Dismissed

Korthiwada Naresh v. shriram finance limited

DRT30 Jun 2026SA/208/2024

Case brief

AI extract

What is this about?

An applicant applied to set aside a possession notice issued by Shriram Finance Limited under the SARFAESI Act due to alleged procedural flaws. The Debt Recovery Tribunal upheld the notice, finding that the financier had scrupulously followed the statutory procedure including service of demand and possession notices.

What did the court decide?

S.A. No. 208/24 was dismissed as there were no merits in the application to set aside the possession notice.

Korthiwada Naresh versus shriram finance limited — Banking and Recovery | DRT (2026)

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.I AT HYDERABAD IN THE DEBTS RECOVERY TRIBUNAL -

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DATEDTHISTHE 3OTH DAYOFJUNE, 2026

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PRESENT: SRI GUMMADI GOPICHAND, PRESIDING OFFICER

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SA.No.2O8/2024

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Kodithiwada @ Korthiwada Naresh, S/o. Shiva Kumar, Aged 40 years, Occ: Business (Plyrvood & Paints Shop) H.No.4-3-82, Patelpura, Siddipet, Medak - 502 103.

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. . . Applicant

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Versus

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The Authorized Officer, Shriram Finance Limited, H.No.3/a/59/ 1, 1"t Floor, Firdous Plaza, Siidipet Karimnanagar Road, Siddipet - 502 103.

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The Authorized Officer, Shriram Finance Limited, Zonal Offrce, H.No.8-4-1, Opp. LIC Divisional Office, Ganesh Nagar, Karimnagar - 505 001 .

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The Authorized Officer, Shriram Finance Limited, 6th Floor (Level 2l Building No. Q2 PARC, Gen4 11, TTC, Thane Belapur Road, Ghan Soil, Navi Mumbai - 400 710.

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The Authorized Shriram Fina

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$:it^{8"d"'l[rlflmzo}

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. .. Respondents

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Counsel for the Applicant Counsel for the Respondents

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: Si N. Sanka,r Rao : Si P. Ramachandran

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Reserued on :05.05.2026 Pronounced on : 30.06.2026 Uploaded to the uebsite on :30.O6.2026

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ORDER

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This Application is hled u/s. 17 of the Securitization and^{Reconstructionof} Financial Assets and Enforcement of Security Interest Act,^2OO2 (SARFAESI Act, 2OO2l challenging the Possession Notice dr.Il.O5.2024 issued by the Respondents in respect of the schedule^property and to declare the same as null and void.

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The averments made in the Application in brief are as follows:

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The Applicant availed loan of Rs.35 lakhs in the^year 2016^{for expansion} of the paint shop from the Respondent company. Due to Covid-I9, the Applicant could not pay some instalments. Subsequently, the Respondents proceeded under arbitration and obtained Arbitration award in Arbitration case No.2369 l17 and later they have withdrawn the E.P.^{proceedings. In} the meanwhile, the Respondent company levied high interest. Thereafter, the Respondent company initiated proceedings under the^provisions of^the SARFAESI Act,2OO2. The Respondent company straightaway^issued possession notice dt. 11.O5.2O24 without serving demand in respect of the schedule property and without following the^procedure. Hence the SA.

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l .: . Th-sr$Eqndents filed their Reply denying all the adverse allegations^made ,1 ""tit..u,,g.w&[4i^]q^{contended that the Appticant availed loan for business} " .1irsi""^-S4; tune of Rs.35 lakhs and created mortgage in respect of perty. Thereafter, the Applicant committed default and ent invoked the arbitration proceedings and the Ld. an award and the same was within the knowledge of the

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Applicant but he failed to challenge the said award. Despite the Ep proceedings, the Applicant failed to pay the award amount. Thereafter, the 1st Respondent invoked the proceedings under the provisions of SARFAESI Act,2OO2 and withdrawn the EP proceedings on O4.O1.2O24. Thereafter, Respondent No.2 herein issued notice u/s l3(2) of the Act dt.3}.Ol.2024 and the said notice was received by the Applicant. Thereafter, the Respondents issued possession notice dt. 11.05.2024 and the said notice was sent to the Applicant and the same was published in Nava Telangana and Indian Mail daily newspapers and also affixed on the schedule property. Thus, the Respondents have followed the procedure contemplated under the provisions of SARFAESI Act, 2OO2 and Rules made thereunder and there are no deviations. Accordingly Respondents prayed to dismiss the SA.

