Debts Recovery Tribunal dismissed an application challenging physical possession taken of mortgaged property and the validity of a sale notice under the SARFAESI Act, 2002, finding no procedure violation.
Application dismissed; no entitlement for re-delivery of schedule property.
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IN THE DEBTS RECOVERY TRIBUNAL. I AT HYDERABAD DATED THIS THE gTH DAY OF APRI L,2C)25 PRESENT: GUMMADI GOPICHAND, PRESIDING OFFICER
sA.No. 124,/2C.22
i.Jaithra Exim pvt.Ltd, ..,R:p.by its Managing Director L,n l:o., 1 -88/ 2,_de,ri sq"u.l Building Madhapur main Road, HVa*"Ola.
... Applicants
I .The Authorized officer State Bank of India, SAM Branch_Il,D.No.3_ 4_ lO 13 / A 1Sr floor, CAC, TSRTC gr" S;tiorr, Kachiguda, Hyderabad.
1sr floor, D.No.3_4_1013/A, __CAC, TSRTC Bus Station,' Kachiguda, Hyderabad Rispondents Counsel for Counsel for Sri Abhag Sinqh Sn G.prabhaiar Sharma 'dP -t-,\ 09tpq ':l -:1 1. u/s.i7 of the SARFAESI Act, 2OO2, ion of the Respondents in taking physical possessio" of ,fr" schedule Property pursuant to the orders of CJM cum principal Senor Judge, Prakasham District and also the Sale Nofice dt.25. 04.2022 issued by the Respondents for conducting
auction of the schedule property on 30.05.2022 and, to declare the same as illegal.
The Applicant companyavailed credit facilities from the sME branch of the Respondent Bank for its business purpose but due to severe recession in the market and covid pandemic, the business of the Appricant was affected and it could not repay the loan outstanding dues. So the Respondents declared the loan account of the Applicant as NpA. The 2.aAppricant is owner of the schedule property and mortgaged the same in favour of the Respondent Bank. At the time of purchase of the schedule property, the value of the schedure property is mentioned at Rs.7,33,85,000/- and in the schedule property, teakwood plantation has grown. The apprication schedule property is contiguous to another similar propertybelonging to a company known as centegic Resources p.Ltd. The entire property of the Applicant herein and the said company form one contiguous bit of land admeasuring Ac.40.g2 cents. out of the said rand, AC.15.96 cents belongs to the 2.,rApplicant herein and in the application schedule property, in a very minor extent of less than 300 sq.yds, there are constructions to an extent of 4s00 sq'ft' made for the purpose of storing imprements, toors, fertllizer, pestjei lestproduce. At present in the schedute o.nn&S.* Red Sanders, 5000 Malabar teakwood, gr$. ;"ffi,00 :.') -\t ango trees. ii ;t B I rpn 20lI i[ ii) "nttffiUrt sought -95l."..l.ry.rsionof theland rrom non- :-::.:,]"\gij- that from ou66araffiiiur I rvevertrreless, the ract remains g.,application schedule property, not one tree was cut and there is standing timber in the nature of teak
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wood plantation in the said premises and there is no commercial activity in the schedule property. The Respondents filed o'A'249/2o2o before this Tribunal against the Applicants and the same is pending.
2' The Respondents took physical possession of the schedule property on 16'02'2022 and thereafter issued Sale Notice dt.25. 04.2022 and published the said notice in New Indian Express fixing the date of auction of the schedule property on 30.05 .2022. The demand notice issued by the Respondents is not within the accepted parameters under law and possession notice was not published in two daily newspapers. In the proceedings before cJM, Addanki, there is suppression of the fact that there is a standing timber including teak wood plantation trees in the schedule property. Hence the SA.
said notice was affixed on the schedule property and also pubrished in two daily newspapers. Thereafter the Respondents issued pre_sale notice u/r 8(6) of security Interest (Enforcement) Rules, 2oo2 on 27.11.2020 and the said notice was served on the Applicants. Thereafter the bank approached principal Asst. sessions Judge_cum cJM, ongole u/s 14 of the Act, 2oo2 by filing crl.M.p.N o.4o/2o2r and the Ld.c.lM appointed advocate commissioner and the said advocate commissioner took physicar possession of the schedule property on 16.02.2022 and handed over the same to the Respondents. As the Applicants failed to repay the loan outstanding dues, the Respondent Bank once again issued Notice for sale dt.17.03.2022 u/r g(6) of Rules, 2oo2 and the said notice was served on the Applicants, M.Arjuna Rao, G.Sreenivas and Smt.D.Madhavilatha and returned on others. Thereafter,the Respondents issued sare Notice dt-25.o4.2022 by fixing the auction of the schedule property on 3o.os.2o22 and the said notice was published in New Indian Exprcss and Sakhi daily newspapers on 26-04.2022 and the said notice was also affixed on the schedure property. However in view of the stay granted by this Tribunal, auction was not conducted. So, there are no merits in the SA. Accordingly, Respondents prayed to dismiss the SA.
