Dismissed

Abdul Sathar Pookkattil v. South Indian Bank

DRT20 Feb 2026SA/775/2024

Case brief

AI extract

What is this about?

Debt Recovery Tribunal dismissed the applicant's Securitisation Application challenging SARFAESI proceedings. The Tribunal held that there was substantial compliance with Section 14 requirements despite the omission of payment details in the affidavit, as they were disclosed in the accompanying petition, causing no prejudice to the borrower.

What did the court decide?

Securitisation Application No.775 of 2024 stands dismissed; no order as to costs.

Abdul Sathar Pookkattil versus South Indian 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 20^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. 775 of 2024

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Between

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Abdul Sathar Pookkattil, S/o.Mohammed Kassim, Pookkattil House, Parakkori, Othukkungal, Puthur, Malappuram District-676503.

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--- Applicant

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And

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The Authorised Officer, South Indian Bank Ltd., Regional Office, 1^st Floor, “happy Towers” Mannanchira, Kozhikode District -673001.

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South Indian Bank Ltd. Angadipuram Branch, Door No.416 A and B, Kozhikode Road, Angadipuram P.O. Malappuram District -679 321, Rep. by its Chief Manager.

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--- Defendants

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SA No.775 of 2024

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This Securitization Application coming on 19.09.2025 for final hearing before me in the presence of Mr. Zakir Hussain Counsel appearing for the Applicant and Ms. Ruby Poulose, Advocate appearing for the defendants and upon hearing arguments of learned Counsels for all 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 17.10.2024 seeking to declare that the entire proceedings initiated by the defendants against the applicant under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act is as null and void; to declare that the property mentioned in Annexure A4 demand notice and Annexure A6 possession notice is not liable to be proceeded under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act by the defendants; to pass an order quashing the entire SARFAESI proceedings initiated by the defendants against the applicant under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act and the Rules made thereunder; to pass an order quashing Annexure A4 demand notice and all further proceedings thereto; to pass an order quashing Annexure A6 possession notice and all further proceedings thereto; to declare that the entire proceedings initiated by the defendants under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 against the applicant are illegal and vitiated by errors on the face of the record; to pass an order quashing the entire proceedings in MC No.212/2025 initiated by the defendants against the applicant under Section 14 of the SARFAESI Act and all further proceedings thereto; to pass an order quashing Annexure A10 order of the Chief Judicial Magistrate Court, Manjeri in MC No.212/2025 and all other further proceedings pursuant to Annexure A10 order of the Chief Judicial Magistrate Court, Manjeri; to direct the defendants to pay to the applicant the cost of this proceedings pending disposal of the SA.

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The applicant availed Kissan Credit Overdraft facility of Rs.100 Lakhs from the 2nd defendant bank. The applicant has created equitable mortgage over his immovable property as described in Annexure-A4 demand notice by deposit of his title deeds with the 2^nd defendant bank as the collateral security for the availment of the aforesaid credit facility.

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Page 2 of 9

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SA No.775 of 2024

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According to the defendants, since the applicant defaulted in repayment of the outstanding loan due, his loan account was classified as Non-Performing Asset on 27.02.2024.

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Therefore, Annexure-A4 demand notice dated 12.3.2024 was served to the applicant and co-borrower and guarantors 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 applicant and coborrower and guarantors 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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Hence, the defendants issued Annexure-A5 possession notice dated 17.08.2024. subsequently, the above possession notice was withdrawn and fresh possession notice dated 04.09.2025 AnnexureA6 was issued for symbolically taking physical possession of the secured asset.

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Thereafter, the defendants approached Chief Judicial Magistrate Court, Manjeri and filed Annexure-A8 petition and A9 affidavit under Section 14 (1) of the SARFAESI Act, 2002. Annexure-A10 Order came to be passed in MC No.212/2026 appointing Advocate Commissioner for taking physical possession of the secured asset. The Advocate Commissioner issued Annexure-A7 notice dated 04.06.2025 to the applicant informing him that she would take physical possession of the secured asset on 25.6.2025. The applicant having aggrieved against the above measures, filed this SA seeking for the reliefs stated supra.

