Dismissed

Upender Civil Construction v. Punjab National Bank

DRT30 May 2025SA/293/2024

Case brief

AI extract

What is this about?

This tribunal dismissed a Securitisation Application filed to set aside a sale notice. The court held the application infructuous as the scheduled auction did not materialize. It rejected the plea of non-service of notices, finding the applicants had taken timeous earlier action to ensure such queries were raised in prior writ proceedings.

What did the court decide?

The Securitisation Application is dismissed. Interlocutory applications pending, if any, stand closed.

Upender Civil Construction versus Punjab National Bank — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL - II AT HYDERABAD

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DATED THIS THE THIRTIETH DAY OF MAY, 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. 293 OF 2024

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Between :

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M/s. Upender Civil Construction Work Proprietor Singireddy Upender Reddy H. No. 16-10-67, Shiva Nagar Warangal - 506 002.

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SmL Singireddy Mallikamba H. No. 16-10-142/A, Shiva Nagar Warangal - 506 002.

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. . . . . . .Applicants.

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And

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Punjab National Bank Circle Sastra Office Secunderabad, II Floor Maharshi House Road No.3, Banjara Hills Hydera bad- 500035. Rep by its Authorised Officer.

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. . . . . .Respondent.

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Counsel for the Applicant Counsel for Respondent

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Mr. Ch. Kishore.

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Itls. N. M. Shiny Mounika.

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-:ORDER:-

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The Applicant filed the present Securitisation Application u/s.77 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security.Interest,,Act, 2002 '' ''\rl '" '^{1 '}

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sA.293/2024

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(hereinafter referred to as "SARFAESI Act 2002") assailing sale notice dated 23.06.2024 putting the SA schedule property for sale on 23.07.2024.

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As per the averments in SA, the case of the applicant in brief, is that applicant is the borrower and has been paying the loan amount regularly, The loan is secured by way of mortgage of SA schedule property. However, respondent bank initiated recovery proceedings against the law, without following the procedure and against the principles of natural justice. Applicants came know of the recovery proceedings when some neighbour has brought the sale notice dated 23.06.2024 to their notice. The respondent bank has not served demand notice or possession notice on the applicants. The possession notice has neither been affixed nor published in newspapers. Applicants are ready to pay the remaining balance. Applicants were not given any opportunity to pay the amounts or providing statement of account showing the breakup of dues. The respondent bank has not given credit to the amounts paid subsequently. The demand raised by the respondent is not correct. Applicants are in severe financial crisis. The sale notice has not been published as per law. Rule 8(6) notice has not been served. Sale notice has not been affixed on the secured asset. Applicant is ready to settle the amount with the respondent bank if the correct debt is adjudicated. Applicants deposited substantial amount.

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Respondent bank filed reply statement denying the allegations made in the SA. It is submitted that the sale scheduled on 23.07.2024 was not materialised. Hence, the SA becomes

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fu:j','b

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sA.293/2024

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infructuous and requires to be dismissed. Initially, respondent started recovery proceedings vide demand notice 25.07.2019, possession notice dated 05.10.2019 and sale notice dated 26.tL.2019. Applicants challenged the sale notice by filing W.P.753 of 2020 and the same ended in dismissal with the sale proceedings were not held for want of bidders. Thereafter, respondent proceeded with a fresh possession notice dated L9.02.2022. The possession notice has been published in Mana Telangana and Business Standard on 24.02.2022. Respondent bank got the property valued through approved valuer on 29.02.2024. Thereafter, respondent issued sale notice dated 23,06.2024 fixing the date of auction as 23.07.2024, published in Namasthe Telangana and Financial Express dailies. photostat copies of postal registration receipts and track reports to prove service of sale notice are filed with the reply statement.

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Learned counsel for the applicants reported no oral arguments. Heard learned counsel appearing for the respondent.^perused the material brought on record.

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The auction sale proceedings scheduled for 23.07.2024 pursuant to sale notice dated 23.06.2024 under challenge did not materialise. Hence the SA to this extent becomes infructuous and the allegations relating to the sale proceedings need no consideration. Applicants took a plea that respondent bank did not comply the provisions of SARFAESI Act and the Rules in serving demand notice and possession notice on the applicant. Respondent bank demonstrated compliance of rules B(1)

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sA.29312024

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papers at pages 7 to L2. The respondent bank placed a photostat cqpy of demand notice dated 25.07.2019 containing the signature of applicant acknowledging receipt of the same on 28.12.2020. Section 13 deals with enforcement of security by secured creditor in accordance with the provisions of this Act. In terms of sub-section 2 of Section 13, in the event of default in repayment of secured debt, the secured creditor is required to notify the borrower in writing to discharge in full his liabilities to the secured creditor within sixty days from the date of notice failing which he secured creditor shall be entitled to exercise all or any of the rights under sub-section (4) f Section 13. Rule 3 (1) of Security Interest (Enforcement) Rules, 2002 prescribe the modes of service of demand notice on the borrower. The purpose of issuing a notice to borrower u/s 13(2) of SARFAESI Act is to draw attention of borrower that his account has become irregular and has been classified as NPA, therefore, he is required to clear the entire dues as per law. Besides, it is to afford the borrower an opportunity to clear the dues before the secured creditor takes recourse to enforce the security interest to recovery the dues. In the instant case, the respondent has placed a Photostat copy of demand notice receipt of which presumably acknowledged by the borrower after a period of one and half an year of its issuance. Interestingly, respondent bank issued possession notice on t9.02.2022 i.e., after a gap of one year. During this intervening period, i.e., from the date of receipt of demand notice and the date of issue of possession notice, applicant had not raised any objections 1o the d.ffinotice. Having (l$n"'*

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sA. 293 / 2024

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acknowredged the receipt of demand notice dated 25.07.2079 on 28.t2.2020 and having agitated the sate notice dated 26'LL.2079 in w.p. No.753 0f 2020, appricants cannot take a plea that they were not served with the demand notice at this belated stage. Further, it is rerevant to mention here that the respondent bank issued a fresh possession notice on 19.02.2022 and nothing prevented the appricants from raising the issue of non-service of demand notice u/s 13(2) at the relevant time. In that view of the matter, appricants have failed to make out any varid ground to interdict in the securitisation proceedings against the secured asset for recovery of outstanding dues by the respondent bank. Thus, the SA is devoid of any merits and is liable to be dismissed.

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In view of the foregoing observations, the SA is riabre to be dismissed.

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In the result, the sA fairs and is hereby dismissed.

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B. consequenuy, Interrocutory Apprications pending if any, shail 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 portat.

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(Dictated to the steno, signed ond pronounced by me in the open court on this the

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3o'o day of May, 2o2s).

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frW"u 1nfresnwAR KorHE) PRESIDING OFFICER

Upender Civil Construction v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

Upender Civil Construction v. Punjab National Bank

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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