Dismissed

M s Mourya Automotives v. The Hongkong and Shanghai Banking Corporation Ltd.

DRT23 Jun 2025SA/103/2024

Case brief

AI extract

What is this about?

This Debts Recovery Tribunal order dismissed a security agreement application filed by a borrower challenging a public sector bank for seeking physical possession of schedule property. The court held that the bank scrupulously followed the SARFAESI Act procedure, making the impugned notice legal and valid.

What did the court decide?

The senior president of the applicant was dismissed. Consequently, the interlocutory applications stand disposed of. No order as to costs.

M s Mourya Automotives versus The Hongkong and Shanghai… — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL - I AT HYDERABAD

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DATED THIS THE 23RD DAY OF JUNE ,2C25

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PRESENT: GUMMADI GOPICHAND, PRESIDING OFFICER

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sA.No. 1c.3/2C24

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MouryaAutomotives Rep. by its partner Sri Midde Shiva Prasad, S/o M.Balaswamy,

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Situated at 6-37, Srinivasapuram village, Vanapathy Mandal, Mahaboobnagr District.

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Sri Midde Shiva Prasad, S/o M.Balaswamy, Occ:business, R/o H.No.2-95/4, Karukonda, Bijanpalli,

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Ku m mera, Mehaboobnagar.

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... Applicants

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And

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The HongkongAnd Shanghai Banking Corporation Ltd., Rep.by its Authorized Officer Situatcd t 6-3- 1107&1 108, Raj Bhavan Road, Somajiguda, Hyderabad-sOO 082.

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.... Resporudent

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Si D.Raghuulu Si M.Sriniuas Reddy

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'l^tF 'i * 2 3^{JUti 2fr6 *.=} 1eI 1. Th the Applicants u/s.17 of the SARFAESI Act., the notice dt.27.O2.2024 issued by rhe Advocate com-rfri5Sioner for taking physical possession of the schedule property pursuant to the orders of Ld.CMM, Cyberabad,

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L.B.Nagarconsequentto the^possession Notice dt.14.09.2023 and to declare the same as illegal and void.

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The averments made in the application, in brief, are that:

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The Applicant availed loan from the Respondent by creating mortgage in respect of the schedule property. Thereafter due to covid-19, the Applicant could not pay some instalments and so, the Respondent declared the loan account as NPA and issued demand notice to the Applicants. The Respondent without issuing any possession notice u/s 13(4) of the Act, 2OO2, straightway approached Ld.CMM, Cyberabad and obtained orders for taking physical possession of the schedule property through advocate commissioner. The said advocate commissioner visited the schedule property and issued notice dt.27.o2.2024 to the Applicants to vacate the schedule premises. The impugned possession notice was not published in two leading newspapers and also not affixed on the schedule property. Hence the SA.

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The Respondent filed their Replydenying all the adverse allegations made in the SA and contended that the Applicant No.1 represented by Applicant No.2 availed loan from the Respondent by creating mortgage in respect of the schedule property and thereafter, failed to repay the loan dues. Accordingly, the Respondent issued demand notice dt.11 .o4.2o23uls 13(2) of the SARFAESI Act, 2oo2to the Applicants and the said notice was also published in two daily newspapers.Thereafter, the Respondent issued possession notice dt.14.09.2O23t4/**:${_a}.of the Act, 2OO2 to the Applicants and the said possgsq.ori.npiiQe was dftf.d on the schedule property and it was notice,lT$e Resporident appfla$fiea Ld.CMM, Cyberabad by filing Crl.M

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taking [4:"1^{possessigg ; of i' the schedule property. The said} .. .t}r* r,, .- .. =t''o'.':}^

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{;, ;::} F?., ;i :1",'A.liii'

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advocate commissioner appointed by Ld.cMM, cyberabad visited the schedule propert5r and issued notice d,t.27.o2.2o24 to the Applicants to vacate the schedule propert5r. Accordingly, Respondent prayed to dismiss the SA.

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I.leard Ld. counsel for the Applicants and Ld. counsel for the Respondent and perused the material brought on record.

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Now the points that arise for consideration are

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uhether the Applicants haue established. ang uatid ground.s for challenging tlle steps initiated. bg the Respondent fo, taking phgsical possession of the schedule propertg?

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ii. To what relief ?

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Point JVo.(i):-

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6' During the course of arguments, Ld. Counsel for the Applicants and Ld. Counsel for the Respondent reiterated their respective versions as stated supra.

