Dismissed

N Kavitha and Ors. v. Bank of Baroda and Anr.

DRAT6 Nov 2025MISC APPEAL/176/2017

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed an appeal challenging an order that denied condonation of delay for filing a SARFAESI application against only the sale certificate. The Court held that the appellants knew of the sale proceedings yet failed to challenge the sale itself. Consequently, a standalone appeal against the sale certificate was not maintainable even if delay were condoned.

What did the court decide?

Appeal dismissed and order dismissing an application challenging only the sale certificate is confirmed.

N Kavitha and Ors. versus Bank of Baroda and Anr. — Banking and Recovery | DRAT (2025)

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IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT CHENNAI

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Dated the 6^th day of November 2025

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PRESENT: Hon’ble Mr. Justice G. Chandrasekharan

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CHAIRPERSON

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(Arising out of IA 4240/2014 in IR No. 2925 of 2014 on the file of DRT, Bengaluru)

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Between

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Kavitha N 2. H. Narayana Rao 3. Usha Rani All residing at No.129 Udani Layout, Cambridge Road, Ulsoor, Bengaluru 560 008. …Appellants

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And

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Authorised Officer, Bank of Baroda, Rep. by its Authorised Officer, Ulsoor Branch, No.11/12, Cambridge Road, Halasuru, Bengaluru 560 008. (substituted as per order dated 31.10.2019 In IA No. 907/2019) In place of Vijaya Bank, Rep. by its Authorised Officer, Ulsoor Branch, No.11/12, Cambridge Road, Halasuru, Bengaluru 560 008. 2. Mrs. Saritha Shetty, D/o Sri Raju, Mantri Garden Apartments, Madhavan Park, Jayanagar, Bengaluru – 560 041. .. .Respondents

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Counsel for Appellants : Mr. S. Suresh Kumar Counsel for Respondent -1 : M/s. Ramalingam Associats R2 – Paper Publication effected.

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ORDER

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This appeal is filed by the appellants against the order dated 30.9.2015 passed by the Learned Presiding Officer DRT, Bengaluru to condone delay in IA No.4240/2014 in SA IR No.2925/2014. The said SA was filed to set aside the sale certificate dated 10.7.2014 and to declare the entire proceedings initiated by the respondent bank under the provisions of SARFAESI Act in respect of the schedule property as null and void and for other relief.

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Learned Presiding Officer dismissed the said IA No.4240/2014 filed to condone the delay in filing SA IR 2925/2014 and against the dismissal order, this appeal is filed.

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Learned Counsel for the appellants submitted that sale was held violating

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the mandatory provisions of SARFAESI Act. Without obtaining proper valuation report and under valuing the property, sale was held. Therefore, sale held is nothing

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but a fraud. Sale certificate was issued on the basis of the sale held fraudulently. Therefore, it is an erroneous sale certificate and is liable to be dismissed. On coming

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to note about the issuance of sale certificate, SA was filed, therefore, it is within the period of limitation. The Tribunal is empowered to condone the delay in filing the application under Section 17 (1) of SARFAESI Act. Even assuming that there is a delay, the said delay is justifiable for the reason that appellants were not aware of the sale proceedings and issuance of sale certificate. Thus, he prayed for setting aside the order of Learned Presiding Officer and allowing this appeal.

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3 (1) Learned counsel for the appellants relied on the following decisions for the preposition that Tribunal has power to condone the delay in filing the application under Section 17 of the SARFAESI Act invoking Section 5 of the Limitation Act.

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(i) Vedhanayaga Pandiyan – Vs. The Authorised Officer, M/s. Sriram Finance

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Ltd., rendered by the Hon’ble Madurai Bench of Madras High Court;

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(ii) Hon’ble Supreme Court of India in (A.R. Venugopal @ R. Venugopal – Vs. – Jotheeswaran and Others reported in (2017 (12) Scale 753);

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(iii) DRAT, Mumbai in D.M. Nangia Engineers & Contractos – Vs. – Bank of Maharashtra ( Misc. Appeal 253/2008);

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(iv) The Hon’ble Bombay High Court in Ashok Balaji Ratan – Vs. – Nagpur Improvement Trust, Nagpur ( CRP No.119/2000);

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(vi) The Hon’ble DRAT, Delhi in Kanti Lal Sadh & Others – Vs. – Indian Overseas Bank & Another (IA 88/2014 and Appeal No.351/2002); and

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(vii) The Hon’ble Madhya Pradesh High Court in Aniruddh Singh – Vs. – Authorised Officer, ICICI Bank Ltd., (MP 5324/2023)

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3(2) He also relied on the decision of the Hon’ble Supreme Court of India in Mahabir Prasad Santuka and Ors. – Vs. – Collector, Cuttack and Ors. ( Civil Appeal No.696/1973) for the preposition that as to market value is the price, for which, a willing purchaser is ready to pay for the similar land to a willing seller.

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(3) He relied on the decision of the Hon’ble Supreme Court of India in Civil Appeal No. 4679/2014 ( Vasu P. Shetty – Vs. M/s. Hotel Vandana Palace and others) for the proposition that Bank is obligated to follow the mandatory procedure for the sale of the property. If mandatory procedures are not followed, the SARFAESI Measures would fail.

