Applicants challenged possession and sale notices issued under the SARFAESI Act regarding mortgaged properties, alleging procedural violations and claiming agricultural exemption. The Tribunal found the bank followed required procedures and rejected the agricultural exemption claim for lack of evidence.
Appeal/sales notice dismissed with no order as to costs.
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DATEDTHISTHE 1 6TH DAYOF SEPTEMBER, 2C25
PRESENT: SRI GUMMADI GoPICHAND, PRESIDING oFFICER
sA.No.409/2c23
H.No.8-2-293 I 821 J-r 1 1/9, Plot No.9/ 1 I 1, Film Nagar, Road No.77, Jubilee Hills, Hyderabad-500 O33.
. . . Applicants
Verszs
DCB BanK Ltd., Collection Department at 8-2-l2O/84,2nd floor, Jyothi Majestic, Banjara Hills, Hyderabad-S0O O34 Regd. Office at: 6ft floor, Tower A, Peninsula Business Park Senapati Bapat Marg, Lower Parel Mumbai-4OO 013. Rep. by its Authorized officer
.. . Respondent
Counsel for the Applicants Counselfor Respondent
: Sri B.Siniuasa Reddy : Si C.Viswanath
ffit 1. This Application is neailffi*;ffi and Reconstruction of Financial Assets and Enforcemen Interest Act, 2OO2 (SARFAESI Act,2oQ2l challepgin{ tfeffioyDqion IYo dt.06.10.2023 and
also the Sale Notice dt.02.1 1.2023 issued by the Respondent bank in respect of the schedule properties and to declare the same as null and void.
The Applicants are co-borrowers and mortgagors to the loan facilities availed by the borrower V.sudhakar Rao and created mortgage in respect of the schedule properties. Thereafter due to unfavourable market conditions, the Applicants ran into temporary liquidity crunch and could not pay some instalments. The Respondent issued demand notice dt.30.05.2023 u/s l3(2) of the SARFAESI Act, 2OO2 to the Applicants by classi$ring the loan account as NpA. The Applicants requested the bank to regularize the loan account but the Bank without considering the same, issued possession notice dt.o6.lo.2o23 u/s r3(4) of the sARFAESI Act, 2OO2 for taking symbolic possession of the schedule properties. Subsequently, the Respondent issued Notice for Sale of immovable property dt.02.l 1.2023 u/r g(6) of security Interest (Enforcement) Rules, 2oo2 and the in the said notice, there is lack of ingredients as required u/r 8(5) & s(6) of Rules, 20o2. The schedule properties are agricurtural properties and so, the Bank is barred under section 3l(i) of SARFAESI Act, 2oo2 to proceed against the said properties. The impugned possesbion notice was not published in two leading newspapers and also not affixed on the schedule property. Hence the SA.
by the Respondent on 04.10.2016 and the Respondent issued demand notice u/s 13(2) of the SARFAESI Act,2OO2 dt.30.05.2023 an the said notice was duly served on the borrower and the Applicant No. 1 and the Bank also published the said notice in two daily newspapers. As the Applicants failed to comply with the said demand notice, the Bank issued possession notice dt.06. 1O.2O23 and the said notice was served on the Applicants and the borrower and the Bank also affixed the said notice on the schedule properties and published the same in Business Standard and Mana Telangana daily newspapers. Thereafter the Bank issued notice u/r 8(6) of Rules, 2OO2 dt.O2.Il.2023 and the said notice was duly served on the Applicants. Since there is no agricultural activity in the schedule properties, the same cannot be treated as agricultural lands and the Applicants have not filed any proof to show that the schedule properties were cultivated. The Respondent has duly followed the procedure contemplated under the provisions of SARFAESI Act,2OO2 and Rules made thereunder in issuing all the statutory notices to the borrower/guarantors. Accordingly, Respondent prayed to dismiss the SA.
ii. whether tlte Applicants haue establislrcd anA ualid grounds for
challenging the impugned Notice of Sate dt.O2.j j.2O23 u/r 8(6) of
Rules, 2001-ry8{Qy tLrc Respondent against the scledule
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L The specific contention of the Applicants is that the impugned possession notice dt.06. 1O.2023 was not affixed on the schedule properties and the same was not published in two leading newspapers and the sale notice dt.02.1 1.2023 issued by the Bank against the schedule properties is not legal and valid and so, the said notices are liable to be set aside. The further contention of the Applicants is that the schedule properties are agricultural properties and so, the Bank is barred from proceeding against the said properties under Section3l(i) of the SARFAESI Act,2OO2.
g. Per contra, Respondent bank contended that the Bank has scrupulously followed the templated under the provisions of SARFAESI Act, 20 o 2 under in issuing all the statutory notices "ni-&G'|;.**d to the borroG. . r.rd,',''.tfi. l:.:-t * rs.
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1 1. Another contentio icants is that the schedule properties is agricultural ffqG are exempted under Section Sl(i) cf
the 2offind a gIy, the bank canirot proceed against the said edi-the e tended that the schedule properties 6 Sil, ?ifi
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are not agricultural properties and so, not exempted under the provisions of SARFAESI Act,2oo2. when the Applicants are contending that the schedule properties are agricurtural properties, the burden lies on the Applicants to prove the same by filing necessary material documents in support of their contention. But the Applicants have not produced any material documents to prove that the schedule properties are agriculturar properties and the sarne are used for cultivation purpose. So, the contention ofthe Applicants that the schedule properties are agricultural properties is not tenable.
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(Dictated to the P.s, transcribed. ba rr, cDttected, signed and pronouned bg me in the open
court on this.the !.6h dag of September, 2O2S).
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2 issues framed by the court
Whether the impugned possession notice and sale notice issued by the bank complied with procedural requirements of the SARFAESI Act.
Whether the schedule properties are agricultural lands exempted under Section 31(i) of the SARFAESI Act, 2002.
4 provisions across 2 enactments
L.Paruchuri Vidya Sagar
Smt. Paruchuri Chandravathi
DCB Bank Ltd.
Sri Gummadi GOPICHAND
As recorded by the court registry
2 orders share this CNR
Judgements on the same questions, provisions and authorities, from every court
