Dismissed

K.Srinivas Reddy, and Another v. Sri Ram finance Ltd.

DRT6 Oct 2025SA/386/2023

Case brief

AI extract

What is this about?

Applicants challenged the respondent's attempt to take possession of mortgaged property under Section 14 of the SARFAESI Act, 2002, alleging procedural violations. The Tribunal found the respondent duly served statutory notices and published notices, upholding the legal validity of the proceedings.

What did the court decide?

Disposal of summary application 386/23 which challenged the recovery proceedings; dismissal of pending interlocutory applications if any.

K.Srinivas Reddy, and Another versus Sri Ram finance Ltd. — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERYTRIBUNAL.I AT HYDERABAD

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DATED THIS THE 6TH DAY OF OCTOBER, 2025

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PRESENT: GUMMADI GOPICHAND, PRESIDING oFFICER

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sA.No.386,/2c23

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K.Srinivas Reddy, S/o K.Mohan Reddy, Aged 38 years, Occ:self employed, R/o 8-101, Upperguda, Koheda, Hayathnagar, R. R. District.

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K.Ravinder Reddy, S/o K.Mohan Reddy,

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Aged 40 years, Occ:self employed, R/o 8-101, Upperguda, Koheda, Hayathnagar, R.R.District

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... Applicants

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And

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M/s Sri Ram Finance Ltd. Rep. by its Authorized officer Himayathnagar branch, H.No.3-6- 199, 4m floor, K.Samantha Reddy Estate, Himayathnagar, Hyderabad-500 029 ... Respondent

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Counsel for the Applicants SiT-Sridhar Reddy Counsel for the Respondent Si M.Indrasen I + -: O.Bp E R*: .^{.,.3-'-ffi-"e} ,.,^{,:,iJ t:?} "'-.\

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rhis application iS &led Y [nnffrlUf"""] 17 ofthe SARFAESI Act, 2002, initiated by"t Respondent for taking .(j^.ln'., physical the schedule.'^: through Advocate commlssloner of Ld.CMM, R.R.District in li,. Cr1.M.P.No.342l23 and as illegal and void.

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The averments made in the application, in brief, are that:

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Applicants availed housing loan from the Respondent. Due to Covid-19, the Applicants could not pay some instalments and the Respondent initiated proceedings under the SARFAESI Act,2OO2 without following the guidelines of RBI. Without serving demand notice and possession notice to the Applicants, the Respondent initiated proceedings for taking physical possession of the schedule property under Section 14 of the SARFAESI Act, 2OO2 by filing Cr1.M.P.No.342l23 on the fite of Ld.CMM, R.R. District and the advocate commissioner appointed by the Ld.CMM, R.R. District issued notice dt.L6.lO.2O23 to the Applicants to vacate the schedule premises. The impugned possession notice was not published in two leading 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 filed their Reply denying all the adverse allegations made in the SA and contended that the Applicants availed loan of Rs.30 lakhs from the Respondent for the purpose of business development by creating mortgage in respect of the schedule property. Thereafter, the Applicants committed default in repaying the loan dues. So, the loan account was classified as NPA on 31.03.201 1 and the Respondent issued demand notice dt.O5.O8.2O22 u/s 13(2) of the SARFAESI Act, 2002 and the said notice was served on the Applicants. Thereafter, the Respondent issued possession notice dt.15.O2.2O23 to the Applicants by Regd. Post and the same was returned as refused and the said notice was affixed on the schedule property and the said notice was also published in two leading n-ewspapers. Thereafter, the Respondent physical u/s 14 ofthe SARFAESI Act, 2OO2. Th ':the^Re$dndent followed the procedure contemplated the I Act, 2OO2 and Rules made taking measures 14 of the SARFAESI Act, 2002 there are no its in the SA ar*d'g ,^{Respondent prayed} to dismiss the SA.

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Heard Ld. Counsel for the Applicants and Ld. Counsel for the

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Respondent and perused the material brought on record.

