground for challenging an auction which either could have been taken earlier before the sale was conducted and confirmed or where no substantial injury has been caused on account of such irregularity.”

¶111

In the present case on hand, this Tribunal has found that there are no procedural irregularities or deviation from the provisions of the SARFAESI Act 2002 and the Security Interest (Enforcement) Rules 2002 in respect of issuance of the sale notices, its affixture and publication, fixation of reserve prices and the manner of conducting auction. There is no material on record to show that there was fraud or collusion between the defendants 1 and 2 and the defendants 3 to 17 who are the successful bidders.

¶112

Page 14 of 18

¶113

SA No.479 of 2023

¶114

In view of the foregoing reasons and discussions, this Tribunal holds that there are no procedural irregularities in respect of the measures initiated by the defendants 1 and 2 with regard to the classification of loan accounts as Non-Performing Asset, issuance of demand notices, possession notices, taking physical possession, sale notices, publications, fixation of reserve price and sale of the secured asset to the defendants 3 to 17.

¶115

Therefore, this Tribunal holds that the applicants who have failed to prove and establish their case are not entitled to get the reliefs sought for in the S.A.

¶116

Resultantly, S.A No.479 of 2023 stands dismissed. However, there shall be no order as to costs.

¶117

Dictated to Steno, taken down, transcribed, typed by him, corrected and pronounced by me in the open court on this the 19^th day of February, 2026.

(Su. WILLYAHM)

PRESIDING OFFICER

Mj/

Page 15 of 18

SA No.479 of 2023

List of documents filed by the Applicants along with the S.A.

¶124

Sl. No.	Date	Particulars
1.	15.03.2023	True copy of the demand notice issued in respect of the loan granted to the 1^st applicant.	Annexure-A1
2.	18.05.2023	True copy of the objection issued by the 3^rdapplicant.	Annexure-A2
3.	03.06.2023	True copy of the reply issued by the 1^st defendant.	Annexure-A3
4.	28.03.2023	True copy of the demand notice issued in respect of the facility granted to the 2^ndapplicant.	Annexure-A4
5.	13.03.2018	True copy of the memorandum of deposit of title deed created by the 2^nd defendant.	Annexure-A5
6.	14.03.2018	True copy of the hypothecation agreement.	Annexure-A6
7.	13.03.2018	True copy of the memorandum of deposit of title deed created by the 2^nd defendant.	Annexure-A7
8.	11.12.2020	True copy of the O.A. No.46/2021 served upon 3^rdapplicant.	Annexure-A8
9.	18.04.2018	True copy of the hypothecation agreement.	Annexure-A9
10.	15.07.2023	True copy of the possession notice issued with regard to the credit facility ofthe1^st applicant.	Annexure-A10
11.	15.07.2023	True copy of the possession notice issued with regard to the credit facility ofthe 2^ndapplicant.	Annexure-A11
12.	---	True copy of postal track report sending possession notice bythe defendants.	Annexure-A12
13.	16.08.2023	True copy of the sale notice issued with regard to the credit facility of 1^st applicant.	Annexure-A13
14.	16.08.2023	True copy of the sale notice issued with regard to the credit facility of 2^nd applicant.	Annexure-A14
15.	06.10.2023	True copy of the sale notice in respect of the credit facilities availed by the 1^st applicant.	Annexure-A15

¶125

Page 16 of 18

¶126

SA No.479 of 2023

¶127

16.	06.10.2023	True copy of the sale notice in respect of the credit facilities availed by the 2^nd applicant.	Annexure-A16
17.	---	True copy of the postal track report with regard to sale notice dt. 06.10.23 ofthe1^st applicant.	Annexure-A17
18.	---	True copy of the postal track report with regard to sale notice dt. 06.10.23 ofthe 2^nd applicant.	Annexure-A18
19.	06.11.2023	True copy of the sale notice with regard to the credit facilities availed by 1^st applicant.	Annexure-A19
20.	06.11.2023	True copy of the sale notice with regard to the credit facilities availed by 2^nd applicant.	Annexure-A20
21.	14.12.2023	True copy of the notice issued by the Advocate Commissioner.	Annexure-A21
22.	17.05.202	True copy of the demand notice issued from Regional office of the 2^nddefendant bank.	Annexure-A22
23.	22.11.2023	True copy of the valuation report by AbdulJabbar P.S.	Annexure-A23
24.	12.07.2022	True copy of the objection along with postal receipt.	Annexure-A24
25.	29.08.2023	True copy of application in M.C. No.816/2023 on the file of Addl. Chief Judicial Magistrate Court,Ernakulam	Annexure-A25
26.	29.08.2023	True copy of affidavit in M.C. No.816/2023 on the file of Addl. Chief Judicial Magistrate Court,Ernakulam	Annexure-A26
27.	08.12.2023	True copy of the order in M.C. No.816/2023 on the file of Addl. Chief Judicial Magistrate Court,Ernakulam	Annexure-A27

¶128

List of documents filed by the 1^st defendant along with the written statement

¶129

Sl. No.	Date	Particulars
1.	13.03.2018	True copy of the Memorandum of Deposit of Title deeds.	Annexure-B1
2.	22.02.2008	True copy of the Sale Deed No.1725/2008 of SRO Perumbavoor.	Annexure-B2
3.	21.07.2023	True copy of the paper publication in Deepika daily.	Annexure-B3

¶130

Page 17 of 18

¶131

SA No.479 of 2023

¶132

4.	21.07.2023	True copy of the paper publication in Businessline daily.	Annexure-B4
5.	12.11.2023	True copy of the paper publication in Mathrubhoomidaily.	Annexure-B5
6.	12.11.2023	True copy of the paper publication in TheHindu daily.	Annexure-B6
7.	29.03.2023	True copy of the Sale Deed No.1762/2023 ofSRO,Perumbavoor.	Annexure-B7
8.	24.03.2023	True copy of the Sale Deed No.1471/2023 ofSRO,Perumbavoor.	Annexure-B8
9.	15.07.2023	The photographs showing affixture of possession notice onthe property.	Annexure-B9
10.	06.11.2023	Photographs showing affixture of sale/ auction notice.	Annexure-B10
11.	11.11.2023	True copies of the postal acknowledgement cards evidencing receipt of the sale notice by 2^ndand 3^rd applicants.	Annexure-B11
12.	18.04.2018	True copy of the letter of extension of mortgage deed executed by the 3^rd applicant.	Annexure-B12
13.	---	Certified copy of O.A. No.52 of 2021 (without documents),DRT-I Ernakulam	Annexure-B13
14.	---	Certified copy of proof affidavit submitted by the applicant in OA No.52 of2021alongwithdocuments.	Annexure-B14
15.	---	Certified copy of O.A. No.46/2021 (without documents),DRT-1 Ernakulam	Annexure-B15
16.	---	Certified copy of proof affidavit submitted by the applicant in OA No.46 of2021alongwithdocuments.	Annexure-B16
17.	08.07.2025	True copy of the application for amendment in OA No.218/2025 filed by the defendant bank.	Annexure-B17
18.	11.09.2023	True copy of the valuation report	Annexure-B18
10.	---	True copy of the sketch showing the secured asset and the property described in Annexure-B7 and B8 sale deeds	Annexure-B19

(Su. WILLYAHM)

PRESIDING OFFICER

Mj/

Page 18 of 18

Skaria Johnson v. Union Bank of India

Case brief

What is this about?

What did the court decide?

Skaria Johnson v. Union Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

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Cases cited

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