Dismissed

Ms Venkatshwara Industries v. Union Bank of India (Andhra Bank)

DRT21 Jan 2025SA/107/2022

Case brief

AI extract

What is this about?

This application challenging the sale notice issued by Union Bank of India under Section 17 of the SARFAESI Act was dismissed. The Tribunal found that the bank scrupulously followed the statutory procedure by issuing demand, possession, pre-sale, and auction notices as required.

What did the court decide?

Application filed under Section 17 of the SARFAESI Act, 2002 challenging the sale notice and related interlocutory applications were dismissed.

Ms Venkatshwara Industries versus Union Bank of India (Andhra… — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERYTRIBUNAL - I AT HYDERABAD DATED THIS THE 21ST DAY OF JANUARY, 2025

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PRESENT: GUMMADI GOPICHAND, PRESIDING OFFICER

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sA.No. 1O^7 /2022

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M/ s Venkateshwara Industries Rep. by its Managing Partner Sri Nukala llamesh Babu, Aged 56 years, Occ:business, Situated at D.No.2 -137 &,2-137A, Hasnapur Village, Bhoothpur Mandal, Mahbubnagar District.

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..Applicant

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Versus

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Union Bank of India (Erstwhiie Andhra Bank) Rep. by its Authorized officer Mahabubnagar Branch-ll, Situated at PB No.8, Opp.Police Head Quarters, Mahbubnagar-50900 l.

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..Respondent Bank

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Counsel for the Applicants

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Counsel for the Respondent Bank

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Sn D. Raghauulu Si V. Sethumadhaua Rao

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:ORDER:

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This application is liled by the Applicant u/s.17 of the SARFAESI Act, 2002, challenging the e Auction Sale Notice dt.21.O4.2022 issued by the Respondent bank fixing the date of auction on 20.05.2O22in respect of the sched to declare the same as null and void.

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'! that:
'l'he averments , :: mbd. . ,fr gh11 $pplimtionfi,,,.i t{r_,.,;

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The Applicant availed occ limit of Rs.540 lakhs, Adhoc Limit of Rs.108 lakhs and Term loan-I of Rs.125 lakhs and rerm Loan-II of Rs'69 lakhs from the Respondent Bank for conducting business and created mortgage in respect of the schedule property. Later the Applicant could not pay some instalments due to huge loss in the business and so, the loan account wasdeclared as NpA. Thereafter the Applicant made proposal for orS and made certain payments. But the Respondent Bank without considering the same, initiated proceedings under the provisions of SARFAESI Act, 2oo2 and without issuing any demand notice and possession notice and without affixing the possession notice on the schedule property and publishing the said notice in two daily newspapers, straightaway issued sale Notice dt.2r.o4.2o22 for conducting auction of the schedule property. The said sale notice was not served on the Applicant and also not affixed on the schedule property nor published in daily newspapers and hence all the impugned notices are not legal and liable to be set aside. Hence, the sA.

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'l'he Respondent Bank filcd their Reply Statement denying all the adverse allegations made in the SA. It is contended that the Applicant availed various loan facilities from the Respondent bank by creating mortgage in respect of the schedule property and thereafter committed default in repayment of loan instalments and the loan account of the Applicant was classified as NpAand a demand notice dt.02.0g.2olg u/s 13(2) of the SARFAESI Act, 2oo2 demanding to pay the entire outstanding dues was issued to the Applicant and the Applicant received the said notice.Even though there was proposal for one Time Settlement, the Applicant failed to pay the ors amount within the stipulated e OTS was cancelled. Subsequently, the Respond.g session notice dt.11 .1O.2O18 u/s 13(4) of theffict an e said'StrqS was sent by Regd. post and the Jr.^,,: Applicant receiv2t ,lgu "ffi noffcpn and the said notice was also published in, two daily newspapers, and also affixed on the schedule property. r the ry#g.t Bank obtained valuation report

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from the approved valuer of the Bank and basing on the said report, fixed reserve price against the schedule property. Thereafter the Respondent Bank issued Auction Sale Notice dt.21.O4.2022 by fixing the auction of the schedule propert5r on 2O.O5.2O22 and the said notice was received by the Applicant and the said notice was also published in Business Standard and Sakshidaily newspapers and also affixed on the schedule property. Thus the Respondent Bank has followed the procedure prescribed under the provisions of SARFAESI Act, 2OO2 and Rules made thereunder in issuing the mandatory notices and So, there are no merits in the SA. Accordingly, the Respondent Bank prayed to dismiss the SA.

