Allowed

Smt Putha Vijaya Lakshmi v. Union Bank of India

DRT19 Feb 2025SA/16/2022

Case brief

AI extract

What is this about?

The Tribunal allowed the applicant's Securitisation Application to set aside the respondent bank's possession notice dated 20.09.2021. The court held the notice was vitiated because it was based on an invalid earlier demand notice and a subsequent fresh demand notice was defective and not properly served.

What did the court decide?

Securitisation Application allowed by setting aside the possession notice dated 20.09.2021 issued under Section 13(4) of the Act, 2002.

Smt Putha Vijaya Lakshmi versus Union Bank of India — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL - II AT HYDERABAD DATED THIS THE 19TH DAY OF FEBRUARY,2025

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PRESENT: SH. RAMESHWAR KOTHE, B.Com, L.LB. (Hons.), M.A. PRESIDING OFFICER

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Securitization Application No.16 OF 2022

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Smt. Putha Vijaya Lakshmi W/o late Sri p. Veera Bhadraiah Aged about 47 years, Occ:Household R/ o, D.No_.42/ 1 23, Jayanagar colony Kadapa-516002

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.......Applicant.

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Versus

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Union Bank of India 27/32, Ground Floor, NS plaza flilhu .?u1ur,.7^{Roads, Kadapa, ySR Kadapa} Rep by its Authorized Officer

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... .Respondent.

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Counsel for the Applicant : Mr.V.V. Ramana Counsel for Respondent : Mr.V. Sethu Madhava Rao

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-:ORDER:-

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The Applicant filed the present Securitisation Application uls L7 of the securitization and Reconstruction of Financiar Assets and Enforcement of security Interest Act, 2oo2 (hereinafter referred to as "the Act") to set aside all the measures of respondent under sec.13(4) of the Act incruding the e-auction sare notice dated 13.12.2021 fixing auction on 20.01.2022 in respect of the SA schedule properties.

¶12

The case of the applicant, in brief, is that her husband viz.,Mr. Putha Veerabhadraiah during his rife ume avaired oD facirity of Rs.11 lakhs and further enhanced to Rs.75 rakhs from the respondent bank, for his proprietary concern in the name and style of M/s New Sri AY* Lv 1o(>

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Pace2of,

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sA No'16/2022

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Parameswara^{Handloomsand also availedtwo housing loans and} createdsecurityinterestovertheapplicationscheduleproperties. After^{the demise of Mr'Puthaveerabhadraiah'the applicantcouldnot} handle^{the business and hence businesswas stalled Therespondent} classified^{the loan accountas NPA on O1'032021 and issuednotice} dated^{15.04.2021 forRs' 1'05'75',339/- and without withdrawing the} same^{again issuedSec 13(2) demandnotice on 1O'08'2021 Before} expiry^{of sixty days from10 08'2021respondentbank issued} ,"rr"*,""^{notice dated 20'Og '2O2:, and thereforepossession notice} isVitiated.Thepossessionnoticewasnotpublished.ThoughSoD account^{is coveredunder India First Life Insurance policies'the} respondent^{is not cooperating in getting insurance amount'Thee-} auction^{sale noticedated 16 11 2021 was issued based on demand} notice^{dated l5'O4'2027 which was not in accordance with law'} Reserve^{price was fixed withoutany prudent manner' The auction} sale notice^{was not affixedas per Rule 8(7) of Security Interest} (Enforcement)^{Rules,2002 ("Rules" hereinafter) The OTS offerfor} Rs.90^{lakhswas rejectedafter payment of Rs'10 lakhsAfter} persuasion^{only,two housing loanswere closedon 20'10'2021 after} receipt of^{insuranceamount' All the measures of respondentare} illegal and^{contrary to law and hence liable to be set aside'}

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g. ih" respondent bank^{filed reply statement'While denyingthe} adverseavermentsofapplicationasuntrue'untenableand unSustainable,itissubmlttedinteralia,thatinitiallyMr.P.Veera Bhadraiah^{as proprietorof M/s New Sri Parameswara Handloomsand} the aPplicant^{approachederstwhile Andhra Bank Kadapa Branch for} occ limit^{of Rs.15lakhs which was sanctioned and enhanced to} Rs.95 lakhs between^{2006 and 2016 at their request SOD was} renewed to^{Rs.95lakhs vide sanction letter-Slated 29 05 2018The} ffi*e

