Dismissed

K Vinay Kumar v. State Bank of India

DRT24 Mar 2026SA/483/2024

Case brief

AI extract

What is this about?

The Tribunal dismissed the applicant's application challenging the recovery bank's possession proceedings under SARFAESI. It held a lessee under an unregistered agreement has no standing to invalidate the secured creditor's rights over the mortgaged property, noting the rare tenancy had also expired.

What did the court decide?

SA No.483/24 dismissed as there are no merits; interlocutory applications disposed of.

K Vinay Kumar versus State Bank of India — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERYTRIBUNAL- I AT HYDERABAD

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DATED THIS THE 24\H DAY OF MARCH,2O26

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PRESENT: GUMMADI GOPICHAND, PRESIDING OFFICER

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sA.No.483/2c24

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Mr. K. Vinay Kumar, S/o Venkatesh, aged 38 years, #3-6-290# 3, Sai Thirumala Towers, Hyderguda, Hyderabad-SOo 029

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... Applicant

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And

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1 . State Bank of India, Rep. by its Authorized officer, Stresses Assets Recovery branch, 2'd floor, TSRTC bus Stand Complex, Koti, Hyderabad.

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Mr.Ambati Ramakrishna Reddy, S/o late Sri Ambati^pulla Reddy, Aged 58 years, # 8 I lol, Main Road, Tadipatri,

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Anantapur District-S15 41 I

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... Respondents

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Counsel for the Applicant Sri P. Bhaskar Rao Counselfor the lst Respondent Si G. Prabhakar SLLarma Respondent No.2 Reserued on 27.01.2026 Pronounced on 24.03.3026 Uploaded on :24.03.2026

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:ORDER:-

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This applica filed by the Applicant u/s.L7 of the SARF.AESI Act, 2002, initiated by the 1"t Respondent for taking schedule property through Advocate orders of Ld.IX Addt.CJM, Hyderabad in M.P.Na.4p4,/mhTflfl^to the same as illegal and void.

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

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The Applicant is a 3rd party who entered into a Rental Agreement with Mr.Ambati Ramakrishna Reddy, Respondent No.2 herein who is owner of the schedule property on O3.O4.2O24 for a period of eleven months and since then, the Applicant is carrying on his business in the schedule premises. Suddenly, one advocate commissioner visited the schedule property for taking physical possession of the schedule property and affixed Vacate Notice dt.29. 1 1.2024 on the premises directing the Applicant to hand over the vacant possession of the schedule premises. The Applicant is not aware of the loan transaction between his landlord and the l"t Respondent Bank. The lst Respondent initiated proceedings for appointment of advocate commissioner as per the orders of Ld.lX Addl.CJM, Hyderabad for taking physical possession of the schedule property under Section 14 of the SARFAESI Act,2OO2 and so the said proceedings are not legal. Hence the SA.

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The lst Respondent Iiled their Reply denying all the adverse allegations made in the SA and contended that M/s APR Jewellers P.Ltd. availed credit facilities to a tune of Rs.528 lakhs from the 1st Respondent Bank and the 2.d Respondent herein and his wife-Smt.P.Usha Rani stood as guarantors for the said loan facilities and the borrower company being the owner and possessor of SA schedule property created mortgage over the schedule property by deposit of tile deeds as security for the repayment of the said loan. Thereafter, the borrower company committed default in repayment of loan dues and the loan account was classified as NPA and the l"t Respondent Bank initiated proceedings er the provisions of SARFAESI Act, 2OO2 and issued d O24 and, possession notice dt.20.07.2024 to the dt;;; t and his wife by duly following the t is not the owner of the SA schedule a?rdt46prqr6 the Respondent cannot enter into the alleged 024 with the Applicant. As the borrower

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company, Respondent No.2 herein and his wife failed to pay the outstanding dues and deliver the possession of the secured asset, the l"t Respondent proceeded u/s 14 ofthe SARFAESI Act, 2002 for taking physical possession of the schedule property through advocate commissioner. The Applicant is a tenant under un-registered Rental agreement and the tenancy period is also over on 03.03.2025 and so, the Applicant cannot continue in the premises. Accordingly, the 1st Respondent prayed to dismiss the SA.

