Dismissed

Muhammed Ashraf a M v. Canara Bank

DRT27 Aug 2026SA/566/2025

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal dismissed the secritization Application filed by borrowers challenging a bank's sale of mortgaged property. The court held the application was time-barred as it was filed beyond the statutory 45-day limit after the sale notice and auction, finding no illegality in the seizure or sale process.

What did the court decide?

The challenged sale notice, intimation, and subsequent possession measures were upheld and the application was dismissed with no costs awarded.

Muhammed Ashraf a M versus Canara Bank — Contract and Commercial Disputes | 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 27th DAY OF AUGUST, 2026

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

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S.A No. 566 of 2025

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Between

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Muhammed Ashraf A.M., S/o late Abdulla Haji, Proprietor, M/s A.M. Tyre Resoling Works, A.M. Manzil, Mangalpadi P.O., Adka House, Kasaragod – 671 324.

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Soopi A.M., S/o late Abdulla Haji, A.M. Manzil, Mangalpadi P.O., Adka House, Kasaragod – 671 324. --- Applicants

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And

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Canara Bank, Manjeswaram Branch, Vyapari Bhavan, Hosangadi Junction, Manjeswar, Kasaragod 671 323, Rep. by its Manager.

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The Authorized Officer under the SARFAESI Act, Manjeswaram Branch, Canara Bank, Vyapari Bhavan, Hosangadi Junction, Manjeswar, Kasaragod 671 323,

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--- Defendants

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SA No.566 of 2025

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This Securitization Application coming on 22.06.2026 for final hearing before me in the presence of Mr. Lijin Thamban, Counsel appearing for the Applicants and Ms. Thankom Mukundakrishnan, 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 18.08.2025 seeking to set aside Annexure-A3 sale notice and to declare that Annexure-A3 sale notice and Annexure-A4 intimation issued by the 2nd defendant are illegal and set aside the same and to restrain the defendants from taking physical possession of the secured asset and to declare that the amount claimed in Annexure-A3 and A4 are erroneous and incorrect and to direct the defendants to pay the cost to the applicants.

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The applicants availed the credit facility from the 1st defendant bank upon creation of equitable mortgage over their immovable property comprised in survey No. 435/5-2 in Mangalpady Village, Manjeswar Taluk, Kasaragod District as collateral security, in favour of the 1st defendant bank. Since, the applicants defaulted repayment of the outstanding amount, the account was classified as Non-Performing Asset on 10.02.2025.

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Therefore, the defendants initiated measures under the SARFAESI Act 2002 and the Security Interest (Enforcement) Rules 2002, with issuance of demand notice and Annexure-A2 possession notice and Annexure-A3 sale notice. In the e-auction held on 27.06.2025, secured asset was sold to the highest bidder. After confirmation of sale, certificate was issued in favour of the successful bidder namely, Smt. Mariyamma on 07.08.2025.

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Thereafter, the defendants approached the Chief Judicial Magistrate Court, Kasaragod and filed Annexure-A7 application and Annexure-A8 affidavit under section 14 (1) of the SARFAESI Act 2002. Annexure-A8 order was passed appointing Advocate Commissioner to taking physical possession of the secured asset. The Advocate Commissioner issued Annexure-A5 notice to the applicant informing their that he would take physical possession of the secured asset. The aforesaid measures are under challenge by the applicant in this SA.

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The counsel appearing for the applicants submitted that the valuation for the property mentioned in Annexure-A3 sale notice is very meagre, since the secured asset would fetch much more than the

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Page 2 of 7

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SA No.566 of 2025

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amount mentioned in the sale notice and that the applicants received Annexure-A4 intimation from the defendants stating that the property was sold on 27.06.2025 for an amount of Rs. 36,70,000/-

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The counsel appearing for the applicants submitted further that the defendants failed to take account of increase of fair value for the land after widening of the National Highway and that and the loan account of the applicant was classified as Non-Performing Asset as illegally without proper intimation and that Annexure-A5 notice issued by the Advocate Commissioner is illegal and that therefore the SA may be allowed as prayed for.

