Dismissed

K Madhava Reddy v. Canara Bank

DRT28 May 2025SA/5/2023

Case brief

AI extract

What is this about?

In this SARFAESI Act application, the applicant challenged a sale notice for auction, alleging procedural violations. The Tribunal found the applicant failed to prove non-service/publication. Crucially, the Bank later submitted the auction was not conducted, making the application infructuous and dismissing it.

What did the court decide?

The Sale Notice was dismissed as infructuous; the Applicant is directed to proceed afresh if necessary.

K Madhava Reddy versus Canara Bank — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL - I AT HYDERABAD

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DATED THIS THE 28TH DAY OF MAY, 2025

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PRESENT: GUMMADI GOPICHAND, PRESIDING OFFICER

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sA.No.05/2023

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K.Madhava Reddy, S/o K.Ram Reddy, Aged 60 years, Occ:retd.service, R/o Plot No.117, H.No.8-6-1313, RTC Colony, ChekpostChintalkunta, L.B.Nagar, Hyderaabad-74.

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... Applicant

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And

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Canara Bank, Saidabad colony branch, 77-t-39r lT 1233A, Near Saraswatinagar colony, Saidabad, Hyderabad Rep.by its Authorized officer

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.... Respondent Bank

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Counsel for ttrc Applicant ; Sn T.Sridhar Reddy Counselfor the Respondent Bank : Sn DishitBhattacharjee

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-:ORDER:-

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This application is filed by the Applicant u/s.17 of the SARFAESI Act, 2OO2, challenging the Sale Notice dt.28. ),2.2O 122 issued by the Respondent Bank for conducting auction of the schedule property on 30.O1.2023 and to declare the same as illegal and void.

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n the application, in brief, are that: :#-:m Sh.^App[Elnt housing loan from the Respondent ,:8".,r&,& ilH.?{E." larly paying the instalments. On s claiming to be recovery agents of the ftx":ffi,-q Wp,@

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Respondent bank, came to the schedule property and informed that the schedule property will be sold in the auction on 3O.O1 .2023 and they served a copy of the Sale Notice dt.28.12.2o22.^prior to issuing the said sale notice, no pre_sale notice was issued to the Applicant for redeeming the schedule property and the impugned Sale Notice was not published in two daily newspapers nor affixed on the schedule propert5r and so, the impugned sale notice issued by the Bank for conducting auction of the schedule property is not legal and valid and liable to be set aside. Hence the SA.

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The Respondent Bank filedReply by denying all the adverse allegations made in the SA. It is contended that the Applicant after availing loan from the Respondent Bank, committed default in repaying the loan dues and so, the loan account was classified as NPA and the Respondent Bank issued demand notice u/s 13(2) of the SARFAEST Act, 2OO2 dt.ol .06.2022 and, the Applicant raised objectionsin response to the said demand notice and the Respondent Bank gave reply on O3.OS.2O22 refuting the objections raised by theApplicant. Thereafter, the Respondent bank issued possession noticedt.O3.O9.2022 to the Applicant and the said possession notice was published in daily newspapers and the said notice was also affixed on the schedure property. Thereafter, the Respondent Bank issued pre Sale Notice dt.14.O9.2022 u/r^g(6) of Security Interesr (Enforcement) Rules, 2oo2 to the Applicant and linalry issued SareNotice dt.2a.12.2o22 for conducting auction of the schedule propergz on 30.01.2023 and the Applicant got returned the said notice. The said sale notice was publi inMana Telangana and The Hindu daily newspa pondent bank has duly followed the proced e provisions of SARFAESI Act, 2002 H*ffi.'R der in issuing all the relevant iB^?-Enrtw:

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W*'sP

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notices to the Applicant and hence there are no merits in the sA and the SA is liable to be dismissed.

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Heard Ld. Counsel for the Applicant and Ld. Counsel for Respondent Bank and 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 has established any ualid grounds for challenging tlle Sale Notice dt.28.12.2022 issued bg the Respondent Bank for conducting auction of the schedule propertg?

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ii) To uhat relieJ?

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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 dispute regarding the fact that the Applicant availed loan from the Respondent Bank by creating mortgage against the schedule property. There is also no dispute regarding the fact that the Applicant committed default in repaying the loan dues and so, the loan account was classified as NPA and the Bank issued demand notice u/s 13(2) of the SARFAESI Act,20O2 and admittedly, the Applicant received the said notice as he raised objections in res. to the said dernand notice and the Bank duly com 3(3A) of the SARFAESI Act,2002 by giving vide letter dt.03.O8.2022. But the Applicant is that he has not pos{egiqgpfnffie ant he said possession notice was

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not afl-rxed on the schedule property nor published in two leading newspapers and simiiarly, the impugned auction sale notice was also not affixed on the schedule property and also not published in daily newspapers and so, the said notices are not valid and legal.

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Per contra, Respondent Bank contended that the Bank has strictly followed the procedure contemplated under the provisions of SARFAESI Act, 2OO2 and Rules made thereunder in issuing all the relevant notices to the Applicant.

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To substantiate their contentions, the Respondent Bank filed material documents along with the Reply filed by them. As per the said documents, it is clear that Respondent Bank issued possession notice dt.03.09.2022 and the said notice was sent to the Applicant through regd. post. The said possession notice was published in two daily newspapers as evidenced by the copies of paper publication filed by the Bank and the said notice was also affixed on the schedule property as depicted in the photographs Iiled by the Bank. Thereafter, the Bank issued Redemption notice u/ r 8(6) of Security Interest (Enforcement) Rules, 2002 dt.14.O9.2022 and the said notice was published in two daily newspapers and so, the contention of the Applicant that no pre-sale notice was given by the Respondent to redeem the schedule property is not tenable. Thereafter, the Bank issued the impugned Sale Notice dt.28.12.2o22 and the said notice was sent to the Applicant through Regd.post. and the said sale notice was affixed on the schedule property as depicted in the phq by the bank and the said notice was also newspapers as evidenced by the copies of by the Bank. Thus the Respondent has ii;ff^*,i[$,.",'J ' .. duly followed rhe prqf as contemplated under the provisions ,;^28ilAYm ; ,a - ^s 4 :'n{.,,.r,## i:,;..r1,^,;,. ':;W

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of SARFAESI Act, 2oo2 and Rules made thereunder in issuing all the relevant notices to the Applicant.

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During the course of arguments, Ld. counsel for the Respondent bank submitted that no auction was conducted by the Respondent Bank in pursuance of the said sale notice. So the said sale notice becomes infructuous and nothing survives in the SA for adjudication as there is no need to decide the validity or otherwise of the impugned Sale Notice dt.2g. 12.2022. 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. The Respondent Bank is directed to proceed afresh for conducting sale of the schedule property by issuing fresh sale notice by duly following the provisions of SARFAESI Act, 2oo2 and Rules made thereunder.

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Point No.(iil:-

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In the result, SA 0S/2023 is dismissed.

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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 2Eh day of

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!^{her,corrected.,} "ign"a^{ona pronounced.bg mein the open court on this the}

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sd/ -
(c. coPr CHAND)
[r-" ti -/. 70ilfiYm :. PRESIDING OFFICER
L'.,:a {
(,VektrTRUE DAPYN
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DI?r-I,^{flYl't E ?.'4n t n.}

K Madhava Reddy v. Canara Bank

Case brief

What is this about?

What did the court decide?

K Madhava Reddy v. Canara 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

All orders in this case

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