Heard Ld. Counsel for the Applicants and Ld. Counsel for Respondents. perused the material brought on record.
i) Whether the established anA ualid. grounds fo, challenging gfr* Responderuts in taking phgsical possessroa''of the schedule tt/s 14 of the SARFAESI Act, 2002 ?
na
iil whether the Appricant estabrished ana uarid grounds fo, chalrenging the sare Notice dt.25.04.2022 issued. bg the Respondentsfor conductirug auction of the schedure propertg?
iii) To what retieJ?
Points No.(i)&(iit:-
- During the course of arguments, Ld. Counsel for the Applicant and Ld. Counsel for the Respondents reiterated their respective versions as stated supra.
- The specific contention of the Appricants is that the Respondents have not issued possession notice to the Applicants and the said possession notice was not published in two daily newspapers and also not affixed on the schedule property and similarly, Sale Notice liable to be re-delivered.
10' In order to substantiate their contention, the Respondentsenclosed relevant materiar documents arong with the Reply filed by them. As per the said documents, it is clear that the Respondents issued demand notice dt'o6'o l.2o2o to the Applicants and the said notice is admittedly received by the Applicants and the Bank also filed postal acknowledgements evidencing the same. Admittedry, the Applicants have not submitted any objections in response to the said demand notice' So' the Respondents issued possession notice dt.2g-or.2o2o and sent the said notice to the correct address of the Appricants through regd' post and the said notice is received by the Applicants as evidenced by the postal track reports filed by the Respondents. The said possessionnotice is published in two daily newspapers as evidenced by the copies of paper publication and the said notice is also affixed on the schedure property as depicted in the photographs filed by the Bank. As per the documents fired by the Respondents, it is further clear that the Respondents issued pre Sale Notice dt'27'11.2020 and the said notice is received by the Appricants as evidenced by the postal track reports. Thereafter the Respondents proceeded u/s 14 0f the 'ARFAESIAct,2002 byfiling crl.M.p.No.4ol2021 and the Ld.cJM, ongole appointed advocate commissioner and the advocate commissioner also took physicar possession of the secu,reil_as$et and hand.d ou., the same to the bank by following thg;$ .mqiig,+r,:. Thereafter, the Respondents once again iss..rled,,rrotice tiar si6irq1,{yres, 2002 0n 17.03 .2022 and served the sEid notice o., +. Appl[a]L and others and thereafter issued salejiNoti".k$2pffi4:2r22 fdr conducting auction of the
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schedule property and the said notice was admittedry received by the Appricants and the said notice was published in Terugu and English daily newspapers as evidenced by the copies of paper pubrication and the said notice was arso affixed on the schedule property as depicted in the photographs filed by the Respondents. In the above circumstances, it is clear that the Respondentshave duly followed the procedure laid down under the provisions of SARFAE.I Act, 2002 and Rules, made thereunder in issuing demand notice, possession notice and sale notice in respect of the schedure property and there are no violations. As per the provisions of section 14 of the SARFAESI Act, 2oo2, the secured creditor is entitled to approach concerned cMM or cJM for taking physical possession of the secured asset and accordingly, the Respondents have hken physical possession of the secured asset by duly following procedure raid under the provisions of section 14 of the Act, 2oo2 and SO, the Applicants are not entitled for re-delivery of the schedule property. So far as the Sare Notice dt.25. 04.2022 is concerned, it is perfectry legal and valid and binding on the Applicants. However, no auction was conducted by the Respondents in pursuance of the said sale notice. Accordingly, these pointsare answered in favour of the Respondents and against the Applicants.
Point No.(iii):-
there are no merits.
(Dictated to the p.s transcribed 2y 1"r, corrected,:?:.d and pronounced. by me in the open court on this the gth daa of April, 2o2s).
RESIDING (c. copr OFFICER""f^fJ;
ffi'fffir AsstffgtCt?gY. * 6af-l,!-J YDHr''liif;P I'
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3 issues framed by the court
Whether the Appellants established valid grounds for challenging the recovery of secured assets under Section 14 of the SARFAESI Act, 2002?
Whether the Sale Notice dated 25.04.2022 for conducting auction is legally valid and binding?
Is the Applicants' request for re-delivery of the schedule property liable to be granted?
1 provisions across 1 enactments
Jaithra Exim Pvt Ltd
Jaithra Tripura JnanaSamardha Enterprises LLP
State Bank of India
Gummadi GOPICHAND
As recorded by the court registry
2 orders share this CNR
Judgements on the same questions, provisions and authorities, from every court
