Dismissed

T Shaik Fairose v. Union Bank of India

DRT10 Oct 2025SA/258/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed a Securitization Application seeking to set aside auction proceedings under the Securitization Act, 2002. The Tribunal held that statutory notices were duly served via deemed service, the auction price was above the reserve valuation, and no fundamental procedural irregularity was established. The application was dismissed with pending interlocutory applicatio

What did the court decide?

The Securitization Application is dismissed; interlocutory applications are closed; no order as to costs.

T Shaik Fairose versus Union Bank of India — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY^TRIBUNAL -^{II AT HYDERABAD}

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DATED THIS THE^{1OTH DAY OF OCTOBER,2025}

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PRESENT: SH. MMESHWAR^{KOTHE,B'com,L.LB' (Hons.), M'A'} PRESIDING OFFICER

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Securitization Application^{No'258OF 2023}

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T. Shaik Fairose

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C/o Late Shaik Mahaboob^Basha Aged about 48^years, Occ:Business Gender:Female, R/o 13/150,^{BKM Street, Kadapa}

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.......APPlicant.

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Versus

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Union Bank of India Rep by its Authorized Officer Ground Floor, Commercial Building D.No.4L I 7454-2, Sankarapuram YSR Kadapa District 516002

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2, Shaik Mohammed Javeed S/o Shaik Jaffer Sadiq, R/o H.No.6-122 Bharathi Bar Street, Near Shankarapuram Kadapa 516002

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,...Respondents.

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Counsel for the Applicants : Nr. T. Vijay Kumar

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Counset for 1st Respondent Bank: Mr.V. Raghu

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Counsel for 2nd Respondent : Mr.G. Ramesh Anand

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-: o_B_Dl_B:-

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The Applicant filed the present Securitlsation Applicatlon u/s 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "the Act") to set aside all the proceedings of the resporldent bank under Sec.13(4) vide sale notice dated 24.08.2023 against the application schedule^property.

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The case of the applicant, in brief, is that husband of applicant obtained loan of Rs.11 lakhs from the respoqdent bank in 2016. Due (-,/ //)V^.,s'rN

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Page 2 of8

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SA No.2s8l2023

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to Covid-19 his business became affected adversely and applicant,s husband died due to health problems. Without serving demand notice possession notice was direcuy published. The respondent issued the auction notice dated 10.05.2023 which was not successful hence a second sale notice was issued on 24.O9.2OZ3 fixing auction on 12.09.2023. The account was not NpA as per RBI Circulars in view of substantial amounts paid by her husband. The respondent failed to follow Rule 8(6) in issuing redemption notice of 3O days prior to sale as per^judgement of Hon'ble Supreme Court in Mathew Varghese vs. M. Amritha Kumar, (2014) 5 SCC 610. Sale notice was also served. Auction sale on AS IS WHERE IS BASIS AND AS IS WHAT IS BASIS is against the law laid down by Hn'ble Supreme Court, The property worth of Rs.40 lakhs whereas being sold at Rs.19 lakhs against the principles of natural justice. Respondent bank also failed to follow Rules 8(1), 8(2), 8(5), 8(7) and 9(1) of 2002. The notices issued in the name of a dead person are void in law. Hence this SA to set aside all the measures against the property.

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The 1't respondent bank filed reply and additional reply statements along with list of documents stating, inter-alia, that the applicant is the co-borrower along with her husband. The payment was not made as per terms of loan and hence it became NPA on 31.03.2020 as^per RBI^guidelines. All the statutory notices have been served, published and affixed as per Rules. Though sufficient time was given applicant failed to avail the opportunity. As the first auction did not materialize, the respondent bank issued second auction sale notice of 15 days on 24.08.2023 which was successful in favour of 2nd respondent. No two separate notices under Rule 8(6) and 9(1) are contemplated. The applicant's^presence is sufficient as legal heir and wife of late Mr.Shaik Mehboob Basha. The noticeihave been sent to /lYt^rt-\ /,/^{-\t^"} -/

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Page 3 of 8

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sA No.258/2023

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the address^given at time of^{contract and the same is also shownin} the cause title. The advocate^{commissionerappointedin Crl.MP} No.473 of 2023 has already taken^{physical possession, handed over} to ltt respondent bank and in turn^{has been handed over to the 2nd} respondent-auction^purchaser. Auction^{purchaser paid 25o/o and 75o/o} of bid amount within stipulated time^{and sale certificate was issued} on 27.09.2023. SA is liable to be dismissed.

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The 2nd respondent-auction^{purchaser adoptedthe reply and} written arguments filed by the 1st respondent bank.

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Learned counsel for applicant reported no oral^arguments. io*euer he filed written arguments.^{Heard learned counselfor the} respondent bank. Perused the written arguments^{of applicantas well} as for respondents and the material documents^{placed on record.}

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During the course of arguments, the^{learned counselfor the 1't} respondent bank, while reiterating the contents of^{the replyand} additional reply statements, referred to the documents^{filed on} various dates as^proof of compliance of due^procedure of^{law. He also} submitted that the applicant never informed the^{changed addressif} any even after specific^pleading taken by the^{bank. Since the notices} were sent to the correct^given address at^the time^{of contract,it is a} deemed service under Sec.27 of the^{General Clauses Act.Learned} counsel relied upon the^judgements of Hon'ble Hioh Court^{for the} State of Telangana in K.V.V. Prasad^{Rao GuDta vs' State Bank of} India in WP No.27831 of 2021 dated 12.03'2021.^{He also relied upon} iudgment of Hon'ble Supreme Courtⁱⁿ S.^{Karthik and others vs.N.} Subhash Chand Jain AIR 2021 Suoreme^{Court 4559 whereinit was} felt not necessary to issue 30 days^{period for second sale. Learned} counsel also stated there is no necessity to^take colsent^{of borrower}

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sA No.258/2023

for extension of time under Rule 9(4), he placed reliance on citation (3) ALD 494. Learned counsel also placed reliance on the judgement of

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Hon'ble decided on 16.05.2025 wherein it was held by referring to paragraphs 126, L27 and 140 of judgement of Hon'ble Suoreme Court in CELIR 3727\ the proceedings which have attained finality cannot be interdicted.

