Dismissed

Anilkumar T R v. South Indian Bank

DRT26 Mar 2026SA/555/2025

Case brief

AI extract

What is this about?

The Tribunal dismissed the Securitization Application filed by individuals seeking exemption for agricultural land. Relying on precedents regarding Section 31(i) of the SARFAESI Act, the court held the burden was on applicants to prove exclusive agricultural use, which was not met despite a prior declaration stating the land was non-agricultural.

What did the court decide?

The Securitization Application is dismissed without costs, and all pending Interim Applications are closed.

Anilkumar T R versus South Indian Bank — Specific Performance | 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 26^th day of March, 2026

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Securitization Application No.555/2025

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Between

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Anilkumar T.R., Aged 55 years, S/o. P.G. Raveendran Nair, Thekkeperoor House, Balagram, Kallar P.O., Karunapuram, Idukki -685 552.

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Maya Vasundhara Devi, Aged 50 years, W/o. Anilkumar T.R., Thekkeperoor House, Balagram, Kallar P.O., Karunapuram, Idukki -685 552. …Applicants

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And

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South Indian Bank Limited, Puliyanmala Branch, Puliyanmala, Idukki District, Pin-685 515, represented by its Manager.

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The Authorized officer, South Indian Bank Ltd., Regional Office, 1^st Floor,

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Regency Square, K.K. Road, Collectorate P.O., Kottayam, Kerala, Pin- 686 002. …Defendants

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SA 555/2025

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This Securitization Application having been heard on 18.03.2026 in the presence of Advocate Reynold Fernandez for the applicants and Advocates John Prakash Bavakkatt for the defendants and stood over to this day for consideration, the Tribunal delivered the following:

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F I N A L O R D E R

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This SA is filed by the applicant under S.17(1) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘the SARFAESI Act’) praying to set aside the entire securitization proceeding including the notice issued by the Advocate commissioner.

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Brief facts of the case :

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2.1 The applicants, being husband and wife, availed ‘Kissan Credit Card Over Draft’ facility for cultivating cardamom and pepper plantations from the 1^st defendant in the year 2019 and mortgaged 48 Ares of their land described in the SA. The KCC loan was renewed from time to time. In spite regular repayment of loan the defendant bank initiated securitization proceeding and issued a demand notice on 31.12.2024 calling the applicants to pay the outstanding dues in the loan account. The applicants have also

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SA 555/2025

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availed housing loan before availing the KCC OD loan mortgaging the same property.

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2.2 Both the loans became irregular and a common demand notice was issued to the applicants to repay the outstanding. Due to non-repayment of the loan, a possession notice under Section 13(4) of the SARFAESI Act was also issued on 08.07.2025 and symbolical possession of the secured asset was taken without following the statutory requirements. It is claimed in the SA that the secured asset is agricultural land for which the securitization proceeding is not maintainable. During pendency of the SA, the applicants amended the SA in challenging the proceeding under section 14 of the SARFAESI Act and the notice issued by the Advocate Commissioner to take possession of the secured asset. It is claimed that all the statutory requirements are not duly followed and the secured asset, being agricultural land, securitization proceeding is not maintainable. Hence the applicants claim to set aside the entire securitization proceeding including the notice issued by the Advocate commissioner.

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3.1 The defendants filed written statement denying the averments and claimed inter alia that the applicants availed housing loan of Rs.35 lakhs in the year 2017 and subsequently they availed KCC-OD facility of Rs.70 lakhs in the year 2019. The subject matter

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SA 555/2025

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property was mortgaged to avail both the loans. Due to default in repayment, the loans turned to ‘NPA’ on 15.11.2024 and a demand notice under Section 13(2) of the SARFAESI Act dated 31.12.2024 was issued to the applicants calling them to pay the outstanding amount of Rs.1,17,09,829.11 within the statutory period. But due to non-repayment, the measure under section 13(4) of the SARFAESI Act was taken. Claiming the secured asset as agricultural land is not correct. Secured asset was never used as agricultural land. In absence of any satisfactory evidence in establishing the claim of agricultural nature of the secured asset at the time of availing the loans the applicants are not entitled to get any relief and hence the SA may be dismissed.

