Dismissed

Mallikarjuna Filling Station v. Ikf Finance Limited

DRT10 Sept 2025SA/323/2025

Case brief

AI extract

What is this about?

An application under s.7 of the SARFAESI Act challenging possession and auction notices was dismissed. The Tribunal held that since other stays rendered the auction infructuous, the sale notice required no adjudication, and the application failed to show merit.

What did the court decide?

Relief claimed by the Applicant became infructuous; SA dismissed with direction to the Bank to scrupulously follow procedures for auction.

Mallikarjuna Filling Station versus Ikf Finance Limited — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERYTRIBUNAL* I AT HYDERABAD DATEDTHISTHE lOTH DAYOFSEPTEMBER, 2c/25

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PRESENT: SRI GUMMADI GoPICHAND, PRESIDING oFFICER

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sA.No.323/2C.22

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Mr.Niranjan Lal Agarwal, S/o Sri Ramswaroop Agarwal, Aged 64 years, R/o 710, V-arun Block, My Home Nawadwepa, Madhapur, Hyderabad-SOOo8 I .

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... Applicant

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Versus

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Tamilnadu Mercantile Bank Ltd., Rep. by its Authorized officer Hyderabad branch, 15-2-696, 1"t floor, Siddiamber Bazar, Kishan Gunj, Hyderabad-SO0 Ol2.

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... Respondent

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Counsel for tLe Appticant : Dr.S.V. Rama Krishna Counselfor Respondent : Si K. Raghauendra Rao

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ORDER

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l. This Application is fired u/s. r7 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2OO2 (SARFAESI Act,2OO2l challenging the possession Notices dt.2c..7O.2022 and also the e Auction Sale Notice dt.22.rr.2022 issued by the Respondent bank in respect of the schedule properties and to decrare the same as nu, and void.

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)

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Applicant in brief are as follows:

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and M/s Gaurav Lubricants Industries p.Ltd. m the Respondent Bank and the Applicant g^losrrPtw WsP

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provided common security for the said loan transactions and created mortgage in respect of the schedule properties. subsequently, there was a proposal for re-structure of the loan accounts but the same was not materialized' The Respondent declared the roan accounts of the borrower companies as NpA contrary to the guidelines of RBI and issued demand notice dt.07.09.2019 u/s l3(2) of the sARFAESI Act, 2oo2 tothe borrower companies and the guarantors to discharge their liabilities. The borrower companies raised objections to the said demand notices and the Respondent Bank submitted repry to the said objections. Thereafter, the Respondent issued possession notices dt.20.10.2022 u/r g(1) of Securit5r Interest (Enforcement) Rures, 2002 for taking symbolic possession of the schedule properties. subsequently, the Respondent issued Auction sale Notices dt'15'11.2022 and 22.11.2022 rn respect of schedure properties. The borrower companies objected the said Auction Notices and requested the Respondent not to proceed further. The borrower companies aJready filed SAs 292122 &293/22 and the said SAs are pending. The impugned possession notices dt.20.10.2022 and sale notices dt. r5.1 r.2022 and, 22'11.2022 are illegal and liable to be set aside. Hence the SA.

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The Respondent fired their Reply denying all the adverse aregations made in the sA and contended that M/s Veer petroleums p.Ltd. and M/s Gaurav Lubricants Industries p.Ltd. availed loan facilities from the Respondent Bank and the Appricant herein is one of the Director in the said companies and the borrower companies committed default in repaying the loan dues and so, the loan accounts were classified as NpA by the Respondent on 31.O7.2019. Even though, there was a proposal for restructure of the loan accounts of the borrower companies, the same was not materiarized as the borrowers did not agree for the terms and conditions of the sanction of the re-s .' The,. Respondent has duly followed the procedure under the irp-ovisions of SARFAESI Act,2OO2 and Rules made nder in issuing , all the statutory notices to the ers / a-rantors. Accoldingly, Respondent prayed to dismiss the SA. 1 ('.' ; l

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4 Heard Ld. Counsel for the Applicant and Ld. Counsel for the Respondent

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Bank. Perused the material brought on record.

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Now the points that arise for consideration are

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i. tulrether the Applicant has establisled. any ualid grounds fo,

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challengirq the impugned possession .lVofices dt.20. 10.2022 in respect of the sclrcdule properties?

