Dismissed

Singhu Chandra Kiran and another v. City Union Bank Limited

DRT4 Mar 2025SA/196/2023

Case brief

AI extract

What is this about?

In this Securitization Application, the Debt Recovery Tribunal examined the validity of physical possession proceedings initiated by a bank under the SARFAESI Act. The court held that the bank followed due process and dismissed the challenge.

What did the court decide?

This Securitization Application is dismissed as there are no merits. Consequently, the Interlocutory Applications pending, if any, shall stand disposed of.

Singhu Chandra Kiran and another versus City Union Bank Limited — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL - I AT HYDERABAD

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DATED^'TFJIS THE 4I^H DAY OF MARCH , 2C25

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PRESENT: GUMMADI GOPICHAND, PRESIDING OFFICER

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sA.No. 196/2C23

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1.Sri Singhu Chandra kiran, S/o late Mohan Rao, aged 39 years, Occ:business, R/o flat No.201, Bharani Apartments, Saleem Nagar, Malakpet, Hyderabad.

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2.Sri Singhu ChandraShekhar, S/o late Mohan Rao, aged 39 years, Occ:business, R/o flat No.201, Bharani Apartments,

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Saleem Nagar, Malakpet, Hyderabad

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... Applicants

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And

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City Union Bank Ltd.,

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Rep. by its Authorized officer Credit Recovery and Management Deptt., Administrative Office NO.24-8, Gandhi Nagar, Kumbakonam-6 L2OOL..

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... Responderut bank

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Counsel for Sri D. Raghauulu

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Counsel for Smt. Clt.Laxmi Chaga B4ilAS

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i. This app fi-..qhS$bplicants u/s.17 of the SARFAEST \n).t^u''

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Act, 2002, ch,d dings initiated by the Respondent Bank before the cMM, Hyderabad in crl.M.p.No.332l2023 for taking physical possession of the schedule property u/s 14 of the SARFAESI Act, 2o02 pursuant to the possession noticc dt.17.03.2022 and to declare the same as illegal.

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sA 196/2023

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The averments made in the application, in brief, are that:

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The Applicants availed credit facilities from the Respondent Bank and created mortgaged in respect of the schedule property towards security for the loan. Due to covid-19, the Applicants could not make some payments and so, the Respondent Bank classified the loan account as NPA. But the Respondent Bank without serving any demand notice and possession notice on the Applicants, proceeded u/s 14 of the SARFAESI Act,2002 for taking physical possession of the schedule property and the said possession notice was not affixed on the schedule property nor published in two daily newspapers. The advocate commissioner came to the schedule property and tried to take physical possession without following the procedure. Hence the SA.

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The Respondent Bank filed their Reply Statement denying all the adverse allegations made in the sA. It is contended that the Applicants having availed loan from the Respondent Bank, committed default in repayment of loan dues, so, the Respondent Bank issued demand notice u/s 13(2) of the SARFABSI Act, 2oo2 onr2.ll.2o2t to the Applicants and the said notice was served on the Applicants. As there was no response to the said demand notice, the Respondent bank issued possession notice u/s 13(a) of the Act on 17.03.2022 for taking symbolic possession of the schedule property and the said notice was served on the Applicants and also published in The New Sunday Express and Andhra Jyothi on 2o.o3.2o22 and the said notice was also affixed on the schedule property. Thus the Respondent bank has duly complied with Rule g(l)&(2) of security nforcement) Rules, 2oo2 in taking possession of the ;"iT nT:"i::;il: ;;:il:#;"H:_ li n crl'M.PlNo'ssz/zE${or Crl'M.I5lN"'332EAhr appointment of advocate comm issioner issioner forrrrr flkt"dmr?H6ar pfi$".ion of the schedure property and the advocare ii; \ r"i|

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r'4 vli %***W

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sA 196/2023

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commissioner issued notice to the Applicants on 29.05.2023 to vacate the schedule property. Hence there are no merits in the SA and the SA is liable to be dismissed.

