Partly allowed

Ms Coverit Flair v. Ms Indusland Bank Limited

DRT2 Jun 2025SA/36/2022

Case brief

AI extract

What is this about?

The court examined an application under Section 17 of the SARFAESI Act challenging a possession notice. It held that the borrower's objections under Section 13(3A) were not rightfully considered due to lack of a reply and non-compliance with publication and affixation rules, rendering the possession notice illegal.

What did the court decide?

The impugned possession notice dated 22.12.2021 was set aside. The respondent was directed to issue a fresh demand notice strictly following the provisions of the SARFAESI Act and applicable Rules.

Ms Coverit Flair versus Ms Indusland Bank Limited — Contract and Commercial Disputes | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL - 1 AT HYDERABAD DATED THIS THE 2NI' DAY OF JUNE, 2C25

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PRESENT: SRI GUMMADI GOPICHAND, PRESIDING OFFICER

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SA.No.36/ZOZ2

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M/s Coverit Flair Rep. by its Proprietor Mr.Zahra Hasan W/o Hasan Bin Hamza, Aged 51 years, Occ:business, R/o H.No .12-2-330 ls lB, Mehdipatnam, Hyderabad

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... Applicant

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Versus

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M/s Indusland Bank Ltd. Rep. by its Authorized Officer Financial Restructuring and Reconstruction Group, Regional Office, l-lO-72,3.d floor, AshokaJanardhan Chambers, Begumpet, Hyderabad- 16

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Begumpet, Hyderabad- 16 ... Respondent Counsel for the Applicant : Sn D.Raghauulu Counselfor Respondent : Sn P. VenkataRamana

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ORDER

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This Application is filed u/s.17of the Securitization and Reconstruction of atlql.r"rt--ttJ:"..," and Enforcement of Security Interest Act, 2Oo2

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OO2) challenging the possession Notice dt.22.12.2)21 ndent in respect of the schedule property and to illegal and arbitrary.

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-r rt(.I 2t pThe averments rn6 by the Applicant in brief are as follows: *F^T^ '{' W,a;t#

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sA3612022

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The Applicant availed loan from the Respondent and created mortgage in respect of the schedule propert5z. The Respondent issued demand notice u/s 13(2) of the SARFAESI Act, 2O02 on06.08.2O2I and after receiving the said notice, the Applicant submitted their objections u/s 13(3A) of the SARFAESI Act,2OO2 and the same was received by the Respondent on 10.1O.2021. But the Respondent without considering the said objections, issued the impugned possession notice dt.22. l2.2O2I u/s 13(4) of the Act, 2OO2 and the said possession notice was not published in two daily newspapers and it was also not affixed on the schedule property. Hence the SA.

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The Respondent filed their Reply denying all the adverse allegations made in the SA and contended that after availing loan from the Respondent, the Applicant failed to repay the loan dues and so, the loan account was classified as NPA. Accordingly, the Respondent issued demand notice dt.O6.O8.2O2t tt/s 13(2) of the SARFAESI Act, 2oo2and the said notice was received by the Applicant and in response to the said notice, the Applicant raised objections vide letter dt. 1 l.lO.2O2l and the Respondent has taken into consideration, all the statements made by the Applicant vide their objections and rightly rejected the same. Thereafter, the Respondent issued possession notice dt.22.12.2027 u/s 13(a) oi the Act, 2002 and took symbotic possession of the schedule property. Accordingly, the Respondent prayed to dismiss the SA.

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Heard Ld. Counsel for the Applicant and Ld. Counsel for the Respondent and perused the material brought on record.

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that arise for consideration are

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i. tuhethi\te Applicant has established ang ualid grounds for

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the Posses.slon N otice dt.22.j2.2o21 issued bu the

sA36/2022

ii. To uhat relief ?

Polnt No.(il:-

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

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The undisputed facts of the case are that the Applicant availed loan from the Respondent and created mortgage in respect of the schedule property to secure the said loan. Thereafter, the Applicant committed default in repaying the loan dues and so, the loan account was classified as NPA. There is also no dispute regarding the fact that the Applicant received the demand notice issued by the Respondent and in response to the said notice, the Applicant raised objections vide letter dt. I 1 . 10.202 1 . Admitredly the Respondent received the said objections.

