Dismissed

Panda Jaya Lakshmi v. Andhra Pradesh State Financial Services Corporation Limited

DRT19 Jan 2026SA/356/2024

Case brief

AI extract

What is this about?

Securitisation Tribunal dismissed an application challenging SARFAESI measures. The court held that the applicant failed to prove the mortgage was invalid. The court found the notices valid as they were served before the mortgagor's death and subsequent legal heir notices were procedural oversights.

What did the court decide?

Application dismissed; interlocutory applications pending, if any, closed; no order as to costs.

Panda Jaya Lakshmi versus Andhra Pradesh State Financial… — Company and Corporate | DRT (2026)

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IN THE DEBTS^{RECOVERY TRIBUNAL - II AT HYDERABAD}

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DATED THIS^{THE19th DAY OF JANUARY,2026}

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PRESENT: SH.^{MMESHWARKOTHE,B'Com, L'LB' (Hons')' M'A'} PRESIDING^OFFICER

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Securitisation^{Application No' 356 OF 2024}

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PANDA JAYA^LAKSHMI

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W/o. Late Panda^{SatyanarayanaYadav} Agedt 47 Years,^{Occ: House Wife} H.No.1-5-80/2,^{Ganga PuthraColony} Old Alwal,^{SECUNDERABAD-500010'}

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. . . .^{. .} .Applicant

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Versus

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The Authorized^Officer

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NT'IOHNN PRADESH^{STATEFINANCIALCORPORATION} $^{5-9-194,Chirag-Ali Lane, P.B'No'165} HYDEMBAD-500^{001 and another}

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Mls. MLN^INDUSTRIES Represented^{bY its Director} H.No.6-3-456117,^{1st Floor,} DwarakaPuri^ColonY, Punjagutta,^{HYDERABAD - 500082'}

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...... ResPondents

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: Mr. V. Pramod^Kumar Counsel^{for the APPlicant}

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Cou nsel^{for Res7ondents}

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: Mr. R.^{Raiendra Prasad}

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-:g-B-D-E-B:-

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The^{present securitisation Application is filed by the Applicant} u/s,L7 of the^{Securitisation and Reconstructionof FinancialAssets} and Enforcement^{of SecurityInterest Act, 2OO2 ("Act" hereinafterfor} short) seeking^{to set aside all the measuresof the respondent} Corporation^{under section13(2) and 13(4) of the Act' 2002 including} the^{proposedactionin takingphysicalpossessionof the application} schedule^{property throughadvocate colglissionernoticedated} 0e.08.2024. apx$$

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Page 2 of 6

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SA No. 3s6l2024

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The averments of the application, briefly, are that the Applicant is a widow and legal heir of Late panda Satyanarayana yadav, the absolute owner of the application schedule property who expired on L2.05.202L. Applicant is neither borrower nor guarantor in any loan transaction' subsequent to her husband's demise, the Appricant arong with her children has been in continuous possession of the said residentiar property. Respondent no.2 avaired business roan from Respondent corporation, which craims deposit of tiue deeds of schedule property as third_party collateral security. The schedule property was never offered as security for any roan either with her consent or that of her rate husband. The Appricant rearnt of the Respondents' claim only upon publication oF sale notice under Rule B(6) of the Security Interest (Enforcement) Rules, 2002 (.,Rules,, hereinafter) dated 23.02.2024 (auction fixed with reserve price of Rs. 31.50 lakhs). No demand notice under Section t3(2), possession notice under section 13(4), or any prior intimation was ever served upon her despite being regar heir and person-in-possession of the property' Respondent officiars remained evasive regarding mortgage detairs or service of notices. The Respondents initiated 'ARFAESI proceedings in the name of the deceased borrower, rendering the same irregar and void ab initio. Mandatory procedurar compriances including notice service, affixture, pubrication and Rure B formarities stand violated. The alleged mortgage is invalid and not binding upon the Applicant for want of consent. Aggrieved by the arbitrary and illegal SARFAESI proceedings for dispossession and auction, the Applicant has invoked jurisdiction of this Tribunal under section 17 for decraration that the enforcement actions are nu, and void and liable to be set aside. fu,a

