Dismissed

Sudalagunta Jayaram Chowdary and others v. M/s. Reliance Commercial Finance Limited

DRT30 Aug 2024SA/315/2023

Case brief

AI extract

What is this about?

In a securitisation application under the SARFAESI Act, the applicants challenged sale notices dated 21.06.2023 and 28.06.2023 issued by the respondent bank. The Tribunal found that the bank followed the statutory procedure under Sections 13(2) and 13(4) without contravention and dismissed the application.

What did the court decide?

Securitisation Application 315 of 2023 was dismissed; pending interlocutory applications remained closed.

Sudalagunta Jayaram Chowdary and others versus M/s. Reliance… — Company and Corporate | DRT (2024)

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IN THE DEBTS RECOVERY^{TRIBUNAL- II} AT HYDERABAD

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DATED THiS THE^{3OTHDAY OF AUGUST,2024}

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

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SECURITISATION^{APPLICATION No 315 OF 2023}

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Between:

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-' 1 sudalasunta^{JaYaram Chowdary} ito La{e Mr.5.^{PenchalaNaidu} troei aoout⁷⁵ Years'^{occ: Business}

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;9^- 3^- 2oc^{- 1, Ka katiYaN aga r} iripini^{- s iz s o t, chittoor District'}

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sudalasunta^{Ramanaiah Naidu}

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' ) Z)i-tii" Mr. s'^{Penchata Naidu} Ii.i-aoout⁸⁰ Years'^{occ: Business}

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1-9 - 3^- 20C^{- 1, Ka katiYa Naga r} ,i rioiini^{- s iz so t, chittoor District'} iiiov^{nit GPA Mr' s'K'K' Kumar}

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? Mrs, Sudatagunta^Prameela '' lavaram^chowdary -Years' occ: Business

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iLZi aoout^7o "i'i^'i'l-siiataqunta lg4-2oc'^{1, KakatiYa Nagar} 'ririoiini- i i z so t, chittoor D istrict' 'iei'iY ne' GPA Mr' s'K K Kumar'

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Sudalagunta^{Krishna Kalvan Kumar} e/^ Mr' sudalaqunta^{nyaramChowdarY} iiea abiut^{a2-Years'occ: Business} 1:9 3^{-2oc- 1, Ka katiY a Naga r} riipiin^{i - i i z so t' ch ittoor District'}

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< M/s. Sudatagunta^{AgroMills Limited} '' Reoresented^{bY its Director} 1;3-2oc-^{1, KakatiYa Nagar} tiipiini-iizsot'^{chittoor DistricL} . //A'*../.^

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U' 6l,z*

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sA.31sl2023

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M/s. Sudalagunta Flour Mills Limited Represented by its Director 19- 3-20C- 1, Ka katiya Naga r Tiru path i- 517 501, Chittoor District.

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M/s. Sudalagunta Hotels Limited Represented by its Director 19-3-20C-1, Kakatiya Nagar Tiru path i - 5 1 7 50 1, Ch ittoor D istrict, ..,,...Applicants.

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AND

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M/s. Reliance Commercial Finance Limited 3.d Ffoor No. 6-3-248, Naveen Nagar Road No.1, Banjara Hills, Hyderabad r erangana State-500034.

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......Respondent.

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M/s. T.V.L. Narasimha Rao & Mr. T.V. Narasimham.

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Counsel for the Respondent : Mr. P. Ramachandran.

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.:ORDER:-

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The Applicant fited th, u / s. t7 or the secu rit zation i.^tJ:il:,ff ;T::il,::il.:J: and Enforcement of security Interest Act, 2oo2 (hereinafter referred to as "SARFAESI Act 2002,,) assailing sale notices dated 2g.06.2023 read with 27.06.2023.

