Dismissed

Natems Sugar Pvt. Ltd. v. Stci Finance Ltd.

DRT30 Jan 2026SA/455/2024

Case brief

AI extract

What is this about?

This Debts Recovery Tribunal dismissed an application seeking to set aside auction measures under the SARFAESI Act. The Applicant failed to prove procedural non-compliance, and the Tribunal noted the sale notice had become infructuous as the auction did not materialize. Justice denied the claim that an unadmitted IBC Section 7 petition barred SARFAESI enforcement.

What did the court decide?

dismissed the Securitization Application (SA) No. 455/2024 and declared pending interlocutory applications closed.

Natems Sugar Pvt. Ltd. versus Stci Finance Ltd. — Insolvency and Bankruptcy | DRT (2026)

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IN THE^{DEBTSRECOVERYTRIBUNAL - II AT HYDEMBAD} DATED^{THIS THE3OIhDAY OF JANUARY' 2026}

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PRESENT:^{sH RAMEsHwARr[?tSrtii;Ei''L LB (Hons)' M'A'}

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Securitization^{Applicatlon No' 455 OF 2024}

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Hrily.i3,Ttnf.'xxii.'ii:iiilr.'"" or. Ramnath^{Nanda Kumar} Havinq^{Regd. Offlce at: III Floor'Plot No' 22} i:m[1.'"',""'l,l',ll??l;]lll"33lTJ Telangana.

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Also having^{Office at:} 14-7g, Sti^{RamNagar Colony'} Patancheru,^Medak, Hyderabad^{- 502319'} Telangana.

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.....APPlicant.

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versus

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STCI^{FINANCELIMITED} .. (FormerlY Securities^Traolng torooration^{of India Limited)} a/R1 802^{A-Wing8th Floor'} t-iurutnon^{Innova, Marathon Nextgen} 3 1,^{" '} ::ti:ru :w",lj;'J::4".'

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......^ResPondent

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Mummaneni^{Vazra Laxmi} Counsel^{for the A\Plicant : Sri} Duwa^PavanKumar Counsel^{for the Reslondent:Sri}

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-:ORDER:-

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1.^{The present Securitization Applicationis filed by the Appllcant} uls-17^{oftheSecuritisationand Reconstructionof FinancialAssets} and^{Enforcement of Securityhterest Act' 2OO2 C'Act"hereinafterfor} short)^{to set aside all measuresinitiated under Sections 13(2)and} the Act bv^the '"'o'"o"frff.lliincrudins lriol "i,n" 'ARFAEsI

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Page 2 of6

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sA No. 455/2024

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proposed sale notice 21.17.2024. dated 06.11.2024 scheduling auction on

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The avermenb ol respondent sanctioned u! ,tn"^{uo'"tut'on'briefly' are} that the disbursed a loan of Rs 60,00,00,000/with interest rate or rs.sl sa re n otice 0",, o, " "^{n J.', :L::: ;:::|,^;:,, ^::::li",j.::} Rs.l17.0O Crore against evaluated price of Rs l8o'oo crore for secured assets; applicant. ks stay of auction to prevent irreparable loss due to undervalu Applicant avers arbitrary NpA classification; impropeurut'on repry to section ,r,ro, ''t"^{of section 13(2) demand} notice; nont"presentation; improper valuation; and failure to o.r" ,olo]r' . rnterest (Enforcer"n,, notice under Rule 8(6) of security The appricant insists that ^r,1'l ] 2002 (hereinafter "rules" for short). tott"o sale undermine the corporate Insolvency Resolution oro, (CIRP) causing undervaluation of assets and irreparabre ,"* ,iii the applicant and its creditor. Appricant over arrirms that il ";;;;;" nd Bankruptcy code, 2016 (IBc) prevairs 'ARFAESI^{Act; thus,} Orr,n, the moratorium period under Section 14 of IB. ".r- ... is prohibited, as uphetd in supreme ,.r,n ,^" rr)'""i!,r,respondents e Industries Ltd' v' rcrcl Bank eor') 1 scc 407. n* ,*"ro' ," schedure properties.^{'" '-set aside all measure} against the sA

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The respondent fitp.t .^""."t^i.,r, ";;;jffJ:|':tatement in the sA. rhe averments sousht corporate Term Loan or Rs. 60 crore ", ;-;;';:j'plicant o""o r r. , o', u 7 : issued sanction reft er "^{; i'i i; ::" ^lespondent} both parties executed a loan agreement secured by ,on.ot'o'u' tn.on deposit of titte deed. Fottowing oo, or,l' on' ,r'l?"respondent issued defaurt notice dated ,u..roro, ",'t72'2079' :ant admitted loan availing and sought , /Aytrr,. _/^.5;.1.)r' ^,

