Dismissed

M S Sas Infra Projects v. Kotak Mahindra Bank Limited

DRT9 Jul 2026SA/321/2024

Case brief

AI extract

What is this about?

Debts Recovery Tribunal dismissed an application seeking to set aside SARFAESI proceedings initiated by a bank. The court held that the bank strictly followed statutory procedures regarding notices, replies, and possession, finding no illegality in the NPA classification or enforcement actions.

What did the court decide?

The Securitisation Application fails and is hereby dismissed; interlocutory applications closed; no order as to costs.

M S Sas Infra Projects 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^grH DAY oF JULY,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. 321^{OF 2024}

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M/s SAS Infra Projects^{(India) Pvt. Ltd',} Having its regd. Office at B-3-9BB/3414, Srinagar Colony, Hyderabad-34

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Presently At: #Plot No. BlII1l72, B.K. Enclave, Road No.2, MiyaPur, HYderabad-49

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N.P.R. Padmaavathy, W/o.^{N. Ranga Reddy,} Age 55 years, Occ: Managing^Director, R/o. 8-59/13A, IDA BachuPallY, Medchal District, Hyderabad - 500090 '........ ' '.Applicants

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Versus

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Kotak Mahindra Bank Limited, Navabharath Chambers, 2nd Floor, 6-3-1709/7, Rajbhavan Road, Somajiguda, Hyderabad, Rep. by its Authorized Officer

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.....Respondent

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Counsel for the Applicants : Sri. Shravan^KumarRagi Counsel for Respondent : Mr. N. B. Sudarshan

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-:g-U_E-B:-

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The^present Securitization Application is filed by the Applicants u/s.L7 of the Securitisation and Reconstruction of Financial^Assets and Enforcement of Security Interest Act, 2002^("Act" hereinafter for short) to set aside all the measures initiated by the respondent bank under section 13(2) & 13(4) of the Act including the action of taking physical possession of the SA Schedule prope;ly through vacate //)Ys|fi91:L\ (./' ;^s'

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Page 2 of 5

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SA No.32112024

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notice dated 28.06.2024 via Crl.M.P.No.881 of 2024 on the fiie of Hon'ble XIV ACMM Court, at Nampally as null and void.

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The averments of the application, in brief, are that the Applicants availed various business loan facilities aggregating to Rs. 3,54,10,000/- from the Respondent Bank by creating security over commercial vehicles through hypothecation agreements. The Applicants submits that the loan accounts were regularly serviced; however, due to recession in the construction sector and financial constraints, repayment was delayed, resulting in the loan account being classified as a NPA. Thereafter, the Respondent Bank issued a demand notice dated 02.04.20t4 under Section 13(2) of the SARFAESI Act, followed by a possession notice dated 20.02.2015 under Section 13(4) of the Act. It is further alleged that the Respondent Bank subsequently issued another possession notice dated 26.12.2019 and later sought to take physical possession through an Advocate Commissioner by issuing a vacate notice in 2024. fhe Applicants aver the SARFAESI measures on the ground that the Respondent Bank failed to comply with the mandatory provisions of Sections 13(3A) and 13(4) of the Act and Rules B(1) and B(2) of the Security Interest (Enforcement) Rules, 2002 (hereinafter "Rules" for short). Applicants allege that the objections submitted under Section 13(3A) were neither considered nor replied to, the statutory notices were not duly served, affixed or^published in accordance with law, and no notices were issued to the^guarantors. Applicants aver that the schedule^property does not constitute^a secured asset for the facilities in^question and that the^Respondent Bank illegally took^possession of movable assets^{withoutdue process.} On these^grounds, relying inter alia upon^{Mardia Chemicals Ltd. v.} IJnion of India, the Applicants seeks setting aside of the^SARFAESI measures as being illegal and contrary to^{the-trrrovisionsof the} SARFAESI Act and the Rules framed thereundey/p;r.rt"

