Dismissed

Poreddy Malla Reddy v. Hdfc Bank

DRT23 Mar 2026SA/489/2024

Case brief

AI extract

What is this about?

In a securitization application under the SARFAESI Act, the Debts Recovery Tribunal at Hyderabad dismissed the applicants' plea to set aside the respondent bank's actions. The court found sufficient proof of compliance with Section 13(2) and Rules 8(1) and 8(2) regarding demand and possession notices, upholding the bank's procedural adherence and ruling the application liable to be dismissed.

What did the court decide?

Securitization Application dismissed; interim stay vacated; no order as to costs.

Poreddy Malla Reddy versus Hdfc Bank — Insolvency and Bankruptcy | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL^_ II^{AT HYDERABAD}

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DATED THIS THE 23.d DAY OF MARCH,²⁰²⁶

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PRESENT: SH. RAMESHWAR KOTHE, B.COM,^{L.LB. (HONS.), M.A.} PRESIDING OFFICER

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Securitization Application^No. 489^{OF 2024}

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Poreddy Malla Reddy, S/o. P. Llnga Reddy, R/o. H. No.4- 123182, Swaroop Nagar, Uppal Hyderabad- 500039

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P. Santoshi, D/o. G. Satyanarayana Reddy Aged about 42 years, Occ: Self employed, R/o. H. No.4- 123/82, Swaroop Nagar, Uppal Hyderabad- 500039

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.......Applica nts

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Versus

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H DFC BanK Ltd. Bank House, 6th floor, Roxana Palladium, #6-3-246 & 6-3-244/A, Road No.1, Banjara Hills, Hyderabad - 500043 ...... Respondent

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Counsel for the Applicants : Mr. K. V. Sudhakar

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Counsel for Respondent Bank: Mr. M. Srinivas Reddy

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-:oj_D-E_B:-

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The present Securitization Application is filed by the Applicants u/s.77 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ("Act" hereinafter for short) to set aside proposed action of the respondent bank from taking physical possession of the SA schedule property through order

Q"ryoa'r'

Page 2 of5

SA No. 489/2024

of Hon'ble U Add., Chief metropolitan lvlagistrate, Medcha l-Malkajgiri at Kushaiguda vide advocate commissioner notice dated 29.77.2024 in Crl. M. P. No.103 of 2024.

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The averments of the application, briefly, are that the Applicant approached the Respondent Bank for retail Agri-facility of Rs.15 lakhs on 09.11.2019 and another farm development loan (DOD facility) of Rs.35 lakhs on 09.11.2010. The Applicant avers that it was initially regular in repayment/ but due to heavy rains the crops were damaged, as a result; the Applicant defaulted in repayment, and consequently the Respondent Bank initiated recovery proceedings by issuing an Advocate Commissioner Notice dated 29.77.2024 in Crl.M.P.No.103 of 2024, ln terms of the order^passed by the Hon'ble II Additional Chief f4etropolitan Magistrate, Medchal Malkajgiri at Kushaiguda. The Applicant alleges non-compliance wlth the mandatory provislons relating to issuance of the demand notlce under Section 13(2) and the^possesslon notice under Section 13(4) of the SARFAESI Act, and further submits that no symbolic^possession notlce was affixed on the secured asset nor was the same^published in two leading newspapers, thereby violating the^provisions of^Rule 8(1) and Rule 8(2) of the Security Interest^{(Enforcement)Rules,} 2002 (hereinafter referred to as "the Rules"). In view of^the aforesaid, the Applicant has filed the^present SA^{praying that all} actions taken by the Respondent Bank against the SA^Schedule property may be set aside.

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The respondent bank filed reply statement along^{with list of} documents. The averments thereof, brief, are that admittedly,^the Applicant approached the Respondent Bank for a retail aqricultural facility and a farm development facility in the^year 2019, and^the same were sanctioned. However, the^{Respondentdenies} that^the Applicant was ever regular in repayment of the loan and

