Dismissed

Sri Kunal Gupta v. Rajdhani Bank

DRT21 Oct 2025SA/32/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed the Applicant's challenge to the Respondent Bank's SARFAESI proceedings. The Court held that despite the absence of physical affixture of the possession notice on the property, the bank validly served the notice to the borrower (who received it) and published it in newspapers. The Court upheld the legality of the advocate commissioner's possession order under

What did the court decide?

Application dismissed. Respondent Bank directed to proceed afresh for conducting auction by issuing a fresh sale notice duly following the provisions of SARFAESI Act, 2002 and Rules thereunder.

Sri Kunal Gupta versus Rajdhani Bank — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERYTRIBUNAL - I AT HYDERABAD DATED THIS THE 21SI DAY OF OCTOBER, 2025

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PRESENT: SRI GUMMADI GoPICHAND, PRESIDING oFFICER

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sA.No.32,/2C.24

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Sri Kunal Gupta, S/o Ramanla_l Agrawal, Aged 41 years, Occ:business, H.No.2 I -2-579, Urdu Shareef, Patel Market, Hyderabad.

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... Applicant

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Versus

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Rajadhani Co-op. Urban Bank Ltd. Rep. by its Authorized officer 3-4-_IOOS / 2 / t, Indrani Complex, Barkatpura, Hyderabad.

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... Respondent Bank

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Counsel for the Applicant : Si Shaik Khaja peer Counsel for Respondent bank : Si Subramangam Kurella

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Reserued on :09.09.2025 Pronounced on :21.10.2025 Uploaded on :21.10.2O25

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ORDER

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This Application is liled u/ s.rz of the securit izationand Reconstruction of Financial Assets and Enforcement of Securit5r Interest Act, 2OO2 (SARFAESI Act,2oO2) the steps initiated by the Respondent for taking e schedule property through advocate commissioner .M.P.No.583/23 and also the Sale Notice dt. t2ozs t bank for conducting

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wild

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auction of the schedule property on O3.O2.2O24 and to declare the same 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 availed loan from the Respondent Bank by creating mortgage against the schedule property and has been repaying the loan dues regularly without any default. But on 12.01.2024, some persons claiming to be prospective punchers of the schedule property arong with some agency persons and advocate commissioner came to the schedule property and informed that the Respondent is going to sell the schedure property and demanded the Appricant to handover the possession of the schedule propert5r and gave a copy of the sare notice to the Applicant. After going through the said sare notice dt.26.12.2023, the Appricant came to know that the Respondent initiated .ARFAESI proceedings and the date of auction was fixed on O3.O2.2O24. But the Respondent has not issued any demand notice and possession notice to the applicant and the said possession notice was not affixed on the schedule property and the same was not published in newspapers. The reserve price fixed by the Respondent in respect of the schedule property is much less than the market varue' The Respondent also initiated proceedings before the Ld'cMM, Medchal-Matkajgiri for taking physical possession of the schedule property through advocate commissioner and the advocate commissioner appointed by the Ld.cMM, Medchal-Malkajgiri issued notice dt.72.O1.2024 to the Applicant for vacating the schedule propert5r. Hence the SA.

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The Respondent filed their Reply denying a, the adverse aregations made t !r"r*?it c-',oqtended thar in view of the default committed by the ^pg(fstiilJ^{e roan dues, tt" n."po,iill't' ::il:':il",i}} ,f#"", "&tS.^{orhh,as NpA on31.03.2022.} Thereafter, the s l3 i ,_ ',y:o"lo;";ri"iffio^- ) I nnT_rfni_^{_)rr.ti-.,*dgs{qnd rrvLrucnotice (rL.z6.u+..zuzz dt.28. 04.2022}^{u/s ts}^{(2) of the} i;S45r,teSt'kCt,(Woz^{arrd the sarnewas followed} by possession notice 2 ;.';.{r ^€"{,$

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dt'o8'o7 '2022 u/s r3(4) of the Act,20 02 and, the said possession notice was published in two daily newspapers. Thereafter, the Bank filed Crl.M.P.No.583/23 before the Ld.CMM, Medchat_Malkajgiri u/s 14 of the SARFAESI Act, 2oo2 for taking physical possession of the schedule property through advocate commissioner and the advocate commissioner issued notice to the Applicant to vacate the schedule property. Accordingly, there are no merits in t}le SA and the 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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wLether the Applicant has established any ualid grounds for challengirry the Sate Notice d.t.26.12.2023 issued by tle Respond.ent

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for^conducting auction of tlLe schedule propertg?

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WhetLer the Applicant has established. any ualid ground s for

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challenging the steps initiated. by the Respondent for taking phgsicat

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possessron of the schedule propertA through aduocate commissioner?

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u. To what relief ?

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Points IVo.(i)&(iif :-

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During the course of arguments, Ld. Counsel for the Applicant and Ld.

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Counsel for the Respondent Bank reiterated their respective versions as

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stated

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case are that the Applicant availed loan from d created mortgage against the schedule

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property and thereafter, the Applicant committed default in repaying the loan dues.

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8' The specific contention of the Applicant is that without serving demand notice, and possession notice to the Applicant, the Respondent Bank issued the impugned sale noti ce dt.26.12.2o23 for conducting auction of the schedule property and also tryrng to take physical possession of the schedule property through advocate commissioner and so, the said proceedings initiated by the Respondent Bank are illegal and liable to be set aside.

