Dismissed

Sri Venkateswara Rice Traders and Ors. v. State Bank of India

DRT25 May 2026SA/314/2024

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal dismissed an application challenging a possession notice issued under the SARFAESI Act. The court held that the bank duly followed statutory procedures and that an unobjected OTS letter did not oblige the bank to issue a reply under section 13(3A).

What did the court decide?

The Securitization Application and pending interlocutory applications are dismissed. No order as to costs.

Sri Venkateswara Rice Traders and Ors. versus State Bank of… — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERYTRIBUNAL.I^{AT HYDERABAD}

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DATED THIS THE 25TH DAY OF MAY, 2026

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PRESENT: GUMMADI GOPICHAND,^{PRESIDING OFFICER}

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sA.No.314/2024

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M/s. Venkateswara Rice Traders, Rep. by its Partner, Sri Durgam Ramesh, Having is place of business at 3-11-26, Mansoorabad, L.B. Nagar, Hyderabad-68'

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Sri Durgam Ramesh, S/o. D.^Venkatadri, Aged 56 years, Occ: Business,^Gender:Male

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Smt Patnam Swaroopa,^{W/o. DurgamRamesh,} Agd 45 years, Occ: Business, Gender:^Female

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Both are resident of: 3-ll-21 12, Plot No. 11,^{RoadNo4, Shankar} Colony, L.B. Nagar, Hyderabad -^{500 074.}

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Applicants.

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Versus

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State Bank of India, Stressed Assets Recovery^Branch-Il, Hyderabad, having its^{branch at} 1-3-563/ 1, l"t Floor, Opp:^{Sandhya Theatre,} RTC X Road, Chi|<kadpally,^{Hyderabad-2O.} Rep. by its Authorized^Officer'

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Respondent.

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Counsel for the Applicant Counsel for tle Respondent

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Si RameshAnand M.G. Sri N. Meher Prasad.

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24.04.2026 25.05.2026 26.05.2026

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The present Application under section¹⁷ of the SARFAESI Act,^{chaliengingthe Possession Notice dt.29.12.2123} u/s.13(a) of the Act,^{2OO2arld the actionof the RespondentBank in trying}

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SA.No.314/2024

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to take physical possession of the application^{schedule property in} pursuance of the Proceedings No.H2l 1O5912024, dt.O4.O7.2024, issued by the Ld. District Collector, Ranga Reddy District,^{appointing Tahsildar,} Saroornagar Mandal, R.R. District for taking^{physicalpossession} of^the schedule property and also the action of the Respondent Bank to take physical possession of the schedule property in pursuance of the Advocate Commission's Notice dt.22.O7.2025, issued in CrI.M.P.M.P.No.l3l I 2025 on the file of the Ld. Addl. Chief Judicial Magistrate, R.R. District.

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The averments made by the Applicants in the application, in brief, are as under:-

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The Applicant No.1 is a partnership firm and Applicants No.2 & 3 are its partners The Applicants availed Cash Credit loan of Rs. 1 . 15 crores from the Respondent Bank. The Applicant No.2 has created security interest over the application schedule property in favour of the Respondent Bank for the said loan. Subsequently, due to Covid- 19 outbreak, the Applicant could not repay the loan amounts. The Respondent Bank has sanctioned additional WCTL under GECL schedule to the Applicant for Rs.23 lakhs @ ll.O5% p.a., towards Covid relief. The said amount was guaranteed by the Central Government under GECL Scheme and the Respondent Bank was secured to that effect. The Respondent Bank has calculated the interest as against the agreed terms and calculated the amounts and forced the Applicants to execute the re-structed loan documents. The Respondent Bank has never given the details with respect to the sanctioned facilities under different heads to the Applicant. Thereafter, the Respondent Bank informed the Applicants that was converted into Term Loan which is to instalments. The amounts deposited by the credited by the Respondent Bank to the of crediting the same to the Term Loan 1"ryt',r?P'ni1ft and AS the Respondent Bank intentionally and loan account of the Applicants as NPA on

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SA.No.314/2024

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31.O3.2023. The Applicants sustained huge losses in their business and that is the reason for non-payment of the loan amount and same is neither wilful nor wanton.

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ii) The Respondent Bank issued Demand Notice u/s. 13(2) of the SARFAESI Act on ll.l0.2o23. The Applicants approached the Respondent Bank and submitted a representation for closure of the account under OTS for Rs. 1.10 crores. But, the Respondent Bank refused to consider the same. The Respondent Bank, without issued reply as contemplated under Sec.l3(3A), proceeded to issuing Possession Notice dt.29.I2.2O23 and as such same is not maintainable. Thereafter, the Respondent Bank approached the Ld. District Collector, Ranga Reddy District for taking physicat possession of the schedule property and the Ld. District Magistrate has appointed Tahsildar, Saroornagar, R. R. District. The Tahsildar, without issuing any prior notice to the occupants in the schedule property, visited the property and threatened to vacate the occupants forcibly. The Respondent Bank has forcibly taken undertaking from the Applicants for vacating and delivering the property on 16.O8.2024. However, the Applicants are in still in possession of the schedule property. The Respondent Bank has approached the Ld. Chief Judicial Magistrate, R.R. District vide Crl.M.p.No.l3l of 2025, wherein Advocate Commissioner was appointed and he issued Vacate Notice dt.22.07.2025 for vacating the schedule property. Hence, the SA.

