Dismissed

kousar Sultahna v. Karnataka Bank Limited

DRT15 Oct 2025SA/434/2023

Case brief

AI extract

What is this about?

This application under Section 17 of the SARFAESI Act, 2002, challenged a bank auction for possession of mortgaged property. The Debts Recovery Tribunal rejected the applicant's claims of fraud and collusion, finding the bank adhered to statutory procedures, and dismissed the application.

What did the court decide?

Application dismissed as devoid of merits; interlocutory applications disposed of.

kousar Sultahna versus Karnataka Bank Limited — Contract and Commercial Disputes | DRT (2025)

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IN THE DEBTS RECOVERYTRIBUNAL-I AT HYDERABAD

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DATED THIS THE 1 5TH DAY OF OCTOBER, 2025

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PRESENT: SRI GUMMADI GOPICHAND, PRESIDING OFFICER

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sA.No.434./2c23

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Mrs.Kousar Sulthana, W/o late Sarwar Moinuddin, Aged 72 years, Occ:household, R/o H.No. l5-4-7 1 (Old), New H.No.l5-4-275, Opp.fire Station, S.V.N. Road, Warangal-5O6 002

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... Applicant

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Versus

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l.Karnataka Bank Ltd, Rep.by its Chief Manager/

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Authorized signatory Basi Reddy A.B. Assets Recovery management branch, Plot No.50, Srinagar colony, Road No.3, Banjara Hills, Hyderabad-SOO 073.

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Basi Reddy A.B.,

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S/o Basi Reddy, Occ:Chief Manager Assets Recovery management branch, PIot No.50, Srinagar colony, Road No.3, Banjara Hills, Hyderabad-S00 073

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Mr.Sreekanth Reddy Basireddy, S/o Narayana Reddy Basireddy, R/o villa No.19, Ramky Enclave, Station Road, Warangal.

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Mr.Zaheer Ahmed parvez, S/o late Sarwar Moinuddin, Occ:Pvt. Service, R/o H.No.15-4-71(old) New H.No. 15-4-275, Opp.Fire Station, S.V.N. Road, Warangal-506 002

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'15OCI 2nl.5
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Wr*ror

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Counsel for the Applicant Counsel for 1st Respondent Respondents No.2 to 4

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: Sri M.Nageswara Rao : Sri N.Meher Prasad

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: Exparte.

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Reserued on o8.09.2025 Pronounced on 15.10.2025 Uploaded on 15.10.2025

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ORDER

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This application is fired by the Appricant u/s.17 of the sARFAESI Act, 2002, challenging the auction conducted by the 1"t Respondent Bank in respect of the schedule property on lg.Og.2O21 pursuant to the e Auction Sale Notice dt-2t -06.202r and also the steps initiated by the lst Respondent for taking physical possession of the schedule property through advocate commissioner and to set aside the same as nu and void.

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The averments made in the application, in brief, are that:

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The Applicant availed loan from the lst Respondent Bank in the year 2016 by creating mortgage in respect of the schedule propert5r. Respondent No.4 who is the son of the Applicant stood as co_applicant. As the Applicant failed to repay the loan dues, the l"t Respondent declared the loan account as NpA and issued demand notice dt.27.12.2018 u/s 13(2) of the SARFAESI Act, 2002. Respondent No.2 who is Authorized officer of the l"t Respondent issued Sale Notice dt.2L.O6.2O2l in order to knock away the schedule property by mentioning the wrong boundaries. Even after issuance of the impugned sale notice, the Applicant was made to pay certain amounts on 18.08.2021. Respondent No.2 sord the schedule property in auction for a price of Rs.l0,5O,0O0/- and the auction purchaser i.e. Respondent No.3 belong tg,the:g..the . j corullunity -:,., of the Respondent No.2.Thereafter the Respon id':tsmmissioner warrant from the Ld.CJM, same was af{ixed on the door of the o.4 colluded with the Respondent No.3, price much less than the value of "t,f,diJ"Aob the roperty. conducted on18.08.202 I in respect

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of the schedule property was vitiated by fraud and colrusion and so, the same is liable to be set aside. Hence the SA.

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The lst Respondent Bank filed their Reply denying all the adverse allegations made in the SA. It is contended that the Applicant and her son availed loan from the lst Respondent Bank by creating mortgage in respect of the schedule property. Thereafter, the Applicant committed default in repayment of loan dues and so, the loan account was classified as NPA and the lst Respondent bank issued demand notice u/ s 13(2) of the SARFAESI Act, 2OO2 on 2T . I2.2O L8 and the said notice was published in two daily newspapers. Thereafter, the 1st Respondent Bank issued possession notice dt.O4. LL.2O2O and the same was returned unserved and the said notice was published in two leading newspapers. Thereafter, the 1st Respondent issued sale notice dt.21.O6.2O21 and conducted auction in respect of the schedule property on 18.08.2021 and sale certificate was also issued in favour of the successful bidder i.e. Respondent No.3. Respondent No.2 who is authorized officer of the l"t Respondent and auction purchaser i.e. Respondent No.3 are having no relationship. The l.t Respondent had rectified the typographic mistake in the boundaries of the property and issued the sale certificate dt. 25.08.2021 with correct boundaries as per the Regd. Sale Deed No.4266178. Thereafter, the advocate commissioner appointed by the Ld.CJM, Warangal affixed the warrant on the schedule propert5r on 25.10.2023. However, the said vacate notice was lapsed. Accordingly, l"t Respondent Bank prayed to dismiss the SA.

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Heard Ld. Applicant and Ld. Counsel for l"t Respondent Bank whereas ts No.2 to 4 are set exparte. Perused the 150[i2m 5. consideration are,-

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Wheth.er tlw Applicant has established ang ualid grounds for challenging the auction conducted bg the 1st Respondent Bank in respect of tle schedule properfu on 18.08.2021 pursuant to the e Auction Sale N otice dt. 2 1. 0 6. 2 02 1 ?

