The High Court · 2025

2 to not take any coercive action pending disposal of the Writ Petition. Counsel for the Petitioners: SRI A. VENKATESH, SENIOR COUNSEL REPRESENTING SRI KOTA LAKSHMI SAI SIRISHA Counsel for the Respondent No.1: SRI ANGOTHU NEHRU, S.C. FOR CENTRAL GOVERNMENT Counsel for the Respondent No.2: SRI A. SATYANARAYANA, SENIOR COUNSEL REPRESENTING SMT. CH. LAXMI CHAYA Counsel for the Respondent Nos.3 & 4: SRI RAMAKANTH REDDY The Court made the following: ORDER HIGH COI]RT FOR THE STA-I'E OF'fEt,,AI IGANA A'f HYDERABAD. I'Ht] HON'RLII.IUSTICE MOUSHUMI BHAl''I ] CHARYA AND THE HON'I}LE JUSTICE GADI PRAVEEN i I]MAR WRTT PETITION No.32316 of 2025 DATE:09-12-2025 Benvcerr l. M/s.Shaftek Intiastructurc Private Limitcd and anothcr And Petitioners l. l-hc I Inion ol lutlia, Rcp.by its Secretary 'l'o Government o1'India and three others I{cspondents. ORDEIT: (ptr IIon blL' .lu:tict: Gudi l'ravectt Kunur) Heard Sri A.Vcnkatesh, learned Senior C'orl sel lcprcsenting Ms.Kota Lakshrni Sai Sirisha, learned counsel lor tl': pctitioners, Sri A.satyanarayana, learned Senior Counsel represent r s Srnt.Clh Laxrni Chal'a, learned counsel appearing for respondent Nc 2 []ank and Sri Ramakanth Reddy, tearned counsel for respondent Nos.l and 4. ,: , t l I I I 2

2. Thc present Writ l)etition is filed assailing the action ol the respondent No.2 Bank in initiating proceedings under The Securitization and Reconstruction of Fir-rancial Assets and Entbrcernent o f Security Interest Act,2002 (for short 'the Act') and issuing of Demand Notice dated Ol .07.2024 under Section l3(2) of the Act and subsequent Possession Notice under Section l3(4) ol the Act dated 02.09.2024 and thereupon proceeding with the auction and sale ol the sub.icct propeny and notice dated 24.09.2024 as well as noticc of taking possession dated 13.10.2025 rvithout complying with Section 26D ol the Act, as arbitrarv and illegal and a consequential direction to set aside the proceedings initiated by respondent No.2 under SARFAESI Act and handover the possession olthe subject land.

3. 'lhc facts teading to filing of thc present Writ Petition arc that petitioner No. I is engaged in thc business of erecting and labricating works lor cell phone towers. Respondent No.2 had offbred overdraft facility to petitioner No.1. In the year 20 16, petitioner No. I approached the respondent No.2 Bank lor financial assistance, upon which, the Bank extended overdraft facilities sanctioning an amount of Rs.3,75,00,000/- in favour of petitioner No.1 . The subject overdraft facility stands secured by collateral, comprising a residential house bearing H.No. t 1-13-36212, on J Plot No.65. adrneasuring 298 scl yards situated at A I rapuri Colony' Saroouragar, Hydcrabacl (tirr short 'the schedule propelt'' ), uhich is the anccstral proporty ol' petitioner No.2, who is one ol' r t' [)irectors tlf petitioner No.l cotupatrv. Against thc said security llrl) 'efl), a suit fbr partition vide O.S. No. 574 ol 2024, is presently pentrrg helbrc the I Additionrl Senior ci'il Juclge' ILa.ga Reddy District' i't erein the rights and intcrests ol'thc co-oiincrs are under adjudication

1. t)uring thc pcriod liom 1020 to 2022 due to (-t'id-19 Pandernic ccrlein iinancial constraints arose on account of adversr.: I arkr:t conditions rvhich tcrnporarily atlectcd thc regular flou, of bus ress t'evcttuc o1- petitioner No. I and also due to ill-health of petitioner No l. the repayment schcdule ol'the loan aocollnt u,as affected and thcrealie ' rr-sp()lldcrlt No.2 Bank classificd ttre account of pctitioner No. I as 'Norl ' 'er'lbrning Asset (NPA)' on 28.06.2024

5. Subsequently, respondent No.2 Bank initiated rec( very proceedings under the Act by issuing a Demand Notice dated 0l-07-::l 24 under Section 13(2) of the Act indicating the outstanding amount or'Rs.i,00,87,923l-' Thereafter, Possession Notice under Section l3(4) of thc \ct was issued on

