Partly allowed

B Aruna v. Indian Bank

DRT9 Jul 2025SA/210/2023

Case brief

AI extract

What is this about?

This is a secritization application challenging a sale notice and possession notice issued by a Bank under SARFAESI Act. Applicants argued they purchased flats via registered sale deeds prior to the bank's mortgage. The tribunal held the bank cannot proceed against flats with pre-existing registered conveyances but dismissed the application regarding an applicant with only an unregistered Agreemen

What did the court decide?

Applicants 1-4: Proceeding u/SARFAESI against Flat No.303 and Flat No.211 is stayed/dismissed. Applicant 5: Application dismissed.

B Aruna versus Indian Bank — Company and Corporate | DRT (2025)

¶1

IN THE DEBTS RECOVERYTRIBUNAL-I AT HYDERABAD

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DATED THIS THE OgTH DAY OF JULY, 2025

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PRESENT: GUMMADI GOPICHAND, PRESIDING OFFICER

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sA.No.zt 0,/2023

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Ms B. Aruna W/o. Late B. Chandra Shekar Female, aged about 55 years, Household, R/o. H.No. 10-5-64 / 1, Kisannagar, Karimnagar, Telangana - 5O5 00 1.

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Mr B. Charan, W/o. Late B. Chandra Shekar Male, aged about 29 years, Business, R/o. H.No. 10-5-64 I I, Kisannagar, Karimnagar, Telangana - 505 001.

¶7

Mr. M. Munender, S/o. Late Satyalarayana Male, aged about 44 years, Business, R/o. Q.No.B-1l15, PTS NTPC, Jyothinagar, Ramagundam, Somnapalle, Karimnagar, Telangana - 505 215.

¶8

Ms M. Munamma, W/o. Late Satyanarayana Female, aged about 58 years, Household, R/o. Q.No.B-1l15, PTS NTPC, Jyothinagar, Ramagundam, Somnapalle, Karimnagar, Telangana - 505 215.

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Mr. T. Anil Reddy, S/o. T. Prkash Reddy, Male, aged about 43 years, Private Employee R/o. H.No.5-23, Baswapur Village of Koheda Mandal of Siddipet District. Applicants.

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Tersus

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Bank, Surabhi Arcade, Bank Street, Rep. by Authorized Officer. d;\ . Pravi Private Limited, lP2. * Regd. Off: H.I,|oiF-2-120 186 l1/t)t, I q Flfltl$$fio], ladmaja Residency. Rd.No.2. - Bhnjara Hills. Hyderabad. Rep. by its M.D.

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Respondents.

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SA.No.21A/2023

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Counsel for the Applicants : Sri R. Rajendra Prasad. Counsel for Respondent No.1 : SiT. Sidhar Reddg. Respondent No.2 : Ex-parte.

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-:ORDERi

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The present application is filed by the Applicants u/ s. 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2OO2, challenging the Sale Notice dt.23.05.2o23' issued by the lst Respondent Bank, fixing the auction of the^schedule property on O4.O7.2023, and the Possession Notice dt.16.01.2021, issued in respect of the schedule property.

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The averments made by the Applicants in the application,^{in brief, are as} under:-

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i) The Respondent No.2, being the absolute owner and^possessorof land admeasuring 19586 sq. Yds.,^{(approximatelyAc.4-0Oof land)in} Sy.Nos.95/8, 951D, 96, 97A & 97 lB,^situated at^{Durgammagadda} Iocality of Karimnagar city & Sy.No.42 situated^{at Bommakkal} Village, Karimnagar Mandal & District, constructed^Apartments complex by name "PRAVISTA HEIGHTS' in^{part of the propertyi.e.,} 8859 Sq. Yds (approximately Ac.2-O0 of^land) by^obtaining permission from Commissioner, Munipal Corporation,^Karimnagar, vide Proc.No.G2 I 26 I 20 lO, BA.No.267,^{dt.21.O5.201 0.}

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ii) Sri B. Chandrashekar, S/o. Veeresham,^{has purchased from the 2"d} Respondent a Flat bearing No.3O3 in^{Block-A, havingplinth areaof} Sft., (inctuding common area) upto^{basementlevelRCC} in 2"d Floor together with car^{parking area (60 Sft), in}

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"#,ffi\n HEIGHTS'^{with undivided interestof 40 sq' Yds., in total}

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- la no nd o I ooJ:, Df SSSS S q. Ydr Ll s. , l1l 'Jy.r\u.7.r/ , in Sy.No.9S/D,^u' 2 97A t r1 & 978,^{situated at} o^{'ll g JIJL Bl.g"mmagaddalocality of Karimnagar citv, videregisteredSale} iLRfu,*# id#i?E

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SA.No.210/2023

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Deed bearing No.49O4/2011, dt.28.O5.2011, registered in the office of SRO, Karimnagar. Sri B. Chandrashekar expired on 13.08.2022 and Applicant No. 1 is the wife and Applicant No.2 is the son of late Sri B. Chandrashekal and they are having right and interest over the properties of late Sri B. Chandrashekar.

