Allowed

Mr Mareppa Seravti v. Shriram Finance Limited

DRT29 May 2026SA/264/2025

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal-II, Hyderabad, allowed an application filed under the SARFAESI Act to set aside a possession notice. The court held that the respondent failed to prove affixture of the notice at a conspicuous place as mandated by Rule B(1) of the Enforcement Rules, despite proving service of the demand notice.

What did the court decide?

The Securitisation Application was allowed by setting aside the possession notice dated 20.02.2023.

Mr Mareppa Seravti versus Shriram Finance Limited — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERY^TRIBUNAL -^{II AT HYDERABAD}

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DATED THIS THE 29TH^{DAY OF MAY,2026}

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PRESENT: SH, RAMESHWAR^{KOTHE, B.COM, L.LB. (HONS.),M.A'} PRESIDING OFFICER

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Securitization Application^{No. 264 OF 2025}

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Mr. Mareppa Seravati S/o Pedda Buggaiah^Seravati Aged 34, Occ: Business Yemmiganur, Kurnool,^A.P.

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.......Applicant.

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Versus

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M/s Shriram Finance^Limited (Formerly known as "shriram City Union^{Finance Limited")} Having its branch at^{KURNOOL-2 Branch} " Rep. by its authorized officer

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"^Respondent

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Counsel for the^APP|icant : Mr. K.V.L. Narashima^MurthY Counsel for ResPondent : Mr. N. Raghuveer

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-:ORDER:-

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1, The^{present SecuritizationApplication is filed by the Applicant} u/s.17 of the securitisation^{and Reconstructionof FinancialAssets} and Enforcement of^{security InterestAct, 2OO2 ("Act" hereinafter for} short) to set aside the^{measures initiatedby the Respondent} Company including^{action to take physical possessionof the SA} schedulepropertypursuanttoAdvocateCommissionerNoticedated 10.05.2025 In crl.M.P.No.09^{0f 2025 0n the file of learned ludicial} chief Magistrate-cu^{m-Principal Assistant sessions Judge at Kurnool.}

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The averments of^{the application, briefly, are that Respondent} Company sanctioned^{a credit facility of Rs'20 Lakhs on 05'11'2020'} secured by the^{scheduleproperty, The applicant admits payment of} 0w*

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Page 2 of 5

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sA No. 264/202s

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17 out of 36 EMIS (total Rs.14,04,302/-) but avers that business losses thereafter prevented further payments and that he requested time to regularize the account. On account of applicant default, Respondent Company initiated recovery proceedings and procured appointment of an Advocate Commissioner who issued a notice dated 10.05.2025 directing the applicant to vacate the premises within five days and hand over possession. The applicant challenges the Advocate Commissioner's notice and the consequential steps on the following grounds: (a) the notice is procedurally defective as it does not specify the date or suitably identify the schedule property; (b) non service of notices under Sections 13(2) and 13(4) of the Act, affixture of the Section 13(4) notice at a conspicuous place as mandated under Rule 8(1) of the Security Interest (Enforcement) Rules, 2002 (hereinafter "Rules" for short) and publication in newspapers under Rule B(2) of the Rules (c) no opportunity was afforded to the applicant to redeem the asset or make payment before invoking execution; and (d) the applicant resides with his family and is in grave financial distress, and therefore will suffer irreparable hardship if eviction is permitted. Hence, this SA to set aside all the measure initiated against the SA Schedule property.

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The respondent company filed reply statement along with documents. The averments thereof, briefly, are that the Applicant approached this Tribunal with suppression and misrepresentation of material facts and is therefore not entitled to any relief. The Respondent has further submitted that the Applicant availed a Business Expansion Loan of Rs. 20 Lakhs in year 2O2O by mortgaging the schedule property as security. Though the Applicant initially repaid certain instalments, he subsequently committed continuous defaults in repayment, resulting in classification of the loan account as a NPA in accordance with RBI norms. The Respondent has

