Dismissed

Ms Sai Ram Krishna Motorbikes Pvt. Ltd. v. State Bank of India

DRT22 May 2026SA/214/2025

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal, Hyderabad dismissed an application filed by a lessee challenging a bank's action to take physical possession of mortgaged schedule properties. The Tribunal held that as a third-party lessee, the applicant lacked locus standi to challenge proceedings initiated against the mortgagors under the SARFAESI Act and was barred from re-agitating the issue after prior dismissal.

What did the court decide?

The application under Section 17 of the SARFAESI Act was dismissed by holding the applicant had no locus standi to challenge the bank's possession proceedings.

Ms Sai Ram Krishna Motorbikes Pvt. Ltd. versus State Bank of… — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERYTRIBUNAL'IAT HYDERABAD

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DATED THIS THE 21ST DAY OF MAY. 2026

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PRESENT: GUMMADI GOPICHAND. PRESIDING OFFICER

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SA.No.214/2025

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M/s Sai Ram Krishna Motorbikes P.Ltd. H.No.2 1 -6-631 1, Sy.No. 1 65, Malkapur vi11age, Near LIC office, Srinagar Colony, Godavarikhani-S0s 209, Peddapalli Rep. by its Director Manchikatla Dayakar

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...Applicant

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Versus

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l.State Bank of India

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Stressed Assets Management branch, Administrative offi ce Campus Balaji Nagar, Siripuram Junction, Visakhapatnam-530003, A.P. Rep.by its Authorized Officer

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M.Paramod Krishna, S/o Venkata Swamy, Aged 40 years, Occ:business, R/o 19-8-289, Laxmi Nagar, Godavarikhani-505 209 Peddapalli Dist.

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M/s MRK Industries

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Plot No. 16/A, Sy.No.125, IDA, Gouthami Nagar, Ramagunam-SO5 209 Peddapalli District.

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Rep. by its Managing partner

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M/s Sai Ram Krishna Cars P.Ltd., Regd. office, ground floor, 101, 102 Balaji Metro Co Narona Road, tnam- 16 aeo. tvfj

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... Respondents

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Ciunsel for thi counset"hrh'l to4

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Si T.V.L.Narsimha Rao Sri C. Prabhakar Sri V.V. Ramana

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;ORDER:

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This application is Iiled by the Applicant u/s.17 of the SARFAESI Act, 2OO2, challenging the steps initiated by the l"t Respondent for taking physical possession of the schedule property pursuant to the Notice dt.O3.O4.2025 and to declare the same as illegal and void.

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The averments made in the application, in brief, are that:

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The Applicant is the lessee of the schedule properties comprising property No.1(a)&1(b) owned by Respondent No.2 and property No.2 owned by Respondent No.3. The property No.1 owned by Respondent No.2 and the property No.2 owned by Respondent No.3 are reportedly mortgaged to Respondent No.1 for securing the credit facilities extended to Respondent No.4. The Applicant is authorized dealer of Honda motorcycles and Scooters and as per the dealership agreement, the Applicant paid Rs.5 lakhs as refundable interest free securify deposit and the Applicant availed credit facilities of Rs.2.70 crores from ICICI Bank against inventory of spares and vehicles. During the visit of the 1"t Respondent bank to the schedule properties, it came to the notice of the Applicant that lst Respondent disbursed credit facilities to Respondent No.4 to the tune of Rs.18.63 crores on 22.10.2018 against the mortgage of schedule property No.l and schedule property No.2 on 27.O8.2O2O without the knowledge of the Applicant. When the borrower committed default, the account became NPA on 16.O5.2022 and the Bank issued demand notice dt.17.05.2022 to the borrower and thereafter, the bank took symbolic possession of the schedule properties on 23.08.2022 by issuing notice u/s 13(a) of the Act. Later, Ld. District Collector on behalf of affixed notice dt.06.0I.2023 on the schedule ical possession and challenging the same, the the lile of this Tribunal which was dismissed o+ 22?st *?? the Respondent issued the impugned notice .ysical possession of the schedule properties nd arbitrary. The l"t Respondent cannot cause 2

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attachment of the schedule properties as envisaged u/ s 51 of Transfer of Property Act, 1882. Hence the SA.

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The 1"t Respondent bank filed their Reply denying all the adverse allegations made in the SA and contended that the Applicant earlier filed SA 40123 challenging the action of the 1st Respondent Bank u/s 14 of the SARFAESI Act, 2OO2 for taking physical possession of the schedule properties and the said SA was dismissed vide order dt.22.O8.2O23 holding that the borrower/mortgagors did not choose to challenge the proceedings initiated by the bank under the SARFAESI Act,2OO2 against the SA schedule properties. So, the Applicant being a 3.d party is not entitled to challenge the SARFAESI proceedings initiated by the Bank. Challenging the said order, the Applicant preferred appeal Diary No.643/23 before the Hon'ble DRAT, Kolkata and the same was also dismissed vide order dt.02.O9.2024. After dismissal of the SA and the appeal, the Bank tried to take possession of the schedule properties u/ s 14 of the Act, the Applicant filed the present SA and there is no tenable defence in the entire SA. Accordingly, the 1st Respondent prayed to dismiss the SA.

