Allowed

State Bank of India v. Ranjeet Seeds Rep by its prop Sri Katturi Gangadhar

DRAT24 Jan 2025REGULAR APPEAL/84/2023

Case brief

AI extract

What is this about?

The Debt Recovery Appellate Tribunal allowed the appeal filed by State Bank of India against the DRT judgment in a SARFAESI Act matter. The Tribunal set aside the impugned order and remanded the matter to the DRT to decide afresh after considering additional evidence filed by the bank and affording a hearing to the respondents. The Tribunal observed that while parties initially argued violations o

What did the court decide?

Impugned order set aside; matter remanded to DRT-Hyderabad to decide afresh after consideration of additional evidence and hearing to parties.

State Bank of India versus Ranjeet Seeds Rep by its prop Sri… — Banking and Recovery | DRAT (2025)

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IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT KOLKATA (CAMP AT DRT, HYDERABAD)

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THE HON'BLE MR. JUSTICE ANIL KUMAR SRIVASTAVA CHAIRPERSON

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Appeal No. 84 of 2023

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(Arising out of SA No.111 of 2020 in DRT-1, Hyderabad)

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State Bank of India, Stressed Assets Recovery Branch-2 H.No.1-8-563/1, 1^st Floor, Opp:Sandhya Theatre, RTC X Roads Chikkadpally, Hyderabad-500020

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…….Appellant

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-Versus-

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M/s Ranjeet Seeds, Rep. by its Proprietor Sri Katturi Gangadhar Son of Late Katturi Sudarshan, R/o H.No.4-3-71/4/2, Dwaraka Nagar Adilabad, Adilabad Mandal and District, Telangana State-504001

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Mr.Ameer Ali Dharani, S/o Mr. Pyar Ali Dharani, R/o H.No.4-112/5, Khoja Colony, Echoda, Adilabad Dist.

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………Respondents

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Counsel for the Appellant … Mrs. Mekhala Kanji (through virtual mode) & Mr.G. Prabhakar Sarma Counsel for Respondents No. 1 & 2 … None JUDGMENT : 24^TH JANUARY, 2025

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The Appellate Tribunal :

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Matter is taken on the revised list. I have heard learned counsel Mrs.Mekhala Kanji virtually. None present for respondents. It is worth to mention that this matter was listed yesterday and on the request of learned counsel for Respondents listed for today. Since none is present for the Respondents, learned counsel for Appellant is heard.

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Instant appeal has arisen against the Judgment and order dated 09.05.2023 passed by Learned DRT-1, Hyderabad allowing the SA No.111 of 2020.

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As per pleadings of the parties, loan facilities were availed by the Respondent who is the Applicant before the learned DRT-1, Hyderabad in the application filed under Section 17 of the SARFAESI Act (hereinafter referred to as the "Act, 2002"). Initially in the year 2011 cash credit facility of

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Rs.1.50 crore was sanctioned with equitable mortgage. It was further raised by Rs.2 crores, equitable mortgage was created. Loan account became irregular and was classified as NPA. Although certain proposals for OTS were made by the borrower the same could not be fructified. Demand notice and possession notice were issued by the Bank, e-auction sale notice dated 03.08.2020 was issued and SA was filed. Demand notice was issued on 14.11.2019 which was duly pasted on the conspicuous part of the secured asset. As per Appellant herein who was Respondent in the application under Sec.17, market value of the secured asset was obtained from the approved valuer and all the steps as required under the SARFAESI Act, 2002 have been taken by the Bank. However, action of the Bank was challenged by the borrower on the ground of violation of Rules 8(2), 8(5) and 8(7) of the Security Interest (Enforcement) Rules, 2002 (hereinafter referred to as “Rules, 2002”).

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4. Learned DRT framed the following two issues for consideration:-

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“ (i) Whether the Applicant has established any valid ground for setting aside the e-Auction sale notice dt.03.08.2020 and consequent auction sale of the application schedule property conducted by the 1^st Respondent Bank on 09.09.2020?

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(ii) To what relief?”

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Issue No.1: Learned DRT arrived at a conclusion that there was a violation of Rules 8(2), 8(5) and 8(7) of the Rules, 2002 as the Appellant Bank failed to comply with the provision of Rule 8(2) in publishing the possession notice in the newspapers having circulation in the locality. Further, valuation report was not obtained from the approved valuer and violation of Rule 8(7) of the Rules, 2002. Consequently, application filed under Section 17 of the Act, 2002 was allowed by the Learned DRT. Feeling aggrieved, the Appellant Bank preferred the Appeal.

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At the very outset, learned counsel for the Appellant Bank would submit that the procedure as required under the Act and the Rules of 2002 were duly followed and complied by the Bank and all the notices were duly published and pasted. However, due to the Covid pandemic the relevant documents could not be filed before the Learned DRT. Pending Appeal, an application under Order 41 Rule 27 C.P.C. was filed seeking permission to file the additional evidence which was allowed and the additional evidence was taken on record. No document in rebuttal was filed.

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Learned counsel would further submit that in view of the documents filed by the Appellant it is abundantly clear on record that the procedure as required under the Act and the Rules, 2002 was duly followed by the Bank.

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As far as the impugned judgment is concerned, it is based mainly on the ground that there is violation of Rules 8(2), 8(5) and 8(7) of the Rules, 2002. Learned counsel for the Appellant filed additional evidence under Order 41 Rule 27 C.P.C. which was allowed. No evidence in rebuttal was filed by the Respondents.

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Since additional evidence is filed by the Appellant Bank in Appeal, although this issue could be disposed of in Appeal also, but keeping in view the fact that if the issue is decided in Appeal, a right to Appeal by either of the parties who may be a looser would be lost, hence I find it appropriate that the matter be remanded back to the Learned DRT to decide it afresh in view of the documents filed by the Appellant Bank after affording an opportunity of hearing to the parties. Accordingly, Appeal is liable to be allowed.

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O R D E R

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Appeal is allowed. The impugned judgment and order dated 09.05.2023 passed by Learned DRT-1, Hyderabad in SA No.111 of 2020 is set aside.

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Matter is remanded back to the learned DRT-1, Hyderabad to decide it afresh after taking into consideration the additional evidence filed by the Bank. Learned DRT would also allow the SARFAESI Applicant to file evidence in rebuttal thereafter Learned DRT would decide the matter afresh after affording opportunity of hearing to the parties in accordance with law.

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Copy of the order be supplied to Appellant and the Respondents and a copy also be forwarded to the concerned DRT and uploaded in the official website.

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File be consigned to Record room.

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Order dictated and pronounced in open Court.

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(Anil Kumar Srivastava,J) Chairperson

State Bank of India v. Ranjeet Seeds Rep by its prop Sri Katturi Gangadhar

Case brief

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State Bank of India v. Ranjeet Seeds Rep by its prop Sri Katturi Gangadhar

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