Dismissed

Yemapalla Mahipal Reddy v. Union Bank of India

DRT5 Dec 2025SA/243/2023

Case brief

AI extract

What is this about?

Applicants challenged an auction sale notice issued by a bank under SARFAESI Act as void for procedural irregularities. The Tribunal observed that while the appeal had merit, the sale was not conducted due to interim orders. It held the appeal infructuous.

What did the court decide?

The Special Appeal is dismissed. A direction is given to the Respondent bank to issue a fresh sale notice following the correct procedure under the SARFAESI Act and Rules.

Yemapalla Mahipal Reddy versus Union Bank of India — Contract and Commercial Disputes | DRT (2025)

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IN THE DEBTS RECOVERYTRIBUNAL - 1 AT HYDERABAD

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DATED THIS THE 5TH DAY OF DECEMBER, 2025

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PRESENT: SRI GUMMADI GoPICHAND, PRESIDING oFFICER

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sA.No.243./2023

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Yempalla Mahipal Reddy, S/o Linga Reddy, aged 51 years, Occ:business, R/o flat No. 108, B Block, Sumadhura Elegance, SBH Colony Gaddiannaram, Saroornagar Mandal, R.R. District Hyderabad-SOO O60.

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Smt.Yempalla Aparna, W/o Yempalla Mahipal Reddy, Aged 40 years, Occ:house wife, R/o Flat No. 108, B Block, Sumadhura Elegance, SBH Colony, Gaddiannaram, Saroornagar Mandal, R.R. District Hyderabad-SoO 06O ... Applicants

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Versus

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Union Bank of India Rep. by its Authorized Officer Regional Office, 1st floor,. Sulthan Bazar, Koti, Hyderabd-SOO 059 ... Respondent

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Counsel for the Applicants : M9.N.M. Shing Mounika
Counsel for : Si V. Setlu Madhaua Rao
Reserued on : O6.11.2O25
Pronounced on :05.12.2O25
Uploaded on f -'& :06.12.2O25
: osoEC
1. This Securitization and Reconstruction of
Financial of Security Interest Act, 2OO2
(SARFAESI Act,2oo2) challenging the E Auction Sale Notice dt.23.o6.2o23

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issued by the Respondent Bank for conducting auction of the schedule property on 13.07.2023 and to declare the same as null and void.

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The averments made by the Applicants in brief are as follows:

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Applicant No. 1 availed Home loan of Rs.40 lakhs from tJ:re Respondent bank and created mortgage against the schedule property whereas the Applicant No.2 is the wife of the Applicant No.2 who stood as guarantor. Due to Covid- 19, the Applicants could not pay some instalments. Without issuing any prior notice, the Respondent Bank issued possession Notice dt.23.O8.2O21 and challenging the said notice, the Applicants filed SA 189 l2O2l on the lile of Hon'ble Debs Recovery Tribunal-Il, Hyderabad and the same is pending for adjudication. Thereafter, challenging the proceedings initiated by the Respondent Bank for taking physical possession of the schedule property, the Applicants approached Hon'ble High Court for the State of Telangana by filing Writ petition No.35802/2021 and deposited L1o/o of the total outstanding dues as directed by the Hon'ble High Court. In the meanwhile, the Respondent Bank issued impugned sale Notice dt.23.o6.2o23 for conducting auction of the schedule propert5r on 13.02.2023 without issuing fresh demand notice and possession notice and without following the procedure as contemplated under Rule 8(l)(2) of Security Interest (Enforcement) Rules, 2OO2. Hence the SA.

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The Respondent bank filed their Reply denying all the adverse allegations made in the SA and contended that the Applicants earlier liled SA 189 l2o2l on the lile of Hon'ble DRT-II, Hyderabad challenging the Possession Notice dt.23.08.2o21 issued by the Respondent Bank and after filing of the said SA, the Applicants also liled W.p.No.35802 l2O2l on tt,e 'ble High Court of Telangana challenging the proceedings Bank for taking physical possession of the schedule advocate commissioner and the Applicants paid 15% of dues as ordered by the Honble High Court and in

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view of the same, the loan account was upgraded and the said possession notice dt.23.O8.2021 was cancelled by the Bank. Even after upgradation of the loan account NPA to PA, the Applicants failed to pay the instalments and so the loan account was again classified as NpA on 20.06.2022. Thereafter fresh proceedings have been initiated by the Bank by issuing demand notice dt.O I . 07 .2022 and the said notice was sent to the Applicants through Regd. Post and the Respondent also published the said notice in two daily newspapers. Thereafter the bank issued possession notice dt.21.09.2022 and sent the same to the Applicants through Regd. Post. The said possession notice was published in Telugu and English daily newspapers and copy of the same was also affixed on the schedule property. Thereafter the bank obtained valuation report from the approved valuer of the bank on 29.10.2022 and fixed reserve price against the schedule property and issued Rule 8(6) notice dt. 14.12.2022. Thereafter, the bank issued Auction Notice dt.23.O6.2O23 for conducting auction of the schedule property on 13.07.2023 but the said auction could not be materialized in view of the interim orders passed by this Tribunal. SA 18912021 filed before the Hon'ble DRTI-II, Hyderabad was dismissed as infructuous vide orders dt.29.Ol.2O2S. Accordingly, the Respondent bank duly followed the procedure contemplated under the provisions of SARFAESI Act, 2OO2 and Rules made thereunder in issuing all the statutory notices to tlle Applicants and prayed to dismiss the SA.

