Allowed

Rajasekhar Buggaveeti, v. Hdfc Bank Limited

Telangana HC26 Sept 2014WP/29411/2014

Case brief

AI extract

What is this about?

This judgment allows a Writ Petition under Article 226 challenging a DRT order that rejected an application against a Bank. The Court held that issuing a possession notice under Section 13(4) of the SARFAESI Act constitutes a measure to recover debt, making the DRT jurisdiction under Section 17 applicable, and remanded the matter for fresh disposal.

What did the court decide?

Writ petition allowed; DRT order dated 22.09.2014 set aside; matter remanded to DRT for fresh disposal after giving due opportunity to both parties.

Rajasekhar Buggaveeti, Vs Hdfc Bank Limited — Contract and Commercial Disputes | Telangana HC (2014)

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THE HON'BLE SRI JUSTICE K.C.BHANU AND

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THE HON’BLE MRS JUSTICE ANIS

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WRIT PETITION No.29411 OF 2014

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ORDER: (per Hon’ble Sri Justice K.C.Bhanu)

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This Writ Petition, under Article 226 of the Constitution of India, is filed to set aside the order, dated 22.09.2014, in Securitisation Application I.R. No.678 of 2014 passed by the Debts Recovery Tribunal, Hyderabad (DRT) and consequently, direct respondent No.2 to entertain the above application and dispose of the same on merits.

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2. Petitioners herein filed the aforesaid Securitisation Application to declare the action of the respondent Bank in approaching the District Court, Ranga Reddy District, and appointing an Advocate Commissioner in Crl.M.P.No.599 of 2014 under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, ‘SARFAESI Act’), as null and void and to declare that the respondent Bank has no right to proceed under Section 14 of the SARFAESI Act against the schedule property without following the due procedure of law and set aside the demand possession notice, dated 20.05.2014, issued under Section 13 (4) of the SARFAESI Act against the schedule property by the respondent-Bank.

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3. The DRT after considering the material on record, rejected the aforesaid Securitisation Application. Operative portion of the order reads as follows:

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“Further the secured creditor in the present case issued the notice demanding possession notice, dated 20.05.2014 only to intimate for the proposed action of the secured creditor to take measures under Section 13 (4) of the Act against the clear

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property, but this does not amount to taking of any measures under Section 13 (4) of the Act and as such the appeal to declare action of the respondent Bank in approaching the District Judge, Ranga Reddy District for obtaining orders for appointment of Advocate Commissioner in Crl.M.P.No.599 of 2014 under Section 14 of the Act and filed issuing notice demanding possession, dated 20.05.2014 is not maintainable under law.”

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4. In the first instance, the respondent Bank issued notice on 07.02.2014 under Section 13 (2) of the SARFAESI Act calling for the borrower to discharge the liability in full within sixty (60) days. Thereafter, on 20.05.2014, the respondent Bank issued notice demanding the borrower to handover the peaceful possession of the secured assets as described in the schedule to the Authorized Officer of the respondent Bank on 21.05.2014.

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5. Under Section 13 (4) of the SARFAESI Act, in case the borrower fails to discharge his liability in full within the period specified in subsection (2), the secured creditor may take recourse to one or more of the following measures to recover his secured debt, namely:-

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(a) take possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realizing the secured asset;

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(b) take over the management of the business of the borrower including the right to transfer by way of lease, assignment or sale for realizing the secured asset.

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6. By virtue of the notice, dated 20.05.2014, as the secured debtor failed to honour the notice, dated 07.02.2014 within the period of sixty days, secured creditor directed the debtor to handover the possession of the secured assets. It amounts to measure to be taken under Section 13 (4) of the SARFAESI Act. Therefore, appeal under Section 17 of the SARFAESI Act is maintainable before DRT. Hence, the

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impugned order is liable to be set aside.

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7. Accordingly, the Writ Petition is allowed setting aside the order, dated 22.09.2014, passed in Securitisation Application IR No.678 of 2014 by the DRT and the matter is remanded to the DRT for fresh disposal after giving due opportunity to both parties. Since no adverse order is passed in this Writ Petition, no notice is required to respondent Nos.1 and 3. There shall be no order as to costs. Miscellaneous petitions, if any, pending in this Writ Petition shall stand closed.

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_____________________ JUSTICE K.C.BHANU _________ JUSTICE ANIS

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SEPTEMBER 26, 2014 YVL

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THE HON'BLE SRI JUSTICE K.C.BHANU AND THE HON’BLE MRS JUSTICE ANIS

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WRIT PETITION No.29411 OF 2014

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26.09.2014

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YVL

Rajasekhar Buggaveeti, v. Hdfc Bank Limited

Case brief

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Rajasekhar Buggaveeti, v. Hdfc Bank Limited

Case brief

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