Dismissed

N Shine Industries v. Bank of Baroda

DRT26 Jul 2023SA/13/2022

Case brief

AI extract

What is this about?

In an application to set aside the bank's action of taking physical possession of secured assets, the tribunal found no procedural irregularity regarding notice service or publication. The applicant failed to establish valid grounds to quash the proceedings under the SARFAESI Act, and the application was dismissed.

What did the court decide?

Application for setting aside the bank's action of taking physical possession of the secured asset was dismissed.

N Shine Industries versus Bank of Baroda — Arbitration | DRT (2023)

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IN THE DEBTS RECOVERY TRIBUNAL.II

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AT HYDERABAD

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DATED THIS THE 26TH DAY OF JULY, 2023

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PRESENT: SH, RAMESHWAR KOTHE, B.com, L.LB.^(Hons.), M.A. PRESIDING OFFICER

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SECURITISATION APPLICATION NO. 13 OF 2022

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M/s. N. Shine Industries

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Rep by its Prop: Smt. G. Hemalatha w/o G. Srinivasa Rao, Aged: 44 years Occ: Business, R/o Flat No.406 3'd Floor, Kancham Residency Block No.6, Gayathri Nagar leedimetla Village GHMC Quthbulla^pur Circle Quthbullapur^Mandal Ranga Reddy Dist. Telangana-500055.

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,,...Applicant.

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Versus

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Bank of Baroda Rep. by its Authorised Officer Tadepallygudem Branch Opp: Amrutha Hospital Near Fire Statiion, K.N. Road Tadepa I lygudem, W.G. Dist. And h ra Pradesh^- 5 34¹ 0 1.

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.....Respondent.

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Counsel for the Applicants : Mr. D. Raghavulu. Counsel for Respondent : Mr. Trivikram Chitturu

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-: g.B-ql-B:'

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The^present Securitization^{Application is filed by the Applicants} uls, 17 of the Securitisation and^{Reconstructionof Financial} Assets and Enforcement of Security Interest^{Act, 2002 to set} aside actlon of the respondent^{bank in takingphysical} //y't9/-:-v

(-/1}'

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SA No.13/2022

possesslon of SA schedule property through the Advocate Commissioner vide notice dated 19.01.2022 appointed in Crl.M.P.344/2021 in^pursuance of Possession Notice dated 19.0 6.2021.

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The facts of the case as averred by the applicant in the SA, in brief, are that applicant committed default in repayment of loan due to losses in business during Covid.19 pandemic. Applicant's request for regularisation by accepting overdue instalments has not been considered. The respondent did not serve notices u/s 13(2) and 13(4) as per the provisions of the SARFAESI Act and the Rules thereunder. The possesslon notlce has not been affixed on the secured asset nor published in two leading newspapers. Warrant u/s 14 has been obtained by suppressing the material facts. A copy of warrant has not been served on the applicant. In view of the above mentioned facts and circumstances, applicant prayed for setting aside the action of respondent bank in taking the physical possession of the property through advocate commissiOner.

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The respondent bank filed reply statement denying the contentions of the applicant stating that the applicant defaulted in repayment of loan as per agreed terms, which necessitated the respondent bank to inltiate Securitisation proceedings. After declaring the loan account as NpA, respondent bank issued demand notice dated 30.01.2021. Since the applicant avoided to receive demand notice, the same was published in Andhra Jyothi, West Godavari edition, Andhra prabha, Hyderabad Edition and The City Hans, Amaravati Edition. With no payment came forward after 60 days of issuance of demand notice, possession notice has been issued on 19.06.2021. The

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SA No.13/2022

possession notice has been affixed on the secured asset and published in Sakshi, Telugu Daily and The Indian Express on 22.06.2022. Applicant never approached the respondent for regularisation account. Accordingly, respondent bank obtained warrant for appointment of advocate commissioner u/s 14 of the SARFAESI Act for taking the physicat possession of the secured asset. The respondent bank took steps in accordance with the provisions of Securitisation Act and the Rules thereunder for recovery of its dues. Hence the SA may be dism issed.

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Heard learned counsel appearing for both the parties. perused the written arguments filed by the respondent and the material placed on record.

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Learned counsel appearing for the applicant contended that the respondent bank did not afford any opportunity to the applicant to clear the dues keeping in view the post Covid.19^pandemic economic scenario. He also contended that the respondent bank failed to serve demand notice, possession notice and affix and publish the possession notice. Without following due procedure as per law, the respondent bank is proceeding to take physical possession of the SA schedule property. With these contentions, learned counsel prayed for setting aside the action of respondent bank in taking physical possession of the schedule property in the interest of^justice.

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Learned counsel appearing for the respondent bank submits that the applicant did not clear the outstanding dues in respect of the loan availed from the respondent bank despite issuing notices u/s 13(2) and 13(4). Applicant never approached the

,XvvtL,- ^ l/t 6lP

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SA No.13/2022

respondent for regularisation^{of the accountnor submitted any} representation in^{responseto the demandnoticeu/s 13(2)'} Accordingly, respondent^{bank initiated actionfor takingthe} physical possession of the secured asset u/s 14^{of the} Securitisation^Act to^{proceed further for recovery of outstanding} amount due under the^{loan accountof the applicant.Any} interdiction at this stage would^{cause great prejudiceto the} respondent in recovery of its^{legitimate dues fromthe} applicant. In view of^{the abovefactual position,learned} counsel^{prayedfor dismissal of the SA.}

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Now the^points that arlse^{for determinationare:} -

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i) Whether the Applicant made out any^{valid ground} for quashing the measures^initiated by^the respondent bank u/s 14 of the^{Securitisation Act} against the SA schedule ProPertY?

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ii) To what relief?

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Point No,⁽ i):

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There is no dispute over the availment of^{loan and committing} default in repayment of loan amount on^{the part of the} applicant. The respondent bank annexed material documents^to the reply statement vide^page nos.5 to¹⁸ as^proof of^service, affixture and^publication of statutory notices u/s 13(2) and 13(4) of the SARFAESI Act on the applicant. Thereafter, the respondent bank proceeded under Sec.14 of the SARFAESI Act, 2002 fot taking physical possession of secured asset. Consldering the proof documents, I find no irregularity or illegality in the^procedure followed by the respondent bank Av',tv,,. /L/ --,'-.t\

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5 of 5

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sANo.L3l2022

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under the provisions of the Act, 2002 and Rules framed theredunder while proceeding against the secured asset.

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In view of the above, I find that the applicant failed to make out any valid ground to set aside the steps initiated by the respondent bank for taking the physical possession of the secured asset under the provisions of the SARFAESI Act, 2002. Accordingly, the SA is liable to be dismissed,

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Point No.(ii):

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In the result, SA fails and hereby dismissed.

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Consequently, Interlocutory Applications pending, if any, shall stand closed.

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No order as to costs.

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Communicate a copy of this order to the parties concerned.

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(Dictated lo the steno, corrected, signed and pronounced by me in the open court on this the 26'h day of July,2023).

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(RAMESHWAR KOTHE) PRESIDING OFFICER

N Shine Industries v. Bank of Baroda

Case brief

What is this about?

What did the court decide?

N Shine Industries v. Bank of Baroda

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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Case details

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