This Application under Section 17 of the SARFAESI Act challenged the validity of a Possession Notice due to alleged non-publication and improper insurance claim handling. The Tribunal found procedural compliance by the bank, dismissed the challenge, and rejected the insurer's liability in this matter.
No order as to costs.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE DEBTS RECOVERY TRIBUNAL _- 1 AT HYDERABAD
DATED THIS THE 22ND DAY OF JANUARY, 2C25
PRESENT: SRI GUMMADI GOPICHAND, PRESIDING OFFICER
SA.No.B07 /2C22
1.M/s GNR Products India Rep. by its Proprietor Sri Garlapati V. Venkatesh S/o Nageswara Rao Aged 38 years, Occ:business, tl.No.9- I-43, Kaman Bazar, Khammam-507001.
2.Mls Sri Sri Ramakrishna Electronics & Home Appliances Rep. by its Proprietor: GarlapatiVenkata Krishna Santosh, S/o Nageswara Rao, aged 40 years, Occ:business, H.No.9- 7-43, Kaman Bazar, Khammam-507001
... Applicants
Versus
... Respondents
Counsel for the Applicants Counsel for TstRespond.ent Respondent No.2
Rajendra Prasad Prabhakar
ORDER
l. This Application is filed u/s.17of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2oo2 (SARFAESI Act, 2OO2) challenging the action of the lstRespondent bank in issuing Possession Notice dL.26.LO.2O22 in respect of the schedule properties and to declare the same as null and void.
The ApplicantsNo.l&2 are proprietary concerns run by two brothers Viz., Sri GarlapatiVenkatesh and GarlapatiVenkata Krishna Santosh and Applicants No.3&4 are the parents of Sri GarlapatiV.Venkatesh and GarlapatiVenkata Krishna Santosh. Applicant No.1 availed Cash Credit loan and Applicant No.2 availed Cash Credit loan and the proprietors of Applicants No.1&2 and the Applicants No.3&4 have availed home loan from the lst Respondent Bank against the mortgage of the schedule properties.Due to covid-l9, the 1"t Applicant could not repay the loan amounts due. so, the l"tRespondent Bankissued demand notice dt.22.O4. to the Appli_cafrts u/s 13(2) of the SARFAESI Act, 2OO2. accident took place at the godown of the Applicant the Applicant No.1 was burnt to ashes. So, the laim before Respondent No.2 i.e. SBI General ,j,$Fli$Bificaf;Jh , ...(..j t," .:,iof thepolicy issued bythe 2.dRespondent, it is . r.i ,l !i ',lnsu.alr{" l+rt r
observedthat the risk address and communication address are mentioned as Kaman Bazar whereas the godown was located at v.V.Palem, Raghunandhapalem Mandal, so the 2"dRespondentrejected theinsurance claimof the Applicant No.1. Without resolving the pending claim of the Applicant No.1, the 1st Respondent bank issued possession notice dt.26.1o.2o22 u/s 13(a) of the sARFAESI Act, 2oo2 for taking symbolic possession of the schedule properties and the said possession notice was not published in two leading newspapers nor affixed on the schedule properties and hence the impugned possession notice is null and void. Hence the SA.
The l"tRespondent Bank filed their Reply denying all the adverse allegations made in the sA and contended that the Applicants availedvarious loan facilities from the erstwhile State Bank of Hyderabad, Khammam for running their business and later committed default in repayment of loan amounts due and the Bank classified theloan accounts as NPA. Thereafter,the State Bankof Hyderabad had been merged with State Bank of India, Respondent No.1 Bank. The lst Respondent bank also filed oAs 301122, OA/TA No.3l2o22 and OA/TA No.4/2022 against the Applicants and all the said OAs are pending for adjudication. The l"tRespondent Bank issued demand notice u/s 13(2) of the SARFAESI Act on 22.O4.2022 and the said notice was received by the Applicants. When there was no response to the said demand notice, thelstRespondent Bank issuecl possession notice dt.26.1o.2022 and the said notice was affixed on the schedule properties and also published in two daily newspapers. Thus, the lstRespondent Bank has followed the procedure contemplated under the provisions of SARFAESI Act, 2OO2 and Rules made thereunder in proceeding under Section 13(a) of the SARFA t, 2OO2 against the schedule properties. Respondent No.2 e claim made by the 1"t Applicant.Accordingly to di 2 2 JAH Z{85 "..., L i4rr rrrtut'?
Point lVo.(if :-
During the course of arguments, Ld. counsel for the Applicants and Ld. counsel for the lstRespondent bank reiterated their respective versions as stated supra.
'.'Th" sp of the Applicants is that Possession Notice published in two leading newspapers nor affixed b b lftrtr i,'-:o"f i','"'l',fr$fmas ''[En
on the schedule properties.To disprove the same, the l"tRespondentBank filed material documents along with the Reply filed by them.
As per the said material documents, it is clear that the lstRespondent Bankissued Possession Notice dt.26.to.2022 under Rule g(1) of Security Interest (Enforcement) Rule s, 2oo2 for taking symbolic possession of the schedule properties and the said notice was admittedly received by the Applicants. The said notice was published in Telugu and Englishdaily newspapers on 26.10.2022 as evidenced by the copies of the paper publication and copy of the said notice was also affixed on the schedule properties as depicted in the photographs filed by the l"tRespondent Bank. Hence in the circumstances, it is quite clear that the l"tRespondent Bank has scrupulouslycomplied with Rule g(1)&(2)of Security Interest (Enforcement) Rule s, 2OO2 in taking possession of the secured assets u/s 13(4) of the SARFAESI Act, 2oo2 and so, the said possession notice dt.26.1o.2022 is perfectly legal and valid. whether the Respondent No.2 is entitled to reject the insurance claim made by the 1st Applicant cannot be decided in this SA. Accordingly, this point is answered in favour of the 1st Respondent Bank and against the Applicants.
Point No.(ii):-
the parties concerned.
signed" and. pronounced. by me in the open
H5(*uary'202s)
2 2 JAit 2U5
sd/(c. coPr CHAND) PRESIDING OFFICER asil. Rcairlr,er ^ nd-t5.HY$sRAs'4i'
2 issues framed by the court
Whether applicants established any valid ground for setting aside the Possession Notice dated 26.10.2022 issued by the 1st Respondent Bank against the schedule properties?
What relief is appropriate in light of the adjudication of the possession notice and other pending matters?
5 provisions across 2 enactments
M/s GNR Products India Rep. by its Proprietor Sri Garlapati V. Venkatesh
M/s Sri Sri Ramakrishna Electronics & Home Appliances Rep. by its Proprietor Garlapati Venkata Krishna Santosh
Sri Garlapati Nageswara Rao
Smt. Garlapati Laxmi
State Bank of India
SBI General Insurance Company Ltd.
Gummadigopichand
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
