Dismissed

A Ramesh Reddy v. City Union Bank Limited

DRT9 Jul 2025SA/38/2023

Case brief

AI extract

What is this about?

Applicant challenged possession proceedings under SARFAESI Act alleging fraud and procedural non-compliance. Tribunal held Tribunal lacks jurisdiction to adjudicate inter-se disputes and found Bank complied with procedural requirements. Application dismissed.

What did the court decide?

The application under Section 17 of the SARFAESI Act was dismissed with interlocutory applications disposed of.

A Ramesh Reddy versus City Union Bank Limited — Execution and Attachment | DRT (2025)

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IN THE DEBTS RECOVERYTRIBUNAL-IAT HYDERABAD

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DATED THIS THE OgTH DAY OF JULY. 2025

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PRESENT: GUMMADI GOPICHAND, PRESIDING OFFICER

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sA.No.38,/2023

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Mr. A. Ramesh Reddy, S/o. late Alluri Ganga Reddy, Aged major, R/o. H.No.4-5-56lC, Vidyanagar, Adilabad.

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Applicant.

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Versus

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City Union Bank Ltd., Adilabad Branch. Rep. by its Authorized Officer.

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Alluri Swarupa, W/o. A. Ramesh Reddy, Aged major, R/o. H.No. 1-21, Pochara, Adilabad.

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Ganesh Seeds and Pesticides, 6-6-l / 3 I 178, Gunj Road. Rep. by Addi Chandraseker Reddy.

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Respondents.

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Counsel for the Applicant Counsel for Respondent No.1

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Sri G. Dinesh Kumar. Si R. Rajendra Prasad.

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.:ORDER:-

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This application is filed by the Applicants u / s. 1 7 of the SARFAESI Act, 2Q92,^{challengingthe actionof the 1"t RespondentBank} in trying to pal possession of the application schedule property u/s. 14 of .$E shhl I Act, through Advocate Commissioner appointed in 6P h6i {. m.P.Nm.r.llfl{ * /2022 on the file of Ld. CJM, Aditabad, in furtherance to otice dt.31.O5.2022, issued by th6 lst Respondent Bank i os^st$nr g - - u/s.13(41o{rrE SARFAEST Act.

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,@a^4- *8'i Q".r"5x-

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SA.No.38/2023

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The averments made by the Applicant in the application, in brief,^are that, the Applicant is the absolute owner and^possessor of^the application schedule property. The Applicant and 3'd Respondent^{(Mr. A.} Chandrashekar Reddy) are relatives and friends and upon request of the 3'd Respondent, they established a business in the name & style of^M/s. Sri Ganesh Seeds & Pesticides, a partnership firm, in which Mr.^A. Chandrashekar Reddy was the Managing Partner and^{Applicantwas the} sleeping Partner. At the request of the 3rd Respondent, the Applicant mortgaged his immovable property described in application schedule for the financial facilities availed by 3.d Respondent from State^Bankof Hyderabad. Later ofl, the loan with State Bank of Hyderabad^was transferred to 1"t Respondent Bank herein and the Applicant^{was asked} to execute the documents. The Applicant is not well educated^{and he} executed the documents. While so, the Applicant and^{RespondentNo.2} herein received a call from the lst Respondent^{Bank that a loan was} availed by M/s. Nikitha Traders and 2"d Respondent^{is the proprietrix of} the said firm. The 2^d Respondent never established^{the said firm and} she never visited the l"t Respondent Bank and^{later it cameto know} that Mr. Chandrasekhar Reddy in collusion^{with the then officials of the} 1"t Respondent Bank opened the account and cleverly^{got mortgaged the} schedule property by the Applicant for the^{loan and had thrownentire} burden on Applicant and Respondent No.2.^{The Applicant got issued a} legal notice and the 1st Respondent Bank^issued a^{reply to that and} thereafter, Applicant filed a civil suit^{vide O.S.No.3/2O21on the file of} Ld. PDJ, Adilabad and the said suit is^{pending adjudication. The 2"d} Respondent gave a police complaint stating that^{her signatureswere} forged in the loan documents and she sent copies^{of her signatures on} documents to Porensic Lab and the lab^{gave areport} stating that the signatures in the loan^{documents do not} 6gOi:ffi2 S"$lo"*^{to'$\espondent. So, the loan transactionin the name of M/s.} 0s not valid and the action of the lst^{Respondent against}

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SA.No.38/2023

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the Applicant is void ab initio. The 1"r Respondent Bank has failed to serve Demand Notice u/s. 13(2) and the possession Notice u/s. 13(4) of the SARFAESI Act on the Applicant. The 1"t Respondent Bank has failed to affix the Possession Notice on the schedule property ald has also failed to publish the said notice in two newspapers as contemplated under Rule 8(1) & 8(2) of the Security Interest (Enforcement) Ruies, 2002. Hence, the SA.

