Dismissed

Sri Devineni Baswa Narendra Babu v. Union Bank of India

DRT29 Apr 2025SA/7/2024

Case brief

AI extract

What is this about?

Debts Recovery Tribunal dismissed the applicant's Securitization Application challenging the recovery measures initiated by the bank, finding that the classification as NPA and subsequent notices were lawful and legally served.

What did the court decide?

Securitization Application dismissed; Interlocutory Applications pending, if any, to be closed;

Sri Devineni Baswa Narendra Babu versus Union Bank of India — Company and Corporate | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL - II AT HYDERABAD

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DATED THIS THE 29rH DAy OF APRIL, 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.07 OF 2024

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Devineni Basava Narendra Babu Son of Seshagiri Rao Hindu, aged 66 years R/o Plot No.861, Road No.10 Vasantha Nagar Colomy, Kukatpally Near JNTU, Hyderabad - 500 085 Telangana

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.......Applicant.

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Versus

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The Chief Manager and Authorized Officer Union Bank of India B.V. Nagar Branch Nellore, A.P.

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...... Respondent

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Counsel for the Applicant : Mr. Shaik Khaja Peer

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Counsel for Respondent Bank : Mr. Srinivasa Rao Chakrala

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-:ORDER:-

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The Applicant filed the present Securitisation Application uls 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to'as "the Act") to declare classification of account as NPA and consequent demand notice, possession notice and sale notice issued against the application schedule properties under the Act, 2002 as arbitrary, illegal and not maintainable.

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The case of the applicant, in brief, is that the applicants availed credit facilities for their business in the name of M/s Kakatiya Industrial and Commercial Developers Pvt. Ltd. from KPHB branch of respondent bank and also in the name of M/s Amarvathi Industrial and Commercial Developers Pvt Ltd. Consi(ering the financial 4l(o'

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Page 2 of4

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sA No.o7l2024

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difficulty, respondent bank^{sanctionedRs.80 lakhs in the individual} names of applicants^{videsanctionletter dated 25.04.2018 against} security of application^{schedule property. The loan accounts were} declared as^NPA on^{various dateswithout followingRBI guidelines} and followed by^{issuance of demand notice and possession notice'} Whlle declaring the^{accountsas NPA the respondent bank failedto} give opportunity to reschedule the accounts^{as per RBI guidelinesand} directions of Hon'ble^{SupremeCourt. Recovery process hasbeen} initiated only against OD account^{highhandedly. Applicants submitted} letter dated 25.72.2023 for^{OTS. The demandnotlce and possession} were neither served^{personallynor affixed on the schedule property} nor^published as^{per Rules. The sale noticedated 22.77} '2023^was also not affixed as^{per Rule 8(7). The respondent failed to issue} notlces to letters dated 05.02.2027,^{04.08.2022, 78.12.2023 and} 26.12.2023. Hence this SA to^{set aside all the notices.}

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The respondent bank filed reply^{statement.The submissions,} briefly, are that it is established^from the^{statement of account as to} why account became NPA. The demand^notice dated^{76.72.2022u/s} 13(2) was issued. As no^{payment was made within sixtydays from} the date of demand notice,^possession notice was^issued, sent^to applicant, affixed on secured asset and^{published in} 'Hans India'and 'Eenadu', English and Telugu newspapers respectively. Rule 8(6) notice was issued and sent to applicant. Valuation report^was obtalned on 23.08.2023. The applicant never cared to^pay any amount except complying the conditional order. A^huge outstanding amount is due from the applicant which is^{public money. Hence} SA^is liable to be dismissed.

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Learned counsel for applicant reported orders may be^passed basing on record. Heard learned counsel ffiRqprngq,Ount bank and perused the material brought on record. -7'^tly"'

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Page 3 of 4

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SA No.0712024

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During the course of arguments, learned counsel for the respondent bank while reiterating the contents of reply statement, referred to the documents annexed to the counter in iA 57/2024 as proof of compliance of relevant provisions of the Act, 2002 and sought for dismissal of the SA.

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The points for consideration are as follows : -

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i) Whether the applicant made out any valid ground to quash any of the measures initiated by the respondent against the SA schedule properties?

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ii) To what relief?

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Point No.(i):

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Admittedly, the applicant along with his wife, availed credit facilities from the OD Alc respondent bank. No.ABPOD/106831100000690 of Rs.BB lakhs is the only subject loan account in this SA. The application schedule 1 and 2 immovable properties are the mortgaged properties securing the said loan. It is also an admitted fact that the^. applicant wrote letters to the respondent bank to settle the account under OTS and hence default cannot be a disputable fact. The statement of account also reflects the irregular^payments, Thus, the contention on illegal classification of account as NPA cannot be accepted and initiation of Securitization measures against the secured assets cannot be termed as illegal or highhanded or arbitrary. Such measures are available to the secured creditor under the provisions of the Act, 2002.

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As regards service of demand notice and^possession notice, the respondent bank placed on record proof of sending the demand notice and possession notice to the applicant and co-applicant by registered post. Demand notice was acknowledged. Possession notice dated 05.08.2023 was affixed on secured assets as^{per photographs} and^pubtished in Enstish and relusu ,"*re7rffK.$ipulated

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Page 4 of 4

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sA No.0712024

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time. As regards non-compliance of^{Sec.13(3A)is concerned, the} demand notice was dated^{16.12.2022. The lettersdated18.12.2023} and 28.12.2023 were issued^{referring the sale notice. The applicant} failed to establish that objections to demand^{notice dated t6.t2.2022} were issued. Hence no violation of Sec.13(3A)^{is found to have} happened. In view of the sufficient^{proof material placedon record, I} find no infraction of Secs.13(2) and¹³⁽⁴⁾ of^{the Act and the Rules8} (1) and 8(2) of 2002. The auction^pursuant to impugned^salenotice dated 22.tL.2023 did not materialize^{and therefore no needto} consider the averments^pertaining to^{non-complianceof Rules B(5),} 8(6), 8(7).

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9, In view of the above observations, I find that the^applicanthas failed to make out any valid^ground to set aside any of the^measures of the respondent bank under the Act,^{2002 againstthe SA schedule} properties and accordingly SA is liable to be dismissed.

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Point No.(ii):

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In the result, the Securitization Application fails and is^hereby dismissed.

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Consequently, Interlocutory Applications^pending, if any, shall stand closed. No order as to costs. 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 ond pronounced by me in the open court on this the 2gth doy of April, 2025).

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/lW**^

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1i(lursNwAR^KorHE) PRESIDING OFFICER

Sri Devineni Baswa Narendra Babu v. Union Bank of India

Case brief

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Sri Devineni Baswa Narendra Babu v. Union Bank of India

Case brief

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