Dismissed

M S Vishal Agri Seeds v. Karnataka Bank Limited

DRT11 Sept 2025SA/273/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed the applicant's application challenging the auction sale notice and possession proceedings initiated by a bank under the SARFAESI Act, holding that the bank followed due process and that prior sale notices were infructuous due to lack of bidders.

What did the court decide?

The applicant's application was dismissed as it had no merits. The Respondent Bank is directed to proceed afresh for conducting sale of the schedule property by issuing a fresh sale notice.

M S Vishal Agri Seeds versus Karnataka Bank Limited — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERYTRIBUNAL _ I AT HYDERABAD DATEDTHISTHE I 1TH DAYOFSEPTEMBER, 2c.25

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PRESENT: SRI GUMMADI GOPICHAND, PRESIDING OFFICER

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sA.No.273/2C22

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M/s Vishal Agri Seeds Rep. by its Managing partner Mr.Maram Madhav Reddy, S/o Mr.Maram Narsimhaiah, Aged 55 years, R/o H.No.I-3-21 1612, Rajendra Nagar, Mahboobnagar District-SO9 00 1

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... Applicant

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I/ersus

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Karnataka Bank Ltd., Rep. by its Author2ed officer Assets Recovery management branch Plot no.50, Srinagar colony, Road No.3, Banjara hills, Hyderabad-SOO O73

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.. . Respondent

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Counsel for the Appticant Counsel for Respondent bank

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: Sri D.Ragtatalu : Si N.Rama Rao

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ORDER

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This Application is fired u/ s. 17 of the securit ization and Reconstruction of

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Financial Assets and Enforcement of Security Interest Act, 2Oe2 (SARFAESI Act,2oo2) chaflenging the e Auction sare Notice dt.2z .og.2o22 issued by the Respondent Bank for conducting auction of the schedule property on 10. 11.2 also the proceedings initiated by the Respondent cal possession of the schedule property through t to the orders of Ld.CJM, Mahabu as null and void.

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The averments made by the^{Applicant in brief are as follows:}

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The Applicant is involved in the^{businessof cottonseedmanufacturingand} availed loan of Rs.25 lakhs^{from the RespondentBank for developmentof} business by creating^{mortgage in respect ofthe scheduleproperty' Due to} Covid-19, the Applicant^{couldnot pay someinstalments.On 07' 11'2022} some bank officials visited the^{scheduleproperty and informed the} Applicant about the Sale notice^{dt.27.O9.2O22issuedby the Bankfor} conducting auction of the^{scheduleproperty'Demand noticeand} possession notice were not served on^{the Applicant.The saidpossession} notice was not^{published in newspapersand the samewas not affixed on} the schedule^{property.The impugnedsale noticewas also not affixed on} the schedule^property and^{it was not published in two dailynewspapers'} Before issuing the impugned^{sale notice, the Bankhas not issuedRule8(6)} notice for giving an opportunity^{to the Applicant to redeemthe secured} asset. The Respondent bank^{has not obtained valuation from the approved} valuer for fixing the reserve^{price againstthe schedule propert5r. Hence} the SA.

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.1. The Respondent Bank filed^{theirReplydenying all the adverse allegations} made in the SA and contended^{that Applicant availedoverdraft facilityof} Rs.25 lakhs from the Respondent^{by creating mortgage against the} schedule property to secured the^{said loan and thereaftercommitted} default in repaying the^{loanduesand so, the loan account was classified} as NPA on 31.O3.2021.^{The Respondentbankissued demandnotice} dt.2g.Og.2o2l to the Applicant^{and one SyedAhmedwho is one of the co-} obligant has received the^{said noticepersonally'Thereafter, the Bank} issued possession notice^{dt.21.06.2022u/s 13(4) of the Act and the said} notice was received by the^{Applicant and the said possessionnoticewas} affixed on the schedule^{property and it was published in two leading} newspapers. .Thereafter, the Bank^{issued eAuction Sale Notice} dt.27 .O*;d022:fun coSafliiating auction^{of the schedule propertyand the said} noticdweg receiGd by"th,|$plicant^{and the same was} lubtished^{in Mana} rrdAiir^rnd Li"i.,.""'S&r.a^{daily newspapers on 03.1o.2022 and} 11 Si? nfr

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challenging the said sale notice, the Applicant fired the present SA along with I.A. r 592 I 22 seektng stay of all further proceedings and this Tribunal granted interim stay. But however, the Applicant has not complied with the said interim conditionar order. Thereafter, the bank again issued fresh Sale Notice d.,3'06.2023 and the said notice was reived by the Applicant and the Bank pubrished the said notice in Mana Telangana and Business standard daily newspapers on 2g.06.2023. But however, no auction was conducted in pursuance of the said sale notice for want of bidders. Accordingly, rst Respondent Bank prayed to dismiss the sA.

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Heard Ld' counsel for the Applicant and Ld. counsel for the Respondent Bank. Perused the material brought on record.

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Now the points that arise for consideration are

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i. whether tLrc Applicant has established ang ualid grounds for challenging the e Auction Sale Notice dt.27.Og.2022 issued by th.e Respondent against tLte schedute property?