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Page 3 of 5

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SANo.32Ll2O24

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The Respondent Bank filed its reply statement along with supporting documents. The averments thereof, in brief, are that the Applicants had availed a home loan of {69,00,000/- and several commercial equipment loans aggregating to {3,67,70,000/-. The Respondent Bank avers that the Applicants, by an undertaking dated 28.01.2011, voluntarily olfered the S.A. Schedule Property as crosscollateral security for all the loan facilities. Owing to persistent defaults in repayment, the loan account was classified as a NPA, where after a demand notice dated 02.04.2014 under Section 13(2) of the Act was issued, followed by a possession notice dated 26.12.2019 under Section 13(4). It is further stated that proceedings under Section L4 of the Act were initiated before the jurisdictional Magistrate, pursuant to which an Advocate Commissioner was appointed and a vacate notice was issued for taking physical possession of the secured asset. The Respondent Bank denies all allegations of non-compliance and asserts that the objections submitted by the Applicants were duly considered and replied to in accordance with Section 13(3A) of the Act. The Respondent Bank further submits that several hypothecated vehicles were repossessed and sold after following due process, the sale proceeds were appropriated towards the outstanding dues, and a substantial amount still remained payable by the Applicants. Hence, Respondent Bank prays for dismissal of the SA.

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Learned counsel for the applicants reported that orders may be passed based on records. Heard learned counsel for the respondent bank. Perused the material brought on record.

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Learned counsel for the Respondent Bank denied the averments of the Appticants and ptaces retiance upon the ^uw:e"

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Page 4 of 5

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SA No. 32U2024

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annexed with the counter filed in IA.No.2197 of 2024. It^is submitted that the Applicants' account was classified as NPA in accordance with RBI guidelines and that the Respondent Bank had strictly followed the due procedure^prescribed under the SARFAESI Act, 2002 and the Rules framed thereunder. Accordingly, sought for dismissal of the S.A.

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The points for consideration are as follows : -

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

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ii) To what relief?

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Point No.(i):

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Admittedly, applicants availed various credit facilities against mortgage of schedule^property as cross-collateral security for^{all the} loan facilities and failed to make^payment as^per repayment schedule. Hence the action of the Respondent Bank in classification of account as NPA and initiating the SARFESI^proceedings cannot be termed^as illegal or irregular as contended by the applicants.

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The Respondent Bank filed material documents annexed with the counter filed in IA.No.219 of 2024 as^proof of compliance of due procedure of law. Pages 62 to 75 of the material paper filed separately are the Photostat copies of^postal receipts^and acknowledgment^proving service of demand^notice. Similarly,^Pages 80 to 82 contain the^photocopies of the Respondent Bank's^reply to the Applicants' representation under Section 13(3A) of the Act, along with the postal receipts evidencing dispatch, thereby establishing compliance with the provisions of Section 13(3A)- of the^Act. ffi'*

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Page 5 of 5

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SA No.321/2024

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Fufthermore, Pages 83 to 100 are the Photostat copies of postal receipt of Possession Notice dated 26.12.2019, photographs as proof of affixture on secured assets and publication of the same in English and Telugu (vernacular language) newspapers on 28.L2.2019. The documents placed on record by the Respondent Bank remain undisputed. In view of sufficient proof place on record, I find no infraction of section 13(2) & 13(4) of the Act and Rules 3, 8(1) & 8(2) of the Rules, 2002. As a secured creditor the Respondent Bank initiated the SARFESI proceedings, which cannot be categorized as illegal or arbitrary.

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In view of above observation, it is concluded that the applicants failed to establish any ground to set aside the measure from taking physical possession by the respondent bank under the Act, 2002 against the SA schedule property and accordingly the SA is liable o be dismissed.

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Point No.(ii):

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In the result, the Securitisation Application fails and is hereby d ism issed.

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Consequently, Interlocutory Applications pending, if any, shall stand closed.

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No order as to costs.

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Communicate a copy of this order to the parties concerned and upload in the official website.

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(fyped to my dictotion by the PS, corrected, signed ond pronounced by me in the open court on this the gth doy of July, 2026). frws

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(RA ]qESHWAR KOTHE) PR ESIDING OFFICER

M S Sas Infra Projects v. Kotak Mahindra Bank Limited

Case brief

What is this about?

What did the court decide?

M S Sas Infra Projects 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

Statutes considered

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