Dismissed

Shanker Dasari v. M S Phoenix Arc Pvt. Ltd.

DRT24 Oct 2025SA/187/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed an application by mortgagors contesting a Notice for taking physical possession under the SARFAESI Act. The court found statutory procedural requirements were met, noting service of notices and publication in newspapers, and rejected the plea that irregular payments due to the pandemic invalidated the enforcement.

What did the court decide?

Application set aside the proceedings for physical possession was dismissed with no order as to costs.

Shanker Dasari versus M S Phoenix Arc Pvt. Ltd. — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL - I AT HYDERABAD

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DATED THIS THE 24'IH DAY OF OCTOBER, 2025

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PRESENT: GUMMADI GoPICHAND, PRESIDING oFFICER

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sA.No.187./2c24

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Shanker Dasari, S/o. Rajaram Dasari, Aged 50 years, Male, Occ: Business, R/o. H.No. 1-18,^perkit, Armoor (T) (M) Nizamabad District, TS 503224.

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Vijaya Dasari, W/o. Shanker Dasari, Aged 45 years, Female, Occ: Business, R/o. H.No. l-18,^perkit, Armoor (T) (M) Nizamabad District, TS 503224.

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Navanath Educational Society, rep. by its Authorized Signatory, Shanker Dasari, R/o. H.No. 1_lg, Perkit, Armoor (T) (M) Nizamabad District, TS 503224.

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Applicants.

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Versus

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Phonix ARC Pvt. Ltd., Rep. by its Authorized Officer, # Sft Floor, Dani Corporate park, 158, CST Road, Kalina Santacrux (E), Mumbai - 400098.

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Respondent.

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Counsel for tle Appticants Counsel for the Respondent

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Si Sharan Kumar Ragi. Si Shabeer Afuned.

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.:ORDERi

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l. The Applicants frled tJre present securitization Application under section 17 ol the SARFAESI Act, the vacate notice dt.08.0 5.2024,

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issued by the Advocate rl.M.P.No. 158 12024 on the frle

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of Ld. Chief S,i,&Je,'r * for taking physical

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possession of the rle propffi and measures initiated by the

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Respondent u/s. I Act in respect of the B^{"{.{orpf}fint^or}

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schedule property.

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W*rsW

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SA.No.187/2024

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The averments made by the Applicants in the application, in brief, are as under,-

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The Applicants availed loan from M/s. Thirumaneni Finance Ltd., (hereinafter referred to as "FI") for running the Applicant No.3 Educational Institution and mortgaged the application schedule property as securier in favour of the said FI. The Applicants were repaying the loan instalments into the loan account regularly till October, 2O2I. In view of lock_down during the Covid_ 19 pandemic, they could not run their educational institution with full strength for more than 2 years and they suffered huge losses. Under the fee reimbursement scheme, more than Rs.450.00 lakhs are due from the State & Central Governments. Even then they had been paying the amounts to the F.I.

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ii) After issuance of Demand Notice u/s. 13(2) of the SARFAESI Act by the Respondent-assignee herein, the Applicants paid around Rs.91.5O lakhs to the Respondent on various dates during March, 2022 in order to fulfil the OTS offer. Due procedure as laid down under the SARFAESI Act has not been followed while declaring the loan account as NpA. Demand Notice and possession Notice have not been issued by the Respondent as per u/s. 13(2) and l3(4) of the Act and the said notices have not been served on the Applicants. Notices have not been published as required under the Act and Rules, 2002. Hence, the SA.

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3' The Respondent fired its Reply Statement denying all the adverse SA. The contentions of the Respondent, in brief,

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6%S ,1."fff"ts;availed various credit facilities aggregating to from Thirumeni Finance pvt. Ltd., for ool building and they have mortgaged the

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u1e property as securit5r for the said credit

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SA.No.187/2024

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facilities in favour of the said FI. As the Applicants were irregular in repayment of the loan and failed to keep_up the stipulations, the loan accounts of the Applicants became highly irregular despite several reminder and as such the loan accounts were classified as NA on 29.O2.2O2O by the FL Merely making payments once in a while would not be sufficient to meet the instalments and same would not make the account a standard account. Subsequently, the FI has assigned the entire debt of the Applicant with all the rights, title arong witrr securit5r interest in favour of the Respondent vide Assignment Deed dt.gl.L2.2O2O.