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denying all the adverse contentions of the Respondent

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S'A.No.314/2024

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leading newspapers dt.l9.l}.2)23 and was also affixed on the mortgage property. The Applicants have submitted OTS letter dt. 1 1. 10.2023 and the Bank has given reply dt.3o. 10.2023 to the said letter. Subsequently, the Respondent Bank has issued possession Notice dt.29.12.2o23 and the said notice was published in Mana Telangana and Business Standard newspapers on O4.1.2O24 and the said notice was also affixed on the schedule property. Thereafter, the Respondent Bank has filed section 14 application before the Ld. District Collector, Ranga Reddy and obtained orders to take physical possession of the schedule property. The Tahsildar, Sarroornagar Mandal, appointed by the Ld. District Magistrate, served vacate notice on the applicants.

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ii) The Respondent Bank has issued notice prior to sale on 22.06.2024 as per Rule 8(6) and same was published in two leading newspapers dt.27.06.2024.

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iii) The Respondent Bank has given ample time to the Applicants to pay the outstanding dues and only after the borrower failed to discharge their liability, the Respondent Bank has proceeded against the secured asset by duly following the procedure laid down under the SARFAESI Act and the Rules made thereunder. Hence, SA may be dismissed.

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Heard both sides. Perused the Written Arguments filed by the Ld. Counsel for the Applicants.

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Now, the points that arise for consideration are,-

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the Applicdnts have established any valid grounds for the proceedings initiated by the Respondent Bank under ,/'.6 lP 'EEAct against the application schedule property?

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..1 r1l lo what rehel /

\.\

SA.No.314/2024

Polnt No.(l)r

There is no dispute regarding the fact that the Applicants availed credit facilities from the Respondent Bank by creating securit5r interest over the application schedule property. There is also no dispute regarding the fact that, the Applicants committed default in the repayment of the loan amount due to the losses sustained in their business. The Respondent Bank has issued Demand Notice dt.11.10.2023 u/s. 13(2) of the SARFAESI Act. The Respondent Bank has filed a copy of the said Demand Notice along with postal receipts, postal track reports, newspapers publication of the said notice and afllxture of the said notice on the schedule property. It is the contention of the Applicants that after issuance of the said Demand Notice, they have visited the Respondent Bank and gave a representation dt.f1.10.2023 for settlement of the matter under OTS and that the Respondent rejected the same over the table itself and that the Respondent Bank, without giving reply u/s. 13(3A) of the SARFAESI Act, has directly issued Possession Notice and therefore the said Possession Notice is not valid in law. I have perused the said representation of the Applicants, wherein they have only requested the Bank for settlement under OTS and they did not raise any objections or pointed out any illegalities in the action of the Respondent Bank. So, there is no obligation on the part of the Respondent Bank to issue a reply u/s. 13(3A) of the Act,2OO2.

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The Respondent Bank has filed a Memo enclosing therewith copies of Possession Notice 29.12.2023 along with postal receipts, photographs depicting affixture of Possession Notice and copies of publication of Possession Notice in English & Telugu newspapers, stating that inad the Respondent Bank could not frle the said documents along l for the Applicants has taken an objection to the that^judicial orders cannot be passed basing on a he placed his reliance on a^judgment of the Hon'ble esh in "Syed Yousuf Ali Vs. Mohammed Yousuf decided ori-' 5.02.2016. I do not Iind anv merits in the said for the reason that, the said Memo is filed by

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5,A.No.314/2024

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the Respondent Bank only to receive the^{documents,which the Bank did} not file along with the Reply inadvertently.^{No relief is sought by the Bank} in the said Memo and no^judicial orders^{were passed on the Memo. The} documents filed by the Respondent Bank amply^{provesthat the Respondent} Bank, while issuing the Possession Notice^{u/s. 13(41r} lw^{Rules 8(1)&(2),has} duly followed the^procedure. As regards^{the proceedingsinitiated by the} Respondent Bank u/s. 14 ofthe SARFAESI^{Act, in approachingLd. District} Collector, R. R. District and obtaining^{ordersof appointment of Tahsildar} for taking physical^possession of the^{schedulepropertyand alsothe} subsequent action ofthe^{RespondentBank in obtaining ordersfrom the Ld.} Chief Judicial Magistrate, R.R.^{DistrictvideCrl.M.P.No. 131 of 2025, for} taking physical^possession of the^{scheduleproperty is concerned, I do not} find any lacuna or illegality^{in the saidactionof the RespondentBank.}

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In view of the facts and^{circumstancesof the case, Ihold that, the} Respondent Bank has duly followed^{the procedure laid down underthe} SARFAESI Act and the Rules^{madethereunderwhile enforcing securit5r} interest over the application^{scheduleproperty. AccordinglyI hold that the} Applicants have failed to make^{out any valid grounds for grantingany relief} to them. This^{point is answeredagainst the Applicants and in favour of the} Respondent Bank.

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Potnt I,lo.(til:-

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g. In the result, the^{present SecuritizationApplicationisdismissed.} Consequently, the Interlocutory^{Applications, pending if any, shall stand} disposed of. No o_rder^{as to costs.}

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a copy of this order to^{the partiesconcerned.}

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tronscribed^by he,^{coffected, signed andprcnouncedby me inthe opencoutton this the146dayol My 2026)'}

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1. 5 E,lY

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sd/(G. GOPICHANDI PRESIDING OFFICER

Sri Venkateswara Rice Traders and Ors. v. State Bank of India

Case brief

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Sri Venkateswara Rice Traders and Ors. v. State Bank of India

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