Dismissed

Mohd Anwar v. The Agrasen Coop Urban Bank Ltd.

DRT1 Aug 2025SA/161/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed a Securitization Application challenging the bank's physical possession of secured property. The court held that the 60-day period under Section 13(2) of the SARFAESI Act runs from the date of notice, not receipt, and found the bank complied with all procedural requirements including publication of notices.

What did the court decide?

The Securitization Application filed by the Applicant under Section 17 of the SARFAESI Act was dismissed, with pending interlocutory applications disposed of accordingly.

Mohd Anwar versus The Agrasen Coop Urban Bank Ltd. — Contract and Commercial Disputes | DRT (2025)

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IN THE DEBTS RECOVERYTRIBUNAL- IAT HYDERABAD

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DATED THIS THE O 1^ST DAY Otr AUGUST. 2025

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PRESENT: GUMMADI GOPICHAND, PRESIDING OFFICER

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SA.No. 16,1 /2023

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Mohd. Anwar, S/o. Mohd. Afzal, Aged 50 years, Occ: Business, R/o.H.No.5-7-541 & 542, Nampally, Hyderabad.

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Applicant.

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Versus

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The Agrasen Cooperative Urban Bank Ltd., Rep. by its Authorized Officer, D.No. 15-2-391 I 392 / I, Siddiammber Bazar Branch, Hyderabad - 500 012.

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Respondent.

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Counsel for the Applicant Sri T. Sridhar Reddg.

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Counsel for the Respondent Si P. Ramachndran.

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-:ORDERi

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The Applicants filed the present Securitization Application under section 17 of the SARFAESI Act, challenging the action of the Respondent to take physical possession of the application schedule property in pursuance of the Advocate Commissioner Notice d,t.15.O4.2O23, issued in Crl.M.P.No. 1327 /2023 on the file of Chief Metropolitan Magistrate, Hyderabad and in pursuance of the possession Notice dt. 19.01.2023, issued by the Respondent Bank u/s. 13(a) of the SARFAESI Act.

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

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.gi-

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The es of Rs. 1.OO crores each in two loan ln 1 the AUG":1tzsvear * br running Lodge business in the

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SA.No.161/2023

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schedule property, which was obtained by the.Applicant on lease. Thereafter, the Applicant purchased the schedule property from its owner by availing credit facilities to the tune of Rs.4.50 crores each sanctioned by the Respondent Bank in two loan account in the year 2027. Applicant closed the earlier loan accounts. The Respondent Bank sanctioned the above credit facilities and has also agreed to enhance the same after taking additional security and accordingly the Respondent Bank sanctioned additional loan. Thus, the total loan amount sanctioned by the Respondent Bank is to the tune of Rs. 10,95,00,000/-. The Applicant has been running the Hotel Business in the name and style of M/s. Rainbow International Hotel by obtained necessary approvals from the concerned authorities. The Applicant paid a sum of Rs.50,00,00O/- on 31.O3.2022 towerds the loan accounts but, the Respondent Bank claimed that from Aprll, 2022 onwards there was default of Rs. 1,67,0O,000/-.

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ii) During Covid- 19 pandemic, the Applicant's business underwent severe financial crises but, the Applicant paid substantial amounts towards the loan account. While so, the Respondent Bank, issued Demand Notice dt. 17.1t.2o22 u/s. 13(2) of the SARFAESI Act, claiming an amount of Rs. 1 1,88,19,9664 l- while the overdue amount was only Rs. 1,67,00,000/-. Immediately after receipt of the said notice, the Applicant approached the Respondent Bank and enquired as to why the account was classified as NpA even aJter payment of substantial amounts towards the loan account but, there was no response from the Respondent Bank. Thereafter, the Respondent Bank sent some persons to the schedule property and got affixed a notice dt.75.O4.2023, issued by the Advocate sioner, wherein 15 days time was given for handing over ffi"qq r $S.ssion^{of the scheduleproperty.At the same time, a} +^'..AE Notice dt. 18.01.2023, issued by the !,IEA.R&$ondent"iltn ,^{was served} on the Applicant. 01 AUC zffi ? )