Hil**

Page 3 of5

SA No.26412025

contended that the^{Applicant's plea of business losses and financial} hardship cannot constitute a^{validdefenceunder the SARFAESI Act,} particularly when no concrete restructuring or settlement^proposal was ever submitted by the Applicant.^{It is also stated that the} Respondent duly complied with all mandatory^{requirementsunder} Sections 13(2) and 13(a) of^{the Act by issuing demandand} possession notices before approaching the Chief^{JudicialMagistrate} under Section 14 for assistance^{in takingphysicalpossessionof the} secured asset. The Magistrate,^{after being satisfiedregarding} statutory compliance, appointed an^{Advocate Commissioner for} execution of^{possession proceedings'Accordingly, the allegations of} procedural irregularity, illegal affixture of^{notice, and non-compliance} with statutory^provisions stand^{specifically denied by the Respondent'} The Respondent has further^{contendedthat the Applicant's} occupation of the secured^{property along with his family does not} create any legal impediment^{againstenforcementof the secured} interest. According to the^{Respondent, all actions were undertaken} strictly within the framework^{of law and the Applicant'sallegations} are merely intended to delay and^{obstruct lawfulrecovery} proceedings. Hence, Respondent^prayed for^{dismissal of the} Securitization Application and^{direction tovacate/handover} possession.

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Learned Counsel for the^{Applicantreported order may be} passed based on record whereas the^{learned counsel for the} Respondent Company reported^{no oral argumentsbut filed written} arguments. Perused the^{written arguments filed by the Respondent} Company and also^{perusedthe material brought on record'}

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Learned Counsel for the^{RespondentCompany while reiterating} and the contents of the^{r'eply statement,denies} *ryients

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Page 4 of 5

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SA No.26412025

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by placing reliance upon the material^papers annexed to the reply statement submitted that the applicant account was classified as an NPA as per RBI guideline and the respondent has strictly followed the due procedure prescribed under the Act, 2002 and the Rules thereunder, hence the SA is liable to be dismissed.

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6. The points for consideration are as follows : -

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Whether the Applicant made out any valid ground for

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quashing the action of the Respondent Company for taking the physical possession of the SA schedule property through Advocate Commissioner appointed under Section 14 of the SARFESI Act?

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ii) To what relief?

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Point No.(i):

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Admittedly, the applicant availed credit facility against mortgage of schedule property as security and failed to make payment as per repayment schedule. Hence the action of the respondent company in initiating the SARFESI proceedings cannot be termed as illegal or irregular as contended by the applicant.

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B. The Respondent Bank filed material documents along with reply statement as proof of compliance of due procedure of law. A perusal of the same would reveal that the demand notice sent through registered post was returned unserved; thereafter, the respondent cempany . cqug.e,d .pqbliggtion of the said r,l.o-!jce . in lwo. lgQdtng newspapers, thereby duly effecting service of the demand notice under Section 13(2) of the Act. Photostat copies of postal receipt, return cover and paper publication (English and Telugu Dailies) are also placed on record. However, on perusal of the record, it is observed that despite the Applicant's specrflc contention that the . []vir.r-[ L 't-" '

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Page 5 of 5

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sA No.26412025

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Possession Notice was not affixed at a^{conspicuousplace on the} scheduled^property; the Respondent Company^{has not placed any} proof of affixture so as to rebut the contention' In the^{absence of any} material proof, it is deemed that^{respondent Company has failed to} comply with the mandatory Rule B(1)^of the^{Rules, 2002.Accordingly,} SA deserves to be allowed by setting^{aside the possessionnotice} dated 20.02.2023.

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Point No.(ii):

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In the result, the Securitisation^{Application is allowed by setting} aside the^possession notice dated^{20.02.2023 issued under Sec'13(4)} of the Act, 2002 by the^{Respondent Company against the SA} schedule property.

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10, However, this order does not^{precludethe Respondent} Company from issuing^{possessionnotice afresh strictly in accordance} with law.

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Consequently, Interlocutory^{Applicationspending,if any, shall} stand closed. No order as to^{costs.Communicatea copy of this order} to the^parties concerned and^{upload in the officialwebsite.}

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(Typed to my dictotion by the P5, corrected, signed ond^{pronouncedby me in the opencourton thisthe} 2g'h doy of May, 2026).

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(RAMESHWAR KOTHE) PRESIDING OFFICER

Mr Mareppa Seravti v. Shriram Finance Limited

Case brief

What is this about?

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Mr Mareppa Seravti v. Shriram Finance Limited

Case brief

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What did the court decide?

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