Partly allowed

Jikky John v. State Bank of India

DRT2 Jun 2026SA/559/2024

Case brief

AI extract

What is this about?

This Securitization Application challenged orders appointing an Advocate Commissioner for physical possession and a sale notice issued under the SARFAESI Act. The Tribunal set aside the mechanically filled pre-printed order appointing the Commissioner based on precedent, following the previous SA's dismissal of other contentions and noting the applicants' failure to comply with a Lok Adalath award

What did the court decide?

Annexure-A6 order appointing the Advocate Commissioner in MC No.405/24 was set aside. Other reliefs pertaining to the sale notice and other Commission appointment were dismissed. No order as to costs.

Jikky John versus State Bank of India — Banking and Recovery | 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 2nd DAY OF JUNE, 2026

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

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S.A No. 559 of 2024

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Between

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Jikky John, Puthet House, MES School Road, Perinthalmanna P.O. Malappuram – 679 322.

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Thushar V.K. Vellamayil House, Karimba post, Mannarcaud, Palakkad – 678 597. --- Applicants

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And

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The Authorized Officer, State Bank of India, Palarivattom Branch, Civil Lane Road, Palarivattom, Ernakulam – 682 025.

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State Bank of India, Palarivattom Branch, Civil Lane Road, Palarivattom, Ernakulam – 682 025, Represented by its Branch Manager. --- Defendants

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SA No.559 of 2024

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This Securitization Application coming on 25.03.2026 for final hearing before me in the presence of Mr. P. Shrihari, Counsel appearing for the Applicants and Mr. Tom K. Thomas Counsel appearing for the defendants and upon hearing arguments of learned Counsels for both 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 02.08.2024 seeking to set aside Annexure-A6 Order and A7 notice issued by the Advocate Commissioner and to set aside Annexure-A16 sale notice and to declare that the no security interest has been registered with the Central Registry in respect of the property described in Annexure-A1 demand notice and to order costs and compensation to the applicants.

¶16

The applicants who are the partners of M/s Super Computer Forms availed credit facility of Rs.2.30 Crores from the 2nd defendant bank. The applicants who are also the partners of M/s Calicut Forms availed credit facility of Rs.1.22 Crores from the 2nd defendant bank. The 2nd applicant has created equitable mortgage in favour of the 2nd defendant bank by deposit of title deeds over his immovable property admeasuring an extent of 1.88 Ares together with building situated in Re. Sy. No.6/2A Vellad village, Thaliparamba Taluk, Kannur District as the collateral security for the availment of the above said credit facilities.

¶17

Since the loan account of M/s Super Computer Forms became irregular, the loan account was classified as Non-Performing Asset. Annexure-A11 demand notice dated 02.07.2018 was issued to the 2nd applicant calling upon him to repay the outstanding loan due within a period of 60 days from the date of receipt of the demand notice. The 2nd applicant neither sent any objection/representation to the demand notice nor did he clear off his liability due to the defendant bank.

¶18

Due to default in repaying the outstanding loan due, the loan accounts of M/s. Calicut Forms came to be classified as NonPerforming Asset on 30.09.2018. Annexure-A1 Demand notice dated 04.10.2018 was issued to the 1st applicant calling upon him to repay the outstanding loan due within a period of 60 days from the date of receipt of the demand notice. The 1st applicant neither sent any objection/representation to the demand notice nor did he clear off his liability due to the defendant bank.

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Subsequently, Annexure-A2 possession notice dated 31.3.2021 was issued for symbolically taking possession of the secured assets belonging to the 1st applicant. The applicants filed SA No.132/2021

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SA No.559 of 2024

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before this Tribunal challenging the above demand notice dated 02.07.2018 and the demand notice dated 04.10.2018 and possession notice dated 31.3.2021. Final order Annexure-A3 came to be passed dismissing the above S.A.

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In the meanwhile, the 1st defendant approached the Chief Judicial Magistrate Court Manjeri and filed Annexure-A4 application and A5 affidavit under Section 14 (1) of the SARFAESI Act, 2002. Annexure-A6 Order dated 06.04.2024 came to be passed in MC No.405/2024 appointing Advocate Commissioner for taking physical possession of the secured assets belonging to 1st applicant. The Advocate Commissioner issued Annexure-A7 notice dated 02.05.2024 to the applicants informing them that he would take physical possession of the secured assets after 15 days from the date of receipt of the notice.

