Dismissed

Sri Venkata Sai Traders and Another v. Punjab National Bank

DRT9 Dec 2025SA/247/2024

Case brief

AI extract

What is this about?

Applicants challenged the validity of a sale notice under SARFAESI Act for non-compliance of procedural rules. The Tribunal found no need to adjudicate validity as no auction was held due to interim orders, rendering the application infructuous. Application dismissed.

What did the court decide?

Application dismissed as infructuous; directed the Respondent Bank to issue a fresh sale notice by strictly following the procedure under SARFAESI Act and Rules.

Sri Venkata Sai Traders and Another versus Punjab National Bank — Specific Performance | DRT (2025)

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IN THE DEBTS RECOVERYTRIBUNAL - .l AT HYDERABAD DATED THIS THE gTH DAY OF DECEMBER, 2025

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PRESENT: SRI GUMMADI GoPICHAND, PRESIDING oFFICER

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sA.No.247./2024

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M/s Sri Venkata Sai Traders Rep. by its Prop.Kethineni Venu, S/o K.Chlamaiah, aged 38 years, Occ:business, R/o 3-3-146, Gandhi Nagar, Khammam-507003.

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Kethineni Venu, S/o K.Chalamaiah, aged 38 years,

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Occ:business, R/o 3-3- 146, Gandhi Nagar, Khammam-507003

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... Applicants

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Versus

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Punjab National Bank,

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Rep. by its Author2ed officer Circle Offi ce: Secunderabad Circle, lO3, 8-2-248 lA, Maharshi House, Road No.3, Banjara Hills, Hyderabad-SOO 034..

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... Respondent

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Counsel for the Applicant : Si Kranthi Kumar K. Counselfor Respondent : Ms.N.M. Shing Mounika

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Reserued on : 30.1O.2O25 Pronounced on :09.12.2O25 Uploaded on : O9-12.2O25

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ORDER

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I. This Application is filed uls.lr of the securitization and Reconstruction of Enforcement of Security Interest Act,2OO2 ing the Sale Notice dt.23.06.2024 issued by ucting auction ofthe schedule property on same as null and void.

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

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Applicants availed business loan of Rs.4g lakhs from the Respondent bank. Due to financial crunch, the Applicants could not pay some instalments and requested for settlement of the account. The Respondent bank without issuing demand notice and possession notice and without following Rule 8(1)(2) of security Interest (Enforcement) Rules,2002, issued the impugned sale Notice dt.23.06.2o24 and the said notice was neither published in two leading newspapers nor affixed on the schedule properties. The Respondent bank failed to follow Rule 8(5)(6)(&)&9(l) of Security Interest (Enforcement) Rules, 2002. 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 availed loan of Rs.4g lakhs from the Respondent by creating mortgage in respect of the schedule properties and thereafter committed default. The Respondent Bank declared the loan account of the Applicants as NpA on 17.05.2023 and issued demand notice dt.2o.os.2o23 and sent the same to the Applicants through Regd. post. Thereafter issued possession notice dt.oz.oa.2o23 and the said notice was published in two daily newspapers and the same also affixed on the schedule properties. The Respondent Bank also obtained orders from the Hon'ble collector & District Magistrate, Khammam for taking physical possession of the schedure properties. Thereafter the bank issued sale Notice dt.23. 06.2024 for conducting auction of the schedule properties on 23.or.2024 and the said notice was published in two leading newspapers and the said notice was affixed on the schedule properties. Thus, Respondent bank duly followed the procedure contemplated under the provisions of sARFAESI Act, 2002 and Rules made all the statutory notices to the Applicants to dismiss the SA.

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Heard Ld. Ld. Counsel for the Respondent. Perused

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Now the points that arise for consideration are

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ii. whetler tle Applicants have established any ualid grounds for challenging the impugned Sale Notice dt.23.O6.2024 issued bg tte Respondent against tle schedule properties?

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iii. To wlnt relief?

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Polnt lVo.(if :-

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During the course of arguments, Ld. Counsel for the Applicants and td. 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 availed loan from the Respondent and thereafter committed default in repaying the loan dues. After declaring t1le loan account of the Applicants as NPA, the Bank issued the impugned Sale Notice dt.23.O6.2O24 for conducting auction of the schedule property and challenging the same, the Applicant filed the present SA.

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The specific contention of the Applicants is that without issuing any prior notices, the Bank issued the impugned Auction Sale Notice dt.23.O6.2O24 for conducting auction of the schedule property without following the procedure contemplated under the provisions of SARFAESI Act,2002 and Rules made thereunder and so, the said sale notice is not legal and valid and liable to be set aside.

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But the Respondent- eontended that they have issued all the statutory .:

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notices to the Applicants undqp the provisions of SARFAESI Act,2OO2 and Rules

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*
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To substantiate their contention, the Respondent Bank filed material documents along with the Reply filed by them. As per the said documents it is clear that the Bank issued demand notice dt.20.OS.2O2g u/s l3(2) of the SARFAESI Act, 2OO2 and sent the same to the Applicants ttrrough Regd.Post as evidenced by the postal track reports liled by the Bank. Thereafter, the Respondent issued possession Notice dt.O7.0g.2023 and sent the said notice to the Applicants through Regd. post as evidenced by the postal track reports filed by the Bank. The said possession notice was published in English and Telugu daily newspapers as evidenced by the copies of paper publication filed by the Bank and the said notice was also affixed on the schedule properties as depicted in the copies of photographs filed by the Bank. Thus the Respondent Bank has duly followed Rule 8(1)&(2) of Security Interest (Enforcement) Rules, 2O02. After issuing demand notice and possession notice as per the contemplated procedure, the Bank issued the impugned Auction Sale Notice dt.2s.o6.2o24 and the said notice is received by the Applicant and the said notice was published in two daily newspapers as evidenced by the copies of paper publication filed by the Bank and copy of the said notice was also affixed on the schedule properties as depicted in the copy of photograph filed by the Bank. In fact, the Applicants filed copy of the said notice along with the SA filed by them.

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However, in pursuance of the impugned Sale Notice dt.23.06.2O24, no auction was conducted by the Respondent against the schedule properties in view of the interim orders passed by this Tribunal. As no auction was conducted in pursuance of the impugned Sale Notice dt.23.06.2O24, rhe relief claimed by the Applicants in the SA becomes infructuous and nothing survives in the present SA for adjudication and there is no need to decide the validity or otherwise of the impugned sale notice. Hence, I am of the opinion that the relief claimed by the Applicants in the present ecomes infructuorls'and the SA is liable to be dismissed. Suffice, if a ;..') 'd" ,+ ai$e*tiorr-i. gir.il to Ur" ft.$orra.nt bank to issue fresh sale notice for ir"""^usfrEcry lii \8,,,-^{" uEb (ua} iJ

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conducting auction of the schedule properties by strictly following the procedure contemplated under the provisions of SARFAESI Act,2002 and Rules made thereunder.

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Polnt No.(tl):-

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In the result, SA 247 124 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, transcribed bg her, corrected, signed and pronounced bg me in the open court on this the 9th dag of December, 2025).

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sd/(G. GOPr CHAND) PRESIDING OFFICER

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?w5

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Sri Venkata Sai Traders and Another v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

Sri Venkata Sai Traders and Another v. Punjab National 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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