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Now the points that arise for consideration are

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i. utetler the Applicants haue establisled ang ualid grounds for challenging th.e steps initiated bg tte Respondent for taking phgsical possession ortte schedule propertg through aduocate ammissioner?

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ii. To uhat relief ?

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Polnt .I\Io.(if :-

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

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

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The specific contention of the Applicants is that without serving demand notice and possession notice to the Applicants and without complying^with Rule 8(1)&(2) of terest (Enforcement) Rules 2002, the Respondent proceedings for taking physical possession of advocate commissioner u/s . l".

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14 of the Act,2OO2 and sq, said proceedings are not legal and valid. , 060[IM

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Per contra, Respondent contended that they have duly followed the procedure laid down under the provisions of SARFAESI Act, 2002 and Rules made thereunder in issuing all the statutory notices to the Applicants and also in initiating steps for taking physical possession of the schedule property u/s 14 ofthe SARFAESI Act, 20O2.

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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 dt.o5.o8.2o22 u/s 13(2) of the SARFAESI Act, 2OO2 and the said^notice was sent to the Applicants through Regd. Post and the same was served on the Applicants as evidenced by the^postal track reports^{filed by the} Respondent. In fact, the Applicants also filed copy of^{the demand notice} issued by the Respondent along with the SA^filed by^{them. Whenthe} Applicants failed to comply with the said demand^{notice,the Respondent} issued possession notice dt.15.o2.2o23 u/s^{13(4)of the Act, 2002 and the} said notice sent to the Applicants^{was returned as refused, so there is} deemed service of^possession notice on the^{Applicants.In fact, the} Applicants filed copy of the said^{possessionnotice alongwith the SA. The} said possession notice was^published in^{Teluguand Englishdaily} newspapers as evidenced by the^{copiesof paperpublication filed by the} Respondent and the said notice^{was also affixed on the scheduleproperty} as depicted in the copy of^{photographsliled by the Respondent.Thus the} Respondent has duly followed^{Rule 8(1)&(2) ofSecurityInterest} (Enforcement) Rules, 2002 in issuing^{possessionnotice to the Applicants.}

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As per the p 14 of SARFAESI Act, 2002, after^issuance of SARFAESI Act,2OO2, the secured creditor is ed District Magistrate or Chief Judicial M possession of the secured asset. In the ins notice and possession notice to trre eppric\id secured creditor, approached Ld.cMM, R.R.$i, AESI Act, 2OO2 for appointment

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of advocate commissioner for taking physical possession of the schedule property. Ld.CMM, R.R. District after going through the record, appointed advocate commissioner and the said advocate commissioner issued notice dt.l6.l0.2023 to the Applicants for vacating the schedule property. The Applicants filed copy of the said notice along with the SA filed by them. So, the said notice dt.18.L2.2023 issued by the advocate commissioner for taking physical possession of the schedule property is perfectly legal and valid.

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So, considering all the circumstances, I am of the opinion that the proceedings initiated by the Respondent on the file of the Ld.CMM, R.R. District u/s 14 of the SARFAESI Act, 2OO2 for taking physical possession of the schedule property are quite legal and valid and strictly in accordance witlr the provisions of SARFAESI Act, 2OO2 and Rules made thereunder and there are no violations. So, I see no ground warranting interference of this Tribunal with the steps initiated by the Respondent for taking physical possession of the schedule property u/s 14 of the SARFAESI Act,2002. Accordingly, this point is answered in favour ofthe Respondent and against the Applicants.

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Polnt No.(il)r

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In the result, SA 386/23 is dismissed as there are^{no merits.}

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t+. Consequently, the Interlocutory Applications,^pending if any, shall stand disposed of. No order as to costs.

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a copy of this order to the^parties concerned.

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bg her, aon'ected, sbned and. prcnounced ba me^{ifu th.e} open^{courton thisthe6hdaa} sdl(G. GOPI CHANDI PRESIDING OFFICER "#'it,%'#I'"'^''

K.Srinivas Reddy, and Another v. Sri Ram finance Ltd.

Case brief

What is this about?

What did the court decide?

K.Srinivas Reddy, and Another v. Sri Ram finance Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

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