Dismissed

Ms Wellbe Agro Food Chronicals Prop Joseph Pious Kassey v. Union Bank of India

DRT23 Sept 2025SA/98/2024

Case brief

AI extract

What is this about?

In a securitisation application under the SARFAESI Act, the Debts Recovery Tribunal dismissed the plea to set aside a secure asset auction. The court held that the bank complied with all statutory procedures, the redemption period was validly completed, and applicants failed to prove fraud, collusion, or inadequate pricing, requiring that the auction not be lightly interfered with.

What did the court decide?

Array Securitisation Application dismissed; pending interlocutory applications closed; no order for costs.

Ms Wellbe Agro Food Chronicals Prop Joseph Pious Kassey versus… — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL - II AT HYDERABAD

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DATED THIS THE 23RD 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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SECURITISATION APPLICATION No.98^{OF 2024}

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M/s Wellbe Agro Food Chronicles Prop. Mr. loseph Pious Kassey

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Shed No.46l2, Plot No.10,^Phase II IDA Cherla^pally, Kapra Mandal Medchal Malkajgiri District

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Telangana- 500051 Also at:

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M/s Wellbe Agro Food Chronicles

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Pro,14r- loseph Pious Kassey

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Plot No.223, Rampally,

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Secu ndera bad, Telanga na- 501301

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Mr. Joseph Pious Kassey S/o Abraham Kassey Aged 30, Occ:Business

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D. No.1-5- 50/302, Victory Resldency

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Street No.8, Near Sai Public School Habsiguda, Hyderabad-07 Also at:

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Bungalow No.261, Silver Oak^Bungalows Cherlapally, Hyderabad-5¹

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lvlr. Abraham Kassey S/o Raja Ratha^{na m Kassey} Aged 65, occ:Buslness

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D.No. 1-5-50/302, Victory Residency Street No.8, Near Sai Public^School Habsiguda, Hyderabad-07

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.. '....APPlicants

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Versus

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Union Bank of India Rep by its Authorized Officer Phase-II, PIot No.27, IDA Cherlapally Hyderabad-51

//ry"*e

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SA No.98/2024

Sri Shanmuga Industries Rep by its Proprietor Srividya Gudiboina, Wo A Satish Kumar Aged 41^years, Occ: Business Rlo 7/2, lDA Nacha ram Mallapur, Hyderabad-500076

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....Respondents.

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Counsel for the Applicants : Mr. G. Adrian Kiran Raj. counsel for 7"t Respondent Bank : Mr. Deepesh Bahadur Counsel for 2'd Respondent : Mr.C. Sreedhar

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-:ORDER:-

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The Applicants flled the present Securitisation Application u/s.77 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "SARFAESI Act 2002") to set aside the possession notice dated 12.70.2023 and auction conducted on 74.02.2024 pursuant to sale notice dated 06.01.2024 in respect of application schedule property.

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The averments of the application, briefly, are that the applicants availed cash credit and term loan facilities of Rs.7.50 lakhs and Rs.42 lakhs. Due to losses and health issues of 3d applicant, they were unable to pay some instalments. Respondent bank classified the account as NPA and not responded to the request to restructure/regularize the loan. On 13.02.2024 some agency person visited residence of 2nd applicant and handed over sale notice dated 06.01.2024 fixing auction on 74.02.2024. No notice under Sec.13(8) was issued prior to that. As per Rute 8(6) respondent ban ought to give 30 days notice before every auction sale notice. Reserve price fixed at Rs.61 lakhs is very less compared to its worth of Rs.1 crore. Despite status quo order dated ffi'"e

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SA No.98/2024

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23.02.2024, respondent^{bank collectedthe bid amounts. 25o/obid} amount was^paid on 16.02.2024^{whereas auctionwas heldon} L4.02.2024 and no^{reasonassigned.The sale certificateissued on} f8.06.2024 based on such auction^{is liable to be set aside.No} notice under Sec.13(2) and 13(4)^{was receivedby applicants.} Respondent bank failed to follow^Rules 8(1),8(2),8(5),8(6),8(7) and 9(1). Hence this SA.

