Dismissed

Smt.Mathangi Vidya v. Canara Bank

DRT6 Jun 2025SA/275/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed the applicant's securitization application filed to challenge a sale notice issued by Canara Bank. The court held the application infructuous as the auction was cancelled and rejected contentions regarding NPA classification and rule compliance as baseless given sufficient documentary proof.

What did the court decide?

The Securitization Application failed and was dismissed. Interlocutory Applications stand closed.

Smt.Mathangi Vidya versus Canara Bank — Insolvency and Bankruptcy | DRT (2025)

¶1

IN THE^{DEBTSRECOVERY TRIBUNAL ' II} AT HYDEMBAD

¶2

DATED^{THIS THESIXTH DAY OF JUNE'2025}

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PRESENT:^{SH. MMESHWARKOTHE,B Com'' L'LB'(Hons')'M A'} PRESIDING^OFFICER

¶4

SECURITISATION^{APPLICATION NO.275 OF ZO24}

¶5

Between:

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Smt. Mathangi^VidYa W/o M. Mahesh H. No.303/8,^RoadNo.6 Sri NilaYa^TownshiP BadangPet,^HYderabad'

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.......APP|icant'

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And

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Canara^Bank VanasthaliPUram^Branch(1825) H. No. P-34,^{HIG, Phase-1} Beside Ganesh^TemPle VanasthaliPuram Hyderabad. -.....Res?ondent. Rep by its^{Authorised Offlcer'}

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Counsel for^{the Applicant : Mr' T' SridharReddy'} -auinset for aespondent : Mr' G' Rangaiah'

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-:8-B-Dl3:-

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The Applicant^{filed the presentSecuritisationApplication} uls.l7 of^{the Securitization and Reconstructionof Financial} Assets and^{Enforcement of Security Interest Act' 2002} (hereinafter referred to^{as "SARFAESIAct 2002")assailing} sale notice dated^{07.06.2024putting the sA schedule} property for sale on 10.07.2024. M+"

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sA, 27s/2(J24

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As per the averments in SA, the case of the applicant in brief, is that applicant is the borrower and has been paying the loan amount regularly. However, applicant came to know of the issuance of impugned sale notice when some intending purchasers and the recovery agents of the respondent came to the schedule property demanding to hand over the subject property. The respondent violated the provisions of SARFAESI Act and Rules and as such the notices issued by the respondent bank are liable to be set aside. The respondent bank declared the account as NpA illegally as the alleged dues were not more than 20o/o of lhe total amount, included other loan amounts sanctioned under CGTMSE and MSME schemes and did not prefer insurance claim towards the damage due to electrical short-circuit in the year 2021. The respondent has not issued notices u/r 8(6) and 9(1). Appticant has not been afforded the opportunity to redeem the property u/s 13(B). The subject property is undervalued and fixed the lowest reserve price. The respondent has not issued possession notice as per law nor did the same has been published in two leading newspapers within the stiputated time.

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Respondent bank filed reply statement denying the allegations made in the SA and asserting compliance of procedure stipulated in SARFAESI Act and the Rules in enforcing the security interest of the subject property. It is submitted that the sale scheduled on LO.O7.ZO24 was cancelled. Hence, the SA cha enging the sale notice dated 07.06.2024 becomes infructuous and requires to be dismissed. Even the subsequent sale notification dated 10.10.2024 slating the auction sale on 30.70.2024 has also been cancelled. As

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'/1'"^'' L/'--/.,x"t-5 ,,/^-ob.'

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sA.27sl2024

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regards the other^{contentions, the applicantalong with her} husband availed^{housing loan of Rs 35 lakhs on 05'11'2018'} Thereafter, applicant^{working capital loan of Rs'12 lakhs being} the Proprietrix^{of M/s. Dobby Mart Both these loansare} secured by mortgage^{of SA scheduleimmovable property'} Applicant^{becameirregular in repaying the loan amountsas} per the agreed terms'^{Accordingly,the loan accountswere} classified as^{NPA and issued demand notice28'11 2023 In} response, applicant^{raised objections vide letterdated} 29.OL.2O?4,^{whichwas suitably replied on 06'02'2024' With} no^{payment was coming forward,respondentbank proceeded} with further^{proceedingsby issuingpossession noticeon} 01.03.2024. The^{possession notice has been sent by post'} published in Mana Telangana^{and Financial Expressdailieson} 03.03.2024 and^{alfixedon the securedproperty'}

