Allowed

S Purnachandra Rao v. Punjab National Bank

DRT9 Jan 2026SA/26/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed a securitization application filed by a guarantor. The court set aside the bank's possession notice dated 30.11.2022 because the bank failed to provide proof of service as required by Rules 2002, despite evidence suggesting the notice was not served or affixed properly.

What did the court decide?

Securitization application allowed by setting aside the possession notice dated 30.11.2022 issued by the 1st respondent bank against the schedule property.

S Purnachandra Rao versus Punjab National Bank — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL^{_ N AT HYDERABAD}

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DATED THIS THE^gTH DAY OF ]ANUARY,²⁰²⁶

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PRESENT: SH. RAMESHWAR KOTHE, B.Com,^{L.LB,(HONS.),IV].A.}

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PRESIDING OFFICER

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Securitization Application No.26 OF²⁰²³

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S. Purnachandra Rao,

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S/o. S. Nageshwar Rao,^{Aged 48 years,}

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Occ: Business, Gender :^Male,

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Plot No- 126, Phase-II, N.S.L. Colony,

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Ameenpur, Patancheruvu, Medak^{Dist, Pin: 502032.}

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.......ApPlicant.

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Versus

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I. Punjab National Bank, Represented by its Authorised officer, Stressed Assets Targetted^{Resolution Action Division,} Zonal SASTRA, Greenland,

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Ameerpet, Hyderabad^- 500016.

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MARK INFRASTRUCTURE Pvt Ltd

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Represented by Mr. V. Ravi Kiran, S/o Late Vemuri Prabhakar Rao,

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Aged: 50^years, Occ: Business,

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Gender: Male, Satya Enclave

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R/o. Plot No 25, Srila Park^Pride,

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lvletro Water Works Road,

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Hydernagar, Kukatpally, Hyderabad - 500082.

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....resPondents

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Counsel for the Applicant^{: Mr. T. Vijay Kumar}

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Counsel for Respondent Bank^{: Mrs. Kalpana Ekbote}

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-i^g-B-P-E-B:-

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The Applicants filed the^present Securitisation^{Applicationu/s} 17 of the Securitizatlon and Reconstruction of^{Financial Assetsand} Enforcement of Security Interest Act,^{2002 (hereinafter referredto as} "the Act") to set aside the^proceedings of the^{respondentbank} pursuant to possession notice and sale notice daled t9 '12.2022ⁱⁿ respect of the application schedule orooe/cvQ\11t5

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PaEe 2 ot 4

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SA No.2612023

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The case of the applicant in brief, is that^{the 1't respondent} bank granted credit facility of^{Rs.6'10 crores to 2nd respondentin} 2015 and had been operating the^{accountto the satisfactionof the} bank. However, the 1st respondent^{bank issueddemand noticeunder} section 13(2) of the Act ot^{26.07.2022without following the RBI} circular dated 01.01.2019 and^{07.02.2018. The1st respondentbank} again issued demand notice daled^{26.O7.2022by declaring the} account as NPA on 30.06.2022 to which the^{second respondent} issued reply. Without considering the^{request for settlementof} account under OTS, the l't^respondent bank^{proceeded to issue} possession notice. However, the^possession notice was not^served, published and affixed as per Rules. Thereafter the sale notice^dated 79.72.2022 was directly^published without^{followingRules 8(5) 8(6)} 8(7) 9(1) of the security interest^{("Enforcement") Rules,2002} ("Rules" herein after). Hence, this SA.

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The 1st respondent bank filed reply statement in the^{SA. The} submissions, inter alia, that due to^{irregularrepaymentsof theloan} the bank classlfied the account as^NPA on^{30.06.2022, and initiated} Securitization^proceedings by^{issuing demand notice on 26.07.2022} to the applicant. He has not issued any reply and^thereafter possession notice was issued on 30.17.2022, served on the applicant and also the borrowers, and the same was^publlshed on^03.12.2022 and got affixed on the secured^asset as^{per Rules.The respondent} bank has strictly followed the due^procedure of^{law while proceeding} against the secured asset hence, SA is liablefhkiismissed^as devoid of merits.

I^/ ^--o.\h

PaBe 3 of4

sA N0.2512023

Learned counsel for applicant reported no oral arguments. Arguments of 1"t respondent bank were heard. Perused the^material documents^placed on record.

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During the course of the arguments, learned counsel for the respondent bank reiterated the version as in the reply statement that, the applicant has not responded to the demand^notice and^the possession notice was duly served on applicant/borrower, published and affixed on the secured asset as^per Rules. She reported that the auction impugned hereln and lf the subsequent action did not materialize. Accordingly she sought for dismissal of the SA.

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The^points for consideration are as follows : -

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i) Whether the applicant made out any valid^ground to quash the measures of the respondent against the SA schedule^property?

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ii) To what relief?

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Point No,(i):

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Admittedly, the applicant stood as guarantor for the loan availed by the 2nd respondent. According to bank, the 2nd respondent failed to conduct the account as per agreed terms hence it became NPA on 30.06.2022. lt is clear from the letter daled 28.09.2022 (page 9 annexed to the reply statement) that the applicant agreed to pay the total value of the asset and hence, committing default in repayment, classification of account as NPA and initlation of Securitization proceedings cannot be questioned. As per material annexed to the reply statement, the^possession notice was^published and affixed however, in spite of specific contention that no notice was served under Section 13(4), the respondent bank has not filed^proof of sending/serving the possession notice on the applicant. In the

O%*

Page 4 of 4

sA N0.2612023

absence of such^{proof, it is to be construed that the possession notice} was not served as^{required under Rule 8(1) of the Rules2002'}

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Reportedly the impugned^{sale was not conducted hence,SA} became infructuos as^{far as sale is concerned'}

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g. Under the above^{circumstancesI find that the respondentbank} has failed to follow^Rule 8(1)^{of the Rules 2002 and accordinglythe} sA deserves to be^{allowedby settingaside the possessionnotice} dated 30.11.2022.

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Point No.(ii):

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In the result,^{the Securitization Applicationis allowed by setting} aside the^{possessionnotice dated 30.1L.2022, issued by the lst} respondent bank against^{the application scheduleproperty'}

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However, this order^{does not preclude the respondentbank} from issuing^{possession notice afresh against the secured asset} strictly in accordance^{with the law'}

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L2. Consequently,^{Interlocutory Applicationspending, if any,shall} stand closed. No order^{as to costs. 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^Ps, corrected,^{signed ond pronounced by mein the opencourt on this} the 09'h doy of Jonuory,^2026).

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$*to'l ESHWAR KOTHE) PRESIDING OFFICER

S Purnachandra Rao v. Punjab National Bank

Case brief

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S Purnachandra Rao v. Punjab National Bank

Case brief

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What did the court decide?

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