The Debts Recovery Tribunal dismissed the applicant's challenge to an auction sale notice because the notice became infructuous when the proposed auction was not conducted due to lack of bidders.
The Securitization Application is dismissed; the Bank is at liberty to proceed afresh conducting the auction following prescribed procedures.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE DEBTS RECOVERY TRIBUNAL. I AT HYDERABAD
DATED THIS THE 25TII DAY OF FEBRUARY. 2025
PRESENT: GUMMADI GOPICHAND, PRESIDING OFFICER
sA.No.27 4/2022
Sri Gugloth Ramesh, S/o Shankar, Aged 34 years, Occ:business, l-7 -360, Revenue Colony, Hanamkonda, Warangal-50600 1.
... Applicant
And
l. Bank of Baroda, Warangal branch, Seetarama complex, Opp.Sunil Theatre, Station Road, Warangal-506002.
Rep. by its Authorized officer
2.Mls Shiridi Sai Mineral Water Plant,
Rep. by its proprietor
Smt.Munavath Rami, Plot at Sy.No.55&56, Thorrur village and mandal, Warangal District Presently Mahabubabad District Telangana-506 I63.
Respondents
Counsel for the Ms.AyeshaNaikKazi
Counsel for the Sri TiuikramChitturu
Respondent N, Exparte
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1.
This applica nt u/s.17 of the SARFAESI Act,
2OO2, challengi Sale Notice dt.03.1O.2022 lixing the
date of auction on 10.1 I .2022 in respect of the schedule property
and to declare the same as illegal.
Respondent No.2 availed loan from the l"tRespondent Bank whereas the Applicant stood as guarantor to thesaid loantransaction. Respondent No.2 committed default inrepayment ofloan dues as he sustained loss in the business. But the 1st Respondent Bank straightaway issued possessionnotice dt.02.I1.2021 without issuing demand notice as contemplated u/s 13(2) of the SARFAESI Act,2OO2. Thereafter the 1st Respondent Bank issued Sale Notice dt.03.70.2022 for conducting auction of the schedule property on 1O.11.2022 and that Bank failed to issue 30 days sale notice as contemplated u/r 8(6) of Rules 2OO2 and the said Auction sale notice was not served on the Applicant nor published in two daily newspapers. Hence the SA.
8(6) of Rules, 2OO2 to redeem the schedule property but the said notice was also returned unserved. Thereafter the 1st Respondent Bank issued Auction Sale Notice dt.O3.IO.2O22 fixing the date of auction of the schedule property on 1o.1 1 .2022,however the proposed auction was not materialized for want of bidders, so the relief claimed in the SA becomes infructuous. Accordingly, thel"tRespondent Bank prayed to dismiss the SA.
Potnt No.ll):-
2oo2, issued possession notice dt.o2.rr.2o2r and the 1"t Respondent bank has not followed the procedure laid down under the provisions of SARFAESI Act, 2OO2 and Rules made thereunder in issuing 30 days sale notice and Auction sale notice against the schedule property. Per contra, the lstRespondent Bank contended that they have followed the prescribed procedure laid down under the provisions of SARFAESI Act, 2oo2 and Rules made thereunder in issuing all the relevant notices to the Applicant.
The lstRespondent Bank in order to substantiate their contention, enclosed relevant materiar documents along with the Reply filed by them. As per the material documents, it is clear that the 1"t Respondent Bank issued demand notice dt.23.or.2o2l to the Applicant and Respondent No.2 and the said notice was received by the Respondent No.2 whereas the notice addressed to the Applicant was returned with endorsement 'addressee left,, So, the r"t Respondent bank published the said demand notice in Telugu and English dailynewspapers and thus there is valid service of demandnoticeon the Applicant. As there was no response to the said demand notice, the l"tRespondent bank issued possession notice dt.02.11.2021 to the Applicant but the said notice was retuned unserved. The said possession notice was affixed on the schedule property as depicted in the photographs filed by the 1st Respondent bank and the said notice was also pubrished in Telugu and Engrish daily newspapers on 07.r1.2022 as evidenced by the copies of paper publication filed by the Bank. Thus, the lsrRespondent bank has scrupulously followed the procedure as laid down under Rule g(1)&(2) of Security Rules, 2OO2 2OO2 in taking possession taking possession possession of
Rules, 2OO2 2OO2 in taking possession taking possession possession of
bank issued notice u/r 8(6) of Security 2OO2 on 14.01.2022 for giving an schedule property. Thereafter the
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4
lstRespondent Bank issued the impugnedAuction Sale Notice dt.03.IO.2O22 to the Applicant andRespondentNo.2. However, theauction as proposed, was not conductedby the lstRespondent Bank in pursuance of the said sale noticeas there are no biddersand so, the sale notice dt.03.lO.2O22 becomesinfructuous and nothing survives in the SA for adjudication todecide the validity or otherwise of the sale notice dt.03.1O.2022.
Since the Auction Sale notice dt.03.1O.2O22which is in challenge in the present SA, becomes infructuousas no auctionwas conduced in pursuance of the said notice, the Applicantis not entitledfor any relief. This point is answered accordingly.
Point No.(iil:-
t4. Communicate a copy of this orderto the partiesconcerned.
bg her, corrected, sigrLed andpronouncedbg me in the open courton thb the25th
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sd/(G. GOPI CHAND) PRESIDING OFFICER DRt-t,H!'n5D,'18,45 5
2 issues framed by the court
Whether the applicant established valid grounds to challenge the Auction Sale Notice issued by the bank?
Whether the applicant is entitled to any relief since the proposed auction could not be materialized due to want of bidders?
4 provisions across 2 enactments
Gugloth Ramesh
Bank of Baroda, Warangal branch
MLS Shiridi Sai Mineral Water Plant
GUMMADI GOPICHAND
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
