Dismissed

Subrahmanya Corporation v. City Union Bank Limited

DRT15 Dec 2023SA/270/2022

Case brief

AI extract

What is this about?

In a Securitization Application under the SARFAESI Act, the Applicants sought to set aside the Respondent Bank's possession notice alleging procedural lapses including incorrect publication and affixture. The Court found that the notice was duly served, published, and affixed as per statutory requirements, rejecting the Applicants' contentions.

What did the court decide?

The Securitization Application was dismissed with the observations that no order as to costs and interlocutory applications stood disposed of.

Subrahmanya Corporation versus City Union Bank Limited — Banking and Recovery | DRT (2023)

¶1

IN THE DEBTS RECOVERY TRIBUNAL-II^{AT HYDERABAD}

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DATED THIS THE 15TH DAY OF DECEMBE&²⁰²³

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PRESENT: SH. RAMESTIWAR KOTHE,B.Com,^{L.LB'(Hons'),M'4.}

¶4

PRESIDING OFFICER

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Securitization Application No'^{27O OF 2022}

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M/s Subrahmanya Corporation Rep by its Proprietrix Smt.Kamala^Batchu W/o J. Manohar Batchu At Plot No.413 & 414, Opp:Naveena^College Christian Colony, HasthinaPuram Saroor Nagar, Ranga Reddy Telangana, Hyderabad-500070

¶7

M/s Subrahmanya Trading Co. Rep by its Prop. Sri l. lYanohar Batchu S/o lagannadham Batchu At Ground Floor, 10-01- 101/ 10 Plot No.8, Bhagyanagar Colony Telangana, Hyderabad-500079

¶8

Mr. J. Manohar Batchu

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S/o Jagannadham Batchu Male, Aged about 62^years, Occ:^Business At Plot No.413 & 414, Opp:Naveena^College Christian Colony, HasthinaPuram Saroor Nagar, Ranga Reddy Telangana, Hyderabad-500070

¶10

lvlrs. Kamala Batchu Wo^{l. l,lanohar Batchu} Female, Aged about 60^years, Occ:Business Opp:Naveena College,^{Christian Colony} Hasthinapuram Saroor Nagar, Ranga Reddy Telangana, Hyderabad-500070

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.......ApPlicants.

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Versus

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City Union Bank Limited Rep by its Authorized Officer fu**

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2of5

¶15

sa No.27Ol2O22

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Credit Recovery and Management Department 'NAMYANA", Administrative Office No.24-8, Gandhi Nagar, Kumbakonam-612001

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City Union Bank Limited Hyderabad Mehdipatnam Branch

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.......Respondents.

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Counsel for the Applicants Counsel for Respondent Bank

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:Sri G. Sandeep :Sri R. Rajendra Prasad

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-:ORDER:-

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The Applicants filed the present Securitisation Application u/s.17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter "the Act" for short) to set aside all proceedings of the respondent bank in respect of application schedule property pursuant to possession notice dated 15.09.2022 issued under Sec.13(4) of the Act, 2002.

¶23

The brief facts of the case as per averments of the application are; that applicants 1 and 2 are involved in rice trading business. Represented by applicants 3 and 4, they availed OD facility of Rs.40 lakhs and Rs.50 lakhs respectively from respondent bank on 18.03.2019 against mortgage of SA schedute property tying in the name of 4th applicant as security. They also availed emergency credit line scheme of Rs.8 lakhs and Rs.9.5 lakhs by extending the mortgage. They never defaulted in repayment even during Covid-19 pandemic. Due to heavy torrential rains between January to July, 2022, lhei. rice business got affected and also applicants 3 and 4 got affected with Covid and they had to spend heavy amounts for treatment. On 10.10.2022, the respondent bank officials came to property, handed over possession notice dated f5.09.2022 and demanded to vacate the property or else to pay outstanding amount.

$u'i\

3ofs

sA No.27Ol2022

Prior to that, no demand^notice or^{possessionnotice were servedon} applicants. The^{possession notice was neither publishedin two leading} newspapers nor affixed on^{securedasset.Descriptionof propertyin} the notice is incorrect.^{Hence the proceedings have to be set aside}

¶28

The respondents 1 and 2^{(hereinafter "respondentbank") filed} reply statement along with^{documents.It is averred that that due to} defaults committed by the^{applicantsthe loan accountwas classified} as NPA as on 31.03.2022 and^{Securitization proceedingshavebeen} initiated by issuing demand^{noticedated73.05.2022u/s 13(2) which} was sent to by registered^post to the^{applicants. As no payment was} made within 60 days, the^{respondentbank issued possession notlce} dated 15.09.2022 u/s 13(4)^{of the Act which was acknowledgedby} the applicants and the^{possessionnotice was publishedin "TheNew} Indian Express" and^"Andhra lyothl"^{newspapers besides its affixture} on secured asset.^{After obtaining valuation report under Rule 8(5), a} pre-sale notice dated 03.11.2022 under Rule 8(6)^{was affixed on} property. The respondent bank has strictly followed^{the procedure} prescribed in the Act and the Rules framed^{thereunder and therefore} SA may be dismissed.

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The right of appllcant advancing^{arguments was forfeited'} Perused the written arguments^{filed by the respondent and the} material brought on record.

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Now, the^points that arise^{for consideration are;-}

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(i) Whether the applicants made out any^{validgroundto set} aside the^{possessionnotice dated19.05'2022 issued} under Sec.13(4) of the^{SARFAESIAct against the SA} schedule^proPertY?

@ryu

(ii) To what relief?

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SANo.27Ol2O22

Point No.^(i):-

The applicants are not disputing availing credit facilities from respondent bank, creation of mortgage over SA schedule property and committing default in repayment. They mainly contend that without giving any opportunity/ respondent bank initiated Securitization proceedings, the demand notice and possession notice were not served and the possession notice was neither published nor affixed on secured asset. However, a perusal of material documents filed along with reply statement reveals that demand notice dated 13.05.2022 was sent by registered post to the same addresses as in the cause title. When the notice was sent to correct addresses, it is a deemed servlce. Besides, as an abundant caution the respondent bank got published the demand notice in Enqlish and Telugu newspapers. Hence the contention that demand notice was not served is not acceptable.

¶38

I have also perused the possession notice dated tS.Og.2OZ2 annexed to the reply statement. It shows all requisite particulars including description of property. Admittedly, the possession notice copy was handed over by respondent bank officials to the applicants on f0.70.2022. Page 40 annexed to reply statement is copy of photographs showing affixture of possession and pages 4l and 42 are copies of newspaper clippings. Thus, I find no vjolation of Rules in service, affixture and publication of possession notice.

¶39

In view of the above, I find that the applicants failed to make out any valid ground to set aside the possession notice dated 15.09.2022 issued by the respondent bank under Sec.13(4) of the Act and accordingty the SA is tiabte to be Oismissed,ffit*

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SANo.27o/2022

Point No.(ii):

In the result, SA fails and is hereby dismissed.

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Consequently, Interlocutory Applications pending if any,shall stand disposed of.

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No order as to costs.

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L2. Communicate a copy of this order to the parties concerned.

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(Typed to my dictotion by the ps, corrected, signed ond pronounced by me in the open court on this the 15th doy of December, 2023).

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dw*o

¶49

(RAtt|5561rAR KOTHE) PRESIDING OFFICER

Subrahmanya Corporation v. City Union Bank Limited

Case brief

What is this about?

What did the court decide?

Subrahmanya Corporation v. City Union Bank Limited

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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