Dismissed

K Sarojana v. Apsfc

DRT23 Oct 2025SA/220/2024

Case brief

AI extract

What is this about?

Debts Recovery Tribunal rejected a Section 17 application under the SARFAESI Act by a guarantor. The Tribunal upheld the financial corporation's right to initiate proceedings for physical possession via an Advocate Commissioner, finding that statutory notice requirements regarding issuance and advertisement were complied with.

What did the court decide?

The surety's application to quash the possession proceedings was dismissed due to compliance with statutory notice requirements.

K Sarojana versus Apsfc — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERYTRIBUNAL- I AT HYDERABAD

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DATEDTHISTHE 23RD DAY OFOCTOBER, 2025

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PRESENT: GUMMADI GOPICHAND, PRESIDING OFFICER

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sA.No.22O,/2024

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Smt.K.Sarojini, W/o Narsaiah, Aged 70 years, Occ:house wife, R/o H.No.2-8-1l 10, Sai Nagar, Jangaon District.

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... Applicant

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And

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Andhra Pradesh State Financial Corporation., Head Office:H.No.5-9- 194, Chirag Ali Lane, P.B.No. 165, Hyderabad-S0O 0Ol. Branch at: Warangal Rep. by its Authorized officer Sri B.C. Prasad, S/o Balaji

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Mls Ananth Gas Service, Prop: Sri N.Pradeep Rao, H.No.2-8-1l 10/B, Hyderabad Road, Jangaon Village & Mandal Jangaon.

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Smt. N.Vimala Devi, Mother of N.pradeep Rao, H.No.2-8-1l 10/8, Hyderabad Road, Jangaon Village & Mandal Jangaon.

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Smt. N.Aruna Devi, R/o H.No. 1-4-158/174 & 175, Saipuri Colony, Sainikpuri, Sec.bad, Hyderabad.

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Counsel for t?rc Applicant

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Counselfor the 7st Respondent Respondents No.2 to 4

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: Ms.P.V. Janani .' Sn R.Rajendra^prasad : Exparte

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Reserued on Pronounced on Uploaded to th.e taebsite on

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: 10.09.2025 :23.10.2025

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:23.10.2O25

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-:ORDER..

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This application is filed by the Applicant u/s 17 of the SARFAESI Act, 2002, challenging the steps initiated by the 1"t Respondent for taking physical possession of the schedule property through Advocate commissioner pursuant to the orders of Ld.CJM, Jangaon in Crl.M.P.No.43 12024 and to declare the same as illegal and void.

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

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The Applicant is a guarantor to the loan availed by Respondent No.2 from the l"t Respondent and created mortgage in respect of the schedule property. Thereafter, the borrower committed default in repaying the loan dues, and so the loan account was classified as NpA and the lst Respondent initiated proceedings under the provisions of SARFAESI Act,2OO2 and issued demand notice dt.24.Og.2o2l uls 1 3(2) of the SARFAESI Act, 2002. Thereafter, the 1st Respondent issued possession notice dt.O 1 . I 2.2021 to the Applicant. The Applicant never stood as guarantor to the alleged amount of Rs.40 lakhs as claimed by the Respondent No.1 Corporation. The 1st Respondent is trying to take physical possession of the schedule property under Section 14 of the SARFAESI Act, 2OO2 by liling Crl.M.P.No.43 / 24 on the file of Ld.CJM, Jangaon for appointment of advocate commissioner and so, the said proceedings initiated by the 1st Respondent are not legal, valid and binding on the Applicant. Hence the SA.

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J. The l"t Respondent filed their Reply denying al1 the adverse allegations made in the SA and contended that the Respondent No.2 availed loan from the lst Respondent whereas the Applicant stood as guarantor by creating mortgage in respect of the schedule property. Thereafter, the 2"d Respondent default in rbpaying the loan dues and so, the loan as NPA and the lst Respondent issued demand tice to the Applicant and others by proc lated under the provisions of SARFAESI Act, 2ofl,z e thereunder. Thereafter, the l"t Re spondent ap-proache d for appointment of advocate

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commissioner for taking physicar possession of the schedule propert5r and the advocate commissioner appointed by the Ld.CJM, Jangaon issued notice dt.gO.OS.2O24 to the Applicant and so, the said proceedings initiated by the 1"t Respondent u/s 14 0fthe SARFAESI Act,2 OO2 are legal and valid. Accordingly, l"t Respondent prayed to dismiss the SA.