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sA No.455/2024

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PaSe 3 of 6

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time to clear overdue^payment. Due to repeated default^the respondent declared the account as NPA on 30.09.2020^and subsequently issued a loan recall notice dated 08.10.2020 for^sumof Rs. 59,46,53,863/-.In response to recall^{notice,applicant admitted} default and sought repayment time;^{respondent issuedDemandcum} Guarantee Invocation notice dated 24.L0.2020 and^demandnotice dated 18.11.2020, to which applicant again admitted default^and requested restructuring. Non-payment led to respondent^flling Section 7 IBC petition before NCLT Hyderabad^{(pending admission);} respondent then issued Section 13(2) SARFAESI demand^{notice dated} 08.05.2021 for Rs.64,77,47,732/-, took symbolic^possessionon !6.09.202f under section 13(4),^proceeded under section^{14 for} advocate commissioner who took^{physical possessionand issuedand} published notice on L9.O4.2024. The respondent alleges that no CIRP is pending, although section 7 IBC^{petitionwas filed but it is yet to be} admitted, hence the respondent is entitled to^proceedunder SARFESI. Further the respondent affirms that^{applicant has complied} with the^provision under section 13(2) of Act, 2002;^{where demand} notice and^possession notice were duly served to^{the applicant.} Applicant's contention of wrongful^{valuation is denied as respondent} asserts valuation of schedule^{propertycompliedstrictly with legal} provisions. The applicant is abuslng the^process of law and trying^to cause unwanted delay to the^{recovery of the said loan,hence the} present application to be dismissed.

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Applicant's right of arguments^{was forfeited fornon-} representation vide docket order dated^{17.09.2025. Heard the} learned counsel for the respondent.^{Perused the writtensubmissions} filed by learned counsel for respondent^{and the material broughton} record. ,f/rya-t$L (-/ '}o'-

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Page 4 of5

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sA No.455/2024

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During the course of arguments, learned counsel for respondent reiterated the contents of reply statement averments that NPA classification, service of demand notice, possession notice/ and taklng physical possession of schedule properties were all effected strictly in accordance with the provisions of the Act and Rules of 2002. The applicant never approached the respondent for settlement of account. He would also submit that although application under Sec.7 of the IBC, 2016 has been filed, no CIRP proceedings have been initiated against the applicant. According to learned counsel, proceedings under IBC and SARFAESI Act are two distinct proceedings and the respondent is well within its rights to enforce the mortgage. He also denied undervaluation of the property and said that a proper, accurate and correct valuation has been obtained from the approved valuer. The applicant could not establish anything contrary to the evidence of the respondent. With these submissions, learned counsel sought for dismissal of the SA in limini.

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The points for consideration are as follows: -

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i) Whether the applicants made out any valid ground to quash the measures of the respondent against the SA schedule property including sale notice dated 06.11.2024, as prayed for?

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ii) To what relief?

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Point No.(i ):

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As reported by learned counsel for the respondent on 27.77.2024 and 06.02.2025, the proposed e-auction did not materialize. Hence, the SA itself has become infructuous insofar as the impugned sale notice and its related grievances are concerned.

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The other averment in the application is non-compliance of provisions of Sections 13(2) and 13(4) of SARIAESI Act read with aw6u

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sA No.455/2024

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Page 5 of 6

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Rules 8(1) and 8(2) of the Security Interest^{(Enforcement)Rules,} 2002. fo controvert the same, the respondent filed^copiesof documents as^proof of due compliance of^{procedure.A perusal of} the same would reveal that the applicant^responded to^{the loan} recall notice dated 08.10.2020, admitting default in^{repayment and} seeking time for regularization of the account.^Thereafter, respondent issued demand cum^guarantee invocation^{notice dated} 24.f0.2020 followed by demand legal^{notice dated 18'11.2020.The} applicant issued reply, once agaln admitting^{the defaultand} informing that restructuring^plan was being submitted.^{As no} payment came forth, respondent issued demand notice^for Rs.64,77 ,47,732/- to be^{paid within sixty days.Copyof the demand} notice along with^postal receipts^{is placed} on^{record. In view of the} ample opportunity^given by the^{respondentto clear the admitted} debt, the applicant cannot be^permitted to^aver that^demandnotice was not 'properly' served.^Respondent also^{placed on record} possession notice containing acknowledgement of receipt,^{proof of} affixture of the same on secured^assets and^{publicationin English} and Telugu newspapers. None of the documents^{filed by the} respondent have been disputed by the applicants.^{Hence they} remain unchallenged and un-rebutted.^{Under suchcircumstances,it} is concluded that the applicants failed to^{establish non-compliance of} procedure adopted by the respondent. Being secured^creditor, respondent initiated action for taking^{physical possessionof the} secured assets as^per entitlement^{undersection 14 of the Act 2002} and such action cannot be trearqd^{as irregularor illegal. Accordingly,} SA is liable to be dismissed. /t lw.n^'2 --n.t\ l_//