Dismissed

Srivani Medi v. Shriram Finance Limited

DRT4 Mar 2026SA/294/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed an application challenging the recovery holder's proceedings under Section 14 of the SARFAESI Act to take physical possession of mortgaged property via an advocate commissioner. The tribunal held the statutory notices were validly served and the procedure was correctly followed.

What did the court decide?

Application dismissed with no order as to costs.

Srivani Medi versus Shriram Finance Limited — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERYTRIBUNAL - I AT HYDERABAD

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DATED THISTHE 4TH DAY OF MARCH, 2026

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PRESENT: SRI GUMMADI GOPICHAND, PRESIDING OFFICER

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SA.No.294/2024

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Smt.Srivani Medi, W/o Srinivas, aged 45 years, Occ:busness, Sri Srinivasa Books General & Stationary, R/o SRT-19, Post Office Basti, Bellampalli, Adilabad-SO4 251.

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Srinivas Medi, S/o Viswanatham, Aged 52 years, Occ:business, Sri Srinivasa Books General & Stationary, R/o SRT-19, Post Oflice Basti, Bellampalli, Adilabad-So4 251

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.. . Applicants

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Versus

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Shriam Finance Ltd., Branch office at Sri Towers, Plot No. 14A, South Phase, Industrial Estate, Guindy, Chennai-600 032 Tamilnadu Rep.by its Authorized officer

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.. . Respondent

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Counsel for the Applicants : SnV. SethuMadhauaRao Counsel for Respondent : Sri M.Indrasen

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Reserued on : 20.01.2026 Pronounced on :02.03.2026 Uploaded on ,.: 04.03.2026

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This application is filed by th5 Applicants u/s.17 of the SARFAESI Act, 2002, by the Respondent for taking physical possession of the schedule property through Advocate commissioner pu rsuantrsuant to the orders of Ld.Prl.Sr.Civil Jud gs e ,.

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Mancherial in Crl.M.p.No .I9 /24 and also 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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M/s Sri Srinivasa Books General & Stationary represented by Applicant No'2 availed loan of Rs.27 lakhs from shriram city Union finance Ltd. in the year 2O18. But due to slump in the business, the Applicants could not pay some instalments. However, the Applicants have not availed any credit facility from the Respondent herein and the security interest created by the Applicants in favour of Shriram City Union Finance Ltd. is not registered under Section 26 of the SARFAESI Act,2OO2. the Respondent declared the loan account as NpA illegally. without issuing demand notice and possession notice to the Applicants, the Respondent initiated proceedings u/ s l4 of the SARFAESI Ac t, 2OO2 for taking physical possession ofthe schedule propert5r and so, the said proceedings are not legal and valid. The impugned possession notice was not published in two daily newspapers and as per the Award passed by the Arbitrator, the Applicants are not liable to the pay the amount as claimed in the demand notice. Hence the SA.

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The Respondent filed Reply denying all the adverse allegations made in the SA and contended that the Applicants availed loan of Rs.27 lakhs from Shriram City Union Finance Ltd. and Applicant No.2 created mortgage against the schedule property and thereafter, the Applicants committed default in payment of instalments and so, the loan account was classified as NPA on 08.10.201g as per the guidelines of RBI. Due to administrative and other reasons, Shriram city union Finance Ltd. merged with Shriram Transport Finance Company Ltd. and the company's narne was changed to M/s Shriram Finance Ltd. and in view of the said merger anfl..ctiange of name, all the assets and liabilities arl,tuan=fe.red to M/s Sirri.am Finance Ltd. and to that effect, there is assignm&dcil[sdflff tn" roan agreement. Thereafter, the Respondent

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filed Arbitration case vide ARC No.44 /2o2o and the s€une was decided in favour of the Respondent. Thereafter, the Respondent initiated proceedings under the SARFAESI Act,2oo2 and issued demand notice dt.14.O4.2O23 and sent the same to the Applicants through Regd. post. When the Applicants failed to comply with the said notice, the Respondent issued possession notice dt.19.or.2024 u/s 13(4) of the SARFAESI Act, 2oo2 and sent the said notice to the Applicants and the said notice was published in daily newspapers and also affixed on the schedule property. Accordingry, Respondent prayed to dismiss the SA.

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Heard Ld. Counsel for the Applicants and Ld. Counsel for the Respondent. Perused the material brought on record.

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Now the points that arise for consideration are

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i. uhether the Applicants haue establish.ed. ang ualid ground.s for challenging the proceedings initiated bg tte Respondent for taking physical possession of the schedule propertA u/ s 14 of tle SARFIIES/ Act, 2OO2 through aduocate ammissioner?

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ii. To uhat relief ?

