Dismissed

M/S. Uday Enterprises v. Unity Small Finance Bank Limited

DRT17 Aug 2026SA/443/2025

Case brief

AI extract

What is this about?

In an application under Section 17 of the SARFAESI Act, 2002, the Applicants challenged the bank's proceedings for taking physical possession of mortgaged property. The Tribunal rejected the challenge, finding that the bank had validly served demand and possession notices in compliance with the Act and Rules, obtaining a court order before proceeding via an Advocate Commissioner. The application w

What the court decided

AI extract

M/S. Uday Enterprises versus Unity Small Finance Bank Limited — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERYTRIBUNAL _ 1 AT HYDERABAD

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DATEDTHISTHE 1 7TH DAYOFAUGUST, 2026

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PRESENT: SRI GUMMADI GOPICHAND, PRESIDING OFFICER

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sA.No.443./2c25

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M/s Uday Enterprises Plot No.69,70,129,13O, New Chaitanya Colony, Korremula Road, Narapally, Hyderabad-Soo 088 Rep. by Mrs.Telu Krishnaveni

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Mrs.Telu Krishnaveni, W/o Anil Kumar Telu, Aged 44 years, Occ:business, R/o H.No.2-3-512 I 4 / I tO, Chennareddy nagar, Saibaba Temple, Amberpet, Hyderabad-S00 013

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Telu Uday Kumar, S/o Anil Kumar Telu, Aged 2I years, Occ:student, R/o H.No.2-3 -5L2 / 4 / 1 tO, Chennareddy nagar, Saibaba Temple, Amberpet, Hyderabad-S0O 013

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Mr.Anil Kumar Telu, S/o Telu Yallaiah, aged 48 years, Occ:business, R/o H.No.2-3 -5t2 I 4 I t Lo, Chennareddy nagar, Saibaba Temple, Amberpet, Hyderabad-Soo 013 ... Applicants Versus 1. Unity Small Finance Bank. Rep. by its Authorized officer Corporate Offrce:Centrum House, 6ffi CST Road, Vidyanagari Marg, (f s^{'q</sup> Kalina, Santacrux €, Mumbai-400O98. l.,¹ I^AUD wts^*ll Kh}

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2.Unity Small Finance Bank, Corporate Office:4O, Basant Lok, Vasant Vihar, New Delhi- 1 10057 Rep. by its Authorized officer

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.. . Respondents

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Counsel for tLe Applicants C ounsel for Re s p ondents

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Si D.S.Pauan Kumar Sri G.Adian Kiran Raj

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Reserued on Pronounced on Uploaded on

: 13.07.2026

: 17.O8.2026

: 17.O8.2O26

ORDER

This application is filed by the Applicants u/s.17 of the SARFAESI Act, 2002, challenging the proceedings initiated by the Respondent bank for taking physical possession of the schedule property through Advocate commissioner pursuant to the orders of Ld.IV Addl.CJM, Hyderabad in Cr1.M.P.No.2408/25 and to declare the same as illegal and void.

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The averments made in the application, in brief, are that:

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Applicants availed mortgage loan of Rs.25,73,273/-for purchase of waste paper from the Respondent Bank and the Applicant No. I represented by Applicant No.2 created mortgage against the schedule property to secure the said loan. Subsequently due to loss in the business, the Applicants could not pay some instalments and the Respondent classified the loan account as NPA by calculating huge interest. Thereafter, the Respondent Bank issued demand notice d1.L8.O7.2O24 and the same was not served on all the Applicants. Without serving possession notice to the Applicants and guarantors, the Respondent straightaway ploQge-ded for taking physical possession of schedule properry.pgrsqapJ'.'to."the. orders of Ld.IV Addl.CJM, Hyderabad and the^'g4u6"",. 6ij--iS.ioo.r issued vacate notice dt. 10. lO.2O25 demanding the Rp/licants'te "foandover the possession of the schedule prdp6|ty *fu&,ilUaffry ,r,af{iUit."v and so, the said

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proceedings are not lega1 and valid. The impugned possession notice is not published in two daily newspapers and also not affixed on the schedule property as contemplated u/r 8(1)&(2) of Security Interest (Enforcement) Rules, 2OO2. Hence the SA.

