Dismissed

Gopiraj Kothapeta v. Omkara Asset Recontruction Pvt. Ltd.

DRT7 Oct 2024SA/192/2022

Case brief

AI extract

What is this about?

This Applicant sought to set aside a possession notice under the SARFAESI Act, arguing an arbitration clause precluded proceedings. The Debts Recovery Tribunal held the proceeding valid, noting the loan was assigned to the applicant who became a secured creditor and there was no ongoing arbitration proceeding. The application was dismissed.

What did the court decide?

Application filed under S. 7 of SARFAESI Act to set aside the possession notice is dismissed. Pending interlocutory applications are disposed of.

Gopiraj Kothapeta versus Omkara Asset Recontruction Pvt. Ltd. — Company and Corporate | DRT (2024)

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IN THE DEBTS RECOVERYTRIBUNAL _ I AT HYDERABAD

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DATED THIS THE 7TH DAY OF OCTOBER,2c/24

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PRESENT: SRI GUMMADI GOPICHAND, PRESIDING OFFICER

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sA.No. t92/2c22

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Sri GopirajKohapeta, S/o BlajiKothapeta, Aged 49 years, Occ:agriculture, R/ o 6-7 -11, Brahmanawada, RagannaDarwaja, Hanamkonda, Warangal-506001.

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... Applicant

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Versus

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l.Omkara Asset Reconstruction p.LTd.(OMKARA) Regd. Office at No.9, Mp Nagar, l"t street, Kongu Nagar Extension,

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Tirupur-641607.

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Corporate office at C/51S, Kankia Zillion,

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Junction of LBS Road 7& CST Road, ;<br>BKC Annexe, Kurla(W), Mumbai_400070.
'*t\IIr_
I
2. M/s Fullerton India Credit Company Ltd.,
* ilp oTnnT
Office at 5- 1 1-503&504, 5&6 elock_E, 1'? :JiTt:lii
Ground floor, Kandakatla gateway,
KUC X Road, Naim Nagar, Hanamkonda_5060o9.
Rep. by its Authorized Signatory
Mr. A. Shireesh, S/o Laxman
... Respondendt:..l:

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Counsel for the Applicant Counsel for Respond.ent

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: Si Baglekar Akash Kumar. : M/s VIS Legis Law firm

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ORDER

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This Application is filed u/s. I 7of the Securitization and Reconstruction of

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Financial Assets and Enforcement of Security Interest Act, 2OO2

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(SARFAESI Act,2OO2) challenging the action of the Respondent in

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sA 792/2022

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issuing Possession Notice dt.30.0 6.2022 for taking possession of the schedule property and to declare the same as null and void.

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The averments made by the Applicant in brief are as follows:

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The Applicant availed credit facilities to a tune of Rs.4 lakhs from the 2"d Respondent and the loan agreement contains an Arbitration clause and an Arbitrator was already appointed on 0g. r0.2014 at the instance of Respondent No.2 and arbitration proceedings are concruded and the matter was reserved for passing of award since 03.10.2015. On 01 .O2.2O22, the Applicantreceived noticefrom the l stRespondentu/ s l3(2) of the SARFAESI Act,2OO2 stating that the 2naRespondentdeclared the roan account of the Applicant as NpA on 31 '05.2015 and assigned the entire debt to the Respondent No. 1 . To the said demand notice dt.O1.02.2022, the Applicant sent objections vide notice dt. 14.02.2022 and thereafter upon receipt of the said reply, the lst Respondent sent a reply dt.03.03.2}22 stating that SARFAESI proceedings and arbitrationproceedings are different in nature and hence they 1"t Respondent is entitled to proceed under the SARFAESI Act,2oo2 to recover the debt. Thereafter on 30.06.2022, the l stRespondent issued possession notice u/s 13(a) of the Act and taken symboric possession of the schedule property. Hence the SA.

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.JThe l"t Respondent fired their Reply denying all the adverse alegations made in the SA and contended that the Appricant availed credit facilities from the 2ndRespondent and created mortgage against the schedule property and later the loan account was assigned to lstRespondent. As the loan account was class A as per the RBI guidelines, the l"tRespondent issued 3(2) of the SARFAESI Act on 01.O2.2022 caliing &t.""; y the entire duesand later possession notice issued T6 the A t for taking symbolic possession of the Ib.B$Ir.rn'ltq. ,* tiespondent being secured

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sA 792/2022

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creditor, is entitred to proceed under the provisions of sARFAESI Act, 2OO2 and Rules made thereunder. pendency of the Arbitration proceedings is not a bar to proceed under the provisions of SARFAESI Act, 2OO2 and, the demand notice issued u/ s 13(2) of the Act dt.O1.O2.2O22 is well within the period of limitation. Accordingly l stRespondent prayed to dismiss the SA.

