CANARA BANK vs S ASHKAR KHAN MUSALIAR on 4 November 2026

IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI

IA 788/2026 (Stay) in R.A(S.A):98/2026

Canara Bank & anr V/S S Ashkar Khan Musaliar & 3 ors 04/11/2026

This appeal is filed against the final order passed in SA 14/21 by the learned Presiding Officer, DRT-II, Ernakulam, on 17.02.2026. Learned counsel for the petitioner submitted that SA 14/2021 has been amended by including multiple prayers as detailed below.

a) To call for the documents relating to Annexure-A1 to A17 and peruse the same.

b) Direct the 1st respondent to reconsider the applicant for revival based on the recommendations made by the State Government and orders accordingly.

c) Directing the respondent Bank to keep in abeyance all further proceedings pursuant to Annexure A10 and Annexure A15 till the applications as per the cashew revival proposals are considered.

d) Direct the first respondent to re-structure/regularize the loan accounts of the applicant as directed by respondent.

e) Declare that the applicants are entitled to get the benefit of Annexure-A2, Government Order.

f) To grant such other reliefs as may be prayed for by the applicant or may deem fit and proper in the facts and circumstances of the case.

g) To set aside Annexure-A21 ‘E’ auction notice.

h) To set aside the sale of the property as per Annexure A21 sale notice, conducted on 30.09.2024 in favour of the 5th respondent/auction purchaser as illegal and unsustainable in law as the same is illegal and unsustainable and liable to be set aside by this Hon’ble Tribunal.

i) To call for records relating to annexure-A29 order of CJM Court, Kollam in MC 378/2025 and Annexure A28 affidavit with Section 14 Petition filed by the defendant to stay all the further proceedings pursuant to Annexure-A27 Advocate Commissioner notice dated 01.04.2025 issued by the Advocate Commissioner pursuant to Annexure A29 order of CJM Court, Kollam in MC 378/2025.

Every measures gives an independent cause of action and therefore filing of amended application to include all the measures is questionable. It is also not known whether the amendment and application for including the prayer hadbeen filed in time. Learned Presiding Officer allowed the SA 14/2021 in part insofar as the secured asset to an extent of 18.17 Ares. The reason is that the SARFAESI measures are invalid due to non-registration of the security interest in the CERSAI portal at the time of issuance of notice under Section 13 (4) of the SARFAESI Act. Other ground forsetting aside the sale in respect of 18.17 Ares of land is that there is no explanation given by the secured creditor for reducing the reserve price to 4.08 crores when the market value was Rs.4,52,87,000/-. It is submitted that the market value is the highest price the property can fetch and distress value is the price the property may get in distress sale. The Bank had fixed the reserve price of the property at Rs.4,08,00,000/-. It is further submitted that the registration in CERSAI Portal was mandatory only from the year 2020. Prior to the year 2020, there is no practice of registration under CERSAI. Merely because, the mortgage entered in this case is in 2011-2014, not registered under CERSAI portal, the SARFAESI proceedings cannot be invalidated. The learned Presiding Officer allowed the SA 14/2021 in part in respect of land measuring 18.17 Ares concerned and directed the appellant-Bank to refund the amount with interest at the prevailing rate of interest. In the said circumstances, this appeal is filed. Thus, he prays for Stay of the operation of the said order. Learned counsel for the first respondent opposes the grant of Stay on the ground that at the time availing the loan, the property was valued at Rs.5,81,75,000/-. There is a reduction in fixing the reserve price. Learned counsel for the third respondent submits that the third respondent is a tenant in the secured asset and the rent has been paid directly to the Bank. Considered the rival submissions and perused the records In view of the submissions on assailing the impugned order, this Tribunal finds that the learned counsel for the appellant has made out arguable points in the appeal, especially on setting aside the sale measures under the SARFAESI Act in respect of the land measuring 18.17 Ares. Therefore, this Tribunal Stays the operation of the impugned order till next hearing. Post the matter on 08.01.2027. Sd/-

Chairperson