Dismissed

Laxmi Venkataramana Constructions v. Union Bank of India (Andhra Bank)

DRT3 Jun 2026SA/53/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed an application filed by a construction company challenging a bank's enforcement proceedings. The court held that the bank followed valid procedures under the SARFAESI Act, including proper notice issuance and rule compliance, in taking physical possession of mortgaged property.

What did the court decide?

The Special Application was dismissed as there were no merits to interfere with the proceedings initiated by the 1st Respondent for taking physical possession.

Laxmi Venkataramana Constructions versus Union… — Contract and Commercial Disputes | DRT (2026)

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IN THE DEBTS RECOVERYTRIBUNAL - 1 AT HYDERABAD

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DATED THISTHE 3RD DAYOF JUNE, 2026

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PRESENT: SRI GUMMADI GoPICHAND, PRESIDING oFFICER

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SA.No.53,/2c22

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M/ s Laxmi Venkataramana Constructions Proprietor V.Kondal Raj, S/o. V. Narsaiah, aged 49 years, Occ:business , R/o 7-l-523, Vittal Chambers, 2.d floor, Flat No. 1, Opp.Gurudwara, Ameerpet, Hyderabad And also at: H.No.7- 1-234&235, Beside Sai Baba Temple, Balkampet, Hyderabad- I 6.

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... Applicant

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Versus

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l.Andrha Bank (now Union Bank of India) Saifabad, Hyderabd-SOO 004

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Rep. by is Authorized Officer.

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Ladharam Patel,

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S/o late Sri Kheta Bhai, aged 79 years, Occ: business, R/o H.No.7-l-234, Balkampet, Ameerpet, Hyderabad.

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Rasiklal Patal, S/o Ladharam patel,

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Aged 56 years, Occ:business, R/o H.No.7-1-234,

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Balkampet, Ameerpet, Hyderabad.

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Prahlad Kumar Patel, S/o Ladharam Patel, Aged 53 years, Occ: R/o H.No.7-1-234, t, 03ilNntn Balkampet, Ameerpet, i1l -:a'-t

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Hyderabad. pondents

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CounselfortheApplicant	; SnG.DineshKumar
Counselfor7stRespondent RespondentsNo.2to4	:SiV.SethumadhauaRao :Exparte

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Reserued on :24.04.2026 Pronounced on : 03.06.2026 Uploaded on : 04.06.2026

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ORDER

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This application is filed by the Applicant u/s. lr of the SARFAESI Act, 2oo2, challenging the proceedings initiated by the lst Respondent for taking physical possession of the schedule property through Advocate commissioner pursuant to the orders of Ld.cMM, Nampally, Hyderabad in crI.M.P.No.a6l2020 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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The Applicant is a proprietorship concern involved in the business of construction. Respondents No.2 to 4 are the joint owners of the land admeasuring7o7.54 sq.yds having MCH No.7- l-284 & 235 situated at Balkampet, Ameerpet, Hyderabad and they requested the Applicant to develop their property as a commercial building and Accordingly, they entered into a Regd. Development Agreement cum GpA dt.2g.o4.2or7 and as per the said agreement, the ratio of construction to be shared between the parties is 57% to the developer and,43o/o to the land owners. During the construction, the Applicant availed loan of Rs.2.40 crores as Secured Overdraft Limit. At the time of sanction, the officials of the 1"t Respondent bank obtained signatures of the Applicant on the blank and unfilled formats. The Applicant was regularly paying the amounts within ii

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within ii ffi*Power.^{However, the Bank issued demand notice} dt. of the SARFAESI Act, 2OO2 and the Applicant .: issuef lette tio O2.1I.2019 u/s 13(3) of the Act. The Bank

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(Enforcement) Rules, 2002. Thereafter, the 1"t Respondent straightway proceeded for taking physical possession of schedure property pursuant to the orders of Ld.CMM, Nampally, Hyderabad in Crl.M.p.No.46/20 and so, the said proceedings are not legal and valid. The boundaries of the schedule properties mentioned in the said notices by thg 1"t Respondent are not correct. Hence the SA.

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The lst Respondent filed their Reply denying all the adverse alegations made in the SA and contended that the Applicants and Respondents No.2 to 4 entered into Deveropment Agreem ent dt.29.o4.2or9 for development of 7oz.s4 sq.yds bearing H.No.7-1-234&23s situated at Balkampet, Ameerpet. As per the terms of the Development agreement, the property is to be developed as Cellar floor, ground floor+ 5 upper floors ad the Applicant is entitled to szo/o of the total constructed area and the Respondents No.2 to 4 are entitled to 43o/o of the developed area. The Applicant has offered its share of developed area as security which is fully described in the demand notice and possession notice. The Applicant availed Secured overdraft Limit of Rs.2o0 lakhs as against the securit5r of schedule property and conlirmed the same. As per the terms of sanction, the rimit is varid for 1z.oz.2o1g, however, the Applicant failed to repay the dues regularly. So, the lst Respondent declared the loan account ofthe Applicant as NpA on 0g.0g.2019 as per the guidelines of RBI. Accordingry, the l"t Respondent issued demand notice dt.O3.O9.2Ot9 u/s 13(2) of the SARFAESI Act, 2002 and admittedly, the Applicant received the said notice and sent objections vide letter dt.o2.1 L.2or9 and the Bank sent their reply vide letter dt.08.11.2019 and thereby complied with section 13(3A) of the Act. Thereafter, the lst Respondent issued possession notice dt.rs.r r.2org and the said blished in two daily newspapers and the same was.. schedule property. Thereafter, the lst Responderg u/ f the SARFAESI Act, 2OO2 for taking physiqb.l.{" possessiori of thd e property through advocate *,,i"si.,0 ldl-W#f ;; -.1, he orders of Ld.CMM, Nampally, :fu.inished by the Applicant in the .,3

