Dismissed

Mr.M.Ganesh v. Kotak Mahindra Bank Limited

DRT8 Apr 2026SA/316/2023

Case brief

AI extract

What is this about?

In this Securitization Application, the applicant sought to quash the bank's possession of Schedule 'A' property under the SARFAESI Act, alleging defects in notice service and NPA classification. The court rejected these claims, noting a prior order validated the bank's compliance and upheld its right to possession under Section 14.

What did the court decide?

The Securitization Application was dismissed; the interim stay granted vide order dated 06.09.2023 was vacated. No order as to costs.

Mr.M.Ganesh versus Kotak Mahindra Bank 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 OSTH^{DAY OF APRIL,2026}

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PRESENT: SH. RAMESHWAR KOTHE,^{B.Com,L.LB (Hons.), lvl.A.} PRESIDING OFFICER

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Securitization Application^No. 316^{OF 2023}

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N4r. lY. Ganesh, S/o. Shankar^Mettu, Aged 48^years, Occ: Business, R/o. H.No. 11-1-419 & 420, Bhoiguda Kaman, Ag ha^pura, Hyderabad

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.......Applicant

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Versus

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Kotak l4ahindra Bank Rep. by its Authorized Officer, 6-3-t10917,2nd floor,^{Nav Bharat} Cham bers, Raj Bhavan^Road, Somajiguda, Hyderabad-082.

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......Respondent

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Counsel for the Aqqlicant^: Ms. T. Sridhar Reddy

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Counsel for Respondent^Bank: Mr. M. Srinivas Reddy

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-:^q-LDEB:-

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The^present Securitization^{Applicationis filed by the Applicants} uls.L7 of the Securitisation^{and Reconstructionof FinancialAssets} and Enforcement of Security^{Interest Act, 2002 ("Act" hereinafterfor} short) to set aside all the^{measuresof the respondentbank initiated} under section 13(4) of^{the Act, including physicalpossesslonof the} SA schedule^property through^{order in Crl.M.P.No.386/2023 dated} 04.07.2023 on the file of^{XVI Addl. Chief MetropolitanMagistrate,} Hyderabad, in^pursuance of^possession ".rrr.W:;18"

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page 2 of5

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SA No.316/2023

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The facts of the case as averred by the applicant in the SA, in brief, are that Respondent Bank sanctioned a credit facility to M/s. Hema Trading Company, Applicant stood as guarantor and created mortgage over SA schedule property to secure the repayment of the loan. As things stood thus, agents of the Respondent Bank approached the Schedule property and demanded that the Applicant vacate the premises, stating that the Bank had initiated proceedings under Section 14 of the SARFAESI Act and had obtained an order dated 04.07.2023 in crl.M.P.No.386/2023 on the fite of the Additionat Chief Metropolitan Magistrate, Hyderabad, pursuant to a possession notice dated 27.71.2017. On enquiry, the Applicant came to know that the Respondent Bank had issued a demand notice dated 31.08.2017 under Section 13(2) of the SARFAESI Act; however, the Applicant contends that he was never served with either the demand notice or the possession notice. The Applicant further alleges that the SARFAESI proceedings are vitiated as the account was never classified as an NPA. It is also contended that the Respondent Bank violated Rule 8(1) and Rule 8(2) of the Security Interest (Enforcement) Rules, 2002 (hereinafter "Rules" for short), as the possession notice was neither affixed at a conspicuous part of the Schedule property nor published in two leading newspapers. In view of the above, the Applicant has filed the present Securitization Application to quash the entire action of the respondent bank.

