Dismissed

Vadla Shekhar v. Union Bank of India

DRT30 Jun 2026SA/136/2023

Case brief

AI extract

What is this about?

Debt Recovery Tribunal dismissed an application challenging the auction of mortgage property by a bank. The Tribunal held that procedural lapses were not fatal, noting the applicants waived rights by repaying dues after the sale. The application to set aside the sale was rejected.

What did the court decide?

Application challenging the auction sale dismissed; sale confirmed; pending interlocutory applications disposed of.

Vadla Shekhar versus Union Bank of India — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERYTRIBUNAL- IAT HYDERABAD

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DATED THIS THE 3OTH DAY OF JUNE. 2026

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PRESENT: GUMMADI GOPICHAND, PRESIDING OFFICER

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sA.No.136/2023

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Vadla Shekar, S/o. V. Chinnaiah,

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Aged about 50 years, Male

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Smt Vadla Anitha, W/o. Sri Vadla Shekar, Aged about 48 years, Female

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(both are R/o. H.No.1-7-15O/2. Vivekananda Nagar, Mahaboobnagar-SO90O l )

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Applicants.

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Versus

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Union Bank of India, (Erstwhile Andhra Bank)

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Mettuguda Branch, Padmavathi Colony, Mahaboobnagar District.

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Rep. by its Authorized Officer.

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Ummarasetty Pullaiah, S/o. Sri Bala Rangappa Ummarasetty, R/o.H.No. 1- 1-7 3 / 7 I C, Dhobighat Road, Budvei, Bansiial Nagar, Rajendranagar, Ranga Reddy District.

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i."49
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: ui,a[ilrfl6

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(Respondent No.2 is impleaded os per Orders dt.19.09.2024, in 1A.No.1209/ 2O24)

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Counsel for tLe Applicants Counsel for Respondent No. 1 Counsel for Respondent No.2

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Sri B. Sreeniuasa Reddg Sri Chakrala Sriniuasa Rao Sri V.V. Ramana

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Reserued on Pronounced on Uploaded to Website on

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18.O5.2026 30.06.2026 o7-07-2026

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sA.No.136/2o23

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-:ORDERi

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The Applicants hled the^{present Securitization Applicationunder section} 17 of the SARFAESI Act,^{challenging the auctionof the schedule property} conducted by the l"t^{RespondentBalk on 31.03.2023, pursuantto the} Sale Notice dt.27.O2.2O23,^{including the Sale certificate issuedin favour} of the 2"a Respondent-auction^purchaser.

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The averments made by the^{Applicants in the application,in brief,are as} under:-

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i) The Applicants are the^{guarantors to the credit facilitiessanctioned} by the 1"t Respondent Bank^{to the borrowerltrm i.e., M/s Manesh} Press Door Ply Wood &^{Hrdware. The Applicants were underthe} impression that the borrower^{firm is doing wetl and paying the loan} instalments regularly.^{While things stood thus, the lst Respondent} Bank, without issuing/serving^{the Demand Notice u/s' 13(2)'} Possession Notice u/s.^{13(4) of the SARFAESI Act and Rule 8(6)} Notice of the Rules, 2OO2,^{on the Applicants, has published the} Sale Notice dt.27 .O2.2O23 in^{respect of the secured assets} belonging to the Applicants'^{As far as to the knowledge of} Applicants, the borrower^{firm was doing well and praying the loan} amounts regularly. To the^{knowledge of the Applicants,the} borrower firm's loan account^{doesnot fa-ll under the categoryof} NPA. The Possession Notice and^{the Sale Notice, were neither} affixed on the secured^{asset nor publishedin two newspapers'As} per Sec.13(8) of the SARFAESI Act, the^{right of redemption to the}

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..,,-.^{&orrQwerwouldexpire upon publication of the Auction Sale Notice}

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,a": arrd' witho-tlt appreciating^{the said provision of law, the1"t} ,\

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i' Respbnaeii'*8qpi<^{has directly issued SaIe Noticedt'27'02'2o23} unlir Rule efl)ibr tr,. Rules.^2002.

