Allowed

T. Mahindra Choudhury v. Uco Bank

DRAT6 Aug 2025REGULAR APPEAL/59/2022

Case brief

AI extract

What is this about?

The Debt Recovery Appellate Tribunal set aside the DRT order that allowed the borrower to seek redemption and refunded the auction price. Drawing upon Supreme Court precedent, the bench held that redemption rights are forfeited upon the publication of the e-Auction Sale Notice. Consequently, appeals by the bank and auction purchaser were allowed, and the impugned judgment was dismissed.

What did the court decide?

Appeals allowed; impugned Judgment dated 03.01.2020 passed by the DRT, Visakhapatnam set aside; S.A. 145 of 2019 dismissed.

T. Mahindra Choudhury versus Uco Bank — Contract and Commercial Disputes | DRAT (2025)

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Reportable/Non-Reportable

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Appeal No. 55 of 2022 & Appeal No. 59 of 2022-DRAT-Kolkata

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IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT KOLKATA

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Appeal No. 55 of 2022

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(Arising out of S.A. 145 of 2019 in DRT, Visakhapatnam)

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HON’BLE MR. JUSTICE ANIL KUMAR SRIVASTAVA CHAIRPERSON

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The Authorised Officer, UCO Bank, Banjara Hills Branch, D.No.8-2-418, Krishnama House, Road No.4 & 7, Banjara Hills, Hyderabad.

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… Appellant

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-Versus-

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1, Mr. P. V. Sitarama Swamy Naidu, D.No.8-3-948/949, Plot No.517, My Home Madhuban Appartments, Srinagar, Colony Road, Ameerpet, Hyderabad;

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Mr. Tripuraneni Mahidhar Chowdhury, S/o Hanuman Chowdhary, D.No.1-51-7, Plot No.78, Sector-1, M. V. P. Colony, Visakhapatnam.

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… Respondents

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Counsel for Appellant Counsel for Respondent No.2

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… Ms. Ashmita Lohia (Virtual) … Mr. R. Padmanabha Raju Debashish Chakrabarty (Virtual)

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With

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Appeal No. 59 of 2022

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(Arising out of S.A. 145 of 2019 in DRT, Visakhapatnam)

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Tripuraneni Mahidhar Chowdhary, D.No.1-51-7, Plot No. 78, Sector-1, MVP Colony, Visakhapatnam-530 017;

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Tripuraneni Rajeswari Chowdhary, D.No.1-51-7, Plot No.78, Sector-1 MVP Colony, Visakhapatnam-530 017.

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… Appellants

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-Versus-

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The Authorised Officer, UCO Bank, Banjara Hills Branch, D.No.8-2418, Krishnama House, Road No.4 & 7, Banjara Hills, Hyderabad.

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P. V. Sitarama Swamy Naidu, D.No.8-3-948/949, Plot No.517, My home Madhuban Apartments, Srinagar Colony Road, Ameerpet, Hyderabad.

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… Respondents

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Counsel for Appellant … Mr. Pratyush Patwari (Virtual) Counsel for Respondent No.1 … Ms. Ashmita Lohia (Virtual)

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Appeal No. 55 of 2022 & Appeal No. 59 of 2022-DRAT-Kolkata JUDGMENT : 6^th August, 2025

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THE APPELLATE TRIBUNAL:

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1. Since both these appeals have arisen against the common Judgment/ Order dt.03.01.2020 passed by the learned DRT, Visakhapatnam in S.A. 145 of 2019 and I.A. 702 of 2019, UCO Bank -vs- Mr. P. V. Sitarama Swamy Naidu and Mr. Tripuraneni Mahidhar Chowdhury. Hence both the appeals are being decided simultaneously by a common Judgment.

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2. Appeal No. 55 of 2022 is filed by the UCO Bank, Secure Creditor against its Borrower namely Mr. P. V. Sitarama Swamy Naidu, while Appeal No. 59 of 2022 is filed by the Auction Purchaser, namely Mr. Tripuraneni Mahidhar Chowdhury, against the UCO Bank and the Borrower.

