Allowed

Ms a R K Fuel Station v. Central Bank of India

DRT30 Jan 2026SA/261/2024

Case brief

AI extract

What is this about?

This application challenged a possession notice issued under Section 17 of the SARFAESI Act. The applicant argued non-compliance with RBI NPA classification guidelines. Uncited due to respondent's absence, this specific claim was accepted, leading to the setting aside of the possession notice and directing the bank not to initiate proceedings.

What did the court decide?

1. Challenged measures leading to possession notice set aside as illegal. 2. Respondent directed not to initiate proceedings. 3. Applicant awarded costs of Rs. 10,000.

Ms a R K Fuel Station versus Central Bank of India — Company and Corporate | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

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Dated this 30^th Day of January, 2026

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Present: Sri. T. RAJESH Presiding Officer

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SA.No.261/2024

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BETWEEN:

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M/s. A.R.K Fuel Station, No-A, Abdul Kalam Azad Circle, (Highway Circle), Industrial Area, K.R. Mohalla, Mysore- 570 024, Represented by its Proprietor, Mr. Rahman Khan.

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…APPLICANT

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AND:

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The Authorized Officer, Central Bank of India, No. 147, K51, Rama Villas Road, K R Mohalla, Mysore- 570 024.

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...RESPONDENT

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Counsel on record/appeared for:

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Applicants : K. Kishor Kumar Respondent : Sunitha A-Objections closed

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FINAL ORDER

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This Securitization application in short the SA is filed under S.17 of Securitization And Reconstruction of Financial Asset and Enforcement of Security Interest Act, 2002, herein after referred to as “SARFEASI

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OA 261/2024

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Act” or “The ACT” as the case be, with a prayer to set aside the possession notice issued by the respondent dated 06.05.2024.

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Though the applicant admits to have availed of the credit facility and admits to have created the security interest in favour of the applicant bank, is impugning the proceedings contending that the measures are continued without allowing the applicant to get the loan rescheduled and after hurriedly classifying the account as NPA. It is also contended that after the classification of the account as NPA, the applicant has paid various amounts to the loan account and without taking into consideration the payments the respondent had hurriedly issued the possession notice.

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In the grounds to the SA the applicant is contending that the possession notice and demand notice is issued without allowing the applicant to settle the loan amount. It is also stated that the amount claimed in the possession notice is exorbitant and that the classification of the account is not in accordance with the statute. On the above premises the applicant prays to set aside the impugned possession notice. Along with the SA the applicant has produced the copy of the possession notice dated 06.05.2024.

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Notice was taken out in the SA and the respondent was served. Despite making an appearance by filing vakalath, the respondent remained absent on 28.11.2024, 06.01.2024, 04.02.2025, 07.04.2025 and 07.07.2025. Since there was no representation for long the chance for filing objection stood closed on 27.01.2026 and the applicant’s counsel

OA 261/2024

was heard.

In view of the above, the only question that is to be considered in the SA is that whether the applicant is entitled to get the application allowed on the basis of the pleadings as made in the SA.

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The applicant is impugning the possession notice mainly contending that no sufficient opportunity was given to clear the liability and to settle the account. The next contention taken is that the bank has hurriedly issued the possession notice without providing adequate time to the applicant to settle the liability. Another contention made is that after the issuance of the demand notice various repayments were made. Taking into consideration of the above the Tribunal is of the view that the above averments are hardly sufficient to decide the case in favour of the applicant, as the above contentions, even if accepted will not invalidate the proceedings especially when the applicant had not put forth any evidence as to his entitlement of time to settle the account.

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However, the applicant had taken the specific contention in para 9 that the classification of the account as NPA is blatant violation of the guidelines issued by Reserve Bank of India for classification of the account. This specific contention taken by the applicant remains uncontroverted as the respondent failed to contest the matter. The uncontroverted specific contention of the applicant in the above aspect leads this Tribunal to accept the contention as correct.

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In view of the above the applicant, is entitled to succeed in his

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OA 261/2024

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challenged leading to the issuance of the impugned possession notice as this Tribunal is of the view that the very challenge to the classification of NPA put forth by the applicant is to be upholded for want of any challenge as to the same.

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In view of the above,

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i. SA 261/2024 stands allowed,

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ii. The impugned measures initiated and continued by the respondent leading to the issuance of the impugned possession notice is found to be illegal and set aside.

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iii. In the facts and circumstances of the case, the respondent is directed not to mut the cost of initiation of the proceedings leading to the impugned possession notice from the applicant. If any debit is already made necessary reversal has to be done.

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iv. The applicant is entitled for the cost of Rs. 10,000/- (Rupees Ten Thousand only) which is to be settled at the time or settlement or closure of the account.

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v. Interim order, if any granted and subsisting till this day stands vacated.

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vi. Pending I.A’s if any are all disposed of in terms of this Order.

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vii. Issue copy to all parties concerned.

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[Dictated to the Stenographer (AJ), transcribed by her, corrected and signed and pronounced by me in the Open Court, this the 30^th Day of January, 2026].

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Sd/- (T. RAJESH) PRESIDING OFFICER

Ms a R K Fuel Station v. Central Bank of India

Case brief

What is this about?

What did the court decide?

Ms a R K Fuel Station v. Central 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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