Allowed

P Rishitha Priya and P Vinay v. Shriram Finance Ltd.

DRT30 Oct 2025SA/189/2024

Case brief

AI extract

What is this about?

This Tribunal considered a Securitization Application by legal heirs to set aside auction and possession notices issued by a finance company. The Tribunal found the respondent failed to prove proper service and publication of notices, vitiating the proceedings.

What did the court decide?

To set aside all measures of the respondent against the schedule property including the possession notice issued under Section 13(4) of the Act, 2002.

P Rishitha Priya and P Vinay versus Shriram Finance Ltd. — Company and Corporate | DRT (2025)

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IN THE DEBTS RECOVERY^TRIBUNAL -^{II AT HYDERABAD}

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DATED THIS THE 3OTH DAY OF^OCTOBER,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.189 OF 2024}

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P. Rishitha Priya

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D/o Late P. Prasad Aged about 25 Years, Occ;Housewife R/o H.No.11-194, S^{V Nagar, Tirupathi} Chittoor, A.P.517501

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P. Vinay

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S/o Late P. Prasad Aged about 23^years Occ:Pvt. Service, V.^{Kondal Raj} R/o H.No.11-194, S V^{Nagar, Tirupathi} chittoor, A.P. 517501

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...... 'APPlicants.

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Versus

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Shriram Finance^Limited Off Address: D.No.138/A2,^{1st Floor} Theerthakattaveedhi,^{Tirupathl-51 7502} Rep by its Authorized^Officer

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....ResPondent.

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Counsel for the Applicant^{: Mr. Santhosh Reddy}

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Counsel for^{RespondentBank : Mr. M. Indrasen}

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-:g-B-D-E-B:-

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(Revised as per docket order dt.3o'1O'2O25)

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The Applicants^{filed the present Securitisation Applicationu/s} 17 of the Securitization^{and Reconstructlonof Financial Assetsand} Enforcement of Security^{Interest Act, 2002 (hereinafter referredto as} "the Act') to set^{aside all the measuresof the respondentunder} Sec.13(4) including^{Rule 8(6) salenoticedated 14'03 2024fixing} auction on 29.04.2024^{in respectof SA schedule oropertv} /fi-,o.g u ''1*

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PaBe 2 of 5

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SA No.189/2024

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The case of the applicants, in brief, is that they are^legalheirs of the borrower and^guarantor who availed^loan of^{Rs.50lakhs from} respondent in 2019. Applicants' mother died on 28.12.2019^and father died on 22.07.2027 due to ill-health. Without^considering request for settlement of account under OTS issued Rule 8(6)^sale notice without following^procedure contemplated under Sec.13 read with Rules 8 and 9 of the Security Interest^{(Enforcement)} Rules, 2002 ("Rules" hereinafter). The borrowers repaid about Rs.30 lakhs and account was standard. Hence the sA.

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The respondent bank filed reply statement along with list of documents. Mr. P. Prasad during his life time availed loan of Rs.50 lakhs from respondent finance company. He and his wife executed loan and security documents thereby agreed to repay the amount. Due to default the account became NPA on 13.10.2013. the demand notice dated 2a.o9.2022 u/s 13(2) of the Act was issued for Rs.1,87,00,983/-. As no payment was made, possession notice u/s 13(4) was issued on 30.01.2023, sent the same by registered post, affixed on secured asset and published in English and Telugu newspapers. Being legal heirs of borrower and guarantor, applicants are liable to pay the dues. SA is liable to be dismissed.

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Heard learned counsel for applicants. Perused the written arguments filed by learned counsel for the applicants along with the material placed on record. 5. During the course of arguments learned counsel for the applicants reiterated the version as in the application that the account was not NPA and that the respondent failed to follow the due procedure as contemplated under Sec.13 of the Act read with Rules 8 and 9 of the Rutes, 2OO2 and sought to a ow the ,gYrO*

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Page 3 of 5

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SA No.189/2024

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The points for consideration are^{as follows :} -

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i) Whether the applicants^{made out anyvalid groundto} quash any of the measures of the respondent^againstthe sA schedule^proqertY, as PraYed^for?

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ii) To what relieP

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Point No.(i):

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Reportedly the impugned^{auction sale scheduledon 29.04'2024} did not take^{place. Hence SA has become infructuous with regard to} contentions^pertaining to auction^{sale notice dated 74.03.2024.}

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Facts not in dispute are that^{father of applicants avalled loan of} Rs.50 lakhs and their mother^{stood as guarantorduringtheir} tifetime, and that the application^{schedule propertyis the security} interest for the loan. Subsequent to^{death of their parents,the} applicants being legal helrs filed the^{present SA to set aside the} measures of the respondent on the^{grounds that the accountwas} standard and respondent has^{not followed due procedure of law.}

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The respondent company flled^{documentson 03.12.2024 as} proof of compliance of relevant^provisions of the^{Act. The statement} of account reflects multiple^{cheque bounce entries,Hence committing} default in repayment and classifying the^{accountas NPAcannotbe} questioned.

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Vide written arguments,^{learned counselfor applicants relied on} Rule 3(1) to contend that the^{respondent failed to servethe demand} notice as^per cited Rule,^publication of^{demandnoticedated} 28.09.2022 was carried out on^{23.11.2022 which is not in accordance} with law, the^possession notice was also^{not served,affixed and} published within seven days. The^publication filed as^proofdoesnot

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/AseDZ '''t6 /'/''to^"

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page 4 ofs

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5A No.189/2024

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bear any date and date of notice was mentioned as 02.02.2023 in Telugu edition and 20.02.2023 in English edition.

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As per written arguments of the learned counsel for respondent, demand notice was sent by registered post besides publication, the symbolic possession notice dated 30.01.2023 was also sent by registered post to the available address of applicants hence deemed to be served. The possession notice was affixed on the premlses on 02.02.2023 and published.

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It is observed that despite specific objections raised by the applicants, the respondent has not filed proof of affixture of demand notice as per Rule 3 of Rules of 2002 and there is no explanation as to why the publication of demand notice dated 28.09.2022 was carried out on 23.77.2022. No proof of sending the possession notice to applicants is filed. Though the publication of possession notice dated 30.01.2023 in Telugu newspaper is dated 02.02.2023 whereas the publication in English edition is dated 20.02.2023. Again there is no explanation on this. In the absence of proof or explanatlon thereof, it is to be deemed that the respondent failed to follow Rule 3 which vitiates the possession notice and also failed to follow Rules 8(1) and 8(2) of the Rules, 2002.

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The applicants have made out valid ground to set aside the measures of respondent including possession notice dated 30.01.2023 and accordingly SA deserves to be allowed.

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Point No.(ii):

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In the result, the Securitization Application is allowed by setting aside all the measures of the respondent against the application

/M*,,

Page 5 of 5

sA No.189/2024

schedule property under the Act, 2002 including the possession notice dated 30.01.2023 issued under Sec.13(4) of the Act, 2002.

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However, this order does not preclude the respondent bank from undertaking measures afresh strictly in accordance with the provisions of under the Act, 2002.

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

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No order as to costs.

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

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(Typed to my dictotion by the P5, corrected, signed dnd pronounced by me in the open court on this the 3oth ddy ol october, 2025).

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PRESIDING OFFICER

P Rishitha Priya and P Vinay v. Shriram Finance Ltd.

Case brief

What is this about?

What did the court decide?

P Rishitha Priya and P Vinay v. Shriram Finance Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

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