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In reply, learned Counsel for the respondent/bank submitted that without challenging the sale notice, SA was filed only challenging the sale certificate. Prior to filing of this SA, appellants filed Writ Petition No.28863/2014 before the Hon’ble High Court of Karnataka at Bangalore, questioning the validity of the notice at Annexure-E

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dated 8.5.2014 i.e., the sale notice. By the said sale notice, appellants were called upon by the bank to discharge the loan of Rs.29,54,627/- with interest within 30 days

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from the date of receipt of notice, failing which, it was informed that property in

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question will be sold to discharge the loan. Hon’ble High Court of Karnataka, earlier passed a conditional order on 20.6.2014, to stay confirmation of auction sale subject to appellants depositing Rs.8.00 lakhs within a week and the balance amount within 7 weeks and it was clarified that stay is only for the confirmation of the auction and not the auction itself. It appears that appellants failed to deposit the amount as per the interim order, therefore, respondent bank confirmed the sale of the property. In the said background, WP No.28863/2024 was dismissed on 24.2.2015, giving liberty to the appellants to pursue the matter before DRT. Appellants had also challenged the sale before DRT.

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He further submitted that it is seen from the affidavit filed in support of the application filed for condoning the delay. Learned Counsel for the appellants contended that appellants came to know about the sale on 19.8.2014 and thus they claimed to have filed the SA within 4 days from the date of end of limitation, calculating it as 45 days from 11.7.2014. This submissions made on a sworn affidavit, is not correct, for the reason that in WP No.28863/2014 what was challenged was the validity of the sale notice dated 8.5.2014 fixing the sale on 20.6.2014. Therefore, to say that appellants were not aware of the sale and they came to know about the sale on 19.8.2014 and issuance of sale certificate only is blatantly incorrect and false affidavit was filed. Liberty was granted to the appellants by Hon’ble High Court of Karnataka to pursue the matter before DRT insofar as sale notice dated 8.5.2014 was

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concerned. That sale notice and the sale was not challenged before DRT by filing

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SARFAESI Application, at least, after the disposal of the Writ Petition in terms of the liberty given to the appellants. There is no challenge to the sale held on 20.6.2014.

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This Tribunal has already decided that issuance of sale certificate cannot be independently challenged for the reason that issuance of sale notice is only an administrative measure on successful completion of sale and payment of sale consideration. Therefore, even if the delay is condoned, the SARFAESI application and

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the appeal would in all probability get dismissed on the ground of maintainability. Thus contending, he prayed for dismissal of the appeal.

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Considered the rival submissions and perused the records.

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There is no dispute raised with regard to borrowal of the loan, classification

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of the loan as NPA and issuance of demand notice, possession notice and sale notice.

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What is challenged in the SA IR No.2925/2014 on the file of DRT, Bangalore was (i) to set aside the sale certificate dated 10/07/2014; (ii) to declare that proceedings conducted by the first respondent/Bank under the provisions of SARFAESI Act are null and void.

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Admittedly, there is no challenge to sale notice and sale held. The

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consequential and administrative action of the issuance of sale certificate alone was challenged. Even this challenge to the sale certificate dated 10/07/2014 was not

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filed within 45 days. It was filed only in September 2014. There is no date mentioned about the date of filing the SA in the copy available in the typed set.

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It is pointed out by the learned counsel for the appellants that the

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grounds taken in the securitization application was that the scheduled property would fetch more than Rs.2 crores, because, it is situated at the very prime locality in Bengaluru i.e. Cambridge Layout. Each sq.ft. of land is sold between 15,000/- to 16,000/- . The schedule property consists of ground floor, first and second floor and each floor would fetch minimum of 72,00,000/- to 75,00,000/-. Appellants request to sell any of the floor and leave the remaining floors to be retained by the appellants fell deaf ears. The reserve price fixed at Rs.65,00,000/- and sold at Rs.66,00,000/- is grossly inadequate. It shows that property was under valued. On a query, the appellants came to know that there was only one bidder. It shows that there was no competitive bidding. On these grounds, the learned counsel for the appellants prays for setting aside the sale and sale certificate.

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Challenge to valuation report and non competitive bidding are the

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matters to be decided in securitization application filed challenging the sale. As already sated, the appellants had miserably failed to challenge the sale. Therefore, these aspects cannot be adjudicated in an appeal filed challenging only against the issuance of sale certificate.

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Admittedly, the first appellant filed WP 2886/2014 (GM-RES) on the

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file of the Hon’ble High Court of Karnataka questioning the validity of notice at

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Affixture ‘3’ dated 08.05.2014 i.e. sale intimation notice. The Hon’ble High Court of Karnataka dismissed the writ petition giving liberty to the first appellant to pursue the matter before the DRT. The order reads that “on 20.06.2014, the Hon’ble High Court stayed the confirmation of auction subject to the first appellant depositing Rs. 8 lakhs within one week and the balance amount within 7 weeks thereafter. It was clarified that Stay was only in respect of confirmation of auction and not the auction itself. On the first appellant failing to deposit the amount, she is not entitled for the benefit of the interim order”. This conditional order was not complied by the first appellant and therefore, the property had been auctioned, sale certificate was registered in favour of the auction purchaser.

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Thus, it is clear that the first appellant/ petitioner was aware of the sale held, sale certificate issued, atleast on the date of disposal of the WP 28863/2014 (GM-RES) on 24/02/2015. Still the first appellant has not chosen to challenge the sale notice and sale held. While filing the writ petition in 2014, first appellant knew about the sale intimation notice dated 08/05/2014. It appears that she has not chosen to follow up the matter

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There are divergent views taken by the Hon’ble High Courts with regard to the powers of the DRT for condoning the delay in filing the application under Section

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17 of the SARFAESI Act. Even, if the delay is condoned when there is no challenge to sale in pursuance of the sale notice, challenge to the issuance of the sale certificate cannot be entertained.

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