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SA.No.161/2023

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iii) The Respondent Bank has issued the alteged possession Notice dt. 18.01.2023 u/s. 13(a), without giving 60 days time from the date of service of Demand Notice u/s. 13(2) of the SARFAESI Act, on the Appiicant and therefore, the said possession Notice dt.1g.01.2023 is not valid under law and also the said action of the Respondent Bank is against dictums laid down by the Honble Supreme Court and various High Courts. The Possession Notice dt. 1g.01.2023 was not served on the Applicant as per the Rules, 2OO2. ^fhe Respondent Bank has failed to affix the possession Notice on the schedule property and has also failed to publish the said notice in two newspapers within seven days. The action of the Respondent Bank in obtaining orders from the Ld. CMM, Hyderabad in Crl.M.P.No. 1327 12023 is illegal, and in violation of provisions of the SARFAESI Act and the Ruies, 2OO2. Hence, the SA.

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J- The Respondent Bank filed its Reply statement denying all the adverse aliegations made in the application. The contentions of the Respondent Bank, in brief, are that, the Applicant atong with Mohd Anwar, Mohd Basith, Mohd Hyder Parveez and Mohd Ibrahim availed loan from the Respondent Bank on 21.06.2017, 23.06.2017 to an extent of Rs.2.00 crores and Rs.9.00 crores on 29.O1.2021. The said persons have expressed their intention to create mortgage in respect of the properties mentioned in Sec. 13(2) notice as security for the said loans and executed the loan documents. After availing the said loans, the Applicant and others became chronic defaulters in the repayment of the loan amounts and the loan accounts were declared as NpA on 31.10.2022. T|ne Respondent Bank issued Demand Notice dt.17.11.2022 wls.l3(2) of the SARFAESI Act, which was received by the Applicant but there was no

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to the said notice. So, the Respondent Bank issued possession 1 .2023 and the said notice was published in the expiry of 60 days in the 'Financial Express' and^,Siasat, J^{o ilric'**':} dated 19.01.2023. Thereafter, the Respondent Bank

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SA.No.161/2023

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proceeded u/s. 14 of the SARFAESI Act and obtained orders from the ld. chief Metropolitan Magistrate, Hyderabad for taking physical possession of the application schedule property. The Respondent Bank has duly foilowed the procedure laid down under the SARFAESI Act and the Rules made thereunder and the SA filed by the Applicant is liable to be dismissed.

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Heard Ld. Counsels appearing for both parties.

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Now, the points that arise for consideration are;-

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(i) Whether the Applicant has made out any valid grounds for setting aside the proceedings initiated by the l"t Respondent Bank under the SARFAESI Act against the application schedule property?

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(ii) To what relieP

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Polnt No.(lb

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The Applicant has not disputed availing of credit facilities from the Respondent Bank and also creation of security interest over the application schedule properties in favour of the Respondent Bank. The Applicant has stated that, his business sustained losses during Covid_19 pandemic and even then he made substantial payments towards the loan accounts but the Respondent Bank classified the loan accounts as NpA and issued Demand Notice dt. 17.1 l.2ol2. per contra, the Respondent Bank contended that, after availing the loans, the Applicant and others became chronic defaulters and as such the loan account was classihed as NPA. The Applicant had admitted the receipt of Demand Notice 1.2022. If at all the Applicant was maintaining the loan account '--q=q paying the loan amounts, he would have definitely raised DJ ectlor\€l the said Demand Notice dt. 17. 1 1.2022, to which he is entitled to s. 13(34') of the SARFAESI Act. But, the Applicant has not a{1 01 AUP"IJH -; bjections to the Demand Notice dt. 17. 1 1.2022, issued ,i,4. , t^{11^} 'i,.n the SARFAESI Act, by the Respondent Bank. So, at this

