Dismissed

Smt Kethavath Neelamma v. Canara Bank (Syndicate Bank)

DRT16 Jan 2026SA/114/2024

Case brief

AI extract

What is this about?

In this SARFAESI Act matter, the DRT dismissed a Special Application challenging the validity of an e-auction sale notice due to alleged procedural lapses. The court held that the bank had strictly followed statutory notices but noted the auction failed due to lack of bidders, rendering the Applicants' relief infructuous.

What did the court decide?

Interlocutory applications pending, if any, shall stand disposed of. No order as to costs.

Smt Kethavath Neelamma versus Canara Bank (Syndicate Bank) — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERYTRIBUNAL_ I AT HYDERABAD

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DATEDTHISTHE 16TH DAYOFJANUARY, 2026

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PRESENT: SRI GUMMADI GOPICHAND, PRESIDING OFFICER

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SA.No.114/2024

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1 Smt.Kethavath Neelamma, W/o K. Ramesh Naik, Aged 42 years, Occ: house wife& Agriculture, R/o H.No. 1-76,1 Midjil, Mahbubnagar-509357.

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2.Mr.Guntala Krishna Kumar Goud, S/o G.Anjaiah Goud, Aged 50 years, Occ:agriculture, R/o H.No.8-6-8 I I I I B, Padmavathi Colony, Yenugonda, Mahabubnagar District-50900 1 .

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... Applicants

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Versus

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M/s Canara Bank

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(previously syndicate Bank) D.No.l1-88 to 92, Badepally, Nethaji Road, Jedcherla, Mahabubnagar District-50930 1

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Badavath Namya @ N Nanu S/o Late Laxman, aged 59 years, Occ:agricultlure, H.No.3- 1, Udugulagadda Thanda, Vemula, Midjil Mandal, Mahabubnagar District.

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Badavath Bhaskar Nayak, S/o B.Namya, Aged 30 years, Occ:agriculture, Udugulagadda Thanda, H.No.9-62, Vemula, Midjil Mandal, Mahabubnagar District.

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16 JAN 7|'l7F

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Counsel for the Applicank Counsel for 7.t Respondent

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: SiT. Ranadhir Singh : Si Gampa Rangaiah

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Reserued on :18.12.2025 Pronounced on :16.O1.2026 Uploaded to tle website on : 17.01.2O26

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ORDER

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This Application is fired ul s.rz of the securit izationand Reconstruction of Financial Assets and Enforcement of Security Interest Act,2OO2 (SARFAESI Act,2oo2l challenging the e Auction sale Notice dt.rl.o2.2024 issued by the r^st Respondent Bank for conducting auction of the schedure properties on 2O.O3.2O24 and to declare the same as null and void.

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The averments made by the Applicants in brief are as follows:

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originally, Respondent No.2 ava ed Agriculturar loan from the rst Respondent Bank for the purpose of Horticulture traditional plantation which is covered under centrar Government subsidy scheme whereas the Applicants No'1&2 and Respondent No.3 stood as guarantors and the Applicants offered the schedule properties as securit5r for the said roan and they are all farmers. Due to Covid_I9, the Applicants could not pay some instalments and the loan account was classified as NpA. The lst Respondent bank invoked the provisions of sARFAESI Act, 2oo2 and, issued demand notice dt. rg.o9.20rg and possession notice dt.2g.r2.2org and challenging the same, the Applicants liled sA rol /2otg before DRT_ II, Hyderabad and the lst Respondent bank dropped all the proceedings and so, the said SA was disposed of as not pressed. The lst Respondent bank without issuing fresh demand notice and possession notice, straightway issued the e Auction sale Notice dt.23.og.2022 for conducting aucti"g4sf lhe schedule properties on 3r .ro.2022 and challenging the said notige,:,the Applicq'qts filed SA 26sr22 and the bank again withdrawn . The main borrower Respondent No.2 No.3 are silent and intentionally not settling the l"t Respondent bank without issuing demand

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notice and possession notice, again issued the impugned sale Notice dt'13'02'2024 for conducting auction of the schedule properties without following the procedure. The 1"t Respondent Bank failed to follow Rule 8(1X2) of securit5r Interest (Enforcement) Rules, 2002in taking possession of the secured assets. The 1st Respondent bank failed to follow Rure 8(6x&)&9(1) of Security Interest (Enforcement) Rure s,2oo2as no separate 30 days sale notice was issued for giving an opportunity to redeem the secured assets' The lst Respondent bank has not obtained valuation report before fixing the reserve price against the schedule properties. Hence the SA.

