Dismissed

Ms Dheeraj Traders v. Karnataka Bank Limited

DRT23 Mar 2026SA/142/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed a Securitization Application filed by mortgagors seeking to quash a possession notice and auction under the SARFAESI Act. The court found the bank had complied with notification and publication requirements, having disproven the applicants' claim of non-service.

What did the court decide?

Securitization Application dismissed; Interlocutory Applications pending shall stand closed.

Ms Dheeraj Traders versus Karnataka Bank Limited — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL-II AT HYDERABAD

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DATED THIS THE 23RD DAY OF MARCH, 2026

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PRESENT: SH. RAMESHWAR KOTHE,B.Com, L.LB.(Hons.), M.A. PRESIDING OFFICER

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Securitization Apptication No. 142 OF ZO24

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M/s Dheeraj Traders Rep by its Prop Mr. Vadiyaram^prabhudas No.16- 11- 16/4/4, Teegataguda Market Hydera bad, Telangana 500036

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M r.Vad iyara m Prabhudas S/o Mr.V. Pentaiah, Age Major Gen: 14ale, Occ: Business R/o H.No.2-3-720/A/tl

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Amberpet, Sri Govindnaga r Hyderabad 500013

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Smt.V. Jyothi

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W/o Mr. Vadiyaram Pra bhudas Age Major, Gen Female Occ:Housewife

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Rlo H.No.2-3-720/A/17 Amberpet, Sri Govind nagar Hyderabad 500013

.......Apptica nts.

Versus

KARNATAKA BANK

Asset Recovery Management Branch Plot No.50, 1't Floor, Srinagar Colony Road No.3, Banjara Hills, Hyderabad 500073 Rep by its Authorized Officer

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Counsel for the Applicants :Sri D. Bhanu Pratap Counsel for Respondent Bank :Sri N. Meher Prasad Ow"

2ot4

sA No.74212024

.:ORDER:-

The Applicants^{filed the present Securitisation Applicationu/s 17} of the Securitization^{and Reconstruction of FinancialAssets and} Enforcement^{of Security Interest Act, 2002 (hereinafter "the Act" for} short) to^{quash all measures of the respondentbank against the} application^{scheduleproperty under Sec 13(2) and set aside} possession notice dated^{12.08.2022 issued under Sec'13(4)of the} Act,2OO2 and^{e-auction sale notice daled 26'O2'2O24 fixingauction} on 21 .03.7024.

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The case of^{the applicants, ln brief, is that theyavailedloan} facility from the^{respondentfor businesspurpose, applicants2 and 3} mortgaged their^{property as security for the said loanThough they} were promptly^{making payments, due to financialcrisls faced on} account of Covid-19^{and consequential lockdown, their scrap business} collapsed. The^{NPA classificationis wrong'Applicants are not awareof} SARFAESI^{proceedingssince no demand notice,possessionnotice and} Rule 8(6)^{noticewere not served on them, not alfixedon secured} asset. Proper^{valuationwas not obtained and reserve price fixed is} very low. There^{is violation of Secs.13(2),13(4) of the Act and Rules} 3, 8(1), 8(2), 8(5),^{8(6) and 8(7) of the Rules of 2002 Hence this SA'}

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The respondent^{bank filed reply statement alongwith} documents. It^{is averred that that due to defaults commltted by the} applicants the^{loan account was classifiedas NPA on 27} '07'2022^as per RBI guldelines and Securitization^{proceedings have been initiated} by issuing demand notice^{daled19.O4.2022' No objectionsreceived} against the demand notice^{and the respondentbank issued} possession notice dated f7.08.2022 which^{was sentby registeredpost} and^published in "Business^{Standard" aLld- "N4ana Telangana"} Avr**rt (/'t>"

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3of4

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sa No.t42/2O24

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newspapers besides its atfixture on secured asset. The sale notice was also issued on 26.O2.2024,^published in two leading newspapers and aftixed on property. The respondent bank has strictly followed the procedure prescribed in the Act and the Rules framed thereunder and therefore SA may be dismissed.

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The right of applicants advancing arguments was forfeited on 24.02.2026. Heard learned counsel for the respondent. Perused the material brought on record.

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During the proceedings it was reported on 14.05.2025 and 24.07.2025 that the impugned auction did not take^place. Accordingly SA has become infructuous as far as contentions on non-compliance of Rules 8(5), 8(6) and 8(7) are concerned.

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Now, the points that arise for consideration are;-

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(i) whether the applicants made out any valid ground to set aside the^possession notice dated 12,08.2022 issued under Sec.1j(4) of the SARFAESI Act against the SA schedule^property?

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(ii) To what relief?

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Point No,(i):-

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Admittedly the applicants availed loan facility from respondent bank, created mortgage over SA schedule^property towards security and suffered business losses. Hence the action of respondent bankⁱⁿ classifying the account as NPA and initiating Securitization measures can not be questioned. /,rbt^ruJ<, (J/'1>"'

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4of4

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sANo.L42l2024

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The applicants mainly^{contendthat they were not served with} demand notice and^{possession notice. This contention hasbeen} disproved by the^{respondentbank by placing materialdocuments} along with its reply^{statementsuch as, copies of postal receiptsand} acknowledgements as^{proofof serving demand notice and possession} notice,^photographs and^{paper clippingsproving affixtureand} publication of possession notice. In view of the^{ample proof, I find no} infraction of Secs.13(2),^{13(4)of the Act and Rules 8(1) and B(2) of} Rules, 2002.

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In view of the above observations,^{it is held that the applicants} have utterly failed to make out^{any valid ground to set aside the} possession notice dated 12.08.2022 issued by^{the respondent bank} under Sec.13(4) of the Act and^{accordingly the SA is liable to be} dismissed.

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Point No.(ii):

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In the result, Securitization Application fails and is^hereby dismissed.

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Consequently, Interlocutory Applications^pending if any,^shall stand closed.

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t2. No order as to costs.

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Communicate a copy of this order^{to the parties concerned.}

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(Typed to my dictotion by the PS, corrected, signed ond^{pronounced by mein the opencourton} this the 2i'd doy of Morch,^2026).

¶42

ESHWAR KOTHE) PRESIDING OFFICER

Ms Dheeraj Traders v. Karnataka Bank Limited

Case brief

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Ms Dheeraj Traders v. Karnataka Bank Limited

Case brief

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