Dismissed

Yara Linga Reddy v. Karnataka Bank Limited

DRT3 Dec 2025SA/164/2024

Case brief

AI extract

What is this about?

Application under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act challenging a Sale Notice for property auction. Tribunal dismissed the application as infructuous since no auction was conducted due to interim orders, holding relief unclaimed.

What did the court decide?

Application dismissed; direction given to Respondent to issue fresh sale notice if applicable.

Yara Linga Reddy versus Karnataka Bank Limited — Contract and Commercial Disputes | DRT (2025)

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IN THE DEBTS RECOVERYTRIBUNAL - I AT HYDERABAD

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DATED THIS THE 3RD DAY OF DECEMBER, 2025

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PRESENT: SRI GUMMADI GOPICHAND, PRESIDING OFFICER

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SA.No.164/2024

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Yara Linga Reddy, S/o Sammi Reddy, Aged 48 years, Occ:business, R/o H.No. 11-29-3231A, 2'd floor, R.B Colony, Deshaipet Road, Warangal-506002

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... Applicant

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Versus

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Karnataka Bank Ltd. Rep. by its Authorized officer Asset Recovery Management branch, Plot No.50, lst floor, Srinagar colony, Banjara Hills, Road No.3, Hyderabad-SOO 073.

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... Respondent

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Counsel for tte Applicant :S'iT.Sidhar Counselfor Respondent : Si N.Rama Rao

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Reserued on Pronounced on Uploaded on

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: 23.10.2025

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:03.12.2O25 : O3.12.2025

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ORDER

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This Application is filed u/s. 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2OO2 )^{challenging the Sale Notice dt.03.04.2024 issued by} for conducting auction ofthe schedule property on the same as null and void.

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,n",.1.L0.i8,"ffio. {. pt Applicant in brief are as follows: ^.l

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Q;sm#

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Applicant availed loan from the Respondent bank against the mortgage of schedule property. The Applicant offered OTS for an amount of Rs.18 lakhs but without considering the same, the bank proceeded further for taking physical possession of the schedule property and challenging the said proceedings, the Applicant liled SA 3612020 and the said SA was later dismissed. The Respondent bank without issuing demand notice and possession notice and without following Rule 8(1)(2) of Security Interest (Enforcement) Rules,2Oo2, issued the impugned Sale Notice dt.O3.O4.2O24 and the said notice was neither published in two leading newspapers nor affixed on the schedule property. Hence the SA.

¶19

The Respondent bank liled their Reply denying all the adverse allegations made in the SA and contended that the Applicant availed loan from the Respondent by creating mortgage in respect of the schedule property and thereaJter committed default. The Applicant offered very low amount under OTS and so, the Respondent Bank refused the said OTS proposal and issued demand notice adt.l4.06.2018 and possession notice dt.06. 11.2018 and obtained orders in Cr1.M.p.No.234/ 19 for taking physical possession of the schedule property. Challenging the said proceedings, the Applicant filed SA 36l2O2O before this Honble Tribunal and the said SA was dismissed on merits. Thereafter the bank issued Auction Notice dt.O3. O4.2O24 for conducting auction of the schedule property on 29.O5.2O24 and the said notice was published in two leading newspapers and the said notice was received by the Applicant. Challenging the same, the Applicant filed the present SA and obtained interim orders. Thus, Respondent bank duly followed the procedure contemplated under the provisions of SARFAESI Act, 2OO2 ar,d Rules made thereunder in issuing all the statutory notices to the Applicant and accordingly, prayed to dismiss the SA.

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Heard Ld. Counsel fqf tt. t and Ld. Counsel for the Respondent. Perused the r{a0"fie3'u16stt

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Now the points that arise for consideration are

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ii. uthetler tlw Applicant has establisted ang ualid grounds for challenging the impugned Sale Notice dt.03.O4.2O24 issued. bg tle Respondent against the schedule propertg?

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iii. To utlwt relief?

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Point .I\Io.(if :-

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

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There is no dispute regarding the fact that the Applicant availed loan from the Respondent and thereafter committed default in repaying the loan dues. There is also no dispute regarding the fact that challenging the proceedings initiated by the Respondent for taking physical possession of the schedule property, the Applicant fited SA 3612020 and the said sA was dismissed by this Tribunal vide orders dt.OZ.Og.2O2g and so, there is no need to decide the vatidity or otherwise of the demand notice and possession notice issued by the Bank in the present SA. Thereafter the Bank issued the impugned Sale Notice dt.o3. o4.2o24 for conducting auction of the schedule property and challenging the same, the Applicant filed the present SA.

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The specific contention of the Applicant is that the Bank issued the impugned Auction sale Notice dt.03.0 4.2024 for conducting auction of the schedule property without following the procedure contemplated under the Act,2OO2 and Rules made thereunder and so, the said SaIe legal and valid and liable to be set aside.

¶28

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But the Respondent contended that they have issued all the statutory notices to the Applicant under the provisions of SARFAESI Act,2002 and Rules made thereunder.

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10' Along with the Reply, the Respondent Bank frred copy of the order dt.o7.o9.2o23 passed by this Tribunal in sA 36/2020 holding that the Applicant has failed to establish any valid grounds for setting aside the action of the Bank to take physical possession of the schedule property. So, the said order operates as Res-judicata and there is no need to decide the validity or otherwise of the demand notice dt. 14.06.201g and possession notice dt.06.l L.2oLg issued by the bank in the present sA. Thereafter, the Respondent issued e Auction sale Notice dt.o3.o4.2o24 and the said notice is received by the Applicant. In fact, the Applicant filed copy of the said notice along with the SA filed by him.

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However, during the course of arguments, Ld. counsel for the Respondent submitted that in pursuance of the impugned SaIe Notice dt.03.04.2024, no auction was conducted by the Respondent against the schedure property in view of the interim orders passed by this Tribunal. As no auction was conducted in pursuance of the impugned sale Notice dt.o3.o4.2o24, the rerief claimed by the Applicant in the sA becomes infructuous and nothing survives in the present SA for adjudication and there is no need to decide the validity or otherwise of the impugned sale notice. Hence, I am of the opinion that the relief claimed by the Applicant in the present SA becomes infructuous and the SA is liable to be dismissed. suflice, if a direction is given to the Respondent bank to issue fresh sale notice for conducting auction of the schedule property by . :^;::--:::::"" contemplated under the provisions of made thereunder.

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Potnt No.(ti)t

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t2. In the result, sA 164 124 is dismissed as there are no merits. Consequently, the Interlocutory Applications, pending if 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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(Dctated. to tl, P.s, transcibed. ba lrcr, corrected, signed. and. pronounced bg me in the open coult on this the 3RD dag of December, 2O2S).

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sd/(G. coPr CHAND) PRESIDING OFFICER

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Yara Linga Reddy v. Karnataka Bank Limited

Case brief

What is this about?

What did the court decide?

Yara Linga Reddy v. Karnataka 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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