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iii) Sri Mengani Satyanarayana, S/o. Kanaka Rathnam, has purchased from the 2na Respondent a Flat bering No.211 in Block-B, having plinth area of 1020 Sft., (including common area) upto basement level RCC structure in 1st Floor together with car parking area (60 Sft), in "PRAVISTA HEIGHTS" with undivided interest of 40 Sq. Yds., in total land of 8859 Sq. Yds., in Sy.No.9S/D, 97A &,97B, situated at Durgammagadda locality of Karimnagar city, vide registered Sale Deed bearing No.1129612010, dt.30.12.2010, registered in the ofhce of SRO, Karimnagar. Sri Mengani Satyanarayana expired on 11.04.2018, Ieaving behind Applicants No.3 & 4 as his legal heirs and successors to the said property.

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¶26

i,r) G. Srinivas has originally purchased from the 2.a Respondent a Flat bearing No.415 in Block-A, vide registered sale deed Doc.No.11237 l2OlO, dt.30. 12.2010, registered in the office of SubRegistrar, Karimnagar. However, as Sri G. Srinivas wanted to cancel the sale deed due to delay in completion of construction, the Sale Deed bearing No.11237 l2Ol0 was cancelled vide Cancellation Deed bearing Doc.No.2898/2014, dt.29.O3.2014, registered in the office of SRO, Karimnagar. Thereafter, Respondent No.2 has entered into Agreement of Sale with Applicant No.S herein, vide Agreement of Sale 05.08.2016, with respect to Flat No.415, Biock-A, having plinth 1076 Sft., (including common area) upto basement level RCC in 3'd Floor together with car parking area (60 Sft), in "PRA A HEIGHTS" with undivided interest of 40 Sq. Yds., in total 19586 Sq. Yds., in Sy.No.95/B, 95|D, 96, 97A and 97 /8,

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Qffi,

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sA.No.210/2023

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situated at Durgammagadda locality of Karimnagar city andⁱⁿ Sy.No.42 at Bommakal Village of Karimnagar Mandal and^District within the limits of City Municipal Corporation, Karimnagar.

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v) The Flats of the Applicants are part of the Flats constructed^{on SA} schedule properties. On 16.01.2021, the lst^{RespondentBank has} affixed Possession Notice dl.l6.Ol.2o2l on "PRAVISTA^HEIGHTS' Apartments. Immediately, late Sri B. Chandrashekar, the^husbaldof Applicant No. 1 and father of Applicant No.2^{frled OS.No.95/202} i^on the hle of Ld. Principal Jr. Civil Judge at^{Karimnagar,against} Respondents No.l and 2^praying the Court to^{grant a decreeof} perpetual injunction with respect to suit schedule^{property, which} includes 40 sq. Yds., of undivided share of^{land out of total land of} 8859 Sq. Yds., in Sy.No.95/D, 97A &^{978, situated at} Durgammagadda locality of Karimnagar^{city, and sought declaration} that the registered Memorandum of^{deposit of title deed No.8202 of} 2014, dt.25.O9.2O14, executed by^{RespondentNo.2 in favourof} Respondent No. 1 Bank with respect to SA schedule^{propertiesas null} and void. However, due to sudden^{demiseof Sri B. Chandrashekar,} the suit was not^pursued and the^{ApplicantsNo.1 and 2 hereinare} now taking steps to pursue the same.

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vi) Applicant No.S has atso filed a suit^{vide OS.No.140/2021 on the file} of III Addl. Jr. Civil Judge at Karimnagar,^{against Respondents No.1} & 2, praying the Court to^{grant perpetual injunctionwith respect to} suit schedule property, which^{includesundivided interest over total} land of 19586 Sq. Yds., in Sy.No.95/8,^{951D, 96, 97A and 97} lB' at Durgammagadda locatity of^{Karimnagar city and in} ,,iffiri-,.Sq.a :/,6.^- S:.{ Sfu*\p at Bommakal Village of Karimnagar Mandat and District aF *+\ *itrliii\ Se limits of city Municipal corporation, Karimnagar^{and to} 09J ;flfclar6^{the registered Memorandum of deposit of title deed No'82O2} o,t ZOl4',iit250g.2014, executed by^{RespondentNo.2 in favour of}

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SA.No.210/2023

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Respondent No. I Bank with respect to SA schedule^properties as null and void. Ld. III Addl. Jr. Civil Judge, Karimnagar was^pleased to pass the decree as prayed for vide^judgment and decree dt.t1.O4.2023.