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As per the averments in in brier, are that respondent il;*iji'l]ltl:::j,ffrffi,:; Rs'19.40 crores to 7th appricant. The respondent is craiming that applicants 1to 6, Late S. Veerappa Naidu and t_ate fvfrs. C. Ramanamma are the co_borr( a mou nt or Rs. 7 4,7 s, 4 3,7 s 1 / Jl:;:' r"l::r1'fi :'ilt "::1i""; 4v<*l-\ 0,'4a"-

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sA.315/2023

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slipped into financial stress due to financial failure of^{its group} companies from the year 2019 onwards. The^7th applicant^shut down its operations from October, 2019 due^{to agitation of its} creditors, followed by Covid.19. Promoters of^{7th applicant groupof} companies started the^process of OTS with^{creditors as well as the} banks. Applicants received impugned^{sale notice dated 28.06.2023} claiming Rs.17,40,25,285.29ps, without^{issuance of any demand} notice, possession notice, notice of sale and^{auction sale notice of} the SARFAESI Act and the Rules^{thereunder'The respondent} clalmed that it took^{physicalpossession of the schedule properties} on 17.05.2022 without any^{proof. The impugnedsale notice dated} 28.06.2023 is infructuous as^{it was in the name of two deceased} persons namely s.veerappa Naidu and Ms. G.^Ramanamma.

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Respondent company filed^{reply statementpraying for} dismissal of the^SA in^{liminl as the SA is barred by limitation. The} SA is filed without challenging^{the symbolicpossessionnoticedated} L2,O7.2OZL , as such the^{applicantsare not entitled to any relief'} Applicants were chronic defaulters.^{Respondentlssued notice u/s} 13(2) of the SARFAESI^{Act dated 09.02.2021, but the applicant} refused to receive the same.^{Hencerespondent published Section} 13(2) notice in^{Nava Telanganaand Business Standard dailies on} 31.03.2021. There^{being no responseto Section13(2)notice,} respondent invoked^{Section 13(4) takingsymbolic possession vide} notice dated 72.07.2o2r'^{Sectlon 13(4) notice was publishedin} 'Hans India' and 'Rayalaseema^{Samayam' dated 19 07 2021'} Respondent took the^{physical possession of the property through} advocate commlssioner^{appointed in Crl.M.PNo 16 of 2022 and the} applicants have^{not resisted the same. However,applicants} encroached upon the^{propertysubsequently and pa.rked some} ,4W..,\EL^ |t/^'/'n')

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sA. 315/2023

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private buses. The sale notice has been sent to the^addressesof the borrowers and^{co-borrowersat as many as 79 addresses.} Notice sent to 12 addresses^{furnished by the 4th applicant has been} duly received. There is no^violation of^{rule 9(1). The subject} property was evaluated before fixing the reserve^{price.The sale} notice was uploaded in the^{website. In fact, the applicants} approached for OTS vide letter^{dated 02.07.2022. fhe salenotices} were sent to the^parties at the addresses^{furnishedby the} applicants at the time of^{sanctioning of the loan. In view of the} above facts and circumstances,^the allegations^{raised in the OA are} far from truth and accordingly respondent^{prayed for dismissal of} the SA in the interest of^justice.

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Both counsel reported no oral arguments. Perused the material brought on record.

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Learned counsel appearing for the respondent bank^filed memo on 07.08.2023 stating that the auction^pursuant to impugned sale notices was not held.

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Now the points that arise for adjudication are:-

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i) I hether the Applicants made out any valid ground for quashing the impugned sale notices dated 21.06.2023 and 28.06.2023 issued by the respondent bank against the SA schedule property under the provisions of Securitisation Acl?

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ii) To what relie./?

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Point No, (i):

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Applicants filed IA.2295123 seeking stay of auction sale proceedings scheduled on 04.08,2023 pursuant to impugned sale notices. When the IA came up for hearing on 07.08.2023, learned counsel appearing for the respondent filed ,a memo stating that firy,"."

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sA. 31sl2023

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auction scheduled on 04.08.2023 was not conducted for want of bidders. Accordingly, the SA becomes infructuous to that extent. However, the other issues raised in the SA are taken up for consideration as follows:

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Respondent bank filed Photostat copies of demand notice issued u/s 13(2) possession notice issued u/s 13(4), postal track repofts, publication of demand notice and possession notice and affixture of possession notice, vide material papers at pages 1 to 68 annexed to the reply statement respectively. A perusal of the same reveals no contravention of provisions of Sections 13(2) and 13(a) of the SARFAEI Act and the Rules thereunder by the respondent company.

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In view of the above facts and circumstances, I find that the applicants failed to make out any valid ground for interdicting the steps taken by respondent under the SARFAESI Act and Rules thereunder for recovery of its outstanding dues from the applicants. Accordingly, the SA is liable to be dismissed.

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Point No.(ai):

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