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3' The lst Respondent bank filed their Reply denying all the adverse allegations made in the sA and contended that the lst Respondent sanctioned Horticulture Plantation Loan to a tune of Rs.95 lakhs to the 2"d Respondent and to secure the said loan, the Applicants herein created mortgage against the schedule properties. Thereafter, the borrower committed default in repaying the loan dues. so, the loan account was classified as NPA on27-08.2018 as per the guiderines of RBI and the Bank initiated proceedings under the provisions of sARFAESI Act, 2oo2 and. issued demand notice and possession notice under the provisions of the SARFAEST Act,2oo2 and cha,enging the same, the Applicants filed SA ror/19 on the fire of Hon'ble DRT-II, Hyderabad and the said sA was disposed of as not pressed since the Bank has withdrawn the sARFESI proceedings. The loan was not covered under cGTMsE and as such, claiming amount from CGMSE does not arise. when the Bank issued e Auction sale Notice dt.23.og.2o22, the Appricants filed SA 26s/22 and got conditionar order and as per the conditionar order, the Applicants paid Rs 20 'i.._11;^{1t,,ll: u""u and thereafter, the said sA was dismissedas} infru-qf.Uous,. .Ag? follSweH" "qrqq.ffi;^{"'bfii -$,ffi,.&'hebank issued fresh demand noticedt.25.0g.2o2g} p, dt'2a'11'2023,i ,- - :;.i:l and trftr$rter e Auction Sale notice ;,;:';#;:""#::dt.13.02.2024 in iresRect S tlrlp ?p;."d,rtitlb||properties by following the due procedure *: l$ ii,,;l itti;L .-'.1 ,.f ---,ii'i#'

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prescribed under the provisions of Act, 2002 and Rules made 'ARFAESI thereunder and there are no violations. Accordingly, Ld. counsel prayed to dismiss the SA.

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Heard Ld. Counsel for the Applicants and Ld. Counsel for the lst Respondent' Notice was not taken against Respondents No.2&3 and hence claim against the Respondents No.2&3 is dismissed. perused the material brought on record.

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Now the points that arise for consideration are

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ii. uhether the Appticants haue established ang uali.d grannd for challenging the impugned e Auction Sale Notie dt.13.O2.2024 issued by the lsr Respondent against the schedute properties?

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iii. To what retief?

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Potnt No.lil:-

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

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There is no dispute regarding the fact that the Respondent No.2 availed Horticulture Prantation r,oan of Rs.95 rakhs from the rst Respondent and the Applicants herein created mortgage in respect of the schedule properties and thereafter, the borrower committed defaurt in repaying the loan dues' After declaring the loan account of the 2oa Respondent as NpA, the lst Respondent Bank issued dernand notice and possession notice and chall the Applicants filed SA lot I tg and the said SA pressed. Then challenging the sale notice dt'2s.L&2023, Iiled SA 265122 and the said SA was ,^the l"t Respondent Bank initiated impugned Sale Notice dt.13.O2.2024 for

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conducting auction of the schedule properties and challenging the same, the Applicants filed the present SA.

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The specilic contention of the Applicants is that without issuing fresh demand notice, possession notice and prior to sare notice, the Bank issued the impugned sale Notice dt.13.o2.2024 for conducting auction of the schedule properties without forlowing the procedure contemplated under the provisions of SARFAESI Act,2oo2 and Rules made thereunder and so, the said sale notice is not regar and valid and liable to be set aside.

