Allowed

Mohammed Faheemuddin v. Kotak Mahindra Bank Limited

DRT25 Aug 2026SA/82/2026

Case brief

AI extract

What is this about?

A Debt Recovery Tribunal allowed a Securitization Application filed by a borrower against a bank. The court set aside the demand notice and possession notice, noting the bank failed to contest the matter, leaving the applicant's allegations of non-compliance with the SARFAESI Act unrebutted.

What did the court decide?

Allowing the Securitization Application by setting aside the demand notice under Section 13(2) and the possession notice under Section 13(4) of the Act.

Mohammed Faheemuddin versus Kotak Mahindra Bank Limited — Banking and Recovery | DRT (2026)

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

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DATED THIS THE 25TH DAY OF AUGUST,²⁰²⁶

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PRESENT: SH. RAMESHWAR KOTHE, B.Com,^{L.LB. (Hons.), M.A'} PRESIDING OFFICER

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Securitlzation Application No. 82 OF 2026

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MOHAM14ED FAHEEIVIUDDIN, S/O NAWAB^]ANI, AGED ABOUT 38 YEARS, OCC: BUSINESS. R/O H. No. 2.3-5471L/B/4, QUADRI BAGH, AMBERPET, HYDERABAD

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Applicant

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Versus

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NAVBHAMT COOPERATIVE URBAN^BANKLlMITED, REP, BY ITS AUTHORIZED OFFICER, 7-79-72172/t07, PLOT NO. 12, BRINDAVAN^COLONY, Dr. A.S. RAO NAGAR, HYDERABAD^- 500 062 .....Respondent

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Counsel for the Applicant : Dr. C,S, Chakravarthy Respondent : Ex^parte

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-: o_B_Dl_B:-

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The^present Securitization^{Application is filed by the Appllcant} u/s.77 of the Securitlsation and^{Reconstructionof FinancialAssets} and Enforcement of Security^{Interest Act, 2002("Act" hereinafter for} short) to set aside all the measures^{inltiatedby the RespondentBank} under sections 13(2) and^{13(4) of the SARFAESIAct, 2002, read with} Rules 8(2) and 8(6) of the Security Interest^{(Enforcement)Rules,} 2OO2^(hereinafter referred to as^{the "Rules"),includingthe impugned} Sale Notice dated 27.07.2026, whereby^{the auctionof the SA} Schedule Property was^fixed on^23.02.2026.

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The averments in the appllcation, briefly stated, are^that applicant being the ProPrietary concern and had availed a^TermLoan of Rs.7,50,000/- in^year2019 and a Top-up Loan oJ Rs.3,50,000/-, (ffi.,ttl.s

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Page 2 of4

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SA No. 8212026

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secured by deposit of^{title deeds of the SA Scheduleproperty' The} Applicant contends^{that he had been regularly servicing the loan} accounts and^{alleges that the RespondentBank,withoutissuingthe} demand notice under^{Section 13(2) or possession notice under} Section 13(4) of the^{SARFAESIAct, proceededto issue and affix the} e-auctlon sale notice^{on 21.07.2026and publish the sameon} 22.OL.2026. It is further^{alleged that the requisitenoticeswere not} affixed on the secured^{asset and that the sale notice was not} published in newspapers^{having wide circulationas required under} the Rules, 2002.^{The Applicantfurther asserts that he deposited} Rs.51,OOO/- on 28.01.2026,^{whichwas not given credit in the} statement of account,^{and disputesthe Bank'sclaim of Rs 9,78,58U-} According to him, after^{adjustment of the said payment,the} outstandlng would be^{Rs.7,8O,204/-.The Applicant contends that the} account had not been^{validly classified as NPA and that the sale} proceedings are^premature and^{unlawful.He furtheralleges that the} Bank^proceeded with undue^{haste despite his requestnot to affix the} sale notice and submits that,^{had a proper Section13(2) notice been} issued, he would have^{proposedsettlement/OTs.Hence, appllcant} pray for interdicting the measures initiated^{by the Respondent Bank} against the SA Schedule^Property.

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Though the Respondent^{enteredappearancethroughits} counsel, Sri. R. Shravan^{Kumar, no reply statement was filed'} Accordingly, the^{Respondent's right to flle the reply statementwas} forfeited and consequently it^{was set ex parte on 11.06.2026.}

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Heard learned counsel for the^{applicant. Perused the written} arguments flled for^{the Applicant and the material brought on record.}

N,p,Y

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SA No. 8212025

Learned counsel for the applicant reiterated the content of its application and submits that Respondent Bank wrongfully classified the account as NPA. Respondent Bank failed to serve the demand notice under section 13(2), possession notice under section 13(4) of the Act and comply the Rules 8(1) and 8(2) of the Rules, hence the measures initiated by the Respondent Bank against the SA Schedule Property is to be interdicted.

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Durlng the course of proceedings it was reported that the auction scheduled on 23,02,2026 pursuant to sale notice dated 27.01.2026 was not successful due to want of bidders. Under such circumstances, the contention of non-compliance of Rule 8(5), 8(6) 8(7) & 9(1) of the Rules^pertaining to the impugned auction need no consideration and SA has become infructuous to that extent.

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I have considered the submissions advanced by the learned counsel for the applicant and perused the material available on record. The principal contention of the applicant is that the Respondent Bank has failed to comply with the mandatory^provisions of the SARFAESI Act and Rules, 2002 while initiating measures against the secured asset. It is well settled that the secured creditor is bound to strictly adhere to the procedure prescribed under the Act and the Rules, and any deviation from the mandatory^provisions would vitiate the measures initlated thereunder. In the^present case, despite due service of summons, the Respondent Bank did not choose to contest the matter. Consequently, there is no material^placed on record to controvert or disprove the speciflc allegations of noncompliance with the statutory^provisions. The averments made by the applicant, therefore. remain unrebutted and unchallenged. In the absence of any evidence to the contrary, this Tribunal finds no reason

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,". ,,4nrnn-".r\s.'r""

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Page 4 of 4

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SA No.8212026^.

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to disbelieve the case^{set up by the applicant.Accordingly,the} Securitisation Application^{deserves to be allowed'}

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In the result, the^{present SecuritizationApplication is allowed} by setting aside demand^{notice under section 13(2) of the Act and} possession notice under section 13(4) of^{the Act.}

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Consequently, Interlocutory^{Applications pending, if any,shall} stand closed.

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No order as to^{costs. 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 steno.,^{cotected,signeddnd pronouncedby me in the opencourt on this} the 25'h doy of^{August, 2026).}

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OW*'u's (RAMESHWAR KOTHE) PRESIDING OFFICER

Mohammed Faheemuddin v. Kotak Mahindra Bank Limited

Case brief

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Mohammed Faheemuddin v. Kotak Mahindra Bank Limited

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