Allowed

J Balaji Alias Jonnalagadda Balaji v. Shriram Finance Limited

DRT12 Jul 2023SA/223/2023

Case brief

AI extract

What is this about?

In SA No. 223 of 2023, the Debts Recovery Tribunal allowed an application seeking to set aside a possession notice dated 21.03.2023 issued by Shriram Finance Limited under Section 13(4) of the SARFAESI Act. The Tribunal allowed the application because the applicant failed to prove compliance with the requirements of Rules 8(1) and 8(2) regarding service of notice and newspaper publication, as the

What did the court decide?

The possession notice dated 21.03.2023 issued under Section 13(4) of the SARFAESI Act, 2002 against the secured assets is set aside.

J Balaji Alias Jonnalagadda Balaji versus Shriram Finance… — Banking and Recovery | DRT (2023)

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IN THE DEBTS RECOVERY TRIBUNAL - II AT HYDERABAD

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DATED THIS THE 12TH DAY OF ]ULY, 2023

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

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SA No. 223 OF 2023

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Between:

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J. Balaji @ Jonnalagadda Balaji S/o Viswanatham Setty Aged about 55 years, Occ: Business R/o H. No. 9-19-18, Kothapeta Dhone, Nandyal District Erstwhile Kurnool District - 5lB 222.

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......Applica nt.

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And

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Shriram Finance Limited Branch Office at Plot No.19-20 Kota Complex Beside Prashanthi Residency Modern High School Road Mahabubnagar-509001.

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Rep. by its Authorised Signatory.

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......Respondent.

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Counsel for the Applicant Mr. V. Sethu Madhava Rao Respondent Exparte.

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Respondent

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-:@_B:-

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The Applicant filed the present Securitisation Application u/s t7 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "SARFAESI Act 2002") tor setring the Possession

sa 223/2023

Notice dated 27.03.2023 and demand notice dated 30.tL.2022 issued against the SA schedule property.

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The case of the applicant as^per the averments of securitisation application, in brief, is that the applicant availed loan from Shriram City Union Finance Limited and since it was not a financial instltution within the meaning of Section 2(m) of the SARFAESI Act, the original lender amalgamated with the respondent, hence the amalgamated company cannot initiate the SARFAESI proceedings. Therefore, the impugned possession notice is a gross abuse of process of law and the respondent is misusing the provisions of SARFAESI Act against the applicant. The respondent with a malafide intention to obtain unlawful gain included Rs.61,87,500/- as financial charges, Rs.18,45,166/towards overdue charges and Rs.19,000/- cheque/ECH/ACH charges upto filing of the Arbitration case No.476/2020 in the total dues of Rs.l,57 ,57 ,476l- mentioned in the possession notice dated 21.03.2023. The respondent failed to follow the provisions of Rule 8(1) and B(2) in publishing the possession notice in two leading newspapers and serving on the applicant. The respondent failed to mention the payment of Rs.l,57,57 47 6/- made by the applicant after issue of demand notice and without deducting the said mount, the possession notice was lssued as if the applicant is liable to pay Rs.7,57 ,57 ,476/-. The respondent charged a higher interest than the contractual rate besides debiting some other charges to the loan account. Hence prayed for setting aside the im pug ned possession notice.

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sA 223/2023

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Despite service of notice, there is no representation for the respondent. Accordingly, respondent waS set exparte vide docket proceedings dated 15.06.2023 as called, absent and no representation.

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Heard learned counsel appearing for the applicant and perused the written arguments filed by the applicant and material brought on record.

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It is the contention of the applicant that the respondent has not complied with the procedure contemplated under rules 8(1) and 8(2) of the Security Interest (Enforcement) Rules, in serving the possession notice dated 27.03-2023 on the appllcant and publishing the same in two leading newspapers. The applicant has paid an amount of Rs.7,57 ,57 ,47 6/- after issuance of demand notice, but the respondent without taking into account the said payment, issued possession notice for Rs.l,57 ,57,476/-. With these contentions, applicant prayed for quashing of possesslon notice dated 27.03.2023 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. Since the respondent remained exparte/ no proof is available on record as to compliance of provisions of rules 8(1) and 8(2) of Security Interest (Enforcement) Rules,2002 in serving and publishing the possession notice dated 27.03,2023. Accordingty the present securitisation application deserves to be allowed setting /M1o

/ / '>' t-/

sA 223 /2023

aside the^possession notice dated 21.03.2023 issued by the respondent u/s 13(4) of the SARFAESI Act, 2002 against the application schedule^property.

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In the result, the present securitisation application is allowed setting aside the^possession notice dated 21.03.2023 issued by the respondent against the SA schedule property. As the order is not being passed on merits, it does not preclude the respondent from initiating measures afresh against the application schedule property 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. (Dictoted to the Steno, corrected, signed ond pronounced by me in the open court on this the 12th day of July, 2023).

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Ow** (RAMESHWAR KOTHE) PRESIDING OFFICER

J Balaji Alias Jonnalagadda Balaji v. Shriram Finance Limited

Case brief

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J Balaji Alias Jonnalagadda Balaji v. Shriram Finance Limited

Case brief

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