Dismissed

Sri Morampalli Madhava Reddy v. State Bank of India

DRT29 May 2024SA/27/2022

Case brief

AI extract

What is this about?

In a Section 13(7) application challenging Demand and Possession Notices issued under the SARFAESI Act, the Debts Recovery Tribunal rejected the applicant's claim that an existing decree barred recovery or that the bank failed to consider settlement proposals. Holding the bank followed statutory procedure, the application was dismissed.

What did the court decide?

The Securitisation Application filed by the applicant is dismissed.

Sri Morampalli Madhava Reddy versus State Bank of India — Company and Corporate | DRT (2024)

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IN THE DEBTS RECOVERY TRIBUNAL. I AT HYDERABAD DATED THIS TF.IE 2gIII DAY OF MAY. 2C.24

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PRESENT: GUMMADI GOPICHAND, PRESIDING OFFICER

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sA.No.27 /2C22

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Sri MorampalliMadhava Reddy, S/o M. Bayappa Reddy, Occ:business, R/o H.No.7-641, Subhash Nagar, Jeedimetla, Ilyderabad-50003 l

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..Applicant

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Versus

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State Bank of India, Rep. by its Authorized Officer Stressed Assets Recovery Branch, 2"d floor, TSRTC Commutcr Amenity Centre, Bus Tcrminal Complr:x, Koti, Hyderabad-S0O 09S

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..Respondent

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Counsel for the Applicant

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Counsel for the Respond_ent Bank

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Sru R..nf. Hemanand. Sn C. Prabhakar

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-:ORDER:-

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This application is lilcd bv the Applicant u/s.r7 orthe SARFAESI Act, 2OO2, challenging thc l)cmand Noticc dt.02.08.2o2l andpossession Notice dt.06. 12.2021 issued by the Respondent Bank in respect of the schedule property and to declare the same as null and void.

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madc in the application, in brief, are that:

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credit facilities from the Respondent

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[r&ryA+ \1yqvead,2oOs and thc Applicanr stood as guarantor and he respect of the schedule property in Thc said Avis l)ress I).Ltd. incurred

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SA.No.27/2022

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heavy loss in the business and could not repay the loan instalments due to the uank. Thc llespondcnt llank issuecl demand notice dt'O1'o8-2o21 calling upon M/s Avis Press p.Ltd and its guarantors to pay a sum of Rs. 7,24,or ,s6g l - by declaring the roan account as NPA as on 24.09.2020. Thereafter the Applicant approached the Respondent bank and requested not to take coercive steps and sought time to repay the loan amounts. Thereafter the Respondent bank issued Possession Notice dt.06. t2.2o2l in respect of the schedule property without giving any reply to the letter dt.16.0g. 2o2l addrcsscd b-v the Applicantfor oTS ancl the said possession notice is bad in law and not maintainablc. IIcncc, thc SA.

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3' The Respondent Bank filed its Reply Statement denying all the adverse allegatirns made in the sA. The contentions of the Respondent lJank in brief are that, M/s Avis press p.Ltd. availed credit facilities from the Respondent bank for which the Applicant stood as guarantor and created equitable mortgage in respect of the schedule property. In view of the default committed by the borrower and guaranl.ors, thc lResponclr:nt bank filed o.A. 17512021for recovery of Rs.1,22,36,632r- ancr thc said o.A. was dccreed on or.06.2022. simultaneously, the l3ank initiatcd sARIrAIrsl proceedings and issued demand notice dt.02.0u.2o21 and the Applicant received the said notice whereas the said notice issued to the borrower and other guarantors was returned unserved and the said notice was aflixed on the schedule property and also pubrished in two daily newspapers. Thereafter possession notice u/s 13(4) of the Act dt.06 .t2.2021 was issued by the Respondent Bank and the same was received by the nnL.tj;an, .:."0 the said notice was affixed on the schedule propriety 1"4i, 1l.it"^{ppblishcd inrwo lcadingnew,spapers.The} borrower '^{tftb'ii=It{ea variotiq orS proposalsbut rhe Respondent Bank has} not cef itl l o'l'S.dTh i.' ,1li:f ,',''lir^acce^ffif^orOf'S.qffr 11^{cRespondent bank has followed} the entire ii t '., T$tflUfeiJf$fissuingldemand^{notice and possession in respectof the} ::,. s-che dulc property and t he rc arc no viorations. Accordingly, the t'r"..fu;ponclcn.lpank pral,ecl to clismiss thc SA. .Q-'^' '-^i""': n'.r} i.- :"'t i ' r': -$;'"''i'" - -:.c:.'i::: :'.. :"'

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Sa.No.27/2022

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Heard Ld. counsel for the Applicant and Ld. counsel for the Respondent Bank and also perused the material brought on record.

