Dismissed

S Jayaram Chowdary v. State Bank of India

DRT3 Sept 2025SA/309/2023

Case brief

AI extract

What is this about?

Debts Recovery Tribunal dismissed an application challenging an auction sale notice under the SARFAESI Act. The court held the notice had become infructuous as no auction was conducted in pursuance of it, ordering the bank to issue a fresh notice.

What did the court decide?

The SARFAESI application is dismissed as it has become infructuous; the bank is directed to issue a fresh sale notice and conduct the sale.

S Jayaram Chowdary versus State Bank of India — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL -- I AT HYDERABAD DATED-THIS THE 3RD DAY OF SEPTEMBER, 2.,25

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PRESENT: SRI GUMMADI GOPICHAND, PRESIDING OFFICER

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sA.No.3C9/2C23

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S.Jayaram Chowdary, S/o late S.p.Naidu, Ged 74 years, H.No.2OG D.No. l9-3-2OG I r, Kakatiya Nagar, Tirupathi-S17 501

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... Applicant

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Versus

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l.State Bank of India Rep. by its Authorized, officer Stressed Assets Management branch, CAC, lst floor, D.No.3-4_1013/A,TSRTC Bus Station, . Kachiguda, Hyderabad.

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2.Sudalagunta Agro Mills 2O9,TP Area, Opp.Bus Stand, Tiruparhi-S 1750 l Rep. by its Chairman MD

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... Respondents

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C_ounsel for the Applicant : Si G.Dinesh Kumar Counsel for 7st Respond.ent bank : Si G.prabhakar Sharma Respondent No.2 : Exparte

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ORDER

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This Application is filed u/s.17 of thc Sccuritization and Reconstruction of F'inancial Asse ts and ''"3Iry,8j;-.:t^{Securitv Interest Act, 2oo2} (SARFAESI Act,2O02) ch ,e,n11q{on^{Sale Notice dt.} 1O.O8.2023 issued by the 1st Res auction of the schedule propert)/ on O8.09.2 as null and void.

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2' The averments made by the Applicant in brief are as fo ows:

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The Applicant is absolute owner of the schedule property and Director of M/ s Sudalagunta Sugars Ltd. and he is running Group of companies including Respondent No.2. The Applicant availed loan from the lst Respondent bank for business purpose by creating mortgage in respect of the schedule property. The 1 "r Respondent Bank declared the loan account of the Applicant as NpA and inil.iatecl proceedings under the provisions of SARFAESI Act,2002 and issued demand notice and possession notice to the Applicant and the said notices werc not served on the Appricant. The said possession notice was also not pubrished in newspapers and the same was not affixed on thc schedule property Thereafter, the 1sr Respondent Bank issued Auction Sale Notice dt. 10.0g.2023 by fixing the date of auction on o8'o9.2o23 and the impugned sale notice was not affixed on the schedule property and it was not published in two daily newspapers. Before issuing the impugned sale notice, the Bank has not r""r.a n.rr. a101 notice for giving opportunity to the Applicant to redeem the secured asset. The reserve price fixed by th6 1st Respondent Bank against the schedule property is very low. Hence the SA.

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The l"t Respondent Bank filed their Reply denying all the adverse allegations made in the SA and contended that in M/s Sudalagunta Sugars Ltd' represented by its cMD, who is the Applicant herein availed credit facilities from the 1"t Respondent and thereafter committed default in repaying the loan dues and so, the loan account was classilied as NpA. The 1"r Respondent Bank issued demand notice dt.25.0g.201g to the Applicant and the borrower company. Thereafter, the Bank issued possession notice dt' 17 '12.20rg u/s l3(4) of the Act and the same was received by the Applicanl noticewaS,rr,,.o,#il.::::^::""-1anvThesaidpossession propcrty and it was published in two , n . :-1 l'"':t"^'1".,0,__d-,^{**.**aPtr;i1^qgrt".; irfri Responcient issued notice u/r 8(6)} of Security ltrfdtlst (Entolcemen .^{r;i,.":tDrrs.rcemenrpx${es,2oo2dt.29.o2.2O2O and the} same was tT$l.o 0 ll-r$fpffint. tfireafter, the Bank issued e Auction

