Dismissed

Mr Vaddalapu Srinivas v. Union Bank of India

DRT27 May 2025SA/68/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal adjudicated an application challenging the validity of a bank's Sale Notice under the SARFAESI Act. Finding no auction was conducted and the notice became infructuous, the Tribunal set aside the application and directed the bank to issue a fresh notice.

What did the court decide?

The SBS is liable to be dismissed. The Respondent Bank is directed to proceed afresh for sale of the schedule property by issuing a fresh sale notice by duly following the provisions of SARFAESI Act,

Mr Vaddalapu Srinivas versus Union Bank of India — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL - I AT HYDERABAD DATED THIS THE 27TH DAY OF MAY, 2C.25

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PRESENT: GUMMADI GOPICHAND, PRESIDING OFFICER

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SA.No.6A/2OZB

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Mr.Vadalapu Srinivas, S/o Yakaiah, aged 54 years, Occ:business, R/o H.No .lO-3-71, Near Bus Depot, Khammam Town, Khammam.

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... Applicant

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And

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Union bank of India, H.No.8-2-1621 t62l t, Beside LIC Buildings, Wyra Road, Khammam-50700 1. Rep.by its Authorized officer

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.... Respondent Baruk

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Counsel for the Applicant

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Counsel for the Respondent Bank

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Si D.Raghauulu Ms.K.Srilatha

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.:ORDER:-

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This application is filed by the Applicant u/s. rz of the SARFAESI Act, 2002, challenging the Sale Notice dt.25.01.2023 issued by the Respondent Bank for conducting auction of the schedule property on 1o.o3.2o23 and to declare the same as illegal and void.

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rief, are that:

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The Applicantavaiia{- rl '' for., m the Respondent ,l t? : Bank in the year ifufi 5 aln created mor in respect of the schedule t sustained loss in the business and loan dues and so,

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the loan account was classified as NPA. The Respondent bank without issuing demand notice and possession notice, straightaway issued the impugned Sale Notice dt.25.oL.2023 for conducting auction of the schedule property and the said notice was not published in two leading newspapers and it was also not affixed on the schedule property. Before issuing the said sale notice, the Respondent bank failed to issue notice u/r 8(6) of Security Interest (Enforcement) Rules, 2OO2 and So, the impugned Sale Notice issued by the Bank for conducting auction of the schedule property is not legal and valid and liable to be set aside. Hence the SA.

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The Respondent Bank filedReply by denying all the adverse allegations made in the SA. It is contended that the Applicantafter availing the loan from the Respondent Bank, committed default in repaying the loan dues and So, the loan account was classified as NPA and the Respondent Bank issued demand notice u/s 13(2) of the SARFAESI Act, 2OO2 dt.29.1O.2O21 and thereafter issued possession notice to the Applicant and the said possession notice was published in daily newspapers and the said notice was also affixed on the schedule property. Thereafter, the Respondent Bank issued Sale Notice dt.25.01,.2023 u/r 8(6) of Security Interest (Enforcement) Rules, 2oo2 to the Applicant and the said notice was aflixed on the schedule propert5r and also published in two leading newspapers. Thus the Respondent bank has duly followed the procedure laid down under the provisions of SARFAESI Act, .2oo2'and Rules made thereunder in issuing all notices to the Applicant and hence there SA is liable to be dismissed. "- "

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Hearfl 'Ld. Counsel fo-r th* \hpplicant and Ld. Counsel for *."4&.,tbJ"#ii'hfi%1r""$$i},. material brought on record. d. r..ift 6. ri .r,i'i11

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Now, the points that arise for consideration are,_

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i) Whether the Appticant has established ang ualid grounds for challenging ttLe Sate Notice dt.25.01.2023 issued. bg the Respondent Bank in respect of tlrc schedule property?

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ii) To what relieJ?

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Polnt No.ll):-

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During the course of arguments, Ld. Counsel for the Applicant and Ld. Counsel for the 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 Respondent Bank by creating mortgage against the schedule property. There is also no dispute regarding the fact that the Applicant committed de fault in repaying the loan dues and so, the loan account was classified as NpA. But the specific contention of the Applicant is that he has not received any demand notice and possession notice and the said possession notice was not affixed on the schedule property nor published in two leading newspapers and similarly, the impugned auction sale notice was also not affixed on the schedule property and also not published in daily newspapersand so, the said notices are not valid and legal.

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Per contra, Respondent Bank .^{contended that the} Bank has strictlv foll ure contemplated under the provisions of Rules made thereunder in issuing all

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the &nt licant.

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ons, the Respondent Bank filed th the Reply filed by them. As per

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the said documents, it is clear that Respondent Bank^issued demand notice u/s 13(2) of the SARFAESI Act,^{2OO2 on} 29.1O.2O21 and the said notice was received by the^Applicantas evidenced by his signature on the office of the said demand notice, So, there is valid service of demand notice on^the Applicant. After receiving the demand notice, the Applicant^has not paid any amounts and So, the Respondent Bank^issued possession notice dt.1 I .O8.2O22 and the said notice was sent to the Applicantand it was personally served on the^Applicantas evidenced byhis signature on the photocopy of the said^notice Iiled by the Bank. The said possession notice was^{published in} two daily newspapers as evidenced by the copies of^paper 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 the impugned Sale Notice dt.25.OI.2023. Admittedly the Applicant^{received the} said notice. The said sale notice^rd/as affixed on the^schedule property as depicted in the photographs Iiled by the bank and the said notice was also published in two daily^{newspapers on} 28.01 -2023 as evidenced by the copies of^{paper publicationfiled} by the Bank.

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During the course of arguments, Ld. Counsel for the^Respondent bank submitted that no auction was conducted by^the Respondent Bank in pursuance of the said sale^{notice. So the} said sale notice becomes infructuous and^{nothingsurvives in the} SA for adjudication as there is no need to decide^{the validity or}

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' otherwise Sale Notice dt.25.O1.2023. Hence,^I am of, relief claimed by the Applicant in the pre &e mes ln ,uous and the SA is liable to^be dir , l{5.a. rhe^{-Reso?f,dent:} nk is directed to proceed afresh for CO ,ie,,"l J"$UJ[he scrg le property by issuing fresh sale &rur#g

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notice by duly following the provisions of SARFAESI Act, 2OO2 and Rules made thereunder.

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Potnt No.(il):-

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In the result, SA 68/2023 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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(Dbtated to the P.S transcribed by her, corrected, signed and pronounced by me in the open court on this the 2Vh daA ofMag,2025).

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sdl - (G. GOPI CHANDI PRESIDING OFFICER

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Mr Vaddalapu Srinivas v. Union Bank of India

Case brief

What is this about?

What did the court decide?

Mr Vaddalapu Srinivas 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

Coram

Case details

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