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The respondent bank^{filed reply and additionalreply} statements which have^{been adopted by the 2nd respondent.The} submissions of the^{respondents,in brief, are that consequentupon} account becoming^NPA on^{30.07.2023, respondentbankinitiated} Securitization measures^{by issuingdemand notlce dated 31.07.2023} under Sec.13(2) of the Act and^{sent by registeredpost to the} applicant and^published in^{English and Telugu newspaperson} 08.08,2023. As no^{paymentwas received withinsixty days of} demand notice,^{possession notice u/s 13(4) was issuedon} 12.70.2023 and the same^{was sent to the applicantby registered} post, published in English and Telugu^{newspaperson 17.t0'2023} and got affixed on the^{secured asset.Thereafter sale notice dated} 09.11.2023 was issued^{informingthe borrowers that property would} be auctioned after^{expiry of thirty days.Since the applicantavoided} receipt of sale notice it^{was publishedon 03.L2.2023 and affixedon} the conspicuous^part of the^{property.On 06.01.2024 auctionsale} notice was issued fixing auction^{of the secured asset on 74,02'2024'} The auction sale^{noticewas sent by registeredpost to applicant,} affixed on secured asset^{and published in English and Telugu} newspapers on 10.01.2024.^{With the publicationof auctionsale} notice, the right of^{redemptionof applicant extingulshedas per} judgement of Hon'ble Supreme Court in CELIR^LLP=vs.BAFNA

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SA No.98/2024

MOTORS (MUMBAI) Ltd. in Civil Appeal No.5542-543 of 2023 decided on 21.09.2023. The bid amounts deposited at the time of auction were adjusted later on and no non-compliance of status^quo order would arise however, this issue had already been decided by the Tribunal in IA filed by the applicant and hence cannot reagitated. The result of the e-auction sale notice was communicated to the bank and successful bidder at 3.51 PM on 15.02.2024 by way of e-mail by the service provider and hence 25o/o of bid amount was deposited on 16.02.2024 by successful bidder. Hence neither the^payment was against Rule 9(3) nor is the sale certificate liable to be set aside. The respondent bank has strictly followed the due procedure prescribed in the provisions of the Act and Rules framed thereunder and therefore SA is liable to be dismissed.

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Heard learned counsel appearing for the applicants, learned counsel for the 1"t respondent as well as learned counsel for the 2nd respondent. Perused the written arguments filed on behalf of the parties and the material documents brought on record.

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Learned counsel for the respondent bank in reiteration of the contents of the application submitted that no prior notice or separate notice under Rule 8(6) providing 30 days redemption time was issued and served before issuing the impugned auction notice. Even the e-auction notice dated 06.0t.2024 was neither served nor published. The property has been undervalued, reserve price of the property worth of Rs.1 crores was kept at Rs.61 lakhs without obtaining fresh valuation report. Learned counsel relied upon judgment of Hon'ble DRAT. Kolkata in Union Bank of India vs. Dilshad Elahi in Misc. Aooeal No.34 of 2023 decided on 03.05.2024

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sA No.98/2024

in support of his contention^necessity of^{issuing 30 days redemption} notice under Rule 8(6) read with^{amended provisionof Sec.13(8)of} the Act. He further contended that^{the successful bidderin the} auction held on 14.02.2024^{failed to deposit the 25o/obid amount} within the time stipulated under^Rule 9(3)^{of Rules, 2002 hence the} auction and consequential^{steps are liable to be set aside. He relied} upon^judgement of Hon'ble DMT,^{Allahabad in Appeal Sr.No.402of} 2012 decided on 18.07.2013^{between Dilio Kumar Sinqh and Ors'} vs. Allahabad Bank and Ors.