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The counsel appearing for the applicant submitted that due to the Nationwide lockdown, the Reserve Bank of India directed all commercial banks to allow moratorium of three months on payment of interest in respect of all term loans outstanding as on 01.03.2020 by the Circular Annexure-A1 and that subsequently Annexure-A2 circular was issued directing all commercial banks to allow a deferment of another three months from 01.06.2020 to 31.08.2020 and that in respect of individual borrowers, circular Annexure-A3 was issued giving direction to allow moratorium of maximum period of two years and that the defendants against the above circulars classified the loan account of the applicant as Non-Performing Asset and issued demand notice and that therefore, issuance of demand notice is illegal.

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Per contra, the counsel appearing for the defendants submitted that the benefits of Annexure-A1, A2 and A3 circulars was extended to the applicant and that loan account of the applicant was classified as Non-Performing Asset in accordance with RBI guidelines since he

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Page 3 of 9

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SA No.775 of 2024

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defaulted in repayment of the debt and also on account of nonrenewal of the aforesaid facility within the stipulated time.

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The applicant has failed to produce the relevant document in order to prove his contention that the benefit of Annexure-A1 to A3 circular was not extended to him. However, it is revealed from the perusal of the written statement of the defendants that the applicant defaulted in repayment of the outstanding loan due after the period stipulated in Annexure-A3 circular was over. It is pertinent to mention that the applicant after having received Annexure-A4 demand notice failed to send objection/representation against the classification of the loan account as Non-Performing Asset. Hence, the applicant is estopped from contending now that classification of loan account as Non-Performing Asset is illegal.

¶30

Annexure-B1 to B3 produced by the defendants evidences the service of demand notice to the applicant/co-borrower and guarantors. Annexure-B5 to B8 produced by the defendants evidences the service of possession notice to the applicant/co-borrower and guarantors and the affixture of the possession notice on the conspicuous part of the secured asset and the publication of the possession notice in two leading newspapers one in The New Indian Express edition dated 07.09.2024 and Mangalam Edition dated 07.09.2024 (vernacular language). Annexure-B9 copy of ID Based search report reveals the fact that security interest over the secured asset has been duly registered with the Central Registry.

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The counsel appearing for the applicant submitted that the mandatory requirements contained in Sec.14 (1) of the SARFAESI Act 2002 was not complied with in the affidavit filed in MC No.212/2025 before the Chief Judicial Magistrate Court, Manjeri and that as per Annexure-A11 statement of accounts, after issuance of Annexure-A4 demand notice, the applicant made payments on various dates totalling to a sum of Rs.29.80 Lakhs and that such payments was not declared in Annexure-A9 affidavit and that the defendants thereby violated the non-compliance of Clause (viii) to the first proviso of Sec. 14(1) of the SARFAESI Act 2002 and that therefore Annexure-A4 passed by the Chief Judicial Magistrate Court, Manjeri and the notice issued by the Advocate Commissioner are liable to be set aside. In support of his above submission, he cited the judgment delivered in Dipak Babaria and another Vs. State of Gujarat and others [2014 (3) SCC 502] of the Hon’ble Supreme Court.

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The counsel appearing for the defendants submitted that the remittance made by the applicant has been mentioned in paragraph 9 of Annexure-A8 petition, though it was not stated in Annexure-A9 affidavit and that however it is clearly stated in Annexure-A9 affidavit that contents of Annexure-A14 application be treated as part and

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Page 4 of 9

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SA No.775 of 2024

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parcel of Annexure-A9 affidavit and that the remittance made by the applicant was brought to the notice of the learned Chief Judicial Magistrate, Manjeri and that it is also not the case of the applicant that the remittance made by him is not seen credited in the loan account and that hence no prejudice would have caused to him. In support of his above submission, he cited the judgment of the Hon’ble Supreme Court delivered in C. Bright Vs. The District Collector and others (MANU/SC/0845/2020) and also the judgment of the Hon'ble High Court of State of Telangana in Tulsi Rocks Pvt. Ltd. and ors. Vs. Bank of India and Ors. [MANU/TL/0034/2019] .