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a The l"t Respondent Bank filed its Reply Statement denying all the adverse allegations made in the application. The contentions of the l"t Respondent Bank, in brief, are that, the Applicant herein and Respondent No.2 have earlier jointly frled SA.No.206l2O22 challenging the Auction Notice dt.08.06.2o22. The fact that the wife of the Applicant, who was Applicant No.1 in SA.No.206/2022, rs arrayed, as Respondent No.2 in the present SA, from which it is very clear that they are trying to create some other litigation and avoiding to pay the outstanding dues. Respondent No.2 being the Proprietrix of M/s. Nikitha Traders, approached the 1st Respondent Bank for sanction of credit facilities and executed necessaq/ loan documents for availing OSOD facility, to which the Applicant herein stood as guarantor and mortgaged the application schedule property to secure the loan. The 2nd Respondent, after availing the loan, failed to repay the same and the loan account came to be classified as NPA on 30.11.2020. It is a fact that the loan account was opened and in operation from the year 2Ol4 and Respondent No.2 has not chosen to give any com[plaint against Respondent No.3. The signatures of 2na Respondent were sent to Truth Labs without following proper procedures and the Applicant cannot reply upon the report of the Truth Labs to avoid the claim. The 1st Respondent Bank issued Demand 97.05.2021^{u/s. 13(2) of the SARFAESIAct and when the} voiding service of the said notice, the 1sr Respondent Bank lished d Demand Notice in the newspapers dt.2l .O7 .2021. Notice dt.31.O5.2022 u/s.13(a) of the SARFAESI J^{o e 3b['i#{"'}

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W,,*o

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SA.No.38/2A23

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Act, was issued and the said notice was affixed on the schedule property and thereafter published in two newspapers. Subsequently, public notice inviting tenders vide notice dt.2o.Ol.2023 was issued fixing the date of auction on 21.02.2023. The said notice was affixed on the schedule property and was also published in the newspapers. The l"t Respondent Bank approached the Ld. CJM, Adilabad by filing Crl.M.P.No. 17112022 u/s. 14 of the SARFAESI Act, wherein Advocate Commissioner was appointed for taking physical possession of the schedule property. However, before taking possession, the Applicant has approached this Tribunal with all false contentions. The 1st Respondent Bank has duly followed the procedure laid down under the SARFAESI Act and the SA is liable to be dismissed.

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The Respondents No.2 & 3 remained ex-parte.

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Heard both Counsels.

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Now, the points that arise for consideration are,-

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i) Whether the Applicant has established any grounds for setting aside the proceedings initiated by the Respondent Bank under the SARFAESI Act against the application schedule property?

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ii) To what relieP

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Point No.ll):-

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be seen from the pleadings of the Applicant, the Applicant is between Respondent No. 1 Bank and 3rd Respondent in playi d fraud in creating loan documents in the name of * including the mortgage over the application favour of the lst Respondent Bank. The forensic obtained independently by 2nd Respondent from

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SA.No.i8/2023

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Truth Lab is not legally binding. Further, the scope and ambit of this Tribunal while adjudicating applications filed u/s. 17(1) of the SARFAESI Act, is very limited. The Debts Recovery Tribunal shall not indulge in deciding the inter-se disputes between the parties if alleged by the applicants in their sec. 17(1) application. It is not at all the duty of the Tribunal to enter into such an area, which is totally un-prescribed under the SARPAESI Act.

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As regards the contentions of the Applicant that the l"t Respondent Bank did not follow the procedure laid down under the SARFAESI Act is concerned, the 1st Respondent Bank has filed material documents to substantiate its contention that it has duly followed the procedure. The 1st Respondent Bank has filed a copy of the Memorandum of Deposit of Title Deeds dt.26.O3.2O14, and letter of confrrmation of deposit of title deeds dt. 19.09.2016, executed by Applicant in favour of the lst Respondent Bank, to establish that the Applicant has mortgaged the application schedule property in favour of the l"t Respondent Bank to secure the loan availed by M/ s. Nikita Traders (Proprietrix Alluri Swapna) and that the application schedule property is a secured asset. The 1st Respondent Bank hled a copy of the Demand Notice dt.O7.O5.2O21 issued u/s.13(2) of the SARFAESI Act, along with copies of returned postal covers, wherein the postal endorsement shows that 'Addressee Refused'. The 1"t Respondent Bank has also filed copies of publication of Demand Notice in 'Andhra Jyothi' and 'Indian Express' newspapers dt.21.O7.2021. So, it cannot be said that the 1"t Respondent Bank has failed to serve Demand Notice u/s. 13(2) of the SARFAESI Act, to the Applicant. The 1st Respondent Bank has also filed a copy of the

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Notice dt.31.O5.2022, issued u/s. 13(a) of the SARFAESI Act, CS of postal receipts, photographs depicting affixture of on the schedule property and copies of pubiication of Possession Nqli in 'The Hindu' and Andhra Jyothi' newspapers 0 $,U&oUEorr* ,^{it is very clear} that the 1"t Respondent Bank has duly

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SA.No.j8/202j

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followed Rules 8(1) & 8(2) of the Security Interest (Enforcement) Rules, 2002, while issuing Possession Notice u/s.13(a) of the SARPAESI Act. Thereafter, the lst Respondent Bank, proceeded u/s.14 of the SARFESI Act and filed Crl.M.P.No.17 | of 2022 on the file of Ld. cJM, Adilabad and obtained orders of appointment of Advocate Commissioner for taking physical possession of the schedule property. However, the Applicant filed the present SA challenging the said action of the lst Respondent Bank without any valid grounds. So, I hold that the present SA filed by the Applicant is liable to be dismissed. Accordingly, this point is answered against the Applicant.

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Point No.(iil:-

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In the result, the present Securitization Application is dismissed. 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 the Priuate Secretary, transcibed bg her, corrected., signed. and" pronouned bg me in the open @urt on this the 09h dag ofJulg, 2025).

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sdl(c. coPrcHANDl PRESIDING OFFICER

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09il,rrys

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TflTE COPY

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Assf.\PFs-icrr.n

A Ramesh Reddy v. City Union Bank Limited

Case brief

What is this about?

What did the court decide?

A Ramesh Reddy v. City Union Bank Limited

Case brief

What is this about?

What did the court decide?

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