Dismissed

P Bala Rathnam v. Canara Bank

DRT14 Oct 2025SA/31/2024

Case brief

AI extract

What is this about?

Applicant challenged auction sale notice under SARFAESI Act on grounds of procedural irregularity and non-service. Court held that auction was not conducted due to lack of bidders, making the relief claimed infructuous. Applicant directed to pursue fresh auction.

What did the court decide?

Sale notice is rendered infructuous as no auction took place; bank directed to issue fresh sale notice and conduct auction afresh.

P Bala Rathnam versus Canara Bank — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL. I AT HYDERABAD

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DATEDTHISTHE 14TH DAYOFOCTOBER, 2025

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PRESENT: GUMMADI GOPICHAND,^{PRESIDING OFFICER}

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sA.No.31/2024

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Pottabathini Bala Rathnam, S/o P.Raghupathi, Aged 62 years, Occ:weaver R/o Plot No.57, H.No.S-281 14C14, Ratna nagar, Choutuppal Town & Mandal, Yadadri Bhongir District.

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... Applicant

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And

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l.Canara Bank , Specialized Mid Corporate Branch, D.No.6-3-1086, l"t floor, Vista Grand^Towers, Raj Bhavan Road, Somajiguda,^Hyderabad'

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Mls Murugan HosPitals

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Rep. by its Authorized^person

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Mr.A.Balachandar, S/o A.^Krishna

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No.6-3-540/9 , 6-3-540 l9A,

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6-3-540/ 10, 6-3-540 12,^54O I^3,540 I⁴ 54O I S I t, s4O I 6,^54O I s,s4o I^8,s4O I⁷ Punjagutta, Somajiguda,^Hyderabad.

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... Respondents

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Counsel for the Applicant SnT.Sidhar Reddg
Counselfor the 7't Respondent S_i Manau Cecil Thomas
Respondent No.2
Reserued on 09.09.2025
Pronounced on 14.10.2025
'tr-"8
Uploaded on h\ 14.10.2025
140ctM *
lirt
1. This licant u/s.17 of the SARFAESI Act,
2002, challenging Sale Notice dt.27.12.2023 issued by

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the l"t Respondent for conducting auction of the schedule property (Lot No.II) on O3.O2.2O24 and to declare the same as illegal and void.

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2. The averments made by the Applicant in brief are as follows:

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Respondent No.2 availed credit facilities from the lst Respondent Bank whereas the Applicant herein stood as guarantor and created mortgage in respect of the schedule property towards securit5r. Suddenly, the Applicant came to know about the impugned Sale Notice dt.27.l2.2o2g issued by the 1.t Respondent fixing the date of auction on 03.O2.2024 in respect of the schedule property and the said sale notice was not served on the Applicant and not published in two leading newspapers and also not affixed on the schedule property. Without issuing any prior notices, the lst Respondent is trying to sell the schedule property without following the procedure. Before issuing the impugned sale notice, the Bank has not issued Rule 8(6) notice for giving an opportunity to the Applicant to redeem the secured asset. The l"t Respondent is trying to take physical possession of the schedule property without issuing possession notice. The reserve price fixed by the l.t Respondent against the schedule property is very low. Hence the SA.

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.)-

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The^lst Respondent Bank filed their Reply denying all the adverse allegations made in the SA and contended that Respondent No.2 committed default in repaying the loan dues and so, the 1st Respondent classified the loan account as NPA in due compliance of the RBI guidelines. Thereafter the lst Respondent Bank issued all the statutory notices to the-,$p.!-qqnt. Possession notice was affixed on the schedule in two leading newspapers. The l^st otice u/r 8(6) of Rules, 2002 and the receiveH:by the t. The lst Respondent bank obtained rdpdrfifilrolpstt e valuer and thereafter issued e

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Auction sale Notice dt.27.r2.2o23, however, the proposed sale was not successful for want of bidders. so there are no merits in the sA and the SA is liable to be dismissed.

