Dismissed

M/S Abrars Today Fashion Mall v. City Union Bank Limited

DRT11 Mar 2026SA/20/2024

Case brief

AI extract

What is this about?

The Tribunal dismissed a Securitization Application challenging possession and auction notices under SARFAESI. The court held that account classification as NPA depends on repayment default duration, not asset value. Alleged rule violations were dismissed as no auction occurred due to a stay order.

What did the court decide?

No order as to costs. Stay on possession notice vacated.

M/S Abrars Today Fashion Mall versus City Union Bank Limited — Specific Performance | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL-II AT HYDERABAD

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DATED THIS THE 11TH 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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SECURITISATION APPLICATION NO. 20 OF 2024

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BETWEEN:

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M/s. Abrars Today Fashion Mall Registered Office: 13/ 7/7D Peddakapu Street Tirupati-517 501 Represented by its Sole Proprietor Sri Haji Syed Abrar Ahmed.

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Haji Syed Abrar Ahmed S/o Sri H.S. Ahmed Basheer Aged 41 years, Occ: Business

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Mrs. Haji Sayed Mayana Shabna Aara W/o Sri Haji Sayed Abrar Ahmed Aged 38^years, Occ: Housewife.

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Applicants 2 and 3 are Residents of 13l 1/7D, Peddakapu Street Tirupati-517 501.

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."...Applicants'

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AND

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City Union Bank Credit Recovery and Management Department Rep by its Authorised Officer "NARAYANA", Administrative Office, 24-B Gandhi Nagar Kumbakonam, Tamil Nadu - 612 001.

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1fu"^

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SA.No.20/2024

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City Union Bank Tirupati Branch Tirupati - Represented By its Authorised Officer.

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.....Respondents.

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Counsel for the Applicants Mr. Mukesh Sharma. Counsel for the Respondents Mr. C. Prabhakar.

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-:ORDER:-

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The Applicants filed the present Application u/s.17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act, 2002) assailing the Possession Notice 30.12.2023, Auction Sale Notice dated 31.07.2024 issued by the Respondents Bank u/s.13(4) of the SARFAESI Act, 2002 and Warrant issued by the learned Principal Civil Judge-cum-Chief ludicial Magistrate, Chittoor in respect of the application schedule properties.

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Initially applicants filed the SA challenging the possession notice dated 30.12.2023. Thereafter, amended the same pursuant to issuance of auction sale notice dated 37.07.2024 by the respondent bank. The case of the applicants as per the averments in the sA, in brief, is that applicant No.1 proprietary concern, represented by 2"d applicant proprletor, availed two loans of Rs.94,40,000/- and Rs.38,OO,OO0/- each from respondent bank to meet its business requirements. The 2nd applicant availed another loan of Rs.23,OO,O00/- on 76.06.2027. OA schedule properties have been offered as a collateral security to the loans besjdes personal guarantees of applicants 2 and 3. Due to slump in market on account of Covid Pandemic, applicants were unable lg pay loan

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,..49i..or$ \'t

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SA.No.2o/2024

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instalments. Applicants are not wilful defaulters but the victims of Covid pandemic created circumstances. Therefore, the respondent bank is not^justified to employ unlawful in issuing demand notice u/s 13(2) of the SARFAESI Act, dated 19.10.2023 by wrongly classifying the accounts as NPA despite appreciation in the value of the secured assets.^The classification of loan accounts as NPA in August, 2023 is^illegal and arbitrary as their account does not fall within the definition of NPA under the Act. Applicants submitted^{representation on} 26.72.2023 seeking renewal of the loan accounts. However, respondent bank issued^possession notice dated 30.12.2023 under Rule 8(1) of the Security Interest^{(Enforcement)Rules,} 2002. The respondent bank did not follow^proper and^lawful process contemplated under the Rules 8(1) and 8(2) of the Security Interest^{(Enforcement)} Rules,2002 while taking^out notice u/s 13(4) of the SARFAESI Act, 2002.^Applicants complied the interim condltional order^{passed in IA.148 of 2024} in the SA daled 17.0!.2024 and deposited^{Rs.40,00,000/- with} some delay. However, the delay was cured by^moving condonation^petition. The respondent bank^{refusedto accept} the loan repayments either in^part or full to^{clear the loans.} During the^pendency of the^present SA, respondent^bank affixed Auction Sale Notice dated 37.07.20?4^{under Rule (6) of} the Security Interest^{(Enforcement)} Rules,^{2002 without} serving the same on the applicants.^{The sale noticedated} 3L.07.2024 is illegal for the^reason of^{violationRule8(5) in} obtaining^proper valuation and^{fixing the reserve price.As per} the knowledge of the applicants the^value of^{the OA schedule} properties is much more than the ones worked out by^the respondent bank. The auction salg notice does^{not dlsclose} /frv;-,>v

