Dismissed

Aji Mol Saji v. the Housing Development Finance Corporation Ltd. Hdfc Ltd.

DRT30 Apr 2026SA/571/2024

Case brief

AI extract

What is this about?

Debt Recovery Tribunal dismissed an application setting aside a Chief Judicial Magistrate's order allowing possession of secured assets. The court held the mortgaged land, classified as wet land but used for residential construction, was not exempt agricultural land under the SARFAESI Act and found no illegality in the compliance of statutory requirements.

What did the court decide?

Set aside the order passed by the CJM, set aside the notice issued by the Advocate Commissioner, and declare the securitization proceeding in respect of the agricultural land as not maintainable.

Aji Mol Saji versus the Housing Development… — Contract and Commercial Disputes | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL-2, KERALA

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AT ERNAKULAM

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PRESENT: SRI.SOVAN KUMAR DASH

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PRESIDING OFFICER

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Dated this 30^th day of April, 2026.

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SECURITIZATION APPLICATION No.571/2024

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Between

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Aji mol Saji, Aged 50, W/o.Saji K., Saji Bhavan, Mallasserry P.O., Pathanamthitta. …Applicant

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And

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The Housing Development FinanceCorporation Ltd. (HDFC), HDFC House, Vazhuthacaud, P.B.No.2288, Thiruvananthapuram - 695 010.

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The Authorised Officer, The Housing Development FinanceCorporation Ltd. (HDFC), HDFC House, Vazhuthacaud, P.B.No.2288, Thiruvananthapuram - 695 010. …Defendants

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This Securitization Application having been heard on

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06.03.2026 in the presence of Advocate Ms.Lakshmi represented

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SA 571/2024

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Adv.V.Philip Mathews for the applicant and Advocate Sri.Saju N.A. for the defendants and stood over to this day for consideration, the Tribunal delivered the following:

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FINAL ORDER

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Challenging the securitization proceeding initiated by the defendants under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘the SARFAESI Act’), the applicant/borrower has filed this SA under S.17(1) of the SARFAESI Act seeking relief to set aside the order passed by the CJM and notice issued by the Advocate Commissioner with further relief to declare that Securitization proceeding in respect of agricultural land is not maintainable.

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Brief facts of the case :

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2.1 The applicant, as a co-borrower along with her husband, availed housing loan and other loans from the defendants starting from the year 2015-2019 by mortgaging 4.5 Ares of land described in the S.A. It is claimed by the applicant that the subject matter property is Nilam (wet land) which was within the knowledge of the defendants.

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SA 571/2024

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2.2 The defendants cannot proceed in respect of the subject matter of the property as the same is agricultural land. So also, the security interest, having not registered in the CERSAI Portal, the securitization proceeding is not maintainable.

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2.3. The applicant claims that her husband is working in Hyderabad. They were remitting installments regularly. Due to some financial constraint the loans could not be repaid in time. Hence the same was classified as NPA on 03.02.2023. The defendants issued a notice in recalling the loan followed by issuance of a demand notice dated 06.05.2023 calling the applicant to discharge the liability within 60 days from the date of receipt of the demand notice.

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2.4. The defendants approached the Chief Judicial Magistrate, Pathanamthitta for taking physical possession of the secured assets without compliance of the statutory requirement. The learned CJM passed an order mechanically without applying mind and appointed an Advocate Commissioner to take physical possession of the secured asset.

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2.5. The applicant and her husband filed WP(C) No.37047/2023 before the Hon’ble High Court of Kerala which was disposed of by a judgment dated 09.11.2023 permitting the

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SA 571/2024

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applicant to repay the loan in installments but they could not comply the order. Subsequently, the applicant approached the defendants to grant facility to pay the loan in installments, but the defendants did not concede the same. Hence the SA is filed by the applicant praying to set aside the Order passed by the CJM and notice issued by the Advocate Commissioner with further relief to declare the Securitization proceeding in respect of agricultural land as not maintainable.

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Defendants filed written statement in denying the averments in the SA and claimed inter alia that applicant and her husband availed the housing loan of Rs.16,00,000/- (Rupees sixteen lakhs only) and Rs.6,00,000/- (Rupees six lakhs only) respectively which was duly sanctioned on 31.01.2015. They also availed additional loans from time to time by extending the mortgage created for earlier loan transactions. There is no illegality in the securitization proceeding. All the statutory measures are duly complied. No illegality is found or established in the proceeding initiated before the CJM. Security interest is duly registered in the CERSAI Portal. The secured asset is a residential property and not attempted under Section 31(i) of the SARFAESI Act. The applicant has no valid and legal ground to interdict in the securitization

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SA 571/2024

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proceeding. Hence the SA, being devoid of any merit, may be dismissed.

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

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(i) Whether the secured asset is an agricultural land exempted under S.31(i) of the SARFAESI Act?

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(ii) Whether the securitization proceeding initiated by the defendants under the provisions of the SARFAESI Act suffer from any illegality or irregularity to interdict with the same?

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

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FINDINGS

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Point No.1 :

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Admittedly, the applicant failed to repay various loans availed from the defendants by creating security interest over the subject matter property. The applicant claimed that the secured asset is ‘nilam’ land exempted under SARFAESI Act. To establish the same, the applicant relied on a possession certificate Annexure A-8 indicating that the subject matter property is wet land. Hence, the applicant claims that the defendants cannot proceed in respect

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SA 571/2024

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of subject matter property which is exempted from the purview of the securitization proceedings.

