Dismissed

Balagouni Balraj Goud v. Shriram Finance Limited

DRT23 Mar 2026SA/107/2024

Case brief

AI extract

What is this about?

An application under Section 17 of the SARFAESI Act challenging a possession notice and proceedings for taking physical possession of secured property. The Tribunal held there were no merits, noted undisputed facts of loan default and equitable mortgage, and found the respondent followed statutory procedures, dismissing the application.

What did the court decide?

The application seeking to quash possession proceedings and declare them illegal was dismissed with no order as to costs.

Balagouni Balraj Goud versus Shriram Finance Limited — Company and Corporate | DRT (2026)

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IN THE DEBTS RECOVERYTRIBUNAL - 1 AT HYDERABAD

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DATEDTHISTHE 23RD DAYOF MARCH, 2026

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PRESENT: SRI GUMMADI GOPICHAND, PRESIDING OFFICER

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sA.No.107,/2c24

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Balagouni Balraj Goud, S/o Sri Lingamay5ra Goud, Aged 59 years, Occ:business, R/o flat o. 101, 8-3-402, Ashok Badam View Apartment, Road No.4&5, Banjara Hills, Hyderabad.

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... Applicant

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Versus

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Shriram Finance Ltd., Rep. by its Authorized officer, D.No.3-6-629, 4th floor, Bhoopal Reddy Complex, Street No.8, Himayathnagar, Hyderabad ... Respondent Counsel for th.e Applicant : SiV. Sethu Madhaua Rao Counsel for Respondent : Si N.Raghuueer

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Reserved on : 21.01.2026 Pronounced on : 23.03.2026 Uploaded on : 23.O3.2026

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ORDER

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This application is frled by the Applicant u/s. 17 of the SARFAESI Act, 2002, challenging the possession notice dt.29.O L.LO24 and also the proceedings initiated by the Respondent for taking physical possession of the schedule property through Advocate corhmissioner pursuant to the orders of Ld.lX A in Crl.M.P.No.l97 124 and also

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to declare the

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The averments brief, are that:

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The Applicant availed credit facilities from Shriram City Union Finance Ltd. in the year 2OL2 and the Applicant has not created any securit5r interest over the schedule property in favour of the Respondent. In view of the loss in the business, the Applicant could not pay some instalments. The original lender liled an Arbitration case before the Arbitrator and the Ld.Arbitrator without notice, passed exparte award in Arbitration Case No. 103/ 14. Challenging the said award, the Applicant frled COP No.07/18 before the Principal Special Court and the said court passed decree by setting aside the award passed by the Arbitrator. Thereafter, without serving demand notice and possession notice to the Applicant, the Respondent straightaway initiated proceedings u/s 14 of the SARFAESI Act, 2OO2 for taking physical possession of the schedule property and so, the said proceedings are not legal and valid. The impugned possession notice was not published in two daily newspapers and also not affixed on the schedule propert5r. Hence the SA.

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The Respondent filed Reply denying all the adverse allegations made in the SA and contended that the Applicant availed Business Development loan of Rs.S crores by creating mortgage against the schedule property and one B. Aruna goud, A. Pochi Reddy and Pothagani Allen Goud stood as guarantors and thereafter committed default and so, the loan account was classified as NPA on 13.10.2013 as per the guidelines of RBL So, the Respondent initiated arbitration proceedings, however, the award passed by the Arbitrator in A.R.C.No.1O3/ 14 was set aside by the Commercial Court, Hyderabad giving liberty to the Respondent to initiate proceedings for recovery of debt. Thereafter, the Respondent initiated proceedings under the provisions of SARFAESI Act, 2002 and issued demand notice dt.25.O9 .2023 and possession notice dt.29_O 1. The said possession notice was affixed on the schedule lished in two daily newspapers. Thereafter, the den s 14 of the SARFAESI Act,2OO2 for taking cal schedule property as per the orders of

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Ld.ACMM in Crl.M.P.No. 197/24 and there are no violations. Accordingly, Respondent prayed to dismiss the SA.

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Heard Ld. Counsel for the Applicant and Ld. Counsel for the Respondent. Perused the material brought on record. 5. Now the points that arise for consideration are

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i. rohether th.e Applicant has establish.ed ang ualid grounds for challenging the proceedings initiated by th.e Respondent for taking phgsical possession ofthe schedule propertA u/ s 14 oftlrc SARFIIESI Act, 2O02 through aduocate commissioner?

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ii. To uthat relief ?

