Allowed

nawazkhantraders v. shriramtransportfinancecompany

DRT30 Jan 2026SA/411/2023

Case brief

AI extract

What is this about?

In this Securitisation Application, the Debts Recovery Tribunal-II, Hyderabad allowed the application filed by borrowers against a finance company. The Tribunal set aside all securitisation measures taken by the respondent company on the grounds that mandatory notices were not duly served, declaring them vitiated based on the demand notice dated 28.07.2022.

What did the court decide?

By setting aside all securitisation measures taken by the respondent company basing on the demand notice dated 28.07.2022 issued u/s 13(2) of the SARFAESI Act.

nawazkhantraders versus shriramtransportfinancecompany — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL-II AT HYDERABAD

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DATED THIS THE 3OrH 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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SECURITISATION APPLICATION No. 4t1 OF 2023

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Between:

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M/s. MD Khan Traders Rep by its Proprietor Ja biu llakha n pathan D. No. 14/705-6-1 DC Road, Kadapa Town & District.516 001. 2. Samiunnisa Pathan W/o P. Mamohammad Khan D. No. 16/510-2-1 Ghouse Nagar Kadapa Town & District.516 001. .....Applicants. And 1. M/s. Shriram Transport Finance Co. Ltd. D. No. 4/622 Rj, 2'd Floor Opp: New RTC Bus Stand Railway Station Road Kadapa Town - 516001 Kadapa District. 2. The Authorised Officer Shriram Transport Finance Co. Ltd. D. No. 4/622 R3, 2'd Floor Opp: New RTC Bus Stand Railway Station Road Kadapa Town - 516001 Kadapa District. .....Respondents. $g-,,u

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SA No.47t/2029

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Counsel for the Applicants : Mr. B. Vikram. Counsel for Respondents : Mr. M. Indersen.

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-:ORDER:-

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The Applicants filed the present Securitization Application u/s. 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2OO2 assailing the Advocate Commissioner Notice dated 13.09.2023 pursuant to orders in Crl.M.P. No. 267/2023 on the file of the learned Chief ludicial Magistrate-cum-Principal Assistant Sessions Judge, Kadapa.

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The facts of the case as averred by the applicants in the SA, in brief, are;

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Applicants are the borrowers and they have been paying the EMIs regularly. Respondent issued possession notice u/s 134) of the SARFAESI Act, 2002, on tl.ll.2022. The account was classified as NPA in contravention of RBI directives. The respondent has not extended the benefit of restructure of NpA classified borrowers from becoming sick as per the RBI circulars dated LL.02.2020 and 01.05.2020. Thereafter, applicants deposited some overdue amount at the instance of the bank officials. However, without issuing demand notice u/s 13(2), respondent is t rying to take the physical possession of the property through advocate commissioner pursuant to orders in Crl.M.P.No.267 of 2023 on the file of the Hon'ble Chief ludicial Magistrate-cum-Principal Assistant Sessions Judge, Kadapa. Any Securitisation steps against the secured prqperty without 1ful*

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SA No.411/2023

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issuance of demand notice u/s 73(2) are not only against the provisions of the SARFAESI Act but also against the principles of the natural justice. Respondent bank refused to furnish statement of account of the loan. Respondent has not declared the amount already paid by the applicants and charged excess rate of interest.

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The respondents filed reply statement denying the correctness of the SA averments. Applicants availed a loan of Rs.25,00,000/- in March 2018 to be repayable with ingerest @21olo^p.m. The loan amount was to be repayable in EN,lIs @Rs.67,633/- for a period of 60 months with a detayed payment interest clause @36%. Due to default in repayment of the loan amount, respondent company issued demand notice under Section 13(2) of the SARFAESI Act dated 28.07.2022. The demand notice was sent by registered post to the same addresses as that of the one indicated in the SA. With no response from the applicants, the respondent company proceeded with Section 13(4) notice dated 11.11.2022. The said possession notice has been sent by registered post to the applicants, followed by publication in Andhra Jyothi and English newspaper. As there is no response from the applicants, respondent bank proceeded for taking physical possession of the secured asset through the impugned Advocate Commissioner notice pursuant to orders in Cr.M.p.267 ol 2023. Hence there is no irregularity in the Securitisation Steps taken against the secured asset for realisation of the outstanding dues from the borrower.

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Both side counsel prayed that orders may be plsged based on records. Perused the material placed on recor@ot*

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SA No. 471/2023

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5. Now the points that arise for determination are:-

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Whether the Applicant made out any valid ground for quashing the measures initialed by the respondent company u/s 14 of the Securitisation Act against the SA schedule property?

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ii) To what relieJ?

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Point No.^(i):

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According to the applicants, the respondent bank has proceeded with issuance of notice u/s 13(4) followed by appointment of Advocate Commissioner for taking the^physical possession of the subject property without there being the mandatory notice u/s 13(2) of the SARFAESI Act. Both in the in the reply statement and the material placed on record, respondent Company has not filed any proof of service of notice under Section 13(2) of the SARFAESI Act, 2002 on the applicants. In the given circumstances, the applicants have made out a valid case to set aside all the securitisation measures taken by the respondent Company basing on the demand notice dated 28.07.2022. Accordingly, all securitisation measures basing on the demand notice dated 28.07.2022 sland vitiated. Therefore, the SA deserves to be allowed.

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Point No.(ii):

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In the result, SA is allowed by setting aside all securitisation measures taken by the respondent Company basing on the demand notice dated 28.07.2022 issued u/s 13(2) of the SARFAEST Act. fl$"ott

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SA No. 477/202i

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B. Consequently, Interlocutory Applications pending, if any, shall stand closed. No order as to costs.

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Communicate a copy of this order to the parties concerned and upload on Web Portal.

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(Dictdted to the steno, signed and pronounced by me in the open court on this the 3dh day of Jonuary, 2026).

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/fua**'\ (RAFIESHWAR KOTHE) PRESIDING OFFICER

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nawazkhantraders v. shriramtransportfinancecompany

Case brief

What is this about?

What did the court decide?

nawazkhantraders v. shriramtransportfinancecompany

Case brief

What is this about?

What did the court decide?

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