Dismissed

Keesara Sai Baba Goud v. Shriram Finance Limited

DRT8 Jun 2026SA/321/2025

Case brief

AI extract

What is this about?

In this securitization application under Section 77 of the SARFAESI Act, the debtor sought to set aside measures for taking physical possession of mortgaged property, alleging non-compliance with statutory notices and rules. The Tribunal held the applicant could not challenge already decided measures and dismissed the application.

What did the court decide?

The Securitisation Application is dismissed; all pending interlocutory applications remain closed.

Keesara Sai Baba Goud versus Shriram Finance Limited — Corruption | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL^_ II AT HYDERABAD

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DATED THIS THE 8TH DAY.OF JUNE, 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 2025

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Keesara Sai Baba Goud, S/o Satyanarayana, Aged about 34^years, Occ: Business, R/o H.No.1-9-359, Kushaiguda, Ka pra, ECIL Post, M a lkajg iri- Medcha l, Malkajgiri District

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.......Applicant

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Versus

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M/s Shriram Finance Ltd,

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Rep. by its Authorized Offlcer,

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Office at 3-6-478, 4TH Floor, Anand Estates,

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Liberty Road, Himayathnagar, Hyderabad-500029 Rep by the Authorised Officer

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Mr. R. Nani Reddy, Occ: Recovery Manager

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.....Respondent

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Counsel for the Applicant : Ms. A. Tanuja counsel for Respondent : M/s. N. Raghuveer

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-i O-B-qEB:-

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The present Securitization Application is filed by the Applicant u/s.77 of the Securitisation and Reconstruction of^{FinancialAssets} and Enforcement of Security Interest Act, 2002 ("Act" hereinafter for short) to set aside all the measures initiated by the Respondent Company, including the action of taking^{physlcalpossessionofthe SA} u6*

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PaBe 2 of 6

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SA No. 32112025

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Schedule Property via appointment of advocate commissioner in Crl.M.P.No.23 of 2025 order dated f4.07.2025.

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The averments of the applicaHon, briefly, are that the Applicant availed a credit facility of Rs. 20 lakhs from the Respondent Company in 2019 and created an equitable mortgage over the SA schedule property as security. The Applicant claims to have been regular in repayment, but due to the COVID pandemic and financial difficutties, defaulted in repayment. It is alleged that the Respondent Company failed to serve the demand notice under Section 13(2) and the possession notice under Section 13(4) of the Act. The Applicant further submits that the Respondent Company initiated proceedings under Section 14 of the Act before the Hon,ble Chief Metropolitan Magistrate, IYalkajgiri-Medchat, in crt.M.p.No.23 of 2025, and that an Advocate Commissioner issued a vacation notice dated 14.07.2025. According to the Applicant, the proposed action of taking physical possession is contrary to the procedure laid down under the Act. It is also alleged that the Respondent did not comply with Rule 8(1) of the Security Interest (Enforcement) Rules, 2002, (hereinafter "Rules,, for short) as the possession notice did not contain the liability amount as prescribed under Appendix IV, and that the Advocate Commissioner,s notice also did not disclose the pending amount. The Applicant additionally alleges non-compliance with Rule 8(2) for failure to publish the possession notice in two leading newspapers, and seeks setting aside of all measures taken against the SA schedule property.

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The Respondent Company filed reply statement along with documents. The averments thereof, briefly, are that it is admitted that the Respondent Company granted a term loan facility of Rs. 20 lakhs secured by creation of a mortgage in its favour. However, as the Applicant defaulted in repayment, the account was classified as NPA and a demand notice under Section 13(2) of the Act was issued.

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Page 3 of6

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SA No.321l202s

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Since the Applicant failed to repay the due amount within the stipulated time, the Respondent Company proceeded to issue the possession notice under Section 13(4) of the Act. The Respondent Company denied the Applicant's contention regarding non-compliance with Rules 8(1) and 8(2) of the Rules, 2002, and asserted that the same were duly complied with. The contention that the due amount was not mentioned in the possession notice and the Advocate Commissioner's vacate notice ls treated as a clerical error, and it is alleged that the Applicant is attempting to create a false technical ground to delay the recovery proceedings. Accordingly, the Respondent Company prays for dismissal of the S.A.

