Dismissed

1.Smt v. Rajamma v Union Bank of India

DRT13 Oct 2025SA/337/2023

Case brief

AI extract

What is this about?

The DrT, Hyderabad dismissed the Special Appeal challenging the bank's auction sale notice and possession proceedings. The court held that while some notices were irregular, a stay rendered the specific sale notice infructuous. The appeal was dismissed for lack of merits with a direction to issue a fresh sale notice.

What did the court decide?

Special Appeal dismissed; Respondent Bank directed to issue fresh sale notice compliant with SARFAESI Act and Rules.

1.Smt v Rajamma versus Union Bank of India — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERYTRIBUNAL _ 1 AT HYDERABAD

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DATEDTHISTHE I3TH DAYOFOCTOBER, 2025

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PRESENT: SRI GUMMADI GoPICHAND, PRESIDING oFFICER

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SA.No.337,/2c23

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Smt. V.Rajamma, W/o late V. Subba Reddy, Aged 68 years, Occ:household, R/o H.No.276 /2RT, L-2Ilpe premises, D.No. 10-3-864, Mallepalli, Vijayanagar Colony, Hyderabad

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Mrs.Kethireddy Mounika, W/o Sri C.N. Deepak, Flat no.209, 2"d floor, Lahari's Adi Emerald, Kondapur village, Serilingampally Manda-l & Municipality, R.R.District, Hyderabad.

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... Applicants

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Versus

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Union Bank of India Rep. by its Authorized officer Assets Recovery branch, #24913RT, lst floor, Main Road, S.R. Nagar, Hyderabad.

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... Respondent Bank

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Counsel for tle Applicant Counsel for Respondent bank

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: Si P.Praueen Kumar : Si Siniuasa Rao Chakrala

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ORDER

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u/s.17 ofthe Securitization and Reconstruction of t of Security Interest Act, 2OO2 e Auction Sale Notice dt.05.09.2023

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issued by the Respondent for conducting auction of the schedule properties and also the steps initiated by the Respondent for taking physical possession of the schedule properties and to declare the same as null and void.

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The averments made by the Appticants in brief are as follows: M/s cssMR Energr^p.Ltd. availed credit facilities from the Respondent Bank for construction of the Hydro Electric power generation unit and the Applicants stood as guarantors by creating mortgage against the schedule properties. Subsequently, the Applicants came to know that the Respondent put the schedule properties for auction in view of the nonpayment of loan dues by the borrower GSSMR Energr p.Ltd. On 05.o9.2023' the Respondent issued e Auction Sale Notice for conducting auction of the schedure properties al0ng with other properties on 26.09.2023- Demand notice and possession notice were not served to the Applicants and the impugned possession notice was not published in newspapers and the same was not affixed on the schedule properties. similarly, impugned e Auction Sale Notice dt.05.0g.2023 was not served on the Applicants and not published in two leading newspapers arso not affixed on the schedule properties. The Respondent also filed Crl.M.P.No.31I/23 and 534/23 on the file of Ld.IX Addl.CMM, Nampaly, Hyderabad for taking physical possession of the schedure properties though advocate commissioner and the advocate commissioner appointed by the Ld.IX Addl.CMM, Nampally, Hyderabad issued vacate notices dt'24.o8.2o23 and 2s.og.2023 for vacating the schedule properties. Hence the SA.

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The Respondent Bank liled their Reply denying all the adverse allegations made in the that in view of the default committed by M/s GSS the loan dues to the Respondent, ttre notice dt. 1 I.ll .2O2t to the Applicants and unserved and so, the Respondent

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affixed the said demand notice on the schedule properties and published the same in New Indiaa Express and Mana Telangana daily newspapers on 23.12.2021. Thereafter the Respondent issued possession notice dt. 10.05.2022 u/s 13(a) of the Act and the said notice was affxed on the schedule properties and it was published in two leading newspapers. Thereafter the Respondent obtained valuation report dt.21.10.2o22 and, issued sale notice for conducting auction on 2g.o3.2o23 but the same was not materialized. Again, the Respondent issued sale Notice dt.05.06.2023 for conducting auction on 22.06.2023 but the said auction was also not materialized. Thereafter, the Bank initiated proceedings before the Ld.IX Addl.CMM, Nampally, Hyderabad u/s 14 of the SARFAESI Act, 2OO2 for taking physical possession of the schedule properties through advocate commissioner and the advocate commissioner visited the schedule properties and issued vacate notices. The Respondent also issued fresh SaIe Notice dt.05.09.2o23 but the auction as proposed was not conducted on 26.09.2023 So the relief claimed by the Applicants becomes infructuous. Accordingly, Respondent Bank prayed to dismiss the SA.

