Dismissed

Sri Sathyanarayana Rao v. Indian Bank

DRT29 Aug 2025SA/93/2024

Case brief

AI extract

What is this about?

In this securitization application challenging a possession notice, the tribunal dismissed the applicant's claims. The court found the bank had validly complied with all procedural mandates under the SARFEASI Act and Security Interest Enforcement Rules, including service of notices and registry registration.

What did the court decide?

The Securitization Application No. 93/2024 is dismissed. Subsisting interim orders are vacated and pending applications are disposed of in terms of this order.

Sri Sathyanarayana Rao versus Indian Bank — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

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Dated this 29^th Day of August, 2025

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Present: Sri. T. RAJESH Presiding Officer SA.No.93/2024

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BETWEEN:

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Sri. Sathyanarayana Rao, S/o. Chinnappa, Aged about 62 years, DOB. 29-06-1962, Prop. Of M/s. Mahasathi Timbers, R/a. Mahasathi Nilaya, 3^rd Cross, SN Nagar, Sagara City, Shivamogga Dist- 577 401.

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…APPLICANT

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AND:

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The Authorised Officer, Indian Bank, Sagara Branch, Opp. KRSTC Bus Stand, Jopa Road, Sagara- 577 401, Shivamogga Dist.

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...RESPONDENT

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Counsel on record/appeared for:

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Applicant : Sri. Puttaraju Respondent : M/s. M.V.Kini & Co.

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FINAL ORDER

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This Securitization Application, in short S.A is filed under sub

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section [1] of S.17 of the Securitization And Reconstruction of

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SA 93/2024

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Financial Asset and Enforcement of Security Interest Act, 2002, herein after referred to as “SARFEASI Act” or “The ACT” challenging the measures taken by the respondent leading to possession notice dated 15.05.2024.

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The applicant is a proprietor of proprietorship concern who along with his wife availed an overdraft facility of Rs. 40,00,000/(Rupees Forty Lakh Only) from the respondent by mortgaging the schedule property owned by his late wife. It is also stated that the mortgagor; namely the applicant’s wife expired on 08.03.2017. It is also stated that despite the Covid-19 pandemic and the substantial remittance made by the borrowers which according to the applicant to the tune of Rs. 40 lakhs, the account was classified as NPA and the measures leading to impugned possession notice is initiated.

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It is the case of the applicant that the measures are initiated without issuing notices to the legal heirs of deceased mortgager and also to the borrower. Even though it is admitted that the names of the legal heirs were mentioned in the demand notice, the applicant contends that the same was not served to them. In the grounds to the SA the applicant apart from reiterating the contentions also contends that the possession notice is only affixed in the property without serving the same or even without mentioning the legal heir’s name. Another contention taken by the

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SA 93/2024

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applicant is as to the alleged non registration of security interest with central registry. The non-service of the possession is also raised by the applicant. The applicant is also putting forth a case that the impugned possession notice is not published within 7 days from its issuance and thereby its procedure is violated.

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Along with the S.A the applicant has produced the following documents:-

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a) Possession notice dated 15.05.2024 ANNEXURE A-1 b) Copy of the death certificate ANNEXURE A-2

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The respondent filed their objections denying the contentions of the applicant. It is also contending that the applicant having received the possession notice cannot now come forward and contend that there is procedural flaws in issuance of the same. It is also stated that the impugned possession notice is properly publishes in newspapers on 17.05.2024, that too within 02 days from the date of the issuance of the same. The contention of the applicant as to the alleged non registration with the central registry is also denied specifically by the respondent. The contention of the applicant as to the non-service of the notices on the legal heirs is also denied in the objections.

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Along with the objections the respondent has filed the following documents:-

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a) “ R-1 12.02.2024 Demand notice issued U/Sec. 13(2) of

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SA 93/2024

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SARFEASI Act by the respondent bank.

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b) R-2 The postal acknowledgement card for having received demand notice by the applicant.

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c) R-3 15.05.2024 Possession notice issued U/sec. 13(4) of the SARFEASI Act by the respondent bank.

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d) R-4 the postal acknowledgement card for having received possession notice by the applicant.

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e) 17.05.2024 Published possession notice in Kannada Newspapers Prajavani.

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f) 17.05.2024 Published possession notice inEnglish newspaper Deccan Herald

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g) Photo for having affixed the possession notice dated 15.05.2024 on mortgage property

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h) Registration of charge with central registry of the mortgage property by the respondent bank Ref.No. PRF/AGRPR/5832J “

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Apart from the above the respondent has produced the following additional documents :-

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a) “ 12.02.2024 Demand notice issued under section 13(2) of SARFEASI Act, to the borrower and legal heirs of deceased late Uma W/o Mr. Sathyanarayana Rao (petitioner/ appellant)

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b) Postal acknowledgement cards for having received the demand notice by the borrower firm M/s. Mahasathi Timbers, proprietor Shri Sathyanarayana Rao (Petitioner/ Appellant) with postal receipt for having sent the notice.