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Respondent No.4 filed their Reply and the same is adopted by the Respondents No.2 & 3. It is contended that Respondent No.4 availed total credit facilities of Rs.18.63 crores from the lst Respondent against the mortgage of schedule property No.1 owned by Respondents No.2 and schedule prpetyNo.2 owned by Respondent No.3 which were leased to the Applicant much prior to the sanction of credit facilities to Respondent No.4. In view of the default, the Bank invoked the provisions of SARFAESI Act, demand notice and possession notice to the R and also issued notice for taking physical o36t.. ule properties through District Collector. ings, the Applicant filed SA 40 123 and the

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Heard Ld. Counsel for the Applicant and Ld. Counsel for the

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Respondent No.1 and Respondents No.2 to 4.

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Now the points that arise for consideration are

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uthetLer the Applicant is hauing locus-standi to challenge the proceedings initiated bg the 1,t Respondent Bank under the prouisions of SARFAESI Act, 20O2 in respect of the schedule properties?

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u. To what relief ?

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Point .l\Io.(i):-

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During the course of arguments, Ld. Counsel for the Applicant and Ld. Counsel for the Respondents No.1&2 to 4 reiterated their respective versions as stated supra.

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As contended by the Applicant company, it is neither a borrower nor a mortgagor to the proceedings initiated by the 1st Respondent Bank against the schedule properties but it is only a lessee of the Respondents No.2&3. Respondent No.4 herein is the borrower who availed credit faciiities from the lst Respondent Bank whereas Respondents No.2&3 created mortgage against the schedule properties in security to the loan facilities availed by the Respondent No.4. Even as per the contentions of the Applicant in the SA, it is clear that the Applicant entered into the alleged lease deed with Respondent No.2 in respect of the schedule propertlr No.1 on 22.07.2015 for a fifteen years w?rereas lease agreement in respect ofschedule into by the Applicant with Respondent No.3 on

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of ten years. As admitted by the Applicant, the said

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alease^{deedS'are u} red documents and both are executed on Rs. 100/ -

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E'^St fi t..r^A&p#dr.?.{ofi r-t1 ft "'." .^-t'

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The Applicant earlier filed SA 40123 challenging the proceedings initiated by the Bank for taking physical possession of the schedule properties and the said SA was dismissed vide order dt.22.O8.2023 by holding that the Applicant being a 3'd party, is not entitled to challenge the SARFAESI proceedings initiated by the l"t Respondent bank against the application schedule properties. Challenging the said order, the Applicant preferred Appeal Dy.No.643l23 before the Hon'ble DRAT, Kolkata and the same was also dismissed vide order dt.02.09.2024 and so, the order dt.22.O8.2O23 passed in SA 40 123 attained finality. After dismissal of the SA and Appeal Dy.No.643123, the l"t Respondent again initiated proceedings for taking physical possession of the secured assets to recover the outstanding dues of the Bank and proceeded to take possession of the application schedule properties. Challenging the same, the Applicant again filed the present SA. As such, the Applicant is not entitled to challenge the proceedings initiated by the Bank for taking physical possession of the schedule properties and admittedly, the Applicant has not complied with the direction given in SA 40123 granting two months time to vacate the schedule properties.

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So, considering all the circumstances, I am of the opinion that the Applicant being 3'd party who is neither owner nor mortgagor of the schedule properties, is not entitled to challenge the proceedings initiated by the 1st Respondent Bank in respect of the schedule properties under the provisions of SARFAESI Act, 2OO2. So, I see no ground warranting interference of this Tribunal with the steps initiated by the 1"t Respondent for taking physical possession of the schedule properties u/s 14 of the SARFAESI Act,2OO2. Accordingly, this point is answered in favour of the lst Respondents and against the Applicant.

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dismissed as there are no merits. ?*

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Consequently, the Interlocutory Applications, pending if any, shall stand disposed of. No order as to costs.

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Communicate a copy of this order to the parties concerned.

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(Dctated to the P.S transcnbed bg her, corrected, signed and pronounced bg me in the open court on this the 21o of Maq,2026).

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sdl(G. GOPI CHANDI PRESIDING OFFICER

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Ms Sai Ram Krishna Motorbikes Pvt. Ltd. v. State Bank of India

Case brief

What is this about?

What did the court decide?

Ms Sai Ram Krishna Motorbikes Pvt. Ltd. v. State Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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