Dismissed

Sanaboina Venu v. Axis Bank

DRT29 Jun 2026SA/184/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal challenged an auction sale certificate issued under SARFAESI Act proceedings. The applicant alleged lack of proper notices and procedural lapses. The tribunal found the bank followed the statutory procedure, no substantive injury occurred, and the auction was regular, dismissing the application.

What did the court decide?

The Sale Certificate dated 21.03.2023 and the auction conducted on 09.03.2023 are declared regular and valid, and the application is dismissed.

Sanaboina Venu versus Axis Bank — Execution and Attachment | DRT (2026)

¶1

IN THE DEBTS RECOVERYTRIBUNAL - I AT HYDERABAD DATED THIS THE 29TH DAY OF JUNE. 2026

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PRESENT: SRI GUMMADI GOPICHAND, PRESIDING OFFICER

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sA.No.184/2023

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Sanaboina Venu, S/o Snaboina Sammaiah, Aged 37 years, Occ:business, R/ o H. No.2-28, Bandarupalli, Duggondi Mandal,Warangal

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... Applicant

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Versus

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1 . The Branch Manager Axis Bank Ltd., Pochamma Maidan area Warangal branch, Warangal City.

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The Authorized Oflicer Axis Bank LTd., Sec.bid , Oflice at: D.No.5-2-183/ 184, 3.d floor, Modi Square, Rani gunj, Sec.bad-SoO 003.

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M/s Thummuluri Laxmi Narayana Adthi Rep. by its Prop:Ravi Kavati H.No. 16-7-95, Shop No. 18, Vontela RAmreddy Complex, Near Venkataramana Theatre, Warangal.

¶10

Kavati Ravi, S/o K.Mallaiah, Aged 42 years, Occ:business, R/o H.No.16-7-95, Shop No.18, Vontela Ramreddy complex, Near VEnkataramana Theatre, Warangal.

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Baloju Srinivas, S/o 48 years, Occ; 9.t1-19-aa I^t, G bugga ... Respondents

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2 I JUN^rus

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Counselforthe^ApPlicant	SiG.KishoreKumar
Counselforthe^{RespondentsNo.1&2}	SiP.Ramachandran
CounselforRespondents^No.3&4	SnM.Rambabu
RespondentNo.5	Exparte

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Reserued on Pronouncedon	18.O5.2026 29.06.2026
Uploaded to the^utebsiteon	30.06.2026

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ORDER

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This Application^{is filed u/s.17 of the securitizationand Reconstructionof} Financial Assets^{and Enforcement ofSecurity InterestAct'2OO2} (SARFAESI Act,2002)^{challenging the auction conductedby the l"t} Respondent on^{09.03.2023 in respect of the schedule property and} consequentSaleCertificatedt.2l.03.2023issuedinfavourofRespondent No.S and to declare^{the sameas null and void'}

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The averments^{made by the Applicant in briefare as follows:}

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Respondent^{No.3 is a sole proprietary business concern represented by} Respondent No.4^{availed businessloan of Rs'50 lakhsfrom the lt} Respondent^{in the year2015 and the Applicant hereinstood as one of the} guarantors to the above^{said loan facility by mortgaging the schedule} property in favour of^{the l"t RespondentBank'Subsequentlydueto} sudden slump^{in the business,RespondentsNo'3&4 couldnot pay some} amounts. Later^{whenthe RespondentsNo'3&4 approached the Bank for} paying the dues, the branth^{managerof the l"t Respondentrefused to} ts stating that^{the schedulepropertywas already sold in} on 09.03.2023^{and the sale was knocked downrn} irror. of th. n."i&h&p"t^{No.S hereinand sale certificate was also issued} i" f "8"1 _{ Bfr}r""t :t . ": l:.., : "".]::: i:'-:.:.1,i: :": ii]: p.of..,v, it " i""pfrd|"t^{Bank failed to issue any prior notices and also} faiied to obtain veiltio.,^{of the schedule property from the approved} .i'^{rj,'^} -.-'t",i*;','

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valuer and the reserve price hxed was very low and there was only one bidder i.e. Respondent No.S. The fixation of auction sale within fifteen days of publication is illegal. The impugned sale notice was not published in two leading newspapers. The Applicant is in physical possession of the schedule property and he is ready to pay the outstanding dues. Hence the SA.