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Now, the points that arisc lor consideration are,

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whether the Applicant has established any ualicl ground. for setting aside the Demand notice d.t.02.08.2021 and. possession Notice dt.o6.12.2021 issued by the Resporud"ent Bank in respect of the schedule property?

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it) To what relieft

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Point No.(i):-

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During the coursc of argumcnts, Ld. Counscl for the Applicant and Ld. Counscl for the Rcsponclent Ilank reitcratcd their respective versions as stated supra.

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There is no dispute regarding the fact that M/s Avis press pvt.Ltd. availed loan facilities from the Respondent Bank and the Applicant stood as guarantor to the said loan transaction by mortgaging the schedule property in favour of the Bank and after availing the loan facilities, the borrower committed default in repayment of the loan amount and thc ltlan account u,as classified as NpA. As per the record, it is clear that thc- Rcsponclcnt llank filecl O.A. lTSl2l before this Tribunal and the said oA was decreed on 01 .06.2022.

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8' The Aoolicant is not clisputing the fact that he received demand notice ,a#ffi+.--

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{a$s.3,%.?m,:ssion^{notice issueclby the RespondentBank. As per the}

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ni'.ul^{maffialdaAffi=aqts} filed by the Respondent Bank along with the RepS it is A'.4\ that the borrower and other guarantors have not

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? ferB0ha10l....iiru'a^the demandnotice and so the said demand notice

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i, r{ was publishcrdeT;in .---'a-'H1,t"' financiail,)xprcss r'rr(irrvrqrrz^l/r,!)!) drr(l ancl lvliM a lla na Telangana lClaffgana Od a l yi l y

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i ,al$ili3pryj$/,^{.os.2021 . As pcr the clocumentsriled by the} Bank, it 'W

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SA.No.27/2022

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is also clear that. Possession notice dt.06. 12.2O2lwas affixed on the schedule property and also published in two daily newspapers. The contention of the Applicant that that the amount mentioned in the possession notice is not recoverable in view of the fact that the Respondent Bank has already filed O.A. andobtained decree against the borrower and other guarantors is not tenable.Accepting oTS proposal of the Applicant and othcrs is only a prerogative of the Respondent Bank and so the contcntion of the Applicant that without considering the oTS proposal made by the Applicant and others, the Respondcnt bank has initiatr:d procccdirrgs undr:r thc SARFAESI Act is untcnable. So, as per the documcnts liled by the Respondent Bank it is clear that the Respondent Bank has duly followed the procedure laid down under the SARFAESI Act and Rules, 2oo2, in issuing demand notice and possession notice and the Applicant has failed to establish any infirmities in issuing the said notices by the Bank. So, I see no ground warranting interference of this Tribunal with the steps initiated by the Respondent Bank in issuing demand notice and possession notice against the schedule property.

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So, considering all thc circums[anccs, I hold that the Respondent Bank has duly followed the procedure laid down under the SARFAESI Act and Rules, 2oo2 in issuing demand notice and possession notice against the schedule property and accordingly, this point is answered against the Applicant and in favour of the l?espondent Bank.

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Point No.(ii):-

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'⁺ lt:-,._ 10. ths'",p. rcsc'nt Sccuritization Application is dismissed. i r':' ' l' the Int-irfti,cutory Applications, pending if &fly, shall orfllNo "*Jl as to costs. -:/-#

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SA.No.27/2022

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communicatc a copy of this ordcr ro thc partics concerned.

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(Dctated to the P.A, transcribed by her, corrected, signed" and pronounced. bg me in the open court on this the 2gh dag of May, 2024).

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sd/(c. coPrcHANDl PRESIDING OFFICER

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t'o=f&

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DRT- !,^{H Y fr} i I^{it'i'' !; f:.}

Sri Morampalli Madhava Reddy v. State Bank of India

Case brief

What is this about?

What did the court decide?

Sri Morampalli Madhava Reddy v. State Bank of India

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

Coram

Case details

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