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.contends /x"Y".Oh ,/

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Page 3 oI5

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SA No.489/2024

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that the^plea of losses through^{heavy rains and financial problemare} lame excuses to avoid repayment of the^{dues. In consequenceof the} Applicant's irregularity in repayment,^{the account was classifiedas an} NPA on 01.04.2023, and a demand notice dated^12.032024was issued under Section 13(2) of the^{Act. The said notice was returned} as unserved, and accordingly the demand^{noticewas published} in Financial Fxpress^(English daily)^{and Mana Telangana(felugu} daity) on 04.04.2024. As the Applicant^{continued to default,the} Respondent Bank took symbolic^{possessionof the securedasset on} 26.07.2024 through a^possession notice,^{which was affixed at a} conspicuous part of the Schedule^{property and publishedin Financial} Express (English daily)^and Mana^{Telangana(Telugudaily)on} 27.07.2024. Upon the Applicant's^{continuedfailureto clear the dues} after symbolic^possession, the^{Respondent Bank proceeded to take} physical possession of the SA Schedule^{propertythroughan Advocate} Commissioner. The Respondent^{Bank submitsthat it hasstrictly} followed the due^{procedure contemplated underthe provisionsof the} SARFAESI Act and the^Rules, and^{accordingly contendsthat the} present Securitization Application is liable to be dismissed^{with costs.}

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Heard leaned counsel for the^{applicantand learned counsel for} the respondent bank. Perused^{the material brought on record.}

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During the course of arguments,^{learned counsel for applicants} contended that though^{substantial repayment has been made, due to} damage of crop on account of^{heavy rains and resultant losses,} appllcants could not repay the amount.^{Withoutconsideringthe} circumstances, respondent bank initiated^{SARFAESIaction. Without} serving demand notice,^{possession noticeand without affixingand} publishing the possession notice, respondent bank directly^invoked Sec.14^proceedings by^{issuing vacate- notice. The respondentbank} /fl.V^,'Y\ (J/

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Page 4 of 5

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SA No.489/2024

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has failed to follow the procedure of law and hence all the measures are liable to be set aside.

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Learned counsel for the respondent bank while relying on the documents annexed to the reply statement, submitted that it followed the due procedure as contemplated in the Act and Rules of 2002 and accordingly sought for dismissal of the SA.

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The points that arise for consideration are as follows : -

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i) Whether the applicants made out any valid ground for quashing the measures of the respondent bank against the SA schedule property including action to take physical possession of the SA schedule property through Advocate Commissioner appointed under Section 14 of the SARFESI Act?

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ii) To what relief?

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Point No.(i):

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B. Admittedly, the applicants availed Retail Agri Facility and Farm Development Facility against mortgage of schedule property as security and failed to make payment as per repayment schedule. Hence the action of the respondent bank in initiating the SARFESI proceedings cannot be termed as illegal or irregular as contended by the applicant.

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The respondent bank filed material documents along with reply statement as proof of compliance of due procedure of law.^pages 17 to 23 of the material paper annexed to the reply statement are the Photostat copies of postal receipts and paper publication in English and Telugu Daily proving service of demand notice. Similarly,^pages 24 to 29 are the Photostat copies of postal receipts of possession notice, photographs as proof of affixture on secured asset and publication of the same in English and Telugu (vernacular language) newspapers on 27.07.2024. The documents placed on record by the fuo"'

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Page 5 of 5

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sA No.489/2024

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respondent bank remain undisputed,^{In view of sufFicient proofplace} on record, I flnd^{no infraction of section13(2) & 13(a) of the Act and} Rules 3, 8(1) & 8(2) of the^{Rules, 2002. Being securedcreditorthe} respondent bank initiated^{action to take physical possession as per} entitlement under Sec.14 of the^{Act, 2002 which cannot be} categorized as illegal or^arbitrary.

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In the view of above^{observations, I hold that the applicant} failed to make out valid^{grounds to set aside any of the measures} initiated by the respondent^{bank under the SARFESI Act including} action to take^{physicalpossessionof the application schedule} property. Accordingly SA is liable to^{be dismissed'}

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Point No.(ii):

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In the result, the^{Securitization Applicationfails and is hereby} dismissed.

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Consequently, interim^{stay granted vide orderdated} 12.L2.2024 in IA.No.3546^{of 2024 in this SA stands vacated'} 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 in the official^website.

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(Typed to my dictdtion by the PS, corrected,^{signedond pronouncedby me in the open court on thisthe} 23'd doy of Morch,^2026).

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ry(!!'r\ ESHWAR KOTHE) PRESIDING OFFICER

Poreddy Malla Reddy v. Hdfc Bank

Case brief

What is this about?

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Poreddy Malla Reddy v. Hdfc Bank

Case brief

What is this about?

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