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Potnt ^I\Io.(i):-

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During the course of argumentsqld. counser for the Appricants and Ld. Counsel for the .Respondent .Ertq,{tt a their respective versions as stated ' iA' supra. 3.

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The undisputed facts of the case-are that the Applicants ava ed loan from M/s shriram city uhion Finance Ltd. and Applicant No.2 created equitable mortgage in respect of the schedule propert5r to secure the said loan and thereafter committed default in repaying the loan dues.

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'8. The specific contention of the Applicants is that the Respondent without serving demand notice and possession notice to the Applicants and without following Rule 8(1)&(2) of Security Interest (Enforcement) Rules, 2002, initiated proceedings for taking physical possession ofthe schedule property through advocate commissioner u/s 14 of the SARFAESI Act, 2oo2 and so, the said proceedings initiated by the Respondent against the schedule property are null and void. It is further contended that as the Applicants availed loan from shriram city Union Finance Ltd. and created mortgage against the schedule propert5r in favour of the said company, the Respondent herein has no securit5r interest against the schedule property and so, the Respondent cannot proceed against the schedule property.

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Per contra, Respondent contended that shriram city Union Finance Ltd. merged with shriram Transport Finance Ltd and the company,s name has been changed to shriram Finance Ltd. and in view of the assignment clause in the loan agreement signed by the Applicants, all the liabilities and underlying securities have been assigned to the Respondent herein and the Respondent has duly followed the procedure contemplated under the provisions of SARFAESI Act, 2oo2 and Rules made thereunder in issuing all the statutory notices to the Applicants and also in taking physical possession of the schedule property u/s 14 of the SARFAESI Act, 2002.

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To substantiate their contention, Respondent filed material documents. As per the said documents, it is clear that after classi$zing the loan account of the Applicants as NpA, the Respondent herein filed Arbitration case vide ARC No.44/2o20 and the same was decided in favour of the Respondent. Thereafter, tho" Respondent initiated proceedings under the provisions of and mand notice dt.l4.O42O2A u/s l3(2) of the said notice was sent to the Applicants through reports filed by the

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respondent and the said notice was received by the Applicant No. 1 as evidenced by the postal acknowledgements filed by the Respondent. Thus there is valid service of demand notice on the Applicants. when the Applicants failed to comply with the said notice, the Respondent issued possession notice dt. 18.01.2024 u/s l3(a) of the Act,2o02 and, sent the said notice to the Applicants through Regd.post as evidenced by the postal track reports filed by the Respondent. The said possession notice was published in Telugu and English daily newspapers as evidenced by the copies of paper publication filed by the Respondent and the said notice was also affixed on the schedure property as depicted in the copies of photographs filed by the Respondent. Thus, the Respondent has duly followed the procedure as contemplated u/r 8(1)&(2) of security Interest (Enforcement) Rules, 2oo2 in issuing the impugned possession notice dt.l8.Ol.2024 u/s 13(a) of the SARFAESI Act,2O02 for taking possession of the schedule propert5r. so, the demand notice and possession notice issued by the Respondent are perfectly legal and valid.

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As per the provisions of Section 14 of SARFAESI Act, 2002, after issuance of possession notice u/s l3(4) of the SARFAESI Act, 2OO2, the secured creditor is at liberty to approach the concerned District Magistrate or chief Judicial Magistrate for taking physical possession of the secured asset. In the instant case, after issuing demand notice and possession notice to the Applicants, the Respondent being secured creditor, approached Ld.Prl.Sr.Civil Judge, Mancherial u/s 14 of the SARFAESI Act, 2OO2 by Iiling crl.M.P.No.19 /24 for appointment of advocate commissioner for taking physical possession of the schedule property. Ld.pr1. sr.civil Judge, Mancherial after considering the material on record, appointed advocate commissioner and the said advocate commissioner issued notice to the Applicants to'iracate the scdedule property and the said notice was :. .l ' admittedly served on the Appliclnt&

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I 1C So, considerinp ail the circumstances, I am of the opinion that the Applicants are not enritled to any relief as there are no merits in the SA.

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So, I see no ground warranting interference of this Tribunal with the proceedings initiated by the Respondent for taking physical possession of the schedule property u/s l4 of the SARFAESI Act,2o02. Accordingly, this point is answered in favour of the Respondent and against the Applicants.

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Point No.(tl)r

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In the result, SA294/24 is 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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(Dictated to the P.s, transcibed bg her, corrected., signed. and. pronounced. bg me in the open court on this the 4a d.ag of March. 2026)

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sd/(G. coPr CHANDI PRESIDING OFFICER

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Srivani Medi v. Shriram Finance Limited

Case brief

What is this about?

What did the court decide?

Srivani Medi 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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