Dismissed

Raja Rao v. Canara Bank

DRT11 Sept 2026SA/123/2025

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal-II, Bangalore dismissed an application seeking to set aside a property sale on the grounds of alleged procedural violations, non-compliance with One Time Settlement facilities, and under-valuation. The Bank produced evidence of valid mortgage deeds, Central Registry certificates, and adherence to valuation norms. The Tribunal held that the Bank had considered OTS proposals earlier but was not bound to grant extensions or specific timelines. It found no merit in claims regarding reserve price fixing and noted that challenges to prior notices were waived by the applicant's approach for settlement and barred by limitation.

What did the court decide?

The Securitization Application SA.123 of 2025 stands dismissed, and all pending interim applications are closed.

Raja Rao versus Canara Bank — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL-II, BANGALORE

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Dated this 11^th Day of September, 2026

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PRESENT: SHRI T. RAJESH Hon’ble Presiding Officer

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S.A. No. 123 of 2025

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Sri. Raja Rao, S/o. Late V Subbaiah, Proprietor, M/s. Raju Watch Works, M. G. Road, Kolar -563101.

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… Applicant

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Versus

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Canara Bank, Doom Light Circle, New Extension, Kolar Town, Kolar Taluk, Kolar District -563101, Rep. by its Chief Manager

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Sri. Raja Shekar, S/o. Venkatachalapathi, R/a ‘Sheshadri Nilaya’, Town Police Station Road, Kolar -563101.

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…Respondents

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Ld. Counsels on record / appeared :-

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Counsel for Applicants :- Rahul S Reddy & Associates Counsel for Respondent No.1 :- C Vinay Swamy

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: - O R D E R - :

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1. This Securitization Application in short this SA is filed under section 17

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of the “Securitization and Reconstruction of Financial Assets and Enforcement

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SA No. 123/2025

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of Security Interest Act, 2002, herein after been referred to as the SARFAESI Act, with a prayer to set aside the sale proceedings held on 30.08.2022 and the sale confirmation dated 30.08.2022 and also the sale notice leading to the above dated 29.07.2022.

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The case of the applicant as set forth in the SA is as follows. The applicant who is the borrower is doing business of watch works under the name and style M/s Raju watch works. It is admitted by the applicant that they have availed a Terms loan for Rs.20 Lakhs by execution of agreement on 26.12.2017. The creation of mortgage as security is also admitted. Apart from the above term loan the applicant admitted to have availed an OD for Rs.30 Lakhs. The applicant further contends that the regular repayments were made to the loan account till September 2018 and thereafter defaults occurred, which according to the applicant is due to his ill health. It is also contended that though the applicant had approached the respondent and sought for a reasonable time to pay of the liability, the respondent bank had issued a possession notice dated 20.12.2018, which the applicant claims is not served on him. It is also admitted that the respondent bank thereafter had issued a sale notice dated 07.08.2019 claiming the outstanding amount Rs.60,69,460/- and the reserve price as Rs.1,04,00,000/-. Since the sale could not go through for want of bidders, the applicant had submitted an OTS and

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SA No. 123/2025

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pursuant to the specific instruction substantial remittances were made by the applicant. The applicant further contents that despite the said remittances the OTS was never considered by the bank and the bank had issued a sale notice dated 14.07.2021 stating the outstanding as R.70,92,070/- and reserve price at Rs.80,50,000/-. The said sale also failed for want of bidders. The applicant further contends that after the unsuccessful attempt of e-auction by the bank, the applicant had again sought for OTS and the bank had given an OTS for Rs.27,56,940.56 and Rs.33,04,126/-. In respect of the above, it is alleged by the applicant that only 10 days’ time was granted for the payment of above OTS amount.

