Allowed

M S Dreams Bakery Foods v. State Bank of India

DRT20 Feb 2025SA/258/2022

Case brief

AI extract

What is this about?

In a writ petition under Section 17 of the SARFAESI Act, the TRi Hyderabad held that the applicant b適當or/guarantors were estopped from claiming non-receipt of notices. Finding the Sec 13 notice valid and previously affirmed, the Tribunal upheld the bank's legal proceeding under Section 14 for physical possession through an advocate commissioner.

What did the court decide?

The petition challenging the bank's proceeding under Section 14 was dismissed; the proceeding is held legal and valid.

M S Dreams Bakery Foods versus State Bank of India — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERYTRIBUNAL.IAT HYDERABAD

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DATED THIS THE ZOTH DAY OF FEBRUARY, 2025

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PRESENT: GUMMADI GoPICHAND, PRESIDING OFFICER

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SA.No.2SA/2C22

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l.M ls Dreams Bakery Foods Rep. by its Proprietor Smt. Raghunathpur Meena W/o Raghunathpur Ram Dev prasad, Aged 50 years, Occ:business, R/o H.No .3-7, Banda Bazar, Narkatpally, Nalgonda.

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Sri Dudemetla Venkateswarlu, S/o late Narasimha, aged 51 years, R/o H.No.3-24, Opp. Bus Stand, Narkatpally, Nalgonda

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Smt. Kadire Yadamma(legal heir), W/o late Kadire Nageshwar, Aged 33 years, Occ:house wife, R/o H.No .8-7 5, Opp.Gram panchayat, Narketpally, Nalgonda.

... Applicants

And

State Bank of India,

Authorized officer & Chief manager Stressed Assets Recovery branch, 2'd floor, TSRTC Commuter Amenity centre, Bus Terminal complex, Koti, Hyderabad.

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Respondent bank Sri K.Buchi BabuK.Buchi Babu Sn P. V. SatganaraAanaP. V. SatganaraAanaV. SatganaraAanaSatganaraAana

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Cou
Sri K.Buchi BabuK.Buchi Babu
Coun
Sn P. V. SatganaraAanaP. V. SatganaraAanaV. SatganaraAanaSatganaraAana
1. This Applicants u/s.17 of the SARFAESI
Act, proceedings initiated by the Respondent

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sA2s812022

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Bank before the CJM, Nalgonda in Crl.M.p.Nos.1g2& 18312022 for taking physical possession of the schedure properties u/s 14 of the SARFAESI Act, 2oo2 and to declare the same as illegal.

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

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Applicant No.lis the borrower who availed credit facilities from the Respondent Bank and Appricants No.2&3 are the guarantors and they created mortgaged in respect of the schedule properties towards security for the loan availed by the Applicant No.1. Due to covid-l9, the Applicant could not make some payments and 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,2OO2 for taking physical possession of the schedule properties and at the request of the Applicants, the Bank gave a copy of the possession notice dt.01.71.2018 issued by the Bank u/s 13(4) of the Act. challenging the said notice, the Applicant No.1 filed sA 2s0/201g before this Hon'ble Tribunal and the said sA was dismissed. All of a sudden, on 24.09.2022, some officiais of the Respondent Bank along with advocate commissioner came to the schedule properties and threatened the Applicants to hand over the possession of the schedule properties. The Bank initiated proceedings in crl.M.P.Nos.182&18312022 on the file of cJM, Nalgonda without following the procedure. The impugned possession notice was not affixed on the schedule property. Hence the SA.

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dent Bank filed their Reply statement denying all the mr";3 tions made in the sA. It is contended that as the dP e& q Tpplicant committed default in repayment of loan dues, the 2 0^Ffi8.ffila." nk issued demand notice u/s 13(2) of the SARFAESI ACt, zupr,P.,,f 1r'u6.2o18 to the Applicant and the said notice was ,*,^,,L \w$-ry.heApplicant.Thereafter,theRespondentbankissued

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sA2s812022

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possession notice u/s 13(4) of the Act on 01.11.201g for taking symbolic possession of the schedule property and the said notice was served on the Applicants and also published in two daily newspapers on 04.11.2018 and the said notice was also affixed on the schedule properties. Thereafter, the Respondent Bank approached the cJM, Nalgonda for appointment of advocate commissioner for taking physical possession of the schedule properties and the advocate commissioner issued notice to the Applicants for evicting the schedule properties. On earlier occasion, the Applicant No.1 filed sA 2sol2olg and the said sA was dismissed. The Respondent bank also filed o.A.672l2org against the borrowers/guarantors/mortgagors and the said o.A. was decreed on 22.O1.2O2O and recovery certificate was also issued. Hence there are no merits in the sA and the SA is liable to be dismissed.

