Dismissed

M S Psb Solutions v. Canara Bank

DRT30 May 2025SA/45/2023

Case brief

AI extract

What is this about?

The Tribunal examined a challenge under Section 17 of the SARFAESI Act regarding the validity of a Sale Notice. It observed that no auction was conducted pursuant to the notice, rendering the application infructuous, and subsequently dismissed it.

What did the court decide?

The applicant was directed to withdraw the suit for lack of prosecution and the bank was directed to issue a fresh sale notice.

M S Psb Solutions versus Canara Bank — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERYTRIBUNAL - I AT HYDERABAD

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DATEDTHISTHE 3OTH DAYOF MAY, 2025

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PRESENT: GUMMADI GOPICHAND, PRESIDING OFFICER

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sA.No.45./2c23

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M/s PSB Solutions Rep. by its Proprietor Mrs.TirumalaPadmalatha, W/ o Mr.TirumalaParthaSaradhi, Aged 38 years, Occ:business, Lenin Nagar, Meerpet, Balanagar, Hyderabad-SoO 005.

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... Applicant

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And

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1 . Canara Bank, Saidabad colony branch, 17-1-s9r lT 1233A, Near Saraswatinagar colony, Saidabad, Hyderabad Rep. by its Authorized officer

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Sri T. ParthaSaradhi, S/o Bhakta vastalam, Occ:business, Lenin Nagar, Meerpet, Balanagar, Hyderabad-SO0 005

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.... Respondents

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Counsel for the Applicant Sn T.Vijag Kumar Counselfor the lstRespondent Bank S i DishitBhatt acharj e e

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-:ORDER:-

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This application is filed by the Applicant u/s. 17 of the SARFAESI Act, 2OO2, the Sale Notice dt.2o.Ol.2023 issued by the 1'tRes nducting auction of the schedule property € lare the illegal and void. /i lp '.:.,:.

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rr,. ..,.fr .,t" ?,!oJ f,],M"0, on, in brief, are that:

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The Applicant availed loan facilities from the l.tRespondent Bank and thereafter due to Covid-19, she could not repay the loan instalments and the 1"t Respondent Bank issued demand notice u/s 13(2) of the SARFAESI Act, 2OO2 dt.27.O7.2022 demanding the Applicant to pay a sum of Rs.85 lakhs. Thereafter, the l "tRespondent bank issued Saie Notice dt.2o .Ol .2023 for conducting auction of the schedule property and prior to issuing the said sale notice, no notice u/ r 8(6) of Security Interest (Enforcement) Rules, 2002 was given for giving 30 days time to redeem the schedule property. The bank also failed to issue possession notice and the said notice was not published in two daily newspapers nor affixed on the schedule property and similarly, the impugned sale notice was also not published in two daily newspapers nor affixed on the schedule property and so, the said notices are liable to be set aside. Hence the SA.

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The l"tRespondent Bank filedReply by denying all the adverse allegations made in the SA. It is contended that the Applicant is a proprietorship hrm represented by its proprietor andavailed loan facilities from the 1"t Respondent bank for business purpose and Respondent No.2 created mortgage against the schedule property. After availing loan facilities from the l stRespondent Bank, the Applicant committed default in repaying the loan dues and so, the loan account was classified as NpA and the l"tRespondent Bank issued dem3nd notice u/s l3(2) of the SARFAESI Act, 2OO2 dt.27.07.2o22 and the Applicant received the said notice. Thereafter, the lstRespondent bank issued possession notice dt. 13.IO.2O22 and the said possession notice was published^-.+qJhe Hindu and Mana Telangana daily newspapers and tb€.shifl notice was also affixed on the schedule p.q p.#i*) rh..u 11, ".,'ihNW e s p o n d e n t B a n k i s s u e d Re d e m p ti o n *g'id;, rcsi)ozz ")F., or securiry rnrerest (Enrorcement) n{irg, z0o0 HYrffiann{.fi"r and the said notice was also \Q>'ls#ri"

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published in the newspapers. The 1"t Respondent bank thereafter issued Sale Notice dt.24.11.2022 for conducting auction of the schedule property however, the said auction was not materialized for want of bidders. Subsequently, the l^stRespondent Bank issued fresh Sale Notice dt.20.01.2023 and the said sale notice was published in Mana Telangana and The Hindu daily newspapers and thus the l^stRespondent bank has duly followed the procedure laid down under the provisions of SARFAESI Act, 2OO2 and Rules made thereunder in issuing all the relevant notices to the Appiicant and hence there are no merits in the SA and the SA is liable to be dismissed.

