Partly allowed

Dipu Mathew v. Canara Bank

DRT12 Feb 2026SA/761/2024

Case brief

AI extract

What is this about?

In a securitization application, the Debt Recovery Tribunal held that regularization of loan accounts is not under Section 13(4) SARFAESI Act. The Tribunal dismissed challenges regarding possession notices due to delay but set aside the order appointing the Advocate Commissioner for procedural non-compliance regarding the affidavit.

What did the court decide?

Annexure-A6 order and Annexure-A7 notice by the Advocate Commissioner were set aside. Other reliefs to stay possession were dismissed.

Dipu Mathew versus Canara Bank — 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 12^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. 761 of 2024

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Between

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Dipu Mathew,

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S/o. P.J. Mathew, Residing at Parakal House, Manakunnam, Udayamperoor P.O., Ernakulam – 682 307.

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Philomina Dipu, W/o. Dipu Mathew, Residing at Parakal House, Manakunnam, Udayamperoor P.O., Ernakulam – 682 307.

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--- Applicants

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And

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The Authorized Officer, Canara Bank, Tripunithura Branch, Palakkatt Building, Pallipparambukavu Road, Tripunithura, Ernakulam -682 301.

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--- Defendant

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SA No.761 of 2024

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This Securitization Application coming on 29.07.2025 for final hearing before me in the presence of Mr. Aju Mathew, Counsel appearing for the Applicants and Mr. Prem Das Advocate appearing for the defendant 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 16.10.2024 seeking to set aside Annexure-A3 and A4 possession notices, Annexure-A6 order passed in MC No.110/2024 and Annexure-A7 notice issued by the Advocate Commissioner and to direct the defendant to permit the applicants to regularize the loan accounts by remitting the actual overdue amount in installments and allow the cost of this proceedings

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The applicants availed home loan from the defendant bank upon creation of equitable mortgage over the immovable property admeasuring an extent of 2.16 Ares of land and building thereon comprised in Re.Sy. No.174/3-2 of Kanayannoor Village, Kanayannoor Taluk, Ernakulam District by deposit of title deeds in favour of the defendant bank.

¶19

Due to default in repayment of the outstanding loan due, the loan account of the applicants came to be classified as NPA on 27.01.2023. Annexure-A2 demand notice dated 30.01.2023 was issued to the applicants 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 applicants neither sent any objection/ representation to the demand notice nor did they clear off their liability due to the defendant bank.

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Therefore, Annexure-A3 possession notice dated 04.05.2023 in respect of 1^st item of the secured asset and Annexure-A4 possession notice dated 04.05.2023 in respect of item No.2 of the secured asset were issued for symbolically taking physical possession of the secured asset.

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Thereafter, the defendant approached the Additional Chief Judicial Magistrate Court (MPs/MLAs) Ernakulam and filed Annexure-A5 petition and affidavit under Section 14 (1) of the SARFAESI Act, 2002. Annexure-A6 Order dated 31.07.2024 was issued in MC No.110/2024 appointing Advocate Commissioner for taking physical possession of the secured asset. The Advocate Commissioner issued Annexure-A7 notice to the applicants informing

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Page 2 of 8

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SA No.761 of 2024

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them that he would take physical possession of the secured asset on or after 30.09.2024. The applicants having aggrieved against the above measures filed this SA seeking for the reliefs stated supra.

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The counsel appearing for the applicants submitted that the loan account of the applicant is not Non-Performing Asset on the date of classification of loan account as Non-Performing Asset and that substantial payments made was accepted by the defendant without any objection and that therefore, issuance of Annexure-A3 and A4 possession notices as well as Annexure-A7 notice of the Advocate Commissioner are unsustainable. Correct details of the secured asset with boundaries has not been furnished in the demand notice. The defendant is not an Authorized Officer. Hence, he is not entitled to proceed against the secured asset for taking physical possession of the same. The outstanding amount as on the date of filing of the petition and affidavit in MC No.110/24 has not been mentioned in the affidavit. The applicants may be permitted to regularize the loan account by remitting the actual overdue amount and the SA may be allowed as prayed for.

¶26

The counsel appearing for the defendant submitted that since the applicants defaulted in repayment of the outstanding loan amount, the loan account was classified as Non-Performing Asset as per RBI guidelines. Objection to the demand notice was not sent by the applicants. Annexure-A2 and A3 Possession notices were not challenged within the period of limitation. Inspite of reminders, applicants failed to regularize their loan account. Correct description of the property has been furnished in Annexure-A2 demand notice. All the statutory requirements contemplated under Clauses (i) to (ix) to the provisions of Section 14 (1) of the SARFAESI Act 2002 in respect of filing of Annexure-A5 petition and affidavit. Therefore, SA may be dismissed with cost to the defendant.

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The applicants having received Annexure-A2 demand notice failed to send any objection/representation with regard to the alleged illegal classification of their loan account as Non-Performing Asset. Further, no material has been placed before this Tribunal in order to prove their claim that they did not commit any default in repayment of the outstanding loan due. A perusal of Annexure-A2 demand notice shows that correct description of the property has been furnished.

¶28

Annexure-A3 and A4 possession notices were issued on 04.05.2023. These notices were not challenged by the applicants by filing SA within the prescribed period of limitation. This SA was filed on 14.10.2024. Therefore, the applicants are disentitled to challenge the issuance of Annexure-A3 and A4 possession notices.

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Page 3 of 8

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SA No.761 of 2024

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One of the reliefs sought for by the applicants in the SA is to permit them to regularize the loan accounts. This relief does not fall under any of the measures referred to u/s 13 (4) of the SARFAESI Act 2002.

