Dismissed

Ayyappa Textiles v. Axis Bank

DRT2 Apr 2025SA/213/2023

Case brief

AI extract

What is this about?

Discussed alleged procedural violations in issuing a possession notice under the SARFAESI Act. The tribunal found sufficient proof of service via postal acknowledgement and publication in newspapers. The application to set aside the notice was dismissed as failed to establish valid grounds.

What did the court decide?

The Securitization Application is dismissed with consequential directions to close pending interlocutory applications, if any.

Ayyappa Textiles versus Axis Bank — Insolvency and Bankruptcy | DRT (2025)

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RAMESHWAR^KOTHE Presiding Officer Govt. of lndia Ministry of Finance DEBTS RECOVERY^TRIBUNAL.z

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rN rHE DEBrs RECU(l"EHVTftI"df&%T'- rr Ar HyDERABAD

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DATED THIS THE o2ND 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.213 OF 2023

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M/s Ayyappa Textiles and another Rep. By its Prop. Mekala Raju D.No.t7/47, Main Road, Yemmiganur Opp :Aravind Textiles, Kurnool-5 18360

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Mekala Raju

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S/o Mekala Nagesh

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Aged about 47 years, Occ:Business R/o D.No.1-1233, Githa Nagar, Kurnool

.......Applicants.

versus

Axis Bank Limited

Door No.22l1223/A-t, 1't Floor GT Nagar, Nellore, Andhra Pradesh-524003 Rep by its Authorized Officer

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....Respondent.

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Counsel for the Applicants : Mr.K. Kranthi Kumar

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Counsel for Respondent : Mr.M. Srinivas Reddy

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-:ORDER:-

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The Applicants filed the present Securitisation Application u/s 17 oF the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "the Act") to set aside the possession notice dated 25.11.2022 issued by the respondent bank under Sec.13(4)of the Act.

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The case oF the applicants, in brief, is that the 1't applicant proprietary concern represented by its proprietor-2nd applicant availed credit Facility from the respondent bank and committed default due to loss incurred in business on account of pandemic which led to classification account as NPA. The respondent bank issued )"'\ -...v'

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2of4

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sA No.21312023

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impugned^{possession notice undersec.13(4)without issuingnotice} under sec.13(2)^{of the Act. The possession notice was neither affixed} nor published in two^{leadings newspapersas per Rules 8(1) and B(2)} of security Interest^{(Enforcement) Rules, 2002 ("Rules"for brevity).} Hence this SA.

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The respondent^{bank filed reply statementalong with} documents. It is^{averred that due to non-payment of loan amount,} the account slipped^{into NPA category and securitization proceedings} had to be initiated^{by issuing Sec.13(2) demand notice dated} 12.07.2022 which^{was served on applicants and Smt'Mekala} padmavathi vide postal acknowledgement cards^placed on record.^As no payment was made^{as per demandnotice, the possessionnotice} dated 25.11.2022^{was issuedunder sec.13(4),The possession notice} was^published in^{'BusinessStandard' and 'Praja Sakthi newspapers} besides affixture on^{secured asset.The respondent bank has followed} due^procedure of^{law and hence SA is liable to be dismissed'}

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Learned counsel for applicants^{reported orders may be passed} on merits.

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During the course of arguments,^{learned counsel for respondent} reiterated his version as in the reply statement.^{While referringto the} proof documents annexed to the reply statement, learned counsel sought for dismissal of the SA.

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Now, the^points that arise for consideration are:. -

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i) Whether the applicant made out any valid^ground to quash the possession notice dated 25.11.2022 issued by the respondent under Sec.13(4) of the Act, 2002 against the SA schedute property? /fu6r5

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ii) To what relief? C/ 0'

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SA No.213l2023

Point No.(i):

It is an admitted fact that the applicant availed loan Facility From the respondent bank and committed default. The SA schedule property is the secured asset for the loan sanctioned by respondent bank and this fact is also not under dispute. The secured creditor is guided by the RBI directives with regard to classification of loan account as NPA on default and hence the action of respondent bank in classifying the account as NPA and initiation of Securitization measures cannot be faulted with.

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B. The respondent bank flled prooF of service of demand notice vide copies of postal acknowledgement cards at pages 36 and 37 annexed to the reply statement. The possession notice was received by Smt.Mekala Padmavathi, wife of Mekala Nagesh-2nd applicant and proprietor of 1't applicant. The postal cover sent to 1't applicant was returned as 'refused', hence deemed to be served. Copies of paper publication of possession notice in English and Telugu newspapers and copies of photographs as proof of affixture of possession notice on application schedule property are placed at pages 45 to 47 annexed to the reply statement. In view of the sufficient^proof, I do not find any non-compliance of Rules B(1) and B(2) of the Rules, 2002. The applicants failed to make out any valid ground to set aside the possession notice 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. ,//fuong (./'a'

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SA No'213/2023

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ConsequentlY,^{InterlocutorY} Applications^{pending, if anY, shall} stand closed. No order^{as to costs,}

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Communicate a^coPY of^this order to the^{partiesconcernedand} upload in the official^website'

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(Typed to my dictotion by the Ps, corrected, signed^{ond pronouncedby me in the opencourt on this} the o2'd doy of^April,2025).

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PRESIDING OFFICER

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RAMESTIWAR^KOTHE Presiding^Officer Govt. of^lndia Ministrv of Finance DEBTS RECOVERY^TRIBUNAL'z Abids,^{HYderabad-500001 '}

Ayyappa Textiles v. Axis Bank

Case brief

What is this about?

What did the court decide?

Ayyappa Textiles v. Axis Bank

Case brief

What is this about?

What did the court decide?

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