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vii)

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The sale deeds executed in favour ofthe Applicants and^{various other} Flat owners are much prior to the alleged Memorandum of deposit^of title deed No.a2O2/2O14, dt.25.O9.2O 14 and the^{2ndRespondent} cannot create a charge over the SA schedule^properties in^favourof the lst Respondent after the Flats are sold to^{third parties, including} the Applicants herein. The lst Respondent Bank, without^considering the undivided interest of the Applicants over the SA^schedule properties, invoked the measures under the SARFAESI Act,^by issuing the Possession Notice and the Sale Notice dt.23.O5.2O23, fixing the auction of the schedule properties on O4.O7.2023.^The2nd Respondent has no valid title to the whole of the^extent of^SA schedule properties to create mortgage in^{favour of the lst} Respondent Bank and the l"t Respondent^{Bank cannot claimany} charge over the whole of the schedule^{propertiesbasing on the} documents offered by 2"d Respondent.^So, the^{1st RespondentBank} cannot proceed against whole of the SA schedule^{properties under} the provisions of the SARFAESI Act.^{Hence, the SA'}

¶36

The 1"t Respondent Bank filed its Reply^{Statementdenying a-ll the} averments made by the Applicants in the^{application' The l"tRespondent} Bank contended that may be there are^{18O Flats constructed in theSA} SC properties, each having separate undivided share.^The2"d charge over the SA schedule^{properties in favour of the} Bank and without informing the Bank,^{the 2"d Respondent} to third-parties, including the^{Applicants herein. The 1"t} by following the^procedure laid^{down under the} t, initiated the proceedings by issuing^{notices to the}

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SA.No.210/2023

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borrowers and others. The decree passed by the Ld. III Addl. Jr. Civil Judge, Karimnagar in OS.No. 140/2021 is only in respect of perpetual injunction against the Respondents therein. The 1st Respondent Bank has right to proceed against the SA schedule properties under the SARFAESI Act and the SA filed by the Applicants is liable to be dismissed.

¶39

The 2"d Respondent remained ex-parte.

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Heard both sides.

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Now, the points that arise for consideration are;-

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(i) Whether the Applicants have made out any valid grounds for setting aside the proceedings initiated by the 1"t Respondent Bank under the SARFAESI Act against the application schedule property?

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(ii) To what relieP

Point No.(il:-

S-
f+'

As can be seen from the pleadings of the Applicants, one Mr. B. Chandrashekar has purchased from Respondent No.2 a Flat No.303, Block-A, 2"d Floor, in "PRAVISTA HEIGHTS" Apartments with undivided share of 40 Sq. yds., out of total land of 8859 sq. yds., situated at Durgammagadda locality of Karimnagar city, vide registered Sale Deed bearing Doc.No.4904/2011, dt.28.05.2011 (copy filed along with SA). Subsequently, said Mr. B. Chandrashekar had expired leaving behind Applicants No.1 & 2 as his legal heirs and successors. So, the Applicants

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;'-^{No;).S.2are claiming their right and interest} over the said Flat No.303.

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;f .i$i"i&N". Mr. Mengani Satyanarayana has purchased from $$espondiflt\o.2^{a Flat bearing No.211 in Block-B, 1st Floor in "PRAVISTA} ts with undivided share of 4O Sq. yds., out of total

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$ s^{iffilffiJ',.*Y:;} yds., in Sy.Nos.95/D, 97 lA &, 97lB, situated at

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SA.No.210/2023

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Durgammagadda locality of Karimnagar city, vide registered Sale Deed bearing Doc.No.L1296/2oro, dt.3o.t2.2oro (copy frled along with sA). Subsequently, said Mr. Manegani Satyanarayana had expired leaving behind Applicants No.3 & 4 as his legal heirs and successors. So, the Applicants No.1 & 2 are claiming their right and interest over the said Flat No.303. According to Applicants, Respondent No.2 initially sold Flat No.415 in Block-A, in 3.d Floor, "PRAVISTA HEIGHTS,,Apartments to one Mr. G. srinivas vide registered Sale Deed bearing Doc.No. lt237 l2oro dt.30. L2.2olo. However, later, the said sale deed was cancelled vide Cancellation Deed bearing Doc.No.2898 / 2OL4, dt.2g.03.2014. Thereafter, Respondent No.2 has entered into Agreement of Sale with Applicant No.5 herein vide Agreement of Sale dt.05.08.2016 with respect to Flat No.4l5 in Block-A, 3.d Floor, "PRAVISTA HEIGHTS,, Apartments.

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¶54

There is no dispute regarding the fact that the said "pRAVISTA HEIGHTS" Apartments is constructed in SA schedule properties. The contention of the Applicants is that, the 2"d Respondent created mortgage over the sA schedule properties in favour of the 1st Respondent Bank by executing Memorandum of Deposit of Titie Deed bearing Doc.No.g2o2l2ol4, dt.25.09.2014 (copy filed along with the sA) to secure the loan availed by it from the 1st Respondent Bank and that the said mortgage is much subsequent to the Sale Deeds executed in respect of the aforesaid Flats. So, the Applicants contend that, the lst Respondent has no right and valid security interest over the aforesaid Flats to proceed under the SARFAESI Act to recover its dues from the 2nd Respondent.

