Allowed

G Aditya v. India Resurgence Arc Private Limited

DRT15 Dec 2025SA/151/2023

Case brief

AI extract

What is this about?

Asserting failure to issue a possession notice under Section 13(a) before invoking Section 14 proceedings, Applicants challenged the Debts Recovery Tribunal's action. The Tribunal quashed the measures for taking physical possession due to lack of evidence proving statutory compliance.

What did the court decide?

Proceedings initiated under Section 14 for taking physical possession of the schedule properties through the Advocate Commissioner are quashed. The Respondent is at liberty to proceed afresh following

G Aditya versus India Resurgence Arc Private Limited — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERYTRIBUNAL.I AT HYDERABAD

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DATEDTHISTHE 1 sTH DAYoF DECEMBER, 2C25

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PRESENT: GUMMADI GOPICHAND, PRESIDING oFFICER

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sA.No.151/2C23

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Between:

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l.Sri G.Aditya, S/o Sri G. Somasekhara Rao, Aged 48 years, R/o Plot No.81/1, Old Marredpally, Sec.bad-So0 O26.

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Sri G. Somasekhara Rao, S/o G.Narayana Rao, Aged 81 years, R/o Plot No.S1/ 1, Old Marredpally, Sec.bad-S00 026

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...Applicants

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Versus

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The Authorized Oflicer, Omkara Assets Reconstruction p.Ltd. Regd. office at 9, M.P.Nagar, lsr street, Kongu Nagar Extension, Coimbatore, Tirpur-641607.

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..Respondent

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Counsel for the Applicants M/ s R.R. Associates Counsel for the Respondent Sn. V. Santosh

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Reserued on Pronounced on Uploaded to the Website on

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06.11.2025 15.12.2025 15.12.2025

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.:ORDERi

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The Applicants filed the under section 17 of the SARFAESI Act, initiated by the ,.* $ oJB Respondent for taking cal posseSSion of property pursuant to the orders of rvrnalHS,#6u&Etn crt P.No.472/23 and to declare the same as n

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*'#

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The averments made by the Applicant in the application, in brief, are as under:-

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i. The Applicants avafled a loan of Rs.42 lakhs from M/s India Bulls Financial service Ltd. for construction of shops in the mortgaged property and subsequentry, they transferred t.I.e said loan account to Religare Finvest Ltd(RFL). The Applicants executed an alleged unregistered Agreement dt.24.o6.2olo for enhanced loan amount of Rs.6l lakhs along with interest @ 16.50/o p.a. and taken signatures on blank documents and the Applicants arso created mortgage against the B schedule property. Thereafter, the Applicants could not pay some instalments due to financiar diffrculties and in view of the return of the blank signed cheque given by the Applicants, Religare Finvest Ltd filed criminar complaints against the Applicants.

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ii. Thereafter, the Religare Finvest Ltd filed application u/s 9 of Arbitration and conciliation Act, 1996 in oMp No. 1 020 I 2or2 before the Hon'ble High Court of Delhi to restrain the Applicants from disposing, selling or alienating the alleged mortgaged property and the said application was allowed on 09.11.2022.

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In pursuance of the said order dt.09. I l.2}l2, RFL appointed

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Arbitrator and the said Arbitrator passed award dt.21.OS.2Ol4 directing the RFL to recover the claim amount from the date of legal notice dt. 17.09.2012 and thereafter, the said OMp No. 1020 l12 was withdrawn by the RFL. However, the Applicants filed an application to set. aside award dt.O1.05.2014 in OMp

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No. 1038/ 14 Court of Delhi and the same

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was

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l, - -. -

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lV. The A and mandatory injunction

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in O.S.No.S before the Honble XVII Addl. Sr. Civil Judge ,".1

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City Civil Court, Hyderabad to declare the arbitration proceedings as null and void and the Applicants also filed Appeal in CCCA No'L22/rs before the Hon'rrre High court of Hyderabad to set aside the order passed in I.A.219/ 15 in O.S.No .522/ tsand the sarne was dismissed by the Hon,ble High Court.

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v. Thereafter, the Respondent herein issued demand notice dt'o7.o7.2o2o u/s r3(2) of the sARFAESI Act,2o02 stating that RFL has unconditionally assigned all its rights, title and interest including the securit5r interest in favour of the Respondent vide Deed of Assignment dt.05. I l.2}lg and on receiving the said notice, the Applicants raised objections u/s l3(3A) of the sARFAESI Act, informing that dispute in between the parties was concluded by the Hon'ble High Court of Delhi in OMp No.1038/14 and the alleged claim is barred by limitation. Thereafter, the Respondent without issuing possession notice u/s r3(a) of the sARFAEST Act, 2oo2 straightaway initiated proceedings u/s 14 of ttre SARFAESI Act, 2OO2 beforc the Ld.CMM, Hyderabad without disclosing the facts. The Respondent has no right to take physical possession of the schedule properties. Hence the SA.

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3' The Respondent fired their Reply denying alr the adverse alregations made in the Application and contended that

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i. The Respondent availed loarr of Rs.6l lakhs from the Respondent

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company in 20lO and created mortgage against the schedule

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property. The another loan of Rs.12 lakhs from

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the Re -t^.i:r 1l and created mortgage over B schedule i,p.rjaperty. loan facilities, the Applicant ndent company filed OMp

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gh Court of Delhi was pleased from disposing of or selling

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or alienating the propert5r subject to RFL initiating arbitration proceedings within two weeks. The Arbitrator passed an award dt.27.O8.2O12 and challenging the said order, the Applicant filed appeal No. 17/ 13 and the same was allowed by an order dt.O5.l2.2ot4. Later the Arbitrator passed an award on2l.OS.2O!4. Again challenging the said order, the Applicant fired Section 34 application before the Hon,ble High Court of Delhi by way of OMp No.1O38/ 14 and the Honble High Court of Delhi allowed the same. The said order does not speak about not to initiate any legal action against the Applicants.

