Dismissed

Smt Chellaboyana Sri Laxmi v. State Bank of India

DRT13 Jun 2025SA/180/2022

Case brief

AI extract

What is this about?

In this Securitization Application, the applicant sought re-delivery of mortgaged property and setting aside an auction sales notice. The Court examined the bank's adherence to the SARFAESI Act and Rules, finding the auction and possession process valid and dismissing the application.

What did the court decide?

Application dismissed; no re-delivery of property granted; property remains with auction purchasers.

Smt Chellaboyana Sri Laxmi versus State Bank of India — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL'^{I AT HYDERABAD}

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DATED THISTHE 13TH DAY OF^{JUNE,2C^25}

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PRESENT: GUMMADI GOPICHAND,^{PRESIDING OFFICER}

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sA.No.1AO/2022

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Smt. Chellaboyana Sri Laxmi, W/ o Sri M.RavindraBabu, Aged 40 years, Occ:advocate, R/o H.No .7 -85, Shiridinagar, Almasguda, Near VenkateswaraswamY^TemPle, Hvderabad-500 058

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... Applicant

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And

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State Bank of India, Stressed Assets Recovery^Branch-2, H.No.1-8-563/ 1, 1"t floor,

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Opp.Sandhya Theatre,^{RTC X roads,} Chikkadapally, Hyderabad-5O0⁰²⁰ Rep. by its Authorized officer

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BasumanthiniSravan^Kumar, S/o B.Thirupathi,

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R/o F.No.3O3, Gayatri^{V.R. Residency,}

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Sa rasr,l,'athi Nagar ColonY,

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Scc.bad-500 015.

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Smt. Ba sumathiniSushma, W/o BasumanthiniSravan^Kumar,

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R/o F.No.303; Gayatri^V. *'H,:Iffl'sTAis'%4 Respondents rF Counsel for the A r,, 3 ,fiII{ ffi75 V.V. Ramana (lounsel for the R t: bhakar Sharma Counsel.for Re: No.2&3 D.Raghauulu

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: o*R !_E_B:

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t. This application is filed by^{the Applicant u/s17 of the SARFAESIAct,} 2OO2, seeking re-delivery of the^{scheduleproperty whichwas taken} possession by the l"tRespondent^{Bank on 17.08.2022pursuant to the} orders of Ld.District Collector,^{R.R. Districtand also for setting aside} the e Auction Sale^{Notice dt.03.06.2023 issued bythe} l"tRespondentBank^{for conducting auction of the schedule property} on 28.06.2023.

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The avermcnts macie^{in the application, in brief, are that:}

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The Applicant availed^{home loan from the l*tRespondent bank and} created mortgage in^{respect of the schedule property.Due to financial} crisis, the Applicant^{could not repay the loan dues and so, the loan} account was classified^{as NPA. The l"tRespondent Bankissued} demand notice dt.24.11.2021^{and subsequently issue possession} notice dt.O2.O2.2O22.^{Thereafter,the 1st Respondent Bank issued} notice u/18(6) of Security^{Interest(Enforcement)Rules, 2OO2} byputting the schedule^{property forsale. Thereafter, the} I'rRespondent Bank^{issuede Auction Sale Notice dt..05.07-2022 and} final sale notice dt.03.06.2023^{and the said impugned notice was not} affixed on the schedule^{property. Subsequently,the 1st Respondent} bank approachedld.District^{Collector, R.R. Districtu/s14 of the} SARFAESI Act,2OO2^{for taking physical possessionof the schedule} property. As per the orders^{of Ld.DistrictCollector, R.R. District,}

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Ld.Tehsildar, notice to possessi ff^{the sc} ulc bank o Rcspon

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the schedule propertY^{and issued} the schedule^{property.Thereafter,} was taken by the^{1st ResPondent} measures initiated bY the^lst cal posscssion of the^schedule

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property are contrary to the provisions of SARFAEI Act, 2oo2 and Rules made thereunder. Hence the SA.