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Page 3 of 7

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SA No.16/2022

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borrower created mortgage by deposit of title deeds pertaining to application schedule properties and executing registered MoDT. As the borrower committed default in repayment, the loan account became NPA on 01.03.2021 and the respondent invoked provision u/s 13(2) and issued demand notice dated 15.04.202L. As acknowledgements were not received, the respondent bank issued another demand notice dated 10.08.2021 otherwise there was a gap of sixty days from demand notice to issuance of possession notice dated 20.09.2021. The possession notice was sent by registered^post, published in 'Andhra Jyothi' and 'The Hans India' newspapers on 25,09.202L besides affixture on secured assets. Valuation report was obtained from approved valuer of the bank on t3.02.2021, fixed the reserve price. SOD llmit is not covered under any insurance and no amount was debited towards insurance premium. The OTS proposal was rejected since the offer was too low and not acceptable to the bank. Rule 8(6) notice was served applicant. E-auction sale notice was published but the auction did not materialize for want of bidders. Though the applicant is realizing good amount towards rents out of the schedule property, she is not depositing any amount to the loan account. Being legal heirs of late Mr. Putha Veerabhadraiah, the applicant and their son and daughter are liable to discharge the liability. Therefore, SA is liable to be dismissed.

¶20

Learned counsel for applicant reported no oral arguments but filed written arguments, perused the same and material documents placed on record. Heard learned counsel for the respondent bank.

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The contentions of learned counsel for applicant, as per written arguments, are that the applicant approached the Hon'ble High Court by filing WP No,1980/2022 and in compliance of direction therein, the A*{r

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Page 4 of 7

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sA No.15/2022

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applicant deposited an amount of^{Rs.29,08,000/-towards25olo of} debt amount. Without deducting^{the said amount and in contempt of} lnterim orders, without serving^prior to sale^{notice underRule 8(6),} the respondent lssued e-auction sale^{notice dated 04.03.2023fixing} auction on 2A.O3.2023. The signature on^{acknowledgementof} demand notice is forged and not signed by the applicant.^The possession notice was also not served. There is violation of^provisions under Rules 8(5), 8(6), 8(7) and 9(1) of the^{Rules,2002 and hence} sA deserves to be allowed.

¶25

During the course of arguments, learned counsel for^respondent reiterated the version as in reply statement thau due to^default committed by the applicant in^payment of^{loan instalments, it became} NPA followed by measures under the SARFAESI Act. The^demand notice dated 75.04.2021 under Sec.13(2) was served on^the applicant. Slnce acknowledgement was^{not received another demand} notice was issued on 18.08.2021. Keeping a gap of more than 60 days from demand notice,^possession notice was issued on 20,09.2027 under Sec.13(4) of the Act. The^{possession notice was} published on 25.09.2021 and affixed on secured asset. According to learned counsel, the respondent bank has duly complied the Rules 8(1) and 8(2) of the Rules, 2002. The SOD account is not covered under any insurance^policy nor any amount was debited towards insurance amount. The auction on 20.01.2022 did not materialize for want of bidders. The OTS proposal was rejected as the offer was low and not acceptable to the respondent bank. In spite of^gettinggood amounts towards rents on secured assets, the applicant is not^paying any amount to the loan account. Learned counsel submits that there are no merits in the SA and deserves no consideration and %*

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Page^{5 of 7}

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sA^No'16/2022

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aPPlication^{with exemplarY}

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accordingly^{he would pray to dismiss the} costs.