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It is also the case of the applicant that the bank had again issued a sale notice fixing the reserve price at Rs.92,20,000/- and in the e-auction held on 30.08.2022 the property was sold to the single bidder for Rs.93 Lakhs. After the sale of the property a vacating notice was issued by the respondent bank which came to be challenged in WP No.19169 of 2022 wherein a stay has been granted by the Hon’ble High court and applicant had made remittance of Rs.28 Lakhs during the pendency of writ petition. The Hon’ble High Court after noticing the outstanding as Rs.66,30,127/- directed the applicant to deposit the amount. The applicant having filed an extension petition had procured

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4 SA No. 123/2025

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Demand Draft totaling Rs.66 Lakhs. The petitioner thereafter had been relegated to this Tribunal. Hence, the present S.A. has been filed.

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In the grounds to the SA the applicant is contending that the sale of the

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property is against principals of natural justice and that the bank had not followed various provisions of the Act. The applicant is also putting forth the alleged anomaly in the amounts as stated by the respondent in various notices. The sale is also challenged contending that there was only one bidder and that the reserve price fixed is too law. The applicant is also contending that there is no legally enforceable security interest and that the secured interest is not registered with the Central registry. The alleged non issuance of demand notice and procurement of demand draft for Rs.66 lakhs is also reiterated in the grounds.

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Along with the SA the applicant had produced the following documents.

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i. Possession notice dated 20.12.2018

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ii. Sale notice dated 07.08.2019

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iii. Payment receipts

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iv. Sale notice dated 14.07.2021

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v. OTS scheme after letters dated 02.07.2022

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vi. Sale notice dated 29.07.2022

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vii. Sale confirmation letter dated 30.08.2022

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SA No. 123/2025

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viii. Possession notice dated 20.09.2022.

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ix. Proceedings sheet of WP.19169 of 2022

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x. Copy of OTS scheme offer letters dated 03.11.2022

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xi. Payment receipts

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xii. Copy of Demand drafts

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xiii. Order in Writ Petition 19169/2022

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xiv. Copy of letter issued to the applicant.

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The applicant had thereafter produced

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i) covering letter dated 01.03.2025

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ii) OTS settlement after dated 10.10.2025 and special OTS dated 13.12.2025

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The 1^st respondent had filed their objection contending inter alia that

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the SA is liable to be dismissed on the ground of limitation. It is also contended that the applicant was directed by the Hon’ble High Court that the statutory remedy it to be availed within four weeks. The respondent also contends that no application under section 14 is filed by the applicant to enable him to get the benefit of section 14 as permitted by the Hon’ble High court.

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It is also contended that the bank had duly followed the procedure mandated by the act. The respondent had also given para-wise rebuttal of the

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SA No. 123/2025

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grounds as urged by the applicant in the SA. It is also pointed out that the property is not sold below the realizable value. The fact that the applicant had lost his right of redemption is also reiterated by the respondent.

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Along with the objection the 1^st respondent had produced the following documents.

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i) Copy of the order in WP.19169/2022

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ii) Sale notice dated 29.07.2022 its postal receipts, publication and affixture.

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iii) Valuation report

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iv) Sale certificate

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v) Mortgage deed.

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The 2^nd respondent who is the auction purchaser had filed their objection pointing out that the applicant to seek the relief. The fact about the respondent became the highest bidder and deposit made by the auction purchaser is also put forth in the objection. The fact that bank had issued the confirmation and payment of entire auction amount are all put forth by the 2^nd respondent in their objection. The issuance of sale certificate is also put forth by the 2^nd respondent. The 2^nd respondent also contends that once the auction is confirmed no objection to the same could be entertained.

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SA No. 123/2025

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Along with the objection the 2^nd respondent had produced the following documents.

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1. Copy of the e-auction bid form

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1. Copy of deposit receipts

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1. Confirmation letter

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1. Sale certificate

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1. Coy of sale deed

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1. Coy of plaint

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Heard the counsel for respective parties, In the light of pleadings and documents, the only issue that is to be gone into and decided is as to legality of measures initiated by the respondent leading to the issuance of sale notice and conduct of sale pursuant to the same.