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The 1st defendant also filed Annexure-A12 application and A13 affidavit u/s 14 (1) of the SARFAESI Act 2002 before the Chief Judicial Magistrate Court, Manjeri for taking physical possession of the secured assets belonging to the 1st applicant. Annexure-A14 order dated 21.10.2024 came to be passed in MC No.1043/24 appointing Advocate Commissioner for taking physical possession of the secured asset.

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Annexure-A16 sale notice dated 04.02.2025 was issued for sale of the secured asset belonging to the 2nd applicant on 14.3.2025. In the amended S.A, there is no averment as to whether sale of the secured asset was fructified on 14.3.2025.

¶26

The counsel appearing for the applicants submitted that an extent of 1.88 Ares of land together with commercial building situated in Vellad Village, Thaliparambu Taluk, Kannur District belonging to the 2nd applicant is not a legally secured asset with regard to the credit facility availed by M/s. Calicut Forms and that the above property was not registered with the Central Registry. The property admeasuring an extent of 19.83 Ares situated in Perinthalmanna village is exempted u/s 31 (i) of the SARFAESI Act 2002 since it is an agricultural land.

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The counsel appearing for the applicants submitted further that the classification of loan accounts of M/s Super Computer Forms and M/s Calicut Forms as Non-Performing Asset on two divergent dates is in violation of Clause 4.2.7 of the RBI Master Circular and that exorbitant rate of interest and penal interest has been charged in the loan accounts and that Annexure-A2 possession notice is per se illegal, since it was not issued in adherence to Appendix –IV of the Rules and that this Tribunal dismissed SA No.132/2021 without appreciating the grounds raised in the above SA.

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Page 3 of 10

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SA No.559 of 2024

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The counsel appearing for the applicants submitted further that Annexure-A4 application and A5 affidavit were executed by the same individual and that the learned Chief Judicial Magistrate, Manjeri passed Annexure-A6 order mechanically by filling in the blanks of preprinted and standardized format and that Annexure-A12 application and A13 affidavit were also filed by one and the same person and that Annexure-A14 order was also passed mechanically and that Rule 8 and Rule 9 of the Security Interest (Enforcement) Rules 2002 has been violated in respect of Annexure-A16 sale notice and that the defendants have arbitrarily clubbed the debts of two distinct partnership firms in the sale notice and that the reserve price fixed at Rs.60,00,000/- in the sale notice is very low for the Kannur property and that the property is not a vacant plot and that there is a commercial building in the property and that therefore, SA may be allowed as prayed for.

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The counsel appearing for the defendants submitted that the very same contentions raised by the applicants in respect of the classification of the loan accounts as Non-Performing Asset, issuance of demand notices, possession notice and enforceability of security interest created in favaour of the 2nd defendant bank were rejected by this Tribunal in the final order dated 17.01.2024 passed by this Tribunal in SA No.132/2021 and that therefore, the applicants are not entitled to raise the same contentions in this SA, since the aforesaid issues are barred by the principles of res-judicata.

¶32

The counsel appearing for the defendants submitted further that the loan accounts of the applicants were classified as NonPerforming Asset as per RBI guidelines and that the security interest over the secured asset were duly registered with the Central Registry as per Annexure-B3 series and that secured asset is not agricultural land and that the direction of the Hon'ble High Court of Kerala passed in W.P (C) No.19301/2024 to deposit a sum of Rs.3 Crores was not complied with by the applicants and that due to non-compliance of the above direction, the above writ petition was dismissed and that Annexure-A16 sale notice was issued in compliance with Rule 8 and 9 of the Security Interest (Enforcement) Rules 2002 and that reserve price for the property was fixed based on the valuation report obtained from the approved valuer and that the sale notice was served on the applicants and that correct description of the secured asset has been furnished in the sale notice.

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The counsel appearing for the defendants submitted further that Annexure-A4 application, A5 affidavit, Annexure-A12 application and A13 affidavit are in compliance with the statutory requirements contemplated under Section 14 (1) of the SARFAESI Act 2002 and that the learned Chief Judicial Magistrate, Manjeri passed Annexure-A6

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Page 4 of 10

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SA No.559 of 2024

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order in MC No.405/24 and Annexure-A14 order in MC No.1043/24 after having satisfied over the contents of the applications and affidavits and that the applicants failed to comply with the terms of the award passed in the Lok Adalath held on 19.7.2025 and that since the above Award is a decree it is binding on the parties to the Award and that hence the applicants are estopped from challenging the recovery proceedings and that therefore, SA may be dismissed with costs to the defendants.