02.09.2024 indicating the outstanding amount of Rs.2,tt'i ?.4,6261-- 4

6. Aggrieved by the action of respondent No'2, the petitioners approachecl the Debts Recovery Tribunal Il, Ilyderabad (for short 'DRT') by filing S.A. No. 438 ol 2024. TIte learned DRT, by an interim order dated 28.10.2024 passed in I-A. No. 3051 of 2024' granted stay on the condition that thc Petitioners deposit a sum of Rs'80,00'000/ in three installntents. one rvithin two weeks from thc date o{' the order and the remaining two at intervals of two weeks each' On account of non- conrpliance of thc said conditional ordcr passed by the learncd DRT' respondcnt No.2 Bank conducted auction olthe schedtrle property and sold the same to the highest bidder. Accordingly, r'espondcnt No 2 Bank issued another notice dated 13.10.2025 to the petitioners for taking possession of the schedule property.

7. J'herefore. the present Writ Petition is flled contending that the proceedings issued by respondent No.2 Bank are in violation of Section 26D of the Act, which imPoses a mandatory pre-condition for the enforcement of any security interest

8. Sri A.Venkatesh, learned Senior Counsel appearing for the petitioners contended that the respondent clearly violated Section 26D of the SARFAESI Act which provides that a security interest has to be I I t I i i I I I i I i 1 i I I I 5 created in fai,our of secured creditol by the borrowcr i nd it has to be registered with the (lentral Registry lor commencetnetrt ot'enfbrccnrent proceedings rvith rcspect to sccuritics by tl're secured : editor. [.earned Senior Clounsel has placed reliauce on thc Asset Rirsr:r Scarch Repoft generated on 18.10.2025, reflccting that the secured ru set lonring the sub.ject matler was not registered with the Cer.r I rl Registry of Securitisation Asset Reconstruction and Security lr -crcst o1- lndia (cEnsAr)

9. l,earncd S,.'nior ( ounsel lurther corrtended that ; nce thc scctLritv interest was nc\ cr i'cpistcled, rcspondent No.2 Bank is talutorill barred undcr Scction 2(rD ol- the Act lrom exercising any en f )rcernent powers conf'ened undcr C'hapter III and as such, all actions takcn including Demand Noticc. Possession Notice. auction proces i ancl possession attempt, are all illegal, arbitrary and devoid ofjurisdictio r

10. On the otl-rer hand, Sri A-Satyanarayana, leame t Senior ('ounsel appearing for the respondent No.2 Bank contended that the Writ Petition itself is not maintainable in view of the Writ Petition irroking of Section 17 of the Act by filing S.A.No.4l8 of 2024 before the l,: rmed DRT which is pending consideration and that the issues raised irr the present Writ 6 Petition as well as the issues raised betbre the leamed DRT are one and the same. I l. Learned Scnior Counsel lurther subrnitted that, the petitioners having suf'fered an adversc conditional order and having failed to comply ivith thc deposit rnandatcd therein, are not entitled to invoke the extraordinary jurisdiction of this Court, and on this ground alone, the Writ Petition deserves to be disrnissed.

11. Learned Senior Counscl lurther contended that thc docurnents filed by' the petitioncrs rel'crring to the schedule propert)'are dil'f-erent fior-n the one ret'lccted in thc Asset Based Search Report of CERSAI dated t8.10.2025, which specifically relers to two propcrties viz.. H.No.ll-ll- 36212 (as claimed by the petitioners) and H.No. I I -13-60lllA (as shown in the CERSAI report) as secured asset.

13. Lealned Senior Counsel appearing for respondent No.2 categorically denies the allegation with respect to violation of Section 26D of the Act stating that the Security Interest was duly registered with the CERSAI and the said mortgage was created by deposit of title deeds on24-03-2O16by petitioner No.2 and was confirmed by executing a registered Memorandum of deposit of title deeds on 29.03.2016. It is contended that the Bank 7 registered the security intorest on the property with Ocrr ral Registry by mentioning the new I).No. I I -13-362 corresponding to sul:l ecL Properry i.e. in Sy.No.9/1/l; parr, plor No.65 adrneasuring 298 sq l'r rJs, whercas the search conducted by the petitioncrs was by using old I) ror Nurnber i.e. ll-13-60/lA, disclosing thc result as'not satisfied'. attd I s such, both the House Numbers are one and the same situatcd at \ ikaptLri Colony, Saroornagar, I Iydc'r'abad-

14. Respondent No.l lllcd l)ebtor Based Scarch I{': 'on of CERSAI datcd 2<).l0.l()li. \/altrrrrion re porL dated 04.09.201 [ and Ccrtificate confimiug the identitl ol thc propcrty.

