Dismissed

M Ashok v. a P Mahesh Co. Operative Urban Bank Limited

DRT14 Nov 2025SA/103/2023

Case brief

AI extract

What is this about?

In this debt recovery proceedings under the SARFAESI Act, 2002, the Debts Recovery Tribunal dismissed the applicants' challenge against a Sale Notice and possession steps, holding that the bank followed statutory procedures, but remanded the matter for conducting a fresh auction due to the impugned auction not having been conducted.

What did the court decide?

Application dismissed on merits; Respondents directed to proceed afresh for auction by issuing a fresh sale notice.

M Ashok versus a P Mahesh Co. Operative Urban Bank… — Contract and Commercial Disputes | DRT (2025)

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IN THE DEBTS^{RECOVERYTRIBUNAL} -^{1 AT HYDERABAD}

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DATED THIS^{THE I4TH DAY OF NOVEMBER'2025}

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PRESENT:^{SRI GUMMADI GOPICHAND, PRESIDING OFFICER}

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sA.No.1c.3/2023

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1.M. Ashok,

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S/o late Sri^{M.Silas,aged53 Years,} Occ:business,^{R/o H.No. 1-6-212 I 24,} Parsigutta,^Musheeabad,

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Hyderabad-50002O'

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Smt.K.D.^{Prema Latha,} W/o M.Ashok,^aged55 Years, Occ:service,^{R/o H.No. 1-6-212I 24'} Parsigutta,^Musheeabad,

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Hyderabad-500020

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Sri M.^Abhishek, S/o M.Ashok,^aged29 Years, Occ:doctor,^{R/o H.No'1-6-212124'} Parsigutta,^Musheeabad,

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Hyderabad-500020

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Smt.Thabitha^Rani,

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W/o Shiva^{Kumar,aged 52 Yeas,} Occ:service,^{R/o H.No'1-31,} Srinivas^{ColonY,OPP'LIC Office,}

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Jadcherla-5090O^{1 .} Mahaboobnagar^District'

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. .. Applicants

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Versus

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1.A.P. Mahesh^{CooperativeUrbanBank Ltd''} Rep. bY its^{Authorized officer} H;in;^{its Regd.offic9-!-s-o^8-o,III floor'} N.s. ft:.':i?"dilil;;ffi:sooosl',rf#-i::.S;;Road,^{Hvoeraoaq-ow":'".}

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. ..,j.fi{lt.l;nfq_.:N
''&
2. A.P. Mahesh Coop. Urban Bank Ltd'' .r;..-'', il..i
\Y 7- I
Rep. bY its Chief MT$:J, . ^ -^^ t; h A
ii"C Ground i"""a"'u."""t floor, Chikkad"p;v,' , oINo. r-e-s2213 ---';- &, 4, ' , 1 4 n ifilU ^ ilm \ .1,al
Hya..ut"a-sbo ozz. !.,t ...., '?'r
.-,'l,1ltr -"F'',i:;
''- ''.;,:.i!t,r*-U 'I "'t'ct";"t't'
=*

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a.,r.r.r*urt^JogaRao, S/oSuwari^{KrishnaRao,aged28} Occ:Doctor,^{R/oH.No'25-I 12,} RoadNo.2,^{Maruthinagar, Alwal,} R.R.District.	^years,
4.St.JosePh's^{VOCJuniorCollege,} Rep.bYits^{DirectorKum.MotikYa} Anupriscilla,^H.No.l-6-212I^24, Parsigutta,^Mushseerabad Hyderabad-SOo^020.	... Respondents
Counselfor^{theAPPlicants} Counsel-for^{ResPondentsNo'1 &2} Respondents^No.3&4	SiJ.Narendra^Kumar SriMagur^Mundra Exparte
Reserued^on Pronounced^on uploadedon	16.10.2025 14.11.2025 15.11.2025

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ORDER

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This Application^{is filed u/s'17 of the Securitization and Reconstructionof} Financial^{Assetsand EnforcementofSecurity InterestAct'2OO2} (SARFAESI Act,2OO2\challenging^{the Sale Notice dt' 14'O2'2023 issued by} the l"t Respondent^{for conductingauction of the schedulepropertyon} ll.o4.2o23andalsotheStepsinitiatedbythelstRespondentfortaking

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physical^{possession of theschedule property throughadvocate} commissioner^{pursuant to the ordersof Ld'XVII Addl'CMM'Hyderabad} and also^{to declarethe same as null and void'}

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The averments^{made by the Applicantsin brief are as follows:} loan from^{the 2nd Respondentfor the}

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The APPlicants . The APPlicants^{No.3&4 stoodas}

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purpose of &d^App t No. ted mortgage^{againstthe schedule} Applicants^{No.1&2is for education}

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propertY t would^{be after comPletionof the}