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SA,No.2o/2024

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pendency of SA proceedings amounting to violation of Rule 8(6Xf) of the Security Interest (Enforcement) Rules, 2002. Rule 9(1) notice was published before expiry of 30 days of Rule 8(6) notice. Respondent bank has not issued any separate notice u/r 9(1) and fixed the date of auction on O4.t0.2024 basing on Rule 8(6) notice. Respondent has not complied the provislons of Rule 8(7) of the Security Interest (Enforcement) Rules,2002 in affixing the sale notice on the conspicuous part of the any of the SA schedule immovable properties at any point of time. During the course of discussions in the post auction sale notice dated 31.07.2024 with the bank officials, applicants were informed that the bank had proceeded under Section 14 proceedings by filing Crt.M.p. No.121 of 2024. The respondent bank suppressed the materlal facts including pendency of SA in the Application u/s 14. Respondent bank has not issued any notice even after appointment of Advocate Commissioner u/s 14 of the Act. Therefore, respondent bank violated the mandatory provisions of SARFAESI Act and the Rules, 2002 in obtaining Warrant dated 73.06.2024 and therefore the said proceedings are illegal, arbitrary, null and void. In view of the above facts and circumstances, applicants pray for setting aslde the possession notice dated 30.j,2.2023, demand notice dated 19.10.2023, auction sale notice dated 37.07.2024 and warrant obtained u/s 14 of the SARFAESI Act dated 13.06.2024.

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The Respondent Bank filed its reply statement and additional reply statement. The submissions of the respondent bank as per the averments in the reply statement, in brief , are: , flWtrc.1^{,<.)</sup> $}

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SA.No.20/2024

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In view of the stay granted in IA.232B/2024 in the SA.2O/2024 moved by the applicants, respondent has not proceeded further both in conducting auction on 04.10.2024 and taking physical possession pursuant to warrant in Cr.M.P. Therefore, the ground No.(g) at page No.9 of and ground No.(xxxiii) at page 25 of the amended SA are not sustainable. As regards the other grounds, respondent bank has followed the entire procedure meticulously and there is no violation of any Rule on the part of the respondent and hence the SA is devoid of any merits. The respondents have to recover huge dues from the applicants. Accordingly, the respondent may be permitted to proceed further for recovery of its dues in the interest of justice.

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Ld. Counsels appearing for applicants reported no oral arguments. Heard learned counsel for the respondent.^perused the written arguments filed by the Respondent and the documents brought on record.

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Learned counsel for the respondent bank would submit that applicants admitted availment of loans and default in repayment. However, defendants raised issues relating to violation of provisions of SARFAESI Act and the Rules, 2002 just for the sake of litigation and to stall the recovery process. The demand notice issued u/s 13(2) of the SARFAESI Act has been duly served on the applicants. During their visit, applicants were informed that upgradation of the account would be considered only upon payment of substantial money and submission of requisite data and documents. As the applicants have not cleared the dues, respondent bank proceeded with proceedings u/s 13(4) of the sARffipt uide possession