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Thereafter, the Respondent initiated SARFAESI proceedings and the Applicant challenged the same before the Hon,ble High Court of Telangana by firing w.p.No.r3424 l20 and the said writ petition was disposed. No court has given any finding that Respondent or ARC cannot institute any case against the borrower as the RFL lost their right to claim.

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1r1. The Applicants are chronic defaurters and fa,ed to adhere to the terms and conditions of the loan agreement and committed default in repayment of dues. So the loan account was classilied as NpA on 28.02.2013 and demand notice was issued on OZ.OT.2O2O u/sec.13(2) of the SARFAESI Act, 2002. Thereafter the Respondent filed an application before the Ld. CMM, Hyderabad u/s 14 of the SARFAESI Act,2OO2 for taking physical possession ofthe schedule properties. Accordingly, there are no merits in the sA and the same is liable to be dismissed.

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Heard pplicants and Ld. Counsel for the

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Respondent ts.

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Now, the n are,-

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Wheth.er the Applicants haue mad.e out anA ualid ground.s for setting aside tle proceedings initiated bg tlle Respond"ent under section 14 of the SARFAESI Act, 20O2 for taking phgsical possession of the application schedule properties through ad.uocate commissioner?

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ii) To u.that relief?

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Polnt No.ll)t

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6' There is no doubt regarding the fact that the Appricants availed credit facilities from the Respondent and created mortgage over the schedure properties' Admittedly the Respondent initiated Arbitration proceedings and the said proceedings are chalrenged by the Appticants before various Courts. Simultaneously, the Respondent has also initiated proceedings under the SARFAESI Act,2OO2 against the secured assets to recover the outstanding dues and challenging the said proceedings initiated by the Respondent u/s 14 of the SARFAESI Act, 2OO2 for taking physical possession of the schedule properties, the Applicants liled the present SA.

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7 ' The specific contention of the Appricants is that the Respondent invoked the arbitration proceedings for craiming the disputed amounts from the Applicants and the same was concluded by the Hon,ble High Court of Delhi and so, the proceedings initiated by the Respondent under the provisions of SARFAESI Act, 2002 are not maintainable. The further contention of the Appricants is that without issuing possession notice u/s l3(a) of the Act, the Respondent straightway initiated proceedings u/s 14 ofthe SARF 2OO2 for taking physical possession of the

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schedule proceedings are null and void.

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But the ,^the Applicants availed

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loan facili executing loan agreement and

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Q'm#

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the said loan facilities are secured by creation of mortgage against the schedule properties and thereafter, they committed default in repaying the loan dues. It is further contended that there is no bar or order against the Respondent in the oMp order about not to initiate any legal action against the Applicants and the RFL has lost their right to claim. so, the Respondent initiated proceedings against the secured assets under the provisions of SARFAERSI Act,2OO2 to recover their dues.

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However, the Respondent though contended that they have folrowed the procedure contemplated under the provisions of sARFAESI Act,2oo2 in issuing statutory notices to the Applicants and also in proceeding u/s 14 of the SARFAESI Act, 2oo2, not chosen to file any material documents in support of their contention. There is no dispute regarding the fact that Demand notice dt.o7.oz.2o2o issued by the Respondent is admittedly received by the Applicants and the Applicants arso raised objections in response to the said notice. However, when the Applicants are specifically contending that the Respondent did not issue any possession notice before initiating proceedings u/s 14 of the sARFAESI Act,2oo2 for taking physical possession of the schedule properties, the burden lies on the Respondent to prove that they issued the possession notice by duly following the procedure by frling material documents. But the Respondent failed to file any material evide nce to disprove the allegations of the Applicants. In the absence of any materiar evidence to show that the r"t Respondent has dury complied with the mandated provisions of SARFAESI Act and Rules, 2002 in taking steps u/s 14 of the SARFAESI Act,2oo2 for taking physical possession of the schedure properties pursuant to the orders of Ld.CMM, Hyderabad, I hold that the

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a case for quashing the measures iniliated bv the schedule properties under the provisions of thereunder and as such, the SA is liable to

Polnt No,(ii)i

In the result, SA l5l 123 is allowed. Accordingly the proceedings initiated by the Respondent for taking physical possession of the schedule properties through advocate commissioner pursuant to the orders of Ld.CMM, Hyderabad in Crl.M.P.No.4l2/23 are hereby quashed. However, the Respondent is at liberty to proceed afresh against the SA schedule properties to recover their dues by duly following the provisions of SARFAESI Act, 2OO2 and Rules made thereunder. No order as to costs.

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1 1. 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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(Dictoted to the Privdte Sectetory, tronsoibed by her, corrccted, signed dnd prcnounced by me in the open court on this the 75k doy ol December,2O25).

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.ffi<br>B'1slEll{tr|-:
W,--'#

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sd/(G. coPrcHAND) PRESIDING OFFICER

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i''li''ri, I-i YDER{8AD.

G Aditya v. India Resurgence Arc Private Limited

Case brief

What is this about?

What did the court decide?

G Aditya v. India Resurgence Arc Private Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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