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purpose

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education^{as per the observationmade by the High court for the Stateof} Telangana.^{The 2'd Respondent charged huge interest treatingthe loanas} mortgage^{loan instead of educational loan' The Respondents No'1&2} initiated^{proceedingsunder ttre provisionsof SARFAESIAct'2OO2 and} issued notices^{u/s 13(2) & 13(4)of the Act' The Respondentalso issued} the impugned^{sale notice dl'14'O2'2O2g for conducting auction of the} schedule^{property on ll'O4 '2023' The RespondentsNo' 1&2 approached} Ld'xul^{Addl'CMM,Hyderabadby filing Crl.M.P.No.1o33/22for} appointment^{of advocatecommissionerfor taking physical possessionof} the schedule^{property'The Respondents No'1&2have not followedthe} procedure^{contemplatedunder the provisionsof SARFAESI Act' 2OO2 and} Rules made^{thereunder in initiatingproceedingsagainstthe schedule} proPertY.^{Hence the SA'}

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J. The Respondents^{No' 1&2 filed their Reply and Additional Replydenying} all the^{adverse allegationsmade in the SA and contended that Applicants} No.1&2^{availed mortgage loanof Rs'2Olakhs from the Respondent No'2 by} creating^{mortgage against the schedule property'The Applicants No'3&4} stood as^{guarantors'In view of the default committed by the Applicants} No.1&2^{inrepaying the loan dues' the loan account was classifiedas} NPA.^{Thereafter,theRespondent bank issued demand notice} dt.19.05.2018^{u/s 13(2)of the SARFAESIAct' 2OO2and the same was} received^{by the Applicants' Thereafter'the Respondents issuedpossession} notice^{dt.29.08'2018u/s 13(a) of the Act'2O02and the said possession} notice^{was published in two dailynewspapersand also affixed on the} schedule^{property' Thereafter'the Bank approachedLd'XVUAddl'CMM'} Hyderabad^{u/s 14 of the SARFAESI Act' 2oo2for} .appoi"T:Tl:T:1: tutit'g^{pt'vsicalpossessionof the schedule propertv and} ;J;;;;,.-r* i ss Lrcuued^{notice rrvlrvvto} '"^{the Applicants to vacate} the said^{adv.geqfecgml6$qlaqerr} ;" ;.-1;":o''g;L:qdents^{No'l &2 arso issuedAuctionnotice} o,.rr.rr.r+ta^{irr r"iit"t tffr\schedule propertv' challenging the} -"^{,* -ii} * p.."."1i*"^{in+iqtqfrP]z0} 1!-!--'-'^r---rr-c e.)!n.l"nts^RedFlfaents No.1&2,^{r\o' rcz'the Applicants filedSA} \ i i11,+-. t:r.o .,P.-p- Sl, '*,fr!*W

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252118^{and SA 32120 and' the same were dismissed' The Applicants} suppressed^{about the filing of the said applications'The loan availed by} the Applicants^{is term Ioan and it's not educational loanas contended by} the Applicants.^{Thus the bank has duly followedthe procedure laid down} under^{the provisionsof SARFAESI Act' 2OO2 and Rules madethereunder} and there^{are no violations. Accordingly,the RespondentBank prayed to} dismiss^{the SA.}

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Heard^{Ld. Counsel for tle Applicantsand l'd' Counsel for the Respondents} No.1&2.^{RespondentsNo'3&4remainedexparte' Perusedthe material} brought^{on record'}

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Now the^{points that arise for considerationare}

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uhetler^{the Applicantshaueestablishedang ualid grounds for} challenging^{tlw Sale Notice dt'14'02'2023issued bg tlw Respondent} Bank for^{conductingauction of t?e scledule propertg?}

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Whether^{the Applicantshaue establishedang ualid groundsfor} challenging^{tle steps initiated bg the RespondentsNo' 7&2 for taking} phgsical^{possessionof the scledulepropertg throughaduocate}

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commissioner?

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Ll. To uhat^relief?

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Points No.(t)&(ii):-

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During^{the course of arguments'Ld' Counsel for tlle APdlcants "":i} t Bank^{reitlrated their respectiveversionsas}

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Counsel^{for tle Be}

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stated^{suPt'i. tr, ."} -it''

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that the^{Applicant No' 1 availed Term}

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1. The undisPutfdif4tr? ffi" "* whereas^{the Applicants No'3&4 stood}

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loan^{., from the ResPondent^$1}

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as guarantors.^{ApplicantNo'l created mortgage against the schedule} property and^{thereafter, committed defaultin repaying the loan dues' So} the loan^{accountwasclassiliedas NPA by the RespondentBank'}

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The specific^{contention of the Applicantsis that withoutfollowingthe} procedure^{contemplated under the provisions of SARFAESIAct' 2002and} Rules made^{thereunder, RespondentsNo' 1&2issued the impugned Sale} Notice dt.14.O^{2.2023 for conductingauctionof the schedule property} and also^{trying to take physical possessionof the schedule property} through^{advocate commissionerand so, the said proceedingsinitiated by} the Respondents^{No'1& 2 are illegal and liable to be set aside'}