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aJ. The l"tRespondent Bank filed Reply and Additional Reply denying all the adverse allegations made in the sA. It is contended that the Applicant and her husband availed housing loan from the

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l "tRespondent by creating mortgage in respect of the schedule property. In view of the default committed by the Applicant, the loan account was classified as NPA and the lstRespondent issued demand notice dt.24.ll.2o2l uls 13(2) of the SARFAES| Act,2oo2 by withdrawing the earlier demand notice issued by the lst Respondent Bank and the said demand notice was received by the Applicant but she failed to comply with the said demand noticc, Thcreafter, the 1,t Respondent bank issued possession notice d,t.o2.o2.2o22 and the same was served on the Applicant and her husband. The said notice was affixed on the schedule property and also published in Business Standard and Mana Telangana daily newspapers. Thereafter, the

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lstRespondent tsank issued notice dt.0s.02.2022 u/r g(6) of Security Interest (Enforcement) Rules, 2oo2 and the said notice sent to the Applicant was returned unserved. Thereafter, the Respondent Bank issued Auction Sale Notice dt. 12.o2.2024 by fixing the auction of the schedule property on 18.o3.2o24 and the said notice was published in daily newspapers, however, no auction was conducted in pursuance of the said sale notice.Thereafter ,the lst respondent banktook physical possession of the schedule property through 'lahildhar, Ralapur Mandal.

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The 1st respondent bank made attempts for conducting auction of thc schedule 7 .2022, 30.9.2022, O4.t t.2022, t4.O2.2023 and 2 id auctions were faiied for want of final n Sale Notice dated 03.06.2023 was by the bank for conducting auction on 13 28. 23 ancl notice was published in Financial

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Express and Nava Telangana daily news papers and the said notice was affixed on the schedule property. The said notice was also served on the Applicant. On 28.06.2023, the lstRespondent bank conducted auction of the schedule property and in the said auction, Respondents No 2 & 3 became highest bidders for an amount of 96,80,0001- and they paid the entire bid amount and sale certificate was issued in their favour and the same was also registered. Thereafter, physical possession of the schedule property was delivered to the Respondents No.2 &3. Hence there are no merits in the SA and so the SA is liable to be dismissed.

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Respondents No.2&3 filed their Reply by contending that they are the bonafide purchasers and successful bidders of the schedule property in the auction conducted by the l"t Respondent Bank on 28.06.2029 and they paid the entire bid amount and sale certificate was issued in their favour and the same was also registered. The 1"t Respondent bank also delivered the physical possession of the schedule property to them. Accordingly, prayed to dismiss the SA.

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Heard Ld. Counsel for the Applicant, Ld. Counsel for lstRespondent bank and Ld. Counsel for the Respondents No.2 & 3. 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 anA ualid grounds for re-
cieliue le property which was taken by the 7.'r
Re t to the orders of Ld.Distnct Collector,
&strict?
* *il
E? 11 iJ
rylt
.{'.'/
{//"

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iil Whether the Applicant established anA ualid grounds fo, challenging the Auction Sale Notice dt.03.06.2023 issued by the l"tResponderut bank fo, conducting auction of the schedule propertg?

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iit) To what relieft

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Points No.(i)&(iil:-

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During the course of arguments, Ld. Counsel for the Applicant and I-d. Counsel for the l"tliespondent bank and Respondents No.2&3 reiterated their respective versions as stated supra.

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There is no dispute regarding the fact that the Applicant availed home loan from the lstRespondent bank and created mortgage in respect of the schedule property and thereafter committed default in repayment of loan dues and so, the loan account was classified as NPA by the^l"t Respondent bank and the 1"t Respondent bank issued Demand notice dt. 24.11.2027 and also possession notice dt. 02.02.2022 to^the Applicant.There is also no dispute regarding the fact that the l"tRespondent Bank approached Ld.CollectorR.R.District for taking physical possession of the schedule property and thereafter, the^{l st} Respondent bank took physical possession of the schedule^property though Tehsildar, Balapur Mandal.

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The speci tion of the ,{pplicant is that the impugned sale is not legal and valid and it'was not issued as noti @ oefi#;.;m" SARFAESI Act,2OO2 and Rules made '4/frP Sb tH'ereunder. Si??ril roceedings initiated by the 1'tRespondent ut13..Jifitrffi or, R.R.District for taking physical roperty are not valid and binding and^so,

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the Applicant is entitled for the redelivery of the schedule property which was taken by the 1st Respondent bank on 17 .08.2022.

