Dismissed

D R Sridhar Naidu v. Axis Bank

DRT1 Apr 2025SA/186/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed the applicant's application under Section 17(1) of the SARFAESI Act seeking to set aside possession proceedings. Upholding the respondent bank's compliance with statutory duties, the Tribunal rejected claims of procedural violation regarding demand and possession notices, noting the existence of proof of service and publication.

What did the court decide?

The Securitisation Application was dismissed with consequential closure of pending interlocutory applications.

D R Sridhar Naidu versus Axis Bank — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL - II AT HYDERABAD

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DATED THIS THE 1ST DAY OF APRIL, 2025

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PRESENT: SH. MMESHWAR KOTHE, B.Com., L.LB.^{(Hons.), M.A.} PRESIDING OFFICER

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SA. No. 186 OF 2024

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Between: Mr. D.R. Sridhar Naidu S/o Ramurthy Naidu Aged about 47 years Occ: Business, H.No.25-55 Ayyakannu Street Palamaner, Chittoor Andhra Pradesh. .......Applicant. And Axis Bank Ltd. Rep by its Authorised Officer D. No. 221L223/A-t 1tt Floor, G.T. Road Nellore, Andhra Pradesh. ...Respondent.

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.......Applicant.

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Counsel for the Applicant : Mr. D. Raghavulu. Counsel for the Respondent : M/s. Lctus Law Associates.

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-:ORDER:-

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The Applicant filed the^present Securitisation^Application u/s.17(1) of the Securitization and Reconstruction of^Financial Assets and Enforcement of Security Interest Act,²⁰⁰² (hereinafter referred to as "SARFAESI Act 2002") for setting aside the^proceedings of respondent company in taking^physical possession of the schedule properties in pursuance of Warrant in oW*

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sA 28612024

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Crl.M.P. No.22 of 2024 and all other^{proceedings under Section} 13(4) of the SARFAESI Act.

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The case of the applicant as^per the averments of^{securitisation} application, in brief, is that aPplicant availed over^{draft and} working capital loans of Rs.95,50,000/- and^Rs.50,000/- respectively for business purpose against the mortgage^of properties. Due to some unforeseen problems and Covid.19 Pandemic, applicant defaulted in repayment.^Applicant requested to regularise the loan account by accepting^overdue instalments. However, respondent bank declared the^loan account as NPA contrary to RBI^{guidelines.Applicantdeposited} Rs.6.50 lakhs at the instance of the respondent bank^for regularisation of loan account. However, respondent^bank proceeded with further measures under the SARFAESI Act. Respondent bank issued^possession notice without^{following the} due^procedure. The demand notice referred toⁱⁿ the^possession notice has not been served on the applicant.^{Respondentfollow} the procedure as laid down under Rules 8(1) and 8(2)ⁱⁿ affixture of^possession notice and its^{publlcation.Applicant filed} SA No.154 of 2022 challenging the^possession notice^dated 06.07.2022 and the same has been allowed by this^{Tribunal vide} order dated L7.02.2023. Applicant^paid Rs.8.50 lakhs^for consideration of OTS. The respondent bank is trying to^take physical possession of the secured assets pursuant to a warrant in Cr.M.P.22 of 2024. Paft of the^properties was^given on^rent. Respondent is trying to take^{physical possession} of^the applicant's residential house also. Applicant^requested respondent several times to regularise the loan accountl{fr.,U ' L,"

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sA 2a6/2024

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Respondent bank filed reply statement denying the averments in the SA. The submissions of respondent, in brief, are that applicant was quite irregular in payment of dues despite repeated reminders/follow-ups, leading to the account becoming NPA by 01.02.2022. Respondent bank has served the demand notice dated L9.O2.2O22 by registered^post. The^postal reports and acknowledgement cards show that the demand notice has been served on the borrowers. Further, as the demand notice addressed to all the borrowers has not been served, the same has been published in Prajasakthi. Telugu daily and Business Standard, English on 25.O3.2022. The^possession notice issued u/s 13(4) dated 20.04.2023, has been served on the borrowers vide postal reports and postal acknowledgement cards. The possession notice has been published in Prajasakthi, Telugu Daily and Business Standard. English daily on 25.04.2023. The possession notice has been affixed on the secured asset vide photograph at pages 19-20 of the reply statement. Applicant cannot interdict the action of respondent bank from taking the physlcal possession of the secured properties without discharging the liability even after issuance of notices under the provisions of the SARFAESI Act and the Rules thereunder.