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fu.ResPondenl^{Bank in its Reply Statement, did not dispute the} ffi of Deposit of Title Deed bearing Doc.No.g2O2/2014, a copy of which is liled by the Applicants. However, the lst if ifr"' ffipondenf t! contended that, it has right to proceed against the SA {1. s under the SARFAESI Act to recover its dues from the ,i : [$1$l-effipr trl,i, . 2nd Respo4d nk. \i;:i.':,. '' ':'" J;r;rr;lfi;il:i.!-,.:' -,.d$--' '"'-^.'. -:l:-..'l';.

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SA.No.210/2023

¶57

As stated supra, there is no dispute regarding the fact that, the said "PRAVISTA HEIGHTS" Apartments is constructed in the land described in sA schedule properties. The Sale Deed bearing Doc.No.4go4l2oll, dt.28.05.2011, executed in favour of late Mr. B. Chandrashekar in respect of Flat No.303, Block-A, 2'd Floor, "PRAVISTA HEIGHTS" Apartments and the Sale Deed bearing Doc.No.11296l2oto, dt.30. l2.2olo, executed in favour of late Mr. Mengani Satyanarayana in respect of Flat No.211, BlockB, 1"t Floor, "PRAVISTA HEIGHTS" Apartments, by the 2"d Respondent, are much prior to the mortgage created by )na Respondent over SA schedule properties in favour of 1"t Respondent Bank by executing Memorandum of Deposit of Title Deed bearing Doc.No.S202l2ol4, dt.2|.og.2o14. The 1"t Respondent Bank did not file any document to establish that it has got valid security interest over the said Flats. Under such circumstance, I am constrained to hold that, the lst Respondent is not entitle to proceed against the said Flat Nos.303 and Flat No.21i in Block-A and Block-B respective of "PRAVISTA HEIGHTS' Apartments under the provisions of the SARFAESI Act.

¶58

Insofar as the Applicant No.5 is concerned, he is challenging the action of the 1st Respondent Bank under the sARFAESI Act, only on the basis of Agreement of Sale dt.05.08.2016, entered by Respondent No.2 in his favour in respect of Flat No.415, BIock-A, 3.d Floor, "PRAVISTA HEIGHTS" Apartments. The said Agreement of Sale dt.05.08.2016 is unregistered and further the said Agreement of Sale is much subsequent to the Memorandum of Deposit of Title Deed bearing Doc.No.g2o2l2ol4, dt.25.O9.2014. Mere Agreement of Sale does not confer any right, title and interest over the property. So, in the absence of any regular sale deed, in his favour prior to Memorandum of Deposit of Title Deed No.82O2 I 2014, dt.25.09.2014, executed by Respondent No.2 Respondent Bank, it cannot be said that the l"t Respondent Bank cannotlFroceed against the said Flat No.415', Block-A, 3.d Floor, 0 $ J.HRi+TsrA,HoicHts,, Apartments.

¶59

¶60

,o.No.21o/202j

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t2. So, in view of the facts and circumstances stated above, I hold that, the present SA is liable to be allowed partly in favour of Applicants No.l to 4 and is liable to be dismissed in respect of Applicant No.5.

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Polnt No.liilt

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In the result, the present Securitization Application is partly allowed holding that the 1st Respondent Bank is not entitled to proceed under the SARFAESI Act and the Rules made thereunder against:-

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Flat bearing No.303 in Block-A, having plinth area of 1420 Sft., (including common area) upto basement level RCC structure in 2nd Floor together with car parking area (6O Sft), in "PRAVISTA HEIGHTS" with undivided interest of 40 Sq. yds., in total land of 8859 Sq. Yds., in Sy.No.9S/D, 97A & gTB, situated at Durgammagadda locality of Karimnagar city; and

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ii) Flat bearing No.21l in Block-B, having plinth area of 1O2O Sft., (including common area) upto basement level RCC structure in l"t Floor together with car parking area (60 Sft), in "PRAVISTA HEIGHTS" with undivided interest of 4O Sq. yds., in total land of 8859 Sq. Yds., in Sy.No.9S/D, 9ZA & g7B, situated at Durgammagadda locality of Karimnagar city.

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t4. 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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transcribed bA her, coftected, signed. and pronounced. by me in thz open cou/t on this the

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DRT.!. I]f {}SRAL

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sd/(c. coPrcHANDl PRESIDING OFFICER

B Aruna v. Indian Bank

Case brief

What is this about?

What did the court decide?

B Aruna v. Indian Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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