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The counsel appearing for the defendants submitted that the applicants did not challenge the possession notice, sale notice within the period of limitation and that therefore the applicants are not entitled to challenge the sale of the secured asset as held by the Hon'ble Supreme Court in Celir LLP vs. Bafna motors (Mumbai) Pvt Ltd (2023) (5) KLT SC 655 ) and that on this ground alone the SA is liable to be dismissed.

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The counsel for the defendants submitted further that possession notice was published in two leading news papers and that it was affixed on the conspicuous part of the secured asset and that reserve price of the property was fixed after obtaining Annexure-B2 valuation certificate and that sale notice was published in two leading news papers and that it was affixed on the conspicuous part of the secured asset and that security interest over the secured asset have been registered with the central registry.

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The counsel for the applicants was submitted that the secured asset was sold to the successful bidder, Smt. Mariyamma in the auction held on 27.06.2025 and that this SA was filed only after issuance of Annexure-A5 notice issued by the Advocate Commissioner for taking physical possession of the secured asset and that there was no collusion between the defendants and the auction purchaser and that property was not undervalued and that all the details contemplated under Section 14(1) of the SARFAESI Act 2002 was furnished in Annexure-A8 affidavit filed before the Chief Judicial Magistrate, Court Kasaragod and that the loan account of the applicants was classified as Non-Performing Asset as per RBI guidelines and that there are no valid grounds and contentions raised by the applicants in the SA and that therefore this SA may be dismissed with costs to the defendants.

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The provisions of Section 13 (2) of the SARFAESI Act 2002 neither contemplates nor does it mandate the secured creditor/ Authorized Officer to send prior intimation to the borrower/ guarantor

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Page 3 of 7

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SA No.566 of 2025

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before classification of the loan account as Non-Performing Asset. In the present case, the applicants has categorically admitted his default in repayment of the outstanding loan due. Further, the applicants neither sent any objection nor representation for the demand notice. Therefore, there is no substance in the contention of the applicant that loan account was classified as Non-Performing Asset without proper intimation.

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Annexure-A2 possession notice was issued on 07.05.2025. The applicants did not challenge the possession notice by filing the SA within the period of 45 days from the date of issuance of possession notice. Hence the applicants are not entitled to raise any contention in respect of the possession notice. However, the defendants have produced Annexure-B6 to B9 in order to prove their contention that possession notice was served to the applicants and that it was affixed on the conspicuous part of the secured asset and that it was published in two news papers, one in vernacular language Mangalam of edition dated 25.04.025 and one in English version of The Hindu edition dated 25.04.2025.

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The defendants issued Annexure-A3 sale notice dated 07.05.2025 for sale of the secured asset on 27.06.2025. The applicants have admitted the receipt of sale notice. Further they have produced copy of the sale notice as Annexure-A3. Annexure-B3 to B5 produced by the defendants evidences the affixture of the sale notice on the conspicuous part of the secured asset and its publication in two news papers, one in vernacular language Mathrubhoomi edition dated 09.05.2025 and one in New India Express edition dated 09.05.2025.

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The defendants have produced Annexure-B2 copy of the valuation report. A perusal of Annexure-B2 shows that the approved valuer inspected the secured asset on 11.04.2025 and that after having assessed the value of the property fixed, the market value at Rs.43,10,000/- and its realizable value at Rs.36,60,000/- and its distress value at Rs.34,40,000/-. In Annexure-A3 sale notice, the reserve price for the property was fixed at Rs. 36,60,000/- which is the distress value. Therefore, this Tribunal finds that the above reserve price fixed is correct and fair. The applicants have not produced any materials before this Tribunal in order to prove their contention that the secured asset has been undervalued and that it would fetch much more than the reserve price.

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The secured asset was sold to the highest bidder, Smt. Mariyamma for a sale consideration of Rs. 36, 70,000/- on 27.06.2025. The 2nd defendant sent Annexure-A2 letter dated 28.07.2025 to the applicants informing them of the sale of the secured assets. Though the applicants had been aware of the sale of the

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Page 4 of 7

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SA No.566 of 2025

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secured asset, no steps was taken to implead the above said auction purchaser in the SA. On this ground alone the applicants are not entitled to challenge the sale of the secured asset.