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Page 3 of 5

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sA No.356/2024

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3, The respondent^{Corporationfiled reply statement in the SA} along with documents.^{Submissionsthereof, briefly, are that the} respondent Corporation^{sanctioneda loan of Rs'444 lakhs on} 05.L2.2017 to^{Respondentno.2, out of which Rs.333'39 lakhs was} disbursed. Late sri^{Pandasatyanarayana Yadav, duringhis lifetime} voluntarily offered the^{schedulepropertyas collateral securityby} executing a registered^{Memorandumof Deposit of Title Deeds} No.5410/2018 dated 12'09.2018'^{Upondefaultby Respondent no'2,} the loan account^{was classifiedas NPA in accordance withRBI} guidelines, and the Corporation^{initiatedrecoverymeasures'A} demand notice under section^{13(2) of the Act dated 18.02.2020and} a^possession notice^{under Section13(4) dated 27'08'2020were} issued and both^{had been served during the lifetime of Late sri Panda} Satyanarayana^{Yadav, who expired on 12.05.2021' The Applicant,} being a legal heir,^{falls within the definitionof "borrower" underthe} Act,andcannotseekafresh60-dayperiodwhentheoriginal mortgagor,duringhislifetime,didnotavailthestatutoryremedy withln time. Reliance^{is placed on judgmentof Hon'ble High Court of} Punjab and Haryana^{at Chandigarh betweenKotakMahindraBank} Ltd, and The District^{Magistrateand ors, in C\NP-435/2022decided} on 03.08.2022^{whereinjudgment in Suhaina Banuand others vs'} Indian Bank of Hon'bte^{MadrasHigh Court} [2011^{(10 CWC 448] was} referredto,tocontendthatproceedingslawfullyinitiatedduringthe lifetime of the^{mortgagor/guarantor do not require recommencement} byissuanceoffreshnoticetolegalheirsandmaybecontinuedin accordance with^{law. The date of Warrant in Crl'MP No'303/2024'The} partition suit in o.s. No.424 of 2022 filed by daughter^{of the} applicant is intended to^{frustratethe secured creditor's lawful} recovery. The respondent^{Corporation asserts scrupulouscompliance} of^procedure of^{law and prays for dismisArof the Application with} costs. UW$#

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Page 4 of 5

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SA No. 356/2024

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Learned counsel for applicant reported order may be passed on records. Heard the learned counsel for the respondent Corporation. Perused the material brought on record.

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The points for consideration are as follows : -

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i) Whether the applicant made out any valid ground to quash any of the measures of the respondent Corporation against the SA schedule property, as prayed for?

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ii) To what relieft

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Point No.(i):

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As per applicant, her late husband never offered the schedule property as security for any loan on the ground that he was no way connected to the borrower company. On the other hand, respondent Corporation asserts that the Applicant's late husband voluntarily offered the schedule property as collateral security by executing a registered Memorandum of Deposit of Title Deeds No.5410/2018 dated 12.09.2018. Except claiming possession of the property, applicant has not averred about possession of title deeds. Hence the averment remains unsubstantiated.

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As per the material documents placed on record by the respondent Corporation, the demand notice is dated 18.02.2020 and possession notice is dated 27.08.2020. Mr.P. Satyanarayna died on 12.05.202t as per cppy of Death Certificate produced by the applicant. Pages 15 to 24 are the copies of postal receipts and acknowledgement cards pertaining to service of demand notice. Pages 25 to 36 are the copies of postal receipts, postal track reports, photographs and publication copies pertaining to service, affixture and publication of the possession notice in English and Telugu (vernacular language) newspapers on 29.08.2010. None of the ffit'tv

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Page 5 of 5

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sA No.356/2024

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documents have been disputed by^{the applicants.The said} documents amply^prove that^{the respondent Corporationhas duly} followed Rules 3, 8(1) and 8(2) of^{the Rules, 2002. It is clear from} the documents that both demand^{notice and possessionnotice were} issued^prior to the death of the^{mortgagor.Proceedingsfurtherance} to Rule 8(6) notice did^{not fructify' Hence the averment that notices} issued in the name of deceased^{personhas no merit. However, the} respondent Corporation^has to^{ensureitself to includethe names of} legal heirs of late P. Satyanarayana^{(mortgagor)in its futurenotices} under the Act, 2002.

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The learned^{counsel for the respondent Corporationreported} that the date of Warrant^{in Crl.MPNo.303of 2024 expired. Hencethe} SA has become infructuous^{as far as challengeagainstphysical} possession of the subject^property is concerned.^{However, being} secured creditor, respondent corporation^{initiated action for taking} physical possession of secured assets as^{per entitlementunder} Sec.14 of the Act, 2002 and^{such action cannot be treatedas} irregular or illegal.

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In the view of above^{observations,it is concluded that the} applicant has failed to^{make out any valid groundto set aside the} measure of the respondent^{corporation under the Act, 2002against} the SA schedule^property and^{accordingly the SA is liable to be} dismissed.

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Point No.(ii):

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