Dismissed

Smt M Sarada Devi v. State Bank of India

DRT10 Jan 2025SA/262/2022

Case brief

AI extract

What is this about?

This order addresses disputed notices under the SARFAESI Act, 2002 concerning recovery proceedings. The applicant claimed a fresh demand notice was not issued or served properly. The Tribunal held that all procedural requirements were met by the respondent bank. The auction notice was rendered infructuous by a stay order, while the possession notice was declared valid. Consequently, the applicatio

What did the court decide?

The application is dismissed. The auction sale notice is declared infructuous due to the stay order. The respondent bank is at liberty to proceed afresh by issuing all mandatory notices.

Smt M Sarada Devi versus State Bank of India — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL. I AT HYDERABAD

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DATED THIS THE ] OTH DAY OF JANUARY, 2C25

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PRESENT: GUMMADI GOPICHAND, PRESIDING OFFICER

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sA.No.262/2022

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Smt. M.Sarada Devi, W/o Late Sri MaddiSadashivudu, Aged 60 years, H.No.8- 1 1-36, RNT Road, Warangal.

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M.Pavan Kumar, S/o Late Sri MaddiSadashivudu, Aged 38 years, H.No.8- 1 1-36, RNT Road, Warangal

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M. Phanindra Kumar, S/o Late Sri MaddiSadashivudu, Aged 39 years, Presently residing at Alde, Virginia-201005, USA Rep. by his GpA Mr.pavan Kumar

... Applicants

And

State Bank of India,

Stressed asset Recovery branch, (SARB) TSRTC Commuter Amenity centre, Bus Terminal Complex, Koti, Hyderabad

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Rep. by its Authorized oflicer

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Respondents

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Counsel for the
Sri B.Sreeniuasa Reddg
Counsel for the i C Prabhakar
ffi
d'$
1 A JAl{ 2025
i. This appl licants u/s.17 of the SARFAESI
Act, '2002,
ssession Notice dt.O6.01.2022 and

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Auction Sale Notice dt.30.09.2022 issued by the Respondent Bank against the schedule properties and to declare the same as illegal.

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

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The Applicants are the partners of the firm by name ChandraSarada Estates' The said firm availed credit facilities from the Respondent bank in the year 2015 but they could not repay the loan amounts due and so, the Respondent bank issued demand notice, possession notice and prior to sale notice and challenging the said notices, the Applicants filed sA ts2l2o2o. subsequently, the Respondent Bank has withdrawn the said notices including the demand notice and so, thc said sA was dismissed as infructuous. Thereafter, without issuing any fresh demand notice to the Applicants, the Respondent bank straightaway issued possession notice dt.06.0 1.2022. Thereafter sale notice dt'3o.09.2022 was issued by the bank fixing the auction of the schedule properties on 1g.rr.2o22 and the said sale notice was not affixed on the schedure properties nor published in two daily newspapers' The Respondent Bank has also not obtained valuation report before fixing auction of the schedule properties. so, the steps initiated by the Respondent Bank for sale of the schedule properties without issuing fresh demand notice are liable to be set aside. Hence the SA.

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The Respondent Bank filed their Reply Statement denying all the adverse allegations made in the sA. It is contended that the Respondent Bank fired 0.4.360/ 2o1g for recovery of a sum of RS.7,76,85,710.30 ps. and the said o.A. was decreed against the Applicants and others o {.2O19.^{Initiallythe Respondent Bank} invoked proceedi isions of SARFAESI Act, 2OO2 in ;',i 3^.,{ahd tl, the said proceedings were .-"4 withdrawn re Rank. espondent Bank issued fresh -i demand notipbdt.od,@ AQn:{/Iff,l, f($, of the SARFAEST Act, 2oo2 \t*.u ^^d,f

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for recovery of a sumof Rs.10,6g,32,rg7.56 ps. as on oz.og.2o2t and the said notice was sent by registered post and some of the guarantors and partners of the firmacknowledged the said notice. But the demand notice sent to the Applicants No.1&2 was retuned undelivered with the endorsement ,unclaimed, which is deemed service. So the said demand notice was affixed on the schedule properties and it was also published in Mana Telanaga and Financial Express daily newspapers on 12.1o.2021. Thereafter the Respondent Bank issued possession notice dt.06.01.2022 u/s 13(4) of the SARFAESI Act, 2oo2 and the said notice addressed to the Applicant No.1 was retuned as he refused the same. The other partners received the said possession notice. The said notice was affixedon the schedule properties and also published in two daily newspapers. Thereafter the Respondent Bankissued Auction sale Notice dt'30.09.2022 for conducting auction of the schedule properties on 18.1 1 .2022 and the said notice was pubrished in two leading newspapers and also affixed on the schedule properties. The Respondent Bank also obtained valuation report from the approved valuer before fixing auction of the schedule properties. Thus the Respondent Bank has followed the procedure laid down under the provisions of SARFAESI Act, 2oo2 and Rules made thereunder in issuing all the mandatory notices and so there are no merits in the SA' Accordingly, Respondent Bank prayed to dismiss the sA.

