Dismissed

Umadevi Pharmaceuticals Pvt. Lt v. Punjab National Bank

DRT5 Jan 2026SA/102/2024

Case brief

AI extract

What is this about?

The Appellate Tribunal dismissed the applicant's security application challenging the bank's possession notice and sale notice under Section 17 of the SARFAESI Act, finding the bank followed due procedure regarding notices under Section 13(2) and 13(4) and Rule 8 of the Enforcement Rules.

What did the court decide?

The Securitization Application under Section 17 of the SARFAESI Act is dismissed; no order as to costs.

Umadevi Pharmaceuticals Pvt. Lt versus Punjab National Bank — Company and Corporate | DRT (2026)

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IN THE DEBTS RECOVERYTRIBUNAL.I^{AT HYDERABAD}

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DATED THIS THE sTH DAY OF JANUARY, 2026

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PRESENT: GUMMADI GOPICHAND,^{PRESIDING OFFICER}

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sA.No. 1o2/2o24

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Between:

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M/s. Umadevi Pharmaceuticals^{Pvt. Ltd} Rep by its Director Mr. Suresh Babu^Chava, 4Ol, 46 Floor, UMA Residency, Opp: Sindhu Cargos, S.R.Nagar,^Hyderabad-38

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) Suresh Babu Chava S/o. Chava Venkata Rao, Aged about 58^years, Occ:^Business, R/ o.H.No.8-3 -898 I 26,^{NagarjunaNagar,} Beside SBI Bank lane,^{Yellareddy Guda,} Hyderabad-500038

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Applicants

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Versus

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Punj ab National Bank Circle Sastra, Secunderabad^Circle, 1 03, D.No.8-2 -248 I A, Maharshi^House, Road No.3, Banjara Hills,^{Hyderabad-500034} Rep. by its Authorized officer

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Respondent

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S'i. Kranthi Kumar K
Counsel for
Si. Manau Gecil Thomas
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*j 07.11.2025
05.01.2026
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V{ebsite on 06.o1.2026
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1 . The Applicant fresent^{SecuritizationApplication undersection} 17 of the SARFAESI Act, challenging^{the SaleNoticedated24.05.2024,} the action of the Respondent Bank to^{take physicalpossession of the} application schedule^properties in^{pursuance to theAdvocate}

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SA.No.102/2024

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Commissioner Notice^{dated 20'05.2O24in Cr1.M.P.No.90 12024 ot tl:e} file of the chief Judicial^{Magistrate, Sanga Reddy and the Possession} Notice dated lg.ol.2o24^{issued by the Respondent Bank in respect of} application schedule^properties.

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i. The averments^{made by the Applicantin the application,in brief,} are that, at the^{request of the Applicants the RespondentBank} sanctioned credit^{facilitiesto Applicant No.1. After availing credit} facilities, the Applicants^{were regular in repaymentof the loan} amount and^{repaid approximatelyan amountof Rs'2'40crores} towards principle and^{interest.However,to the surprise of the} Applicants, the^{RespondentBank has issued Demand Notice dated} O4.1O.2O23^{u/sec. 13(2) of the SARFAESIAct, demanding the}

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Applicants to^{pay an amount of Rs'5,07,75,965'45/-as on} Og.lO.2O23.TothesaidDemandNotice,theApplicantsraised objections vide^{letter dated la'Ol'2}24'Even though the} RespondentBankhasreceivedthesaidobjections,theRespondent BankhasnotpreferredtogiveanyReplytot}reobjectionsraised by the Appticants^{in compliance of Section' 13(3A) of the SARFAESI} Act. The Respondent^{Bank issuedPossessionNotice dated} lg'ol.2o24ulsec.13(4)oftheSARFAESIAct.ThesaidPossession