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Be that as it may, the applicants did not file the SA within the period of 45 days from the date of issuance of sale notice or within a period of 45 days from the date of sale of the secured asset. Hence, it is evident that this SA which was filed on 18.08.2025 challenging the issuance of Annexure-A3 sale notice and sale of the secured asset is not maintainable.

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The applicants have not averred in the SA as to whether Annexure-A8 affidavit filed in CMP No. 2427/2025 is not in compliance with the statutory requirements stipulated under Clauses (i) to (ix) to the first proviso of Section 14(1) of the SARFAESI Act, 2002. However, a perusal of Annexure-A8 affidavit shows that the aforesaid statutory requirements has been complied with by the defendants.

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A perusal of Annexure-A9 order passed in CMP No. 2427/2025 shows that the learned Chief Judicial Magistrate, Kasaragod after having perused the contents of the affidavit and the documents filed in support of the affidavit and having satisfied over the same passed the order appointing Advocate Commissioner to take physical possession of the secured asset. This Tribunal does not find any illegality in the above order.

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The applicants have failed to establish their case so as to get the reliefs sought for in the SA.

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In the result, SA No. 566/2025 stands dismissed. No 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 27^th day of August, 2026.

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(Su. WILLYAHM) PRESIDING OFFICER

Rn/

Page 5 of 7

SA No.566 of 2025

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

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Sl. No.	Date	Particulars
1.	07.09.2023	True copy of the loan sanctioning memorandum issued by the 1^st defendant	Annexure-A1
2.	07.05.2025	True copy of the possession notice issued by the 2^nd defendant	Annexure-A2
3.	07.05.2025	True copy of the sale notice issued by the 2^nddefendant	Annexure-A3
4.	28.07.2025	True cop of the intimation issued by the 2^nddefendant	Annexure-A4
5.	01.08.2025	True copy of the notice issued by the Advocate Commissioner.	Annexure-A5
6.	01.08.2025	True copy of the judgment in W.P (C) No.28609/2025 of the Hon’ble High Court of Kerala.	Annexure-A6
7.	08.07.2025	True copy of the petition in CMP 2427/2025 of the CJM Court Kasaragod.	Annexure-A7
8.	08.07.2025	True copy of the affidavit of the 1^st defendant in CMP 2427/2025 of the CJMCourtKasaragod.	Annexure-A8
9.	26.07.2025	True copy of the order in CMP 2427/2025 of the CJM Court Kasaragod.	Annexure-A9
10.	01.04.2026	True copy of the valuation report issued by the certified Valuer of the secured assets.	Annexure-A10
11.	21.04.2026	True copy of the RTI information issued by State Public Information Officer of District Industries centre Kasaragod regarding the subsidy for the loan credited to the applicant along with English translation.	Annexure-A11

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

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Sl. Date	Particulars

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Page 6 of 7

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SA No.566 of 2025

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No.
1.	28.07.2025	True copy of the sale certificate	Annexure-B1
2.	11.04.2025	True copy of the Valuation Report	Annexure-B2
3.	---	Photographs evidencing affixture of sale notice.	Annexure-B3
4.	09.05.2025	True copy of the publication of sale noticein Mathrubhumidaily.	Annexure-B4
5.	09.05.2025	True copy of the publication of sale noticein TheNew Indian Express daily.	Annexure-B5
6.	19.04.2025	True copy of the possession notice and A/Dcards	Annexure-B6
7.	---	True copy of the photograph evidencing affixture ofpossession notice	Annexure-B7
8.	25.04.2025	True copy of the publication of possession noticein Mangalamdaily.	Annexure-B8
9.	25.04.2025	True copy of the publication of possession noticein TheHindu daily.	Annexure-B9
10.	---	True copy of the CERSAI registration certificate.	Annexure-B10
11.	11.02.2025	True copy of the demand notice and A/Dcards	Annexure-B11

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(Su. WILLYAHM) PRESIDING OFFICER

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Rn/

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Muhammed Ashraf a M v. Canara Bank

Case brief

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Muhammed Ashraf a M v. Canara Bank

Case brief

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