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l1 Per contra, the lstRespondent bank contended that they have followed the prescribed procedure laid down under the provisions of SARFAESI Act, 2OO2 and Rules made thereunder in issuing all the relevant notices to the Applicant and in in taking physical possession of the schedule property.

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L2. In order to substantiate their contention, the lstRespondent enclosed relevant material documents along with the Repty and Additional Reply filed by them. As per the said documents, it is clear that the 1st Respondent bank issued demand notice dt.24.t 1.2021 to the Applicant through Regd.post and the said notice was received by the Applicant as evidenced by the postal acknowledgements filed by the 1"t Respondent Bank. Thereafter, the l"tRespondent issued possession noticc d1.o2.O2.2022 to the Applicant and the Applicant received the said notice as evidenced by the postal acknowledgcmcntsfiled by thc 1st Respondent bank: The said possession notice is published in tw<r daily newspapers as evidenced by the copies of paper pubiication and the said notice is also affixed on the schedule property as depicted in the photographs filed by the lstRespondent bank. Thus, the 1"r Respondent Bank has followed Rule 8(1)(2) of Security Interesr (Enforcement) Rules, 2OO2 in issuing possession notice dt.O2.O2.2022. Thereafter, the 1"t Respondent bank issued notice dt.05.02.2022 ulr 8(6) of Security Interest (Enforcement) Rules, 2oo2 for giving an opportunity to the Applicant to redeem the schedulc property withirr thirty days .of^{receipt of the said notice.} The saicl noticewas Post to the correct address of the Applican the 1 spondent bank issued final Sale Notice id notice was received by the Applicanftt I acknowledgements filed by the Bank. Thb said notice was d in two daily newspapers and the

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same was also affixed on the schedule property as depicted in the photographs filed by the 1"r Respondent bank.

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13' Prior to conducting auction, the lstRespondent bankobtained valuation report from the approved valuer as evidenced by the valuation report filed by the lst Respondent Bank. In pursuance of the Sale Notice dt.03.06.2023, auction was conducted by the lstRespondent Bank on 2g.06.2023 and in the said auction, Respondents No.2&3 became successful bidders for a sale consideration of Rs.96,g0,oool-. As per the documents filed by the l "tRespondent bank, it is clear that sale confirmation was issued to the Rcspondents No.2&3 on 2g.06 .2o2s and thereafter, Respondents No'2&3 paid the entire bid amount and Regd. Sale Certificate was issued in their favour.

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14' As per the material available on record, it is clear that the lsr Respondent Bank approached Ld. District collector, R.R.District for taking physicar possession of the schedule property u/s 14 of the SARFAESI Act, 2oo2 and the Ld. District collector was pleased to direct the Ld.Tehsildar, Balapur Mandal to take the physical posscssion of the schedule property. Accordingly, Ld. Tehsildar after giving notice to the Applicant, took physical possession of the schedule property and handed over the same to the 1"t Respondent Bank and the lst Respondent bank after registration of the sale certificate, delivered the possession of the schedule property to the Respondents No.2&3, auction purchasers.

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So, stances, I am of the opinion that that the I { "''on con st Respondent bank on2g.O6.2023 in -i' ! ' ---lE'r . pursuant to the Auction Sale Notice ::,.5l-.,:I1:'"'o*!ff^"T1 dt.03.06. 2023 is perfeltty and valid and it was conducted by

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strictly following the procedure laid down under the provisions of SARFAESI Act, 2oo2 and Rules made thereunder. As the physical possession of the schedule property was taken by the l"tRespondent Bank by invoking the provisions of section 14 of the SARFAESI Act,2oo2 by following due process of law, the Applicant is not entitled for re-delivery of the schedule property as sought by her. Accordingly, these pointsare answered in favour of the Respondents and against the Applicant.

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Point No.(iii):-

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In the result, the present Securitization Application is dismissed as there are no merits.

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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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(Dictated to the P.S transcribed by her, corrected, signed and pronounced by me in the open court on this the 13th day of June, 2O2S).

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sd/(c. coPr CHAND) RESIDING OFFICER

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:":: it''rq ,t

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nRuE^goPY LL^9,N4, ,#;:';l#ffift. 8

Smt Chellaboyana Sri Laxmi v. State Bank of India

Case brief

What is this about?

What did the court decide?

Smt Chellaboyana Sri Laxmi v. State Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

Parties & counsel

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