Dismissed

Ayyanna It Park LLP Rep by P Sreedhar v. State Bank of India

DRT5 Mar 2026SA/427/2024

Case brief

AI extract

What is this about?

Applicants challenged a possession notice under Section 13(4) of the SARFAESI Act, arguing defective NPA classification, non-compliance with publication rules, and delay in replying to objections. The Tribunal found no merit in these claims. The application was dismissed.

What the court decided

AI extract

Ayyanna It Park LLP Rep by P Sreedhar versus State Bank of India — Specific Performance | DRT (2026)

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IN THE DEBTS RECOVERY^TRIBUNAL -^II AT HYDERABAD

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DATED THIS THE^STH DAY^{OF MARCH, 2026}

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

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SECURITISATION^{APPLICATION No. 427} 12024

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BETWEEN:

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M/s. AYYanna IT^{Park LLP} Rep by its Designated^Partner Sri PuralasettY^Sreedhar Regd. Office: 8-3-833/9 Plot No.9, KamalaPuri^ColonY Hyderabad, Telanga^na-500073.

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Also at: Plot No. 350, Street^No.B KakatiYa Hills,^MadhaPur Hyderabad, Telangana-^500090'

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Smt. PuralasettY^Prameela W/o AYYanna^PuralasettY Aged about⁷⁰ Years Occ: Business,^B-3-833/9 Plot No.9, Villa^{No. 9} KamalaPuri ColonY,^HYderabad Telangana-500073.

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Sri PuralasettY^Sreedhar S/o AYYanna^PuralasettY Aged about⁷⁰ Years Occ: Business,^8-3-833/9 Plot No.9,^{Villa No. 9} KamalaPuri^{ColonY, HYderabad} ......Applicants, Telangana-500073.

And

sA.No.427/2024

.....Respondent.

State Bank of India SME Yellareddyguda Branch H.No.B-3-961/B, First Floor Srinagar Colony, Hyderabad Rep by its Authorised Officer. .....Respondent. Counsel for the Applicants : Mr. V. Santosh. Counsel for the Respondent : Mr. Alluri Krishnam Raju.

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-:ORDER:-

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The Applicants filed the present Application u/s.17 of the securitization and Reconstruction of Financiar Assets and Enforcement of Security Interest Act, 2OO2 (SARFAESI Act, 2002) assailing the possession Notice 30.08.2024 issued by the Respondent Bank u/s.13(4) of the SARFAESI Act,2OO2, against the application schedule property.

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The case of the Applicants, in brief, is that they are engaged in infrastructure business and borrowed money from the respondent bank. They have been regular in repayment if EMIs despite riquidity crunch and unfavourabre market conditions. However, the respondent issued demand notice dated 26.06.2024 without declaring the loan account as NpA as per RBI guiderines. Appricants raised objections to demand notice on 26'07.2024 0n the crassification of NpA and rate of interest citing violation of RBI Master Circular RBt/2OIL_L2l4g UBD. BPD. (PCB) MC No.3/09.L4.000/2OLt_12 dated 01.07.2011. Respondent did not give crarity on NpA and interest rate in its reply letter dated 17.08.2024. l'he reply to objections to the demand notice dated 17.08.2024 was not issued within 15 days. Issuance of demand notice un|)ffi,ession notice

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U'6''Y^

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SA.No.427/2024

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dated 30.08.2024 is highly objectionable, unwarranted and contrary to^guidelines issued by RBI. The applicants account does not fall within the purview of definition of NPA under the Act as the secured assets cannot be classified as sub-standard or doubtful or loss assets as the same have not lost their value and are rather of a higher market value. The impugned possession notice was neither affixed at the conspicuous place of schedule properties nor published in two leading newspapers within the time as stipulated under Rules 8(1) and (2) of the Security Interest (Enforcement) Rules, 2002. The demand notice and the possession notice were not served on all the parties. In view of the above facts applicants pray for declaring the possession notice dated 30.08.2024 issued by the respondent bank against the schedule^properties as arbitrary, illegal, premature and not maintainable,