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NoticewasneitherservedontheApplicants/Guarantorsnor publishedintwoleadingnewspaperswithintimeasstipulated underRulesS(1)ands(2)oftheSecuritylnterest(Enforcement) Rules,2OO2.TheauthorizedofficeroftheRespondentBankwith an ulterior^{motive published the Sale Noticedated 24 'O5 '2024and} thereafter the^Res ent Bank^{proceededtotake physical} possession of ihq s,clq+Jl\Ioperties^{in pursuantof the Advocate} .^"'4g.yceYS 2O.O5.2O24 issued^rn ld. Chief Judicial^Magistrate

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l2O2t}on^ttre pTf{ ffionon Magistrate , Sanga^ReddY.The }.4

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Banr k has . not seLv€ the Sale Notice^{under Rule8(6)}

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1:. ts and the said Notice^wasalso

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of the ;,12Qo2, not s place of schedule^{properties. The}

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SA, No,102/2024

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Respondent Bank has also failed to publish the Sale Notice in two leading newspapers. So, the Respondent Bank has violated Rules 8(6) and 8(7) of the Rules, 2OO2. Tl:re Respondent Bank has not obtained correct valuation of the schedule properties form the approved valuer as contemplated under Rule 8(5) of the Rules, 2OO2 and the reserve price Iixed by the authorized officer is shabby and very low. Hence the S.A.

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The Respondent Bank Iiled its Reply denying all the adverse allegations made in the Application. The contentions of the Respondent Bank, in brief, are as under:-

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i. The Applicants, after availing the credit facilities from the Respondent Bank, were irregular in repayment of the loan amount. The account of the Applicants was non-standard from June 2023 itself due to non-payment of interest in the cash credit account and the drawing from the cash credit account exceeded the drawing power and further the Hypothecated stocks and book debts have been illegally disposed of by the Borrowers. The last payment made by the Applicants on 13.09.2023 itself is insignificant and not a single rupee has been repaid for more than six months till today. So, the account of the Applicants was classified as Non-Performing Asset (NPA) and the Respondent Bank has issued Demand Notice dated 04.10.2023 u/sec. 13(2) of the SARFAESI Act. The Applicants did not issue any reply to the said Demand Notice. The alleged Reply Notice dated 18.01 .2024 was issued by the Counsel for the Applicants to the loan Recall Notice dated 29.12.2023 issued by the counsel for the Respondent Bank. of issuing reply u/sec. 13(3A) of the SARF t Bank does not arise.

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issued Possession Notice dated 19 tion schedule properties and 'J$fl"30Tr

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the Applicants. The said Possessron duly published in leading

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SA.No.102/2024

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newspapers as required under^{law. The Respondent Bankhas} approached the Ld. XIV Addl.^{Chief Metropolitan Magistrate,} Hyderabad, by frling Cr1.M.P.No.293l2O24^{for taking physical} possession of the schedule^{propert5r. The RespondentBankhas} attempted to take^{physical possessionof the schedule property} and failed due to hurdles^{createdby the Applicants. Auction of the} application schedule^{properties scheduledon28} '06 '2024 pursuant to the Sale Notice dated^{24.05.2024, issuedby the} Respondent Bank, failed^{for wantof bidders' Hence the S'A may be} dismissed

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Heard Ld. Counsels^{appearing for both parties.}

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Now, the^{points that arise for considerationare,-}

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Whether the Applicants^{have made out any valid grounds for} setting aside the^{proceedingsinitiated by the RespondentBank} under the SARFAESI^{Act, against the application schedule} properties?

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ii) To what relief.2

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Polnt l,to.lllt

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The Applicants^{have not disputed availingof credit facilities from the} Respondent Bank.^{The Applicants have also not disputed creation of} security interest^{over the applicationscheduled propertiesin favour of} the Respondent^{Bank to secure the credit facilities availed by them. The} contention of the Applicants^{is that-they wereregular in the repayment} of the Respondent Bank but,^{the RespondentBank} has t of the Applicants as^{Non-Performing} contended that the^{Applicants were} amount and so the account^{of the}

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'"0'T ffiflllfl]:":d s was classllled:' Non-Performing Asset^{(NPA)' The} documents has frled^{statement of}

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SA.No.102/2024

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account in respect of the loan account of the Applicants from which it is very clear that the Applicants were irregular in repayment of the loan amount to the Respondent Bank. So classification of the loan account of the Applicants by the Respondent Bank as Non-Performing Asset (NPA) cannot be found fault.

