Dismissed

A Ramesh Babu v. M S Shriram Finance Limited

DRT13 Jan 2026SA/57/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal considered an application challenging a possession notice issued under the SARFAESI Act. The tribunal held that the notice was valid as it was received by the applicant via registered post and published in newspapers, ruling that non-affixation is not a ground for challenge. Application dismissed.

What did the court decide?

Application SA. No. 57/2023 dismissed as there are no merits; pending interlocutory applications disposed of.

A Ramesh Babu versus M S Shriram Finance Limited — Banking and Recovery | DRT (2026)

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IN THE DEBTS^{RECOVERYTRIBUNAL} -^{1 AT HYDERABAD}

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DATEDTHISTHE 13TH^{DAYOFJANUARY'2026}

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PRESENT: SRI GUMMADI^{GOPICHAND, PRESIDING OFFICER}

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SA.No.57./2023

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A. Ramesh Babu, S/o A. Pothanna, Aged 56 years

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Smt.A. Gayatri, W/o A.Ramesh Babu, Aged 42 years, Both R/o D.No.2i-367, Yadava Street, Dharmavaram, Satyasai District.

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A. Jaya Prakash, S/o Pothanna, Aged 49 years, Both R/o D.No.25-33, Yadava Street, Dharmavaram, Satyasai District ... Applicants

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Versus

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l. Shriram Finance Ltd., (formerly known as Shriram Transport Finance ComPanY^Ltd') Regd. Office at: Sri Towers Plot No. 14, South Phase, Industrial Estate,GuindY, Chennai600 032 Admn. Office at: No.3-6-478, Anand Estate, 4ft floor, Liberty Road, Himayath Nagar, Hyder abad-29 Rep. by its Authorized Officer Anantapur Zone, No.251644-ll-4, Parthasarathi nagar, 1 3 ,i$i ?iltl Penukonda Road, Dharmavaram, A.P.

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Sri ShaikAbdul Khallel Pasha, S/oShaik Abdul Hameed, Aged 50 years, H.No. 1- 1-639, 4ft cross, R.K. Nagar, Ananthapur-s1500 1. . .. Respondents

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Counsel for the Applicants : Sri R. Raui Kumar& Ms.Jagadama Counsel for 7"t Respondent : Si M.Indrasen Respondent No.2 : Exparte Reserued on : 28.1 1.2025 Pronounced on :13.01.2026 Uploaded on :16.01.2026

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ORDER

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This Application is filed u/s.17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2OO2 (SARFAESI Act,2OO2l challenging the action of the l"t Respondent in issuing Possession Notice dt.28.O1.2O23 in respect of the schedule property and to declare the same as null and void.

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The averments made in the Application in brief are as follows:

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The Applicant No. 1 who is running a rice mill in the name of Modern Rice Mill at Dharmavaram availed loan of Rs. 1 crore from Shriram City Union Finance Ltd. for development of business and the Applicant No. 1 created mortgage in respect of the schedule property to secure the said loan whereas Applicants No2.&3 stood as guarantors and the Respondent No.2 is a co-obligant. During the Covid- 19 period, the lst Respondent classified the loan account No. 1 as NPA and also invoked arbitration tration proceedings, Applicant No.1 paid Rs.19 t. The Arbitrator pronounced the award on the said award, the Applicants Iiled Arbi of.J'{oiPpl&9P2 on the file of the Ld.District Judge, Anan During the cy of the said OP, the lst Respondent issued u/s 13(2) of the SARFAESI Act,2002

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and the said notice was received by the Applicant No.l. The Applicant No.1 raised objections in response to the said notice. Without considering the request for settlement, the lst Respondent issued^possession notice dt.28.O1.2O23 without following the procedure and so, said notice is not legal and valid. Hence the SA.

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.). The l"t Respondent filed their Reply denying all the adverse allegations made in the SA and contended that Applicant No.l availed loan from the l"t Respondent whereas Applicants No.2&3 stood as guarantors. After availing the loan facilities, the Applicants committed default in repaying the loan dues and so, the lst Respondent appointed Arbitrator in view of the arbitration ciause contained in the loan agreement. However, the Applicants failed to comply the Award passed in the arbitration proceedings and so, the 1"t Respondent initiated proceedings under the provisions of SARFAESI Act, 2OO2 and issued demand notice and possession notice to the Applicants by duly following the procedure contemplated under the provisions of SARFFAESI Acl, 2OO2 and Rules made thereunder and there are no violations. Accordingly prayed to dismiss the SA.

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Heard Ld. Counsel for the Applicants and Ld. Counsel for the 1st Respondent whereas the 2"d Respondent remained exparte. Perused the material brought on record.

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Now the points that arise for consideration are

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for l"t

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Point No.lil:- , 13 Jilli 7U6
.