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The Respondent Bank filed its Reply Statement and the submissions of which in brief, are; applicant No.1 availed a loan of Rs.24,00,00,000/- from its Madinaguda Branch vide sanction letter dated 02.04.2019 and applicants 2 and 3 being the managing^partners stood as^guarantors to the loan. Due to breach in repayment, the loan account became NPA^w.e.f. 24.06.2024, followed by Securitisation measures. Applicants objections to the demand notice were duly responded by^reply dated 17.08.2024. Since applicants failed to discharge^the liability within the time stipulated in the demand notice, respondent bank proceeded with^possession notice dated 30.08.2024 u/s 13(4) of the SARFAESI Act, 2002 to all^the applicants. The^possession notice was affixed on the^SA schedule^properties besides taking out the^{publicationin Andhra} Jyothi and New India Express dailies on 3L.08.2024,^{copies of}

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,/Aywa -. i^t/ v-t / //\ -/** l./

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SA.No.427/2024

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which are annexed to the reply statement. If the debt is overdue for 90 days, the account can be classified as NpA even if there is a security and its value remain intact. In view of the aforementioned facts and circumstances, respondent bank prays for dismissal of the SA.

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Ld, Counsels appearing for applicants reported no oral arguments. Heard learned counsel for the respondent. perused the written arguments filed by the applicants and the documents brought on record.

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q The points that arise for consideration are,-

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i) LYhether the Applicants have made out any valid grounds for setting aside the possession nolice dated the 30.08.2024 issued by Respondent Bank under the SARFAESI AcI?

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ii) To what reliel?

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Point No.(il:-

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Availment of loan and default thereafter are not under dispute. The chief contention of the applicants is that NpA classification is not warranted as the secured asset has not lost its market value and in fact its value was appreciated. In response, respondent bank made it clear that a loan account falls into NpA category if the loan amount is overdue for 90 days irrespective of the appreciatlon or depreciation of the asset(s) value. Applicants have not disputed this statement nor did they place any material on record contradicting the respondent,s statement. The second contention of the applicants is that the @s,,

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SA.No.427/2024

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respondent bank has failed to take out the publication of possession notice dated 30.08.2024 within the prescribed time as per the provision of Rule 8(1) of the Security Interest (Enforcement) Rules, 2002. This contention is a bald statement in the absence of bringing on record to the notice of this Tribunal the exact number of days that was exceeded in the publication as per the Rule B(1). Therefore, this contention needs no consideration. As regards the other contention of affixture of possession notice on the secured assets, respondent bank placed photographs evidencing affixture of possession notice dated 30.08.2024 on the secured asset vide pages 32 to 38 annexed to the reply statement. These documents have not been disputed by the applicants. Therefore, the allegation applicants on this count is disproved and needs no consideration. It is the further contention of the applicants that the respondent bank has not issued reply to the objections to the demand notice within 15 days. This contention is not supported by any material evidence from the applicants end. However, as per the documents at pages 15 to 18, annexed to the SA itself, applicants dispatched the objections vide^postal registration receipt dated 02.08.2024 and as per the postal consignment track report the letter was delivered to the applicants on 05.08.2024. On the other hand, as per the material papers placed on record at pages No.19 to 23 of the reply statement, reply to objections to the demand notice was sent to the applicants by registered post on 17.08.2024. These documents are not disputed by the applicants. Therefore, applicants' contention of delay in addressing the issues raised in the objections to the demand notice is not^proved. Thus, the

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SA.No.427/2024

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applicants' contention on this count too is baseless and contrary to the facts borne out of the record.

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In view of the aforesaid discussion, I find that the Applicants have failed to make out any valid ground for quashing the Possession Notice dated 30.08.2024 issued by the Respondent Bank. Therefore, the present Securitization Application is devoid of any merits and is liable to be dismissed.

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Point No.(ii):-

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