Dismissed

Mrs Uma Devi Agarwal v. Tamilnad Mercantile Bank Limited

DRT10 Sept 2025SA/324/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed an application challenging possession and auction sale notices issued by the Respondent Bank under the SARFAESI Act. The Tribunal held the auction notices as infructuous due to the absence of an actual auction, rendering the application lien dispositive.

What did the court decide?

Application dismissed; direction given to Respondent Bank to follow procedure for conducting fresh auction of schedule properties.

Mrs Uma Devi Agarwal versus Tamilnad Mercantile Bank Limited — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERYTRIBUNAL - I AT HYDERABAD DATEDTHISTHE 1 OTH DAYOF SEPTEMBER. 2c.25

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PRESENT: SRI GUMMADI GOPICHAND, PRESIDING OFFICER

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sA.No.324./2c22

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Mrs.Uma Devi Agarwal W/o Mr.Niranjan Lal Agarwal, S/o Sri Ramswaroop Agarwal, Aged62 years, R/o 710, Varun Block, My Home Nawadwepa, Madhapur, Hyderabad-SOoO8 I .

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... Applicant

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Tersus

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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 012.

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... Respondent

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Counsel for the Appticant Counselfor Respondent

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: Dr.S.V. Rama KrisLtna : Si K. Raghauendra Rao

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ORDER

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This Application is filed u/ s. 17 of the Securit ization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2OO2 (SARFAESI Act,2oo2l challenging the possession Notices dt.2o.ro.2022 and also the e Auction sale Notices dt.23.1 t.2022 &2s.11.2022 issued by the Respondent bank in respect of the schedure properties and to declare the same as null and void.

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The averments

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brief are as follows:

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M/ s Veer Petrol M/s v Lubricants Industries p.Ltd. availed credit ent Bank and the Applicant

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provided common security for the said roan transactions and created mortgage in respect ofthe schedule properties. subsequently, there was a proposal for re-structure of the loan accounts but the same was not materialized. The Respondent declared the loan accounts ofthe borrower companies as NPA contrary to the guidelines of RBI and issued demand notice dt.07.09.2019 u/s 13(2) of the sARFAESI Act, 2002to the borrower companies and the guarantors to discharge their liabilities. The borrower companies raised objections to the said demand notices and the Respondent Bank submitted reply to the said objections. Thereafter, the Respondent issued possession notices dr.2o.ro.2022 u/r s(1) of security Interest (Enforcement) Rules, 2oo2 for taking symbolic possession of the schedule properties. Subsequently, the Respondent issued Auction sale Notices dt. 15. I l -2022 and 22.11.2022 in respect of schedule properties. The borrower companies objected the said Auction Notices and requested the Respondent not to proceed further. The borrower companies already filed SAs 292 122 e 2gg 122 and the said SAs are pending. The impugned possession notices dt.2O.lO.2O22 and sale notices dt.23.11.2O22 and 25.11.2022 are illegal and liable to be set aside. Hence the SA.

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The Respondent filed their Reply denying all the adverse allegations 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 Applicant 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 31.07.2OI9. Even though, there was a proposal for restructure of the loan accounts of the borrower companies, the same was not materialized as the borrowers-di.d not agree for the terms and conditions of the sanction of e Respondent has duly followed the procedure rovisions of SARFAESI Act,2OO2 and Rules made all the statutory notices to the ,^{Respondent prayed} to dismiss the SA. a ) .Q i\f/ ffiw'

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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 uletlter the Applicant has establi.shed ang uali-d grounds for challenging tte impugned Possession Notices dt.20. 10.2022 in respect of tle schedule properties?

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It. uhetler the Applicant has established ang ualid grounds for challenging the impugned e Auction Sale Notice dt.23.11.2o22 & 25.11.2022 issued bg the Respondent against tle schedule properties?

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To uhat relief?

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Polnts .t\lo.(if & (iif :-

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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 Petroleums P.Ltd. and M/s Gaurav Lubricants Industries P.Ltd. availed 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 availing of loan facilities, the borrower companies committed default in rep-qy-m_ent of loan dues and so, the Respondent bank declared accounts ias. NPA and issued notice u/s 13(2) of the SARFAESI the_loan . Act,2OO2 to the boffol&ers and^guarantors. Subsequently the Respondent otices and sale notices in respect of the schedule

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The specific contention of the Applicant is that tl.e impugned possession notices dt.20.ro.2022 and the sale notices dt.23.l r.2022 & 25. 1r.2022 issued by the Bank against the schedule properties are not legal and valid 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 Act, 2oo2 and Rules made thereunder in issuing all the statutory notices to the borrowers and the guarantors.

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In order to substantiate their contention, the Respondent filed relevant material documents along with the Reply l ed by them. As per the said documents, it is crear that the Respondent declared the loan accounts of the borrower companies as NpA by duly forlowing thg guidelines of RBI and initiated proceedings under the provisions of sARFAESI Act, 2002 and issued demand notice u/ s r 3(2) of the SARFAESI Act,20o2 to the borrowers/guarantors. The borrower companies submitted their objections to the said demand notice on 24.1o.2o1g & 26.10.2019 and to the said objections, the Respondent Bank submitted their reply on 29.1o.2o19. copies of the said objections and reply given by the bank are filed by the Respondent Bank. Thereafter, the Respondent Bank issued Possession Notices dt.2o.ro.2022 in respect of the schedule properties.

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I 1. The said veer Petroleums p.Ltd and Gaurav Lubricants Industries p.Ltd. Iiled - SAs-€92 &293 I 22 challenging the impugned possession notices ,^{'dt.2o.1o .2o2f and sale} notice dt. 1s.1 r.2o22and the said sAs are disposed . " -:, ' of "i.qr1t".r.offirong with the presenr SA. The validiry of the impugned , l- ryF"?".:j'1.:ttica $t'zo. ro.2o22 was upheld bv this Tribunal in the said , ii dot. S"i 3E"" #, ,r l;1^{uAs'bD lsddno} EIqF"d^{warrantingthe interferenceof,this} Tribunar with - ci- -!!.. 'tr6;i?.'',**2 4 :u4ry

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the possession notices dt.2O.1O.2O22 issued by the Respondent bank in respect of the schedule properties.

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So far as the e Auction Sale Notice dt.23.1I.2O22 & 25. 11.2022 are 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 notices.

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So in the circumstances, the impugned e Auction Sale notice s dt.23. 1 I .2022 & 25. 1 1.2022 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 Notices dt.23.11.2022 & 25.f 1.2022. 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 scrupulously follow 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.(ttl)t

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t4. In the result, SA 324 12022 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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d to the P.S, ; by her, corrected, signed and pronounced bg me in the open L thts the 10.h.. September, 2025). .rjt,.' * 7^g .c,:r sd/-

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sd/(G. GOPr CHANDI PRESIDING OFFICER

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DRT.I, HYDERABAD.

Mrs Uma Devi Agarwal v. Tamilnad Mercantile Bank Limited

Case brief

What is this about?

What did the court decide?

Mrs Uma Devi Agarwal v. Tamilnad Mercantile Bank 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

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Case details

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