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3o unryBg *

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&*&P

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SA.Na.1i6/2023

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i0 The l"t Respondent Bank has not obtained correct valuation of the schedule properties from the approved valuer and the reserve price fixed is very low when compared with the existing market value of the properties. The Auction Purchaser has not deposited 2;o/o and, 75%o of the bid amount with the stipulated time under Rule 9(3) & (4) of the Rules, 2002. The total auction proceedings adopted by the Authorized Ofhcer are in coiiusive with the Auction purchaser and same are illegal in the eye of law. Hence, the SA.

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.JThe 1"t Respondent Bank has filed Reply Statement and Additional Reply Statement denying a_ll the adverse allegations made in the application. The contentions of the l"t Respondent Bank, in briei are as under:_

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i) The Applicants created mortgage over the application schedule properties to secure the credit facilities i.e., CC limit of Rs.4O.OO lakhs, availed by M/ s. Maneesh press Door. Since the loan account was not regular, the lst Respondent Bank has initiated SARFAESI proceedings. The l"t Respondent Bank has auctioned the application schedule property No.2 and the 2nd Respondent herein stood as successful bidder on 31.03.2023 for Rs. 17.90 lakhs and he deposited the total amount on 03.05.2023 and the Bank issued sale certil-rcate in his favour on 03.05.2023.

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ii) The l"t Respondent Bank has issued Sale Notice for application schedule property No. 1 on 26.O5.2O23 for reserve price of Rs.54.00 lakhs, at which time, the Applicants deposited the total outstanding dues on 06.06.2023 and 14.O6.2023 and accordingly the CC loan account was closed. The Applicants did not approach with clean hands and they do not deserve any relief. t Bank has duly followed the procedure

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lated the SARFAESI Act and the Rules made e present SA may be dismissed.

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fT'lttomff"o^*

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SA.No.1i6/202j

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The 2"d Respondent-auction purchaser filed his Reply^{Statement denying} all the averments made by the Applicants in the^{application. The 2"d} Respondent submits that, he participated in the auction^ofthe application schedule property No.2, conducted by the^{lst Respondent} Bank on 31 .O3.2O23 by paying the EMD of^{lOoh amountof Rs. l,78,OOO} I^- and upon declaring him as highest/successful^{bidder for an amount of} Rs.17,90,000/-, the 2"d Respondent^{made furtherpayment of an amount} of Rs.2,69,500/- on 31 .O3.2O23 towards^{25o/o of the sale amount. The 1"t} Respondent Bank has issued sale^{confirmation letter and thereafter the} 2nd Respondent paid remaining^{75% of the sale amount of} Rs.13,42,500/- by 29.O4.2O23^{and in total the 2"d Respondentpaid an} amount of Rs.17,90,000/-^{withinthe stipulated time and thereuponthe} l"t Respondent Bank^{has issued Certificate of Sale on O2.O5.2O23 in} favour of the 2"d Respondent^{and the Bank has also handed over the} possession of the property to^{2"d Respondent on O7.O7.2O23. T}:re l"t} Respondent Bank has duly^{followedSec.13(2),13(4) &13(8) of the} SARFAESI Act and Rules^{8(1), (2), (5), (6), (7) and 9(1) of the Rules,} 2OO2. So, the present^{SA may be dismissed.}

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Ld. Counsel for the Applicants,^{Ld. Counselfor the l"t Respondent Bank} and the Ld. Counsel^{for the 2"d Respondent filed their respective Written} Submissions/Arguments.^{I haveperused the same'}

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

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Whether the Applicants^{have made out valid grounds for setting} aside the auction^{sale of the applicationschedule Item No'2} of the 2"d Respondent?