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Clause (viii) to the first proviso of Sec. 14(1) of the SARFAESI Act 2002 provides as follows:

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“The Authorized Officer shall declare that borrower has not made any payment of the financial assistance inspite of the above notice (demand notice) and the Authorized Officer is, therefore, entitled to take possession of the secured assets under the provisions of sub-section 4 of Section 13 r/w Sec.14 of the Principle Act.”

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It is not in dispute that the applicant after issuance of Annexure-A4 demand notice, made several payments on various dates to a total sum of Rs.29.80 Lakhs as evidenced from perusal of Annexure-A7 statement of accounts. It is also not in dispute that the above payments has not been declared by the 1st defendant in Annexure-A9 affidavit. However, in paragraph 8 of Annexure-A8 petition, it is stated that a total amount of Rs.29,80,001/- was paid by the respondent (applicant) after the account became Non-Performing Asset. The above averment of the petition strengthens the contention of the applicant also with regard to payment of a total sum of Rs.29.80 Lakhs. Therefore, it cannot be said that the 1st defendant has wilfully suppressed the aforesaid payments made by the applicant in Annexure-A9 affidavit. However, in paragraph 3 of Annexure-A9 it is specifically averred that the contents of the application (Annexure-A8) may be treated as part and parcel of this affidavit (Annexure-A9). The learned Chief Judicial Magistrate, Manjeri has specifically mentioned in his order Annexure-A10 that he had gone through the application as well as the supporting affidavit and records and satisfied that applicant duly complied with all the legal formalities required for enforcement of security interest created against the secured asset. Hence it is evident that the learned Chief Judicial Magistrate Manjeri could not have omitted to notice the averment with regard to payments made in Annexure-A8 petition. Therefore, this Tribunal does not find any force in the submission of the counsel for the applicant that Clause (viii) to the first proviso of Sec. 14(1) of SARFAESI Act 2002 was not complied with by the 1st defendant.

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Page 5 of 9

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SA No.775 of 2024

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In Dipak Babaria and another Vs. State of Gujarat and others [2014 (3) SCC 502] relied on counsel appearing for the applicant, the Hon’ble Supreme Court has held that if a matter is to be done and any particular manner, it shall be done in that manner only. However, the Hon’ble Supreme Court has held in another judgment delivered in C. Bright Vs. The District Collector and others (MANU/SC/0845/2020) as follows:

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“Section 14 of the Act is not to be interpreted literally without considering the object and purpose of the Act. If any other interpretation is placed upon the language of Section 14 it would be contrary to the purpose of the Act.”

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The object of Section 14 (1) of the SARFAESI Act 2002 is to assist the secured creditor in taking physical possession of the secured asset in case there is resistance by the borrowers/guarantor against taking physical possession of the secured asset. This Tribunal has to consider as to whether any prejudice was caused to the borrowers/ guarantors due to the non-compliance of any of the clauses of the first proviso to Sec. 14 (1) of the SARFAESI Act 2002. As already observed by this Tribunal, the payments made by the applicant has been stated in Annexure-A8 petition and that therefore, no prejudice would have caused to him. Hence, the judgment relied on by the applicant has no application to the facts of the present case.

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Be that as it may, the Hon'ble High Court of State of Telangana, has held in Tulsi Rocks Pvt. Ltd. and ors. Vs. Bank of India and Ors. [MANU/TL/0034/2019] which has been cited by the counsel for the defendants as follows:

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“wherever this Court finds that the parameters indicated in Clauses (i) to (ix) of the first proviso to Section 14 (1) of the Act are broadly complied with, the Court is bound to invoke the doctrine of ‘substantial compliance.’ It must be remembered that Clauses (i) to (ix) of the first proviso to Section 14 (1) of the Act merely provide the form in which the essential averments for an application under Section 14 of the Act are to be made. Therefore, what is important, is the substance and not the form.”