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J. The Respondent Bank filed their Reply denying all the adverse allegations made in the SA and contended that Applicants availed mortgage loan from the Respondent Bank and Applicant No.l represented by Applicant No.2 created mortgage against the schedule property and thereafter, the Applicants committed default in repayment of loan dues. So, the Respondent Bank classified the loan account of the Applicants as NPA as per the guidelines of RBI. Thereafter, the bank issued demand notice and possession notice to the Applicants by duly following the procedure. Thereafter, the Respondent proceeded u/s 14 of the Act, 2OO2 and obtained orders from the Ld.IV Addl.CJM, Hyderabad for appointment of advocate commissioner for taking physical possession of the schedule property and the said advocate commissioner issued notice to the Appticants to vacate the schedule property and thus there are no violations. Accordingly, Respondent prayed to dismiss the SA.

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Heard Ld. Counsel for the Applicants and Ld.Counsel for the Respondent bank. Perused the material brought on record.

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Now the points that arise for consideration are

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i. whether tte Applicants haue established ang ualid grounds for challenging the initiated bg the Respondent Bank for taking schedule propertg u/s 14 of tle SARFAESl

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ii. To what 17 lijf ?W

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Point JVo.(il:-

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During the course of arguments, Ld. Counsel for the Applicants and Ld. Counsel for the Respondent Bank reiterated their respective versions as stated supra.

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The undisputed facts of the case are that the Applicants availed loan from the Respondent and created mortgage against the schedule propert5r and thereafter, committed default in repaying the loan dues and so, the Respondent Bank initiated proceedings under the provisions of SARFAESI Act, 2OO2 for taking physical possession of the schedule property through advocate commissioner.

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The specific contention of the Applicants is that the Respondent without serving demand notice and possession notice and without following Rule 8(l)&(2) of Rules, 2002, straightaway, initiated proceedings for taking physical possession of the schedule property through advocate commissioner u/s 14 of the SARFAESI Act, 2OO2 and so, the said proceedings are null and void.

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Per contra, Respondent Bank contended that the Applicants committed default in repaying the loan dues and so, the loan account was classilied as NPA as per the guidelines of RBI and the Respondent issued demand notice, possession notice to the Applicants by duly following the procedure as contemplated under the provisions of SARFAESI Act,2OO2 and Rules made thereun d also initiated proceedings u/s 14 of the SARFAESI Act, possession ofthe schedule property through ad ing due process of law.

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ii.t"^{1 '7 /r]6e ?afr} Ws#

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To substantiate their contention, the Respondent Bank filed material documents along with the Reply filed by them. As per the said documents, it is clear that the Respondent issued demand notice dt.lg.O7.2024 wls 13(2) of the SARAFAESI Act, 2OO2 and sent the said notice to the Applicants and others through Regd. Post as evidenced by the postal track reports filed by the Respondent and the said notice was also published in two daily newspapers as evidenced by the copies of paper publication filed by the Respondent. Thus there is valid service of demand notice on the Applicants. When the Applicants failed to comply with the said demand notice, the Respondent Bank issued possession notice dt. 1g.11.2024 ttl s 13(a) of the Act, 2OO2 and the said possession notice was sent to the Applicants and others through Regd.post as evidenced by the postal track reports filed by the Respondent. The said notice was published in Telugu and English daily newspapers as evidenced by the copies of paper publication liled by the Respondent and the said notice was also affixed on the schedule property as depicted in the copies of photograph liled by the Respondent. Thus, the Respondent has duly followed Rule g(l)&(2) of Security Interest (Enforcement) Rules, 2OO2 in issuing possession notice in respect the schedule property.

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As per the provisions of Section 14 of SARFAESI Act, 2002, after issuance of possession notice u/s 13(a) of the SARFAESI Act, 2OO2, the secured creditor is at liberty to approach the concerned District Magistrate or chief Judicial Magistrate for taking physical possession of the secured assets. In the instant case, after issuing demand notice and possession notice to the Applicants, the Respondent Bank being secured creditor, approached Ld.IV AddI.CJM, Hyderabad u/s 14 of the SARFAESI Act, 2002 by Iiling Crl.M.P.No.24Oa 125 for appointment of advocate commissioner for taking physical the schedule propert5r. The said advocate to the Applicants and the same was the said proceedings are perfectly legal and valid, 17 AUC M

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So, considering all the circumstances, I am of the opinion that the Applicants are not entitled to any relief as there are no merits in the SA. So, I see no ground warranting interference of this Tribunal with the proceedings initiated by the Respondent Bank for taking physical possession of the schedule propert5r u/s 14 of the SARFAESI Act,2002. Accordingly, this point is answered in favour of the Respondent and against the Applicants.

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Potnt No.(it)r

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