Dismissed

Kannam Nagaraju v. Edelweiss Assets Reconstruction Company Limited

DRT11 Sept 2025SA/372/2023

Case brief

AI extract

What is this about?

This Debts Recovery Tribunal dismissed an application challenging the Respondent’s initiation of physical possession proceedings—initiated under Section 14 of the SARFAESI Act, 2002—via an Advocate Commissioner appointed by the CJM, Khammam. The Tribunal found the Respondent complied with mandatory pre-conditions, including notice issuance and publication.

What did the court decide?

The application SA.No.372/2023 is dismissed as there are no merits; interlocutory applications are disposed of without order as to costs.

Kannam Nagaraju versus Edelweiss Assets Reconstruction Company… — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERYTRIBUNAL - I AT HYDERABAD

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DATEDTHISTHE 1 ITH DAYOFSEPTEMBER, 2025

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PRESENT: GUMMADI GOPICHAND, PRESIDING OFFICER

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sA.No.372,/2023

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Sri Kannam Nagaraju, S/o Pochaiah, Aged 43 years, Occ:business, R/o H.No.l-4-47 lB &,4-47 lC, Saradhi Nagar Locality, Khammam Municipality, Khammam District

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... Applicant

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And

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Edelweiss Asset Reconstruction Company Ltd, Rep. by its Authorized Officer, Situated at Edelweiss House, Off CST Road, Kalina, Mumbai-4OO 098. ... Respondent

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... Respondent

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Counsel for tLrc Applicant Counsel for tlrc Respondent

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Si D.Raghatrulu Si R. Rajendra Prasad

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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 Respondent for taking physical possession of the schedule property through Advocate commissioner pursuant to the orders of Ld.CJM, Khammam in Crl.M.P.No.18/23 consequent to the Possession Notice dt.05.01.2023 and to declare the same as illegal and void.

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The are that: App from the Respondent and property to secure the said Due to could not pay some

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instalments and the Respondent illegally classified the loan account as NPA. The Respondent without issuing demand notice and possession notice to the Applicant, straightaway, initiated proceedings for taking physical possession of the schedule property through advocate commissioner under Section 14 of the SARFAESI Act, 2OO2 by filing Crl.M.P.No. 18123 on the file of Ld.CJM, Khammam and the advocate commissioner appointed by the Ld.CJM, Khammam issued notice dt. 10.10.2023 to the Applicant to vacate the schedule premises. The impugned possession notice dt.OS. 01 .2023 was not published in newspapers and also not affixed on the schedule property and so, the said proceedings are illegal and arbitrary. Hence the SA.

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The Respondent Bank filed their Reply denying all the adverse allegations made in the SA and contended that the Applicant having availed loan from the Respondent, committed default in repaying the loan dues. So, the loan account was classified as NpA and the Respondent issued demand notice dt.r6.og.2o22 and the said. notice was sent to the Applicant through Regd. post and when the Applicant avoided to receive the said notice, the Respondent published the said demand notice in Business Standard and Nava Telangana daily newspapers and also aflixed the said notice. Thereafter, the Respondent issued possession notice dt.05.01.2023 and the said possession notice was affixed on the schedule property and the said notice was arso published in two leading newspapers. Thereafter, the Respondent bank initiated proceedings before the Ld.CJM, Khammam for taking physical possession ofthe schedule propert5r u/s 14 ofthe SARFAESI Act, 2002. So there are no merits in the SA and accordingly, Respondent prayed to dismiss the SA.

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for the Applicant and Ld. Counsel for the the material brought on record.

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for consideration are ,r:-.r a^t .;lf ILIIJ '' .,.1 , t'.ⁱ ..1 2 . -. ,,.,,;,ff:if o*qtdgz

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wLrcther tle Applicant has established ang ualid grounds for challenging the steps initiated bg the Respondent for taking phgsical possession of the schedule property through aduocate commissioner pursuant to tlrc possession notice dt.O5.01 .2023 issued bg the Bank?

