Allowed

Ms Rav Smittens Opc Private Limited v. Canara Bank

DRT19 Aug 2024SA/80/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed a Securitisation Application filed by a company to set aside a possession notice issued by a bank. The court held that the bank failed to prove compliance with Rules 3 and 8(1) of the SARFAESI Rules regarding service of notices and affixture, though it reserved the bank's right to initiate fresh measures.

What did the court decide?

Securitisation Application allowed by setting aside the possession notice published on 26.11.2021 issued against the security asset schedule properties.

Ms Rav Smittens Opc Private Limited versus Canara Bank — Company and Corporate | DRT (2024)

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IN THE^{DEBTSRECOVERYTRIBUNAL-IIAT HYDERABAD}

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DATED^{THISTHE 19TH DAY OF AUGVST'2024}

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

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Securitization^{Application No'80 OF 2022}

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M/s Rav Smittens^{Opc Private Limited} i'l'^^'i" 'i.^{rli. nuiriiitheharadwaiLakinepallv} liJ rir<'ln"prrrv^{venkataRavinderRao} Aoed about³³ Years,^Occ:Business li'tiltl"O-ur^{prot'ruo.33, lanakpu ri Colonv} il;;i;;r,^{secunderabad,HYderabad}

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... ....APPlicant.

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Versus

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Canara^Bank ReD bv its^{AuthrolzedOfficer} Situated at^{MukramjahiRoad} Hvderabad^Branch NampallY,^HYderabad

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Counsel for^{the APPlicant} Ciunset^{ror aesPondent Bank}

......,Res7ondent'

:Mr. D.^Raghavulu

:Ms. A.^Sravanthi

The^{Applicantfiled the present Securitisation Applicationu/s 17} of the Securitizatlon^{and Reconstruction of FinancialAssetsand} EnforcementofSecuritylnterestAct,2002(hereinafter''theAct,,for short)^{to aside all proceedingspursuantto possession noticein} respect^{of SA schedule propertyand the sale notice dated 09 03 2022} fixing date^{of auction on 30 03 2022'}

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The case^{of the applicant as per averments of the application' in} brief,^is that^{the appllcant company availed variouscredit facilitiesfor} its business^{purpose against mortgage of SA schedulepropertiesas} security.^{The applicant paid instalments regularlytill Covid pandemic'} ,frg./-nt-w /^(/ '\qr"

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Without serving demand The respondent bank ilegaly no ctassified the toan "..;';:T:: tice u/r 3 and without serving' affixing and pubrishing the possession rn terest ( E n ro rce, " ",^{*,ll' ii : ff} ,. ,l:fi , ::1], ilt:,t^",.rT:,; auction notice dated 09.( 3 o. o 3. 20 22 No Rue 8(6) ;:i l,1,,,:::r';il:',"'::,:.r",T::: J; reserve price fixed was v( compared to market value of t' '"tt properties. The e-auction no *ut not affixed on secured asset as per Rule 8(7). Hence thrs ,o.t'tu

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The respondent bank f adverse avermen",. ; ;rfl . J:;lr#:"ffi:rlJ :,Hilr# alia, that the applicant Faited sanction and hence roan uaaa 'n^{tu'u,'"nt against agreed terms of} )unt had to be classified as NPA as per RBI guiderines. The demand dated 30'04'2027 was served on the appricant. As payment wlotice not made' possession notice dated o2.o7.2o22was issued u/s 13 ot tn" Act and the same was affixed on secured asset and oro,,to' shed in two leading newspapers on 26.11,2o2r thereby compried and 8(2)' Reserve price was rixed arter obtaining varuation ;:':t :1' to' registered valuer as per Rule 8(5)' Rule 8(6) notice was .urruo un there was 30 days gap. The applicant filed wp No.16047 of 2022 d granted interim stay subject to depositing Rs.50 rakhs *h,.h *u compried bv the appricant. rhe sA is riabre to be dismissed _,,r1t"J,::

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Heard learned counsel for the applicant and the learned counsel for the respondent bank. perused the material brought on record.

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During the course of arguments, both the learned counsel reiterated their respective version as in the application and reply

dy.,u\

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sA No 80/2022

statement. Learned^{counsel for applicantprays to allow the SA} considering the^{grounds urged in the application whereas, the learned} counsel for^{respondent bank sought for dismissal of the SA withcosts} since the bank^{has complied due procedureof law}

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Now, the^points that^{arise for consideratlonare;-}

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(i) Whether the applicants^{made out anyvalid ground to set} aside the measures^{initiatedby the respondentbankin} respect of SA schedule^{propertiesunder the provisions of the} Act, 2Oo2 and^{Rules framedthereunder?}

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(ii) To what relief?

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Point No.(i):-

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Since there is admission^{of availing variouscredit facilities from} the respondent^{bank, creation of mortgageover SA schedule} properties as security for^{repaymentand defaultin repayment' the} contention on^{classification of loan accountsas NPA is not acceptable'} 8. As^per docket^{proceedings, even the subsequentauction} scheduled on^{10.08.2022 did not materialize' There shouldnot be any} ambiguity that subject^{auction on 30} '03 '2022^{did not takeplace'} Hence the^{cause of actionas far as auction is concerneddoes not} survive.

¶29

The specific arounds^{urged in the application are;non-} compliance of^{relevantRules3, 8(1) andS (2) of the Rules' 2002 in} serving demand^{notice. possessionnotice. its affixture and} publication. Except stating^{that demand noticewas served' the} respondent bank^{has not placed proof of servicesuch as postal} receipts or acknowtedgement.^{The possessionnotj%,,t} .:^tu[d to b" (.7 //A^{<tq</sup> -/ 'tG^-}

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SA N0.80/2022

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issued on 02.07.2022 and rerying on pubrication of possession notice on 26'tl'2021 which was even prior to issuance of possession notice. No copy of possession notice is made avairabre for perusar. Even if it rs assumed that possession notice dated 23.11.2021 was pubrished on 26.L1.202L, no proof of affixture of possession notice on the secured assets is fired. In the absence of any proof, it has to be construed that the respondent bank faired to foilow Rures 3 and g(1) of Rures, 2002. Accordingly, the SA is to be allowed setting aside the possession notice published on 26.tL.202L in respect of SA schedule properties under Sec.13(4) of the SARFAESI Act.

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Point No.(ii):

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In the result, SA is allowed by setting aside the possession notice published on 26.IL.202L issued against the SA schedule properties under Sec.13(4) of the SARFAESI Act.

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However, this order does not preclude the respondent bank from initiating fresh measures stricily in accordance with the SARFAESI Act and Rures framed thereunder against the sA schedure properties for recover of legitimate dues.

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Consequenfly, the Interlocutory Applications pending if any, shall also stand closed. No order as to costs. Communicate a copy of this order to the parties concerned and upload in the web portal.

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(Typed to my dictotion by the pS, corrected, signed ond pronounced by me in the open court on this the 79th doy of August, 2024).

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,ffi#,,, PRESIDING OFFICEi

Ms Rav Smittens Opc Private Limited v. Canara Bank

Case brief

What is this about?

What did the court decide?

Ms Rav Smittens Opc Private Limited v. Canara Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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