¶37

The applicants herein filed SA No.132/2021 against the defendants herein before this Tribunal seeking to declare AnnexureA1 demand notice dated 02.07.2018, A2 demand notice dated 04.10.2018, A3 possession notice dated 31.03.2021 as illegal. The aforesaid demand notices and possession notice have been produced by the same applicants in this SA as Annexure-A1, A11 and A2 respectively. The contentions raised by the applicants in the above SA No.132/2021 has also been raised in this S.A. This SA after having heard both sides’ counsels and after having perused the material on record, passed final order dated 07.01.2024 (copy of the final order has been produced by the applicants as Annexure-A3), dismissing the above S.A. Therefore, the contentions raised by the applicants in this S.A with regard to illegal classification of the loan account as NonPerforming Asset, validity of the demand notices, and possession notice, registration of the security interest of the secured asset with the Central Registry, nature of the land as agricultural property which were elaborately considered and discussed in Annexure-A3 final order, cannot be considered and discussed in this final order, on the principal of resjudicata.

¶38

After the disposal of SA No.132/2021, the subsequent measures were initiated by the defendants with issuance of Annexure-A16 sale notice and obtaining Annexure-A6 and A14 orders for taking physical possession of the secured asset. Hence, the applicants have filed the present S.A. challenging the aforesaid measures.

¶39

Annexure-A16 sale notice was issued for sale of the secured asset belonging to the 2nd applicant on 14.03.2025. The applicants have not averred either in the amended copy of the SA or in the written argument notes as to whether sale of the secured asset was fructified or not.

¶40

The defendants have produced copies of postal acknowledgment cards and returned postal covers as Annexure-B5 to B9. AnnexureB5 postal acknowledgment card evidences the service of the demand notice on the 1st applicant. Annexure-B6 postal acknowledgment card evidences the service of the demand notice on the 2nd applicant. Annexure-B7 postal cover shows that sale notice sent to M/s. Calicut Forms was returned un-served. Annexure-B9 postal cover shows that

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Page 5 of 10

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SA No.559 of 2024

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sale notice sent to M/s. Super Computer Forms was returned unserved. Annexure-B9 postal cover shows that sale notice sent to Sunithra Kurian was returned un-served. Therefore, it is evident that defendants have taken steps to comply with Rule 8 (6) of the Security Interest (Enforcement) Rules 2002.

¶44

Annexure-B10 to B12 produced by the defendants evidences the affixture of Annexure-A16 sale notice on the conspicuous part of the secured asset and publication of the sale notice in Mathruboomi edition dated 07.02.2025 and in New Indian Express edition dated 07.02.2025. Annexure-B13 is the valuation report which was obtained from an approved Valuer, prior to fixing of reserve price in AnnexureA16 sale notice.

¶45

In Annexure-B13 valuation report, the fair market value of the property has been fixed at Rs.60,73,000/- and the realizable value of the property and distress sale value of the property has been fixed at Rs.57,69,000/- and Rs.51,62,000/- respectively. In Annexure-A16 sale notice, the reserve price for the secured asset has been fixed at Rs.60,00,000/-. A perusal of Annexure-B13 shows that the approved Valuer after having inspected the properties on 01.11.2024 and after having perused possession certificate, location certificate and the relevant documents such as guideline value and after getting information from the nearby people for ascertaining the market value of the property, fixed the value for the land and the building at Rs.60,73,000/-. This Tribunal does not find any force in the submission of the counsel for the applicants that the reserve price fixed for the secured asset was very low. The sale notice was issued on 04.02.2025. The date of sale was on 14.03.2025. Hence it is evident that more than 30 days had been granted for sale of the secured asset. Hence, this Tribunal holds that the defendants have complied with Rule 8 (5), Rule 8 (6), Rule 8 (7) and Rule 9 (1) of the Security Interest (Enforcement) Rules 2002.