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Heard Ld. Counsel for the Applicant and Ld. Counsel for the Respondents and perused the material brought on record.

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Now the points that arise for consideration are

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i. whether the Applicant has established ang ualid grounds for setting aside tle Possession Notice dt.1 1 .05.2024 issued by the Respondents against th.e schedule propertg?

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ii. To whot relief ?

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Point IVo.(i):-

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course of arguments, Ld. Counsel for the Applicant and Ld. /A;;ffi reiterated their respective versions as stated tP _q? 3 o .luH mzr

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There is no dispute regarding the fact that^{the Applicantavailedloan} facilities from the Respondent^{company by creatingmortgageagainstthe} schedule property and thereafter^{committed defaultin repaymentof loan} dues and so, the Respondent^{company declared the loan account of the} Applicant as NPA. In^{view of the default, the Respondent companyinvoked} arbitration^{proceedings and the Ld. Arbitrator passedArbitrationaward} and subsequently, the^{Respondentcompany withdrawn the proceedings} in E.P.

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The specific contention of^{the Applicantis that the Respondentsfailedto} follow the procedure contemplated^{underthe provisions of SARFAESI Act,} 2OO2 and Rules made thereunder^{in issuingdemand notice and possession} notice to the Applicant and^{so, the said proceedings are not legal and valid.}

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But the Respondents contended^{that the Applicant admittedlyavailed} credit facilities from the^{Respondent company by creatingmortgage} against the schedule^{property and thereafter committed defaultand so,} the loan account was classified^{as NPA on O8.10.2016and thereafter,the} Respondent company^{initiated arbitrationproceedingsand subsequently} initiated EP^{proceedingshowever, the said proceedingswere later} withdrawn. As per the loan^{agreement,the lst Respondent levied the} interest on the outstanding^{amount as per the RBI guidelines from the} date of default and the^{Applicant agreed to repay the loan with the agreed} interest which includes the^{principleand the outstanding amount'} Subsequently, the^{Respondentcompany invokedthe provisions of} SARFAESI Act, 2OO2^{by issuing demand notice and possessionnotice to} the Applicant by duty^{following the procedure as contemplatedunderthe} provisions^pf SARFAESI Act, 2OO2^{and Rules made thereunder and there} !!. .:i..

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!/^lP are n9,.y1olauQns.e$^'e

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(; 3 rfl dgdeirXb n.!*'$ *,.i. contention, the^{Respondents filed material} the said material documents, it^{is clear that the} demand notice dt.30.O1.2O24 u/s^{13(2) of the}

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SARFAESI Act, 2oo2 and sent the said notice to the Applicant through Regd.Post as evidenced by the postal acknowledgements filed by the Respondents and the said demand notice was also published in two daily newspapers' Thus there is valid service of demand notice on the Applicant. Thereafter, the Respondents issued possession notice dt. 1 r.os.2o24 uls 13(4) of the SARFAEST Act, 2oo2 and sent the same to the Applicant through Regd. post as evidenced by the postal acknowledgements fired by the Respondents.. The said possession notice was published in Telugu and English daily newspapers as evidenced by the copies of the paper publication filed by the Respondents and the said notice was also affixed on the schedule property as depicted in the copies of photographs filed by the Respondents' Thus it is quite clear that the Respondents have scrupulously followed the procedure raid down under the provisions of SARFAESI Act, 2oo2 and Rures made thereunder in issuing possession notice dt. 11.OS.2024 u/s 13( ) of the Act. Accordingly, this point is answered in favour of the Respondents and against the Applicant.

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Point No.(fi)r

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In the result, sA 208/24 is dismissed as there are no merits in the SA. Consequently, the Interlocutory Applications, pending if any, shall stand disposed of. No order as to costs.

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1 1. Communicate a copy of this order to the parties concerned.

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Korthiwada Naresh v. shriram finance limited

Case brief

What is this about?

What did the court decide?

Korthiwada Naresh 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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