Partly allowed

M S Lavanya Constructions v. Karur Vysya Bank

DRT13 Oct 2022SA/216/2022

Case brief

AI extract

What is this about?

In an application under Section 17 of the SARFAESI Act read with Section 22(2)(h) of the RBI Directions, the Debts Recovery Tribunal restrained the bank from disturbing the applicant's plant and machinery in the secured asset for a specified period, while directing that the property possession remains with the bank.

What did the court decide?

Permission granted to remove plant and machinery by 30.11.2022; bank directed not to disturb said machinery; possession of property remains with bank.

M S Lavanya Constructions versus Karur Vysya Bank — Company and Corporate | DRT (2022)

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IN THE DEBTS RECOVERYTRIBUNAL- IAT HYDERABAD DATED THIS THE 13TH DAY OF OCTOBER,2C.22

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PRESENT: GUMMADI GOPICHAND, PRESIDING OFFICER

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lA.No.1 153,/2C22 IN sA.No.216/2C22

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M/s. Lavanya Constructions, Rep. by its Partner, Musa Babu, S/o. Venkanna, Office at 8-2-lO9 l3l 1, APSEB Colony, Sagar Road, Hyderabad - 500 O79.

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Petitioner/ Applicant.

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Versus

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The Karur Vysya Bank Ltd., Asset Recovery Branch, 5-8-356 to 362. III Floor, Chirag-A1i-Lane, Abids, Hyderabad - 500 001 .

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M/s. Virtue Marketing pvt. Ltd., MCH No.1-2-137 to 154,

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Unit No.306, Minerva Complex, III F1oor, S.D. Road, Secunderabad - 500 003.

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a Sri Jain Hitesh Ramesh Kumar, S/o. Sri RameshKumar Otarmal Jain, R/o.2-3-450, Flat No.303, Block B, Sri Sai Residency, Nallagutta, Secunderabad - 500 003.

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Sri RameshKumar Otarmal Jain, R/o. 2-3-450, Flat No.303, Block B, Sri Sai Residency, Nallagutta, Secunderabad - 50O 003.

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M/s. Sri Sai Krishna Gases pvt. Ltd., Regd. Office at 14- 109, patancheru, Patancheru Mandal, Sanga Reddy. Rep. by its Director, Smt L. Rupavani.

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Respondents/
Respondents.

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tA.No.1153/2022

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Counselforthe petitioner : Si V. Sethu Madhaua Rao. Counsel for Respond.ent No.7 : Sn c. Krishna Chaitanga. Respondents No.2 to s

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.:O.RDERi

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This application is filed by the petitioner/Applicant u/ s. 17 of the SARFAESI Act,2OO2, rlw. Sec.22(2)(h) of the RDB Act, 1993, for directing the 1st Respondent Bank to redeliver the physical possession of the SA schedule property together with plant & machinery, pending disposal of the SA.

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In the affidavit filed by the Managing partner of the petitioner lirm, he averred that, the SA is filed by the petitioner/Applicant challenging the action of the lst Respondent Bank in taking physical possession of the SA schedule property, including the plant & machinery located in the SA schedule property and that the said plant & machinery is not hypothecated to the lst Respondent Bank and that the lst Respondent Bank without giving any prior notice to the petitioner, took the possession of the said property. In view of the filing of the SA, there is need for redelivery of possession of the SA schedule property during pendency of the SA.

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o. The 1st Respondent Bank filed a Memo stating that it is adopting the Counter frled by it in IA.No.I lS4 /2022. It is averred in the said Counter that the lst Respondent Bank is having right to sell the secured asset as per the provisions of the sARFAESI Act and that the present application is filed by the petitioner to delay the recovery proceedings in_iliated by the lst Respondent Bank. //* .r,' . "^t' .i-- ';, ''"i". -5"\ 4. ,flgprd^{arsurtdnts. e} t i.1 13 oci mn :'j

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*ry, :n. point for considiration is whether the petitioner is entitled for t$eliyery of the SA schedule property during pendency of the SA?