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Learned counsel also relied on^judgement of Hon'ble Hiqh Court Corooration Bank in WP No.20729 of 2018; in support of his contention that 15 days gap is sufficient for the subsequent auction sale.

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B. Learned counsel further submitted that the property was sold at Rs,19 lakhs against reserve price of Rs.13 lakhs. Appendix-IVA of the Act, 2002 also indicates that the auction sale can be on^..As is what is and wherever there is basis". While referring to documents placed on record, learned counsel sought for dismissal of the SA./42(.p

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PaBe 5 of8

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SA No.258/2023

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The^points for consideration^{are as follows :} -

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i) Whether the applicant^{made out any valid ground to} quash the measures of the respondent against^{the SA} schedule^{propertyincludingauction held on 12.09,2023,} as PraYed for?

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ii) To what relieP

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Point No,(i):

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As per documents^placed on^{recordby the respondentbank,} the applicant is also the signatory^{to all the loan and security} documents in the capacity of^{co-borrower alongwith her husband,} who deceased subsequently. The^{respondentbank addressed the} notices to the applicant also^{as co-borrower. Thus, applicant cannot} contend that SARFAESI^{noticeswere issued only in the name of} deceased^person.

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As far as service of demand notice,^{possession noticeand its} amxture and publication is concerned, the respondent^{bank filed} documents filed with lists of documents dated 24.04.2024.^rhe demand notice dated 21.10.2019 and^possession notice^dated 09.L2.2022 were sent to the correct address of the applicant, but the same were returned with postal remarks as'door locked' and 'no instructions', Burden of proof lies with the applicant to show that she informed the bank about change in the address however, no such proof establishing communication of changed address has been placed on record. As the notices were sent to the correct address, it is a deemed service as per clause 27 of the General Clauses Act and also in the light of judgement in K.V.V. prasad Rao (supra). The demand notice and possession notice were published in English and Telugu newspapers and possession notice was also amxed on secured asset as per as per documents filed along with the list of documents.

Aryr*.9 1/^''!'*

page 6 of8

SA No.2s8l2023

I find no valid ground to set aside the measures of the respondent bank under Secs.13(2) and 13(4) read with Rutes B(1) and B(2) of the Rules,2002.

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The valuation report placed on record by respondent bank shows the market value as Rs.12.93 Iakhs whereas reserve price kept is Rs.13 lakhs and fetched a price of Rs.19 lakhs. The applicant has not substantiated her plea of undervaluation of the property by placing a reliable document on record. Hence undervaluation is ruled out.

¶48

The impugned e-auction sale conducted on 12.09.2023 is the 2nd auction. The respondent bank earlier issued auction notice dated 10.05.2023, sent the same to the applicant, affixed on the secured asset besides publication. Even the 2nd auction notice was sent to the appiicant, returned unserved. The 2nd auction notice dated 24.08.2023 was published on 26.08.2023, affixed on secured asset as per proof filed with list of documents dated 16.11.2023. Appticant never received any notices even though sent to the correct address which is still shown as her address by the applicant. I find no violation of Rule 8(6) and 9(1) of the Rules, 2002.

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L4, Pursuant to auction notice dated 24.08.2023, the auction was successfully conducted on 12.09.2023 and 2nd respondent stood as successful bidder who^paid 25o/o and 75o/o of bid amount within time as per statement of account filed by the respondent bank^on 16.11.2023. No violation of^Rules 9(3)^{and 9(4) of the Rules, 2002is} estabrished. ,/xwz,o c_/ \o,"

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Page 7 of8

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SA No.258/2023

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Though the applicant^{contendedthat the auction ought not to} have been conducted on'as^{is whereis'and'as is what is'basis,she} failed to explain as to what^{way it caused prejudiceto her' Hon'ble} U RLLPV IVIATI BA (supra ) that :-

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"27a. Any^{sale by auction or other public} Procurement methods once already confirmed^{or concludedought} not to be set-aside or^{interteredwith lightlyexcepton} grounds that go to the core of^{such sale process,such} is either being collusive,^{fraudulent or vitiated by} inadequate^pricing or^{underbidding.Mere irregularityor} deviation from a rule^{which does not haveany} funiamental^procedural error^{does not take away the} foundation of authority for such^{proceeding. In such} cases, courts in^{particular should be mindfulto refrain} entertaining anY^{ground for challenging an auction} which either could have^been taken^{earlier before the} sale was conducted and confirmed^{orwhere no} substantiat iniury^{has been caused on accountof such} irregularity. In the instant^{case, the applicant failed to} proie any iffegularity that^goes to the root^{of the} proceedings."

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(EmPhasis)

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In the case on hand, the applicant^{has not been ableto} establish any irregularity or illegality^{in the process whlch goes to the} root of the^proceedings.

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In the light of the above discussion, it is^{concludedthat the} applicant failed to make out any valid^ground to^{set asidethe} measures under Secs.13(2), 13(4) of the Act, the action^{in taking} physical possession of the SA schedule property, conducting the auction sale of application schedule property on 12.09.2023 and consequential sale certificate. Accordingly SA is liable to be dismissed. 4M#

Page 8 of 8

sA No.2s812023

Point No.(ii):