Dismissed

M S Zain Minerals Rep by Its Managing Partner Azghar Ahmed v. Andhra Pradesh State Financial Corporation

DRT13 Sept 2024SA/141/2022

Case brief

AI extract

What is this about?

Application under Section 17 of the SARFAESI Act, 2002 filed by a borrower challenging an auction sale notice issued by a financial corporation. The Debts Recovery Tribunal held that the respondent followed due process regarding demand, possession, and sale notices, dismissing the application.

What did the court decide?

Dismissed the Securitization Application and dismissed pending interlocutory applications.

M S Zain Minerals Rep by Its Managing Partner… — Contract and Commercial Disputes | DRT (2024)

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IN THE DEBTS RECOVERY TRIBUNAL - I AT HYDERABAD DATED THISTHE 1 3TH DAY OF SEPTEMBER, 2C.24

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PRESENT: GUMMADI GOPICHAND, PRESIDING OFFICER

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sA.No.14t /2022

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M/s Zain Minerals Rep. by its Managing partner Azghar Ahmed S/o Ekthyar Ahmed, aged 40 years, Occ:business, R/o Sy.No.4Z / T eSO / Z, Talakondapally(V)&(M), R.R. District.

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..Applicant.

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Versus

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Andhra Pradesh State Financial Corporation V,rjayavandana Towers, Opp. post Offi ce, Mettuguda, Mhabubnagar, Rep. by its Authorized officer

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..Respondent.

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Counsel for the Appticant Si SidharTadakanti

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Counsel for the Respond"ent Si R. Rajendra^prasad

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-:ORDER:-

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This application is filed by the Applicant u/s. 17 of the sARFAESI Act, 2OO2, challenging the Auction Sale Notice dt.12.O5.2O22 issued by the Respondent Corporation fixing the auction of the application schedule property on 15.06.2022 and to declare the same as null and void.

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in brief, are that:

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arn{c}n$fpgy6ny credit facilities from the Respondent ,# business and mortgaged the schedule

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property as security to the loan facilities availed by them. As the Applicant incurred loss in the business, they could not repay the roan outstanding dues. So, the loan account of the Applicant was declared as NPA' The Respondent did not issue demand notice and did not affix the possession notice on the schedule property. The Respondent has taken physical possession of the schedule property which is a running unit without following the due process of law. The Respondent issued Sale Notice dt. L2.os.2o22 by fixing the date of action on rs.06.2022 without following the procedure as contemplated under Rule g(6)&9(1) of Security Interest (Enforcement) Rules, 2oo2. The sale notice was not affixed on the schedule property and valuation report was not obtained by the Respondent before Iixing the reserve price of the schedure property. Hence, the SA.

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Respondent corporation filed its Reply Statement denying all the adverse allegations made in the sA. It is contended that in view of the default made by the Applicant, the loan account was declared as NpA and the Respondent issued demand notice dt.r2.og.20Lg u/s 13(2) of the SARFAEST Act,2oo2 caling upon the borrower, to pay the outstanding dues within 60 days but they failed to do so. Subsequently, theRespondent issued possession notice dt.10.72.2or9 and the said notice was pubrished in Sakshi andBusiness Standard daily newspapers on 16.12.2019 and also affixed on the schedule property. Thereafter Respondentissued prior to sale Notice dt.31.os.2o22 and thereafter issued Auction sale Notice dt.12.05.2022 fixing the date of auction on 1s.o6.2o22 and. the said notice was published in Eenaduand Business standard daily -a1p.,9.,affixed on the application schedule property. The physical possession of the schedule due procedure laiddown under the The Respondent obtained valuation of the Respondent before fixing the has scrupulously followed the provisions of SARFAESI Act and Rules

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made thereunder. Accordingly, Respondent prayed to dismiss the SA.

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Heard Ld. Counsel for the Applicant and Ld. Counsel for Respondent and also perused the written arguments filed by them.

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Now, the points that arise for consideration are,_

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i) whether the Appricant estabrished. ana uarid ground. for challenging the Auction sare Notice d,.12.0s.2o22 issued bg the Respondent fixing the d.ate of auction on 15.06.2022 in resptect o7 tLrc schedule properlg?

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ii) To what relieJ?

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Point No.li):-

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During the course of arguments, Ld. Counsel for the Applicant and Ld. Counsel for the Respondent reiterated their respective versions as stated supra.

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The undisputed facts of the case are that the Applicant availed credit facilities from the Respondent against the mortgage of schedule property but the Appricant failed to repay the loan amounts due and so' the loan account of the Applicant was declared as NpA.

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The contention of the Applicant is that they have not received demand notice, possession notice issued by the Respondent and w'tffiedueprocedure,theRespondentissuedAuction PKueqlffmK," per contra, the Respondent contended ,i,:ft^,n.ffiu. :UBS:usly^{fouowed the procedure laid down under} ,', ..thr^{provisi6ns of} sefpAbSl Act, 2oo2 and Rures made thereunder in ,, ,,I","tfl3'5Ef"dfr"ti$,jj.n"""."",o. notice and also sale notice. rn i.',.o-f"9.ff^{to subste} . above contention, the Respondent filed

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material documents along with the Reply filed by them to prove that the Respondent has duly folowed the procedure. The Respondent issued demand notice u/s 13(2) of the 5ARFAESI Act, 2oo2 on 12'o9.2or9 and sent the said notice to the Applicant by regd.post and the same was received by the Applicant. It is not the case of the Applicantthat incompliance of the said demand notice, the Applicant paid any amounts to the Respondent. As there is no response to the demand notice, theRespondentissued possession Notice dt. to.12.2otg and the said notice was dury received by the Appricant and the said notice was pubrished in sakshi and Business standard daily newspapers on r6.L2.20t9 and copy of the said notice was arso affixed on the schedule property. To prove the same, the Respondent filed postal receipts and acknowledgements and copies of paper publication and also photographs depicting the affixture of the said notice on the schedule property. The Respondentobtained valuation report dt.28.0r.2022 from the approved valuer Sri ANS prasad and basing on the said report, fixed the reserve price against the schedule property. Thereafter the Respondent issued prior to sale notice u/r 8(6) dt'S1.o3.2o22 giving an opportunity to the Applicant to redeem the property by paying the entire outstanding dues. The said notice was served on the Applicant. Thereafter the Respondent issued Auction Sale Notice dt.12.os.2o22 fixing the date of auction on 15.06.2022 and. the said notice was received by the Appricant and also published in Business Standard and Eenadu daily newspapers and also affixed on the schedule property. so, considering alr the circumstances, I hord that the Respondent has scrupulousry followed the procedure raid down under the provisions of SARFAESI Act, 2oo2 and Rules made thereunder in proceeding for auction of the schedule rdingly, this point is answered against the Appri ."2ffuaTffivde$-Bh. Re sponden t. /fu i=^{,lI$Jptn *} %**s#''

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