Dismissed

Mohammed Esupe Ashraf v. Canara Bank

DRT21 Nov 2025SA/184/2024

Case brief

AI extract

What is this about?

The applicant challenged the Tribunal's order of 23.07.2024 under the SARFAESI Act, alleging violations regarding agricultural land status and procedural lapses in serving notices. The Tribunal dismissed the application for being beyond jurisdiction.

What did the court decide?

The application under Section 17 of the SARFAESI Act dated 23.07.2024 was dismissed, and all pending internal applications were closed.

Mohammed Esupe Ashraf versus Canara Bank — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL-II, BANGALORE

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Dated this 21^st Day of November, 2025

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PRESENT: SHRI T. RAJESH Hon’ble Presiding Officer

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S.A. No. 184 of 2024

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Sri. Mohammed Esupe Ashraf, S/o. M. G. Yousef, R/at. Radhakrishna Badavane, Kushalnagar, Somwarpet (Tq), Kodagu District -571234.

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. . . Applicant

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Versus

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The Authorized Officer, Canara Bank, Kushalnagar Branch, B. M. Road, Opp. Govt. School, C. Kushalanagar -571234.

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Sri. Bala Boopathy Ramaguru Swamy, S/o. Sri. Rama Guru Swamy, No. 4-94, 4^th Block, River Road, Adi Sankaracharya Extension, Kushal Nagar -571234.

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. . . Respondents Ld. Counsels on record / appeared :- Counsel for Applicants :- Sri. E Devaraja Counsel for Respondent No.1 :- Sri. Venu K. V Counsel for Respondent No.2 :- Deep in Law’s

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SA No. 184/2024

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: - O R D E R - :

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The Securitization Application (SA) filed by the applicant u/s 17 of the "Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 herein after been referred to as SARFAESI Act or the act, as the case be with a prayer to set aside the sale notice dated 23.07.2024.

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The applicant who admitted to have availed a term loan of Rs.70,00,000/-, which the applicant claims is availed for agricultural purpose. It is the case of the applicant that despite making several remittances and expression of the willingness to pay of the liability through OTS, which according to the applicant was accepted by the bank, the bank proceeded to issue the impugned sale notice.

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In respect of the measures, it is the case of the applicant that the property sought to be proceeded against is an agricultural one The applicant is also having a case that the bank had failed to serve the demand notice and possession notice to be borrowers which is sine qua none for further measures leading to impound sale notice.

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In the grounds to the SA the applicant had reiterated the above contentions and further contents that the due amount shown in the sale

SA No. 184/2024

notice is not correct. It is also the case of the applicant that the outstanding amount due as on date of the issuance of sale notice is not mentioned in the sale notice. The next contentions taken in the grounds is that there is no CERSAI registration. It was also specifically pleaded

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that the sale notice is not served, particulars of the property is not mentioned and the bank failed to value the property before issuing the sale notice. A contention is also raised that the sale notice is not affixed in the premises are required under the statute.

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Along with the SA the applicant had produced the copy of the sale notice and copy of the RTC .

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The respondent had filed their objection refuting the contentions of the

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applicant. It is stated that the present application is filed after suppression of material facts and there is misrepresentation and malafied attempt on the part of applicant from restraining the respondent from proceeding against the secured asset. The respondent had put forth the case that credit facilities totaling Rs.94.50 lakhs were sanctioned out of which and amount of Rs.66.15 lakhs was sanctioned of starting diary Unit and Rs.28.35 lakhs for starting goat rearing Unit. It is

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also stated that mortgage over the immovable properties were created.

SA No. 184/2024

It is also contended by the respondent that since the applicant failed to pay back the amount the account was classified as NPA on 05.09.2023 and the demand notice was issued. It is further contended by the respondent that despite the issuance of demand notice no repayment was forth coming, the possession notice dated 04.12.2023 was issued. It is also stated that they had duly followed the procedure in issuance service and publication of the demand notice and possession notice.

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In respect of the impugned sale notice also the respondent contends that they had duly followed the procedure in issuance of sale notice and conduct of the sale. Along with the objection the following documents were produced.

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Sanction letter

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Demand notice and connected documents

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Possession notice along with its documents

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Sale notice along with its connected documents.

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Valuation report

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Photograph of the property,

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CERSAI registration.

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Heard the counsel of both sides and considered the contention put forth

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by either side. The only issue that is to be gone into in respect of the

SA No. 184/2024

measures is whether the respondent had followed the procedure as required under the statute or not.

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The first and foremost contention taken by the applicant is that the property sought to be proceeded against is agricultural land and the proceedings are hit by section 31(1) of the Act. In support of the contention, the applicant had produced copy of the RTC. It is evident that RTC describes the property as agricultural one. It is settled law that the Revenue Records does not conclusively prove the nature of the property. The applicant who puts forward the contention had to prove with positive evidence, their case that at the time of creation of Security Interest the property was pronominally used for agricultural purpose.