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.- \.)2 - u/

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5A.No.20/2024

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notice dated 30.L2.2023. The^{possessionnotice has been sent} by registered^post and service of the^{same has been certified by} the Postal authorities vide letter dated 23.01.2024.^The possession notice dated 30.L2.2023 has been duly affixed on the secured assets,^photographs evidencing the affixture^are filed with the reply statement, The^{possessionnotice has been} published in the Indian Express and Andhra Jyothi editions^of 05.01.2024. Applicants obtained a conditional^{order in} lA.l4B/2024 dated 17.01.2024 in the^{SA filed challengingthe} possession notice dated 30.L2.2023 but failed to deposit^the amount in time as stipulatedⁱⁿ the order.^{In view of the non-} compliance of the order dated 17.01.2024,^{respondent bank} initiated further steps by^{issuing notice} u/r^{B(6) of the Security} Interest (Enforcement) Rules, 2002 dated^{07.02.2024fixing the} date of auction on 19.04.2024.^{Applicants challenged the sale} notice dated 07 .02,2024 by filing another^{SA.183/2024 to} mislead the Tribunal. However,^{applicantswithdrewthe SA.} L8312024 resulting in dismissal of the same^{as infructuous.} Thereafter, respondent issued fresh sale^noticedated 31.07.2024 fixing the auction date as 04.10.2024.^Learned counsel would further submit that^{in view of the conditional} order passed by this Tribunal in^{1A.2328/2024dated} 30.09.2024, the respondent bank did^{not proceed furtherin} conducting the auction on 04.10.2024 as^{also in taking the} physical possession of the SA schedule^{properties.Accordingly,} the SA becomes infructuous in^{respect of impugned sale notice} and^{physical possession} of^{the securedassets.}

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The^points that arise^{for consideration} arc,fui*

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SA.No.20/2024

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i) Whether the Applicants have made out ony valid grounds for setting aside the possession notice dated the 30.12.2023 issued by Respondent Bank under the SARFAESI Act?

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ii) To what relieJ?

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Point No.(i):-

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The grievance of the applicants all through the SA is about respondent action to classify the account as NPA and issuance of demand notice and possession notice without following the provisions of the SARFAESI Act the Rules thereunder. These allegations have been disproved by the respondent by placing material papers from pages 1 to 16 annexed to the reply statement. The authenticity of these documents has not been disputed by the applicants. As regards the NpA, appricants are under the impression that since the value of their secured being intact and rather appreciated over a period, respondent bank cannot classify the loan account as NpA. on the face of it, the applicants are under the misconception that the value of the secured assets has a bearing on the NpA classification. In fact, as per the banking norms, the account falls under the NpA category if there is a default in repayment for a consecutive period 90 days. Appreciation or depreciation in the value of the secured assets is nothing to do with the NpA classification of a loan account. Therefore, applicants contention of there being any illegality in the classification of loan account as NpA has no merit. As regards the contention in respect of violation of Rules B(5), B(6)(0, B(7) and 9(1), the same is not considered in the SA as the auction pursuant ,^" notice has not ;ryW.ff

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5A.No.2o/2024

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taken place at all in view of the conditional order passed in IA 2324/ 2024 dated 30.09.2024.

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In view of the aforesaid discussion, I find that the Applicants have failed to make out any valid ground for quashing the Possession Notice dated 30.12.2023 issued by the Respondent Bank. Therefore, the present Securitization Application is devoid of any merits and is liable to be dismissed.

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Point No.(iil:-

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q In the result, the present Securitization Application fails and same is hereby dismissed.

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Consequently, the interim stay granted in 1A.232812024 dated 30.09.2024 shall stand vacated and 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 and upload in official Web Portal.

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(Dictated to the Steno, signed and pronounced by me in the open court on this the l1h day of March, 2026).

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1/Ssut,/

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(kAMesnwnR KorHE) PRESIDING OFFICER

M/S Abrars Today Fashion Mall v. City Union Bank Limited

Case brief

What is this about?

What did the court decide?

M/S Abrars Today Fashion Mall v. City Union Bank Limited

Case brief

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What did the court decide?

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