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SA.No.161/2023

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belated stage, the Applicant cannot contend that the loan account was regular and the loan account cannot be classified as NPA. The next contention raised by the Applicant is that, the Respondent Bank, without waiting for the expiry of 60 days from the receipt of Demand Notice by the Applicant, has issued Possession Notice dt.18.01.2023 u/s.13(a) of the SARFAESI Act and that there is only 57 days gap from the date of receipt of Demand Notice dt.l7.ll.2o22, by the Applicant and the issuance of Possession Notice dt.18.01.2023 by the Respondent Bank and so the said Possession Notice dt.18.01.2023 is bad under law. The Respondent Bank, in its material documents filed along with the SA, filed copies of postal acknowledgements in respect of the Demand Notice dt.I7.ll.2o22, a perusal of which reveals that, the Demand Notice dt.l7.Ll.2O22 was received by the Applicant on 19.11,.2022. The Possession Notice issued by the Respondent Bank is dated 18.01.2023. There is 60 days gap, if the date of receipt of Demand Notice is taken into count. In this regard, it would also be just and proper to refer to Sec.13(2) of the SARFAESI Act, which reads as under:-

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" 13(2) Where any borrouter, tttho is under a liability to a secured creditor under a security agreement, makes any default in repayment of secured debt or any installment thereof, and his account in respect of such debt is classifed by the secured creditor as non-performing nsset, then, the secured creditor may require the borrower by notice in uiting to discharge in full his liabilities to the secured creditor within sixU days.{rom the date o.f notice failing which the secured creditor shall be entitled to exercise all or any of the rights under sub-section (4)."

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As can be seen from the above section l3(2), it is not 60 days from the date of receipt of the notice but "it is 60 days from the date of notice", the borrower is expected to discharge his liabilities in full. So, I do not find any illegality in the issuance of Possession Notice dt.18.01.2023 by the t Bank. Tlie Possession Notice dt.18.01.2023, issued by the k u/s.13(4) of the SARFAESI Act, has been duly received

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.$ t. In fact, the Applicant himself has filed a copy of the said

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ir*

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ri*t: along with the SA. The Respondent Bank, in its tS, filed copies of photographs depicting affixture of

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i. =i^{0 1"ildE'ffi} I!'"^l\ i:':'. t .i, Possesion on the schedule property and also copies of publication

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SA.Na.161/2A23

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of Possession Notice in English and Urdu newspapers dt.2O.O1.2O23. From the said documents it is very clear that the Respondent Bank has duly followed Rule 8(1) & (2) of the Security Interest (Enforcement) Rules, 2002, while issuing Possession Notice dt. 18.01.2023 uls.l3(4) of the SARFAESI Act. Since the Applicant has failed to discharge his liabilities in fu1l, the Respondent Bank proceeded u/s. 14 of the SARFAESI Act and obtained orders from the Ld. CMM, Hyderabad for taking physical possession of the application schedule property.

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So, in view of the facts and circumstances stated above, I hold that, the Respondent Balk has duly followed the procedure laid down under the SARPAESI Act and the Rules made thereunder while proceeding against the application schedule property, being the secured asset, to recover its legitimate dues from the Applicant. The Applicant has faiied to establish any valid ground for setting aside the steps taken by the Respondent Bank under the SARFAESI Act against the application schedule property. So, the present SA, which is devoid of merits, is liable to be dismissed. Accordingly, this point is answered against the Applicant and in favour of the Respondent Bank.

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Polnt No.liil:-

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In the result, the present Securitization Application is dismissed. 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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transcribed bg her, d)rrected, signed dnl. pronoun@d bg me in the open aun oft this tle

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DRT.I, HYDERAEAD.

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sd/(G. GOPTCHANDI PRESIDING OFFICER

Mohd Anwar v. The Agrasen Coop Urban Bank Ltd.

Case brief

What is this about?

What did the court decide?

Mohd Anwar v. The Agrasen Coop Urban Bank Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

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