Allowed

Sanjay Kumar Moosramthota v. Cholamandalam Investment and Finance Co. Ltd.

DRT20 Mar 2024SA/204/2022

Case brief

AI extract

What is this about?

In this securitization application under the SARFAESI Act, 2002, the Debts Recovery Tribunal-II at Hyderabad allowed the applicant's plea. Finding that the respondent failed to produce evidence of proper service and publication of notices as mandated by the Security Interest (Enforcement) Rules, 2002, the court set aside the possession and auction measures.

What did the court decide?

The Securitization Application was allowed by setting aside all measures initiated by the respondent against the Schedule A property under the SARFAESI Act, 2002.

Sanjay Kumar Moosramthota versus Cholamandalam Investment and… — Banking and Recovery | DRT (2024)

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IN THE DEBTS RECOVERY TRIBUNAL-II AT HYDERABAD

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DATED THIS THE 2OTN DAY OF MARCH, 2024

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PRESENT: SH, RAMESHWAR KOTHE,B.com.^{L.LB.(Hons'), M.A.} PRESIDING OFFICER

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securitization Application No.2o4 oF 2022

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Sri Sanjay Kumar Moosramthota S/o Eshwaraiah Moosaramthota Aged about 47 yearc, Occ:Business R/o H.No.8-3-224 / 70/ Al 4, Block-H4 Flat No.101, l.4adhura Nagar Yousufguda, Hydera bad^- 50000 38

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.......Applicant.

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Versus

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Cholamandalam Investment and Finance Company^Ltd. Rep. by its Authorized Officer Situated at Dare House,2 NSC^{Bose Road} Parrys, Chennai-600 001

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.,.,,,.Respondent.

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Counsel for the Applicant :Sri D. Raghavulu

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:M/s Vishnu Grover & Associates Counsel for Respondent Bank

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-:ORDER:-

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The Applicant filed the^{present Securitisation Application u/s.17} of the Securitization and^{Reconstruction of FinancialAssetsand} Enforcement of Security Interest Act,^{2002 (hereinafter "the Act" for} short) to set aside the^proposed action^{of respondent in taking physical} possession and measures under Sec.13(4)^{includinge-auction sale} notice dated !2.08.2022^{fixing date of auctionon 19.09.2022in respect} of sA schedule property. '"*,t-

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sA No.204/2022

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The case^{of the applicant, in brief, is that applicantavailed} mortgage loan of^{Rs.37 lakhsin 2018for businesspurposeTill Covid-} 19^{pandemic the applicant was making regularpayments but thereafter} sustained losses and^{hence there was delay in paymentas per} schedule. The^{respondentillegally declared the loan account as NPA'} The respondent^{failed to serve demandnotice as per Rule 3 of the} Security Interest^{(Enforcement) Rules, 2OO2("Rules" for short)and} also failed to^{serve, affix and publish the possessionnotice as per Rules} 8(1) and 8(2).^{The sale notice was also not served, publlshedand} afFixed on^{schedule property. The sale notice does not containfull} description.^{No 30 daysprior to sale was served on applicant The} property is situated in a^{prime area and its worth is more than Rs 1 70} crores. The^{respondent failedto follow due procedureof law and hence} this SA.

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The respondent^{filed reply statement stating,inter alia, that the} respondent is a^{NBFC and it advancedloan in June, 2018 and after} availing loan,^{the applicantcommitted defaultin repayment' Asa} result, the loan^{account was classlfiedas NPA on 12 07 '2021' rhe} demand^{notice dated 09.08.2021 was issuedfor Rs 36,65,005 71 ps} and the same^{was received by applicanton 12'07 '2027 and it was also} published. No objection to the^{demandnotice under Sec l3(34) was} raised by applicant.^{Thereafterpossessionnotice dated 25 11 2021 was} issued under^{Sec.13(4) and publishedin 'Nava Telangana'and'The} Indian Express'^{newspapers.Since no payment was made, the} respondent took^{steps for taking physicalpossessionunder Sec 14 and} possession was taken and thereafter^{published e-auction sale notice} darcd f2.O8.2022.^{The respondent has followedthe duelrocedureof} law and hence SA^{is liable to be dismissed.} 6.otu

6.otu

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SA No,2O4l2022

Both learned counsel reported that orders may be passed on merits. Perused 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 valid ground to set aside Sec.13(4)^proceedings initiated by the respondent against the SA schedule property including the sale notice dated 19.09.2022 as prayed for?

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(ii) To what relieP

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Point No.(i):-

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There ls no dispute about availment of loan facility, creation of mortgage in respect of SA schedule^property and committing defaultⁱⁿ repayment. The main contention of applicant is that the respondent did not serve any notices i.e., demand notice,^possession notice, sale notice and that^possession notice and sale notice were not afflxed on schedule property and published in newspapers as per Rules. Whereas, the respondent bank stated that demand notice and^possession notice were served and^published, However, except filing a^statement of^account along with memo dated f2.07.2024, the respondent^{has not furnished} any document evidencing service, affixture and^publicatlon of^{any of} the notices issued by it under the SARFAESI Act,^{2002, in spite of} specific contention from the slde of appllcant.^Therefore, it^{has to be} construed that the respondent failed to^complyRules 8(1), 8(2),^8(6), 8(7) and 9( 1) of the Rules, 2002.

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Under the above circumstances, the^{SA deserves to be allowed} by setting aside all the measures initiated^by the^{respondent against} the SA schedule^property under the SARFAESI^Act, 2002. i ] "r"

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Point No.(ii):

In the result,^{the Securitization Application is allowed by setting} aside all the^{measures initiatedby the respondent againstthe sA} schedule^{propertyundertheSARFAESI Act, 2002 and Rules thereunder'}

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However, this order^{does not preclude the respondentfrom} initiatingmeasuresafreshagainstthesecuredassetstrictlyin accordance with^{provisions of the Act, 2OO2 and Rules framed} thereunder.

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