Allowed

M S Sai Kiran Granites v. State Bank of India

DRT21 Oct 2024SA/201/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal, Hyderabad allowed an instant application filed by mortgagors challenging a possession notice issued by State Bank of India. The bank failed to issue the mandatory demand notice and comply with enforcement rules, leading the Tribunal to quash the notice and permit fresh proceedings.

What did the court decide?

The impugned possession Notice dated 02.06.2023 issued by the Respondent Bank against the schedule property is hereby quashed. The Bank is at liberty to proceed afresh.

M S Sai Kiran Granites versus State Bank of India — Banking and Recovery | DRT (2024)

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IN THE DEBTS RECOVERYTRIBUNAL - 1 AT HYDERABAD

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DATED THIS THE 2I5T DAY OF OCTOBER,2024

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PRESENT: SRI GUMMADI GoPICHAND, PRESIDING oFFICER

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sA.No.2oI /2023

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1.M/ s Sai Kiran Granites Rep. by its Proprietor Sri AnasuriPurushotham Chary, S/o Ramulu, aged 58 years, Occ:business, R/o H.No.2- S-BS l I I A, Flat No. 1, DasariRangaiahNilayam, Mukurampura, Karimnagar.

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Smt. Ana suriShobharan i, W/o Purushotham Chary, Aged 56 years, Occ:house wife, Occ:business, R/o H.No.2-8-85/ 1 /A, Flat No. 1, DasariRangaiahNilayam, Mukurampura, Karimnagar. .. . Applicants

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Versus

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State Bank of India, Rep. by its Authorized Officer Retail Assets & Small Medium Enterprises, City Credit Centre, Karimnagar

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-^{... Respondent} Bank

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Counsel for the : Sn K. BuchiBabu
Respondent d. : Exparte
k*q<br>21OCT
1. The tisation Application u/ s. 17 of
the tion of Financial Assets and
Enforcement of terest Act, 2002 (SARFAESI Act, 2002)
challenging the possession Noticedt.02.O 6.2025 issued by the
Respondent Bank against the schedule propertyand to set aside the
same as illegal and void.

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sA2OL/2O23

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The averments made in the application, in brief, are that, the Applicant No' 1 availed mortgage loan to a tune of Rs.20 lakhs from the Respondent Bank and Applicant No.2 stood as guarantor and mortgaged the schedule property towards the securit5r of the said 10an facilities' It is submitted that due to sudden 10ss in the business, the Applicant could not pay some instalments and the Respondent Bank issued^possession Notice d.t.26.O3.2olg and challenging the said notice, the Applicants Illed SA 26slrg and the said SA was allowed by this Tribunal. Thereafter, the Applicant is paying the loan instalments regularly.But all of a sudden, the Respondent Bank without issuing demand notice u/s 13(2) of the SARFAESI Act, proceeded further by issuing the impugned possession notice dt.o2.o6.2023which is illegal. The Respondent Bank failed to follow Rule 8(1)&(2) of Security Interest (Enforcement) Rules, 2002 in taking possession of the schedule propert5r. Hence the SA.

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The Respondent Bank in spite of service of notice, called absent and there was no representation even after giving several opportunities and hence the Respondent Bank was set exparte.

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Heard Ld. Counsel for the Applicants.

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Now the points that arise for consideration is

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I Wl'tetLar the Applicants haue established ang ualid grounds for setting aside the possession Notice d1.02.06.2o23 issued bg the Respondent Bank against the schedule propertA?

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ii) To what relief.t pointNo.n) ffi,

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rhe Applicants fited t16a"[s&n c the proceedings initiared by the Respo#ent e#. n 13(a) of the SARFAESI Act lor taki'ar ,^{ifg s{n(Uffi} ffisessio, of the application schedule property. who invoked the

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sA 2Ot/2023

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SARFAESI proceedings against the schedule property, failed to justify their action by filing Reply and produce necessary material documents to prove that the Bank has strictly followed the provisions of SARFAESI Act and Rules framed thereunder while proceeding against the secured asset. The Bank has not evinced any interest in contesting the matter even after giving several opportunities and failed to file their Reply and material documents to disprove the allegations of the Applicants. In the absence of any material evidence to show that the Respondent Bank has duly complied with the mandated provisions of SARFAESI Act and Rules, 20O2 while proceeding against the secured asset for taking possession u/s 13(4) of the Act, I hold that the Applicants have made a case for quashing the measures initiated by the Respondent Bank against the SA schedule property under the provisions of the SARFAESI Act and Rules thereunder and as such, the SA is liable to be allowed.

Polnt No.llll:.

In the result, SA2OI/23 is allowed.

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Accordingly, the impugned possession Notice dt.02.0 6.2023 issued by the Respondent Bank against the schedule property is hereby quashed. However, the Respondent Bank is at Iiberty to proceed afresh against the SA schedule property to recover their dues by duly following the provisions of SARFAESI Act, 2OO2 and Rules thereunder.

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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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(Dctated to :,,r'1
me in the transcribed bg her, corrected., signed and pronounced. bg
# tdaA of October, 2024).
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I UE COPY
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M S Sai Kiran Granites v. State Bank of India

Case brief

What is this about?

What did the court decide?

M S Sai Kiran Granites v. State Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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