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3. As per the pleadings of the parties, Respondent herein, namely Mr. P. V. Sitarama Swamy Naidu, preferred a Securitisation Application under Section 17 (1) of the SARFAESI Act (herein referred to as the Act) with the assertion that he is the guarantor for the loan availed by Borrower, M/s. PVSRSN Enterprises Private Limited. He is the absolute owner of the schedule properties. In pursuance of the e-Auction Sale Notice dated 28.02.2019, auction is fixed on 08.05.2019, which is against law. The notice was intended for M/s. Eco Green Industries. It is violation of Rule 8 (6) and Rule 9 (1) of the Security Interest (Enforcement) Rules. (hereinafter referred to as the ‘Rules’).

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Appeal No. 55 of 2022 & Appeal No. 59 of 2022-DRAT-Kolkata 4. Notice under Section 13 (4) of the Act is also against the law. There are other properties of the principal borrower from which amount can be recovered, hence the instant Sale Notice is illegal. Accordingly, relief was sought to set aside all the measures initiated in pursuance of the e-Auction Sale Notice dated 28.02.2019 further with a prayer to allow the Securitisation Applicant to redeem the schedule properties by paying total reserve price of Rs.1,89,05,000.00.

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5. Objections were filed by the Bank stating that the Securitisation Application is not maintainable. E-auction Sale Notice was issued on 28.02.2019. E-auction was fixed on 08.05.2019. Proceedings, under Section 14 of the Act, cannot be challenged by the Securitisation Applicant taking advantage of Section 13 (8) of the Act. S.A. No. 68 of 2017 and S.A. No. 72 of 2017 were filed, which were already disposed of. Appellant is not even willing to repay the amount. At one stage, it is stated that the reserve price is low and on the other hand, he is prepared to take the property at the reserve price which is against settled principles of law. All the steps were taken by the Respondent Bank in accordance with law. Notice, under Section 13 (4) of the Act, dated 09.01.2017 was sent to the Appellant and was also published in two newspapers on 13.01.2017. E-auction Sale Notice was also published in two newspapers on 05.04.2019.

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6. After considering the submissions made by the Learned Counsel for the parties and perusal of on the record, Learned DRT recorded the findings that there is violation of

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Appeal No. 55 of 2022 & Appeal No. 59 of 2022-DRAT-Kolkata Rules 8(6) and 9(1) of the Act as no separate notice, under Rule 9 (1) of the Rules was issued by the Bank. Further there is violation of Rule 8 (5). I.A. 702 of 2019 was also allowed with a direction to redeem the property and a further direction for refund of the sale price to the Auction Purchaser.

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7. Feeling aggrieved by the impugned judgment, Bank as well as the Auction Purchaser preferred two separate appeals. 8. Notices were issued to Respondent No. 1, namely Mr. P. V. Sitarama Swamy Naidu, but, despite services, he is not represented in the appeal. 9. I have heard the Learned Counsel for parties and perused the record.

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10. The main challenge of the Respondent No. 1, Securitisation Applicant, is regarding violation of Rules 8(6) and 9(1) of the Rules. Notice under Rule 8 (6) was issued on 28.02.2019 against M/s. PVSRSN Enterprises Private Limited, Sri P. V. Sitarama Swamy Naidu, Sri Jonnada Ramana Murthy, Sri P.V. Rangayya Naidu and Smt. P. Nagamani. Date and time of e-auction was mentioned as 08.05.2019, 12:00 to 2:00 P.M. This notice was served upon the Securitisation Applicant, i.e., Respondent No. 1 herein. Thereafter, e-Auction Sale Notice was published in Times of India, Hyderabad dated 05.04.2019 and Andhra Jyothi dated 05.04.2019 which is in due compliance of the Rule 8 (6) and Rule 9 (1) of the Rules. Rule 8 (6) and Rule 9(1) of the Rules, reads as under:

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Appeal No. 55 of 2022 & Appeal No. 59 of 2022-DRAT-Kolkata “ Rule 8 (6) and Rule 9 (1) of the Security Interest (Enforcement) Rules, 2002, deal with the procedure for the sale of immovable secured assets by a secured creditor under the SARFAESI Act, 2002. Rule 8(6) mandates a 30-day notice to the borrower before selling the property, while Rule 9(1) requires a public notice of the sale i n newspapers.”