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itJ I o JijN rrt25 :t

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SA.No.136/2023

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Point No.(il:-

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There is no dispute regarding the fact that, M/s. Manesh Press Door Ply Wood & Hrdware availed credit facilities from the 1st Respondent Bank and the Applicants stood as guarantors for the due repayment of the sarne. As there is default in repayment of the loan outstanding dues, the l"t Respondent Bank initiated proceedings under the SARFAESI Act, to recover the outstanding dues. The lst Respondent Bank has issued Demand Notice dt.03.12.2019, u/s. 13(2) of the Act, 2OO2, which was in fact received by the Applicants as per the copies of acknowledgements filed by the 2"d Respondent along with IA.No.222812025. The Applicants did not send any representation/objections to the said Demand Notice. The contention of the Ld. Counsel for the Applicants, in his Written Arguments is that, in the Sale Notice dt.27.O2.2023, the 1st Respondent Bank has referred to the Demand Notice dt. 15. 11.2021, which notice was not served on the Applicants. In this regard, I have perused the Possession Notice dt.24.O6.2O2I, which was published by the lst Respondent Bank in the newspapers, in which the lst Respondent Bank has referred to the Demand Notice dt.03.12.2OI9. So, mentioning of wrong date of the Demand Notice in the Sale Notice cannot be fatal, particularly when in the Possession Notice it is clearly mentioned that the date of Demand Notice as 03.12.2OL9.

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As regards the compliance of Rule 8(1) & (2) of the Rules, 2OO2, in issuing Possession Notice is concerned, it is the contention of the Ld. Counsel for the Applicants that, the Possession Notice has not been served on the Applicants, not affixed on the schedule properties and not published in two newspapers. In this regard, I have perused the copies of owledgements filed by the 2"d Respondent along with ,^{from which it is revealed that, the said notice} sent to tr6/h, Ap turned un-served with postal endorsement as * "Addressee Left.gllince returned to sender". As per the copy of postal '- 3 1;^{Juil flr'f,} *:i

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sA.No 136/2023

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acknowledgement, the said notice is^{served on ApplicantNo.2, who is} none other than wife of Applicant^{No. 1. Similarly, from the copies of} paper publications filed along with the said IA, it^{is very clear that the 1"t} Respondent Bank has duly^published the^{said notice in Englishand} Telugu (vernacular language)^{newspapers. As regardsaffixtureof} Possession Notice on the schedule^{property is concerned, now it is a} settled law that, the aggrieved^person for^{non-affixtureof Possession} Notice on the secured asset, would be^{the general public who dealt with} such property and no^{prejudicewouldbe caused to the borrowerafter} service of Possession Notice on him. So, I do^{not l-rnd any material} irregularity in issuing Possession^{Noticeby the 1"t RespondentBank in} respect of the schedule^properties.

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Ld. Counsel for the Applicants in^{his writtenarguments contendedthat,} as per the valuation report obtained by^{the 1"' RespondentBank,the} valuer has considered only 4133.33 sq.^{yds., out of 454.O7 sq. yds., of} land in the schedule property but the l"t^{Respondent Banksoldthe} entire 454.07 sq. yds., for the^{price of 433.33sq. yds. I have perused the} Valuation Report dt.24.01.2023^{filed by the} l"t^{Respondent along with its} Counter in IA.No. 1784 12023,^whetein the^{valuer by consideringthe} dimensions of the site^(under column^14.1 and^{14.2) actual as per the} plan and with Latitude, Longitude and Coordinates^{of the site,came to} the conclusion under column 16 of the^{said valuation report that, the} extent of the site considered for^{valuation(Least of 14.1 &14.21 as} 433.33 sq. yds. So, the 1"t Respondent^{Bank hassold the property as per} the available document mortgaged by^{the Applicants and it cannot be} said that, the lst Respondent^{Bank has sold the propertyadmeasuring} ,^{for the priceof 433.33 sq. yds.} -:.-- , -^-'--:'</sup>

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-^:-- _-.''^':,):-, 10. the otheirconE raised by the Ld. Counsel for the Applicants^are '' l 'tt '.,',| that, thete are structures constructed on the schedule^property t Bank without mentioning the same^{has issued} ".fS^.1}h?i1}l'

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SA Na 136/2021

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Sale Notice and that the Sale Notice dt.27.02.2023, was dispatched by the 1"t Respondent Bank by registered post on 06.03.2023 for the auction slated on 31.03.2023 and so there is no clear 30 days gap from the receipt of the Sale Notice till the date of auction, which is in violation and Rule 8(6) and 9(1) of the Rules, 20O2. In this regard, Ld. Counsel for the Applicants has placed his reliance on the following decisions:-

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Decision of the Honble High Court of Telangana State and for the State of A.P., in the case of^.Kuality Agro products, Warangal District Vs. Canra Bank, Madikonda Branch, Warangal District & others", [2O19(1) DRTC 675];

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ii) Decision of the Honble High Court of A.p., in the case of^,,Canara Bank Vs. The Registror" - WP.No.17935 of 20 18 and. Wp.No.2538Z of 2O18;

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iir) Decision of the Honble High Court of punjab and Haryana at Chandigarh in CWP.No. 16095 of 2018; and

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irr) Decision of this Tribunal in SA.No.146 of 2018 -^,,M/s. Sri Dhonalaxmi Industries Vs. A.P. Mahesh Co-op. Urbon Bank Ltd..