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Heard Ld. counsel for the Applicant and Ld. counsel for the rst Respondent Bank. Notice not taken against Respondent No.2 and so, claim against Respondent No.2 is dismissed. perused the material brought on record.

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Now the points that arise for consideration are

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i' ,thether ttle Appricant has estabristrcd. ana uatid. ground.s for challenging the e Auction sale Notice dt.27.12.202s issued. bg the 1st Respondent for conducting auction of the schedure property?

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iii. To what retief?

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Points JVo.(i) &(ii):-

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6' During the course of arguments, Ld. counsel for the Applicant and Ld. counsel for the 1st Respondent Bank reiterated their respective versions as stated supra.

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7 '

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There is no dispute regarding the fact that Respondent No.2 availed loan from the l"t Respondent Bank whereas the Applicant stood as guarantor by creating mortgage against the schedure property. Thereafter Respondent No.2 committed default in repaying the loan dues and so, the loan account was classified as NpA.

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. has not notice, possession notice and pre_sale notice j,' r,S [, rtl said possession notice was neither published Jpllcant-andsi 3 Ws$tu'.-*P:$l - -tii:. cS'% :.t'.,, ?, ..^{- :} "t,ri 1.,_. triLXYy

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in newspapers nor affxed on the schedule property. Similarly, the Respondent issued the e Auction Sale Notice dt.27.12.2}23 without following the procedure contemplated under the provisions of SARFAESI Act, 2OO2 and Rules made thereunder and so, the said notices are illegal and liable to be set aside.

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Per contra, lst 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.

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In order to substantiate their contention, the Bank enclosed relevant material documents along with the Reply filed by them. As per the said documents, it is clear that the 1"t Respondent Bank issued demand notice dt.30.08.2023 and the said notice was sent through Regd. post to the Applicant and others as evidenced by the postal track reports filed by the Bank. The bank also published the said notice in English and Telugu daily newspapers. Thus there is valid service of demand notice on the Applicant. Subsequently, the bank issued possession notice dt. 17. I L.2023 and the said notice was sent to the Applicant and others through Regd. Post and the same was received by the Applicant as evidenced by the postal acknowledgements filed by the Bank. The said possession notice was affixed on the schedule property as depicted in the copies of photographs filed by the Bank and the said notice was published in Telugu and English daily newspapers as evidenced by the copies of paper publication filed by the Bank. Thus the I "t Respondent Bank has duly followed Rule 8(1)&(2) of Securit5r Interest (Enforcement) Rules, 2002 in n notice. Thereafter the bank issued pre-sale no d the said notice was sent to the Applican by the postal receipts filed by the E Auction Sale Notice dt.27.t iJ "{Jlc[ffi m. the lst Respondent bank submi the impugned sale notice

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dt.27.12.2o23, no auction was conducted by the bank for want of bidders. so, in view of the fact that no auction was conducted by the Bank in pursuance of the impugned Sale Notice dt.23.12.2023,1 am of the opinion that the relief claimed by the Applicant in the present SA becomes infructuous and there is no need to decide the validity or otherwise of the impugned sale notice dt.27.12.2023 issued by the 1st Respondent. This point is answered accordingly. The lst Respondent Bank is directed to proceed afresh for conducting sale of the schedure property by issuing fresh sale notice by duly folrowing the provisions of SARFAESI Act,2OO2 and Rules made thereunder.

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Potnt ltlo.(tlt)r

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In the result, SA 31 12024 is dismissed as there are no merits.

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t2. Consequently, the Interlocutory Applications, pending if any, shall stand disposed of. No order as to costs.

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i3. Communicate a copy of this order to the parties concerned.

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(Actated to the P.S, transcibed bg _her, corected., signed. and pronounced. bg me in the open court on this the 14h day of October,2025).

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*
1 I IcT 2$t5

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sd/(c. coPr CHAND) PRESIDING OFFICER ARUEFoPY t lLg n--a""t*{gp!t' ^^.^{I |!Y'ERAE.\D.}

P Bala Rathnam v. Canara Bank

Case brief

What is this about?

What did the court decide?

P Bala Rathnam v. Canara Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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