Dismissed

M S S K Industries v. Union Bank of India

DRT21 Oct 2024SA/64/2023

Case brief

AI extract

What is this about?

An application under Section 17 of the SARFAESI Act challenging an auction sale notice was dismissed. The court observed the sale notice became infructuous as the scheduled auction was not conducted, rendering the challenge devoid of merits.

What did the court decide?

The Securitization Application (SA No. 64/2023) is dismissed. Interlocutory applications, pending if any, stand disposed of.

M S S K Industries versus Union Bank of India — Banking and Recovery | DRT (2024)

¶1

IN THE DEBTS RECOVERY TRIBUNAL - I AT HYDERABAD

¶2

DATED THIS THE 21ST DAY OF OCTOBER,2C24

¶3

PRESENT: GUMMADI GOPICHAND, PRESIDING OFFICER

¶4

sA.No.64/2C23

¶5

M/s SK Industries

¶6

Rep. by its Proprietor Mr.BathulaSrikanth, S/o Kailashpati, aged 46 years, Occ:business, H.NO.6- lO-12 I 2, Vinayaka Nagar, Near Vinayaka complex, Bala Nagar, Hyderabad-sOo 042.

¶7

..Applicant

¶8

Versus

¶9

l.Union Bank of India, Rep. by its Authorized Officer, Regional Office , 1"t floor, Sultan Bazar, Koti, Hyderabad

¶10

..Respondent Bank

¶11

Counsel for the Applicant Counselfor the Respondent Bank

¶12

Si D.Raghatrulu. Smt. Tarangini Pisipati

¶13

.:ORDER:.

¶14

This application is filed by the Applicant u/s. 17 of the SARFAESI Act, 2002, challenging the e Auctiop. Sale Notice dt.20.0 l.2O2S issued by the Respondent Ban f auction on 23.02.2023 in respect of the sch lare the same as null and void. ?1fltf mt 2. The averments f, are that: ,q Se^{application, inj} fr .,';rb,.'ru,ror,*-i3o$i

¶15

The Applicant availed 8et Credit loan of Rs.4O lakhs schedule property. But due to covid-19, he could not repay the loan amount due. on 18.02.2023, the Applicant came to knowthat

¶16

sA 64/2023

¶17

theRespondentbank is trying to sell the schedule propert5r in pursuance of the e Auction Sale Notice dL21.Ol.2023. The Applicant is ready to deposit some amount and regularize the loan account but the Respondent Bank is tying to sell away the schedule property at a cheaper price. Demand notice, possession notice and sale notice are not served on the Applicant and the said possession notice and sale notices are not published in daily newspapers nor affixed on the schedule property. Hence the SA.

¶18

¶19

The Respondent Bank filed their Reply denying all the adverse allegations made in the SA. The contentions of the Respondent Bank in brief are that, the Applicant having availed the credit facilities from the Respondent Bank for the purpose of business, failed to repay the loan amount and so, the Respondent Bank initiated measures under the provisions of SARFAESI Act, 2OO2 and issued Demand notice u/s 13(2) of the SARFAESI Act,2oO2 on 26.07.2027 demanding to repay the entire outstanding dues within 60 days^from the date of receipt of said notice and the said notice was sent to^the Applicant by Regd. Post. When the Applicant has not complied^with the said demand notice, the Bank issued^{possessionnotice} dt.22.lo.2o2l u/s 13(4) of the Act for taking symbolic^possessionof the schedule property and the said notice was sent^{to the Applicant} through regd. Post and published in two daily^newspaperson 25.10.2021 and copy of the said notice was affixed on the^schedule properly. Thereafter E Auction Sale Notice dl.2o.Ol.2023 was issued for conducting auction of the schedule property but however,^the said saie could not be conducted and hence thesale^notice dt.2O.lO.2O23 becomes infructuous. The Respondent Bank^has scrupulously followed the p scribed under the provisrons ofSARFAESI Act,2OO2 er in issuing the sale notice against the sc ,^{the Respondent} Bank prayed to dismi * 21^{ocl mt} tr'

¶20

sA 64/2023

¶21

Heard Ld. Counsel for the Applicant and Ld. Counsel for the Respondent Bank and perused the material brought on record.

