Dismissed

Meghana Communication S and Others v. Icici Bank Limited

DRT21 Jan 2025SA/4/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed an application under Section 17 of the SARFAESI Act challenging a Rule 8(6) possession notice. The court held that the applicants failed to prove irregularities in notice service or NPA classification and thus no valid grounds existed to quash the bank's recovery measures.

What did the court decide?

The Securitisation Application was dismissed; interlocutory applications stood closed; no order as to costs.

Meghana Communication S and Others versus Icici Bank Limited — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL - II AT HYDERABAD

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DATED THIS THE 21ST DAY OF JANUARY, 2025

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PRESENT: SH. RAMESHWAR KOTHE, B,COM,, L.LB.^(HONS.), M.A. PRESIDING OFFICER

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SECURITISATION APPLICATION NO. 4 OF 2023

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Between:

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MeghanaCommunications Rep by its Proprietor Ramakrishna Rao lami 10/2/193, Opp: Deccan Club East Maredpally Hyderabad-500026.

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Ramakrishna Rao lami Ftat No. 203, 2'd Floor M u n icipa I No. 22- 1 18/ B, 203 (old No. 22-130 and 22-92) Sri Venkata Sai Apartments Plot No.52, Radhakrishna Nagar GHMC Malkajgiri, Hyderabad-500047. ....Applicants.

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And

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ICICI Bank Limited Rep by its Authorised officer ICICI Bank Towers Wall Street Plaza, 2"d Floor Beside Old Airport Begumpet, Hydera bad- 500016. Telanqana.

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.....Respondent.

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Counsel for the Applicants : Mr. G.L.^{Prasada Rao.} Counsel for the Respondent : Mr. S.^{Nagesh ReddY.}

5A 412023

-: Q_B_p-E-B:-

The Applicant filed the^{present SecuritisationApplication u/s.17} of the Securitization and^{Reconstructionof Financial Assetsand} Enforcement of Security^{Interest Act, 2002 (hereinafterreferred} to as "SARFAESI Act 2OOz")^{assailing the Rules8(6) and 9 (1)} Notice dated 16.7!.2022 issued by^{the RespondentBank.}

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The case of the applicants as^{per the avermentsin the SA,in} brief, is that applicants^{have availed various credlt facilitiesfrom} the respondent bank to a tune of^{Rs.1,20,00,000/- to meet their} business requirements. Applicants^{created mortgage over the SA} schedule^property as security^{towardsthe credit facilitles.} Applicants were regular in repayment^of the^{loans. However, the} respondent bank issued^possession notice dated^L5.17.2022 showing the outstanding dues as^{Rs.1,21,01,088.63Ps without} considering the representations over^{excess rate of interest} charged to the loan account and^{consequential requestto bring} down the interest rate on^par with other^{lending banks,In fact,} respondent bank has not served demand^{noticeu/s 13(2) dated} O2.O7.2022 as alleged in the^{possession notice.The possession} notice has neither been affixed on the secured^assetnor published in two leading newspapers. Thereafter, respondent issued pre-sale notice dated 76.71,2022.^{The respondent} obtained applicants signatures on blank^{printed loandocuments} and have not furnished statements of^{accountsof theloan} account. NPA classiflcation is not^{correct as the secured asset} has not lost its current market value. In view of^the aforementioned irregularities, the^rule 8(6)^{notice is invalid and}

Nse

illeg a L

sA 4/2023

Respondent company filed reply statement. The submissionsⁱⁿ the reply statement in brief, are that the applicants were^not regular in repayment of loan amount. Applicants^havenot brought out any specific RBI^guideline that^{was alleged to have} been violated by the respondent in the rate of^{interestcharged} to the loan account. The loan account slipped^{intoNPA category} due to continuous default in repayment. In^para 5(5)^{of the SA,} applicants admitted of difficulty in clearing the^{loan amountas} their business was not^good. The demand^{notice and possession} notices were sent by registered^post to the^{applicants besides} publishing in two newspapers. The applicants have no cause of action to file the^present SA except to frustrate the^recovery measures. Applicants have failed to comply the^{conditional order} passed by this Tribunal in IA.1865/2022 in the SA dated 07.02.2023 in depositing 30o/o of the outstanding^dues. Accordingly, respondent^prays for dismissing the SA.

