Dismissed

M/s Suguna Diary Pvt. Ltd. v. M/S Rbl Bank Ltd.

DRT16 Jul 2026SA/591/2025

Case brief

AI extract

What is this about?

DT Disp. ordered SA No. 591 of 2025 filed by Suguna Dairy and A. Pandu Ranga Reddy to set aside possession measures against their residential property under the SARFAESI Act dismissed. The court held the property is not agricultural and procedural compliance was established.

What did the court decide?

The Securitisation Application and the measures initiated by the Respondent Bank are dismissed.

M/s Suguna Diary Pvt. Ltd. versus M/S Rbl Bank Ltd. — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL - II AT HYDEMBAD

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DATED THIS THE 16rH DAY OF JULY,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. 591 OF 2025

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M/s Suguna Dairy private Limited Rep by its Managing Director Mr. A.^pandu RangJ neddy D, No.^g-2-69 /H/6, Opp _ Hunrrnun Temote Kharmanghat, Manda llaffa-a i noaj"'" Hyderabad, Telangana _ 500 079

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A.^pandu Ranga Reddy S/o A, Narasimha Red'dy Aged 51 years, Occ: Business L.7-t-382/N/t9, pF No. 19, Block No.1 lJagarjuna^{Cotony,ChampaGt ' '- '} Hyderabad, Telangana _ 50b 079

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..........Applicants

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Versus

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M/sRBLBankLrd 6-3-865, Ground FloorMy Home Jupallv. Opp. Green park Hotel. Greenland's Hyderabaj. Telangana - 5OO 016. Represented by its Authorised Officer

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.....Respondent

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C^ounsel for the Applicanrc counsel for Respondent

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: M/s. Mulugu Mailikariuna : Mr. Vivek lain

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-:ORDER:-

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,.,,ri: :::.:.t Securitization Apptication is filed by rhe Appticants securitisation and Reconstrucio. ;r-;;;;1rr"; :1s,':1,:: :^e :::":"i:r:"rent of security rnrerest Act, 2002 (,.^.,;. ;;";;";;; short) to set aside all the measures

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Page² of6

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sA No'^59u2025

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under^{the Act, includingthe action of takingphysicalpossession of} the SA^{ScheduleProperty via advocate commissionernoticedated} 08.L2.2025^{in pursuance to crl M P No 2298/2025 issued by the} Hon'ble^{VII Additional Chief ludicialMagistrate' Nampally'Hyderabad'} 2.^{The avermentsof the application'briefly'are that the} Respondent^{Bankhad sanctioned Term Loan-I of F(s' 2'23'O!'4361-'} Term^{Loan-II of Rs 79'65'0321-and aHome L:an'of Rs'} 1,26,67,1931-^{ln March' 2018 for expansionof their dairybusiness} and^{residential purposes' and contend that they had been regularin} servicing^{the loan accountsuntil the COVID-19 pandemicadversely} affected^{their dairybusiness' resultingin closure of dairy units'} reduction^{in workforce and severe financiallosses The Applicants} further^{allegethat, despite oeing erigiore, the Respondent Bank faired} or moratorium^{in termsof the} to extend^{the benefits of} '"tt'ult"ing RBI^{guidelinesand instead p'oc"eOeOwith recovery measureslt is} further^{contended that dairyOuslness being an agricultural activityis} Act^{The Applicants also} exempt^{from the provisions o"n"} 'OtOttt assert^{that the Respondentiant iltegatly classifiedthe loan accounts} as^{NPA on 06 03 2025 itn-out uOn"'inqto the RBI guidelinesand} initiated^{measuretuna"r tnllnnFAESI Aci withoutcomplYing with} the^{mandatory provisions orl".,a". 13(2), 13(3A), 13(4) and 14 of} (Enforcement)^Rules'2002 the^{Act read with the} '"t"" 'nt"* .:llf^{:"iJ':h JT:^ :l:} tn-",",^{nun".'Rures'f or} ;"** possession^{notice dated,.1'acate} notice,^{thereby deprivingthem of an} Advocate^{Commissioner'svacate rruLrue'',-'-,--^} "^.^{t".. account The} "rr"",",,, to submit ":,",T::;..Jj T:]j]ffi j:"r.":l ievied penar Applicants^{also contend-trr} material^factswhile .;;;**"d ";, .ARFAE'I-Ad'^wronsrv ;i o' 'n" ::ffi::,'::,::. ;t'"t^{MetropolitanMagistrate' and} invoked^{the iurisdiction;;} assets "";"'11"';;; initiated^{coercive t"u"|.lto"'on" *"uatue ot} ffiitured U'Xo$

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PaBe 3 of 6

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sA No. 59v2025

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being substantially higher than the outstanding dues. Hence, applicants pray for setting aside the measures initiated by the respondent against the SA Schedule Property.

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The Respondent Bank filed reply statement along with documents. The averments thereof, briefly, are that respondent admits sanctioning two Loans Against property amounting to Rs. 2,23,07,436/- and Rs. 79,65,030/_, and a Home Loan of Rs. '1,,26,67,793/- to the Applicants, who executed the requisite loan and security documents. It is averred that the Applicants committed persistent defaurts in repayment, resurting in the roan accounts being classified as NpA on 06.03.2025 subsequenuy, demand notice dated 26.03.2025 under Section 13(2) of the Act was issued, as no objections were received under Section 13(3A), possession notice dated 74.07.2025 under Section 13(4) of the Act was issued and duty affixed and published in compliance with Rule 8 of the Rules, 2002. It is further contended that, upon the Applicants, failure to regularise the loan accounts or hand over possession of the secured asset, the Respondent invoked Section 14 of the SARFAESI Act by fiting Crl.M.p.No.229B of 2025 before the ViI Chief Judiciat Magistrate, Hyderabad, resulting in the appointment of an nOvocate commissioner for taking physicar possession of the secured asset. The Respondent specifically denies the allegations regarding nonservice of statutory notices, wrongfur crassification of the accounts as NPA, non-grant of restructuring benefits, wrongful levy of penal interest, and the contention that the loans were exempt from the provisions of the SARFAESi Act on the ground that they were utitised for dairy business. Accordingly, the Respondent prays for dismissal of the SA with exemptary costs.

