GOLLA NARAESH KUMAR YADAV Vs. KOTAK MAHINDRA BANK

JUDGEMENT

(1.) The transfer petition depicts a David versus Goliath battle between a gargantuan bank having its branches spread throughout the country and a small-time borrower carrying on business in Adoni, District Kurnool, Andhra Pradesh.

(2.) Petitioner No. 1, Golla Naraesh Kr. Yadav, is proprietor of M/s Hari Cotton Traders and its sister concern, M/s Hari Cotton Ginning Pressing Factory. In 2021-2022, both firms obtained overdraft and loan facilities to the tune of Rs.3.00 crores and Rs.7.00 crores, respectively, from the respondent Bank through its branch at Adoni. Petitioners stood as guarantors and issued cheques in favour of the respondent Bank. In the course of business, it is alleged the overdraft facility was not serviced, and in April 2023, the Bank declared the account as a Non- Performing Asset (NPA).

(3.) Respondent Bank initiated proceedings under the SARFAESI Act, 2002[Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. Hereinafter, 'SARFAESI Act'.], which were challenged by the petitioners before the Debt Recovery Tribunal at Hyderabad (DRT). Respondent Bank also instituted OA No. 787 of 2023 under Sec. 19(4) of Recovery of Debts and Bankruptcy Act, 1993[Hereinafter, 'RDB Act'.] before the DRT. Proceedings were also instituted before the High Court of Andhra Pradesh challenging the respondent Bank's decision to declare the firm's account as NPA.