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The sum and substance of the reply statement of the respondent bank, is that Securitization Application is premature, as the Respondent Bank has yet to take physical possession of the SA Schedule property. The Respondent Bank admits that the Applicant is the guarantor and absolute owner of the secured asset, but disputes the Applicant's plea of not having been informed that the account was classified as an NPA. On account of multiple defaults, the _account was

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Page 3 ofs

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5A No. 315/2023

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classified as an NPA on 31.O7.20L7,^{and a demand noticedated} 31.08.2017 was thereafter^{issued under Section 13(2) of the} SARFAESI Act. The notice^{sent by post returned unserved,and} accordingly it was^{publishedin New India Express (English) and} Namaste Telangana^{(Telugu)on 22'O3.2078. As the Applicant} continued to remain in default,^{the RespondentBank issueda} possession notice dated 2!.77.2017 under^{Section 13(4) of the Act,} which was^publlshed in^{New India Express (English) and Namaste} Telangana^(Telugu) on^{28.77.2017. To challengethe said possession} notice, the Applicant filed^{SA No.1465 of 2017, which was dismissed} by this Hon'ble Tribunat.^{Thereafter,the Applicant undertookto} regularize the account, but^{in breach of that commitmentcontinued} to defaulu Respondent Bank^{proceeded under Section14 of the} SARFAESI Act by^{filing Crl.M.P.No.386of 2023, to takephysical} possession of the SA Schedule^{property.Withthese contentions, the} Respondent Bank^prays for^{dismissal of the present Securitization} Application with costs.

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The right of applicant^{to advanceoral arguments was forfeited} vide docket order dated^{20.02.2026as reportednot readyfor} arguments even after^{affording ample opportunity. Heard the} arguments of the^{learned counsel for the respondentbank Perused} the written arguments filed^{by the respondent bank and also Perused} the material brought^{on record.}

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Learned Counsel for the^{RespondentBank during the courseof} arguments reiterated^{the contents of lts replystatement,and} contended that on account^{of default, recovery proceedingswere} initiated and that the demand^{notice,possessionnotice and sale} notice were duly served,^{the possession notice and sale notlcehaving} been affixed on the^{secured property and publighed in accordance}

lQg;w...u

Page 4 of 5

SA No.316/2023

with the Rules, 2002. Learned counsel further stressed the point that the Tribunal vide orders dated 26.02.2020 in SA No.1465/2-t7 (filed by the Applicant) upheld the procedure adopted by the respondent bank as valid and legal. Lear5ned counsel sought for dismissal of the SA as devoid of merits, with exemplary costs.

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The points that arise for consideration are as follows : -

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i) Whether the applicant made out any valid ground to quash the measures initiated by the respondent bank against the SA schedule property as prayed for?

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ii) To what relieP

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Point No.(i):

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It is a matter of record that vide order dated 26.02.2020 in SA No.1465/2017 filed by the applicant, this Tribunal held that respondent bank complied Sec,13(2) pertaining to demand notice dated 31.08.2017 and 13( ) of the Act, 2002 and Rutes 8(1) and B(2) of the Rules, 2002 pertaining to possession notice dated 21.11.2017 in respect of the SA schedule properties. In this SA also, respondent bank filed sufficient material as to compliance of the same. Hence the averment relating to demand notice and possession notice is liable for outright rejection.

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B. The Respondent Bank, being the secured creditor is entitled under Section 14 of the SARFAESI Act to proceed for taking physical possession of the secured assets. Accordingly Crl.M.p.No.386/2023 was filed on the file of learned XVI Additional Chief Metropolitan Magistrate, Hyderabad. Such action is lawful and cannot be treated as illegal. ffi",

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Page 5 of 5

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SA No. 3tGl2O23

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In the view of above^{observations, Ihold that the applicant} failed to make out^{valid ground to quash any of the measures} initiated by the^{respondentbank under the SARFESI Act againstthe} application schedule^properties.

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Point No.(ii):

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In the result,^{the Securitization Applicationfails and is hereby} dismissed.

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Consequently,^{the interim stay granted vide order dated} 06.09 .2023^{in I.A.No.2278 of 2023 standsvacated'The Interlocutory} Applications^{pending,if any, shall stand closed. No orderas to costs'}

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L2. communicate^{a copy of this order to the parties concernedand} upload in^{the official website'}

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(Typed to my dictotion^{by thePS, corrected, signedand pronounced by me in the open court onthis the} o,'n doy of^{April, 2026).}

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., ,.,\\ ", , .. ).^{I l}

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(RAMESHO^KOTHE) PRESIDING^OFFICER

Mr.M.Ganesh v. Kotak Mahindra Bank Limited

Case brief

What is this about?

What did the court decide?

Mr.M.Ganesh v. Kotak Mahindra Bank Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

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