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it) Whether tle Applicant has establislrcd ang ualid grounds for challenging the proceedings initiated by the lst Respondent for taking phgsical possession of tle schedule propertg through aduo cate commis sioner?

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iit) To what relieft

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Potnts No.(l) &(tl)t

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

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There is no dispute regarding the fact that the Applicant availed loan from the l"t Respondent bank and thereafter committed default in repaying the loan dues and so, the l"t Respondent Bank initiated proceedings under the provisions of SARFAESI Act,2OO2 by issuing demand notice dt.27.12.2018 u/s 13(2) of the SARFAESI Act, 2OO2 ar]d the same was received by the Applicant.

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B. and so, the said auction is liable to be set is that the 1"t Respondent is not entitled of the schedule property through advocate SARFAESI Act,2OO2.

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Per contra, the lst Respondent Bank contended that they have duly followed the procedure contemplated under the provisions of SARF.AESI Act, 2OO2 and Rules made thereunder in issuing all the statutory notices to the Applicant and also in conducting auction of the schedule property on 18.08.2o21 and the auction purchaser paid the entire bid amount and sale certilicate was also issued in favour of the auction purchaser. There is no collusion or fraud in conducting auction of the schedule property as contended by the Applicant and thus, the sale conducted by the lst Respondent Bank in respect of the schedule property and the proceedings initiated by the Bank for taking physical possession ofthe schedule property are perfectly legal and valid.

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In order to establish their contention, the lst Respondent Bank filed relevant material documents along with the Reply filed by them. As per the said material documents, it is clear that the l"t Respondent Bank issued demand notice dt.27.l2.2}lg u/s 13(2) of the SARFAESI Act, 2OO2 arrd admittedly, the Applicant received the said notice. In fact, the said notice was also published in Telugu and English daily newspapers Thereafter, the 1"t Respondent Bank issued possession notice dt.O4.l t.2O2O u/s t3(a) of the SARFAESI Act,2002 and the said notice was sent to the Applicant through Regd. post. The impugned possession notice was published in Telugu and English daily newspapers as evidenced from the copies of paper publication filed by the I^st Respondent Bank and the copy of the said notice was affixed on the schedule property as depicted in the photographs Iiled by the 1"t Respondent Bank. Thus the l"t Respondent Bank has duly followed Rule 8(1)(2) of Security Intepest (Enforcement) Rules, 2OO2 in issuing dt.04.1t.2020.

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notice, the 1st Respondent bank issued

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i^{".s"t1Ngtdft.oo} and admittedly, the Applicant received the notice. Before ing auction of the schedule propert5r, the 1st

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Respondent fixed reserve price against the scheudule property basing on the valuation report obtained from Nagendra Nath Aitha who is approved valuer of the l"t Respondent. So, the reserve price is fixed only basing on the valuation report submitted by the approved valuer of the Bank and so, the contention of the Applicant that bid amount is much less than the market value is not tenabre. As per the documents filed by the lst Respondent, it is further clear that the said sale notice is published in Telugu and Engtish daily newspapers and it was also affixed on the schedule property. Thus the lst Respondent has duly followed the procedure contemplated under Rule g(5)&(7) of Security Interest (enforcement) Rules, 2002

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In pursuance of the said Sale Notice dt.2l.O6.2O2L, the lst Respondent Bank conducted auction on 1g.0g.2021 in respect of the schedule property and the auction purchaser i.e. Respondent No.3 herein paid the entire bid amount and sare certificate was also issued in favour of the auction purchaser as evidenced by the copy of sale certificate fired by the bank. So, the auction conducted by the lst Respondent Bank in respect ofthe schedule property on 1g.0g.2021 pursuant to the Auction Sale Notice dt.2r.o6.2o2r is perfectry legal and valid as the same is conducted by the I st Respondent Bank by strictly following the procedure contemplated under the provisions of sARFAESI Act,2oo2 and Rules made thereunder.

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As per the provisions of Section 14 of SARFAESI Act, 2OO2, after issuance of possession notice u/s l3(a) of the SARFAESI Act,2OO2, the secured creditor is at liberry to approach the concemed District Magistrate or chief Judicial Magistrate for taking physical possession Accordingly, the lst Respondent being secured

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Ld.CJM, Warangal u/s 14 of the SARFAESI Act, for taking physical

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the ,- Sphedule property. Ld.CJM, Warangal after placed on record, appointed advocate

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commissioner. So, the steps initiated by ths 1"t Respondent for taking physical possession of the schedule property through advocate commissioner u/s 14 of the SARFAESI Act, 2OO2 are perfectly legal and valid.

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14' So, considering a, the circumstances, I hold that the Applicant has miserably failed to establish any valid ground for challenging the auction conducted by the lst Respondent Bank on 1g.0g.2021 in respect of the schedule property and also the steps initiated by the lst Respondent for taking physical possession of the schedule property u/ s 14 of the SARFAESI Act, 2OO2. Accordingly, these points are answered in favour of the 1"r Respondent Bank and against the Applicant.

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Point No.(ttt)r

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In the result, the present Securitization Application 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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Communicate a copy of this order to the parties concerned.

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(Dictated to the p's' transcribed.bg her, -conected., signed and. pronounced bg me in the open court on this tlrc l*t, day of- October, 2025),

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(G. GOPr CHAND)
PI,ESTDTNG OrFrcER
1 5 o0r 2fl5
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kousar Sultahna v. Karnataka Bank Limited

Case brief

What is this about?

What did the court decide?

kousar Sultahna v. Karnataka 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

Coram

Case details

All orders in this case

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