Allowed

B T Publications v. Union Bank of India

DRT28 Aug 2024SA/99/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the applicant's application to set aside the possession notice issued by Union Bank of India due to a violation of Rule 8(1) of the Security Interest Enforcements Rules. Despite the auction not taking place, the court held the notice invalid but permitted the bank to issue a fresh compliant notice.

What did the court decide?

Sale Application allowed to the extent of setting aside the possession notice dated 03.06.2022 for violation of Rule g(1); order does not preclude fresh notice.

B T Publications versus Union Bank of India — Cheque Dishonour | DRT (2024)

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IN THE DEBTS RECOVERY TRIBUNAL^_ II AT HYDERABAD

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DATED THIS THE 28-rH DAY 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. 99 OF 2023

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,. ,/t.B.T. Publications RepbyitsProprietor Sri P. Maneesh S/oSriP.Sridhar Agedabot28years Occ: Business H.No.11-9-120/3/3C Street No.16 Vuayapuri Colony Kothapet Hyderabad-500035.
2. Mr.P.VaraPrasad S/oLateP.Satyanarayana Agedabout 64years Occ: Business,FlatNo.302 AbhyaPrada Residency M.No.4-9-182,HMTNagar NacharamVillage,UppalMandal Medchal-MalkajgiriDist.50007	6. .......Applicants.
Versus
Union Bankof India Repby its Authorised Officer Asset RecoveryBranch 249l3RT,1'tFtoor SRNagar MainRoad Hyderabad-500038.	.,,,..Respondent.
CounselfortheApplicants:Mr.	D,Raghavulu.
CounselfortheRespondent:Mr.	V. Sethu MadhavaRao. 6/'*tu

sA, 99 / 2023

-:ORDER:-

The Applicant filed the^{presentSecuritisatlonApplication} uls.l7 of the Securitization^{and Reconstructionof Financial} Assets and Enforcement of^{Security Interest Act, 2002} (hereinafter referred to as "SARFAESI^{Act 2002")assailinq} auction scheduled on^{10.03.2023 pursuantto salenotice} dated 01.02.2023.

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As^per the averments^{in SA, the contentionsof the applicants} in brief, are that the^{respondentbank issued the lmpugned} sale notice without there being^{complianceof concerned} provisions of SARFAESI Act and the Rules in^{servlngdemand} notice,^possession notice,^{notice of sale and valuationof the} property. The lmpugned sale notice has^{neitherbeen affixed} on the secured^ASSET nor^{publishedin two newspapers.In} view of these irregularities, applicants^{prayed for settingaside} the notice under challenge.

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Respondent bank filed reply^{statement denying the averments} in the SA ln toto. Even after^{extendingthe credit facilities} applicable to Covid^{Pandemic, applicants failed to clear the} dues as^per the agreed terms.^{Accordingly, respondentbank} invoked^provisions of Securitisation^{Act, by issuingdemand} notice u/s 13(2) dated 16.08.2021.^{The receiptof demand} notice has been duly acknowledged by^{2nd respondent-} mortgagor. With no response^{from the applicants,respondent} issued^possession notice dated^{03.06.2022,publishedin two} newspapers on 08.06.2022 and affixed on^{the securedasset} in compliance of rules 8(1) and 8(2) of the^{Security Interest} ,j)lttttg.-...n , J/'^t5u"

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sA. 99l2OZ3

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(Enforcement)^{Rules, 2002. Respondentbank compliedRules} 8(5), 8(6)^{and 9(1)of the Rules, 2OO2' The auction scheduled} on 11.05.2023^{was not materialisedHence the SA may be} dismissed.

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Learned counsel^aPPearlng for the applicant Prayed^orders Heard learned^{counselaPPearing}

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may be Passed^{on records'} the material^{brought on record'}

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for the respondent^Perused

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Applicants filed the^{SA on 08.03.2023 challenging the auction} of SA schedule^{property scheduledon 10 03 2023 pursuant to} sale notice dated^{01.02.2023.Respondentbank filedreply} statement on^{23.02.2024.As per the reply statement'the} auction scheduled^{on 10.03.2023was not materialisedfor} want of bidders.^{Therefore,the SA becomeslnfructuousas far} as the sale^{proceedings are conceTned'}

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6, As regards other^{contentions are concerned, respondentbank} filed^proof of^{serviceof demand notice However,respondent} bank has not^{placed on record proof of service of possession} notlce and its affixture^{on securedasset.Therefore,there is a} violation of Rule 8(1)^{of the Security Interest (Enforcement)} Rules, 2002. Compliance^{of Rule 8(1) is amandatory} requlrement. Non-compliance^{of the provision of Rule 8(1)} makes all further^{steps invalidas per the Securitisation Act'} However, in the^{case on hand,further steps like issuanceof} Rule 8(6) Notices and^{Auctlon Sale Noticeshavebecome} lnfructuous on account^{of the auctions not beingfructified'} ,119/.^">,r,

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Ul^'#""

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sA.99/2023

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In the light of the above facts and circumstances, applicants made a valid ground for setting aside the possession notice dated 03.06.2022 and accordingly, the SA deserves to be allowed to that extent.

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B. In the result, the SA is allowed setting aside the possession notice dated 03.06.2022 for violation of Rule g(1) of the Security Interest (Enforcement) Rules, 2002. However, this order does not preclude the respondent bank to issue possession notice afresh strictly in accordance with the provisions of SARFAESI Act and the Rules thereunder for recovery of its dues from the applicants.

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Consequently, Interlocutory Applications pending if any, shall stand closed. No order as to costs.

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Communicate a copy of this order to the parties concerned and upload in Web^portal.

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28"'dayof (Dictoted to Ausust,2024). the Steno, signed ond pronounced by me in the open court on this the

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frryA*, (:/ (RAMESHWAR KOTHE) PRESIDING OFFICER

B T Publications v. Union Bank of India

Case brief

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B T Publications v. Union Bank of India

Case brief

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What did the court decide?

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