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Heard Ld. counsel for the Applicants and rd. 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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whether the Applicants haue established ang ualid. ground.s for challenging tle e Auction Sale Notice d"t.0S.Og.2O23 issued bg the Respondent for conducting auction of the schedule properties?

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n WhetLLer the Applicants haue established ang ualid grounds for challenging bg thP Respondent for taking phgsical ?

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ii. To

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Points IVo.(i)&(iif :-

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

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The undisputed facts of the case are that the Ms/s GSSMR Energr p.Ltd. availed credit facilities from the Respondent Bank and the Applicants herein stood as guarantors and created mortgage against the schedule properties and thereafter, the borrower committed default in repaying the loan dues.

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The specific contention of the Applicants is that without serving demand notice,possession notice and auction sale notice, the Respondent Bank is trying to conduct auction of the schedule properties and also trying to take physical possession of the schedule properties 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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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 Applicants and also in initiating steps for taking physical possession of the schedule properties as per the orders of the Ld.IX Addl.CMM, Nampally, Hyderabad and so, the said proceedings are legal and valid.

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In order to substantiate their contention, the Respondent Bank filed relevant along with the Reply filed by them. As per the said t the Respondent Bank. issued demand u/s .'iof the SARFAESI Act,2O02 and. sent the

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'1'Tfirtfiff* thers through Regd. Post and the said

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notice sent to the Applicants was returned unserved and the said notice was published in two leading newspapers as evidenced by the postal returned covers and copies of paper publication filed by the Bank.. Thus there is valid service of demand notice on the Applicants. when the Applicants failed to compry with the said notice, the Respondent Bank issued possession notice dt.ro.os.2o22 and sent the same to the Applicants through Regd. post as evidenced by postar receipts frled by the Bank. The said possession notice was pubrished in English and rerugu daily newspapers as evidenced by the copies of paper publication filed by the Bank and the sarne was also affixed on the schedule properties as depicted in the copies of photographs filed by the Bank. Thus the Bank has scrupulously followed Rule g(1)&(2) of security Interest (Enforcement) rules, 2002 in issuing possession notice u/s 13(a) of the sARFAESI Act, 2OO2 to the Applicants.

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1 1. As per the provisions of section 14 of SARFAESI Act, 2o02, after issuance of possession notice u/s r3(a) of the sARFAEST 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 Applicants, the Respondent being secured creditor, approached Ld.IX Addl.cMM, Nampalry, Hyderabad u/s 14 of the sARFAESI Act, 2oo2 for appointment of advocate commissioner for taking physicar possession of the schedule properties. Ld.Ix Addl.cMM, Nampaily, Hyderabad after going through the record, appointed advocate commissioner and the said advocate commissioner visited the schedule properties and issued notices dt.24.o8.2o23 & 2s.o8.2o23 to the Appricants for vacating the schedule properties. said notices issued by the advocate commissioner for

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taking * "Es of the schedule properties are perfectly legal ".,a.r6i$ ,"''nt s ii I 13scr2u5 : ,. lrl W'-'s#'Z s

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So far as the impugned e Auction sale Notice dt.05.09.2023 is concerned, no auction was conducted by the Respondent Bank in pursuance of the said sale notice in view of the stay granted by this Tribunal and so, the said sale notice becomes infructuous and hence there is no need to decide the validity or otherwise of the said sale notice dt.os.o9.2o23 issued by the Respondent Bank. These points are answered accordingly.

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Point No,(ttl):-

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In the result, sA 337 123 is dismissed as there are no merits. The Respondent Bank is directed to proceed afresh for conducting auction of the schedule properties by issuing fresh sale notice by dury forowing the provisions of SARFAESI Act,2OO2 and Rules made thereunder.

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t4. 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. la. her,^ 991ected, signed. and pronounced. bg me in th.e open court on this the 13th dag of October,2025).

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PRESIDING OFFICER (c. coPr "Jj;

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1.Smt v. Rajamma v Union Bank of India

Case brief

What is this about?

What did the court decide?

1.Smt v. Rajamma v Union 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

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Case details

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