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sale Notice dt'25'o3.2021 for conducting auction of the schedule property. challenging the said sale notice, the Applicant and others filed SA 4s /2o2L before this Hon'bre Tribunar but however, auction in respect of the schedule property was not conducted whereas auction in respect of other properties covered in the said sale notice was conducted and the said SA was dismissed by this Tribunal on os.og.2o22. Thereafter the lst Respondent Bank issued fresh Auction Sale Notice dt.1 o.og.2o23 by fixing auction of the schedule property on 0g.09 .2o2s. But however, no auction was conducted in pursuance of the said sale notice'and so, the relief prayed in the SA becomes infructuous. Accordingly, 1st Respondent Bank prayed to dismiss the SA.

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Heard Ld. Counsel for the Applicant and Ld. Counsel for the 1st

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Respondent Bank whereas the 2"d Respondent was set exparte. perused

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the material brought on record.

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Now the points that arise for consideration are

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whether the Appricant ha.s estabrished, ana uarid. ground.s for challenging the e Auction sale Notice dt.10.0g.2o23 issued bg the 1st Respondent against the schedule propeftg?

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ii. To what relief ?

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Point No.(if :-

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During the course of arguments, Ld. counser for the Applicant and Ld. counsel for the 1"t Respondent tsank reiterated their respective versions as stated supra.

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are that the Applicant availed loan from

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the 1*i R8sporra.# Bank ating mortgage against the schedule default in repaying the loan dues.

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8' The specific contention of the Applicant is that without issuing demand notice and possession notice, the 1st Respondent Bank straightaway issued the sale notice without issuing Rule g(6) notice and so, the said sale notice is illegal and liable to be set aside.

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Per contra, 1st 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. so far as the impugned Auction sale Notice dt.10.Og.2023 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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In order to substantiate their contention, the lst Respondent Bank filed relevant material documents along with the Reply filed by them. As per the said documents, it is clear that the 1st Respondent Bank issued demand notice dt.2s.09.20rg u/s 13(2) of thc SARF-AESI Act,2002 and sent the said notice to the Applicant and others through Regd. post and the same was received by the Applicant as evidenced by postal acknowledgements filed by the 1st Respondent. Thereafter, the 1.t Respondent Bank issued possession notice dt.22.12.2o1g and the said notice was duly received by the Applicant as evidenced by postal acknowledgements liled by the Bank. The said possession notice was pubrished in English and Telugu daily newspapers as evidenced by the copies of paper publication filed by the Bank and also affixed on the schedule property as depicted in the copies of photographs liled_ty the llank. Thereafter, the rst Respondent Bank issued noti g.urity^Interest (Enforcement) Rules, 2OO2 \

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dt.29.O2. d others lor redeeming the schedule propcrty le Notice dt.1O.09.2023 is concerned, :^orsrPzm :lI B- :1# W**rr-.-^F

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no auction was conducted by the 1"t Respondent Bank in pursuance of the said sale notice.

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So in the circumstances, the impugned sale notice dt.10.08.2o2s becomes infructuous and nothing survives in the SA for adjudication as there is no need to decide the validity or otherwise of the impugned Sale Notice dt.10.08.2023. Flence, I am of the opinion that the relief claimed by the Applicant in the present SA becomes infructuous and the SA is liable to be dismissed. The 1st 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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Point No.(ii):-

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12, In the result, sA 309123 is dismissed as there are no merits. 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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(Dictated to the P.S, trq.nscribed. bg her, corrected", signed. and. pronounced by me in the open court on this the 3d dag of September, 2O2S).

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sd/ -

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(c. coPr CHANDI

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PRESIDING OFFICER

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0 3 stP 206

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'fir

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DRf-fr ,,h^{?E'$,'iii#S.{}.}

S Jayaram Chowdary v. State Bank of India

Case brief

What is this about?

What did the court decide?

S Jayaram Chowdary 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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