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

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Now, the points that arise for consideration are,

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icants established anA ualid ground fo, session Notice dt.06.0i.2022 and. Auction Sale

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Notice dt.30.09.2022 issued by the Respond.ent Baruk tn respect of ttrc schedule properties?

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ii) To what relieJ?

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Point No.(i):-

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During the course of arguments, Ld. Counsel for the Applicants and Ld. counsel for the Respondent Bank reiterated their respective versions as stated supra.

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'l'here is no dispute regarding the fact that the Applicants are the partners of chandra Sharada Estates along with others and they availed credit facilities from the Respondent Bank and thereafter committed default in repayment of loan amounts.

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Thc spccific contention of the Applicants is that without issuing fresh demand notice, the Respondent Bank straightaway issued possession notice and sale notice and so, the saidnotices are not legal and valid. Per contra, the Respondent Bank contended that they have followed the due procedure raid down under the provisions of SARFAESI Act, 2oo2 and Rules made thereunder in issuing all the relevant notices to the Applicants and there are no violations.

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The Respondent Bank in order to substantiate their contention, enclosed relevant material documents along with the Reply filed by them. As per the said material documents, it is clear that the

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Respondent Bank issued fresh Demand Notice on og.o9 .2021 u/s l3(2) of the SARFAESI Act, 2oo2 to the Applicants and to prove the same, the Bank fited office copy of the demand notice and also postal acknowledgements and returned covers. As per the said documents, it r-. of the partners of the firm received the demand whereas Applicants No.1&2 uncraimed the said videnced by the postal endorsements on the COVCTS r. as notice address to the Applicant No.3 was r.1,-0,"J4$,t$Br,.a the Respondent Bank has published the said 4

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demand notice in Telugu and English daily newspapers and the said notice was also affixed on the schedule properties as depicted in the photographs filed by the Bank. So, the Respondent Bank has scrupulously followed the procedure prescribed under Rule 3 of Security Interest (Enforcement) Rule s, 2oo2 in issuing demand notice to the Applicants and others. So, the contention of the Applicants that no fresh demand notice was issued by the Bank to the Applicants is false and untenable. It is pertinent to note that some other partners of the firm who received the demand notice dt.08.09.2o2r are not made as parties to the present SA for the reasons best known to the Applicants.

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10' As there was no response to the said demand notice, the Respondent Bank issued possession Notice dt.06.0 1.2022 u/s 13(a) of theAct to thc Applicants and others and the said notice was sent through regd. post to the correct address of the Applicants and others, so, it can be deemed that the Applicants and others received the said possession notice' Moreover, in the sA, the Applicants have admitted that they received the possession notice but the contention of the Applicants is that the said possession notice was not affixed on the schedule properties nor published in two daily newspapers. But as per the material documents filed by the Bank, it is very clear that the said possession notice was published in English and Telugu daily nc/spapers on 09.01.2022 as evidenced by the copies of paper publications and it was arso affixed on the schedule properties as depicted in the photographs filed by the Respondent Bank. Thus the Bank has dury followed the procedure laid down under Rule g(1)&(2) of security Interest (Enforcement) Rures, 2oo2 in taking possession of

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thc secu

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d* ffi 11. T'h @s t Bank issued Auction Sale Notice dti auction of the schedule properties on ':,ffrt^8M lr said Sale Notice, the Applicants filed 5 'q+h,*'**:,

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the present sA and along with the sA, the Applicants filed I.A. 1470122 seeking stay of auction proposed to be conducted by the Respondent Bank in respect of the schedule properties and this Tribunal was pleased to grant conditional stay order subject to deposit of Rs.1.5 cores by the Applicants herein. In view of the stay granted by this Tribunal, theproposed auction was not conducted and so there is no need to decide the validity or otherwise of the said Sale notice dt.30.09.2022. Accordingly, the Auction sale Notice dt.30.09.2022 becomes infructuous as no cause of action survives. T2, Since no auction was conduced in pursuance of the Sale notice dt.30.09.2022, the Sale Notice dt.30.og.2022 becomes infructuous. so far as Possession Notice dt.06.01.2022 is concerned, it is perfectly legal and valid. Accordingry, this point is answered in favour of the Respondent Bank and against the Applicants.

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Point No.lii):-

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In the result, the present Securitization Application is dismissed as there are no merits. The Respondent Bank is at liberty to proceed afresh for conducting auction of the schedule properties by issuing the mandatory notices as per the procedure laid down under the provisions of SARFAESI Act, 2oo2 and Rules made thereunder 14. consequently, the Interlocutory Applications, pending if any, shail 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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bs her, corrected, signed and. pronounced bs me in the open coutl on this the loh '!:r':F:"nfr,';|,rl[i"uo"d

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sd/(c. coPr CHAND) PRESIDING OFFICER

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1 0 JliN 2$25

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DRT.I, ItrYDEP4T.$,T1?
6

Smt M Sarada Devi v. State Bank of India

Case brief

What is this about?

What did the court decide?

Smt M Sarada Devi v. State 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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