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Right of applicant^{to advanceargumentshas been forfeited} vlde docket order^{dated01.05.2025. Whereas, learned} counsel appearing^{for the respondentbank reported no oral} arguments.^{Perused the material brought on record'}

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As^per respondent^{bank, the loan account of the applicantwas} classified as NPA by^{following RBI guidelines. Suitablereply} was given to the^{objectionsraised by the applicantto the} demand notlce. The^{respondentbankhas followed due} procedure as contemplated in the^{Act of 2002 and Rules} framed thereunder in^{serving the demandnoticeand} possession notice and^publishing and affixing^{the possession} notice in respect of the^{securedasset.The. SA became}

¶21

'l!9-'.'*-Lc i"^r-ob'"

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s4.27512lJ24

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infructuous since the very auction challenging which SA was filed did not materialize.

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Now, the points that arise for consideration are:-

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(i) Whether the applicant made out any valid ground to set aside any of the notices including sale notice dated 07.06.2024 fixing auction on 10,07.2024 issued by the respondent bank under the Act, 2002 against the application schedule property?

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(ii) To what relieP

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Point⁽ i):

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The present sA is filed by the appticant chaltenging the sate notice dated 07,06.2024 scheduling the auction sale of SA schedule property for auction on 70.O7.2024. The auction sale scheduled o^ L0.07.2024 did not take place, followed by another unsuccessful attempt of the respondent vide sale notice dated 10,70.2024. Hence, contentions raised by the applicant with respect to auction sale proceedings initiated by the respondent bank under the provisions of SARFAESI Act and the Rules thereunder need no consideration and SA becomes infructuous as far as sale proceedings are concerned.

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The other contentions relate to classiflcation of loan account as NPA and non-compliance of provisions of Rules 8(1) and Rule 8(2). Respondent bank placed a photostat copy each of objections of applicant to the demand notice dated 29.07,2024 and reply of the respondent bank dated 06.02.2024 at pages 19 and 22 annexed to the reply statement. In her letter dated 29.01.2024, applicant while admitting default in repayment of loan amounts from November, 2023 sought concession to pay the- outstanding /42'""s (_/. h t." "

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sA,27512024

¶31

EMIS in a reasonable time along with^{present EMIS. There is} no whisper of any irregularity over the NPA classificationⁱⁿ the reply to the demand notice dated 28.L.2023.^{The reply to} objections to demand notice clearly brings out^{of the fact that} due to irregular repayments, the loan account has^become NPA on 27.11.2023. Therefore, it can be safely^concluded that the issue of NPA classification^{has been invented at the} time of filing the SA. Further, respondent^bankplaced photostat copy of the possession notice dated 07.03.2024, photograph of afflxture and publication in two^newspapers vide material^papers at^pages 23 to 37^{annexedto the reply} statement as proof of sending^{possessionnotice to the} applicant, its afnxture on^{secured assetand publication.In} view of the sulficient^proof, the contentions^{of the applicantas} to non-compliance of^provisions of^Rules 8(1)^{and 8(2) of the} Security Interest^{(Enforcement) Rules, 2002 are found to be} baseless.

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In view of the foregoing observations,^{I find that the applicant} has failed to make out^{anyvalid ground to set aside any of the} measures of the respondent bank^{against the application} schedule^property under^{the Act, 2002 and accordinglythe SA} is liable to be dismissed.

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Point (ii):

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In the result, the Securitization^{Applicationfails and is hereby} dismissed.

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Consequently, Interlocutory^Applications stand closed. No order^{as to costs.}

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W;C^^'

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sA,27512024

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Communicate a copy of this order to the^{partiesconcerned} and upload in the official website.

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(Iyped to my dictotions by the Steno, signed ond pronounced by me in the open courton this the dh doy of June,2o2s).

¶40

m'-l};'., PRESIDING OFFICER

Smt.Mathangi Vidya v. Canara Bank

Case brief

What is this about?

What did the court decide?

Smt.Mathangi Vidya v. Canara Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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