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The first and foremost contention taken by the applicant who admitted to have availed the loan facilities and admitting the defaults is that the respondent had not favorably considered the OTS facilities. However, going by the pleadings as put forth by the applicant and documents produced in respect of same it is evident that the bank had for more than one occasions considered the OTS proposal. In this regard it is pertinent to notice that even

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the applicant does not have a case as to any timely compliance of OTS proposals accepted by the bank. The applicant’s complaint that on one

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8 SA No. 123/2025

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occasions only ten days’ time was given for the payment of OTS alter after the situation as a banker who is providing OTS after forgoing a portion of the liability is entitled to put the time line and other terms where and this Tribunal cannot substitute its wisdom and decided the propriety of the decision of the bank.

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The next contention taken by the applicant that the Hon’ble High court had permitted the prayers of redemption which according to the applicant is evident from the proceedings of the writ petition is not sufficient to beguile this Tribunal to hold that the applicants right for redemption is intact. The proceedings and interim directions of whatever nature had become redundant as the final order had been passed by the Hon’ble High Court. By virtue of where the apart from relegating to this Tribunal and giving a reasonable time keeping the measures in abeyance the high court had not specifically declared as to any such right. Admittedly the first sale notice was issued as early as on 07.08.2019 which itself makes it clear the right of redemption if any available for the applicant is not available after that.

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The applicant is also harping up for the contention as to the Reserve price which according to the applicant is fixed by grossly undervaluing the property. This contention is also liable to be rejected as the Reserve Price is fixed in accordance with the valuation as fixed by the approved valuer. The

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SA No. 123/2025

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other contention that the Reserve Price was reduced for on Rs.1,04,00,000/as fixed in the first sale notice dated 07.08.2019 to Rs.92,20,000/- on 30.08.2022 is answered in a satisfactory way by the 1^st respondent as the Reserve Price is fixed in accordance with the valuation as given by the approved valuer.

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It is also pertinent to notice that the Reserve Price was once fixed at Rs.80,50,000/- in one occasion when the sale notice was issued on 14.07.2021 and property remain unsold despite the same. Hence this tribunal is of the view that there is no force in the contention of the applicant as to the alleged under valuation.

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The applicant though had raised contentions as to want of any security interest and registration with the Central Registry, the same stands successfully rebutted by the 1^st respondent as the 1^st respondent had produced the registered Mortgage deed as well as evidence as to Central Registry Certificate.

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This Tribunal is disinclined to go into the contention of the applicant as to the alleged non service of demand notice and possession notice at this point as it is the admitted case of the applicant that even after the issuance of sale notice, the applicant had approached the respondent seeking settlement. Hence it is evident that the applicant by virtue of his own conduct is not

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SA No. 123/2025

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entitled to challenge the demand notice and possession notice. The applicant had in fact waived of his objection of any to the demand notice and possession notice by approaching the bank seeking settlement.

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Even otherwise the challenge on to demand notice and possession notice is hopelessly barred by limitation as the mandate of section 17 of the Act is that the aggrieved person can challenge the measures with forty-five days from the cause of action.

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No other contention is raised at the time of hearing by both sides. In view of findings as entered above regarding the legality of measures, this Tribunal is not adverting to the issue of limitation as raised by 1^st respondent.

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The discussions above lead to the conclusion that there is no merit in

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the SA and the same is to be dismissed.

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In the result,

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i. SA.123 of 2025 stands dismissed,

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ii. all pending IAs stands closed.

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iii. No orders as to cost. Issue copies in accordance with rule 16 of the

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Debt Recovery Tribunal (procedure) rule.

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(Dictated to PY directly on the Computer, after its transcription, corrected and pronounced by me in the open Court on this the 11^th day of September, 2026)

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Sd/(T. RAJESH)

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PRESIDING OFFICER

Raja Rao v. Canara Bank

Case brief

What is this about?

What did the court decide?

Raja Rao v. Canara Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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