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In the present case on hand, except the non compliance of Clause (viii) of the first proviso of Sec.14(1) of the SARFAESI Act 2002 all other clauses ie., Clauses (i) to (vii) and (ix) has been substantially complied with in respect of filing of Annexure-A9 affidavit. Further, Clause (viii) to the aforesaid provisions of the Act has been complied with in Annexure-A8 petition. By applying the dictum laid down in the above cited judgment to this case, Annexure-A9 satisfies with the

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Page 6 of 9

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SA No.775 of 2024

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substantial compliance of the statutory requirements contemplated under the first proviso to the provisions of Sec. 14(1) of the SARFAESI Act 2002.

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A perusal of Annexure-A10 order 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 procedural irregularity in the above order.

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In view of the foregoing reasons, this Tribunal holds that there are no procedural irregularities or illegalities in respect of the measures initiated by the defendant with regard to classification of loan account as Non-Performing Asset, issuance of Annexure-A4 demand notice and Annexure-A6 possession notice, filing of Annexure-A8 and A9 in MC No.212/2025 before the Chief Judicial Magistrate Court, Manjeri and passing of Annexure-A10 order for taking physical possession of the secured asset.

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Therefore, this Tribunal holds that the applicant is not entitled to get any of the reliefs sought for in this SA.

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Resultantly, S.A No.775 of 2024 stands dismissed. However, 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 20th day of February, 2026.

(Su. WILLYAHM)

PRESIDING OFFICER

Mj/-

Page 7 of 9

SA No.775 of 2024

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

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Sl. No.	Date	Particulars
1.	27.03.2020	A true copy of the Circular issued by theReserveBankof India.	Annexure-A1
2.	23.05.2020	A true copy of the Circular issued by theReserveBankof India.	Annexure-A2
3.	05.05.2021	A true copy of the Circular issued by theReserveBankof India.	Annexure-A3
4.	12.03.2024	A true copy of the demand notice issued by the1^st defendant.	Annexure-A4
5.	17.08.2024	A true copy of the possession notice issued by the1^st defendant.	Annexure-A5
6	04.09.2025	True copy of the possession notice issued by the1^st defendant.	Annexure A6
7.	04.06.2025	True copy of the notice issued by the Advocate Commissioner in MC 212/2025.	Annexure A7
8.	…….	True copy of the petition numbered as MC No.212/2025 filed by the 1^st defendant Authorised Officer before the Chief Judicial Magistrate Court, Manjeri.	Annexure A8
9.	…….	True copy of the affidavit filed by the 1^st defendant Authorised Officer before the Chief Judicial Magistrate Court, Manjeri in M.CNo.212/2025.	Annexure A9
10.	14.02.2025	True copy of the order in MC 212/2025 of Chief Judicial Magistrate Court, Manjeri.	Annexure A10
11.	04.06.2025	True copy of the statement of accounts for the period 04.06.2024 to 04.06.2025 issued by the 2^nd defendant bank.	Annexure A11

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Page 8 of 9

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SA No.775 of 2024

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

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Sl. No.	Date	Particulars	Annexures
1	…..	Copy of Section 13(2) Demand Notice issued by the Defendant Bank to the applicant/co-borrower/guarantors.	B1
2.	……	Copy of the postal receipts evidencing the issuance of Section 13(2) notice to the applicant/co-borrower/guarantors.	B2
3.	…..	Copy of acknowledgment cards evidencing the receipt of the same by the applicant/co-borrower/guarantors.	B3
4.	04.09.2024	Copyof thepossession notice	B4
5.	…..	Copy of the postal receipt evidencing issuance of Annexure B4 possession notice to the applicant/co- borrower/guarantors.	B5
6.	……	Photographs evidencing affixture of Annexure B4 possession notice in the security property.	B6
7.	07.09.2024	Copy of the paper publication made in heading English daily” The New Indian Express”	B7
8.	07.09.2024	Copy of the paper publication made in leadingMalayalam daily‘Mangalam’	B8
9.	….	Copy of the CERSAI report pertaining to the security property.

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(Su. WILLYAHM) PRESIDING OFFICER

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Mj/

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Page 9 of 9

Abdul Sathar Pookkattil v. South Indian Bank

Case brief

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Abdul Sathar Pookkattil v. South Indian Bank

Case brief

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What did the court decide?

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