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ii) The Respondent issued Demand Notice dt.l8. 1 l.2O2l u/ s.l3(2) of the SARFAESI Act, calling upon the Applicants to pay outstanding dues of Rs.2,r6,44,r69/- wittrin 60 days and the said notice was served on the Applicants. As the Applicants failed to comply with the demand, the Respondent issued possession Notice dt.O I . 1 I .2022 u/ s. l3(a) of the Act by taking symbolic possession of the schedule property. The possession Notice was served on the Applicants and thereafter published in Business Standard and Nava Telangana newspapers dt.O7. I 1.2022. As the Applicants continued to resist to handover physicar possession of the schedule property, the Respondent approached ld. CJM" Nizamabad u/s. 14 of the SARFAESI Act and obtained orders in Crl.Mp.NO. 15 8/2024 for taking physical possession of the schedule property. The Applicants approached this Tribunal with unclean hands and the present SA may be dismissed.

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Heard both sides.

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Now, the ts that arise for consideration are,_

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ts have made out any valid grounds for setting initiated by the Respondent Bank under the

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st the application schedule property?

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SA.No.187/2024

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Point No.lilt

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The Applicants have not disputed availing of credit facilities from the FI by mortgaging the application schedule property to secure the said facilities. The Applicants have also admitted that, they were unable to repay the loan amounts as their institution was affected due to lack of students strength due to lockdown in covid-19 pandemic. However, they contended that, they paid the loan amounts into their account even after issuance of Demand Notice. The Respondent contended that, merely making payments once in a while to meet the instalments due and that it would not make the account as standard and that the loan account of the Applicants was declared as NpA on 3O.O9.2O20. A perusal of the statement of account in respect of the roan account of the Applicants, filed by the Respondent reveals that, the Applicants did not deposit any amounts in the loan account from March, 2019 till December, 2019. As per the Demand Notice dt. lg.1 l.2o2l, issued by the Respondent, the total outstanding dues payable by the Applicant were Rs.2,L6,44,169 /_ as against the loan amount of Rs. 1,95,00,000/- availed by the Applicants in the year 2016-17. so, it cannot be said that the loan account of the Applicants was standard as on the date of NpA/issuance of Demand Notice.

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The Respondent filed a copy of the Demand Notice dt. rg.1l.2021, issued u/s.13(2) of the SARFAESI Act, to the Appticants, along vrith postal receipts and postal track reports, which amply prove that the Applicants have received the said Demand Notice. The Applicants neither raised any objections to the said Demand Notice nor paid the outstanding dues within the statutory period. so, the Respondent proceeded to take symbolic possession of the schedule propert5r by issuing possession u/s.13(a) ofthe SARFAESI Act. As can be seen, the time to the Applicants for clearing the dues, after issuance of Demand Notice and when the was not done by the Applicants, only then Possession Notice. The Respondent filed a Notice along with postal receipts and also

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SA.No.187/2024

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copies of publication of the said possession Notice dt.01. 11.2022 in Business Standard, and^,Nava Telangana, newspapers dt.OZ.ll.2l22. So, the contention of the Applicants that the Respondent has not issued Possession Notice to the Appricant and has also not published the said notice in the newspapers has no legs to stand. Since the Applicants failed to pay the outstanding dues even after issuance of possession Notice u/s'13(a) and are not handing over the possession of the schedule property to the Respondent, the Respondent has invoked Sec. 14 of the SARFAESI Act and obtained orders from the Ld. CJM, Nizamabad, for taking physical possession of the schedule property, to which the Respondent-secured creditor is entitled to under the SARFAESI Act. so, in view of the above, I hold that the Applicants have tailed to make out any valid grounds for setting aside the proceedings initiated by the Respondent against the apprication schedule property and as such the present SA, which is devoid of merits is liable to be dismissed. Accordingly, this point is answered against the Applicants and in favour of the Respondent.

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Polnt No.(llli

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In the result, the present Securitization Application is dismissed.

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Consequently, the Interlocutory Applications, pending if any, shall stand

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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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(Dictdted to the PrNote sectetory, trunscribed w het, cotrccted, signed ond pronounced by me in the open coun on this the 24o doy ol

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2q0[Trus

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sd/(c. coPrcHANDl PRESIDIIVG OFFICER "UYry o".(ffi;''

Shanker Dasari v. M S Phoenix Arc Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

Shanker Dasari v. M S Phoenix Arc Pvt. Ltd.

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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