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The specific contention of the Applicant is that the Respondent has not submitted any reply to the objections raised by the Applicant in response to the demand notice dt.06.08.202 land without considering the objections, the Respondent straightaway issued the impugned Possession notice dt.22.12.2o21 which was neither published in two leading newspapers nor affixed on the schedule property.

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Per contra, Respondent contended that the Respondent has rejected the objections raised by the Applicant and they have duiy followed the procedure laid down under the provisions of SARFAESI Act,2002 and Rules made thereunder in issuingdemand notice and possession notice.

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tiate their contention, the Respondent has not ts along with the Reply filed by them. As per

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rr1 the Applicant, it is clear that the Respondent

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iu1 t,"'''iW.h__\s_s

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sA 36/2022

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issued demand notice dt.O6.OB.2O21 u/s t3(2) of the SARFAESI Act, 2oo2 and after receiving the said notice, the Applicant raised objections vide letter dt. 10.10.202 1. Admittediy, the Respondent received the said objections, and moreover, as token of receipt of the said objections, the Respondent signed on the acknowledgment dt. 1r.ro.2o2r. Thereafter the Respondent issued Possession rLotice dt.22.r2.2o2l and office copy of the said possession notice is enclosed with the SA.

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when the Applicant is contending that the Respondent has not issued any reply to the objectionsraised by the Applicant in response to the demand notice dt.06. o8.2o2r, the burden lies on the Respondent to establish that they have issued reply to the said objections. But along with the counter liled by them,the Respondent has not encrosed anymaterial documents. Even in the counter also, the Respondent has notmentioned as on which date, they submittedtheir reply to the objections dt. 10.10.2021 raised by the Applicant in compliance of Section 13(3A) of the SARFAESI Act,2o02. The further contention of the Applicant is that the impugned possession notice was neither affixed on the schedule property nor published in two daily newspapers. If realy, the Respondent has published the impugnedpossession notice in two leading newspapers and affixed the said notice on the schedule property, nothing prevented the Respondent in filing the relevant material documents to substantiate their contention. But for the reasons best known to the Respondent, the Respondent has not filed any documents to prove that they have followed Rule g( l )&(2) of Security Interest (Enforcement) Rules, 2OO2 in issuing the possession notice dt.22.r2.2021 . so, in view of the above circumstances, it can be inferrell that the Respondent has neither published the impugned possedsion notjc.g in two leading newspapers nor affixed the same on the -.\ schedule propeitt'r

Ft a rns ..{ d(

sA 36/2022

So, in view of the non-compliance of Section l3(3A) of the SARFAESI Act, 2OO2 in giving reply to the objections raised by the Applicant in response to the demand notice dt.06.09.202 1 issued by the Respondent under Section 13(2) of the SARFAESI Act,2OO2, and also in view of the non-compliance of Rule 8( 1)&(2)of Security Interest (Enforcement) Rules, 2002 in taking possession of the secured asset, the impugned possession notice dt.22.r2.2o21 issued by the Respondent in respect of the schedule property is not legal and varid and liable to be set aside. Accordingly, this point is answered in favour of the Applicant and against the Respondent

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Potnt No,(tt):-

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In the result , SA 3612022 is allowed by setting aside the impugned Possession Notice dt.22.12.2o2r issued by the Respondent in respect of the schedule property. In view of the circumstances of the case, the Respondent is directed to issue fresh demand notice u/ s 13(2) of the SARFAESI Act, 2oo2 by strictly foiiowing the provisions of sARFAESI Act,2OO2 and Rules made thereunder.

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13' 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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(Dctated to

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(c. coPr CHAND)
f -ji COPY
PRESIDING OFFICER
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Ms Coverit Flair v. Ms Indusland Bank Limited

Case brief

What is this about?

What did the court decide?

Ms Coverit Flair v. Ms Indusland Bank Limited

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

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Case details

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