15. Leamed Senior Counsel appearing for respotl ent No'2 lastly contended that, iu Vicu ol the pendency of the proc, r dings before the leamed DRT and thc petitioners' lailure to compll'r'T'itlr the interim order passed therein, thc pctitioners are barred from i I roking the writ jurisdiction of th is Court.

16. Sri Rarnakanth Reddy, Iearned counsel appea - ng lbr petitioner Nos.3 and 4/auction purchasers submits that they z re the successful bidders and pursuant to the auction, they have depo; ted an amount of Rs,.3,29,1 8,000/- and accordingty, the Bank has issuecl ! rle Certiflcate and 8 took possession and as such, the Writ l)etition has become infructuous and liable to be dismissed.

17. Wc havc given our eamest consideration to the contentions urged by respectivc partres

18. Section 26D of the Act states ')bl). Right of enfitrume nl o[ .securitie.s ' Notv,ithslunding on.)lhing trtrttuinttl in tttl other lutr'fttr the time baing in./i;rcc,.liom the cktt tsf' (ontm(nL'enrcnl of lhe pr<xi.sions o/ this ('haptar, no sacurtd crtditor shull hc antitlatl to exercise lhc rights o[ enJircemcnl of stcuritir:s utklt'r (-lNptL't'ill unlc.s: thc:rtt:urttv intctast L:tcdlcd itt it.;.ftrtout h1' tltt horrovtr ltas bean re gistere tl :rilh the ('entrul Registr.y.

19. A perusal of the record rcveals that it is not in dispute that the petitioners k-nocked the doors of the leamed DRT on the similar circumstances bf irrstituting S.A.No.438 ol 2024, which is pending lor consideration.

20. Thc security asset (schedule property) is situated in Sy.No.9/l/F bearing Plot No.65 admeasuring 298 sq. yards with Door No.11-13-60/iA (old) and new Door No. l1-13-362, which was subsequently bifurcated and allotted Door Numbers ll-13-362, 362/l and 36212, situated at Alkapuri Colony, Saroor Nagar, Hyderabad. The sale deed bearing Doc.No. 141201 6, () which is mortgagcd on 2.1.03.2016 with respondent No.2 [ ank' reflects old Door Number of' the property bcaling No. I 1-13-601 [ {, u'hcreas the respondent No.2 Ilank rcgistered thc sccurity interesVchar le crcatcd ort the property with the ('entral Rcgistrl by mentioning the ner" D.No.1l-ll-162 in the same survey nurttber. 'fhe said charge was dull' rl ristcred with the Central Rcgistry as reqLrired undcr Scction 26D of the A: . '[he documents placed on record bv the leamed cottnsel appearing tirr r.-spondent No.2 specifu the sarne. Thcrefbrc, it caut-tot be said that th: e is violation of Section 26D of the Act 2l . The record fufther reveals tltat the petitioners raised any objection with respect to the alleged non-registration ,r'charge u'ith the Central Registry at an1 point ol'titne cither at the tirre r 'l)e urand Notice, Possession Noticc or Salc Noticc. A perusaI of the pror', edings befbre the leamed DRf in S.A.No.,138 o1' 2024, rcveal that thr' petitioners never raised any objection during the auction proceedings. Si Lce lhe petitioners have failed to comply with the conditional order pass :d by the leamed DRT while passing the interim orders, the petitioners Lre cstopped liom invoking the .jurisdiction of this Court under A - icle 226 of t}:.e Constitution of India \ l0

22. Further, the petitioners did not raise any objection at the time of receiving Demand Notice under Section l3(2) ol the Act or subsequently and the sanre indicates that there are no bono fitles on the part of the petitioners.

23. The petitioners availed the statutory renredy before the leamed DRT" however, lailed to comply with the conditional orders and the registration under CERSAI is duly completed. Thereforc, rve are of the opinion that initiation ol the present writ Petition is clcarly abuse of process of law, arrd the saure'is llot maintainable.

24. Accordingly, W.P.No.323 l6 of 2025, along with all connected applications, is disrnissed. There shall be no order as to costs' sD/' A'H's' GowRl sH4ry[48 ASSISTANT REGISTRAR //TRUE COPY// SECTION OFFICER To One CC to SRI KOTA LAKSHMI SAI SIRISHA' Advocate IOPUCI One CC to SRI ANGOTHU NEHRU' S C for Central Government IOPUC] One CC to SMT CH' LAXMI CHAYA' Advocate [OPUCI One CC to SRI RAMAKANTH REDDY' Advocate IOPUCI Two CD CoPies

2. 3 4 q MP LS {IGH COURT DATI: D:0411212025 .(' -) tJ T ."$ ,S,</\) \t\ + (r L:. l I + ORDER WP.No ,t2316 of 2025 DISMISSING THE ![/ ?IT PETITION WII'{OUT COSTS 4- \b / "J)