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Heard Ld. Counsel for the Applicant and Ld. Counsel for lstRespondent Bank whereas notice was not taken against the 2"d Respondent and hence the claim against the 2"d Respondent is dismissed. Perused the material brought on record.

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Now, the points that arise for consideration are,-

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Wletlrcr the Applicant has established any ualid grounds for challenging the Sale Notice dt.2O.01.2O23 issued bg the l.tRespondent Bank for conducting auction of the schedule

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propertg?

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iil To what relieft

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Point No.(l)t

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During the arguments, Ld. Counsel for the Applicant and Ldrl Counsel l^stRespondent Bank reiterated their respecgi$S versiorla as upra. n'! r-.) * ''..,. .: 6 n,,q. ..,).:i:r1 ,.+'.:.^,, '> // :;i4

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There is no dispute regarding the fact that the Applicant availed loan facilities from the l stRespondent Bank whereas the 2"dRespondent created mortgage in respect of the schedule property in security to the said loan facilities. There is also no dispute regarding the fact that the Applicant committed default in repaying the loan dues and so, the loan account was classified as NPA and the Bank issued demand notice u/ s 13(2) of the SARFAESI Act,2OO2. But the specific contention of the Applicant is that she has not received possession notice and sale notice and the said possession notice and sale notice were not affixed on the schedule property nor published in two leading newspapers and prior to issuing the said sale notice, the l"t Respondent bank failed to issue notice u/r g(6) of Security Interest (Enforcement) Rules, 2OO2 for giving an opportunity to redeem the schedule property.

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Per contra, lstRespondent Bank contended that the Bank has strictly followed the procedure contemplated under the provisions of SARFAESI Act, 2OO2 and Rules made thereunder in issuing all the relevant notices to the Applicant.

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To substantiate their contentions, the l srRespondent Bank filed material documents along with the Reply fi1ed by them. As per the said documents, it is clear that lstRespondent Bank issued Demand notice d1.27.07.2022 u/s 13(2) of the sARFAESI Act, 2OO2 and said notice is received by the applicant as evidenced by the signature on the office copy of the said demand notice. In fact, the said demand notice is also published in Telugu and English daily newspapers. Thereafter the 1st Respondent bank !.13.10.2022^{and the norice is} received by the Ap her signature on the ofhce copy session notice was published in by the copies of paper

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publication filed by the Bank and the said notice was also affixed on the schedule property as depicted in the photographs filed by the Bank. Thereafter, the Bank issued Redemption Notice wlr 8(6) of Security Interest (Enforcement) Rules, 2OO2 on i6.11 .2022 and the said notice was sent to the Applicant and also published in two daily newspapers and so, the contention of the Applicant that no pre-sale notice was given by the l.tRespondent to redeem the schedule property is not tenable. Thereafter, the Bank issued the Sale Notice dt.24.Il.2o22however, no auction was conducted by the Bank pursuant to the said sale notice. So, the Bank issued fresh Sale Notice dt.2O.O L.2O23 and the said notice was sent to the Applicant through Regd.Post and the said sale notice was affixed on the schedule property as depicted in the photographs liled by the bank and the said notice was also published in two daily newspapers as evidenced by the copies of paper publication filed by the Bank. Thus the lstRespondent has duly followed the procedure as contemplated under the provisions of SARFAESI Act,2OO2 and Rules made thereunder in issuing all the relevant notices to the Applicant.

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During the course of arguments, both the Ld. Counsel submitted that no auction was conducted by the l"tRespondent Bank in pursuance of the impugned sale notice dt.20.O1.2O23 . So the said sale notice 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 Notice dt.20.O1.2023. Hence, I am of tne lyin],9"tt"",-hu,^{the relief claimed by the Applicant in the} ..beci and the SA is liable to be Bank is directed to proceed afresh ti i^{-------o :--T</sup> dule property^{-- -} by issuing fresh sale notlcefi€^{o, fl{v:{plt_",ioffstt*} iirrovisions^{of SARFAESIAct, 2oo2} and Ri.rles made thereundei,l'}

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Potnt No.(til:-

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In the result, SA 45/2023 is dismissed.

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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 transcribed bg her, conected, signed and pronounced bg me in the open court on thb the 30h dag ofMay,2025).

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sdl - (G. GOPr CHANDI

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PRESIDING OFFICER

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odlli'i,i;-=iiABA

M S Psb Solutions v. Canara Bank

Case brief

What is this about?

What did the court decide?

M S Psb Solutions v. Canara Bank

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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