Dismissed

Kanaparthi Prabhakar Rao v. State Bank of India

DRT4 Jul 2025SA/326/2022

Case brief

AI extract

What is this about?

Applicants challenged the validity of a Sale Notice issued by State Bank of India for auction of mortgaged property, alleging non-publication and procedural defects. The Debt Recovery Tribunal held the application was infructuous as no auction was conducted.

What did the court decide?

The Sale Notice will not be quashed; the Bank is directed to scrupulously follow Section 17 procedures to issue a fresh Sale Notice and conduct the auction.

Kanaparthi Prabhakar Rao versus State Bank of India — Specific Performance | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL^_ 1 AT HYDERABAD

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DATED THIS THE 4TH DAY OF JULY, 2C^25

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PRESENT: SRI GUMMADI GOPICHAND, PRESIDING OFFICER

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sA.No.326/2022

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KanaparthiPrabhakar Rao, S/o Sri Srinivas Rao, Aged 50 years, R/o H.No.4-l4Oll, Rampalli Village, Peddapalli Mandal, Peddapalli District.

¶6

ThakkallapalliVenkata Rao, S/o Sri Narsinga Rao, Agcd 55 years, H.No.4-3-21613/ 1, Kunaram Road, Peddapalli Village & Mandal, Peddapalli District

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... Applicants

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Versus

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State Bank of India, Stressed Assets Recovery Branch, 2'd floor, Upstairs, TSRTC Building, Commuters Amenity Centre, Koti, Hyderabad-500 095 Rcp. by it.s Authortzed Officer

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... Respondent

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Counsel for the Applicants Counselfor Respondent

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; Sn B.Sreeniuasa Reddg : Si G.Prabhakar Sharma

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ORDER

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is filed u/ s. 17of the Securittzatton^{and Reconstruction of} and Enforcement of Security^{InterestAct,2OO2} ni[,zbbZ) challenging the Sale^{Noticedt.25.17.2O22issuedby} [,d"^{Jt["flMacntpank and to declarc the same as null and void.}

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The averments made by the Applicants in brief are as follows: M/s Bhavani Industries availed credit facilities from the Respondent Bank and the Applicantsstood as guarantors and created mortgage in respect of the schedule property. The borrower company defaulted in repaying the loan dues and so, the Respondent Bank issued demand notice,possession notice and sale notice against the schedule propert5r. The impugned e Auction Sale Notice dt.25. LI.2O22 for conducting auction of the schedule property on 21.12.2022 was not published in two newspapers and also not affixed on the schedule property. Prior to issuing the said sale notice, notice :ulr 8(6) of Security Interest (Enforcement) Rules,2OO2 was not issued. Hence the SA.

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J.The RespondentBank filed their Reply denying all the adverse allegations made in the SA and contended that the Respondent Bank has duly followed the procedure contemplated under the provisions of SARFAESI Act, 2OO2 and Rules made thereunder in issuing demand notice, possession notice and sale notice against the schedule^property. I-lowever, in pursuance of the Sale Notice dt.25.11.2022,^{no auction was} conducted on 2t.L2.2O22 and so, the SA^{becomesinfructuous.} Accordingly, Respondent^prayed to dismiss^{the SA.}

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Heard Ld. Counsel for the Applicants and^{Ld. Counsel for the Respondent} Bank and perused the material brought^{on record.}

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Now the points that arise for consideration^are

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whether the Applicants established anA ualid grounds for ing the Sale Notice dt.25.1 1.2022 issued bY the tBank ?

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0 f^{$P Nrat ret*}

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Point^jVo.(if :-

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During the course of arguments, Ld. Counsel^{for the Applicantsand} Ld. Counsel for the Respondent reiterated^{theirrespectiveversionsas} stated supra.

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The undisputed facts of the^{case are that the Applicantsstoodas} guarantors for the loan facilities^{availed by M/s Bhavani Industries} and created mortgage^{in respectof the scheduleproperty.Thereis} also no dispute^{regardingthe fact that the borrowercompany} committed default^{in repayingthe loan dues and so, the Respondent} bank classified the^{loan account as NPA and initiatedproceedings} under the provisions^{of SARFAESIAct, 2OO2 and issued demand} notice, possession notice^{and sale notice'}

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Bven though,^{the Respondent bank issuedthe impugned SaleNotice} dt.25.1I.2O22^{for conducting auctionof the schedule propert5r, no} auction was^{conductedas proposed. As the auction was not conducted} bytheRespondentBankinpursuanceoftheimpugnedsalenotice dt.25. 11.2022,^{there is no need to decide the validly or otherwiseof} the said sale^{notice.So, suffice,if a directionis given to the} Respondent^{Bank to scrupulouslyfollow the procedurelaid down} under the^{provisions of SARFAESIAct, 2oo2 and Rules made} thereunde.r^{. inissuing fresh sale notice tothe Applicants for} lng^{auction of the scheduleproperty'This point is answered}

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In the result, SA 326122 is dismissed as devoid of merits. Consequently, the Interlocutory Applications, pending if any, shall stand disposed of. No order as to costs.

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l0.Communicate a copy of this order to the parties concerned.

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(Dctated to the P.S, transcibed bg her, corrected, signed and pronounced bg me in the open court on this the 4thdag of Julg, 2025).

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sdl - (G. GOPI CHANDI PRESIDING OFFICER

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¶31

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¶32

Kanaparthi Prabhakar Rao v. State Bank of India

Case brief

What is this about?

What did the court decide?

Kanaparthi Prabhakar Rao 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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