Dismissed

Nidamarthi Hima Gouri and Another v. State Bank of India

DRT30 Jan 2026SA/379/2024

Case brief

AI extract

What is this about?

In an application under Section 17 of the SARFAESI Act, guarantors challenged possession notices issued by a bank, claiming discharge from their guarantee liability. The Tribunal found the appellants failed to prove discharge and established no violation of statutory procedures, dismissing the application.

What did the court decide?

Securitization Application dismissed; Interlocutory Applications closed.

Nidamarthi Hima Gouri and Another versus State Bank of India — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL - II AT HYDERABAD

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DATED THIS THE 3OTH DAY OF JANUARY, 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.379 OF 2024

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1. Nidamarthy Hima Gouri, D/o. Late N. Susheel Kumar

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Rep. by her GPA Holder Nidamathy Siva Prasad

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Age: 50 Years, Occ: House wife,

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H.No.6-2-231l8, Kukatpally.

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Hyderabad - 500072.

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1. Y. Pardhasaradhi, S/o. RYC Sekhar, Aged: 65 Years, Occ: Business R/o. Plot No.22, H. No.1-4-180/22, Sai Baba Colony Sainikpuri, Kapara Hyderabad - 500094.

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.......APPlicants.

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Versus

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1. State Bank of India, Stressed Assets Management Branch, 1st Floor, D. No.3-4- 1013/A, CAC, TSRTC Bus Station, Kachiguda, Hyderabad, Rep. by its Authorised Officer.

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1. State Bank of India, IE Sanath Nagar, Hyderabad, Rep. by its Manager.

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Counsel for the Applicants :^{Mr.S. Nagesh Reddy}

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Counsel for Respondents : Mr. C.^Prabhakar

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-:g-B-D-EB:-

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The^present Securltization Application^is filed^by the^Applicants u/s.17 ol the Securitisation and^{Reconstructionof FinancialAssets} , ,}n!r<,, )-\r ,,/f.,'/\

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Pate 2 of5

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sA No. 379/2024

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and Enforcement of Security Interest Act, 2002^("Act" hereinafter for short) assailing^possession notices dated 09.08.2024 and 14.08.2024 against the application scheduled^properties.

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The averments of the applications, briefly, are that they are guarantors for credit facilities availed by N'l/s. Lampex Electronics Limited from the 2nd Respondent-Bank, with Applicant No.1 mortgaging her^property described as Item No.7 and Applicant No.2 mortgaging his properties described as ltem Nos.4, 5 & 6 in the demand notice daled 29.02-2024. At the request of applicants, the lvlanaging Director of the borrower company wrote a letter to respondent bank for replacement of the collateral properties of applicants and to release their^properties. Thus, the applicants were discharged from guarantees and the respondent No.2 bank is obligated to release mortgaged propertles. Notwithsta nd ing, Respondent Bank initiated SARFAESI proceedings by issuing demand notice dated 73.03.2023 under Section 13(2), withdrawn post Section 13(34) reply; issued another demand notice dated 13.10.2023 issued, but withdrawn post reply dated 13.11.2023; and issued third demand notice dated 29.02.2024. Applicants issued objections under section 13(3A) on 20.04.2024 and Respondent Bank responded vide issuing reply of section 13(34) on 06.05.2024 defending NPA classification/norm compliance. Subsequently, Possession notices dated 09.08.2024 & 74.O8.2024 were issued against the schedule properties. The Applicants assail the actions as illegal, arbitrary, and violative of SARFAESI provisions, disentitling the Banks from proceeding against the scheduled properties since they stand discharged as guarantors of M/s. Lampex Electronics Limited.

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The respondents 1 and 2 banks ("respondent" hereinafter) filed reply statement along with documents. The averments thereof, ks*u

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Page 3 of5

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SA No. 379/2024

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briefly, are that the borrower^(M/s. Lampex^{ElectronicsLimited)} defaulted in repayment of loan due to which^{their accountwas} classified as NPA, thereafter a demand^{noticedated 29.o2.2024was} issued under section 13(2) of the Act, 2002.^{Boththe borrowerand} applicants i.e.,^{guarantorsreceived} the^{demand notice as per postal} record^placed on record. The^Applicants objected^{to the demand} notice via representation under Section^{13(3A)of theSARFAESIAct,} 2002, contending discharge from^{guaranteeliabilityrendering them} no longer liable for the loan amount^{and requesting release of} secured^properties listed as Items^{Nos.4 to 7 in the demand notice.} In response, the^{Respondent-Bankissued a reply stating that} mortgaged properties would be^{releasedupon clearing entlre due} amounts mention under^{demand notice. Non-paymenttriggered} possession notices dated 09.08.2024 and^{14.08.2024.the} respondent banks have duly^{followedthe provislonof the AcUhence} the SA is liable to be^dismissed.

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Learned counsel appearing^{for the applicants reported no oral} arguments. Heard the^{learned counsel appearingfor the respondent} bank. Perused the^{written argumentsfiled by the applicantsand} respondent bank and^{also perused the material broughton record'}

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Learned counsel for^{applicants while reiteratingthe contents of} the application would^{contend vide his writtenargumentsthat the} applicants stood^{discharged as guarantorsof M/s LampexElectronics} Limited since the^{Managing Director wrote lettersto the respondent} bank to replace^{collateral properties.}

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Per contra.^{learned counsel for the respondentbank reiterated} his version as in the^{reply statement and submitted that respondent} bank never released^{the guaranteesat any point of time They are} equally liable to^{clearthe outstanding dues alo/g.with the borrower'} , Tyrrrtt><,,->\ I /^{-'^1't'}

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PaEe 4 of 5

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SA No. 37912024

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The respondent bank has strictly followed the RBI directives as well as the procedure contemplated under the provisions of the Act and Rules framed thereunder. With these submissions, learned counsel sought for dismissal of the SA.

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fhe points for consideration are as follows : -

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i) Whether the applicants made out any valid ground to quash the measures initiated by the respondents against the SA schedule properties, as prayed for?

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ii) To what relieo

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Point No.(i):

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Admittedly, the applicants stood as guarantors for the loan facility availed by M/s Lamplex Electronics and mortgaged their respective properties morefully described in the SA schedules. Though the applicants pleaded discharge from the guarantees, there is no substantiating evidence such as clearance certificate issued by the secured creditor. In the absence of the same, contention on discharge from guarantees cannot be accepted.

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The applicants also did not refute the contention of respondent bank that at no point of time the applicants raised objection as to NPA classification during their interaction with regard to OTS. Mere receipt of certain amounts into the escrow account, by itself does not automatically render the NpA classification invalid unless it is shown that the account was regularised in accordance with RBI norms.

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As per the material documents annexed to the reply statement, the respondent bank issued reply notice to the applicant on 26.04.2024. The Respondent Bank has placed on record proof of service, affixture and publication of thg-rossession notices in Qffnv*

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Page 5 of 5

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sA No.37912024

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compliance with Rules 8(1) and 8(2) of the^{SecurityInterest} (Enforcement) Rules, 2002. No violation of the mandatory^provisions oF the Act or the Rules has been^{established by the Applicants.}

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In view of the above observations,^{it concluded that the} applicants failed to make out^{any valid groundto set aside the} possession notices dated 09.08.2024 and 14.08.2024.^{Accordingly SA} is liable to be dismissed.

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Point No.(ii):

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L2. In the result, the^{securitisation application fails and is hereby} dismissed.

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