Dismissed

Ms Rishika Cotton Pvt. Ltd. v. State Bank of India

DRT19 May 2025SA/26/2022

Case brief

AI extract

What is this about?

This Special Application challenging an auction under Section 17 of the SARFAESI Act was dismissed as not maintainable. The Debt Recovery Tribunal held that the High Court and Supreme Court had already dismissed the applicants' writ and appeal against the auction, rendering this application dead.

What did the court decide?

Application dismissed; pending interlocutory applications disposed of; no order as to costs.

Ms Rishika Cotton Pvt. Ltd. versus State Bank of India — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERYTRIBUNAL- IAT HYDERABAD

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DATED THIS THE 1^gTH DAY OF MAY, 2025

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PRESENT: GUMMADI GOPICHAND, PRESIDING OFFICER

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sA.No.26,/2022

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1.M/s Rishika cotton P.Ltd., 18-2-60 I 8I, Jangament Railway Bridge,

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Falaknuma, Hyderabad-SOO 053. Rep. by its Managing Director Aj ay Kumar Agarwal

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2.Smt.Archana Agarwal

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Smt.Santosh Agarwal

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Ajay Kumar Agarwal

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Vijay Kumar Agarwal All are residing at

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Prazanta Villas, Villa No.26, Tejaswi Nagar, Attapur, Hyderabad-SOO 048

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... Applicants

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And

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State Bank of India, SAM branch-2, TSRTC Bus Station,

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Kachiguda, Hyderabad-SOO 027 Rep.by its Authorized officer

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Mls S.K. Cars Lounge, Rep. by its Proprietor

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Mr.BasharatAhmed Khan, Opp.Commissioner Office,

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Gachibowli, Hyderabad-SOO 032.

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Counsel for tle Applicants Counselfor the 1st Respondent Counsel for 2"d Respondent

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Sri B. Sreeniuasa Reddg Si G. Prabhakar Sharma Si A.P.Reddy

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sA26l2022

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:ORDER:

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This application is liled by the Applicants u/ s. 17 of the SARFAESI Act,2OO2, challenging the auction conducted by the 1"t Respondent in respect of the schedule property on 28.72.2021 and to declare the same as illegal and void.

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The averments made in the application, in brief, are that:

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The l"t Applicant availed loan from the lst Respondent Bank and Applicants No.2 to 5 stood as guarantors and executed certain loan documents. Thereafter, the 1st Applicant ran into temporary liquidity crunch and so, there was a delay in repayment of loan dues and so,the l"tRespondent declared the loanaccount as NPA and issued demand notice dt.06.03.2017 and possession notice dt.06.06.2017 to the Applicants. Finally, the l^stRespondent issued e Auction Sale Notice dt. 1 l.l2.2021 fixingthe date of auction on 28.12.2021 and accordingly conducted auction on28.l2.2O2l and in the said auction, Respondent No.2 became successful bidder. The said auction was conducted without furnishing necessary notices to the Applicants and without following the procedure laid down under the provisions of SARFAESI Act,2OO2 and Rules made thereunder and so, the said auction is liable to be set aside. Hence the SA.

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The l"t Respondent Bank filedReply by denying all the adverse allegations made in the SA. It is contended that in view of the default commit_ted by the Applicants in repaying the loan dues, the loan on 27.02.2017. Thereafter demand notice ssionnotice dt. 14.05.2019were issued to th ssession notice was affixed on published in two daily newspa Notice 13.09.2021 was issued by the l "tResponde nducted in pursuance of the

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sA 26/2022

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said sale notice. Finally e Auction SaleNotice was issued onl7.l2.2O2l for conductingauction on 28.72.2021 and in the said auction, Respondent No.2 became highest bidder. The Applicants herein filed Writ Petition No.l99l /2022 before the Hon'ble High Court of Telangana. After hearing the submissions ofboth sides, the Hon'ble HighCourt byorder dt.O6.O4.2}22dismissed the said writ petition with costs ofRs.25,000/- payable to the Telangana High Court Legal Services Committee within 30 days from the date of said order. Challenging the said order passed in writ petition, the Applicants hled SLP(Civil) Diary No.3806512022 before the Hon'ble Supreme Court of India and the Hon'ble Supreme Court vide order dt. 13.12.2022, dismissed the said SLP. So in thelight of the orders dt.O6.O4 .2022 inwrit petition No. 1991/22 and order dt. 13.12.2022 in SLP(Civil) Diary No.3806512O22 , the present SA is not maintainable and the same is liable to be dismissed.

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Respondent No.2 filed their reply by contending that he is the auction purchaser of Item No.1 of the schedule property being successful bidder in the auction conducted on 28.12.2021 for an amount of Rs.5,32,00,000/- The Applicants filed W.P.No. 199112022 before the Honbie High Court of Telangana and the same was dismissed. The RespondentNo.2 Iiled WP.No.1789812022 before the Hon'ble High Court for the State of Telangana challenging the letter dt.25.O3.2O22 issued by the 1"t Respondent herein and the Hon'ble High Court after hearing the matter at length, was pleased to allow the said writ petition. As per the orders of Hon'ble High Court, Respondent No.2 paid 7 5o/o of the balance bid amount and the lst Respondent Bank executed sale certificate dt.13.O5.2022 conveying Item No.1 ol proper'ty in favour of Respondent No.2. dismissed. u."." ffif,db /r=t*^"-ffi tus ''.t * 1gilNzm :a a ^s -os t,E -o,?at' 1{1,b",.dsg ":i*lP

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sA26/2022

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Heard Ld. Counsel for the Applicants and^{Ld' Counsel for} 1st on

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Respondent and 2"d Respondent.^{Perusedthe materialbrought} record.