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It. whether tLrc Applicant has established ang ualid. ground s for challenging the impugned. e Auction Sale Notice dt.22.1 1.2022 issued by the Respondent against the schedule properties?

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lu. To uthat relief?

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Points lvo.(i) & (ti):-

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q During the course of arguments, Ld. Counsel for the Applicant and Ld. Counsel for the Respondent Bank reiterated their respective versions as stated supra.

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There is no dispute regarding the fact that Mr.veer petroreums p.Ltd. and M/s Gaurav Lubricants Industries p.Ltd. ava,ed various credit facilities from the Respondent whereas the Applicant stood as guarantor and created mortgage in respect of the schedule properties to secure the said loan facilities' There is also no dispute regarding the fact that subsequent to the ava,ing of loan facilities, the borrower companies committed default in repayment ofloan dues and so, the Respondent bank declared the loan accounts as NpA and issued notice u/s l3(2) of the SARFAESI A,ct,2OO2 Irowers^{and guarantors.} Subsequently the Respondent

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The specific contention of the Applicant is that the impugned possession notices dt.2o.ro.2o22 and the sale notice dt.22.rr.2o22 issued by the Bank against the schedule properties are not regar and varid and so, the said notices are liable to be dismissed.

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Per contra, Respondent bank contended that the Bank has scrupulously followed the procedure contemplated under the provisions of sARFAESI

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' Act, 2oo2 and Rules made thereunder in issuing all the statutory notices to the borrowers and the guarantors.

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10' In order to substantiate their contention, the Respondent filed relevant material documents along with the Reply frled by them. As per the said documents, it is clear that the Respondent decrared the roan accounts of the borrower companies as NpA by duly folowing the. guiderines of RBI and initiated proceedings under the provisions of sARFAESI Act, 2o02 and issued demand notice u/s 13(2) of the SARFAESI Act,20o2 to the borrowers/ guarantors. The borrower companies submitted their objections to the said demand notice on 24.ro.2org & 26. 10.2019 and to the said objections, the Respondent Bank submitted their reply on 29.1o.2or9. copies of the said objections and repiy given by the bank are filed by the Respondent Bank. Thereafter, the Respondent Bank issued Possession Notices dt.2o.lo.2022 in respect of the schedule properties.

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1 1. The said Veer Petroleums p.Ltd and Gaurav Lubricants Industries p.Ltd. filed sAs 292&29a 122 challenging the impugned possession notices dt.2o.7o.2o22 and sale notice dt. 15.1 1.2022 and the said sAs are disposed of simultaneously along with the present SA. The validity of the impugned

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..p-ossession^{nofices dt.20.10.2022was} upheld by this Tribunal in the said

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r,' 1i:^sAsDAs^{**.**So roI l}^{see no ground} warrant li ng the interference of-this Tribunal with

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1 tfre posdeSsion --

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. , "odc+F il^{dt.2O.lO.2O22 issued by the Respondent bank in} :,-,^{re{ppcqegt[ppctred+r!]properties.}

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"a"r*.^,tf#f

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12' So far as the e Auction Sale Notice dt.22.r1.2022 is concerned, during the course of arguments, both the Ld. counsel submitted that no auction was conducted by the Respondent Bank in pursuance of the said sale notice in view of the stay granted by this Tribunal.

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13' So in the circumstances, the impugned e Auction Sale notice dt'22.rr-2o22 becomes infructuous and nothing suryives in the sA for adjudication as there is no need to decide the varidity, or otherwise of the impugned Sale Notice dt.22.r r.2022. Hence, 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. Suffice if a direction is given to the Respondent Bank to scrupulousry forow the procedure contemplated under the provisions of SARFAESI Act, 2oo2 and Rules made thereunder in taking fresh steps for conducting auction of the schedule properties. These points are answered accordingly.

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Potnt No,(tt[)r

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In the result, SA 32312022 is dismissed as there are no merits.

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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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(Dctated to the P.S, transcibed bg her, conected, signed and pronounced bg me in the open court on this the 10th daA of September, 2025).

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sd/-

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(c. coPr CHANDI PRESIDING OFFICER

Mallikarjuna Filling Station v. Ikf Finance Limited

Case brief

What is this about?

What did the court decide?

Mallikarjuna Filling Station v. Ikf Finance Limited

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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