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Applicant's right of arguments has been forfeited vide docket order dated 11.03.2025 with a liberty to file written arguments as the learned counsel repeatedly took adjournments on the ground of not being ready to argue the matter. Heard learned counsel appearing for the respondent bank. Perused the written arguments filed by the respondent bank and the material brought on record. 1K*

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sA286/2024

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According to the learned counsel for the respondent bank, the entire mortgaged property is in the possession of the applicant/ borrower. Learned counsel submits that since the Warrant for appointment of Advocate Commissioner has been obtained as per the provisions laid down under the SARFAESI Act and that the Hon'ble CMM issued the warrant after considering the application filed u/s 14 of the Act, applicant has no right to seek indulgence of this Hon'ble Tribunal or any relief without discharging the liability and accordingly prayed for dismissal of the SA in the interest ofjustice.

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Now the points that arise for adjudication are: -

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llthether the Applicant made out any valid ground for qwshing the measures initiated by the l"' respondent against the SA schedule property under the provisions of Securitisation Act? ii) To what reliej?

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Point No.(i):

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Applicant filed the present SA objecting respondent's action from taking the physical possession of the SA schedule properties through Advocate Commissioner. This Tribunal granted interim conditional stay of taking the physical possession of the secured assets through Advocate Commissioner subject to deposit of Rs.30,00,000/- vide order dated 25.04.2024 in IA.1906 of 2024 filed in the SA. Applicant complied with the conditional order dated 25.04.2024.

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sa 2a6/2o24

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Applicant filed the SA citing violation of Section 13(2) in serving the demand notice and 13(4) in serving the possession notice. Applicant also alleged violation of Rules 8(1) and 8(2) of the Security Interest (Enforcement) Rules, 2002 in affixture and publication of possession notice. In fact, applicant challenged the^possession notice dated 06.07.2022 vide SA.154 of 2022 on similar grounds. However, SA.154 of 2022 was allowed exparte on 77.02.2023. Whereas in the present SA, respondent filed reply statement disputing violation of any of the provisions of the SARFAESI Act or the Rules thereof. In support of its claim, respondent bank filed proof of serving demand notice and possession notice on the applicant/borrowers as also affixture and publication of possession notice vide material papers at pages 1 to 32 annexed to the reply statement. On the other hand, learned counsel appearing for the applicant neither disputed these documents by way of arguments nor by filing written arguments. It is very clear that the applicant was quite aware of the securitisation proceedings as back as 06,07.2022 i.e., date of issuance of possession notice which was the subject matter of 5A.754 of ?022, Fudher, in his own admission, applicant has been in the process of clearing the dues either under OTS or under regularisation/restructure and admittedly made some adhoc payments. It is not under dispute that the applicant committed default in repayment as stated in Para 3 of the SA averments. The earlier SA 154 of 2O2Z was disposef of as back as L7.02.20?3. Whereas, the present SA is filed on L8.04.2024 i.e., more than 14 months from the date of disposal of SA.154 of 2022. Thus, there was enough time for the applicant to clear the dues until the respondent bank proceeded for taking the physical possession of the Eecured assets. Xfu- .o i^{/rz>'^,trw'ut} - -/

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5A 2a6/2O24

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Applicant has neither cleared the dues during the interregnum period nor did he offer any valid reason for not doing so in the present SA to justify his inaction all these days.

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As the respondent bank filed enough proof of compliance of provisions SARFAESI Act and the Rules thereunder in the securitisation measures as per the prescribed procedure, I do not find any valid^ground to interdict the action of respondent bank from taking the physical possession of the secured assets in accordance with law. Accordingly, the SA is liable to be dismissed.

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Point No. (ii):

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In the result, SA fails and 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.

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(Dictoted to the Steno, corrected, signed ond pronounced by me in the open couft on this the 1't doy of Aprit,2013).

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(RAMESHWAR KOTHE) PRESIDING OFFICER

D R Sridhar Naidu v. Axis Bank

Case brief

What is this about?

What did the court decide?

D R Sridhar Naidu v. Axis Bank

Case brief

What is this about?

What did the court decide?

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