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7 ' The undisputed facts of the case are that the lstApplicant availed loan from the Respondent and created mortgage in respect of the schedule property to secure the said loan. Thereafter, the Applicants committed default in repaying the loan dues and so, the Respondent issued demand notice dt.11.o4.2o23wls l3(2) of the SARFAEST Act,2oo2 and the Applicant ..trry.$.,tt'sriltF.\Aice. In fact, the Appticant atso filed copy o f the said,, ',?fF*w**Bdfi$1e"t6r6-gwil1F'qg€"\S

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i, f , rl ,rrn,r.r ***** 8. e $RRlicants is that without issuing rhe "p.din" . i^,.fr "&8"tlUllzffi^{fit0ntIUll (tt(D} th^i; nn"."""iffi, the n.=lpsfstraightaway, initiated steps before "irl1, ; i: ; l.:l1.j;i;#' 'r-'-.::,liri'rtld ",,.-1'

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the Ld.CMM, Cyberabad for taking physical possession of the schedule property through advocate commissioner without following the due process of law.

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9 ' Per contra, Respondent contended that they have duly foliowed the procedure laid down under the provisions of SARFAESI Act, 2oO2 and Rules made thereunder in issuing demand notice and possession notice to the Applicant and also in taking steps u/s 14 of the 3ARFAESI Act, 2oo2 for taking physical possession of the schedule property.

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10 ln order to substantiate their contention, the Respondent filed relevant material documents along with the Reply filed by them. As per the said documents, it is clear that the Respondent issued demand notice dt.11 .o4.2o23 u/s 13(2) of the SARFAESI Act, 2oo2 and sent the said notice to the Applicantsthrough Regd. Post and the same was received by thc Applicant.ln fact, the Respondent also published the said demand notice in two daily newspapers. Thereafter, the Respondent issued possession notice dt.14.09.2023 and the Applicant received the said notice as evidenced by the postal acknowredgements fired by the Rcspondent. The said possession notice was published in English and Tclugu daily newspapers as evidenced by the copies of paper publication filed by the Respondent and the said notice was also affixed on the schedule property as depicted in the photographs filed by the Respondent. Thus, the Respondent has scrupulously followed Rule 8(1)&(2) of Securi rest (Enforcement) Rules, 2OO2 in issuing

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possesslon

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-, ::1,,j fd(" 'i;liri f#, ..-..' 10. Aftert"$3". 13(a) of the SARFAEST Act, 2oo2, Try"mn"denoti&ju/s as per tffirovlsions of Section-T4 of SARFAESI Act, 2oo2, the secured creditor 'i,$,tffi.erty^{to ap.Bsaeh. the concerned District Magistrateor} chief J"dib'ia1i.'!^-#ti6t.ili"r taking physical possession of the secured asset. In the in'sta;.u-.ccs6;':after issuing demand notice and possession

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notice to the Applicant, the Respondent approached Ld. cMM, cyberabad u/s 14 of the SARFAESI Act, 2oo2 for appointment of advocate commissioner for taking physical possession of the schedule property. The Ld. cMM, after going through the record, appointed advocate commissioner and the advocate commissioner visited the schedule property and issued notice dt.27.o2.2o24d,irecting the Applicantsto vacate the schedule property within 15 days from the date of receipt of said notice and admittedly, the Applicants receivgd the said notice. So, the said notice is perfectly legal and valid.

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1 1' So, considering all the circumstances, I am of the opinion that the proceedings initiated by the Respondent before the Ld.CMM, Cyberabad u/s 14 of the SARFAESI Act, 2Oo2 for taking physical possession of the schedule property are quite legal and strictly in accordance with the provisions of SARFAESI Act, 2oo2 and there are no violations. Accordingly, this point is answered in favour of the Respondent and against the Applicants.

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Polnt No.(fi):-

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In the result, sA 103/24 is dismissed as there are no merits.

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13' Consequently, the Interlocutory Applications, pending if any, shall stand disposed of. No order as to costs.

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communicate a copy of this order to the parties concerned.

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bg her, corrected, signed and. pronounced" bg me in the open court on this the 23d

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7 X Jllil2ffi

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sd/(c. GoPr CHANDI PRESIDING OFFICER

M s Mourya Automotives v. The Hongkong and Shanghai Banking Corporation Ltd.

Case brief

What is this about?

What did the court decide?

M s Mourya Automotives v. The Hongkong and Shanghai Banking Corporation Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

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Statutes considered

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