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The Applicants have not disputed the receipt of Demand Notice dated O4.1O.2O23 issued by the Respondent Bank u/sec. 13(2) of ttre SARFAESI Act. It is the contention of the Applicants that they raised certain objections to the Demand Notice vide letter dated 18.01.2024 but the Respondent Bank has not considered the same and no reply as contemplated u/sec.13(3A) of the SARFAESI Act, was issued by the Respondent Bank. The Respondent Bank contended the Applicants have not issued any reply to the Demand Notice issued by the Respondent Bank and that the alleged Reply Notice dated 18.01.2024 was issued by the counsel for the Applicants to the loan Recall Notice dated 29.12.2018 issued by the Counsel for the Respondent bank and so the question of issuing reply u/sec.13(3A) of the SARFAESI Act, by the Respondent Bank does not arise. I have perused the copy of the Reply Notice dated 18.O1.2024 fied by the Applicants along with the S.A. The said Reply Notice was issued by Mr. Md.Habib Advocate on behalf of the Applicants herein to the legal notice dated 29.12.2023, issued by the Counsel for the Respondent Bank. It cannot be said that the said Reply Notice was issued as reply to the Demand Notice dated O4.1O.2O23 issued u/sec. 13(2) of the SARFAESI Act, by the Respondent Bank. So, the contention of the Applicants that the Respondent Bank has failed to with section. 13(3A) of the Act 2O02, does not have

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documents liled a copy of the Notice dated 19.0 4 issued u/sec.13(4) of the o",5,5 d8g.3mr "o; on schedule properties along with postal ts themselves have filed a copy of the th S.A. So, it cannot be said the

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S'A. No.102/2024

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Respondent Bank has not issued^possession Notice to the Applicants. The Respondent Bank has also liled copies of publication of possession Notice dated 19.01.2024 in "Eenadu" and "Times of India" newspapers dated 20.01.2024. So, it is clear that the Respondent Bank has duly followed Rule 8(1) and 8(2) of the security Interest (Enforcement) Rules, 2OO2 while issuing Possession Notice dated L9.Ot.2024 u/sec. 13(4) of the SARFAESI Act. It is a matter of record that the auction of the schedule properties contemplated by the Respondent Bank on 28.06.2024 pursuant to Sale Notice dated 24.os.2o24 failed for want of bidders. So, I am not delving into the issue as to whether the Respondent Bank has followed due procedure while issuing the said Sale Notice dated 24.05.2024.

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So, in view of the about I am of the considered opinion that the Respondent Bank has duly followed the procedure laid down under the SARFAESI Act, and ttre Rules made thereunder while issuing Possession Notice u/sec. 13(4) and Demand Notice u.sec. 13(2) of the SARFAESI Act. The Applicants have failed to make out any valid grounds for setting aside the action of the Respondent Bank under the SARFAESI Act, against the application schedule properties. So, the present s.A is liable to be dismissed. Accordingly this point is answered against the Applicants and in favour of the Respondent Bank.

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Potnt ltfio.ltilt

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In the result, the present Securitization Application is dismissed. Consequently, the Interlocutory Applications, pending if any, shall of. No order as to costs.

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copy of this order to the parties concerned.

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by heL cofiected, signed ond plonounced by me in the open coutt on this the y doy ol

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O 5 Jl{N 2$78

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sd/-

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lG.^coPrcHAND)

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il*#"%, PRESIIDING OFFICER ffiS,.l.Yq#grD

Umadevi Pharmaceuticals Pvt. Lt v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

Umadevi Pharmaceuticals Pvt. Lt v. Punjab National 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

Coram

Case details

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