Allowed

D R Sridhar Naidu v. Axis Bank

DRT17 Feb 2023SA/154/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal-II at Hyderabad set aside an impugned possession notice dated 06.07.2022 issued by Axis Bank. The Tribunal ruled that the bank failed to serve a prior demand notice per Section 13(2) of the SARFAESI Act and did not strictly comply with Rules 8(1) and 8(2) regarding service and publication of the possession notice.

What did the court decide?

Possession notice dated 06.07.2022 issued by respondent bank against SA schedule properties is set aside.

D R Sridhar Naidu versus Axis Bank — Contract and Commercial Disputes | DRT (2023)

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IN THE DEBTS^{RECOVERYTRIBUNAL-II AT HYDERABAD}

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DATED THIS^{THE 17TH DAY OF FEBRUARY, 2023}

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PRESENT:^{SH.RAMESHWAR KOTHE,B.COM, L.LB' (HONS.),M'A.} PRESIDING^OFFICER

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SA. No.^{754 OF 2022}

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Between:

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Mr. D. R. Sridhar^Naidu S/o RamurthY^Naidu Aged about⁴⁷ Years Occ: Business,^{R/o H' No' 25-55} Ayya kaⁿ nu^{Street,Pa la ma ner} Ch ittoo r,^{Ch ittoo r D i strict} Andhra Pradesh.

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Applicant.

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Versus

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Axis Bank Ltd. Door No. 22/1223/4-1 7't Floor, G. T.^Road Nellore, Nellore^Dist. Andhra Pradesh.

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.......Res7ondent.

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Counsel for the APPlicant^: Mr. D. Raghavulu. No representation for^{Respondents bank.}

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Mr. D. Raghavulu.

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.:ORDER:-

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The present Securitization^{Applicationis filed by the Applicant} u/s.17(1) of the Securitisation and^{Reconstructionof Financial} Assets and Enforcement of Security Interest^{Act, 2002assailing} the Possession Notice dated 06.07.2022^issued u/s^{13(4)of the} /ffi'^'">

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54.No.154/2022

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SARFAESI Act, 2OO2 by the respondent bank against the SA schedule properties.

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The facts of the case as averred by the applicant, in brief, are that applicant availed credit facilities for business purposes and has been regular in paying the instalments till Covid.19 pandemic. Applicant requested to accept the overdue instarments and regularise the loan account as also for OTS. At the instance of the respondent bank appricant deposited Rs.6.50 rakhs for regularising the loan account. contrary to the assurance, respondent proceeded with impugned securitisation measures. The respondent bank did not serve demand notice prior to issuance of possession notice dated 06.07.2022. The possession notice has neither been served on the appricant in terms of rure B(1) nor published in two newspapers in terms of rule B(2) of the Security Interest (Enforcement) Rules, 2002. Despite seizing applicant's account with a credit balance of Rs.9 lakhs, the respondent failed to adjust the amount against the outstanding dues of the loan account. In view of the above irregularities, applicant prays for quashing of possession notice dated 06.07.2022, in the interest of justice.

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? Despite service of notice, there is no representation for the respondent. Accordingly, respondent bank was set exparte vide docket proceedings dated 18.10.2022 as called, absent and no representation.

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Heard learned counsel appearing for the applicant and perused the material brought on record. (-y /A%fi!

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SA.No.154/2022

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It is the contention of the applicant that the respondent bank has not complied with the procedure under rules 8(1) and 8(2) of the Security Interest (Enforcement) Rules, in servlng the possession notice dated 06.07.2022 on the applicant or publishing the same in two newspapers. The respondent bank also failed to comply Section 13(2) of the Securitisation Act in serving demand notice prior to issuance of possession notice dated 06.07.2022. The respondent bank failed to aFfix the possession notice on the secured assets. The applicant has been put to loss by seizing the account with Rs.9,00,000/- balance at credit. With these contentions, applicant prayed for quashing of possession notice dated 06.07.2022 in the interest of^justice.

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I have gone through the material brought on record. The specific contention of the applicant is that the possession notice has not been served on the applicant, affixed on the SA schedule properties or published in newspapers. It is also the contention that the respondent bank also failed to serve demand notice as per the provisions of Section 13(2) of the Securitisation Act before resorting to issuance of possession notice dated 06.07.2022. Since the respondent bank remained exparte, no proof is available on record as to compliance of provlsions of section 13(2) in serving demand notice and rules 8(1) and 8(2) of Security Interest (Enforcement) Rules,2002 in serving, affixing and publishing the possession notice dated 06.07.2022. Accordingly the present securitisation application deserves to be allowed settinq aside the^possession notice dated 06.07.2022 ,/,M.Lb L,'-{.,J"

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SA.No.154/2022

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issued by the respondent bank u/s 13(4) of the SARFAESI Act, 2002 against the application schedule properties.

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In the result, the present securitisation application is allowed setting aside the possession notice dated 06.07.2022 issued by the respondent bank against the SA schedule properties. However, this order does not preclude the respondent bank in initiating measures afresh against the application schedule properties strictly in accordance with the provisions of Securitisation Act and the Rules framed thereunder to realise its dues. Consequently, interlocutory applications pending, if any, shall stand closed. No order as to costs.

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B. Communicate a copy of this order to the parties concerned. (Dictated to the Steno, transcribed by him, corrected, signed and pronounced by me in the open court on this the 17h day of February, 2023).

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dw'* (RAMESHWAR KOTHE) PRESIDING OFFICER

D R Sridhar Naidu v. Axis Bank

Case brief

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D R Sridhar Naidu v. Axis Bank

Case brief

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