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c) Postal acknowledgement cards for having received the demand notice by the proprietor Shri Sathyanarayana Rao (Petitioner/ Appellant) proprietor of M/s. Mahasathi Timbers, with postal receipt for having sent the notice.

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SA 93/2024

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d) Postal acknowledgement cards for having received the demand notice by Shwetha legal heir of Late Uma with postal receipt for having sent the notice.

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e) Postal acknowledgement cards for having received the demand notice by Vanitha legal heir of Late Uma with postal receipt for having sent the notice.

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f) Postal acknowledgement cards for having received the demand notice by Ranjitha legal heir of Late Uma with postal receipt for having sent the notice.

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g) 15.05.2024 Possession notice issued under section 13(4) of SARFEASI Act, to the borrower and legal heirs of deceased late Uma W/o Mr. Sathyanarayana Rao (Petitioner/ Appellant).

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h) Postal acknowledgement cards for having received the possession notice by the borrower firm M/s. Mahasathi Timbers, proprietor Shri Sathyanarayana Rao (Petitioner/ Appellant) with postal receipt for having sent the notice.

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i) Postal acknowledgement cards for having received the possession notice by the proprietor Shri Sathyanarayana Rao (Petitioner/ Appellant) proprietor of M/s. Mahasathi Timbers, with postal receipt for having sent the notice.

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j) Postal Track record for having received the demand notice by Shwetha legal heir of Late Uma with postal receipt for having sent the notice.

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k) Postal Track record for having received the demand notice by Vanitha legal heir of Late Uma with postal receipt for having sent the notice.

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l) Postal Track record for having received the demand notice by Ranjitha legal heir of Late Uma with postal receipt for having sent the notice.”

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SA 93/2024

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Heard the counsels for both the sides.

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There is no dispute as to the disbursement of the amount or creation of security of security in lieu of the same and also as to the defaults committed in the account. The contention of the applicant that the amount remitted by them were not properly given credit is taken without producing even a scrap of paper to prove the so-called remittances. Despite the specific denial by the respondent in their objection no evidence as to the so-called remittance is forth-coming which leads this Tribunal to reject the above contention.

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The next contention taken by the applicant is as to the non-service of the demand notice on the borrower as well as the legal heirs of the deceased mortgager. The respondent along with objections had produced the proof as to the issuance of the demand notice and proof of service on the borrower. Along with the additional documents the respondent has produced the postal acknowledgement evidencing the receipt of the demand notice on the legal heirs of the deceased mortgager. Inspite of the production of postal acknowledgement cards evidencing the service on Shwetha, Vanitha and Ranjitha, the legal heirs of the deceased mortgager, the applicant had not put forth any contention that there are any other legal heir for the deceased mortgager was left out. In view of the above it can safely be

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SA 93/2024

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concluded that issuance of demand notice is strictly in accordance

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with statute as the mandate of Rule 3 is strictly complied with.

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The respondent had also produced the proof as to the dispatch

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of the impugned possession notice on the borrower as well as legal heirs of the deceased mortgager. The publication of the possession notice dated 15.05.2024 in newspapers dated 17.05.2024 is also produced along with objections. The Photograph evidencing the affixture of the possession notice in the secured asset is also produced by the respondent along with their objections. By production of above documents the respondent has succeeded in proving the due compliance of Rule 8(1) and 8(2) of Security Interest Enforcement Rules.

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The next contention of the applicant as to the noncompliance of S.26D is also disproved by the production of the registration particulars with the central registry which evidences the due compliance of S.26D of the Act.

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All the contentions taken by the applicant had been successfully rebutted by the respondent by production of evidence substantiating the due compliance of the Act and Rules, resulting the S.A liable to be dismissed.

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In the result,

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S.A 93/2024 stands dismissed.

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SA 93/2024

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Interim order, if any granted and subsisting till this day stands vacated.

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Pending I.A’s if any are all disposed of in terms of this Order.

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No order as to cost.

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Issue copy to all parties concerned.

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[Dictated to the Stenographer (AJ), transcribed by her, corrected and signed and pronounced by me in

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the Open Court, this the 29^th Day of August, 2025].

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Sd/- (T. RAJESH) PRESIDING OFFICER

Sri Sathyanarayana Rao v. Indian Bank

Case brief

What is this about?

What did the court decide?

Sri Sathyanarayana Rao v. Indian Bank

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

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Case details

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