Dismissed

M S Royal Engineers v. Small Industries Development Bank of India

DRT1 Sept 2025SA/143/2023

Case brief

AI extract

What is this about?

Applicants challenged a possession notice under the SARFAESI Act. The tribunal observed that while the notice was issued, the respondents later issued a revised demand notice. Despite this potential change, the applicants failed to submit objections under Section 13(3A) to the bank, rendering the service adjudication infructuous. The application was dismissed on this merit.

What the court decided

AI extract

M S Royal Engineers versus Small Industries Development Bank of India — DRT (2025) — LawSathi Research

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IN THE DEBTS RECOVERY TRIBUNAL - 1 AT HYDERABAD DATED THIS THE 1 SI'DAY OF SEPTEMBER, 2C.25

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PRESENT: SRI GUMMADI GOPICHAND, PRESIDING OFFICER

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sA.No. 143/2c23

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1.M/s Royal Engineers Rep. by D.Chandra Shaker, 2- l-8- I 33 I NR, Saraswati Nagar Colony, Nagole road, Uppal,

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Medchal-Malkajgiri Dist. -5OO 039.

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Devireddy Chandra shaker, S/o D.Venkat Reddy, Occ:business, Villa No.212, Indu Aranya, Indu Haritha, I?.^{Bus Depot, BandlagudaGSI(SR),}

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R.R. Dist.-SOO 068.

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Devireddy Poornima,

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W/ o Devireddy Chandrashaker, Villa No.212, Indu Aranya, Indu IJaritha, lear^{Bus Depot, BandlagudaGSI(SR),}

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R.R. District-SoO 068

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... Applicants

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Versus

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M/s Small Industries Dcvclopmcnt Bank of India(SIDBI), Rep. by its Authorized officer G-1, Akira Shikara plaza, D.No.5-8 -196 to 2OZ , Opp. Intermediate Board, Jashbhag, Nampally, Hyderabad-500 0O1

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Counsel for th.e Applicants Counsel for the Respond.ent

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... Respondent bank

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; Sn Shra uan Kumar Ragi : Si P.Bhiksheswar

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This Applicarion is filed r_r/ s !^d,l'thcS nd Reconstruction of F-inancial Asscts and Enfo N t or s$trit1, rn Act, challenging the Possession Notice dt.14. dent in respect of the schedulc property and and arbitrary.

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The averments made by the Applicants in brief are as follows:

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Applicant No.1 is represented by Appiicant No.2 availed loan of Rs.33O lakhs under Secured Business Loan Scheme and Rs.66 lakhs under BCLGS-TWARIT from the Respondent. Applicant No.3 stood as guarantor and created mortgage in respect of the schedule property in security to the said loan facilities. Due to Covid-19 Pandemic, the Applicants No.1&2 could not pay some instalments and so, the Respondent initiated proceedings under the provisions of SARFAESI Act,2OO2 and issued demand notice dt.2o.12.2022 and possession notice dt.14.O3.2023 to the Applicants and the impugncd possession notice was neither published in two daily newspapcrs nor affixcd on thc schcdulc property and so, the said impugned possession notice is illegal and arbitrary. Declaration of the loan account as NPA is bad undcr law. IIence the SA.

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The Respondent filed their Reply denying all the adverse allegations made in the SA and contended that Applicants No.1&2 having availed loan from the Respondent, failed to repay the loan dues and so, the loan account was declared as NPA on 1O.O4.2022 and the Respondent issued demand notice dL.2o.12.2022 u/s 13(2) of the SARF'ABSI Act, 2OO2 and the said notice was received by the.Applicant No.2. As acknowledgements are not received from all the guarantors and mortgagors, a Revised notice dt.12.o2.2o24 was issued but the said notice was also unserved and so, again a Revised notice was issued on 28.O2.2024 and thc same was hand-clelivercd to the borrower and guarantors. After issuing thc demand notice dt.20. 12.2022, the Respondent issued possession notice dt.14.03.2023 u/s 13(a) of the SARFAESI Act, 2OO2 but the said notice was withdrawn since revised notice u/s 13-$l::r4f*:::iss.ugd. Hence the sA becomes infructuous. Accordin

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Heard Ld. Counsel for the Respondent. Peru

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Now thc points that arisc lbr conside ration arc

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i. uthether the SA becomes infructuous ?

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ii. To uthat relief ?

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Point JVo.(i):-

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During the course of argume,ts, Ld. counscr for the Appricants and Ld. counscl for the llcspondent rciterated thcir respective versions as stated supra.

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7' There is no dispute regarding the fact that Applicants No.l&2 availed loan from the Respondent whereas the Applicant No.3 stood as guarantor and created mortgage in respect of the schedule property and thereafter, the Applicants No.1&2 committed default in repayment of roan dues.

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8' The Applicants filed the present sA challenging the demand notice dt'2o'12'2022 and also possession notice dt.14.03. 2023 issued by the Resp<lndent' The contenti<>n of thc llcspondcnt is that Respondent issued Revised demand notice on 2g.o2.2024 and so, the impugned possession notice dt.14.03.2022 was withdrawn by the Respondent. As the Respondent issued fresh demand notice dt.2g.o2.2024, it is always open to the Applicants to submit objections as contemplated under section 13(3A) of the SARFAESI Act, 2oo2. But it appears that the Applicants have not submitted any such objections to the Respondent. So, in the present SA, the Applicants cannot challenge the action of the Respondent in declaring the loan account as NPA. So far as the impugned possession notice dt' 14'03.r9ffi.=r.!{-"0, the Respondenr has already withdrawn :1"::l:^{j:1?'ffi s4#"'r'}*;;;;;ffi ..,:TJ--",

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i i: r ra.r
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Point No.(ii):-

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In the result, sA 143/23 is dismissed as there are no merits.

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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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(Dictated to the P.S, transcribed by her, corrected, signed and pronounced bg me in the open court on this the 1e dag of September, 2025).

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sd/ - (G. GOPr CHAND) PRESIDING OFFICER

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TRUP G$PY .
o,:,W

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OFT.I, I'Y[}FRAS,4N

M S Royal Engineers v. Small Industries Development Bank of India

Case brief

What is this about?

What the court decided

M S Royal Engineers v. Small Industries Development Bank of India

Case brief

What is this about?

What the court decided

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Parties & counsel

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