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9 ' Per contra, Respondent contended that the Respondent has scrupulously followed the procedure contemplated under the provisions of SARFAESI Act' 2oo2 and Rules made thereunder in issuing demand notice, possession notice and sale notice to the Applicant and the bank also followed the procedure contemplated under the provisions of SARFAESI Act' 2o02 and Rules made thereunder in initiating steps for taking physical possession of the schedule property.

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10' During the course of arguments, both the Ld. counsel submitted that in pursuance of the impugned sare notice dt.26.L2.2o23, no auction was conducted by the bank in view of the stay grand by this Tribunal. As no auction was conducted by the Bank in respect of the schedule propert5r, there is no need to decide the validity or otherwise of the said sale notice dt.26.12.2023.

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initiated by the Respondent for taking physical property are concerned, the Respondent Bank

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,documents^{along with the Replyfiled by them} scrupulously followed the procedure s of SARFAESI Act, 2OO2 and Rules made

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thereunder' As per the said documents, it is crear that the Respondent Bank issued demand notice dt.28.04.2022 u/s 13(2) of the SARFAEsI Act,2OO2 and sent the said notice to the Applicant and others and the Applicant received the said notice as evidenced by his signature on the office copy of the said demand notice. After receipt of the said demand notice, the Applicant has not submitted any objections. When the Applicant failed to comply with the said notice, the Respondent Bank issued possession notice dt.Og.OZ.2O22 and sent the same to the Applicant and the same was received by the Applicant as evidenced by his signature on the office copy of the said possession notice and the said notice was published in two daily newspapers as evidenced by the copies of paper publication filed by the bank.. However, no documents are filed by the Respondent to prove that the said possession notice is affixed on the schedule property. But mere non_affixture of the possession notice on the schedule property particularly when the Applicant is having knowledge of the possession notice issued by the Respondent, cannot be a ground to cha,enge the said notice. when the Applicant received the possession notice and the said notice is also published in two daily newspapers including one in vernacular language, even if the said notice is not affixed on the secured asset, it cannot be a ground for the borrower as the affixture is meant only for the general public. In this regard, the Hon'ble High court of And.hra prad,esh in M/s sottthro priuate Lrmited Vs. The Debts recouery Z'rirbunal_I, reported in 2olg SCC Onllne IIgd I88, has held in paragraph 17, which is as follows:

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In this regard, it mag be noted that Rule S(1) of the Rules of 2oo2 requires the authoised offi.cer of the seanred creditor to deliuer a possession notice, prepared as nearly as possible in .IV to the Rules of 20O2, to the bonower and. bg afrtinS outer door or at a conspicuous place of the propertg. It is that the borrower compang receiued fhe possession 04.08.2012. The complaint taas that it had not been

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affixed on the SA schedule propertg. Affixlre o.,f such possession notice on the outer d.oor or at a conspicuous place of tlrc propertg is notice to the public at large. This is clear from th.e antents of the statutory format of the possession notice in Appendix_N to the Rules of 2OO2. Thereund.er, the borrouter in partianlar and the public in general are cautioned not to d.eal uith the propeftg. In such a sihtation, it is not open to tlrc borrower companA, hautng already receiued fhe possessio n notice dated. 04.O8.2O12, to complain of failure on the part of ING vgsga Bank Limited in affixing tte notice on tle premises of the secured. assefs. If at all, such a gieuance could. be projected. by a member of tle general public utho deatt uith the secured assefs in ignorance of the possession notice. Such is not tLrc case presentlg.

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Hence in the circumstances and in view of the ratio raid down by in the Hon'lcle High Court of Andhra pradesh in the decision referred supra, it is quite clear that the Respondent has scrupulousry foll0wed the procedure laid down under the provisions of SARFAESI Act, 2OO2 and Rules made thereunder in issuing possession notice dt.Og.0 2.2022 u/s 13(4) of the Act,2OO2.

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1e As per the provisions of Section 14 of SARFAESI Act, 2OO2, after issuance of possession notice u/s l3(4) of the SARFAES I Act, 2OO2, the secured creditor is at liberty to approach the concerned District Magistrate or Chief Judicial Magistrate for taking physical possession of the secured asset. In the instant case, after issuing demand notice and possession notice to the Applicant, the Respondent being secured creditor, approached Ld.CMM, Medchal_Malkajgiri u/s 14 of the SARIX_9F-LSS:!\2 tor --,i:_"--.-^..-::.: appointment -rrv---qr.vrr! of vr advocate quvt,uir.Lc commiuull[nrs s loner sioner fl o rr talril.S f5fSrChLpo$6ssion of the schedule propert5r. Ld. CMM, Medchal Mllkajsiri through the record, appointed advocate ! advocate commissioner visited the schedule 2 1 r]tr 2.W 1 ;\ ,:,' .-.llx -",S9 .-$?gsflV

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property and issued notice dt. 12.01.2024 to the Applicant for vacating the schedule property. So, the said notice issued by the advocate commissioner for taking physical possession of the schedule property is perfectly legal and valid. These points are answered accordingly.

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Potnt No.(ttl)r

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In the result , SA 3212024 is dismissed as there are no merits. The Respondent Bank is directed to proceed afresh for conducting auction 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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(Dictated to the P.S, transcibed bg tter, corected, signed" and pronounced bg me in the open aurt on this the 21't daA of October, 2025).

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sd/_ (G. GOPr CHANDI PRESIDING OFFICER

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,d.
2 1 0[T 7m5

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fi:v:ftry

Sri Kunal Gupta v. Rajdhani Bank

Case brief

What is this about?

What did the court decide?

Sri Kunal Gupta v. Rajdhani Bank

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

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