Allowed

Gayathri Digital Shoppy v. Kotak Mahindra Bank Limited

DRT30 Jan 2026SA/161/2025

Case brief

AI extract

What is this about?

This Debts Recovery Tribunal allowed a Securitization Application filed by entrepreneurs against Kotak Mahindra Bank. The Tribunal set aside a possession notice dated December 24, 2024, finding that the Bank failed to provide proof of service and affixture as mandated by Rule 8(1) of the Security Interest (Enforcement) Rules, 2002.

What did the court decide?

The Securitization Application was allowed by setting aside the possession notice dated 24.12.2024.

Gayathri Digital Shoppy versus Kotak Mahindra Bank Limited — Company and Corporate | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL^_ II AT HYDERABAD

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DATED THIS THE 3OTH DAY OF ]ANUARY, 2026

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PRESENT: SH. RAMESHWAR KOTHE, B.Com, L.LB. (Hons.), 1.4.A. PRESIDING OFFICER

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Securitization Application No.161 OF 2025

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M/s. Gayathri Digital Shoppy Rep by its Proprietor Mr. Vuppuluri Madhava Reddy, S/o. Vuppuluri Chenna Reddy, Aged 51^yrs. R/o. 15-627, 628, Cellar and ground Floor, Raju Road, Ananthapur, Andhra Pradesh-515001.

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Mr. Vuppuluri Madhava Reddy , S/o. Vuppuluri Chenna Reddy, Aged 51 yrs, R/o. 75-627, 628, Cellar and ground Floor, Raju Road, Ananthapur, Andhra Pradesh-515001

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.......Applicants.

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Versus

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Kotak Mahindra Bank Ltd., Somajiguda Branch, Jewel Pawani Tower, 3d Floor, 6-3-7709/L/302, Raj Bhavan Road, Somajiguda, Hyderabad-500082 Rep by its Authorised Officer.

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....respondent

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Counsel for the Applicant : Mr. V. Ravinder

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Counsel for Respondent Bank : Mr.^{D. Bala}

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-:^q-B-DEB:-

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The Applicants filed the^present Securitisation^{Applicationu/s} 17 of the Securitization and Reconstruction of^{Financial Assetsand} Enforcement of Security Interest Act, 2002^{(hereinafter referredto as} "the Act") to set aslde the^possession notice dated 24.12.2024^and declare the action of the respondent bank in^{obtaining warrantdated} 28.02.2025 from Learned Chief ludicial^{MagistratecumPrincipalAsst.} Sessions ludge, Ananthapuramu in Crl.MP.No.6 of^{2025in respect of} the apprication Schedule property.

OW*"

Page 2 of4

SA No.161/202s

The case of the applicants, in brief, is that they availed OCC and term loan of Rs.45,00,000/- each respectively in²⁰¹⁸ from^the respondent bank. Though the account was regular and not^NPA, respondent bank issued demand notice dated 29.08.2024^under Section 13(2) of the Act showing loan account as^NPA as^on 30.07.2024. The account is not NPA since the applicants^made several^payments after the date of NPA. Respondent bank failed to serve, affix and^publish the^possession notice dated 24.72.2024 in violation of Rules 8(2) of Security interest^{(Enforcement)} Rules, 2002 ("Rules" hereinafter for short). Respondent bank also failed to follow the procedure under Section 14 of the Act while obtaining orders in Crl.MP hence the entire action of the respondent bank is liable to be set aside.

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The respondent bank filed reply. The submissions briefly are that after availing the total loan amount of Rs.90 lakhs, applicants failed to maintain the account regularly hence account became NPA followed by Securitization proceedings. As the amount was not paid as per demand notice, respondent bank issued possession notice which was published in the New Indian Express and Eenadu news papers on 28.72.2024. The applicants have no locus standi to question section 14 proceedings of the bank hence SA is liable to be dismissed.

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Heard learned counsel for the applicants and learned counsel for the respondent bank perused the written arguments filed for the respondent bank.

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It is contended by learned counsel for the applicants that account was not NPA; the possession notice was7gpt served affixed eW*"

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Page 3 of4

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sA No.151/2025

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on the property as^per Rule 8(1);^{the statutory schemeunder} Sections 13(2), 13(4) and 14 of^{the Act has not been filed by the} respondent bank. Learned^{counsel would pray to set aside all the} measures of the respondent bank^{in respect of application schedule} properties.

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Per contra, learned^{counsel for the respondent bank would} submit that the^present applicant^{ls not maintainableas Section} 14(3) of the Act 2002 bares the^{challenge of ordersof CMM/DMin} any court or Tribunal. The account^{became NPA on 30.07.2024} followed by a loan recall^{notice dated 09.08.2024 and demandnotice} under Section 13(2) dated^{29.08.2024.Demandnotice wasserved} through substitute service of^{publicationon 10.70.2024 and symbolic} possession was taken on 24.72.2024 and^{published the same on} 2Aj,2-2024. Learned counsel further^{submitted that the applicants} misused the secured^property by^{closing the digital marketing} business and openlng a^{hotel without disclosureHenceapplicants are} guilty of suppression of material facts and SA^{is liableto be dismissed} on this^ground alone. With^{these submissions, learned counselsought} for dismissal of the SA with exemplary^costs.

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

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i) Whether the appticant made out any^{valid ground to} quash any of the measures of the respondent against^the SA schedule^proqertY?

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ii) To what relieP

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Point No.^(i):

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Admittedly, the applicants availed^{OCCand termloan of Rs.45} lakhs each from the respondent bank in 2018. Creation of^mortgage in respect of application schedule DroDerties is not under dispute.^The

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Page 4 of 4

SA No.161/2025

main contention of the applicants is that the account was not NpA. As per no dues certificate filed at page 45 of the documents annexed to the application, the applicants cleared the WCFL and they continue to be liable under over draft facility. Be that as it may. Despite specific contention of non-service of possession notice and its affixture, the respondent bank has not filed any proof. There is no whisper about the service and affixture of possession notice dated 24.12.2024 as mandated under Rule 8(1) of the Rules 2002. In the absence of any proof material, it has to be construed that the respondent bank has failed to follow Rule B(1) of the Rules 2002. Accordingly SA deserves to be allowed.

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Point No.(ii):

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In the result, the Securitization Application is allowed by setting aside the possession notice dated 24.L2.2024 in respect of the application schedule property.

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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 dnd pronounced by me in the open court on this the 3oth doy of Jonuory, 2026).

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Ow*"

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(RAMESHWAR KOTHE) PRESIDING OFFICER

Gayathri Digital Shoppy v. Kotak Mahindra Bank Limited

Case brief

What is this about?

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Gayathri Digital Shoppy v. Kotak Mahindra Bank Limited

Case brief

What is this about?

What did the court decide?

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