Allowed

J Balaji Alias Jonnalagadda Balaji v. Shriram Finance Limited

DRT12 Jul 2023SA/224/2023

Case brief

AI extract

What is this about?

SARFAESI Act Securitisingmblicant applied to set aside a possession notice deducted incorrectly. DTR-II Hyderabad allowed the application due to lack of proof regarding service and newspaper publication compliance by the respondent who remained ex parte.

What did the court decide?

Securitisation application allowed setting aside the possession notice dated 21.03.2023 issued by the respondent against the SA schedule property.

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

¶1

IN THE DEBTS RECOVERY TRIBUNAL _ II AT HYDERABAD

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DATED THIS THE 12TH DAY OF JULY, 2023

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PRESENT: SH. RAIYESHWAR KoTHE, B.Com, L.LB. (HonS.), M.A. PRESIDING OFFICER

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SA No. 224 OF 2023

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Between:

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l. Balaji @ Jonnalagadda Balaji S/o Viswanatham Setty Aged about 55 years, Occ: Business R/o H. No.9-19-18, Kotha peta Dhone, Nandyal District Erstwhile Kurnool District - SIB 222.

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......Applicant.

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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 H igh School Road Maha bu bnaga r-509001.

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Rep. by its Authorised Signatory.

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

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-:ORDER:-

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The Applicant filed the present Securitisation Application uls 17 ol the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "SARFAESI Act 2002") for setting aside the possession P,(',,

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sa 224/2023

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Notice dated 27.03.2023 and^{demand noticedated30.71.2022} issued against the^{SA schedule property.}

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The case of the applicant^{as per the averments of securitisation} application, in brief,^{ls that the applicantavailed loanfrom} Shriram City Union^{FinanceLimited and since it was not a} financial institution within the^{meaning of Section2(m) of the} SARFAESI Act, the original^{lender amalgamatedwith the} respondent, hence the amalgamated^{company cannotinitiatethe} SARFAESI^{proceedings.Therefore, the impugnedpossession} notice is a^gross abuse of^process of^{law and the respondentis} misusing the^provisions of SARFAESI^{Act against the applicant.} The respondent with a^{malafideintention to obtain unlawfulgain} included Rs.61,87,500/- as^{financial charges,ln the total dues of} Rs.83,28,O72/- mentioned ln the^{possessionnotice dated} 27.03.2023. The respondent^{failed to follow the provisionsof Rule} 8(1) and 8(2) in^publishing the^{possessionnotice in two leading} newspapers and serving on the applicant.^{The respondent failed} to mention the^payment of^{Rs.83,28,072l-made by the applicant} after issue of demand notice and^{withoutdeducting the said} mount, the^possession notice was^issued as if the^applicantis liable to pay Rs.A3,28,O721-. The^{respondentcharged a hlgher} interest than the contractual rate besides debiting^someother charges to the loan account. Hence^{prayed for settingaside the} impugned^possession notice.

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Despite service of notice, there ls no representation for^the respondent. Accordingly, respondent was set exparte vide docket rM^-'o

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1-/ "r,'-

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sa 224/2023

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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 appllcant 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 21.03.2023 on the applicant and publishing the same in two leading newspapers. The applicant has paid an amount of Rs.83,28,072l- after issuance of demand notice, but the respondent without taking into account the said payment, issued possession notice for Rs.83,28,O72/-. With these contentions, applicant prayed for quashing of possession notice dated 21.03.2023 in the interest ofjustice.

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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 2L.03.2023. Accordingly the present securitisation application deserves to be allowed setting aside the possession notice dated 21.03.2023 issued by the respondent u/s 13(4) of the SARFAESI Act, 2002 against the apptiEation schedule property. OY."

OY."

sA224/2023

In the result, the^{present securitisationapplication is allowed} setting aside the^{possessionnotice dated 21.03.2023issued by} the respondent against^{the SA scheduleproperty. 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^{theprovisionsof} Securitisation Act^{and the Rules framed thereunder to realise its} dues. Consequently,^{interlocutory applicationspending, 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 mein the opencourt on this} the 12th doy of July,2023).

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MESHWAR 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

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