Dismissed

Sandeep Traders Rep by Sunil Kumar Agarwal v. reliance commercial finance limited

DRT27 Aug 2026SA/137/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed the applicant's Securitization Application challenging the respondent's measures under the SARFAESI Act, including obtaining physical possession of mortgaged property, holding that procedural requirements were duly complied with.

What did the court decide?

Securitization Application fails and is dismissed; Interlocutory Applications pending stand closed.

Sandeep Traders Rep by Sunil Kumar Agarwal versus… — Contract and Commercial Disputes | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL - II AT HYDEMBAD

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DATED THIS THE 27TH DAY OF AUGUST, 2026

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PRESENT: SH. RAMESHWAR KOTHE, B.COM, L.LB.^(HONS.), M.A. PRESIDING OFFICER

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Securitization Application No. 137 OF 2024

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Sandeep Traders, Rep. by its Prop. Sunil Kumar Agarwal, S/o Late Babulal, Aged about 57^years, Occ; Business, R/o H. No. 8-3-833/280, Kamalapuri Colony, Near Green Bawarchi Restaurant, Hyderabad - 500 073, Telangana.

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Smt. Savithri Bai, W/o Late Babulal, Aged about B5^years, Occ: House Wife, R/o H. No. 8-3-833/280, Kamalapuri Colony, Near Green Bawarchi Restaurant, Hyderabad - 500 073, Telangana.

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.Applicants

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Versus

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Reliance Commercial Finance Ltd., Rep. by its authorized officer, Situated at Dhruv Arcade, 3rd Floor, Bearing No.6-3-248, Naveen Nagar, Road No. 1, Banjara hills, Hyderabad - 500 034

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..... Respondent

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Counsel for the Applicants :^{Mr. K. Kranthi Kumar} Counsel for Respondent :^{Mr. D. S. PavanKumar}

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.: B_D-E-B:-

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The^present Securitization^{Applicationis filed by the Applicants} u/s.L7 of the Securitisation and^{Reconstructionof FinancialAssets} and Enforcement of Security Interest^{Acl, 2OO2 ("Act" hereinafterfor} short) to set aside all measures initiated^{by the Respondent under} section 13(4), including the action^{taken for obtainingphysical} possession of the SA Schedule PropE{y^pursuant to the^advocate o%,,

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Page 2 of 5

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SA No. 13712024

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commissioner notice dated 06.03.2024, issued in^pursuance of the order passed in Crl.M.P.No.t7O of 2024 by the Hon'ble XVII ACMM Court, Nampally, Hyderabad in^pursuance to the^possession notice dated 14.07.2022.

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The averments of the application, in brief, are that Respondent Company sanctioned mortgage loan facilities of Rs.75,00,000/- and Rs.20,00,000/- to Applicant No.1 secured by mortgage of the S.A. Schedule Property furnished by Applicant No.2. They contend that, owing to business losses during the COVID-19^pandemic, certain instalments could not be serviced and, despite their requests for reg u la risatio n/restructu ring and willingness to clear the overdue amounts, the Bank classified the account as NPA and initiated SARFAESI^proceedings. The Applicants allege that the demand notice was never served upon them and that the possession notice dated t4.07.2022 was neither duly served nor affixed on the secured property nor published in two leading newspapers as required under the SARFAESI Act and the Security Interest (Enforcement) Rules, 2002 (hereinafter "Rules" for short). Accordingly, the applicants^pray for setting aside the SARFAESI measures initiated against the SA schedule property.

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The Respondent Company filed its reply statement along with supporting documents. The averments thereof, in brief, are that the Applicants committed persistent defaults in repayment, resulting in classification of both loan accounts as NPAs on t9.12.2020. Consequently a demand notice dated L0.03.2022 under Section 13(2) of the SARFAESI Act was issued and thereafter published in Nava Telangana and Business Standard on 08.04.2022. As the Applicants failed to clear the dues, the Respondent issued a possession notice dated 14.07.2022 under Section 13(4), which was allegedly duly served, affixed on the secured property (sNand published in the

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Page 3 of 5

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SA No. 137/2024

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aforesaid newspapers on 19.07.2022. It is further contended that, upon continued default, the Respondent initiated^proceedings under Section 14 of the Act in Crl.M.P. No.170 of 2024 before the Hon'ble XVII ACMM, Nampally, Hyderabad, pursuant to which an Advocate Commissioner was appointed and notice dated 06.03.2024 was issued granting 15 days'time to vacate the property. The Respondent further alleges suppression of material facts, padicularly regarding the subsequent gift of a portion of the mortgaged property belonging to co-applicant/guarantor Respondent No.2 in favour of the Applicants' brother, which allegedly came to its knowledge only upon filing of S.A. No.134 of 2025. Accordingly, respondent prays for dismissal of the SA.

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Learned counsel for the Applicants stated that orders may be passed on records. Learned counsel for the respondent reported no oral arguments. Perused the written arguments filed by the respondent and also perused the material brought on record.

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Learned Counsel for the Respondent Company, vide written arguments, reiterated the contents of the reply statement denying the averments made in the SA; and placed reliance upon the documents filed along with the reply. It is submitted that the loan account was duly classified as NPA in accordance with the applicable RBI guidelines and that the Respondent Company had strictly complied with the^{procedure prescribed} under the SARFAESI Act and the Rules, 2002. Accordingly, Learned Counsel prayed for dismissal of the SA.

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Pagc 4 of 5

SA No. 13712024

The points for consideration are as follows : -

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i) Whether the Applicants made out any valid ground for quashing the action of the Respondent for taking the physical possession of the SA schedule property through Advocate Commissioner appointed under the provision of the Section 14 of the SARFESI Act?

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ii) To what relief?

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Point No.(i):

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Admittedly, the Applicants availed mortgage loan facility against mortgage of schedule property and failed to make payment as per repayment schedule. Hence the action of the Respondent Company in classification of account as NPA and initiating the SARFESI^proceedings cannot be termed as illegal or irregular as contended by the Applicants.

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B. The Respondent Company relied on copies of documents annexed with the reply statement. Pages 40 to 96 of the material paper annexed to the reply statement are the Photostat copies of postal receipts, track reports, postal return covers and publication of the same in English and Telugu^(vernacular language) newspapers on 08.04.2022 proving service of demand notice. Similarly the Respondent Company has filed the photostat copies of^postal receipts, track report and return covers as a proof of issuance of possession notice dated 20.04.2024, copies of paper publication of the possession notice in English and Vernacular language and photograph of affixture of the notice are also placed on record. In view of sufficient proof place on record, I find no infraction of section 13(2) & 13(4) of the Act read with Rules 3, 8(1) & B(2) of the Rules, 2002. As a secured creditor the Respondent Company initiated the

fu'ps

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SA No. L3712024

SARFESI proceedings, which cannot be categorized as illegal or a rbitra ry.

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In view of the foregoing observations, this Tribunal finds that the Applicants has failed to establish any ground warranting interference with the measures initiated by the Respondent Company under the SARFAESI Act, 2002, including the action for taking physical possession of the SA Schedule Property. Accordingly, the SA is liable to be dismissed.

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Point No.(ii):

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