Allowed

Sharma Electrical Works and Others v. Union Bank of India

DRT13 Oct 2025SA/397/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an application to set aside a possession notice issued under Section 13(4) of the SARFAESI Act. The court ruled that despite the bank proving publication of the notice, it failed to file proof of affixture, making mandatory affixture deemed non-compliant.

What did the court decide?

The Securitization Application was allowed by setting aside the possession notice dated 15.09.2021 issued under Section 13(4) of the Act, 2002.

Sharma Electrical Works and Others versus Union Bank of India — Company and Corporate | DRT (2025)

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IN THE DEBTS RECOVERY TR]BUNAL^_ II^{AT HYDERABAD}

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DATED THIS THE 13TH^{DAYOF OCTOBER,2025}

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PRESENT: SH. RAMESHWAR^{KOTHE, B.Com,L.LB.(Hons.), N4.A.} PRESIDING OFFICER

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Securitization Application No.397^{OF 2024}

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M/s Sharma Electrical Works Rep by its Proprietor Gunturl Bhadrinath No.6-3-841 / 24, SRT, Ameerpet Hyderabad

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Smt.Gu nturi Rukmini H.No.27lSRT, Ameerpet ColonY Punjagutta, Hydera bad

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... ....Applica nts.

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Versus

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Union Bank of India Railway Station Road Branch D.No.9-4- 104, Razimental Bazar Near Gurudwara, Secunderabad⁵⁰⁰⁰²⁵ Rep by its Authorized Officer ...Respondents

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Counsel for the AP7licant^: Mr. B. Sreenivasa ReddY

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Counsel for Respondents^Bank: M/s KsL Associates^{re? bY} Ms. Srilatha

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-: o-B-qEB:-

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The Applicants filed the^{present Securitisation Applicationu/s} 17 of the Securitization and^{Reconstructionof Financial Assetsand} Enforcement of Security^{InterestAct, 2002 (hereinafter referredto as} "the Act") to set aside all^{measuresof the respondent bank under} Sec.13(2) and 13(4)^{of the Act, 2002 againstthe applicationschedule} property including possession notice dated^15.09.2021.

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The case of the applicants, in^{brlef, is that they availed Cash} Credit facility of^{Rs.40 lakhs in 2oo8 and subsequentlyenhanced'} Offlcials of respondent^{bank obtained signatures on blank documents'} Though the applicant^{had been regularlypaying the amounts,} respondent bank issued draft^{demand notice dated-^q8.04.2Q27u/s} ,/,rl\4.>L/^''o

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Page 2 of 4

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SA No.397 12024

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13(2) and further demand notice for Rs.1,17,55,540/-^without furnishing the requisite details. Respondent bank was^reluctantto settle the account under OTS. Without serving demand^notice, possession notice was issued on 15.09.2021 u/s 13(4). The account of applicant does not fall under the^purview of NPA.^{The respondent} charged high rate of interest,^penalties and modified the EMIS without consent. Classification of account on 30.06.2020 at the^peak tlme of covid^pandemic is arbitrary. The impugned^possession notice was neither affxed nor published as per Rules 8(1) and 8(2) of the Security Interest^{(Enforcement)} Rules, 2002 ("Rules" hereinafter). Hence this SA.

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The respondent bank filed reply statement denying the adverse averments of the application. It is submitted inter alia, that earlier the payment became overdue and respondent bank issued notice on 08.01.2018 whereupon applicants paid the overdue amount and regularized the account hence they were well aware of status of his account. Even after rescheduling the account in 2018, applicants again committed default and hence it became NPA on 30.06.2020. The applicants failed to avail nine months time to regularize the account, excluding the moratorium period on account of Covid-19 pandemic. No proof of submission of OTS is filed. The demand notice dated 08.04.2021 was received by the applicants. The possession notice was published in 'Mana Telangana' and 'Indian Express' newspapers. The applicants failed to comply the order of Hon'ble High Court to deposit 15olo of the total amount due. They also failed to keep up the promise made on 03.01.2022 to clear the outstanding within slxty days hence respondent bank issued sale notice dated 09 -03.2022. The respondent bank has followed the due procedure of law and SA is liable to be dismissed. ffi'r,$

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Page 3 of4

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SA No.397l2024

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Representative of learned counsel for the^{applicantsreported} that orders may be^passed based^{on records. Heard learnedcounsel} for the respondent bank.^{Perused the material broughton record.}

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During the course of arguments,^{learned counselfor the} respondent bank in reiteration of^{the contentsof the reply statement} submitted that earlier the account^{was rescheduledin 2018hence} applicants cannot claim^{ignorance.The applicants did not avail ampie} opportunity and time to^{regularize the accountand hence it was} classified as NPA on 30,06.2020.^{Thereafterbank waited till April,} 2021 to issue demand notice and^{September, 2021 to issue} possession notice. Excluding the moratorium^{period, nine months} time was^given to applicants.^{The demand notice and possession} notice was^published as^{per Rules' It is further submitted that the} applicants failed to^comply the^{orders of Hon'bleHigh Court to pay} 150/o of total outstanding amount and^{hence the respondentbank} proceeded with sale notice. The applicants are not^{entitledto any} relief hence SA is liable to^{be dismissed'}

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The^points for consideration^{are as follows :} -

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i) whether the applicant^{made out any valid ground to set} aside the^{possessionnotice dated15'09.2021issued} under Sec.13(4) of the^{Act, 2002 against the 5A schedule} property, as PraYed for?

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ii) To what relief?

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Point No.(i):

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According to respondent^{bank. the loan accountwas} rescheduled in the^year 2018.^{This fact ls not denied by the} applicants. Admittedly, the^{applicants approached the respondent} bank for one time settlement^{and they have been given ample time} and opportunity to^{regularizeor close the account but} /rbi.$^{tDey could not}

1J/ ''>"

Page 4 of4

SA No.39712024

avail the opportunities. Hence they^cannot aver that^paymentwas regularly made and account is not NPA.

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The annexures filed along with the application confirm that the applicant received the demand notice and^{possessionnotice. The} respondent bank filed^{paper publication} copies dated 2L,09.2027^as proof of publication of possession notice. However, despite specific averment as to non-aftixture of^possession notice, the respondent bank has not filed any^proof of alfixture. Under such circumstances,^it is deemed that the affixture of^possession notice, which is mandatory as per Rule 8(1) of the Rules, 2002, has not taken^place. Accordingly SA deserves to be allowed by setting aside the^{possession notice} dated 15.09.2021 for non-compliance of Rule 8(1) of the Rules, 2002.

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Point No.(ii):

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In the result, the Securitization Application is allowed by setting aside the possession notice dated 15.09.2027 issued under Sec.13(4) of the Act, 2002 against the SA schedule^property.

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consequently, Interlocutory Applications^pending. if any, shall stand closed. No order as to costs. Communicate a copy of this order to the^parties concerned and upload in the official website.

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(Typed to my dictotion by the Ps, coffected, signed ond pronounced by me in the open couft on this the 131' dov ol octobet.2o2s).

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//)Y:.,rh,.^_rt //,/ }." 1mf,-esxwan^xorxey PRESIDING OFFICER

Sharma Electrical Works and Others v. Union Bank of India

Case brief

What is this about?

What did the court decide?

Sharma Electrical Works and Others v. Union Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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