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It is clearly averred in Annexure-A5 petition and the affidavit filed along with the petition that the petitioner is the Senior Branch Manager and he has been authorized to represent the Bank. Therefore, he is the Authorized Officer as defined u/s 2 (a) of the Security Interest (Enforcement) Rules 2002.

¶33

A perusal of the affidavit filed in MC No.110/24 shows that the outstanding amount as on the date of filing of the petition and affidavit is not stated. What has been stated in both petition and affidavit Annexure-A5, is as follows:

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“As on 04.05.2023 a sum of Rs.13,87,560/- is due to the petitioner bank under the Cash credit loan account and Rs.31,08.455/- is due in the Term loan facility as mentioned in the possession notices.”

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Therefore, it is evident that the outstanding amount as on the date of filing of the petition and affidavit is not stated and that there is a clear violation in non-compliance of Rule 14 (1) (i) of the SARFAESI Act 2002. It appears that the learned Additional Chief Judicial Magistrate (MPs/MLAs), Ernakulam omitted to notice the above non compliance of Rule 14 (1) (i) of the SARFAESI Act 2002. Therefore, this Tribunal is constrained to hold that Annexure-A6 order passed in MC No.110/24 and the consequent issuance of Annexure-A7 notice by the Advocate Commissioner to take physical possession of the secured asset is liable to be set aside.

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In view of the foregoing reasons and discussions, this Tribunal holds that there is no illegality in respect of classification of loan accounts of the applicants as Non-Performing Asset, issuance of Annexure-A2 demand notice and Annexure-A3 and A4 possession notices. However, Annexure-A6 order and A7 notice issued by the Advocate Commissioner are hereby set aside.

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Accordingly, SA No.761/2024 stands partly allowed in respect of the relief to set aside Annexure-A6 order and A7 Advocate Commissioner and SA partly dismissed in respect of other reliefs sought for in the SA.

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Page 4 of 8

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SA No.761 of 2024

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However, it is made clear that there is no bar for the defendant to approach the Chief Judicial Magistrate Court, Ernakulam for taking physical possession of the secured asset afresh in accordance with law. 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 12^th day of February, 2026.

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(Su. WILLYAHM) PRESIDING OFFICER

Mj/

Page 5 of 8

SA No.761 of 2024

S C H E D U L E

ITEM No.1

District : Ernakulam Sub District : Mulanthuruthy Taluk : Kanayannur Village : Kanayannur Local limits : Chottanikkara Grama panchayath Re.Sy. No. : 174/3-2 Re.Sy. Block No. : 12 Old Sy. No. : 540/2 Extent : 2.16 Ares (5.340 cents)

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Description

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All that part and parcel of the property having a total extent of 2.16 Ares (5.340 cents) in Re Sy. No.174/3-2 (Old Sy.No.540/2) of Re. Sy. Block No.12 of Kanayannur Village, Kanayanoor Taluk, Ernakulam District and the residential building bearing Door No.VII/415-E of Chottanikkara Grama panchayath therein with all rights and improvements appurtenant thereto.

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Boundaries

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North : Property of Maani South : Property of Abhilash West : Road and Property of Unni North : Property of Paily

Page 6 of 8

SA No.761 of 2024

ITEM No.1I

District	: Ernakulam
Sub District	: Mulanthuruthy
Taluk	: Kanayannur
Village	: Manakunnam
Local limits	: Udayamperoor Grama panchayath
Re.Sy. No.	: 40/19-5
Re.Sy. Block No.	: 19
Old Sy. No.	: 161/11-1
Extent	: 1.77 Ares (4.370 cents)

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Description

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All that part and parcel of the property having a total extent of 1.77 Ares (4.370 cents) in Re Sy. No.40/19-5 (Old Sy.No.161/11-1)Re. Sy. Block No.19 of Manakunnam Village, Kanayanoor Taluk, Ernakulam District and the residential building bearing No.2/400 of Udayamperoor Grama panchayath therein with all rights and improvements appurtenant thereto.

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Boundaries

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North : Property of Jijo South : Property of Church West : Thodu North : Vazhi and Property of Unni

(Su. WILLYAHM)

PRESIDING OFFICER

Page 7 of 8

SA No.761 of 2024

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

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Sl. No.	Date	Particulars
1.	19.05.2022	True copy of demand notice issued by the defendant in respect of schedule item No.IIproperty.	Annexure-A1
2.	30.01.2023	True copy of demand notice issued by the defendant in respect of schedule item No.Iproperty.	Annexure-A2
3.	04.05.2023	True copy of the possession notice issued by the defendant in respect of scheduleitem No.Iproperty.	Annexure-A3
4.	04.05.2023	True copy of the possession notice issued by the defendant in respect of scheduleitem No.IIproperty.	Annexure-A4
5.	---	True copy of the application filed as MC No.110/2024 before the Additional	Annexure-A5
		Chief Judicial Magistrate Court (MPs/MLAs),Ernakulam
6.	31.07.2024	True copy of the order passed in MC No.110/2024 before the Additional Chief Judicial Magistrate Court (MPs/MLAs),Ernakulam.	Annexure-A6
7.	12.09.2024	True copy of the notice issued by the Advocate Commissioner.	Annexure-A7

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(Su. WILLYAHM) PRESIDING OFFICER

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Mj/

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Page 8 of 8

Dipu Mathew v. Canara Bank

Case brief

What is this about?

What did the court decide?

Dipu Mathew v. Canara Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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