¶22

Now, the points that arise for consideration are,-

¶23

Whetler the Applicant is entitled to challenge the e Auction Sale Notice dt.20.01.2023 issued bg the Respondent Bank against the schedule propertg?

¶24

ii) To uhat relieJ?

¶25

Polnt No.lll :-

¶26

During the course of arguments,^{Ld. Counselfor the Applicantand} Ld. Counsel for the Respondent^{Bank reiterated their respective} versions as stated suPra.

¶27

7 . There is no dispute^{regardingthe fact that the Applicant having} availed credit facilities^{from the Respondentbank, committeddefault} in payment of outstanding^{dues and so the Respondent Bank} declared the 10an account^{as NPA and initiated measures under the} provisions of SARFAESI^{Act,2OO2. There is also no disputeregarding} the fact that even though,^{the RespondentBank has issuedsale} notice for conducting^{auction of the schedule property,no sale was} conductedinpursuanceofthesalenoticeandso,thesaidsalenotice becomes infructuous.^{The RespondentBank in order to establishthat} the Bank has followed^{the procedurelaid down under the SARFAESI} Act, 2OO2 in issuing demand^{notice,possessionand sale notice,filed} necessary material^{documents along with the Reply filed by them'}

¶28

As per the said t the Respondent^Bank issued Demand^no 2) of the SARFAESI^Act and the said noti VIAS t as evidenced^{bY the} Thereafter, the

¶29

postai acknow

¶30

sA 64/2023

¶31

Respondent Bank issued Possession Notice dt.22.10.2021 under Rule 8( 1) of Security Interest (Enforcement) Rules, 2002 for taking symbolic possession of the schedule property and the said notice was sent to the Applicant and the said notice was published in Telugu and English daily newspapers on 25.L0.2021 and copy of the said notice was also affixed on the schedule^property as depicted in^the photographs filed by the Respondent Bank. Thereafter, the bank issued e Auction Sale Notice dt.2O.Ol.2O23 fixing the date^{of auction} on 23.02.2023 in respect of the schedule property.^{However,no sale} was conducted by the Respondent Bank in^{pursuanceof the sale} notice dt.20.01.2023, so the said sale notice^{becomesinfructuous. In} view of the above, nothing survives in the^{SA for decidingthe validity} or otherwise of the impugnedSale^{Notice dt.20.01 .2023.}

¶32

So, considering all the circumstances,^{I am of the opinionthat there} are no merits in the SA. If the^{RespondentBank intends to conduct} sale in respect of the schedule^{property,the Bank has to initiate fresh} measures under the^provisions of^{SARFAESI Acl,2OO2 as the e} Auction Sale Notice dt.2o.O1.2023^{becomes infructuous. This point is} answered accordinglY.

¶33

Polnt No.lllb

¶34

In the result, the present Securitization Application is^dismissed' Consequently, the Interlocutory Applications,^{pending if any,shall} stand disposed of. No order as to costs.

¶35

a copy of this order to the^{parties concerned'}

¶36

her, coffected, signed^{andpronouncedbA me in the opencoun on this the21d day}

¶37

*
sd/-
21 ofi m0
TRUE COPY (c. GoPTCHANDI
N /, / : PRESIDINGOFFICER
/r,##;i;r;T'rof vt-

M S S K Industries v. Union Bank of India

Case brief

What is this about?

What did the court decide?

M S S K Industries v. Union Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

State Bank of India versus M/S. Cuts and Curve

State Bank of India versus Suggala Sai Kumar

State Bank of India versus Vaishnavi Enterprises

State Bank of India versus Brite Industries

Ms Mourya Enterprises versus State Bank of India

M S Sai Kiran Granites versus State Bank of India