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tA.No.1153/2022

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Potntt

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6 sA'No'216/2022 is filed by the petitioner herein against Karur Vysya Bank and 4 others i.e., Respondents herein, challenging the action of the lst Respondent Bank in taking physical possession of the SA schedule property. The contention of the petitioner herein in the sA is that he is neither a borrower nor a mortgagor of the SA schedule property and that Respondent No.5, who is the owner and possessor of the SA schedule property, let_out the said premises to the petitioner herein on l1.l1.2O2O for a monthly rent of Rs.2,2S,00O/_ and he established ready mix concrete unit in the said property but the lst Respondent Bank by obtaining order from the Ld. Chief Judicial Magistrate, Sanga Reddy, took possession of the SA schedule property through Advocate Commissioner and the Advocate commissione. ;;. ;; ;;; ;.';J. ;",..T"::j..1 T :l: schedule property is not hypothecated to the 1"t Respondent Bank and so the^petitioner is entitled for redelivery of the same.

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The contentions of the lst Respondent Bank as seen from the Reply Statement fi1ed by it are that, Respondent No.2, which ,. . O.r*" limited company, represented by its Directors i.e., Respondents No.3 & 4, availed credit fac,ities from the 1st Respondent Bank by creating mortgage over the schedule propert5r to secure the said credit facilities. The Respondent No.S executed the Lease Agreement in respect of the schedule property in favour of the petitioner without any title or authority.

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As ner thr ents enclosed to the SA, it is clear that the petitioner un-registered Lease Agreement dt.1S.l2.2O2O, ne.?l . Krishna, who is the Managing Director of de - vur^L,t u n a per the d ocuments fi led by the l"t Respondent ,, _ , ul.".l$..itH =Y/j^" its Reply statement, it is clear that the sth "";iloff uted registered Sale Deed dt. 1S.07.201S, in respect of ule propert5r in favour of Respondent No.3. So, it appears that the petitioner has obtained Lease Agreement from Respondent

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1A.No.1153/2022

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No.S, who already divested his title in respect of the SA schedule property way back on 15.07.2015, in favour of Respondent No.3 by executing registered Sale Deed. As the Respondents No.2 to 4 committed default in the repayment of the loan amount, the I "t Respondent Bank initiated proceedings under the =ARFAESI Act and took physical possession of the SA schedule property, which was mortgaged by Respondent No.3. so, when the rst Respondent Bank has taken possession of the SA schedule property under the provisions of the SARFAESI Act, question of redelivery of possession during pendency of the SA does not arise.

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Ld. Counsel for the petitioner submitted that the petitioner has established the unit by investing lot of money and by obtaining licence and approvals from various departments and the petitioner requires a reasonable time for shifting plant & machinery and so the possession of the SA schedule propert5r may be redelivered to the petitioner till the Petitioner acquires alternate premises. per contra, Ld. Counsel for the l"t Respondent Bank submitted that the petitioner can be permitted to take his plant & machinery within a reasonabre time but the possession of the property cannot be redelivered.

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By taking into consideration all the facts and circumstances of the

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case and particularry in view of the fact that the petitioner entered into Lease Agreement with Respondent No.5, who is the vendor of Respondent No.3, I am of the opinion that the possession of the property cannot be redelivered to the petitioner herein. However, as the plant & machinery of the petitioner are lying in the schedule 1.-,1]re Petitioner shall be permitted to take out the said plant & ,,;_ \ a reasonable time i.e., bu y the Lrrc en od o If November, tor ]re^{Sr'fuo". of running his unit in some other premises. So,} answered in favour of the petitioner. 7W s application is partly allowed, permitting the out his plant & machinery lying in the SA schedule before 30. 1 7.2022 and till such time, ths 1st

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tA.No.1153/2022

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Respondent Bank is directed not to disturb the said plant & machinery. No order as to costs..

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Communicate a copy of this order to the parties concerned.

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(Dictated to the priuale Secrelary, transcrtbed bA him, coftecled. . open court on ,n* ,i i s,ii"iti signed and pronount:ed bg me in the october, 2o22).

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sdl(c. GOPICHAITDT PRESIDING OFrICEi

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¶39

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¶40

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M S Lavanya Constructions v. Karur Vysya Bank

Case brief

What is this about?

What did the court decide?

M S Lavanya Constructions v. Karur Vysya Bank

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

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Case details

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