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3.2 At the time of availing the loans, the applicants executed Annexure-D4 declaration stating that the secured asset is nonagricultural in nature and they shall be precluded taking any contrary view in future. In view of this declaration, the applicants cannot claim any contrary claim as advanced in this case. There is no illegality in the proceeding under section 14 of the SARFAESI Act. In absence of any illegality, the SA may be dismissed.

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

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SA 555/2025

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

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(ii) Whether the applicants are entitled to get any relief in this proceeding?

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FINDINGS:

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

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Both the points being interlinked with each other are taken up together for consideration. The main contention is raised by the applicants in this case that the secured asset is agricultural land used for cultivation of cardamom and plantation of pepper. Since the applicants claimed exemption under Section 31(i) of the SARFAESI Act, burden lies on them to prove that at the time of availing the loan, the secured asset is exclusively used for cultivation purpose and they were depending on the income derived from such agricultural activities.

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The Hon'ble Apex Court in the judgment reported in 2023 KHC 6012 in the case of K.Sreedhar v. M/s.Raus Constructions Pvt. Ltd. & others by referring its earlier two judgments reported in 2018 (4) SCC 793 and 2018 (18) SCC 252 in the case of ITC Limited vs. Blue Coast Hotels Ltd. & others and Indian Bank & another vs. K.Pappireddiyar & another, held as follows:-

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SA 555/2025

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“7.1 The purpose of enacting Section 31(i) of the SARFAESI Act has been considered by this Court in the case of Blue Coast Hotels Ltd. (Supra) in paragraph 36, which reads as under:

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“36. The purpose of enacting Section 31(i) and the meaning of the term “agricultural land” assume significance. This provision, like many others is intended to protect agricultural land held for agricultural purposes by agriculturists from the extraordinary provisions of this Act, which provides for enforcement of security interest without intervention of the Court. The plain intention of the provision is to exempt agricultural land from the provisions of the Act. In other words, the creditor cannot enforce any security interest created in his favour without intervention of the court or tribunal, if such security interest is in respect of agricultural land. The exemption thus protects agriculturists from losing their source of livelihood and income i.e. the agricultural land, under the drastic provision of the Act. It is also intended to deter the creation of security interest over agricultural land as defined in Section 2(1)(zf)35. Thus, security interest cannot be created in respect of property specified in Section 31.”

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7.2 Thus, as per the law laid down by this Court in the aforesaid two decisions, only in a case where the secured property is actually put to use as agricultural land and solely on the basis of the revenue records / Pattadar and once the secured property is put as a security by way of mortgage etc. meaning thereby the same was not treated as agricultural land, such properties cannot be said to be exempted from the provisions of the SARFAESI Act under Section 31(i) of the SARFAESI Act. Applying the law laid down in the aforesaid two decisions to the facts of the case on hand and when no evidence was led at all on behalf of the borrowers that the secured properties in question were actually put to use as agricultural land and/or any agricultural activity was going on, the High Court has committed an error in applying Section 31(i) of the SARFAESI Act and quashing and setting aside the entire Possession Notice, Auction Notice as well as Sale etc.”

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In view of this ratio, the burden lies on the applicants to prove that

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at the time of availing the loan the secured asset was set apart exclusively for cultivation. Not only that they have to establish that they had intention to use the land exclusively for agricultural purpose even they created security interest over the same. No such evidence is placed on record. Mere claiming that secured asset is agriculture land; the burden is not discharged.

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SA 555/2025

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During pendency of the SA an Advocate commissioner was deputed to ascertain the nature of land. It is found that there is a residential building inside the subject matter property and over the remaining portion, there are some plantations of cardamom, coffee, pepper, jack fruit, arecanut etc. having with some coconut trees which are very common in the State of Kerala. In the report the Advocate commissioner could not able to ascertain the nature of land at the time of availing the loan. Hence the report of the Advocate commissioner would not discharge the burden on the applicants claiming exemption of the secured asset under Section 31(i) of the SARFAESI Act. Besides the same at the time of availing the loan, the applicants have executed a declaration marked Annexure-D4 stating that the secured asset is non-agricultural land and they will not raise any contrary claim in future. Execution of such document is not disputed by the applicants.