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Heard the counsel appearing for both the^{parties' Perused the} material placed on record.

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Both counsel, while reiterating their respective^{stand, prayed for} allowing/dismissing the SA as the^{case may} be,^{in the interest} of^justice.

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Now the points that arise for adjudication are: -

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Whether the Applicants made out any valid ground for quashing the notice issued by the respondent under rule 8(6) of the Security Interest^{(Enforcement)} Rules,²⁰⁰² against the SA schedule property? ii) RetieJ? /ww (.2

sA 412fJ23

Point No.(i):

The main^grievances of the applicants^{in the SA are (i) higher} rate of interest charged to the^{loan account,(ii) classification of} loan account despite secured assets^{not losing the marketvalue,} (iii) violation of section 13(2) of the SARFAESI Act and^(iv) nonaffxture of^possession notice on^{secured assetsand publication} of^possession notice in two newspapers.^{The allegationwith} respect to rate of interest charged^to the^{loan account cannotbe} considered in the absence of specific^{instanceor guideline} governing the rate of interest issued if any by the RBI^As regards the classiflcation of loan account as^{NPA, respondent} bank clarified that the same^{was because} of^{continuous default} in repayment. Hence the market worth of the^{secured assetsis} nothing to do with the account becoming^{NPA.As regardsthe} compliance of Section 13(2) of the SARFAESI^{Act, respondent} bank^placed on record material^papers dealing wlth^{service of} demand notice filed along with list of^{documents alongwiththe} reply statement on 15.11.2023. As^per these documents, respondent bank has sent notice to the applicants u/s^{13(2) at} four different addresses through Speed^Post, which^{inter alia} shows the addresses^given by the applicants in the SA itself.^In addition to this, respondent^placed on record material^papers relating to^publication of demand notice in The New^Indian Express and Nava Telangana dailies in thelr^{respectiveedltions} daled 76.07.2022. These documents have^not been^disputedby the applicants. Hence, I do not find any irregularity on the^part of the respondent in the compliance of^provislons of^Section 13(2) of the SARFAESI Act. Respondent^placed on^record ,-4rr^,/.9 /.//tu-

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sA 4/2023

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photocopies of newspapers as to publication of Possession notice in The New Indian Express and the Nava Telengana editions daled 22,Ll.2022 respectively besides photograph evidencing affixture of possession notice on the secured assets. These documents have not been disputed by the applicants. Accordingly, I do not find any fault on the part of the respondent in serving the possession in terms of the provisions of the Security Interest (Enforcement) Rules, 2002. Applicants have not plated any material on record as to whether they have taken up the issue of violation of provisions of Section 13(2) in serving demand notice even after receipt of possession notice. According to their own revelations, applicants approached the respondent bank to convey their difficulties in clearing the loan amount and requested the bank to reduce the interest in line with the rates of other banks in India. It is not the case of the applicants that they were regular in repayment of loan amount. Applicants have not proved their bonafides to comply the conditional order passed by this Tribunal in IA.1865 of 2022 in the sA dated 07.02.2023, Accordingly, I do not find any irregularity on the part of the respondent in lssuing the impugned Rule 8(6) notice under the provisions of Security Interest (Enforcement) Rules, 2002 fot recovery of its legitimate d ues.

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In view of the above discussion, applicants have failed to make out any valid ground to set aside the notice issued u/r 8(6) of the Security Interest (Enforcement) Rules, 2002 by the respondent bank for recovery of its dues. Accordingly, the SA is devoid of any merit and liable to be dismissed,//,I2/.,x,* l./

sA 4/2023

Point No.(ii)

In the^{result, SA fails and is hereby dismissed'}

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Consequently,^{InterlocutoryApplications 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 Web Portal'Web Portal'}

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^{in Web Portal'Web Portal'}

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(Dictoted to the^{steno,corrected' signed ond pronounced byme in the opencourt on this} the 21't^{day of Jonuory' 2024)'} ) rnr*;--.1frnr*;--.1f

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) rnr*;--.1frnr*;--.1f ,,\ <.t'-

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(RAMESHWAR^KOTHE) PRESIDING^OFFICER

Meghana Communication S and Others v. Icici Bank Limited

Case brief

What is this about?

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Meghana Communication S and Others v. Icici Bank Limited

Case brief

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