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But the l"t Respondent contended that after disposal of the sA 265/22, they have initiated fresh sARFAESI proceedings and issued all the statutory notices to the Applicants under the provisions of sARFAESI Act,2OO2 and Rules made thereunder.

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10' To substantiate their contention, the Respondent Bank filed material documents arong with the Repry fired by them. As per the said documents, it is clear that after the disposal of SA 265/22 by this Tribunal, the 1st Respondent Bank initiated fresh proceedings under the provisions of SARFAESI Act,2002 and issued demand notice dt.25.0 g.2023u/s l3(2) of the SARFAESI Act, 2002 and sent the same to the Applicants and others through Regd'post as evidenced by the postar track reports fired by the Bank and the said notice was also published in Telugu and English daily and thus there is valid service of demand notice on the When there is no response to the said demand notice, the lst issued Possession Notice dt. 1g.11.2023 and sent the said notice to ts and others through Regd. post as evidenced by the by the Bank. The said possession notice was published in daily newspapers as evidenced by the by the Bank and the said notice was also d0t[ as depicted in the copies ofphotographs 9.Y', (l---'--..r-""*ttd$h-

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filed by the Bank. Thus the l"t Respondent Bank has dury foflowed Rule 8(1)&(2) of Security Interest (Enforcement) Rules, 2oo2. After issuing demand notice and possession notice to the Applicants as per the contemplated procedure, the Bank issued pre Sale Notice dt.23.1 r.2o2s u/r 8(6) of Rules, 2OO2 and sent the same to the Applicants through Regd.Post as evidenced by the postal track reports filed by the bank. Thereafter, the lst Respondent bank issued the impugned e Auction Sare Notice dt. 13.02.2024 for conducting auction of the schedule properties and the said notice was sent to the Applicants and others through Regd. post and the said notice was published in two daily newspapers and arso affixed on the schedule properties.

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1 1 . However, during the course of arguments, Ld. counsel for the I st Respondent Bank submitted that in pursuance of the impugned e Auction sale Notice dt.r3 -o2.2o24, the Applicants obtained interim conditionar order directing the bank to proceed with the auction but not to confirm the sale and they paid the amounts as directed by this Tribunal, however, no auction was conducted by the Bank for want of bidders. As the auction in respect of the schedure properties in pursuance of the impugned Sale Notice dt.r3.o2.2o24 was not conducted, the relief claimed by the Applicants in the SA becomes infructuous and nothing survives in the present SA for adjudication and there is no need to decide the validity or otherwise of the impugned sale notice. As far as demand notice dt.25.o8.2o23, possession notice dt. 1g. rr.2o2g and pre-sale notice dt.23.11.2o23 are concerned, the lst Respondent Bank has scrupulously followed the procedure contemplated under the provisions of sARFAESI Act' 2oo2 and Rures, made thereunder in issuing the said notices and so, the said notices are lega1 and valid. Hence, I am of the opinion that the relief cants in the present SA becomes infructuous dismissed. Suffice, if a direction is given to the bank e fresh sale notice for conducting auction of 1 6 JAil 2026^*

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the schedule properties by strictry folrowing the procedure contemprated under the provisions of sARFAESI Act, 2oo2 and Rules made thereunder.

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Potnt No.(tl)r

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In the result, SA ll4 124 is dismissed as there are no merits. Consequently, the Interlocutory Applications, pending if any, shall stand disposed of. No order as to costs.

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i3. Communicate a copy of this order to the parties concerned.

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(Dictated to the P.s, transcribed bg her, _corrected., sened and. pronounced bg me in the open court on this the 16th dag of January, 2026).

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sd/(c. coPr CHAND) PRESIDING OFFICER

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i':"
1 6 JAil zozo

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XR,UE'COPY
lL sxaffi,"
Asslrfeglsttir
Fc.t-^..,'i YItiPlt 51 D

Smt Kethavath Neelamma v. Canara Bank (Syndicate Bank)

Case brief

What is this about?

What did the court decide?

Smt Kethavath Neelamma v. Canara Bank (Syndicate 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

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