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Now, the points that arise for consideration^are,-

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Whetlrcr tle SA is maintainable in uieu of the^{dismissal of Wit} Petition No. 1991/ 2022 and SLP( ciuil) Diary^No'38O65 I^2022?

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ii) To uhat relief

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Polnt No.lilr

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During the course of arguments, Ld.^{Counsel for the Applicants} submitted that the impugned auction conducted^{by the1st} Respondent is liable to be set aside as the^{l"t Respondenthas not} followed the procedure laid down under^{the provisionsof SARFAESI} Act, 2OO2 and Rules made thereunder^{in conducting auction of the} schedule property.

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Per contra, the lst Respondent contended that^{the Hon'bleHigh} Court of Telangana after elaborate^{hearing,dismissed the Writ} petition No.l99ll22 filed by the Applicants in which,^{the Applicants} challenged the impugned auction^{conductedby the 1st Respondent} and subsequently the SLP(Civil)^{filed by the Applicantschallenging} the order passed by the Honble^{High Court in the above writ petition} was also dismissed by the Hon'ble^{Supreme Court and so, the SA is} liable to be dismissed.

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To substan contentions,l the lst Respondent^Bankfiled material ith the Reply filed by them.^{As per the} said c1 Applicants No.1 to 3 filed^{Writ Petition} the High Court of Telangana^wherein

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spdn0erfdYhffiin arrayed as Respondent No.2^and

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sA 26/ZOZ2

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Respondent No.2 herein is arrayed as Respondent No.3 in the said writ petition. Hon'ble High Court after hearing both the parties, dismissed the said writ petition vide order dt.O6.O4.2022. In the said writ petition, the petitioners therein challenged the auction conducted by the lstRespondent herein on 28.12.2021 in respect of Item No. 1 of schedule property wherein Respondent NO.2herein becamesuccessful bidder. But the said writ petition was dismissed with costs of Rs.25,000/- to be payable by the Petitioners in favour of Telangana High Court Legal Servicers Authority within 30 days from the date of the said order. Challenging the said order, the Petitioners in the said writ petition preferred Sl-P(civil) Dy.No.38065/ 2022 before the Hon'ble Supreme Court of India and vide order dt. 13.12.2022, the Hon'ble Supreme Court dismissed the said SLP. As per the documents filed by the lstRespondent, it is further clear that the Respondent No.2 herein filed Writ Petition No. 17898/2O22 before the Hon'ble High Court of Telangana against the lstRespondent Bank herein and Applicants No. 1 to 3 herein challenging the letter dt.25.O3.2O22 issued by the 1"t Respondent regarding the forfeiture of 25o/o of the bid amount paid by the 2"d Respondent herein. After elaborate enquiry, the Hon'ble High Court set aside the letter dt.25.O3.2O22 issued by the l"t Respondent herein and directed the Petitioner therein to deposit balance 7 Sok of the bid amount within seven days from the date of receipt of the said order. A direction is also given to the 1st Respondent bank herein to take necessary steps for issuance and registration of sale certificate in favour of 2"d Respondent herein.

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So, in the circumstances, it is very clear that the Writ petition No.l99l /2022 the Applicants No.1 to 3 herein challenging the aucti lstRespondent on 28.72.202 1 in respect of the issed by the Hon'ble High Court of T tion filed by the 2"dRespondent herein ltltbiffi$er by the l^stRespondent forfeiting

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sA26/2022

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25o/o of the bid amount paid by the 2"d Respondent was allowed with a direction to the 1st Respondent herein to take necessary steps for issuance and registration of sale certificate in favour of 2"dRespondent herein. So when the Hon,ble High Court has already upheld the auction conducted by the l"t Respondent in respect of the schedule propert5r wherein the 2ndRespondent became successful bidder, nothing survives in the present sA for adjudication. After dismissal of the Writ petition and Slp(Civil) by the Hon,ble High Court ofTelangana and Honble Supreme Court respectively, the Applicants ought to have taken steps for withdrawal of the present SA but instead of withdrawing the SA, they prosecuted the SA and invited order from this Tribunal. So considering all the circumstances, I hold that the presentsA isnot maintainable in view of the dismissal of writ petition and the Sl,p(civil) by the Hon"ble High Court of Telangana and Hon,ble Supreme Court receptively.

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Polnt No.llll:-

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In the result, the present SA 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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to the P.S transcibed bg signed and prorlounced bg me in the open court on this the lgh
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: 1 g i'rl' :ls :. (G. GOPr CHANDI
rd J-.i PRESIDING OFFICER
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Ms Rishika Cotton Pvt. Ltd. v. State Bank of India

Case brief

What is this about?

What did the court decide?

Ms Rishika Cotton Pvt. Ltd. v. State Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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