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Heard both sides. Now the points that arise for consideration are

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i. whetler the Applicant has established. any ualid ground. for setting aside the possession Notice dt.30.O6.2O22 issued bg the

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lstRespondent against the schedule propertg?

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ii. To what retief ?

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Potnt No.(il:-

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

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There is no dispute regarding the fact that the Applicant availed credit facilities from the 2ndRespondent by mortgaging the schedule property. Subsequently, the debt was assigned to the l stRespondent by the 2"a Respondent.

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As per the material documents filed by the l^stRespondent herein, it is clear that the lstRespondent issued Demand notice to the Applicant u/s 13(2) of the SARFAESI Act. After receipt of the said 01.O2.2022, the Applicant submitted reply vide certain objections. To the said objections, nEfrtntsent Reply dt.30.03.2022. 0[I rp,lr rr il^* 3 ^^:=','J ;x5^t$7

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sA79212022

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As the Applicant has not complied with the said demand notice by paying the dues, the lstRespondent issued PossessionNotice d,t.3}.06.2022 for taking symbolic possession of the schedule property. Admittedly, theApplicantreceived the said notice.

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The Applicant is challenging the proceedings initiated by the lstRespondent under the provisions of sARFAESI Act, 2002 on the premise that in the loan agreemententered between the Applicant and Respondent No.2, there is an Arbitration clause and so, the 2"dRespondent issued a notice d,t.26.o6.2014 through its advocate to pay the total dues and in case of default, the matter w,l be referred to the Arbitrator. The Applicant did not pay the outstanding dues as per the said notice' In fact arbitration proceedings are arreadyinitiated and Arbitrator issued notice dt.Og. 1O.2O14 to the Applicant, so, the lstRespondent is not entitred to proceed under the provisions of SARFAESI Act' 2002' Liabiliry of the Applicant can be decidedby the Ld. Arbitrator in the Arbitration proceedings only.

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A perusal of the record makes it clear that 2,dRespondentgranted loan facilities to the Applicant and in view of the default committed by the Applicant, declared the loan account as NpA and later assigned the entire debt of the Applicant along with underlying securities to the l st Respondent vide assignment Agreeme nt d,t.26.O2.2021 duly registered by Sub-Registrar, Andheri, Mumbai. The l stRespondent being is a secured creditor, isentitled to proceed under the provisions of SARFAESI Act, 2OO2 for recovery of outstanding dues, after declaring the loan account as NpA. Accordingly, the l stRespondent issued demand notice foilowed by the possession notice under the provisions of SARFAESI Act, ,r,10.r Or: the course of arguments, Ld. Counset for the Applicant filed copy of order in Wp.No.3 was filed by the applicant before the Hon,ble High the said order, it is clear records that lrom the Appticant the Ld. Arbff fm,q "' ,*d. ".i;L.ti,i..;;; ";;;;;';;; jl't{fl ' tor and for dlgpting to pass arbitration "r-'ff"i hti"mr [ /^{lll'l 'nrrr -'"} l' ' .a4, i^r; A ' l:^.e o -s^**,.i 'Q7'"#SP

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sA L9212022

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award. In the said writ petition, Hon'ble High court passed order to the effect that the Arbitrator declined to continue as Arbitrator and so, it is open for the^petitioner to seek appointment of arbitrator afresh. with the above observation, the writ petition is dismissed. As the matter stands now, even the arbitration proceedings are also not pending.

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lo considering arl the circumstances, r hold that the r"r Respondent as a secured creditor, has rightly initiated proceedings under the provisions of SARPAESI Act, 2OO2 against the secured asset for recovery of outstanding dues and I see no ground warranting the interference of this Tribunal with the proceedings initiated by the lst Respondent and there are no merits in the sA. Accordingly, this point is answered in favour of the l"tRespondent and against the Applicant.

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Potnt ltto,(tl):-

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In the result, SA Ig2l2022 is dismissed. Consequently, the Interlocutory Applications, pending if any, shall stand disposed of. No order as to costs.

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Communicate a copy of this order to the parties concerned.

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(Dictated to the P.S, transcibed.,bg he^r, corrected., signed. and pronounced. bg me in the open court on this the Vh day of October, 2024).

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sd/(c. coPr CHANDI PRESIDING OFFICER

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7R
Ll/

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or'i+^rYorealro'

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Gopiraj Kothapeta v. Omkara Asset Recontruction Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

Gopiraj Kothapeta v. Omkara Asset Recontruction Pvt. Ltd.

Case brief

What is this about?

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