Disposed

M/S Reddy Raw Rice Mill v. the Canara Bank

Andhra Pradesh HC10 Sept 2026WP/25943/2026

Case brief

AI extract

What is this about?

The High Court disposed of a writ petition challenging an auction notice under the SARFAESI Act, directing the Debts Recovery Tribunal, Visakhapatnam to decide the pending secured asset application (S.A. No. 445 of 2023) within three weeks and ordering status quo on the mortgaged properties until such disposal. The court found the DRT's adjournment of the stay application to a date after the proposed auction prima facie unreasonable, and noted the statutory four-month disposal period had long expired.

What did the court decide?

Writ petition disposed of with directions: (1) Debts Recovery Tribunal to dispose of S.A. No. 445 of 2023 within three weeks; (2) status quo to be maintained on the secured assets pending disposal; (3) no order as to costs.

M/S Reddy Raw Rice Mill Vs the Canara Bank — Banking and Recovery | Andhra Pradesh HC (2026)

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APHC010476582026

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IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI

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(Special Original Jurisdiction)

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FRIDAY, THE 11^th DAY OF SEPTEMBER 2026

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PRESENT

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THE HONOURABLE SRI JUSTICE BATTU DEVANAND

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THE HONOURABLE SRI JUSTICE TUHIN KUMAR GEDELA

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WRIT PETITION NO: 25943 OF 2026

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Between:

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M/S REDDY RAW RICE MILL, Jaladanki, Jaladanki Mandal, SPSR Nellore District Rep. by its Managing Partner M.Raghava Reddy.

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...Petitioner

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AND

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THE CANARA BANK, Specialized Assets Recovery and Management Branch (Specialized ARM Branch), 7 Roads Circle, Canara Bank Building, 2nd Floor, Kadapa 516 002., Rep. by its Authorized Officer.

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The Canara Bank, Kavali-1 Branch, Kavali, SPSR Nellore District 524 201.

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The Canara Bank, Specialized Asset Recovery and Management Branch (Specialized ARM Branch), KVC Arcade, 3rd Floor, 13-1, RC Road, Vani Nagar, Avilala, Tirupati 517 501, Rep. by its Authorized Officer.

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...Respondents

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Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased toissue a writ of mandamus or any other appropriate writ or direction declaring the action of the respondents in proposing to auction the mortgaged properties on 16.09.2026 pursuant to the notice issued to the petitioner dated 19.08.2026 as illegal, arbitrary, mala-fide and in violation of the Securitization

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and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and the Security Interest (Enforcement) Rules, 2002 and consequently set aside the auction notice dated 19.08.2026 indicating the proposed auction date as 16.09.2026

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IA NO: 1 OF 2026

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Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased stay the auction scheduled to be conducted on 16.09.2026 by the respondent herein in pursuance of auction notice issued to the petitioner dated 19.08.2026 issued by the respondent bank, pending disposal of the Writ Petition

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Counsel for the Petitioner: G SRAVAN KUMAR

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Counsel for the Respondents: PRUDVI RAJU MUDUNURI

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The Court made the following order:

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THE HON’BLE SRI JUSTICE BATTU DEVANAND

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THE HON’BLE SRI JUSTICE TUHIN KUMAR GEDELA

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WRIT PETITION NO.25943 OF 2026

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ORDER: (Per Hon’ble Sri Justice Battu Devanand)

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This Writ Petition is filed seeking to issue a Writ of Mandamus declaring the action of the respondents in proposing to auction the mortgaged properties on 16.09.2026 pursuant to the auction notice issued by the 3^rd respondentbank on 19.08.2026 as illegal and arbitrary.

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Heard the learned counsel for the petitioner and the learned counsel for the respondents-bank.

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There is no dispute with regard to the admitted facts of the case. The petitioner availed financial assistance from the 2^nd respondent-bank, which was subsequently classified as Non Performing Asset. Thereafter, the bank started initiation of securitization proceedings. When the mortgaged property i.e., the secured asset(s) was proposed to take into custody, the petitioner approached the Debts Recovery Tribunal, Visakhapatnam by filing S.A.No.445 of 2023 and it is pending for consideration till now.

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As per the learned counsels appearing on either side, the respondents took steps to auction the mortgaged property and issued auction notices twice. But, due to lack of bidders, the auction proceedings could not materialize. Thereafter, the 3^rd respondent-bank issued auction notice,

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dated 19.08.2026, proposing to auction the mortgaged property on 16.09.2026. Aggrieved by the said notice, the petitioner filed four (4) Interlocutory Applications bearing I.A.Nos.3871, 3872, 3873 and 3874 of 2026 before the Debts Recovery Tribunal in pending S.A.No.445 of 2023. The learned Presiding Officer of the Debts Recovery Tribunal, Visakhapatnam has allowed the out of order petition filed by the petitioner in I.A.No.3874 of 2026 and posted the matter for counters in the stay petition and other interlocutory petitions to 17.09.2026. When the auction is proposed to be held on 16.09.2026 and the petitioner approached the Debts Recovery Tribunal by filing stay application for stay of the auction proceedings, the action of the Debts Recovery Tribunal, Visakhapatnam in posting the matter to the subsequent date ie., to 17.09.2026, prima-facie appears to be unreasonable.

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Besides this, it is an admitted fact that as per 17(5) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘the S.A.R.F.A.E.S.I Act’), the Debts Recovery Tribunal shall dispose of the application pending before it within a period of four (4) months from the date of making the said application.

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Admittedly, in the present case, S.A.No.445 of 2023 filed by the petitioner was pending for the last three (3) years before the Debts Recovery Tribunal and the time stipulated under Section 17(5) of the S.A.R.F.A.E.S.I Act already expired.

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In view of the same, in our considered view, it is appropriate and

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desirable to dispose of this Writ Petition at the stage of admission without going into the merits of the case with certain directions to the Debts Recovery Tribunal to meet the ends of justice.

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Accordingly, this Writ Petition is disposed of with the following

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directions:-

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1. The Debts Recovery Tribunal shall dispose of S.A.No.445 of 2023 within a period of three (3) weeks from today.

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1. Till disposal of the S.A.No.445 of 2023, there shall be a direction to maintain status-quo in all respects with regard to the secured asset(s). There shall be no order as to costs.

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As a sequel, miscellaneous petitions pending, if any, shall stand closed.

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__________________________ JUSTICE BATTU DEVANAND

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____________________________ JUSTICE TUHIN KUMAR GEDELA

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Dated: 11.09.2026 TM

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THE HONOURABLE SRI JUSTICE BATTU DEVANAND

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