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Respondents No.1&2 filed their Reply denying all the adverse allegations made in the sA and contended that the Respondent No.3 availed loan from the lst Respondent herein to an extent of Rs.SO lakhs in 2015 and the Applicant herein is one of the guarantors for the said loan by mortgaging the schedule property and he also signed Guarantee Agreement. In view of the default committed by the Respondents No.3&4 in repaying the loan dues, the Respondent Bank classified the loan account as NpA on 24.02.2019 as per the guidelines of RBI and initiated proceedings under the provisions of SARFAEST Act, 2oo2. The bank issued demand notice dr.23.o4.2or9 and the said notice was received by the Respondents NO.3&4 and the Applicant and thereafter, the bank issued possession notice dt.o8.08.2019 and the said notice was published in two daily newspapers and the Bank also took possession of the schedule property on 08.08.2019. Thereafter, the Bank proceeded further and issued impugned sale Notice dt.73.r2.2o22 to the borrowers and the Appricant herein giving 30 days time to redeem the secured asset and they received the said notice and the said notice was published in two daily newspapers. Before issuing the said sale notice, the Bank obtained valuation report from its approved valuer and fixed reserve price in respect of the schedule property. In pursuance ofthe said sale notice, the Bank conducted auction of the schedule property ono9.03.2023 and Respondent No.5 was declared

¶23

az rl it iflder and sale certiiicate was issued on 21.03.2023 arld ,/,,,a#.ssn oft$r edule property was also handed over to him. Thus, l'&rn^* e$.,dentl has duly followed the procedure prescribed under rffiig61 o AESI Act, 2OO2 and Rules made thereunder in '! il, * thP I rad, . S'

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W;stEW

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conducting auction of the^{scheduleproperty.Accordingly, Ld' counsel} prayed to dismiss the SA.

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Heard Ld. counsel for^{the Applicant and Ld. counsel for the Respondents} No. 1&2 whereas Respondent^{No.5 remained exparte. RespondentsNo'3&4} failed to file their counter^{and replyeven after availingsufficient time and} hence their right of filing^{counter and reply was forfeited.Perused the} material brought^{on record.}

¶27

Now the points that arise^{for considerationare}

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lt. uslether tle Applicant^{has establishedany uolid grounds for} challenging tle^{impugnedSateCertificatedt'21'03'2023issued bg} the lst Respondent^{Bank in} fauour^{of RespondentN o ' S-auction} purchaser in respect of^{the scLedulepropertg pursuant to tLe} auction conducted^{on O9.O3.2O23?}

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Lll. To what relief^?

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Point No.(i):-

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Counsel for^{the APPiicantand Ld.}

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1. During the course^{of arguments,Ld.} reiterated their^{respectiveversions}

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Counsel for the^{Respondents No.1&2} as stated suPra.

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the fact that^{Respondent No.3 represented} credit facilities^{from the 1"t Respondentbank}

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by stood as one of^{the guarantors by creating}

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wlyereas he dc'hedule^{property in security to the repaymentof}

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morts $B1s e ffi".flf,1"tfulh. rhe said Ioan anJ^{therg-{1er,the borrowers committed defaultin repaying} th.e:tqbn aues.^AfteFq$sb ,"Fqt"E$ rv^ify^ing s^{the loan account of the RespondentNo.3} ,$ial.a action^{under th} e provisions of^SARFAESIAct,

¶38

""^*r$;Egift rti:f5;'ffi' ',:Spvng\X':;-u!f;R\ -'-I.::---zl--"ft'

¶39

2OO2 and conducted auction of the schedule propertSz and also issued sale certificate dt.21.03.2023 in favour of the auction purchaser, Respondent No.5 herein and challenging the same, the Applicant filed the present SA.

¶40

The Applicant is contending that the bank conducted auction of the schedule property without issuing demand notice and possession notice to the Applicant and without following the procedure contemplated under the provisions of SARFAESI Act,2OO2 and Rules made thereunder and so, the impugned sale certificate dt.21.O3.2O23 is not legal and valid and liable to be set aside.

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But the Respondent Bank contended that they have issued all the statutory notices to the Applicant and also the borrowers under the provisions of SARFAESI Act,2OO2 and Rules made thereunder and also followed the procedure in conducting auction of the schedule property. Respondent No.S herein participated in the auction who became successful bidder and he paid the entire bid amount and so, sale certilicate was issued in favour of Respondent No.5 herein and physical possession of the property is also handed over to him.