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

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There is no dispute regarding the fact that the Applicant No.l availed credit facilities from shriram city Union Finance Ltd. which later amalgamated with Shriram Transport Finance company Ltd. and changed its name as shriram Finance Ltd. w.e.f. 3o.rr.2o22. Applicants No.2 & 3 stood as guarantors and Applicant No. 1 created mortgage against the schedule property and later, the Applicants committed default in repayment of loan dues and so, the loan account was classified as NpA. There is no also no dispute regarding the fact that the lst Respondent served demand notice dt.26.O9.2O22 u/s 13(2) of the SARFAESI Act, 2OO2 and, the Applicants though submitted that they sent objections in response to the said demand notice, but not filed any material documents to prove the same.

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The specific contention of the Applicants is that during the pendency of the Arbitration O.P.No.23l2022 on the of Ld.District Judge, Ananathapuram, the lst Respondent issued the impugned demand notice dt.26.O9.2022 and possession notice dt.2g.Ol.2O23 and so, the said notices are not legal and valid.

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But the lst Respondent contended that in view of the arbitration clause contained in the loan agreement, they have invoked the arbitration proceedings and Arbitration Award was also passed against the Appricants but the Applicants failed to comply with the said Award and challenging the said Award, they liled o.p.No.23l22 on the lire of Ld.District Judge, Ananthapuram and the same is pending. In view of the defaut committed by the Applicants in paying the outstanding dues as per the Arbitration Award, the I ent invoked the provisions of SARFAESI Act, 2OO2 possession notice to the Applicants and 2"d the procedure and there are no violations.

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In order to prove their contentions, the lst Respondent filed material documents along with the Reply filed by them. As per the said material documents, it is clear that the lst Respondent issued demand notice dt.26.O9.2o22 and admittedly, the Applicants received the said notice. When the Applicants failed to comply with the said demand notice, the lst Respondent issued possession notice dt.28.0t.2O25 and sent the said notice to the Applicants through Regd. Post and the same was received by the 1st Applicant as evidenced by the postal acknowledgments filed by the lst Respondent. The said possession notice was published in Telugu and English daily newspapers as evidenced by the copies of the paper publication filed by the 1st Respondent. However, no documents are filed by the 1st Respondent to prove that the said possession notice is affixed on the schedule property. But mere non-affixture of the possession notice on the schedule property particularly when the borrower is having knowledge of the possession notice issued by the secured creditor, cannot be a ground to challenge the said notice. When the Applicants received the possession notice and the said notice is also published in two daily newspapers including one in vernacular language, even if the said notice is not affixed on the secured asset, it cannot be a ground for the borrower as the affixture is meant only for the general public. In this regard, the Hon'ble High Coutt of Andhra Prqdesh in M/s Solithro pritnte Limited. Vs. The Debts recoaery Tribunal-\ reported. in 2Ol8 SCC Online Hgd, 788, has held in paragraph IT, which is as follows:

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In this regard, it mag be noted. that Rule B(1) of the Rules of 2002 reqrires the authorised officer of the seqtred. cred.itor to deliuer a possession notice, prepared. as nearly as possible in Appendix-IV to the Rules of 2002, to the borrower and. bg affing it on the outer d.oor oi at a conspianous place of the property. It is that the borrower companA receiued. the possession .2012. The complaint was that it had. not been ule propertg. Alfixture of suchpossesslon , door or at a conspicuous place of the propertg at large. This is clear from the contents of the

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statutory format of tlrc possession notice in Appendix_IV to the Rttles of 2002. Thereunder, *Le borrotaer in partianrar and. the public in general are cautioned not to deal with the propertg. In such a situatiory it is not open to the borrower cnmpanA, lwuing alreadg receiued the possessio n notie d"ated O4.Og.2012, to complain of failure on the part of ING vgsga Bank Limited in alfixing *e notice on the premises of tte secured assets. If at att, such a gieuance cnuld be projected. by a member of the general public ,tho dealt uith the secured. assefs in ignorance of the possession notice. Such is not the case presentlg.

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Hence in the circumstances and in view of the ratio laid down by in the Hon'ble High court of Andhra pradesh in the decision referred supra, it is quite clear that the l"t Respondent has scrupulousry foll0wed the procedure laid down under the provisions of sARFAESI Act, 2002 and Rules made thereunder in issuing possession notice dt.2g.01.2023 u/s l3(4) of the Act, 2002. Accordingry, this point is answered in favour of the lst Respondent and against the Applicants.

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Polnt No.(ti)r

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In the result, sA sz l2o2z is dismissed as there are no merits in the SA. 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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bg her, corr-ected, signed and. pronounced. bg me in the open nuary, 2026)

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6

A Ramesh Babu v. M S Shriram Finance Limited

Case brief

What is this about?

What did the court decide?

A Ramesh Babu v. M S Shriram Finance Limited

Case brief

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