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11. Notice under Rule 8 (6) issued on 28.02.2019 which was duly served on 01.03.2019 and Rule 9 (1), e-Auction Sale Notice was published on 05.04.2019 which was in compliance of Rule 8 (6) and Rule 9(1) of the Rules.

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12. A Recall Notice was issued by the Bank on 21.04.2016 indicating that the account is declared as N.P.A. on 31.03.2016 where in the outstanding balance was shown as Rs.24,01,94,415.74p. It was duly served upon the Borrowers. Thereafter Notice under Section 13 (2) was issued and duly served. Notice under Section 13 (4) was issued and duly served upon the Borrowers and it was also affixed on the secured assets at the conspicuous part of schedule property. It was also published in newspaper on 13.01.2017 in English and Vernacular language. Panchanama was also prepared. 13. In the Securitisation Application, limitation was sought from e-Auction Sale Notice dated 28.02.2019 and Application under Section 17 (1) of the Act was filed on 03.04.2019 while there is a relief for quashing the Possession Notice dated 09.01.2017 filed beyond the period of limitation and relief sought for as regards Notice, under Section 13 (4) of the Act, is time barred.

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14. Redemption is sought by the Appellants on the reserve price fixed by the Authorised Officer. Valuation Report dated

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Appeal No. 55 of 2022 & Appeal No. 59 of 2022-DRAT-Kolkata 08.02.2019 reflects that the distress value was Rs.1,02,03,000.00, while the reserve price was fixed for Rs.1,04,65,000.00 which was above the distress value. Whereas in the Securitisation Application, Applicant is seeking redemption on the basis of the reserved price which means that he is accepting the valuation and now he cannot be permitted to withdraw the same. Principle of ‘approbate and reprobate’ would be applicable against him. Accordingly, I do not find any illegality in fixing the reserve price.

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15. Sale Notice was published as per law laid down by Hon’ble Supreme Court in the case of Celir LLP -vsMr. Sumati Prasad Bafna & Others (2024 SCC OnLine SC 3727) . Right of Redemption after publication of e- Auction Sale Notice has been forfeited.

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16. Accordingly, the Securitisation Applicant was not entitled for any relief as far as redemption is concerned.

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17. On the basis of the above discussion, I am on the considered view that, learned DRT has taken erroneous view by allowing the Securitisation Application. Accordingly, both the appeals deserve to be allowed. S.A. 145 of 2019 is liable to be dismissed.

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O R D E R

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Appeal No. 55 of 2022 and Appeal No.59 of 2022 are allowed. Judgment dated 03.01.2020, passed by Learned DRT, Visakhapatnam in S.A. 145 of 2019 is set aside. Accordingly, S.A. 145 of 2019 stands dismissed.

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No order as to costs.

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Appeal No. 55 of 2022 & Appeal No. 59 of 2022-DRAT-Kolkata File be consigned to Record room.

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Let the copy of Judgment be placed on the record of

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Appeal No.59 of 2022.

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Copy of the Judgment/Final Order be uploaded in the Tribunal’s Website.

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Order signed, dated and pronounced in open Court.

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(Anil Kumar Srivastava,J) Chairperson

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Dated: 6^th August, 2025 ac

T. Mahindra Choudhury v. Uco Bank

Case brief

What is this about?

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T. Mahindra Choudhury v. Uco Bank

Case brief

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