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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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Whether the Applicants established anA ualid ground fo,

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challenging the proceedings initiated bg the Respondent Bank on the file of CJM, Nalgonda in Crl.M.P.Nos.l82/ 2O22 & 183/ 2022for taking physicalpossession of tLrc schedule properties?

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iil To what relieJ?

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Point No.(il:-

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6.
During the gEar+e&Uguments, Ld. Counsel for the Applicants and
'"t Bank reiterated their respective
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.'i'jj
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sA2s8l2022

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There is no dispute regarding the fact that the Applicant No.l availed credit facilities from the Respondent Bank whereas Applicants No.2&3 stood as guarantors and created mortgage against the schedule properties and thereafter, the Applicant No.1 committed default in repayment of outstanding dues.

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B. But the specific contention of the Applicants is that without issuing any demand notice and possession notice, the Respondent Bank straight away proceeded u/s 14 of the Act for taking physical possession of the schedule propertiesthrough advocate commissioner. Per contra, Respondent Bank contended that they have followed the contemplated procedure laid down under the provisions of SARFAESI 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 materiar documents along with the Reply filed by them. As per the said material documents, it is clear that on earlier occasion, Applicant No. 1 filed sA 2so l2olg challenging the possession notice dt.01 .rl.2o1g issued by the Respondent bank. After an elaborate enquiry, the said sA was dismissed vide order dt.05.07.2019- A perusal of the said order indicates that this Tribunal has given a categorical finding that the Respondent Bank issued demand notice dt.11.06.201g and possession notice dt.o1 .rr.2o1g to the Applicant and the said possession notice was affixed on the schedule property and it was also published in Indian Express and Andhra Jyoti daily.. newspapers on 04.1 1 .2olg and So, the said notice is valid in law. So, this Tribunal has already gave a '6 -offi"'Y$'** *gqr$A\effect ",rtrul^{that Lrral}^thn^e l(es^Res^pondent u^B^ank tⁱ^ssued deman dd notice 7#, andi{posse otice to the Applicant and the said notices are duly .,t , :t:".t^d -3 thea.$nlicant and the Bank followed the procedure as "r.E^{2 [",Et&r7fl?5*d;jfh.rthe sARFAEST} Act, 2oo2 and Rules made ing the ".id ooti".s. In view of the same, now the 4

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"\s-i#W't-*," -:

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sA2s8l2o22

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Applicants are estopped from contending that they have not received demand notice and possession notice from the Respondent Bank. There is also no dispute regarding the fact that the said order dt.05.07.2oL9 passed in sA 2so/2019 attained finality as no appeal is filed by the Applicants challenging the same.

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After issuing possession notice dt.O1.Lt.2018, the Respondent Bank initiated proceedings u/s 14of the SARFAESI Act, 2oo2 for taking physicai possession of the schedule properties by fling crl.M.P.Nos.182&18312023. Ld.cJM, Nalgonda was pleased to appoint advocate commissioner for taking physical possession of the schedule properties and when the advocate commissioner issued notice to the Applicantsfor directing them to vacate schedule properties, they filed the present SA. As per the provisions of Section 14 of the Act, secured creditor can initiate proceedings before the concerned Chief Juridical 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 properties throughadvocatecommissioner 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 Applicants.

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Point No,(iil:-

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stand disposed of. No order as to costs.
2 fi.??iit t""r,jfiarl
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W,!,'{I.r*WW;;ffiqry,r s

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sA2s8l2022

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communicate a copy of this order to the parties concerned.

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(Dctated to the P.s transcribed' bg her, corrected., signed and. pronounced. bg me in the open court on this the 20* dag of February, 2025).

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sd/(G. coPr CHAND) PRESIDING OFFICER

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2 0 rEB 2025

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rRuE\cFpv v"4rfr.Regir'al r ^??-t.^{|tY!1fr!?ARAD.}

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M S Dreams Bakery Foods v. State Bank of India

Case brief

What is this about?

What did the court decide?

M S Dreams Bakery Foods v. State Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

Parties & counsel

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Case details

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