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Heard the Learned Counsel for the Applicant whereas Learned Counsel for the Respondent Company reported no oral arguments but filed written arguments. Perused the written arguments filed by the Respondent Company and also perused the material brought on record.

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Learned Counsel for the Applicant reiterated contents of its applicant and submitted that it availed a Rs.20 lakh credit facility in 2019, mortgaged the SA schedule property, and defaulted later due to the COVID period and financial distress, while alleging that the Respondent Company did not properly serve the Section 13(2) demand notice or the Section 13(4)^possession notice under the SARFAESI Act. It is also alleged that the Respondent initiated Section 14 proceedings in Crl.M.P.No.23 of 2025 before the Chief l4etropolitan Magistrate, Malkaigiri-Medchal, and that the Advocate Commissioner issued a vacation notice on 14.07.2025, but the proposed physical possession is said to be contrary to the Act and the Rules because the possession notice allegedly omitted the liability amount required under Appendix IV, was not publishei in two leading Xrrw, -.-, / //-/." i-y

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Page 4 of 6

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SA No. 321l202s

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newspapers, and the commissioner's notice also did not disclose the outstanding dues. On that basis, the Applicant seeks setting aside of all measures taken against the SA schedule property.

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Learned counsel for the Respondent Company denied the averments of the Applicant and placed reliance upon the material papers annexed with the reply statement. It is submitted that the Applicant's account was classified as NpA in accordance with RBI guidelines and that the Respondent Company had strictly followed the due procedure prescribed under the SARFAESI Act, 2002 and the Rules framed thereunder. Further learned counsel for the respondent company avers of The Respondent's case is that the present application is not maintainable because the Applicant had already filed S.A. No. 512 of 2023 before DRT-II, Hyderabad on the same cause of action, and that proceedtng is still pending, so the new application is said to be barred by res judicata. The learned counsel also relies on the Appllcant's failure to comply with the Tribunal,s conditional order in I.A. No. 2186 of 2025, which required a deposit of ?13,30,000 in two instalments, arguing that such non-compliance disentitles the Applicant from equitable relief. The learned counsel further submits that the reference to "l.4ohsin Khan" in the affidavit filed in Crl.M.P.No.23 of 2025 is only a clerical error and does not invalidate the Magistrate's order. On that basis, the Bank contends that the Applicant is raising only technical objections to obstruct lawful recovery, asserts that all measures were taken under valid statutory authority and in compliance with the SARFAESI Act, and prays for dismissal of the Securitisation Application along with a direction to hand over physical possession of the secured property to the Bank. Accordingly, sought for dismissal of the S.A. ,4"t< 7. / /'/v'' ) "->' The points for consideration are as follows : - -/

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Page 5 of 6

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SA No.32U2025

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i) Whether the applicant made out any valid^ground for quashing the action of the Respondent Company for taking the physical possession of the SA schedule property through Advocate Commissioner appointed under the provision of the 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 classification of account as NPA and^initiating the SARFESI^proceedings cannot be termed as illegal or^irregularas contended by the applicant.

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It is a matter of record that the^Applicant earlier^approached this Tribunal for^quashing the^possession notice dated^26.10.2022by filing S.A. No. 512 of 2023, wherein the S.A. was dismissed on^the ground that the Applicant failed to make out any irregularity in the SARFAESI measures initiated by the Respondent Company.^Upon perusal of the previous order in S.A. No. 512 of 2023, it is evident that Rules 3,8(1), and B(2) were duly complied with, and^{hence the} Applicant cannot again challenge the same^{provisions without any} additional grounds. However, the Respondent Company^{has also filed} sufficient proof of compliance in this S.A. The only additional^point regarding physical^{possessiongoes} against the Applicant, as^has already been held in S.A. No. 512 of^2023, the^{Respondent Company,} being the secured creditor is entitled to take^{physical possessionof} the secured asset. Accordingly, the S.A. is^liable to^{be dismissedas} devoid or any merits.