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Learned counsel would also submit^{that the accountwas} illegally classified as NPA and the^{respondentbank failed to follow} Secs,13(2), 13(4) of the^{Act and Rules 8(1) and 8(2) of 2002,} reliance was^placed on Hon'ble^{High Court for the State of} Telangana in state Bank of^{India vs. Unionof India and M/s Classis} Chemicals Limited vs.^{Debts Recovery Appellate Tribunal and others} in WP Nos.4623 and 4373 of^{2025 decided on 16.06.2025}

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With the above contentions,^{learned counsel urged to allow} the SA.

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Per contra, learned counsel for the^{1st respondentbank} reiterated the version in the^{reply and additionalreply statements} and further submitted that^{demandnotice and possessionnotice} were duly served,^{possessionnotice was publishedand affixed as} per standard procedure. A valuation report^{was obtainedon} 30.10.2023 from the approved^{valuer. Thereafter, a sale notice} under Rule 8(6) read with^{amendedprovision under Sec.13(8)on} 09.11.2023 was^{published in newspaper and affixed on secured} asset since sale notice was^{returned unserved by post. Thereafter}

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SA No.98/2024

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auction notice dated 06.01.2024 was issued fixing auction of the asset on 14.02.2024, published the same on 10.01.2024 besides sending by post to the applicant.

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Learned counsel further submitted that learned counsel would also submit that as per Rule 9(2), sale shall be confirmed in favour the^purchaser who has offered the highest sale price in his bid or tender or quotation or offer to the authorized officer and shall be subject to confirmation by the secured creditor and Rule 9(3) stipulates that on every sale of immovable property, the purchaser shall immediately, i.e. on the same day or not later than next working day as the case may be pay a deposit of twenty five per cent of the amount of the sleep and these two Rules have to be read together and not Rule 9(3) in isolation. In the present case, the auction was conducted on MSTC e-Commerce portal, result was communicated to respondent on 15.02.2024 at 3.51 PM by way of e-mail and therefore, on the next working day being 16.02.2024 the successful bidder deposited 25o/o of bid amount as per Rule 9(3) of the Rules, 2002. After payment of balance bid amount sale certificate was issued on 18.06.2024. The auction purchaser got mutated his name vide Certificate of Transfer/Mutation dated 19.06.2024. Learned counsel referred to the documents filed along with its reply and additional reply statement as proof of compliance of relevant provisions of the Act, 2002 and sought for dismissal of the sA.

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Learned counsel for the 2nd respondent sailed with the arguments of the respondent bank and said once auction notice is * published the right of redemptio) n ext ine inguisuis hes as held in CELIR LLp zryit#

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SA No.98/2024

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case (supra) and accordingly SA is liable to^{be dismissed as} meritless.

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Now, the^points that arise^{for consideration are:-}

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i) Whether the applicants made out any^{valid groundto} aside the auction held on^14.02.2024 in^respect of a ppl icatio n sched u I e Pro2ertY^?

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ii) To what relief?

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Point Nos.( i):-

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L2. The respondent bank filed documents^{along with reply} statement and additional^{reply statement as proof of compliance of} procedure prescribed under the Act. A^perusal of the^{same would} reveal that the demand notice dated^31.07 '2023^{was returned} unserved with^{postal remarks as 'left' hencethe apPlicanthad to} publish and affix the demand notice. The^{possession noticedated} f2.70.2023 was also^{sent by registered post to the applicant, same} was returned unserved. The^{possession notice was publishedon} 77.f0,2023 and^got affixed on^{schedule property' The valuation} report is dated 30.10.2023 and^{immediatelysale notice under Rule} 8(6) was lssued, sent to the^{applicants. As returnedunserved,the} Rule 8(6) notice was^published on 03.12.2023^{and alsoaffixed.} After expiry of 30 days^{e-auction sale notice dated06.01.2024was} issued,^published on^{10.0L.2024,fixing auctionon 74,02.2024.I} find absolutely no deviation in the^{procedure followedby the} respondent bank under the^{provisionsof the Act and the Rules of} 2002. As the respondent bank^{issued separateRule 8(6) notice and} 9(1) auction sale^{notice by maintaining the time period as stipulated} under the Rules read^{with amendedSec' 13(8) of the Act, there is no} application^judgements of^{Hon'ble SuDreme Court in CEUR LLP}

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/fu<9/-uqre. / //^-\ 1,,,

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SA No.98/2024

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case, or Hon'ble High Court for the State of Telanoana in WP Nos.4623 and 4373 of 2025 or the Hon'ble DFUT. Kotkata in Dilshad Elahi cases rcupra) are not of help to the applicants.