¶42

To substantiate their contention, Respondent Bank filed material documents along with the Reply l-rled by them. As per the said documents, it is clear that the bank issued demand notice dt.23.04.2019 u/s 13(2) of the SARFAEST Act,2oo2 and sent the said notice to the borrower and the as evidenced by the postal acknowledgements hled by the Bank. bank issued possession notice dt.08.0 B.2O19 and sent the i'',,,! "rffi""a"U\e^{apptcantand others and the saidnoticewas arso} li * ^^{p"P.["].-q in lr^t[ dailynewspapersand the same was affixed on the} ii-" 2 t 9.il[U"[t"rooertV6chb'dlu1e p."p"rff as de np icted in the the conies copies of nf photographs nhnrnoranhc firp.r filed by r-.,, +],-the i\g the said notices i,, tt. p,.":".,t sa i" u".."a uy Rn ruigy-alrenging s r:o"=rt1.)7/

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limitation. Thereafter,^{the Bank issued 30 days Sale Notice dt. 13'12.2022} for giving an opportunity^{to the Applicantto redeem the secured asset and} the said notice^{was sent to the borrowers and the Applicantthrough Regd'} post as evidenced by^{the postal acknowledgementsfiled by the Bank'The} saidnoticewaspublishedintwodailynewspapersaSevidencedbythe copies of^{paper publication hled by the Bank'Beforeissuing the sale} notice,theBankobtainedvaluationreportdt.o4.o3.2o22fromthe approved valuer ofthe^{Bank in respect ofthe scheduleproperty and fixed} the reserve^{price'So, the contentionof the Applicantsthat the lst} Respondent Bank^{has not followed procedure prescribedunderthe} provisions of SARFAES I^{Act,2OO2and Rules made thereunderin} conducting auction^{of the schedule propertyis not tenable'In the auction} conducted^{by the l"t Respondent Bank onOg '03'2023 in respect of the} scheduleproperty,RespondentNo.Shereinbecamethesuccessfulbidder for a sale consideration^{of Rs.32,20,000/- and he paid the entirebid} amount and a^{sale certificatedt'21'O3'2O23 was issued in his favour'} Thereafter, the bank^{also handed over the physical possessionof the} schedule^{property to the auction purchaser i'e' Respondent No'S herein} on 26.04.2023.

¶44

1 1. In a recent^{judgementof the ApexCourt in CelirLLP Vs' Mr'sumatiPrasad} Bafna in Contempt^{Petition(C) NOS'lsS-15912024 in CivilAppeal} Nos.5542-554^{312023,the Hon'ble SupremeCourt held as follows:}

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sale bE auction^{or oth.er publicproa'Lrement methods} 218: "Ang confinned. or^{concluded ought not to be set aside} uith lightlA^{except on groundsthat go the core of} fdsuch as either^{beingcollusiue,} fraudulent^or rP trl uitiated ba picing or underbidding.^{Mere irregulaitgor} ? ,tri,N cleutatton?fl2F a rule rtthich^{does not haue any fundamental} d.oes not take^{a us ag the} foundation^{of autlaitg for} In such cases,^{courts in partianlar should be} refrain entertaining^{ang ground} for^{challenging an}

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auction uhich either could haue been taken earlier before the sale was conduced and confirmed or where no substantial injury has been caused on account of such irregularitg ".

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So, considering all the circumstances, I hold that the Applicant has miserably failed to establish any valid ground for challenging the auction conducted by the Respondent Bank on O9.O3.2O23 in respect of the schedule property and so, there are no merits in the SA. Accordingly, this point is answered in favour of the Respondent Bank and against the Applicant.

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Point No.(ii)r

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In the result, SA 184 123 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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Communicate a copy of this order to the parties concerned.

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(Dictated to the P.s' transcibed bg her, conected., signed. and pronounced bg me in the open court on this the 29th dag of June, Q026).

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PRESIDIITG OFFICER (c. copr ""f"ui;

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,VW

Sanaboina Venu v. Axis Bank

Case brief

What is this about?

What did the court decide?

Sanaboina Venu v. Axis Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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Cases cited

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