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ii. To uhat relief?

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Potnt IVo.(if:-

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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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7 . There is no dispute regarding the fact that the Applicant availed loan from the Respondent and created mortgage in respect ofthe schedule property and thereafter, the Applicant committed default in repaying the loan dues.

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The specific 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 Security Interest (Enforcement) Rules 2002, the Respondent straightaway, initiated proceedings for taking physical possession of the schedule property through advocate commissioner u/s 14 of the SARFAESI Act,2OO2 and so, the said proceedings are not legal and valid.

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Per contra, contended that they have duly followed the procedure e provisions of SARFAESI Act, 2OO2 and Rules all the statutory notices to the Applicant physical possession of the schedule

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s r+1of t$Epgy 2002.

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In order to substantiate their contention, the Respondent enclosed relevant material documents along with the Reply filed by them. As per the said material documents, it is clear that the Respondent issued demand notice d,t.16.O9.2O22 u/s 13(2) of the SARFAESI Act, 2OO2 and sent the said notice to the Applicant through Regd. Post and the Respondent also published the said demand notice in English and Telugu daily newspapers as evidenced by the copies of paper publication filed by the bank and so, there is deemed service of demand notice on the Applicant. Thereafter, the Respondent issued possession notice dt.05.01.2023 and the said notice was sent to the Applicant through Regd. Post and the said notice was received by the Applicant. In fact, the Applicant filed copy of the said notice along with the SA filed by him. The said possession notice was published in two daily newspapers as evidenced by the copies of paper publication filed by the Respondent and the said notice was also affixed on the schedule property as depicted in the copy of photograph filed by the Respondent. Thus the Respondent has duly followed Rule 8(1)(2) of Security Interest (Enforcement) Rules, 2OO2 rn issuing possession notice to the Applicant.

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As per the provisions of Section 14 of SARFAESI Act, 2002, after issuance of possession notice u/s 13(a) of the SARFAESI Act, 2002, 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 instant case, after issuing demand notice and possession notice to the Applicant, the Respondent approached Ld. CJM, Khammam u/s 14 of the SARFAESI Act, 2OO2 for appointment of advocate commissioner for taking physical possession of the schedule property. Ld. CJM, Khammam after going appointed advocate commissioner and the said ad {sited^{the schedule property and issued} notice the t for vacating the schedule property. The notice along with the SA filed by him. f\a5ppv"Stne

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commissioner for^taking So, the said^{notice issued by the advocate} perfectly legal^{and valid'} physical possession^{of the schedulepropertyis}

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t2. So, considering^{all the circumstances' Iam of the opinion that the} proceedings initiated^{by the Respondenton the fileof the Ld' CJM '} Khammam^{u/s14 of the SARFAESI Act'2OO2 for taking physical} possession of^{the schedulepropertyare quitelegal and valid and strictlyin} accordance^{with the provisions of SARFAESI Act' 2OO2and Rulesmade} thereunder and^{there are no violations' So' I see no ground warranting} interference^{of this Tribunalwith the steps initiatedby the Respondentfor} taking^{physicalpossession of the schedule property u/s14 of the} SARFAESI^{Act,2OO2. Accordingly,this point is answered in favour of the} Respondent^{and againstthe Applicant'}

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Polnt lt[o.(ll)r

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In the^{result, S,A372123is dismissed as there are no merits'}

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pending if anY,^{shall stand}

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t4. Consequently,^{the Interlocutory Applications'} 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 the P.S transcribed^{bgl@r,conec'ted'sig/Led dtul protlounced'by meit the opefl courton this the 11h} of Septeflber,^2025).

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#
ilg *i@r, 11 sEP 2w #

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sd/(G. GOPI CHAND) PRESII'ING^OFFICER 5 npr-r

Kannam Nagaraju v. Edelweiss Assets Reconstruction Company Limited

Case brief

What is this about?

What did the court decide?

Kannam Nagaraju v. Edelweiss Assets Reconstruction Company 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

Coram

Case details

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