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The Ld. counsel though placed reliance on the valuation report produced by the respondent and canvass that even going by the valuation report, the nature of property is evident that the same is agricultural one, this Tribunal is not enticed to accept the said contention as from the said valuation report it is evident that there exists number of buildings in the property. Even though the existence of a cowshed is evident, this Tribunal is not inclined to hold the same in favour of the applicant for two reasons; one mere existence of a cowshed will not make the property agricultural and secondly that

SA No. 184/2024

there is no evidence available on record even to suggest that any agricultural activity was carried out in the property at the time of creation of security interest.

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The next contention taken by the applicant is as to the service of demand notice and possession notice. The applicant though had taken a specific contention that the demand notice is not served, the respondent failed to produce the proof as to the compliance of rule 3 as admittedly despite the failure in serving demand notice, no publication or affixture as required under rule 3 is proved to be complied. The demand notice issued had been returned unserved. The copy of the paper publication produced by the respondent correspondents to that of the possession notice. Hence it is evident that the respondent failed in compliance of rule 3 and proviso to rule 3 of the Rule.

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Though the applicant had taken the contention that there is no proper service of possession notice, the respondent had produced the proof of dispatch, publication and affixture of the possession notice. Hence this Tribunal is of the view that there is due compliance of rule 8(1) and 8(2) of the Security Interest Enforcement (Rules). Hence there is no force in the contention of the applicant that there is no proper

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service of possession notice.

SA No. 184/2024

The next challenge put forth by the applicant is as to the alleged undervaluation of the property by the respondent. The said contention is specifically denied by the respondent. The applicant though had taken the above contention, no supporting evidence is produced. Not even an attempt was made to prove the valuation of the property as not even the guideline vehicle of the property was produced by the applicant. Hence in the absence of any materials which throw light as to present valuation of the property this Tribunal is not inclined to accept the above challenge.

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The applicant though admits the issuance and service of impugned sale notice is putting forth a case that the particular of the property is not mentioned in the sale notice. The perusal of the impugned sale notice makes this Tribunal to decline said contention on the descripting of the property is clearly mentioned in the said notice.

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The description given in the impugned sale notice is sufficient for identification of the property.

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The respondent along with their objection had produced the proof as to the issuance, publication and affixture of the impugned sale notice.

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Even otherwise the applicant is putting forth the contention that there is

SA No. 184/2024

no affixture of the sale notice. Hence in view of the documents

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produced as Annexure R4 series, this Tribunal holds that there is no improperly in the issuance, publication and affixture of the impugned sale notice.

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The respondent had produced the valuation obtained by them before the issuance of sale notice, which evidences the mandate of getting the property valued through an approved valuer and that the Reserve price is fixed in conformity with the valuation given by the approved valuer.

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In view of the discussion as held in aforementioned paragraphs and discussions held there is leads to a position where this Tribunal had

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to take a call whether the finding that the respondent failed in compliance of rule 3 is sufficient to interfere with the measures. This question is to be answered taking into consideration the fact that this Tribunal had taken a view that there is proper service of possession notice. Having received the possession notice the applicant does not choose to challenge the same and the said failure of the applicant to avail the said opportunity is fatal.

SA No. 184/2024

It is trait law that a person who is sleeping over his right is

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virtually waiving the said right by his acquiescence and later cannot turn back and claim the said right. The applicant by his own conduct in not choosing to taken up the legal contention had surrendered his right through implied consent and passive acceptance. It is also settled legal position that waiver and acquiescence will stand on a complete different footing than an estoppal. If a party knowingly permits. The state of affirms to continue and read finality cannot challenge the same at a later stage.

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In “ Kalpraj Dharamshi v. Kotak Investment Advisors Ltd. ”

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(2021) 10 SCC410, the Hon’ble Supreme Court had reiterated the law as

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“112. Thus, for constituting acquiescence or waiver it must be established, that though a party knows the material facts and is conscious of his legal rights in a given matter, but fails to assert its rights at the earliest possible opportunity, it creates an effective bar of waiver against him. Whereas, acquiescence would be a conduct where a party is sitting by, when another is invading his rights. The acquiescence must be such as to lead to the inference of a licence sufficient to create a new right in the defendant. Waiver is an intentional relinquishment of a right. It involves conscious abandonment of an existing legal right, advantage, benefit, claim or privilege. It is an agreement not to assert a right. There can be no waiver unless the person who is said to have waived, is fully

SA No. 184/2024

informed as to his rights and with full knowledge about the same, he intentionally abandons them.”

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In view of above findings, this Tribunal is of the considered

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opinion that the contentions as put forth by the applicant is not sufficient to interfere with the measures, especially as the sale of the property had taken place in pursuant to the impugned sale notice. Despite allowing of Impleadment application and appearance of auction purchaser, the applicant failed to carry out the amendment, this application is liable to be dismissed.

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In the result SA.184 of 2024 stands dismissed, all pending IAs stands closed. NO orders as to cost. Issue copies in accordance with rule 16 of the Debt

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Recovery Tribunal (procedure) rule.

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(Dictated to PY directly on the Computer, after its transcription, corrected and pronounced by me in the open Court on this the 21^th day of November, 2025)

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Sd/(T. RAJESH) PRESIDING OFFICER

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Mohammed Esupe Ashraf v. Canara Bank

Case brief

What is this about?

What did the court decide?

Mohammed Esupe Ashraf v. Canara Bank

Case brief

What is this about?

What did the court decide?

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