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4, Heard Ld. Counsel for the Applicants and Ld. Counsel for Respondent Bank. Perused the material brought on record.

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Now, the points that arise for consideration are,

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i) whether the Applicants haue established. any ualid ground. for challenging the proceed.ings initiated" by the Respond"ent Bank before the Ld.VII Ad.ditional CMM, Hgd.erabad", in crl.M.P.No.332/ 202s for taking physicar possession of the schedule propertg?

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ii) To what relieft

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Point No.(i):-

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During the course of arguments, Ld. Counsel for the Applicants and Ld. Counsel for the Respondent Bank reiterated their respective versions as stated supra.

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There is no dispute regarding the fact that the Applicants availed credit facilities from the Respondent Bank and created mortgage against the schedule property and thereafter, the Applicants committed default in repayment of outstanding dues.

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But the specific contention of thp Applicants is that without issuing any nd possession notice, the Respondent Bank u/s 14 of the Act for taking physical property through advocate commissioner. k contended that they have followed the

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fii:,"g1 TAr?il,g:", d down under the provisions of SARFAESI 3

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sA196/2023

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Act, 2oo2 and Rules made thereunder in issuing all the relevant notices to the Applicants.

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The Respondent Bank in order to substantiate their contention, enclosed relevant material documents along with the Reply filed by them. As per the said material documents, it is clear that the

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Respondent Bank issued demand notice dt.12.11.2021 to the Applicants u/s 13(2) of the Act demanding them to rcpay the entirc utstanding dues within 60 days and the said notice was received by the Applicants as evidences by the postal acknowledgments filed by the Bank. It is not the case of the Applicants that they submitted any

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objections in response to the said demand notice. Thereafter, the Respondent Bank issued possessionnotice dt.17.03.2022 to the Applicants and the said possession notice was served on the Applicants as evidenced by the postal acknowledgements filed by the Bank. The said possession notice was affixed on the schedule property as dcpicted in the photographs filcd by the bank and it was also

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published in The New Sunday Express and Andhra Jyoti daily newspapers as evidenced by the copies of paper publication filed by the Bank. Thus the Bank has followed the procedure as contemplated under Rule B(1)&(2) of Security Interest (Enforcement) Rules, 2oo2 in taking possession of the secured asset.

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After issuing possession notice dt.17.03.2022, the Respondent Bank initiated proceedings u/s 14 of the SARFAESI Act,2oo2 before Ld.vrl Additional cMM, Hyderabad for taking physical possessionof the schedule property by fling crl.M.p.No.332l23. Ld.vII Additional cMM, Hyderabad was pleased to appoint advocate commissioner for taking ph "of^{the schedule property and when the advocate}

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COT ot i ce to the A ppli cants fibr d i recti n e g th em to sche the Applicants filed the present SA. As per 4 of the SARFAESI Act, secured creditor before the concerned Chief Juridical 4

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sA196/2023

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Magistrate or District Magistrate for taking physical possession of the secured asset.

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So, considering all the circumstances, I am of the opinion that the proceedings initiated by the Respondent Bank u/s 14 of the Act for taking physical possession of the schedule property through advocate commissioner are quite legal and valid and strictly in accordance with the provisions of SARFAESI Act, 2OO2 and there are no violations. Accordingly, this point is answered in favour of the Respondent Bank and against the Appiicants.

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Point No.(tl):-

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t2. In the resuit, the present Securitization Application is dismissed as there are no merits. consequently, the Interlocutory Applications, pending if any, shall stand 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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(Dictated to the P.S transcibed by her, corrected, signed and pronounced. by me in the open court on this the 4th day of March, 2025).

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sd/-

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(c. coPr CHANDI

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PRESIDING OFFICER

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Singhu Chandra Kiran and another v. City Union Bank Limited

Case brief

What is this about?

What did the court decide?

Singhu Chandra Kiran and another v. City Union Bank Limited

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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