¶46

A perusal of Annexure-A5 affidavit shows that all the statutory requirements contemplated under Clause (i) to (ix) to the first proviso of Section 14 (1) of the SARFAESI Act 2002 has been complied with. However, a perusal of Annexure-A6 order passed in MC No.405/24 clearly shows that the order appears to be a pre-printed and standardized format as submitted by the counsel for the applicants. It can be noticed in Annexure-A6 order that the date of passing of the order, MC No., names of the petitioner and respondents, the date of outstanding liability, name of the Advocate Commissioner are written in ink. Therefore, it is evident that the above order passed by the learned Chief Judicial Magistrate Court, Manjeri mechanically without application of mind.

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Page 6 of 10

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SA No.559 of 2024

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In Sri Dulal Nath Sharma Vs. The State of West Bengal & ors) , the order passed by the Additional District Magistrate for taking physical possession of the secured asset was in a printed format with only the blank spaces filled up. Therefore, the Hon'ble High Court of Culcutta observed as follows:

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“It is unfortunate that an order has been passed mechanically and without application of mind. For the reasons aforesaid, the order impugned is set aside.”

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In The South Indian Bank Ltd. Vs. Jahfer M. [judgment dated 18.03.2025 in OP (DRT) No.336 of 2024] cited by the counsel for the applicants, the Hon'ble High Court of Kerala has held has held as follows :

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“Though the exercise of jurisdiction by the Magistrate under Section 14 of the SARFAESI Act does not involve any adjudication, the act of the Magistrate in passing orders in printed form by filling in necessary details in blank spaces cannot be justified under any circumstances. It cannot be forgotten that the power under Section 14 of the SARFAESI Act involves drastic consequences and that is why the Parliament conferred the power to take action under Section 14 of the SARFAESI Act on high officials such as District Magistrate or the Chief Judicial Magistrate Court. While it may not be necessary to examine the correctness of the averments in the affidavit filed by a bank/financial institution in support of the application for orders under Section 14 of the SARFAESI Act, the Magistrate must clearly apply his mind to the averments in the application and determine as to whether procedure contemplated has been followed before passing an order under Section 14 of the SARFAESI Act. Therefore, I have no doubt in my mind that the Tribunal was justified in setting aside the order of the Chief Judicial Magistrate Court, Manjeri in MC No.929/2023.”

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Since Annexure-A6 order passed in MC No.405/24 is a cutpaste-stereo type order, it is liable to be set aside in the light of the observations made in the afore cited judgments.

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A perusal of Annexure-A13 affidavit filed in MC No.1043/24 before the Chief Judicial Magistrate Court, Manjeri shows that all the statutory requirements contemplated under Clause (i) to (ix) to the first proviso of Section 14 (1) of the SARFAESI Act 2002 has been complied with. This Tribunal does not find any procedural irregularity in Annexure-A13 affidavit. A perusal of Annexure-A14 order passed in

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SA No.559 of 2024

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MC No.1043/24 shows that the learned Chief Judicial Magistrate, Manjeri 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 illegality in the above order.

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Copy of the Award dated 19.07.2025 passed in the Lok Adalath has been filed along with memo in ID No.21425/25 by the counsel for the defendants. A perusal of the Award shows that both the applicants and the defendants and their counsels participated in the Lok Adalath held on 19.07.2025. Award was passed pursuant to the settlement arrived at between the parties. The applicants had agreed to pay an amount of Rs.3,65,00,000/- to the 2nd defendant bank in two instalments within the stipulated period. Admittedly, the above terms of the Award was not complied with by the applicants instead they have filed this S.A challenging the measures initiated by the defendants. Legally and morally speaking the applicants are not entitled to challenge the measures initiated by the defendants for their default in complying with the terms of the Award passed in the Lok Adalath.

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Be that as it may, the applicants have failed to prove their case so as to get the reliefs in the SA except the relief of setting aside Annexure-A14 order passed in MC No.1043/24 by the learned Chief Judicial Magistrate Court, Manjeri.

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In view of the foregoing reasons and discussions, this Tribunal holds this SA No.559 of 2024 stands partly dismissed in respect of the reliefs sought for by the applicants pertaining to Annexure-A4 application, Annexure-A5 affidavit, Annexure-A12 application, Annexure-A13 affidavit, Annexure-A14 order and Annexure-A16 sale notice and the S.A stands partly allowed in respect of the relief pertaining to Annexure-A6 order passed in MC No.405/24 on the file of the Chief Judicial Magistrate Court, Manjeri.

