Allowed

kankanala Swarupa and others v. Cholamandalam Investment and Finance Company Ltd.

DRT21 Feb 2025SA/164/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the applicant's Section 17 securitisation application challenging a possession notice issued by the bank. Finding the bank failed to file a reply or produce documents proving compliance with statutory provisions regarding demand notice and possession rules, the court quashed the notice. The bank was given liberty to proceed afresh.

What did the court decide?

The impugned possession notice dated 09.03.2023 issued against the schedule property is hereby quashed. The Respondent is at liberty to proceed afresh.

kankanala Swarupa and others versus Cholamandalam Investment… — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL - 1 AT HYDERABAD DATED THIS THE ZOTH DAY OF FEBRUARY, 2C.25

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PRESENT: SRI GUMMADI GOPICHAND, PRESIDING OFFICER sA.No. 164/2C23

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1.Smt. KankanalaSwarupa,

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W/o late KankanalaRajgopal Reddy, Aged 55 years, Occ:business, H.No.2- lO-1797, Bhagran agar, Karimnagar-505001

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Kankanala Madan Mohan Reddy, S/o late K.Rajgopal Reddy, Aged 32 years, Occ:business, H.No.2- 70- L7gT, Bhagranagar, Karimnagar-SO5OO1.

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K.Srikanth Reddy,

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S/o late K. Rajgopal Reddy, Aged 29 years, Occ:business, H. No.2- lO- L7^gT, Bhagranagar, Karimnagar-S05O01

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Versus

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Cholamandalam Investment & Finance Company Ltd., Rep. by its Authonzed officer, ll:p^{No.22,1"tfloor, KSL Towers,} Old Bazar Main road, Karimnagar

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Counsel for the Applicants Respondent

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; Sru T. Vijag Kumar
: Exparte

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ORDER

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The Applicants filed the present securitisation Application u/s. 17 0f the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (.ARFAESI Act, 2002) challenging the possession Notice dt.09.03. 2023 issued by the

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Respondent against the schedule property and to set aside the same as illegai and void.

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The averments made in the apprication, in brief, are that, the husband ofApplicant No. 1, late K.RajagopalReddy availed a housing loan to a tune of Rs.15 lakhs from the Respondent in the year 2019 and the borrower also took insurance policy from HDFC Life Group credit protect plus to secure the above said loan and he had been paying the instalments regurarry. A1l of a sudden, saidRajagopar Reddy died on 21.1 1.2o2o due to cardiac arrest and death craim was arso filed by the Applicants with the Respondent. But the Respondent failed to claim the insurance and all of a sudden, published the impugned possession notice dt.09. oa ,2023 in newspapers without issuing demand notice u/s 13(2) of the Act. The Respondent failed to folrow Rule 8(1)&(2) of Securiqr Interest (Enforcement) Rules, 2002 in taking possession of the schedule propert5z. Hence the SA.

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3' Sri vishnuvardhan, advocate though filed vakalat for Respondent, given up the same. No representation for the Respondent, counter and reply not filed and hence the Respondent was set exparte.

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Heard Ld. Counsel for the Applicants.

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Now the points that arise for consideration is

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i) Whether the Applicants haue established ang uatid. grounds for setting aside the po;"r?".spn,4rtiee dt.O9.03.2023 issued. bg the R e s p o n d e n t o n o, n nr'r't u-, gJ !, n - rW ; ; il To u.thawha t re liefr lieft r.' '' -Q 'i \ PointNo.(t) t 21frgrrx -d\ 6. |T lr,r],*:t"^ii$furesenr Lgp.{#lenging^{the proceedings} initiated by the Re 13(4) of the SARFAEST Act for taking symbolic pos application schedule property.

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But, the Respondent who invoked the SARFAESI proceedings against the schedule property, failed to justify their action by filing Reply and produce necessary material documents to prove that the Bank has strictly followed the provisions of SARFAESI Act and Rules framed thereunder while proceeding against the secured asset. The Respondent has not evinced any interest in contesting the matter even after giving several opportunities and faited to lile their Reply and material documents to disprove the allegations of the Applicants. In the absence of any material evidence to show that the Respondent Bank has duly complied with the mandated provisions of SARFAESI Act and Rules, 2oo2 while proceeding against the secured asset for taking possession u/s l3(a) of the Act, I hold that the Applicants have made a case for quashing the measures initiated by the Respondent against the sA schedule property under the provisions of the SARFAESI Act and Rules thereunder and as such, the SA is liable to be allowed.

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Point No.(ii):-

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In the result, SA 164123 is allowed.

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B. Accordingly, the impugned possession Notice dt.og.03.2023 issued by the Respondent against the schedule property is hereby quashed. However, the Respondent is at liberty to proceed afresh against the SA schedule property to recover their dues by duly following the provisions of SARFAESI Act, 2oo2 and Rules thereunder.

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