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

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Now, the points that arise for consideration are,

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Whether the Applicant established ang ualid ground for challenging theSale Noticedt.21.04.2022 issued bg the Respondent Bank in respect of the schedule propertg?

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ii) To uhat relieft

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Point No.(i):-

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During the course of arguments, Ld. Counsel for the Applicant and Ld. Counsel for the Respondent Bank reiterated their respective versions as stated supra.

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There is no dis act that the Applicant availed various mortgage of r sch property and thereafter committed default in repayment of ioa., A,-S"tllthrlffip.cific contention of the Applicant is i '^."

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that without i .qs"ping ssui any notices as prescribed under the provisions of -' ,1,. "+-r!'. ...'"i'

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SARFAESI Act, 2oo2 and Rules made thereunder, the Respondent Bank proposed to conduct auction of the schedule property on 2o.o5.2o22 in pursuance of the sale Notice dt.2t.o4.2o22. per contra, the Respondent Bank contended that the Bank has scrupulously followed the procedure laid down under the provisions of SARFAESI Act, 2oo2 and Rules made thereunder in issuing demand notice, possession notice, pre-sale notice and sale notice in respect of the schedule property.

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In support of their contentions, the Respondent Bank filed relevant material documents along with the Reply filed by them. As per the material documents liled by the Respondent Bank, it is clear that the Respondent Bank has issued demand notice dt.o2.og.2olg u/s 13(2) of the SARFAESI Act, 2oo2 and sent the same to the correct address of the Applicant through Regd. post and the Applicant received the said notice. Thereafter on 11.10.201g, the Respondent Bank issued possession notice u/s 13(a) of the SARFAESI Act, 2oo2 and the said notice was sent to the Applicant through Regd. post as evidenced from the postal acknowledgments. The said notice was published in Andhra Jyothi and The New Indian Express daily newspapers as evidenced from the copies of paper publication liled by the Respondent Bank and said notice was also affixed on the schedule property as depicted in the photographs filed by the Respondent Bank. Thus the Respondent Bank has duly complied with Rule 8(1)&(2) of security Interest (Enforcement) Rules, 2oo2 in taking possession of the secured asset.

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As per the material documents filed by the Respondent Bank, it is quite clear that .uction,^{the Bank has issued} Pre Sale Notice dt.26.ryo.zoX's;,Mi'"*Qt'"tt Security Interest (Enforcement) fr'. - 'illi;i '1'r'r,,-1,--------J {,bi,"^{giui.,g *rt oppo.tuniiy to the Applicant to redeem} the schedule prooerty,,within 30_.4lays and the said notice was sent to the :l Applicant .lhroughL Regd. Post. Thereafter, the Respondent Bank ....^,..;

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issued e Auction Sale Notice dt.21.O4.2022 for conducting auction of the schedule property on 2O.O5.2O22 and the said notice was published in Business Standard and Sakshi daily newspapers on 29.04.2022 as evidenced by the copies of paper publication filed by the Respondent Bank. The said sale notice was also affixed on the schedule property as depicted in the copies of photographs filed by the Bank. In fact, physical possession of the schedule property was also taken by the Respondent bank as depicted in the copies of photographs filed by the Bank.Thus, the Respondent bank has scrupulously followed the procedure laid down under the provisions of SARFAESI Act,2OO2 and Rules made thereunder in issuing demand notice, possession notice, pre-sale notice and e auction sale notice to the Applicant.

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So, considering all the circumstances, I hold that the Respondent bank has duly followed the procedure prescribed under the provisions of SARFAESI Act, 2OO2 and Rules made thereunder in issuing Possession Notice dt. 1 1. 10.2018 and Sale Notice dt.21.O4.2o22in respect of the schedule property and so, there are no merits in the SA. Accordingly, this point is answered in favour of the Respondent Bank and against the Applicant.

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Potnt No.liil:-

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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.

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t2. Communicate a copy of this order to the parties concerned.

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by her, conected, signed and pronounced bg me in the open court on this the 21d daA

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"i sd/(G. GOPI CHAND) PRESIDING OFFICER ,6Rg Lt.^>. .-t*',;H;.Hlo.

Ms Venkatshwara Industries v. Union Bank of India (Andhra Bank)

Case brief

What is this about?

What did the court decide?

Ms Venkatshwara Industries v. Union Bank of India (Andhra Bank)

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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