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However, it is made clear that there shall be no bar for the defendants to approach the Chief Judicial Magistrate Court, Manjeri for taking physical possession of the secured asset pertaining to Annexure-A4 application and A5 affidavit in accordance with law.

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There shall be no order as to costs.

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Dictated to Steno, taken down, transcribed, typed by him, corrected and pronounced by me in the open court on this the 2nd day of June, 2026.

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(Su. WILLYAHM) PRESIDING OFFICER

Mj/

Page 8 of 10

SA No.559 of 2024

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

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Sl. No.	Date	Particulars
1.	04.10.2018	True copy of demand notice issued by the 1^stdefendant to2^ndapplicant.	Annexure-A1
2.	31.03.2021	True copy of possession notice	Annexure-A2
3.	17.01.2024	True copy of final order in SA No.132/2021.	Annexure-A3
4.	27.03.2024	True copy of application numbered as MC No.405/2024 on the file of CJM CourtManjeri.	Annexure-A4
5.	27.03.2024	True copy of affidavit numbered as MC No.405/2024 on the file of CJM Court Manjeri.	Annexure-A5
6.	06.04.2024	True copy of order in MC No.405/2024 on the file of CJM Court Manjeri.	Annexure-A6
7.	02.05.2024	True copy of notice in MC No.405/2024 on the file of CJM Court Manjeri.	Annexure-A7
8.	30.05.2024	True copy of interim order in W.P. (C) No.19301/2024 of Hon'ble High Court of Kerala.	Annexure-A8
9.	24.06.2024	True copy of interim order in W.P. (C) No.19301/2024 of Hon'ble High Court of Kerala.	Annexure-A9
10.	---	True copy of case status of W.P. (C) No.19301/2024 obtained on 01.08.2024 from Kerala High Court website.	Annexure-A10
11.	02.07.2018	True copy of demand notice issued by the 1st defendant to the 2nd applicant.	Annexure-A11
12.	19.09.2024	True copy of application in MC No.1043/2024 on the file of CJM Court Manjeri.	Annexure-A12
13.	19.09.2024	True copy of affidavit in MC No.1043/2024 on the file of CJM Court Manjeri.	Annexure-A13
14.	21.10.2024	True copy of order in MC No.1043/2024 onthefile ofCJMCourtManjeri.	Annexure-A14
15.	---	True copy of certificate	Annexure-A15
16.	04.02.2025	True copy of sale notice issued by 1^st defendant.	Annexure-A16

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Page 9 of 10

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SA No.559 of 2024

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17.	11.04.2016	True copy of	letter	No.	RM	ME/MISC/	Annexure-A17
		CF/17/2016	issu	ed	by	the 2^nd
		defendant.

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List of documents filed by the defendants along with the written statement

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Sl. No.	Date	Particulars
1.	25.04.2021	True copy of Securitization Application in SA No.132/2021	Annexure-B1
2.	18.05.2021	True copy of the written statement filed by the bank inSA No.132/2021.	Annexure-B2
3.	---	True copy of the Registration Certificate showing the certificate of registration before the Central Registry.	Annexure-B3
4.	31.07.2024	True copy of the judgment in W.P. (C) No.19301/2024 of the Hon'ble High Court of Kerala.	Annexure-B4
5.	---	True copy of postal acknowledgement card evidencing receipt of the sale notice by the1^st applicant.	Annexure-B5
6.	---	True copy of postal acknowledgement card evidencing receipt of the sale notice by the 2^ndapplicant.	Annexure-B6
7.	---	True copy of the postal cover containing the returned notice of M/s Calicut Forms	Annexure-B7
8.	---	True copy of the postal cover containing the returned notice of M/s Super Computer Forms	Annexure-B8
9.	---	True copy of the postal cover containing the returned notice of Sunitha Kurien	Annexure-B9
10.	---	Photographs showing the affixture of the sale notice.	Annexure-B10
11.	07.02.2025	True copy of news paper publication published in Mathrubhumi.	Annexure-B11
12.	07.02.2025	True copy of News Paper Publication published in Indian Express	Annexure-B12
13.	02.11.2024	True copy of Valuation Report issued by SreeragRavindran,Chartered Engineer	Annexure-B13

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(Su. WILLYAHM) PRESIDING OFFICER

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Mj/

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Page 10 of 10

Jikky John v. State Bank of India

Case brief

What is this about?

What did the court decide?

Jikky John v. State Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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