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Memorandum confirming deposit of title deeds, the Applicant has not furnished the boundaries to he shops offered as securit5l. Thus the lst Respondent has duly followed the procedure and there are no violations. Accordingly, l"t Respondent prayed to dismiss the SA.

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Heard Ld. Counsel for the Applicant and Ld.Counsel for the l"t

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Respondent whereas Respondents No.2 to 4 remained exparte. Perused the material brought on record.

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Now the points that arise for consideration are

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i. uhether the Applicant has establisled ang ualid grounds for challenging tLe proceedings initiated bA the 7st Respondent for taking phgsical possession of tle schedule propertA u/ s 1 4 of the SARFAES/ Act, 2OO2 through aduocate commissioner?

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ii. To what relief?

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Point .I\Io.(if :-

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

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The undisputed facts of the case are that the Applicant availed Secured Overdraft facility from the l"t Respondent and created mortgage against the schedule property and thereafter, committed default in repaying the loan dues and so, the lst Respondent initiated proceedings under the SARFAESI Act, 2OO2 for taking physical possession of the schedule property.

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B. The specific contention of the Applicant is that the 1"t Respondent without complying with Section 13(3A) of the SARFAESI Act,2OO2 and without serving possession notice and without following Rule 8(1)&(2) of Rules, 2002, straightaway, initiated proceedings for taking physical possession of the schedule prQffi ugh advocate commissioner u/s 14 of the e said proceedings initiated by the 1"t Respondent-hgainst are null and void. lr

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Per contra, lst Respondent contended that admittedly, the Applicant availed loan from the 1st Respondent against the mortgage of the schedule property. After availing the loan, the Applicant committed default in repaying the loan dues as per the terms of the loan agreement and so, the loan account was classilied as NPA as per the guidelines of RBI and the 1"t Respondent issued demand notice and possession notice to the Applicant and others by duly following the procedure contemplated under the provisions of SARFAESI Act, 2oo2 and Rules made thereunder and also in taking physical possession of the schedule property u/s 14 of the SARFAESI Act,2OO2.

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To substantiate their contention, the l"t Respondent Iiled material documents along with the Reply liled by them. As per the said documents, it is clear that after classit,ing the loan account of the Applicant as NpA, l"t Respondent issued demand notice dt.03.O9.2}lg u/s l3(2) of the SARAFAESI Act,2OO2 and the said notice was admittedly received by the Applicant and the Applicant raised objections to the said notice vide their letter dt.o1.11.2079 and the 1st Respondent issued reply vide their letter dt.08. ll.2olg and thereby duly complied with Section 13(34,) of the SARFAESI Act,2OO2. When the Applicant failed to comply with the said demand notice, 1"t Respondent issued possession notice dt. 15.1I.2019 u/s l3(a) of the Act, 2OO2 and the said possession notice was sent to the Applicant through Regd. Post as evidenced by the postal acknowledgements liled by the Bank. The said notice was published in Telugu and English daily newspapers as evidenced by the copies of paper publication filed by the lst Respondent and the said notice was also affixed on the schedule property as depicted in the copies of photographs filed by the l"t Respondent. Thus, the l"t Respondent has duly followed Rule 8(l)&(2) of Securi'y ,-Interest (Enforcement) Rules, 2OO2 in issuing possessron no

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As per the f SARFAESI Act, 2OO2, after issuance of posses8-ign notice rifs 13(4) tif t\e SenfeeSl Act, 2OO2, the secured creaitor ii ai lfte&ftol!flp?ffit urt $.rc"r.red District Magistrate or chief Judicial M,agisl.pate for takin4physical possession of the secured assets.

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In the instant case, after issuing demand notice and possession notice to the Applicant, the l"t Respondent being secured creditor, approached Ld.CMM, Nampally, Hyderabad u/s 14 of the SARFAESI Act, 2OO2 by filing crl.M.P .No.46l20 for appointment of advocate commissioner for taking physical possession of the schedule property. Ld.CMM, Nampally, Hyderabad after considering the materiar on record, appointed advocate commissioner for taking physicar possession of t].e schedule property and the said advocate commissioner visited the schedule property and issued notice to the Applicant to vacate the schedule property and the said notice was admittedly served on the Appricant, so, the said proceedings are perfectly legal and valid.

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So, considering all the circumstances, I am of the opinion that the Applicant is not entitled to any relief as there are no merits in the sA. so, I see no ground warranting interference of this Tribunar with the proceedings initiated by the lst Respondent for taking physical possession of the schedule property u/s 14 0f the SARFAESI Act,2002. Accordingly, this point is answered in favour of the 1st Respondent and against the Applicant.

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Potnt No.(il)t

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