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Ld. Counsel for the Applicants further contended that, the auction of the schedule property was conducted on 31.03.2023 and 15 days to deposit balance 7 5%o of the bid amount expires on 15.04.2023 and even though Respondent No.2 frled extension letter dt.03.0 4.2023 but there is no acceptance by the 1"t Respondent Bank and as such there is a violation of Rule 9(4) of the Rules, 2002.

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his valuation report dt.24.0I.2O23, by considering the in the schedule property has frxed the value of the

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which the 1st Respondent Bank has hxed the reserve

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3^{gri611p2616epit} The prospective purchasers would inspect the

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''N.g*,,**c.sl \P:-'1.^,''"^':

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SA.Na.135/202i

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property before participating in the auction and accordingly^{the 2"d} Respondent has participated in the auction^{and stood as highest bidder.} So, it cannot be said that, the Authorized^{Officer has failed to mention} the extent of structures in the^{scheduleproperty.As regards the} contention of the Ld. Counsel for the^{Applicants that there is no clear30} days gap from the dispatch of Sale Notice^and till^{the date of conducting} of auction is concerned, the Applicants^{have themselvesstated in their} application (SA) that, upon coming to^know that^{the 1"t Respondent is} conducting auction of the schedule^{propertieson 31.03.2023,they} approached the borrower and the borrower^{has assured them to clear the} dues of the Bank and release all the^{securities.So, the Applicants are} very much aware of the auction of the^{scheduleproperties fixed on} 31.03.2023. The Applicants did not^{raiseany objectionswith the 1"t} Respondent Ba-nk for sale of the schedule^{properties.In fact, after sale of} the application schedule^{properties in favour of the 2"d Respondent-} auction purchaser in the auction^{conducted on 31.03.2023,the} Appticants have approached the^1st Respondent^{Bank and deposited the} balance outstanding dues on 06.06.2023^{arrd' 14.06.2023and as per the} letter dt. 14.06 .2023, lbe l"t Respondent^{Bank by acceptingthe balance} outstanding dues, after adjustment^{of the sale proceedsin respect of the} application schedule Item No.2^{property has closed the loanaccount.} Even though the Applicants filed^{the present SA, initially challenging the} Sale Notice 27.02.2023 for auction of^{the schedule propertyon} 31.O3.2O23, during^pendency of^{the SA, auctionof the schedule property} was conducted and after completion of sale^{of ltem No'2 property of the} SA schedule in favour of the 2"d^{Respondent, the Applicantsapproached} the 1st Respondent Bank and^paid the^{balanceoutstanding dues in the} t, after adjustment of the sale^{proceeds.By doing so, the} waived their right to challenge the^{proceedings initiated} e 1.t ent Bank under the SARFAESI Act.^{The decisions} upon Ld. Counsel for the Appticants do not^{apply to the} ces of the case at hand. Under such^{circumstance,I}

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SA.No.135/2023

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am of the considered view that the Applicurnts are not entitled for any relief as sought for in the present SA and the present SA is liable to be dismissed.

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Point No.(ii):-

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In the result, the present Securitization Application is dismissed. 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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(Dictoted to the Privote Secretary, tronscribed by her, corrected, signed ond pronounced by me in the open court on this the 30th doy of June, 2026).

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sd/(G. coPrcHAND) PRESIDING OFFICER

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30 Julilffi

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TRUE GOPY
(t^g{ffi'
lR,-'l, ffyD;T,?JlSrn

Vadla Shekhar v. Union Bank of India

Case brief

What is this about?

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Vadla Shekhar v. Union Bank of India

Case brief

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