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Heard Ld.Counsel for the Applicant and Ld. Counsel for the lst Respondent Bank whereas notice not taken against Respondent No.2 and so, claim against Respondent No.2 is dismissed..

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Now the points that arise for consideration are

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i. uhetler tlw Applicant is lnuing loctts-standi to clnllenge the proceedings initiated bg tle 7"t Respondent Bank under the prouisions o/ SARFAESI Act, 2002 in respect of the schedule

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property?

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ii. To what relief ?

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Point lVo.(if:-

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

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Even as peg-; the Applicant, he is neither a borrower nor a mortgagor.$ initiated by the l"t Respondent Bank he is only lessee by virtue of the Rental Respondent No.2 and the said rental for a period of eleven months i.e.

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till 03.03.2025. Further, the said unregistered rental agreement is executed by ths 2"a Respondent herein in favour of the Applicant whereas the 2"4 Respondent is not the owner of the SA schedule property and so, he cannot enter into the alleged Rental Agreement dt.03.04.2024 and so, the said rental agreement basing on which, the Applicant is claiming tenancy rights over the schedule property is a fabricated and concocted one to stall and delay the recovery proceedings initiated by the lst Respondent Bank. Further, all the subsequent transactions in respect of the schedule property shall be subject to the mortgage created in favour of the secured creditor.

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Further, the alleged Rental Agreement dt.03.O4.2O24 is executed in violation of Section 13(13) of the SARFAESI Act,2OO2.

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Section 13(13) of SARFESI Act,2OO2 which reads as follows:

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13(13): No borrouter shall, afier receipt of notice referred to in subsection (2), transfer bg uag of sale, lease or otheruise (otler than in the ordinary murse of his business,/ ang of his seanred assets referred to in the notice, u.tithout pior witten consent of the seanred creditor."

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So, considering all the circumstances, I am of the opinion that the Applicant being a 3ra party who is neither owner nor mortgagor of the schedule property, is not entitled to challenge the proceedings initiated by the lst Respondent in respect of the schedule property under the provisions of SARFAESI Act, 2OO2, by virtue of the unregistered Rental Agreement dt.O3.O4 .2024 executed by 2"d Respondent herein and the Applicant cannot claim any t as a tenant over the schedule property since the F NoI no right to execute the alleged Rental as he brnot owftr\rof the said property. Accordingly, the Appli i,ith"spqrqmF?tfi.rai 6lbt"tt.rs. the proceedings initiated by the U.d.4a.pt^{under the p.o1,i"ior" of SARFAESI Act,2OO2 in respectof} '..l:':,,ji- "''-.^.J ^f .<sup>'.| tlio.llt,rr- ,. .-.o,frt.:''^o '\v7r:

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the schedule property. So, I see no ground warranting interference of this Tribunal with the steps initiated by the 1st Respondent for taking physical possession of the schedule property u/s 14 of the SARFAEST Act,2oo2. Accordingly, this point is answered in favour of the lst Respondent and against the Applicant.

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Point No.(tl):-

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In the result, sA 483/24 is dismissed as there are no merits.

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consequently, the Interlocutory Applications, pending if any, shall stand disposed of. No order as to costs.

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communicate a copy of this order to the parties concerned.

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(Ddated to the P.S transcribed by her, arrected, signed and pronounced bg me in the open court on this the dag of Marclg 2026).

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sd/(G. coPrcHAND) PRESIDING OFFICER

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2 4 ilAn 2ffi0

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K Vinay Kumar v. State Bank of India

Case brief

What is this about?

What did the court decide?

K Vinay Kumar v. State Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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