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The chief contention of the applicants is that the auction purchaser deposited the 25% bid amount on 76.02.2024 as against Rule 9(3) without assigning any reason. The respondent bank submitted that the service provider itself confirmed the bid of 2nd respondent on 75.02.2024 at 3:51 Pl4 and therefore on the next working day 25o/o of bid amount was paid by znd respondent. I have perused the e-mail placed at page 26 of the material documents annexed to additional reply statement of the 1st respondent bank. A perusal of the mail sent by [email protected] on 75.02.2024 at 3:51 PM confirms the submission of the respondent bank. This document is not disputed by the applicants. In the given circumstances, payment of 25olo bid amount on 16.02.2024 cannot be held as without assigning any reason and the reason as explained, is substantiated by way of documentary proof. Under such circumstances, it cannot be inferred that Rule 9(3) is deviated. As deviation of Rule 9(3) is disproved, the judgement of Hon,ble DRAT, Allahabad in Dilip Kumar Sing case (supra) is not applicabte in the circumstances of the case.

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Before parting with the order, I would place on record the conduct of the applicants-borrowers as borne out of record, they avoided receipt of notices at every stage right from demand notice to auction sale notice. This SA also was also filed after one week of completion of auction proceedings and even after part-payment was made by the auction purchaser. The application being IA

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SA No.98/2024

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No.545/2024 filed by the^{applicantsseeking stay of consequential} steps pursuant to impugned auction^{was rejected on the very} ground that the interest accrued by the third^{party could not be} infrinqed without a valid^{reason. Anotherapplicationin IA} No.1913/2024 seeking direction to^{auction purchasernot to change} the nature of^{propertyand alienationthereof, was also rejected on} the similar^{ground. These orders attained finality in the absenceof} any challenge. Further, in the^{judgment of Hon'ble SuoremeCourt} in CELIR LLP case^(surla) as^{relied upon by the applicants} themselves, it^{is held in para 218 as hereunder:-}

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"Any sale by^{auctionor other public procurement methods} once alreadY confirmed or^{concludedoughtnot to be set-} aside or intertered^{with lightly excepton grounds that go} to the core of such sale^{process,such as either being} collusive, fraudulent or^{vitiated by inadequatepricing or} underbidding. Mere irregularity^{or deviation from a rule} which does not have any^{fundamental proceduralerror} does not take awaY the^{foundation of authoritYfor such} proceeding. In such cases, courts in^{particutar should be} mindful to refrain enterbining^{anY ground for challenging} an auction which either^{could have beentaken earlier} before the sale was^{conductedand confirmedor where no} substantial iniury has^{been caused on account of such} irregularity,"

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In the case on^{hand, the applicantsfailed to prove fraudor} collusion or inadequate^{pricing or underbiddingwhich wouldgo to} root of the auctlon^{process. Further, as stated suprathe applicants} flled the SA after^{completion of the auctionproceedingsand even} after part-payment made^{by the successfulbidder. The above} extracted observations^{made in the cited judg€mentsquarelyapply} to the case on hand. ,,{P-,,^q,r-q

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,,{P-,,^q,r-q ')/'tl"

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SA N0.98/2024

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In view of the above discussion, it is concluded that the applicants failed to make out any valid ground to^quash any of the measures of the lst respondent bank under the Act, 2002 including the auction sale held on 74.02.2024 and the consequential steps pursuant auction sale in respect of the application schedule property and accordingly SA is liable to be dismissed.

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Point No.(iii'l:-

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