Dismissed

Sri Santosh Kumar Gumpanpally v. Indian Overseas Bank

DRT29 Apr 2025SA/185/2024

Case brief

AI extract

What is this about?

This Securitization Application filed by borrowers challenging the bank's physical possession of secured property was dismissed. The Tribunal held that the bank followed due procedure under the Securitization Act, 2002, with notices deemed served and physical possession legally taken under Section 14.

What did the court decide?

The Securitization Application is dismissed. Consequently, pending interlocutory applications stand closed. No order as to costs.

Sri Santosh Kumar Gumpanpally versus Indian… — Contract and Commercial Disputes | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL _ II AT HYDERABAD

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DATED THIS THE 29TH DAY OF APRIL, 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.1B5 OF 2024

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Sri Santosh Kumar Gumpanpally S/o Mr. G. Krishna Murthy Rao Aged about 37 years, Occ;Business R/o Plot No.14, Indraprastha Colony Behind Ford Service Centre, Fathullaguda Hayathnagar, KV Ranga Reddy Distrilt Telangana-500 068

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Smt.Divya Sree Dhage W/o Santosh Kumar Aged about 35 years, Occ:Housewife R/o Plot No.14, Indraprastha Colony Behind Ford Service Centre, Fathullaguda Hayathnagar, KV Ranga Reddy Distri-t Telangana-500 068

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Versus

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.......Applicants.

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Indian Overseas Bank Rep by its Authorized Officer Situated at Rashtrapathi Road Branch 4-2-25, 1't Floor, Kasuva Complex Rashtrapathi Road, Secunderabad-500003

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... .Respondent.

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Counsel for the Applicants : Mr.D. Raghavulu

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Counsel for Respondent Bank : Mr.Gampa Rangaiah

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-:ORDER:-

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The Applicants filed the present Securitisation Application u/s 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2OO2 (hereinafter referred to as "the Act") to set aside the action of respondent bank in taking physical possession of the application schedule property in pursuance /nYE -.-\.^Lq //^{--A.v -.}

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sA No'18s/2024

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Page 2^of 5

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of Warrant^{in Crl'MP No'516 of 2023 on the file of learnedChief} Metropolitan^{Magistrate,Medchal-Malkajgiri District and all other} measures^{under Sec'13(4) of the Act' 2002'}

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2.Theavermentsoftheapplication,briefly,are;-thatafter availing^{housing roan of Rs.1.44crores the applicantscommitted} default^{in payment due to business losses' Without heeding to the} request^{of the applicantsto regularizethe account by accepting} overdue^{instarments,the respondentbank proceeded to crassify the} account^{as NPA and initiate Securitization proceedings'Demand} notice and^{possessionnotice dated L4'06'2O23 were not served'} possession^{noticewas not affixed on secured assetand published as} per Rules. Without^{following due procedure'the respondentbank} resorted to^{take action for physicalpossessionof the application} schedule ProPertY'^{Hencethis SA'}

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The^{respondentbank filed reply statement alongwith} documents.^{The submissions, briefly,are that the accountbecame} NPA on^{77.02.2023as per RBI guidelines' due to failure of applicants} in repayment^{as per agreedterms and conditions of sanction followed} by initiation^{of Securitization proceedings'The demand notice dated} 21.02.2023^{u/s 13(2) for Rs'1,48'82'g}5l-as on 19'02'2023was} issued on^{01.03.2023as the notice was retuned unserved'The} application^{schedulepropertyis also an extended securityfor the loan} availed by^{M/s Anaga Industries PrivateLimited' The possession} notice dated^{L4.06.2023 u/s 13(4) of the Act was sent to applicants'} got affixed on the^{property and published in 'Mana Telangana'and} .Business Standard" Telugu and English newspapers'^{A pre-sale} notice was^{also issued on Ol'07 '2023'After respondentbank} obtainedwarrantandadvocatecommissionerissuedVacatenotice ffir"*

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Page 3 of 5

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SA No.185/2024

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dated 02.12.2023, SA No.526/2023 was filed by alleged tenant and the sA was dismissed and thereafter another aileged Lessee rired sA 67/2024' The respondent bank has repeated the steps for sare of secured asset. The respondent bank has followed due procedure prescribed under the Act of 2002 and therefore sA is riabre to be dismissed with exemplary costs.

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Heard learned counsel for the respondent bank and perused the written arguments filed by him along with other material documents placed on record, Learned counsel for applicants has not chosen either to advance oral arguments or to file written arguments.

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During the course of arguments, learned counsel for respondent bank while reiterating to the contents of reply statement and referring to the documents annexed thereto as proof of compriance of relevant provisions of the Act, 2002 whire proceeding against the applicant schedure property, wourd submit that in spite of obtaining interim conditionar stay order in rA 1203/2024, the appricants Faired to comply the same and hence they are not entiued to any rerief. The attempts made by the applicants through the alleged tenants prove collusion and intention to drag on the litigation. The respondent bank has strictly followed the due procedure. Learned counser wourd further inform that furtherance to non-compliance of conditional order and as per liberty granted in the event of such non-compliance, the respondent bank took the physical possession oF the application schedule property on 21.06.2023 through advocate commissioner appointed by the learned CMM court. With these submissions, learned counsel sought for dismissal of the SA with exemplary costs. I*t.. .r, - aq.{V'}'

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Page^{4 of 5}

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SA No'185/2024

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The^{points for consideration are as follows : -} i) Whether^{the applicantmade out anY valid ground to} ini'iiiatea^{oy the respondent against}

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quash the '"Zii'''"t ihe SA^schedule ProPertY?

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ii) To what^relief?

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Point No.(i):

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Admittedly,^{the applicant availed housing loan of Rs'1'44crres} against^{mortgage of application schedule property and committed} default^{due to businesslosses' Henceclassification of loan account as} NPA and^{initiationof Securitizationmeasurescannot be termedas} illegal.^{As per materialdocuments placed on record' the demand} notice and^{possession notice were sent to the correct addresses of} the applicants^{and hence deemedto be served'However'demand} notice^{was served by way of paper publication also' The possession} noticeWasaffixedonsecuredassetandpublishedintwonewspapers" I find^{no violation of secs.13(2) and 13() of the Act and Rules B(1)} and 8(2)^{of 2002.}

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As informed^{by the learned counselfor the respondent bank'} the^{physical possessionof the application schedule property has} already been^{taken through advocatecommissioner' Such measureis} available to^{the respondentbank under Sec'14of the Act' 2002 and} accordingly^{I find absolutelyno illegality in taking physical possession} of the secured^asset.

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In^{View of the above observations, I find that the applicant} failedtomakeoutanyvalidgroundtosetasideanyofthemeasures of the respondent^{againstthe SA schedule property and accordingly} sA is tiabte to^{be missed} ffi'sg

Page 5 of 5

SA No.18Sl2024

Point No.(ii):

In the result, the securitization Apprication fairs and is hereby dismissed.

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Consequently, Interlocutory Applications pending, if any, shall stand closed. No order as to costs.

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Communicate a copy of this order to the parties concerned and upload in the offlcial website.

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(Typed to my dictotion by the PS, corrected, signed ond pronounced by me in the open court on this the 2gt" doy of April, 2025).

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f\7*'"*

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lnar/esxwAR^KorHE) PRESIDING OFFICER

Sri Santosh Kumar Gumpanpally v. Indian Overseas Bank

Case brief

What is this about?

What did the court decide?

Sri Santosh Kumar Gumpanpally v. Indian Overseas Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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