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Heard ld. Counsel for the Applicant and Ld. Counsel for the 1"t Respondent and perused the material brought on record. Respondents No. 2 to 4 remained exparte.

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Now the points that arise for consideration are

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i. ulhether tLrc Applicant has established. ang ualid. grounds for challenging tlle steps initiated bg the 7st Respondent for taking physical possession of tle schedule propertA through ad.uocate commissioner?

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ii. To uhat relief?

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Point No.lll-

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During the course of arguments, Ld. Counsel for the Applicant and Ld. counsel for the l"t Respondent reiterated their respective versions as stated supra.

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There is no dispute regarding the fact that the 2"d Respondent availed loan from the lst Respondent whereas the Applicant stood as guarantor by creating mortgage in respect of the schedule property towards security for the said loan and thereafter, the borrower committed default in repaying the loan dues.

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The specilic contention of the Applicant is that without serving demand notice and possession notice to the Applicant and without complying with Rule 8(1)&(2) of Securi Interest (Enforcement) Rules 2002, the 1"t Respondent Sated^{proceedingsfor taking physical} possession oi't$t through advocate commissioner u/s 14 of the sefFaBsr ,^{the said proceedings} are not legal and valid. *

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Per contra, l"t Respondent contended that they have duly followed the procedure laid down under the provisions of SARFAESI Act,2OO2 and. Rules made thereunder in issuing all the statutory notices to the Applicant and also in initiating steps for taking physical possession of the schedule properry u/s 14 ofthe SARFAESI Act, 2002.

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In order to substantiate their contention, the l"t Respondent enclosed relevant material documents along with the Reply filed by them. As per the said material documents, it is clear that the lst Respondent issued demand notice dt.24.O8.2021uls 13(2) of the SARFAESI Act, 2OO2 to the Applicant and others and the said notice was received by the Applicant as evidenced by her signature on the office copy of the said notice. As there was no response to the said demand notice, the lst Respondent issued possession notice dt.01.12.2021 u/s 13(4) of the Act, 2OO2 to the Applicant and others and the Applicant received the said notice as evidenced by her signature on the office copy of the said possession notice. The said possession notice was published in Telugu and English daily newspapers as evidenced by the copies of paper publication frled by the l^st Respondent and the said notice was also affixed on the schedule property as depicted in the copies of photographs filed by the 1st Respondent. Thus the lst Respondent has duly followed Rule 8(1)&(2) of Security Interest (Enforcement) Rules, 2OO2 irt issuing possession notice to the Applicant and others.

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As per the provisions of Section 14 of SARFAESI Act, 2002, after issuance of possession notice u/s l3(a) of the SARFAESI Act, 2OO2, the secured creditor is at liberty to approach the concerned District Magistrate or Chief Judicial Magistrate for taking physical possession of the secured asset. In the ins after issuing demand notice and possession notice to the dent being secured creditor, approached Ld. of the SARFAESI Act, 2oO2 by Iiling t of advocate commissioner for taking hedule property. Ld.CJM, Jangaon after

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considering the material on record, appointed advocate commissioner and the said advocate commissioner issued notice dt.30.05.2024 to the Applicant for vacating the schedule property. So the steps initiated by the lst Respondent for taking physica-l possession of the schedule propert5z u/s 14 of the SARFAESI Act, 2OO2 are perfectly legal and valid.

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t2. So, considering all the circumstances, I am of the opinion that the Applicant is not entitled to any relief. So, I see no ground warranting interference of this Tribunal with the steps initiated by the Respondent for taking physical possession of the schedule property u/s 14 of the SARFAESI Act,2OO2. Accordingly, this point is answered in favour of the lst Respondent and against the Applicant.

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Point No.(tl)r

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In the result, SA22Ol2024 is dismissed as there are no merits.

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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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(Actated to the P.S trdnscribed bA tler, coftected., sigfied aftd pfoiounced. bg me in tlLe open court oftthis tlle 23 d.ay of October, 2025).

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2 3 BCT 2flfi

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(G. GOPr CHAND)
PRESIDING OI'rICER
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A*(RegB,;tct
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K Sarojana v. Apsfc

Case brief

What is this about?

What did the court decide?

K Sarojana v. Apsfc

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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