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ii. Wletler the Applicant has established ang ualid grounds for challenging tlrc measures initiated. bg the Bank for taking phgsical

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possession of the schedule propertg through ad.uocate commi"ssioner?

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ii. To what relief?

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Polnt .I\Io.(if :-

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

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The undisputed facts ofthe case are that the Appticant availed loan from the Respondent Bank by creating mortgage against the schedule property and thereafter committed default in repaying the loan dues.

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tention of the Applicant is that without issuing demand notice, the Respondent Bank straightaway issued Led s ce dt.27.O9.2022 without issuing Rule 8(6) notice said tice is illegal and liable to be set aside. Another ir)

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contention of the Applicant is that during the pendency of the SA, the Bank obtained orders from the Ld.cJM, Mahabubnagar for taking physical possession of the schedule property through advocate commissioner u/s r4 of the SARFAESI Act, 2oo2 without following due process of law.

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Per contra, Respondent bank contended that the Bank has scrupulously followed the procedure contemplated under the provisions of sARFAESI Act, 2oo2 and Rules made thereunder in issuing all the statutory notices to the Applicant and also in initiating measures u/s 14 of the SARFAESI Act,2oo2 for taking physicar possession ofthe schedule property through advocate commissioner. So far as the impugned Auction Sale Notice dt.27.09.2022 is concerned, no auction was conducted in pursuance of the said sale notice and so, the said sale notice becomes infructuous.

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10' In order to substantiate their contention, the Respondent Bank liled relevant material documents along with the Reply filed by them. As per the said documents, it is clear that the Respondent Bank issued demand notice dt.29.O9.202r u/s 13(2) of the SARFAESI Act,2002 and sent the said notice to the Applicant and others through speed post and the same was received by the Applicant as evidenced by postal acknowledgements Iiled by the Respondent. In fact, one Syed Ahemed, who is one of the coobligant received the said notice personally as evidenced by his signature on the copy of the demand notice filed by the bank. Thereafter, the Respondent Bank issued possession notice dt.2r.06.2022 and the said notice was duly received by the Applicant as evidenced by postal acknowledgements filed by the Bank. The said possession notice was published in English and relugu daily newspapers as evidenced by the copies of paper publication filed by the Bank and the same was also affixed on the schedule property as depicted in the copies of photographs rrted by us the Bank has scrupulously followed Rule g(1)&(2) of brcement) rules, 2002 in issuing possession notice AESI Act, 2002.

So far as the impugned e Auction Sale Notice dt.27.Og.2O22 is concemed, no auction was conducted by the Respondent Bank in pursuance of the said sale notice in view of the stay granted by this Tribunal and so, the said sale notice becomes infructuous. Thereafter the Respondent Bank issued fresh sale Notice dt.2a -06.2023 and the said notice was served on the Applicant and published in two daily newspapers, however, auction was not conducted by the Bank in pursuance of the said sare notice for want of bidders. So, the said sale notice also becomes infructuous. This point is answered accordingry. The Respondent Bank is directed to proceed afresh for conducting sale of the schedule property by issuing fresh sale notice by duly following the provisions of sARFAESI Act, 2oo2 and Rules made thereunder.

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Potnt No.(tl):-

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As per the provisions of Section 14 of sARFAESI Act, 2002, after issuance of possession notice u/s 13(a) of the SARFAESI Act, 2OO2, t'.e secured creditor is at liberty to approach the concerned District Magistrate or chief Judicial Magistrate for taking physicar possession of the secured asset' In the instant case, after issuing demand notice and possession notice to the Applicant, the Respondent Bank approached Ld.CJM, Mahbubnagar u/s 14 of the SARFAESI Act, 2OO2 for appointment of advocate commissioner for taking physical possession of the schedule properties. Ld.CJM, Mahabubnagar after going through the record, appointed advocate commissioner. So, the said proceedings initiated by the Respondent Bank for taking physical possession of the schedule property are perfectly legal and valid.

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So, considering all the circumstances, I am of the opinion that the proceedings initiated by the Respondent Bank before the Ld.cJM, Mahabubnagar u/s 14 of the SARFAESI Act, 2OO2 for taking physical e schedule property are quite legal and valid and strictly the provisions of SARFAESI Act, 2OO2 and Rules made are no violations. So, I see no ground warranting bunal with the steps initiated by the Respondents 1 1 srP 2f,5

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for taking physical possession of the schedule property u/s 14 of the SARFAESI Act,2OO2. Accordingly, this point is answered in favour of the Respondent and against the Applicant.

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Potnt No.(itl)r

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In the result, SA 273122 is dismissed as there are no merits. The Respondent Bank is directed to proceed afresh for conducting sale of the schedule property by issuing fresh sale notice by duly following the provisions of SARFAESI Act,2OO2 and Rules made thereunder.

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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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(Dctated to the P.S, transcibed bA her, corrected, signed and pronounced by me in the open court on this the llth daA of September, 2025).

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sd/-

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(G. GOPr CHANDI PRESIDING OFFICER

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M S Vishal Agri Seeds v. Karnataka Bank Limited

Case brief

What is this about?

What did the court decide?

M S Vishal Agri Seeds v. Karnataka Bank Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

Parties & counsel

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Case details

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