Dismissed

Mr Chinthareddy Yeshwanth Reddy v. Bank of India

DRT10 Aug 2026SA/149/2025

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed a Securitisation Application filed to set aside measures initiated by Bank of India under the SARFAESI Act. The court found that the bank complied with statutory requirements for notice and possession, rejecting claims of procedural default.

What did the court decide?

The Securitisation Application is dismissed, and the measures initiated by the bank for recovery are upheld.

Mr Chinthareddy Yeshwanth Reddy versus Bank of India — Company and Corporate | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL - II AT HYDERABAD

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DATED THIS THE 1OTH 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. 149 OF 2025

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Mr. Chinthareddy Yeshwanth Reddy, S/o Venkat Reddy, Aged about 30 years, Occ: Business, R/o Flat No. 202, Door No. L-LBB/C/202/ Al, Pragathi Nagar, Bachupally Village Bachupally Mandal, Nizampet, Medchal - Malkajgiri District

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..........Applicant

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Versus

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Bank of India, Rep. by its authorized officer, Situated at Film Nagar Branch, Plot No, A-10, Road No. 4, Jubilee Hills, Hyderabad - 500 096

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.....Respondent

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Counsel for the Applicant : Sri. D. Raghavulu Counsel for Respondent : Sri. V. Sethu Madhava Rao

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-:ORDER:-

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The^present Securitization^{Applicationis filed by the Applicant} uls.L7 of the Securitisation and^{Reconstructionof FinancialAssets} and Enforcement of Security Interest^{Act, 2002 ("Act" hereinafterfor} short) to set aside all the measures initiated^{by the respondent,} including the action of taking^{physical possessionof the SA schedule} property via advocate commissioner notice dated 21.03.2025 as^per orders in Crl.M.P.No.192 of^{2025 on the file of Hon'ble Senior Civil} Judge cum Assistant Session Judge,^{Medchal-Malkajgiri District at} Kukatpally^pursuant to the^{possession notice dated 19.12.2024 under} section 13(4) of the Act. O%""

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Page 2 of 5

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SA No. 149/2025

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The averments of the applicatlon,ⁱⁿ brief,^{are that applicant} had availed a housing loan of^{Rs.65,59,000/-from the respondent} bank and, due to unforeseen^{financial circumstances, defaultedin} repayment of the loan. It is^{contendedthat despiterequestingthe} respondent bank to^{grant reasonable} time^{to regularisethe loan} account, the respondent^proceeded to^{classify the accountas a NPA} and thereafter initiated^proceedings under the^{SARFAESIAct. The} applicant further submits that the^{respondentobtainedan order} under Section 14 of the SARFAESI^{Act ln Crl.M.P.No.192of 2025 on} the file of the Hon'ble Senior Civil ludge-cum-Assistant^Sessions ludge, Medchal-Malkajgiri District at Kukatpally,^{pursuant to whlch an} Advocate Commissioner issued a notlce dated 21.03.2025 for^taking physical possession of the SA schedule property. The appllcant alleges that the respondent bank failed to^issue the^DemandNotice under Section 13(2) and the Possession Notice under Sectlon^{13(4) of} the SARFAESI Act. It is further contended that the respondent failed to affix the Possession Notice on the secured asset and^publish the same in two leading newspapers as mandated under Rules 8(1) and 8(2) of the Security Interest (Enforcement) Rules, 2002^(hereinafter "Rules" for short). On these grounds, the applicant prays for setting aside the measures initiated by the respondent bank against the SA schedule property.

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The Respondent Bank filed its reply statement along with supporting documents. The averments thereof, in brief, are that applicant committed^persistent defaults in repayment of the loan, resulting in the loan account being classified as a NPA on 08.10.2024 in accordance with the RBI guidelines. Thereafter, a Demand Notice dated 09.10.2024 under section 13(2) of the SARFAESI Act was issued demanding payment of the outstanding dues. As the applicant evaded service, the notice was^published in lydleadinq newspapers /}'Y.n\d" t l,/