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The Hon’ble High Court of Kerala in the Judgment reported in OP (DRT) No.447/2022 in the case of Rahiya P. v. Authorised Officer, South Indian Bank Ltd. held as follows:-

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“3) The contention of the learned counsel for the petitioner that the Tribunal should have allowed the commission application and should have considered the nature of the land before it rejected the application for interim relief, is also not acceptable. The purpose of taking an undertaking in the form of Ext.R1(b) is to ensure that there is no argument taken at a later point in time that the land in question is agricultural land to which the provisions of the SARFAESI Act do not apply. If borrowers are permitted to contend

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SA 555/2025

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that the land in question is agricultural land even after giving an undertaking in the form of Ext.R1(b), it would defeat the purpose for which an undertaking in the form of Ext.R1(b) has been obtained. As I have already found that Ext.R1(b) is not hit by the provisions of Section 23 of the Contract Act, it does not lie in the mouth of the petitioner to now seek to establish that the land in question is agricultural land by the appointment of an Advocate Commissioner to determine the nature of the land”.

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In view of this ratio, raising any contention contrary to the declaration is not permissible. The applicants have failed to establish that the secured asset is agricultural land, exempted under SARFAESI Act. No other contention is raised in respect of the measures taken under the provision of the Securitization Act. In absence of any illegality, interference with the securitization proceeding is not warranted. Hence the applicants are not entitled to get any relief. Both the points are answered against them.

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Hence it is ordered:-

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ORDER

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In view of the foregoing reasons, the SA, being devoid of

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any merit, is hereby dismissed but in the circumstances without costs. All pending IAs are closed.

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(Dictated to my PA, corrected and pronounced by me in the open Tribunal on this the 26^th day of March, 2026).

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[SOVAN KUMAR DASH] PRESIDING OFFICER

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SA 555/2025

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Documents on the part of the applicants

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Annexures	Date	Particulars of documents
Annexure-A1	13.03.2019	True copy of the lease deed executed by the 1^stdefendant.
Annexure-A2	31.12.2024	True copy of the Notice under Sec.13(2) of the SARFAESI Act, 2002.
Annexure-A3		True copy of the statement of accounts for the period from 01.01.2025 to 09.07.2025 in Kissan credit card loan account bearing No.0893656000000058.
Annexure-A4		True copy of the statement of accounts showing the repayment commencing from 01.01.2023 to 14.07.2025.
Annexure-A5	08.07.2025	True copy of the possession notice issued under Rule 8(1) of the Security Interest Enforcement Rule, 2002.
Annexure-A6		True copy of the photographs showing the agricultural plantations in the secured asset.
Annexure-A7	12.11.2025	True copy of the notice issued by the advocate commissioner to the petitioners.
Annexure-A8	12.11.2025	True copy of the notice issued under Sec.13(8) of the SARFAESI Act read with Rule 8 (6) of the Security Interest (Enforcement) Rules, 2002.
	Documents o	n the part of the defendants
Annexure-D1	04.01.2017	True copy of the sanction letter with respect to the Housing loan.
Annexure-D2	21.05.2019	True copy of the sanction letter with respect to the KCC-OD facility.
Annexure-D3	31.12.2024	True copy of the complete demand notice issued by the defendant bank.
Annexure-D4	22.05.2019	True copy of the Deed of Declaration duly signed by the applicants.

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SA 555/2025

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Annexure-D5	..	True copy of the extract of the CERSAI report with respect to the mortgaged property.
Annexure-D6	13.07.2025	True copy of the paper publications made by the defendant bank in The Hindu (English newspaper).
Annexure-D7	13.07.2025	True copy of the paper publications made by the defendant bank in Malayala Manorama (Malayalam newspaper)