Dismissed

Chillara Madhu Babu v. Union Bank of India

DRT14 Nov 2025SA/80/2025

Case brief

AI extract

What is this about?

In a securitization application, the debt recovery tribunal dismissed the applicants' plea to set aside the respondent bank's possession of mortgaged property. The court held that the bank followed statutory procedure for NPA resolution and notice under the SARFESI Act.

What did the court decide?

Application to set aside demand notice, possession notice, and proposed physical possession action is dismissed.

Chillara Madhu Babu versus Union Bank of India — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY^{TRIBUNAL_ II AT HYDEMBAD}

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DATED THIS THE 14TH^{DAYOF NOVEMBER,2025}

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PRESENT: SH. RAMESHWAR^{KOTHE,B.com, L.LB. (Hons'), M'A'} PRESIDING OFFICER

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Securitization Application^{No' 8O OF 2O25}

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Mr. Chillara^{Madhu Babu} S/o. C. Ranga^Rao, Aged: 48 Years Occ: Private^emPloYee, Flat No. c2-208, znd Floor, JanaPriya^LakeFront, Near KaPra, Ranga^{Reddy Dist,} Hyderabad- 500094

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Mrs. MyanamPati^Madhuri, Wo^{C. MadhuBabu,} Aged: 45^years Occ: House Wife,^{Flat No. C2-208,} 2nd Floor, Janapriya^LakeFront, Near Kapra,^{RangaReddy Dist,} Hyderabad-sooob 4

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" " "Applicants'

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Versus

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Union Bank of^India Rep. by its^{AuthorizedOfficer,} Alwal Branch, Bhatia^Bakery, First Floor, 14r.^{Krishna Sai Nagar,} Alwal, Secunderabad-10 "^ResPondent

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Counsel for the Applicant^{: Mr' G' Adrian Kiran Rai} Counsel for^{RespondentBank : Mr. K. Santosh}

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-: Q-B-91-B:-

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The^{present Securitization Applicationis filed by the Applicant} uls.l7 ol the^{Securitisationand Reconstructionof FinancialAssets} and Enforcement of^{SecurityInterest Act, 2002 ("Act" hereinafterfor} short) to set aside^{all the noticesincluding demand notice,possession} notice and the Proposed^{actionin takingphysical possessionof the} application schedule^{propertythrough advocate commissioner in} pursuance of the warrant in^{Crl.M.P.No'119[} .2.024^{on the file of the} y'M.*tr (-,/

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Page 2 of 4

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SA No. 80/2025

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learned Additional Chief Judicial Metropolitan 14agistrate, Medchal Malkajgiri District.

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The averments of the application, briefly, are that the applicants availed Housing Loan Facility of Rs. 15,00,000/- in 2o1o from erstwhile Corporation Bank (now Union Bank of India) against mortgage of application schedule property. After making substantial repayment, there was overdue of instalments due to applicant losing job. Without considering the regular payments and difficulties faced by the applicant, respondent bank initiated Securitization proceeding. However, without serving the notices under Secs.13(2) and 13(4) and affixture and publication of the possession notice as per Rules, respondent got issued vacate notice under section 14 of the SARFESI Act, 2002 on 14.03.2024. The respondent bank failed to follow Rules 8(1) and 8(2) of the Security Interest (Enforcement) Rutes, 2002 ("Rules" hereinafter). Hence this SA to set aside all the measures against the SA schedule property.

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The respondent bank filed reply statement along with documents. The averments thereof, briefly, are that due to non payment the Housing Loan account became NpA on Z|.O2.ZO24 and the Securitization proceedings had to be initiated against the secured asset by issuing demand notice dated 02.03.2024 for Rs. 77,44,743.43 ps which was duly sent to correct address of the applicant by registered post and received by the applicant on 06.03.2024. As no payment was made, respondent bank issued possession notice under section 13(4) of the SARFESI Act, 2OO2 dated 24.05.2024, seryed through registered post, the said possession notice was affixed on the scheduled property and published in'Business Standard English Daily, and ,Mana Telangana Telugu Daily'English and Telugu newspapers on 25.05.2024 as per Rules 8(1) and 8(2) of the Security Interest (Enforcement) Rules, ZXWy{" / -./

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Page 3 of4

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SA No. 80/202s

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Thereafter respondent bank^{lnitiated Sec'14 proceedingby} filing Crl.MP NojIL/2024^{for taking physical possession of the secured} asset. The bank has duly^{followed the provlsions of the Act, 2002and} therefore the SA ls^liable to^{be dismissed.}

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Learned counsel for applicant^{reportedorders may be passed} on records. Heard the learned^{counsel for the respondentbank'} Perused the material brought^{on record.}

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During the course of^{arguments,learned counselfor the} respondent bank while^{relying on the documents annexedto the reply} statement submitted that the^{housing loan account of applicants was} classified as NPA as^{per RBI guidelines and the respondentbank has} strictly followed the due^{procedure prescribedunderthe Act, 2002} and the Rules thereunder^{hence SA is liable to be dismlssed He} further contended that^{the applicants failed to complythe conditional} orders passed by the^{Tribunal in IA No.506/2025and as a} consequence the advocate^{commissioner executedthe warrant issued} in Crl.MP No.11 of 2024 and^{handedoverphysicalpossessionof the} secured asset^to the^{respondent bank.}

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

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i) Whether the applicants^{madeout anyvalid groundto} quash the measures initiated bY the^{respondent against} the sA schedule^{propertyas prayed for?}

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ii) To what relief?

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Point No.(i'l:

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Admittedly. the^{applicant availed housing loan against} mortgage of application^{schedulepropertyas securityand failed to} make^payment as^{per repayment schedule.Hencethe action of the} respondent bank in^{classifyingthe accountas NPA and initiating} Secu ri ti za^{ti o n p roceedi n} I^{s ca n n ot be ai sp} '^*e{. }ffri9\F' l-/

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Page 4 of 4

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SA No.80/202s

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The respondent bank flled material documents as proof of due compliance of procedure. As per postal track reports filed by the bank, the applicants were served with the demand notice. They personally acknowledged receipt of possession notice on 28.05.2024. The possession notice dated 24.05.2024 was published on 25.05.2024 in English and Telugu (vernacular language) newspapers as per publication copies and affixed on secured asset as per copy of photograph annexed to the reply statement. Thus, the contention of the applicants on non-compliance of Secs.13(2) and 13(4) of the Act, 2002 and the Rules 8(1) and 8(2) of the Rules, 2OO2 is baseless and cannot be accepted. Being secured creditor, the respondent bank is entitled to take physical possession of the secured asset and as such the action of respondent bank in taking physical possession of application schedule property cannot be treated as against law.

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In view of the above observations, it is concluded that the applicants failed to make out any valid ground to set aside any of the measures of the respondent bank under the Act,2oo2 against the sA schedule property as prayed for, and accordingly SA is liable to be dismissed.

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Point No.(ii):

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In the result, the present securitization Apprication fairs and is hereby dismissed.

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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 m_y dictotion by the ps, corrected, signed ond pronounced by me in the open court on this the 74- dqy oI November, 2025).

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ESHWAR KOTHE) PRESIDING OFFICER

Chillara Madhu Babu v. Union Bank of India

Case brief

What is this about?

What did the court decide?

Chillara Madhu Babu v. Union Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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