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Page 3 of 5

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SA No. 149/2025

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in compliance with Rule 3 of the Rules, 2002. Upon the applicant's failure to discharge the liability within the statutory period, the respondent issued a Possession Notice dated 17.12.2024 under Section 13(4) of the Act, which was served upon the applicant, affixed on the secured asset, and published in two leading newspapers in compliance with Rules B(1) and 8(2) of the Rules. The respondent further submits that it initiated proceedings under Section 14 of the SARFAESI Act before the competent Magistrate, who appointed an Advocate Commissioner for taking physical possession of the secured asset. It is further contended that though this Tribunal granted conditional interim protection to the applicant subject to deposit of Rs,16.50 lakhs, the applicant failed to comply with the said condition, pursuant to which the Advocate Commissioner took physical possession of the secured asset on 19.05.2025 and handed over the same to the Authorised Officer. Accordingly, the Respondent Bank prays for dismissal of the SA.

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Heard learned counsel for the applicant and learned counsel for the respondent. Perused the material brought on record.

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Learned counsel for the applicant reiterated the averments made in the Securitisation Application and submitted that the respondent bank had wrongly classified the loan account as a NonPerforming Asset and initiated measures under the SARFAESI Act without duly serving the Demand Notice under Section 13(2) and the Possession Notice under Section 13(4) of the Act. It was further contended that the respondent bank failed to affix the Possession Notice on the secured asset and failed to publish the same in two leading newspapers in compliance with the mandatory provisions of the Rules, 2002. On these g rounds, roundr,t"wer learrle.d counsel pr ad ye d o fr or

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Page 4 of 5

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sA No. 149/2025

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setting aside the measures^{initiatedby the respondent bankagainst} the SA schedule^property.

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Learned counsel for the^{Respondent Bank deniedthe averments} of the Applicant and^{places relianceupon the material papers} annexed with the reply^{statement. It is submitted that the Applicant'} account was classified^{as NPAin accordancewith RBI guidelinesand} that the Respondent^{Bank had strictly followedthe due procedure} prescribed under the SARFAESI Act, 2002 and the^{Rules framed} thereunder. Accordingly,^{sought for dismissalof the S.A.}

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

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i) Whether the Applicant^{made out any valid ground for} quashing the action of the Respondent Bank for taking^the physicat possession of the SA schedule^{propertythrough} Advocate Commissioner appointed^{under the provision of} the Section 14 of the^SARFESIAct?

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ii) To what relief?

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Point No.(i):

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The Respondent Bank filed^{material documentsas proof of} compliance of due^procedure of law.^{Pages B to 18 of the material} paper annexed with the reply statement are the^{Photostat copies of} postal receipts, acknowledgement and^publication of the^samein English and Telugu^{(vernacular language)newspaperson 15.10.2024} proving service of demand notice dated 09.10.2024. Similarly,^Pages 19 i to 28 are the Photostat^copies of^{postal receipt and trackreport of} Possession Notice dated 17.12.2024,^{photographsas proof of} affixture on secured assets and^{publication of the samein English and} Telugu (vernacular language) newspapers on^{t9'!2.2024' In view of} sufficient proof^place on record, I^{find no infrrstion of section13(2) &} OW**

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Page 5 of 5

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sA No. 149/2025

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13(4) of the Act and Rules 3, 8(1) & B(2) of the Rules, 2002. As a secured creditor the Respondent Bank initiated the SARFESI proceedings, which cannot be categorized as illegal or arbitrary.

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In view of above observation, it is concluded that the Applicant failed to establish any ground to interdict the measures initiated Respondent Bank under the Act, 2002 against the SA schedule property and accordingly the SA is liable to be dismissed.

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Point No.(ii):

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In the result, the Securitisation Application fails and is hereby dismissed.

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Consequently, Interlocutory Applications pending, if any, shall stand closed.

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No order as to costs.

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Communicate a copy of this order to the parties concerned and upload in the official website.

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(Typed to my dictotion by the steno, corrected, signed and pronounced by me in the open court on this the tl'h doy of August, 2026).

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.$ft'u:t,'^- ESHWAR KOTHE) PRESIDING OFFICER

Mr Chinthareddy Yeshwanth Reddy v. Bank of India

Case brief

What is this about?

What did the court decide?

Mr Chinthareddy Yeshwanth Reddy v. Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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