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Polnt .l\Io.(if :-

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During the course of arguments, Ld. Counsel for the Applicant and Ld. Counsel for the Respondent reiterated their respective versions as stated supra.

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The undisputed facts of the case are that the Applicant availed loan from the Shriram City Union Finance Ltd. and created equitable mortgage in respect of the schedule property to secure the said loan and thereafter committed default in repaying the loan dues.

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The specific contention of the Applicant is that the Applicant has not created any security interest in favour of the Respondent herein and so, the Respondent is not entitled to initiate proceedings under the provisions of SARFAESI Act,2OO2 in respect of the schedule property. The further contention is that the Respondent without serving demand notice and possession notice to the Applicant and without following Rule 8(1)&(2) of Securitlr In rcement) Rules, 2002, initiated proceedings for lon^{of the scheduleproperty throughadvocate} SARFAESI Act, 2OO2 and so, the said ndent against the schedule property are

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Per contra, Respondent contended that at the time of availing credit facilities, the Applicant executed Memorandum Evidencing Deposit of Title Deeds in respect of the schedule property in favour of the original lender Shriram Union finance Ltd. and later in view of the amalgamation, the name has been changed to Shriram Finance Ltd, Respondent herein and 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 Applicant and guarantors and also in taking physical possession ofthe schedule property u/s 14 ofthe SARFAESI Act, 2002.

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To substantiate their contention, Respondent filed material documents along with the Reply Iiled by them. As per the said documents, it is clear that after classifying the loan account of the Applicant as NPA, the Respondent issued demand notice dt.25.O9 .2023 u/ s 13(2) of the SARAFAESI Act, 2OO2 and the said notice was sent to the Applicant and guarantors through Regd.Post and the said notice was received by the Applicant as evidenced by the postal acknowledgements filed by the Respondent. When the Applicant failed to comply with the said notice, the Respondent issued possession notice dt.29 .Ol .2024 u/ s 13(4) of the Act,2OO2 and sent the said notice to the Applicant and others through Regd.post as evidenced by the postal track reports Iiled by the Respondent. The said possession notice was published in Telugu and English daily newspapers as evidenced by the copies of paper publication filed by the Respondent and the said notice was also affixed on the schedule property as depicted in the copy of photograph filed by the Respondent. Thus, the Respondent has duly followed the procedure as contemplated u/r 8(1)&(2) of Security (Enforcement) Rules, 2OO2 in issuing the impugned 1.2024 u/s 13(a) of the SARFAESI Act,2002 for edule propertSr. So, the demand notice and Respondent are perfectly legal and valid.

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: 23itAs,025 I M;#

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As per the provisions of Section 14 of SARFAESI Act, 2002, after issuance of possession notice u/s 13(a) of the SARFAESI^{Act,2OO2,the secured} creditor is at liberty to approach the concerned District^{Magistrate or Chief} Judicial Magistrate for taking^{physical possession} of the secured^asset.In the instant case, after issuing demand^{noticeand possession notice to the} Applicant, the Respondent being secured creditor,^{approachedLd.IX} ACMM, Hyderabad u/s 14 of the SARFAESI Act,^{2OO2 by filing} Crl.M.P.No.197 124 for appointment of^{advocatecommissionerfor taking} physical possession of the schedule^property and^{the advocate} commissioner issued notice to the^{Applicant to vacate the schedule} property.

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So, considering all the^{circumstances,Iam of the opinion that the} Applicant is not entitled^{to any relief as tltere are no merits in the SA. So,} I see no ground warranting^{interference of this Tribunalwith the} proceedings initiated by the Respondent^{for takingphysicalpossession of} the schedule^property u/s^{14 of the SARFAESIAct,2002' Accordingly, this} point is answered in favour of the^{Respondentand against the Applicant'}

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Potnt No.(il)r

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In the result, SA lO7 12024^{is dismissed as there are no merits'}

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Consequently, the Interlocutory^{Applications, pendingif any, shall stand} disposed of. No order^{as to costs'}

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Communicate a copy of^{this order to the partiesconcerned.}

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(Dictated to the P.s, transcibed bg^{her, corrected,signedand pronounced bg me in the open} courl on this the 23'd day^{of March' 2026)}

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sd/_ (G. GOPICHAND) PRESIDING OFFICER wPoeo*L o-.lh-;;L{; ,i:mpr7

Balagouni Balraj Goud v. Shriram Finance Limited

Case brief

What is this about?

What did the court decide?

Balagouni Balraj Goud v. Shriram Finance Limited

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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