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The Points^{for considerationare as follows : -}

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ii',n","!ililo:;:"'iX'::'

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'',tri!!:r:::fr2{:iit^:1,1!;

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iD^{To what relief?}

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Point^No'(i):

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B.^{rhe fact not disputed is that the applicant^Tt:.:::":":r:i;} l;'."lll^{:,:';illrutrr.nu' avaired orisinar and renewedcredit} facilities^{including housing loans' The last beingSOD facility of Rs'95} lakhs^{in the year 2016' It is also not in dispute that the application} schedule^{properties are mortgaged properties securingthe loan} facility.^{Admittedlythe applicantwas not in a position to handle the} handloom^{business subsequentto demiseof her husband'}

¶36

The auction on^{20.01.2022 impugnedin the applicationdid not} materialize for^{want of bidders' Though the applicant filed an} amendment^{petition pertainingto subsequent auction notice dated} 04.03.2023,^{the same was not pursued' However'this Tribunal} granted interim stay of^{e-auction scheduledon 28'03'2023reserving} theissueforexaminationinfurtherproceedingsthattheamountof Rs.29,08,000/- deposited^{by the applicant towards compliance of} Hon,b|eHighCourtinterimorderinWPNo'1980of2022hadnot been adjusted in the^{e-auction sale notice, since the auction did not} takeplace,Idonotdeemitnecessarytoconsidertheissues pertaining to the auction sale^{notices dated t3'12'202Land} 04.03.2023.

¶37

owo

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page 6 of 7

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sA No'15/2022No'15/2022 10' The main coDtenrin,. ^r -, of the applicar issued two ourunr""n''on is that the respondent dated 1o.og .rorr.'notices "'" ',-."*ont 15'04'2021 and another expiry of mandatorywhereas^,o"urr"n-i was issued before 10.08.2021. rn" ..1t'ouv"to'l'i'uo,o''t" since acknow,"rr","i?",iji[iHfl^{:"[.ff]:::;:H'il::} 0,n". demand notice was issued on 10.0g.2021. I am not incrined , o t accept such submission. when a fresh notice was iq.,,-.lr^-':^l:" ;;,,,,::.;;.;;;;J::,;:::,:.f;::::liT"il:.;ff^:."1'"T;

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sA No'15/2022No'15/2022

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A perusal of subsequent demand notice dated 10.08.2021 would reveal that the respondent bank did not issue tn" ,ur" to uff the legal heirs of rate Mr, putha veera Bhadraiah and the respondent bank was also negligent in wrongly mentioning the name of firm as 'star werd Mesh Industry' which was not the subject account. once a fresh demand notice was issued, the respondent bank shourd have waited till expiry of sixty days as mandated under Sec,13(2) of the Act, 2002 and if no payment made thereafter, then it should have issued the possession notice under Sec.13(4) of the Act. In the present case, on one hand the possession notice was issued basing on demand notice dated 15.04,202I which was not in force and on the other hand, the fresh demand notice dated 10.08.2021 itself was defective and therefore, the further proceedings under Sec.13(4) of the Act, 2002 would stand vitiated.

¶42

In view of the above observations, I find that the applicant made out a valid ground to set aside the possession notice dated 20,09.2021 issued by the respondent bank under Sec.13(4) of the Act, 2002 against the SA schedule property and accordingly SA deserves to be allowed /t%"s

Page^{? o{ 7}

SA No.16/2022

Point^No.(li):

13.^{In the result, the present SecuritizationApplication is allowed} by setting^{aside the possessionnotice dated 20'Og'2021 issued by} the respondent^{bank under Sec l3(4) of the Act' 2002 in respectof} the SA^{schedule Property;}

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14.^{However,this order does not preclude the respondentbank} from initiating^{the measuresafreshstrictly in accordancewith the} provision of the^{Act, 2002 and Rules thereunder' In that event' the} amountofRs.29,08,000/-,ifpaidbytheapplicanttowards compliance of^{interim order passedby the Hon'bleHigh Court' shall} be considered^{with retrospective dates of deposit and adjusted in the} outstanding^{amount in freshnotices'}

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Consequently,^{Interlocutory Applications pending, if any, shall} stand closed.

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No order as to costs.

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Communicate a copy of this order to the^{parties concerned and} upload in the official website.

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(Typed to my dictotion by the PS, corrected, signed ond^pronounced by^{mein the opencourt on this} the 19'h doy of Februory,2025).

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ESHWAR KOTHE) PRESIDING OFFICER

Smt Putha Vijaya Lakshmi v. Union Bank of India

Case brief

What is this about?

What did the court decide?

Smt Putha Vijaya Lakshmi v. Union Bank of India

Case brief

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