Dismissed

Ananthapur Agro Food and Beverages v. Indian Overseas Bank

DRT1 Sept 2025SA/50/2024

Case brief

AI extract

What is this about?

This order pertains to a securitization application filed to set aside an e-auction sale notice and possession notice issued under the SARFAESI Act. The Debts Recovery Tribunal dismissed the application, holding that the applicant failed to prove prejudice from procedural lapses and the sale was infructuous due to lack of bidders.

What did the court decide?

The Securitization Application filed under Section 17 of the SARFAESI Act was dismissed as devoid of merits.

Ananthapur Agro Food and Beverages versus Indian Overseas Bank — Banking and Recovery | DRT (2025)

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IN THE^{DEBTSRECOVERY TRIBUNAL -II ATHYDERABAD} DATED^{THIS THE OlST DAY OF SEPTEMBER'2025}

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PRESENT:^{SH.RAMESHWAR KOTHE,B.COM, L.LB.(HONS'), M,A.} PRESIDING^OFFICER

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Securitization^{Appllcation No'50OF 2024}

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M/s Ananthapur^{AgroFood and Beverages} ooor No.3-355,^{Somanadhnagar} AnanthaPuram,^{AndhraPradesh} ReD bv its^{ManagingDirector} pri!.i. rleeta:a Cadma, w/o c^Manoranjan

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Versus lndian^{Overseas Bank} AnanthaPur^Branch PIot No.36,^VidYUthNagar Main noaO,^{Ananthapur-s15 001}

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.......ApPlicant.

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... ResPondent

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Counsel^{for the Appticant: M/sIndus.La.wFirm through} Mr.Ramesh^Anand

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Counsel^{for Respondent Bank : Mr'Gampa Rangaiah}

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-:ORDER:-

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The^{Applicant filed the present Securitisation Applicationu/s 17} of the Securitization^{and Reconstruction of FinancialAssets and} EnforcementofsecuritylnterestAct,2oo2(hereinafterreferredtoas "the Act")^{to set aside e-auction sale noticedated O1'01'2024and} possession notlce^dated20 '05 '2023^'

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The case of^{the applicant, in brief, is that applicant sanctioned} two loans of^{Rs.15 lakhs and Rs 84 lakhs Due to separateState} agitation^{businessfacedhuge lossesresultingdefaultin service of} loan. Account^{becameNPA on 30 09'2013 Thoughfactory was} reopened there^{was major accident'Despiteadverse conditions} applicant^{repaid Rs'10.05 lakhs. Thoughsubstantial amount was paid} under OTS, without^{granting further time and witlout- is.suing any} lru""

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Page 2 of4

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sA No.5O/2024

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prior notices, respondent published the e_auction sale notice dated 07.01.2024 by undervaluing the property and fixing reserve price at Rs.70.04 lakhs in violation of Rule 8(5). Demand notice under Sec.13(2) and possession a n d possess i o n n oti ce wa s ;:,,'^? :H:.t""l :'f l, ffi : J :H:: 8(1) and 8(2) of the Secu ty Interest (Enforcement) Rules' 2002 ("Rutes" in srrort). e-aucr] served on appricant. o,,.,'n^{'ot'tuwas also neither affixed nor} amended provision under sec. 13(8) -;, :::H::: ;j:1" ;:: r:

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3 The respondent bank fired repry statement with documents. The submissions, briefly, are th t the applicant is a partnership firm represented by the partners. All of them are not made parties hence sA is riabre to be dismissed f non-joinder of necessary parties The applicant failed to deposit ,n,or o7.ot.zo24 passed by,r" ril:::H:1,,11;?:"ffi:':.1#:: want of bidders. The demand notice sent to the borrowers/guarantors/mortgagors was returned unserved hence it was got published in ,Hans 06. 02. 2023. possession,",,."' olllo", oll: ,ijiil. :::':i;ff ;: parties, got affixed on the secured asset and published in newspapers. An amount of more than Rs.1.7g crores is due from the applicant which is public money. The SA is liable to be dismissed.

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4' Heard Iearned counser for the appricant and rearned counser for the respondent bank. perused the material brought on record. 5. During the course of arguments, learned counsel for the parties for the applicant as well as respondent bank reiterated their respective version as in the application and the reply statement. Learned counsel for applicant prayed to allow the SA while learned counsel for the respondent bank sought for dismissal of the-same.

/AVe ur{.

Page 3 of 4

SA No.50/2024

The points for consideration^{are as follows : -}

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i) Whether the applicant^{madeout any valid ground to} quash the measures of the^{respondent against the} apptication schedule^{propertyas prayed for?}

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ii) To what relief?

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Point No.(i):

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Admittedly the^{applicant availedtwo types of loans and} committed default^{in repayment.The respondentbank classified the} loan account as^{NPA and this action cannotbe treatedas irregular or} illegal. The OTS terms^{were also admittedly not adheredto'}

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The e-auction impugned^{herein did not take place for want of} bidders hence I^{find no necessityto} 90^{into the contentions pertaining} to compliance or^{otherwiseof Rules 8(5), 8(6), 8(7) and 9(1) of the} Rules, 2002. sA becomes^{infructuousas far as impugned auctionsale} is concerned.

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As^pointed out by the^{learned counselfor the respondentbank,} the applicant is a^{partnershipfirm but the applicationis filed onlyby} the firm represented^{by one of the partners. As far as serviceof} notices on the applicant^{is concerned, a perusal of documents} annexed to the^{replystatement would reveal that demand notice and} possession notice were sent to the^{address as in the cause title but} returned unserved.^{Noticeswerealso sent to the other partners.The} demand notice and^{possessionnoticewerepublished.It is observed} that the applicant^{is a partnership firm and the mortgagedproperty is} factory land and building^{and all notices were sent to applicantwere} returned unserved.^{Having defaulted in repayment, failed to adhere} to the OTS terms, comply^{the conditional order,,",in this SA and}

UW""

Page 4 of 4

SA No.50/2024

abandoned the given address, the appricant has not justified as to what prejudice caused due to non-affixture of any of the notices. The auction sale however did not take place. The account became NpA in the year 2013. Under such circumstances, I find that the applicant failed to make out any valid ground to set aside the possession notice. Accordingly SA is liable to be dismissed as devoid of any m erits.

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Point No.(ii):

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In the result, the securitization Apprication fairs and is hereby dismissed.

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Consequently, Interlocutory Applications pending, if any, shall stand closed. No order as to costs.

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t2. Communicate a copy of this order to the parties concerned and upload in the official website.

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(Typed to my dictotion by the ps, corrected, siqned and pronounced by me in the open court on this the O1't doy of September, 2025).

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S;n's'" (RAMESHWAR KOTHE) PRESIDING OFFICER

Ananthapur Agro Food and Beverages v. Indian Overseas Bank

Case brief

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Ananthapur Agro Food and Beverages v. Indian Overseas Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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