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Page^{4 of6}

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SA No'^59U2025

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Heard both^{learned counset for the applicantsand learned} counsel^{for the respondentPerused the written arguments filed by} the applicants,^{respondent and also perusedthe materialbroughton} record.

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During^{the course of arguments' learned counsel for the} Applicants^{reiteratedthe averments made in the Securitisation} Application^{and contended that the RespondentBank falled to afford} the Applicants^{a reasonableopportunity to regularisethe loan} account^{and clear the outstanding dues' It was further arguedthat} the Respondent^{Bank had not complied with the mandatory} provlsionsofSectionsl3(2),13(3A),13(4)and14oftheSARFAESI Act, 2002^{readwith the Rules'2o02 Learned counsel also contended} thatthes.Ascheduleproperty'beingusedfordairybusiness'is e*empt^{trom the purviewof the SARFAESI Act as it constitutes an} agricultural^{activity On the aforesaid grounds' learnedcounsel} prayed that^{the measures initiatedby the Respondent Bankagainst} thes.A.schedulepropertybedeclaredillegal,nullandvoidandbe set aside.

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Per contra,^{learned counsel for the Respondent Bank denied the} averments^{made by the Applicants' reiteratedthe contentsof the} reply^{statement,and placed relianceon the documentsannexed} thereto.^{Itwas contended that the loan accounts were rightly} classified^{as NPA in accordancewith the RBt guldelinesand that all} measures^{underSections13(2)'13(3A)' 13(4) and 14 of the} SARFAESI^{Act, 2OO2were initiated after strictcompliancewith the} provisions^{of the Act and the Rules'2OO2'Reliancewas placed on the} judgment of^{the Hon'ble SupremeCourtin L&T HousingFinance} Limited^{v. TrishulDevelopersand enother' (2020)10 scc 659'} wrrerern^{it was held that unless substantia' ot""}ffi]Sto nu""}

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Page 5 of 6

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sA No.59U2025

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been caused on account of any procedural lapse, the measures initiated under the SARFAESI Act cannot be invaridated. Accordingry, learned counsel prayed for dismissal of the SA.

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The points for consideration are as follows : _

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i) Whether the applicants made out any valid ground for guashing the action of -the Respondent'Bank fo; tuking the physical possession of the SA schedule property through Advocate Commissioner appointed under th,e piovisioi-of the Section 74 of the SARFESI Act?

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ii) To what relief?

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Point No.(i):

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B. The principal contention advanced by the Applicants is that the s.A. schedure property is exempt from the purview of the sARFAESI Act by virtue of Section 31(i) of the Act. However, a perusal of the description of the secured asset crearry revears that the schedure property is a residential property and not an agricultural land. In the absence of any materiar to estabrish that the secured asset fails within the exemption contemplated under Section 31(i) of the SARFAESI Act, the said contention of the Appricants is devoid of merit and is accordingly rejected.

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The Respondent Bank filed material documents along with reply statement as proof of compliance of due procedure of law. pages 12 to 19 of the material paper filed separately are the photostat copies of postal receipts and publication of the same in English and Telugu (vernacular language) newspapers on 25.04.2025 proving service of demand notice, Similarly, pages 20 to 24 are the photostat copies of postal receipt of possession Notice dated L4.07.2025, photographs as proof of affixture on secured assets and pubricarion of the same in

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Page 6 of⁵

sA No. 591/2025

EnglishandTelugu(vernacularlanguage)newspaperson 16.07.2025.In^{view of sufficient proof place on record' I find no} infraction^{of section13(2) & 13(4) of the Act and Rules3' B(1)& B(2)} of the^Rules ,^{2OO2' As a securedcreditor the RespondentBank} initiated the^{SARFESI proceedings'/which cannotbe categorizedas} illegal^{or arbitrarY'}

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In^{view of the above observations'it is concludedthat the} Applicants^{havefailed to establishany valid ground to interdictthe} measures^{initiated by the RespondentBank under the provisionsof} the Act^{against the SA scheduleproperty'Accordingly'the SA is liable} to be dismissed'

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Point No.(ii):

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the Securitisation^{Applicationfails and is hereby} 11. In^{the result,} d ism issed^.

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12.^{ConsequentlY,} Interlocutory^{Applicationspending'if any' shall} stand closed.

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13.^{No order as to costs'}

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Communicate^{a copy of this orderto the partiesconcernedand} upload^{in the official website'}

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n-the^{o4encourt on this} (Typed to my dictotion^{by the steno" coffected'signed ond pronouncedby m} the ldh^{do| ol tul, 2026)} / / ffii#, PRESIDING^OFFICER

M/s Suguna Diary Pvt. Ltd. v. M/S Rbl Bank Ltd.

Case brief

What is this about?

What did the court decide?

M/s Suguna Diary Pvt. Ltd. v. M/S Rbl Bank Ltd.

Case brief

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