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Heard Ld. counsel for the Applicants and Ld. counsel for the Respondent. Perused the material brought on record.

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Now the points that arise for consideration are

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haue establislrcd ang ualid grounds for Sale Notice dt.23.06.2023 issued bg ttLe

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#,R schedule propertg?

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Potnt No.lil:-

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During the course of arguments, Ld. counser for the Appricants 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 Applicants ava ed loan from the Respondent by creating mortgage against the schedule properry and thereafter committed default in repaying the loan dues. There is also no dispute regarding the fact that the earlier proceedings initiated by the bank including the impugned possession Notice dt.23. og.2o2r were cancelled by the bank in view of the payment of lso/o of the total outstanding dues by the Applicants as per the directions of Hon,ble High court in the writ petition liled by the Appricants. Thereafter, the Bank initiated fresh proceedings under the provisions of SARFAES I Act,2oo2 for conducting auction of the schedule property.

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The specific contention of the Applicants is that without issuing fresh demand notice and possession notice to the Applicants, the Respondent straightaway, issued the impugned Auction sale Notice dt.23.o6.2o23 for conducting auction of the schedule property and so, the said sale notice is not legal and valid and liable to be set aside.

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But the Respondent contended that they have issued all the fresh notices to the Applicants under the provisions of sARFAESI Act,2oo2 and Rules made thereunder.

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in order to prove that they have followed the under the provisions of SARFAESI Act,2O02 and

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ffiu1es in issuing all the relevant notices to the

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*ApST"0EC t material documents along wittr the Reply 6 -+:ⁱ

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r.'. al -+I{]^,,,

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wffi

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filed by them. As per the said documents filed by the Respondent, it is clear that after cancelling the earlier possession notice dt.23.Oa.2O2l, the Respondent bank issued fresh demand notice dt. 14.O2.2022 and sent the same to the Applicants through Regd.post as evidenced by the postal acknowledgements liled by the Bank. The said notice was also published in Telugu and English daily newspapers as evidenced by the copies of paper publication filed by the Bank. Thus there is valid service of demand notice on the Applicants. Thereafter, the Respondent bank issued possession notice dt.2 1 .09.2022 to the Applicants and the said notice was sent to the Applicants through Regd.post and the same was served on the Applicant No. I as evidenced by the postal acknowledgements filed by the Bank. The said notice was affixed on the schedule property as depicted in the copies of photographs filed by the Respondent and the said notice was published in Telugu and English daily newspapers as evidenced by the copies of paper publication filed by the Respondent. Thus the Respondent has complied with Rule S(1)(2) of Security Interest (Enforcement) Rules, 2OO2. Therealter, the Bank obtained valuation report dt.29.IO.2O22 from the approved valuer of the Bank and issued Rule 8(6) notice dt. 14.12.2022 and sent the same to the Applicants as evidenced by the postal acknowledgements filed by the Respondent. Thereafter, the Respondent issued the impugned e Auction sale Notice dt.23.06.2023 and the said notice was sent to the Applicants. In fact, the Applicants filed copy of the said notice along with the SA filed by them..

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However, during the course of arguments, Ld. Counsei for the Respondent submitted that in pursuance of the impugned Sale Notice dt.23.06.2o22, no auction was conducted by the Respondent against the schedule property in view of the-interim orders passed by this Tribunal. As no conducted in pursuance of the impugned SaIe Notice relief claimed by the Applicants in the SA becomes

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Pus^ar survives in the present SA for adjudication and

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1S no ne ed t| de the validity or otherwise of the impugned sale

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OE [zffi

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notice. Hence, I am of the opinion that the relief claimed by the Applicants 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 strictly following the procedure contemplated under the provisions of SARFAESI Act,2OO2 and Rules made thereunder.

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Polnt No.(ll)r

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In the result, SA 243 /2023 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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(Dictated to the P.S, transcibed. by her, corrected, signed and. pronounced. bg me in tE open court on this the 3h day of December,2025).

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sd/_ (c. coPr CHANDI PRTSIDIITG OFrICER

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+st R6'flf$trar

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Yemapalla Mahipal Reddy v. Union Bank of India

Case brief

What is this about?

What did the court decide?

Yemapalla Mahipal Reddy v. Union Bank of India

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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