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The defendants claim that the loan was availed by the applicant for construction of a residential building over the subject matter property. The applicant has not placed any material showing the secured asset was used for agricultural purpose at the time of availing loan. In absence of such proof applicant cannot claim the entire secured asset as agricultural land based upon the Revenue record.

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As per the document filed by the applicant marked annexure A-8, the secured asset of an extent of 4.5 Ares is shown as wet land. The said land was mortgaged by the applicant to avail the housing loan and the applicant and her husband constructed a residential house over the said property. Revenue record is not an acceptable document to prove the agricultural nature of the secured asset for the purpose of exemption under SARFAESI Act.

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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 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

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SA 571/2024

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Indian Bank & another vs. K.Pappireddiyar & another, held as

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follows:-

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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

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SA 571/2024

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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 the ratio decided by the Hon’ble Apex Court, applicant is required to prove that the secured asset was agricultural land at the time of availing the loans and she has intention to retain the property as agricultural land even after creation of security interest. In absence of such material evidence, the applicant has no legal right seeking benefit of Section 31(i) of the SARFAESI Act. The applicant, having created security interest over the subject matter property for construction of residential building, it establishes that she has voluntarily relinquished her claim of agricultural nature. The applicant has failed to establish that the subject matter property was agricultural land at the time of availing the loan and hence she is not entitled to get protection on the ground of agricultural land as contended in the SA. In view of discussion as made above this point is answered against the applicant.

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Points No.2 & 3

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The applicant has filed the SA claiming that the learned CJM has passed a mechanical order without applying mind to the documents placed on record. On perusal of the said impugned

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SA 571/2024

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order, marked as Annexure A-4, it appears that the learned CJM has perused all the documents including the demand notice and being satisfied with the documents and the affidavit, the Order was passed. In such premises it cannot be said that the order passed by the CJM is mechanical in nature.

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Law is well settled on the point that in a proceeding u/s.14 of the SARFAESI Act, CJM exercises only administrative power to assist the secured creditor in taking possession of the secured assets. He has no jurisdiction to adjudicate any disputed question between the parties as held by the Hon’ble Apex Court in the judgment reported in (2023) 1 SCC 675 in the case of

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M/s.R.D.Jain and Co. v. Capital First Ltd. & others had held as

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follows:-

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“8.1 …………Thus, we reiterate that the step to be taken by the CMM/DM under Section 14 of the SARFAESI Act, is a ministerial step. While disposing of the application under Section 14 of the SARFAESI Act, no element of quasi-judicial function or application of mind would require. The Magistrate has to adjudicate and decide the correctness of the information given in the application and nothing more. Therefore, Section 14 does not involve an adjudicatory process qua points raised by the borrower against the secured creditor taking possession of secured assets.”

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SA 571/2024

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In view of this ratio, if all the requirements under S.14 of the SARFAESI Act are duly complied with, it is statutory obligation on the part of the CMM/DM to assist the secured creditor in obtaining physical possession of the secured asset.

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It appears that the impugned order was passed by the learned Chief Judicial Magistrate on proper application of mind. It cannot be said that the said order was passed by the CJM as illegal. No illegality or irregularity in the securitization proceeding is established by the applicant. Hence the applicant is not entitled to get any relief in this SA. Both the points are answered against him.

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Hence it is ordered:-

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O R D E R

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In view of the foregoing reasons, this SA, being devoid of any merit, is hereby dismissed but in the circumstances without costs.

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(Dictated to my Steno, corrected and pronounced by me in the open Tribunal on this the 30^th day of April, 2026.)

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[SOVAN KUMAR DASH] PRESIDING OFFICER

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Documents on the part of the applicant

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Annexures	Date	Particulars of documents
Annexure-A1	-	True copy of sale deed No.2047/10 of Konni SRO.
Annexure-A1(a)	-	True English translation of Annexure-A1.
Annexure-A2	22.05.2023	True copy of the land tax receipt describing the property as Nilam.
Annexure-A2(a)	-	True English translation of Annexure-A2.
Annexure-A3	06.05.2023	True copy of the demand notice.
Annexure-A4	29.09.2023	True copy of the order in MC No.249/2023 passed by the Chief Judicial Magistrate Court, Pathanamthitta.
Annexure-A5	01.01.2024	True copy of the representation from the applicant to the Manager, HDFC Bank, Pathanamthitta.
Annexure-A5(a)	-	English translation of Annexure- A5.
Annexure-A6	20.01.2024	True copy of the reply from the 2^ndrespondent to Annexure-A5.
Annexure-A7	10.06.2024	True copy of the
		representation to the Manager, HDFC Bank, Pathanamthitta.
Annexure-A7(a)	-	English translation of Annexure- A7.
Annexure-A8	26.05.2023	True copy of possession certificate stating the class of land as “wet”.
Annexure-A9	08.08.2024	True copy of the notice from the Advocate Commissioner.

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Documents on the part of the defendants

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Annexures Date Particulars of documents Document No.1 09.11.2023 Copy of Judgment in WP(C) No.37047/2023 of the Hon’ble High Court of Kerala. Document No.2 Copy of CERSAI certificate.

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PRESIDING OFFICER

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IN THE DEBTS RECOVERY TRIBUNAL-2,

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KERALA AT ERNAKULAM

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PRESENT: SRI. SOVAN KUMAR DASH PRESIDING OFFICER

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Dated this the 30^th day of April, 2026.

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S.A.No.571/2024