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Per contra,^{Respondents No'1&2 contended that the Respondent Bank} has scrupulously^{followed the procedure contemplatedunderthe} provisions^{of SARFAESI Act' 2OO2 and Rules made thereunderin issuing} all the^{statutory noticesto the Applicants and the bank also followed} the^{procedure contemplatedunder the provisionsof SARFAESI Act' 2002} and Rules^{made thereunderin initiating steps for taking physical} possession^{of the schedule property and that the loan availed by the} Applicants^{No.1&2 is term loan but not educational loan' Further} contention^{of the Respondents No'1&2 is that on earlier occasion'the} Applicants^{filed SA 2521 lSandSA 32120on the file of this Tribunaland} the said^{SAs are dismissed' But the said fact is suppressed by the} ApPlicants..

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Along with^{the SA, the Applicantsfi1ed copiesof the demand noticedt'} 19.05.2018,^{possession notice dt'29'08'2018 and also Sale Notice} the Respondents^{No'1&2' As per the said} dt.14.O2.2 ts No.1&2^{after classifying the loan} A, issued^{demandnotice dt'19'05'2018} * 1 4 lli0u 2tI6 V*k..-u9

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and^{possession noticedt'29'O8'2018to the Applicantsand the Applicants} received the^{said notices'}

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The^{RespondentsNo'1&2filed relevant material documentsto establish} that the^{Bank has scrupulouslyfollowedthe procedurecontemplated} under the^{provisions of SARFAESI Act'2OO2 and Rules made thereunder'} As per the^{said documents, it is clear that the Respondent Banksanctioned} Mortgage^{Ioan on l4'O7} '2017^{to the Applicant No'1' As per the sanction} letterdt.14'07,2o|T,itisclearthatloansanctionedbytheRespondent bank in^{favour of the ApplicantnNo'1 is Mortgageloan but not educational} loan as^{contended by the Applicants'The RespondentBank issued} possession^{notice dt.2g.0g.2o1g and sentthe sameto the Applicantsand} thesaidnoticewaspublishedintwodailynewspapersasevidencedbythe copies of^{paper publicationfiled by the bank'}

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As per^{the provisionsof Section 14 of SARFAESIAct' 2O02' after issuance} of^{possessionnotice u/s 13(4) of the SARFAESIAct' 2OO2 ' the secured} creditor^{is at liberty to approach the concerned DistrictMagistrate or Chief} Judicial^{Magistrate for taking physical possessionof the secured asset'} In the^{instant case, after issuing demandnotice and possessionnotice to} the Applicants,^{the Respondentbeingsecured creditor' approached} Ld.XVII^{Addl.CMM,Hyderabadu/s 14 of the SARFAESIAct' 2OO2 for} appointment^{of advocatecommissionerfor taking physical possessionof} the schedule^{property' Ld' XVIIAddl'CMM'Hyderabad aftergoingthrough} the record,^{appointed advocate commissioner and theadvocate} commissioner^{issued notice for taking physical possessionof the} schedule^{property' So, the said proceedingsinitiated by the Bank for}

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of thd^{schedule property through advocate} taking Iegal and^valid'

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*i 14il0ll2ffi

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1;. So^{far as the impugned SaleNoticedt'14'O2'2O23is concerned' during} the course^{of arguments, boththe Ld' Counselsubmitted that no auction} was conducted^{by the bank in respect of the scheduleproperty in} pursuance^{of the saidsale notice'So there is no needto decidethe validity} or otherwise^{of the impugnedSale Noticedt' 14'02'2023 issued by the} bank in^{respect of the schedulepropertyand so' the saidsale notice} becomes^{infructuous'Thesepoints are answeredaccordingly'}

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Polnt lilo.(tll)r

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t4. In the result,^{SA 103/23 is dismissedas there are no merits' The} Respondents^{No.l&2 are directedto proceed afresh for conducting} auction^{of the schedulepropertyby issuing fresh sale notice by duly} following^{the provisions of SARFAESIAct' 2OO2and Rulesmade} thereunder.

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Consequently,^{the InterlocutoryApplications, pendingif any, shall stand} disposed^{of. No order as to costs'}

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

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tDictated b^{e P.S, tronscribedbV her' co'lected'signed and pronouncedbg me in the open} ti"i,it"ti.r-ir tin aas of Nouember' 2o25)'

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sd/_ (G. GOPI CHAND) PRESIDING^OFFICER

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OPY

M Ashok v. a P Mahesh Co. Operative Urban Bank Limited

Case brief

What is this about?

What did the court decide?

M Ashok v. a P Mahesh Co. Operative Urban Bank Limited

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

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