Dismissed

Sri Ayyanna Konidala v. Union Bank of India

DRT15 Sept 2026SA/205/2025

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal at Hyderabad dismissed an application challenging SARFAESI proceedings initiated by Union Bank of India. The Tribunal held that challenges to early notices were barred by limitation under Section 17. It found the bank complied with all statutory rules regarding service, valuation, notice periods, and possession, rejecting arguments regarding the timing of the valuation and the status of apartment shares in the mortgaged property. The auction was upheld as valid, and the applicant was denied relief for 'unclean hands'.

What did the court decide?

The Securitisation Application was dismissed with no order as to costs. All interim challenges were barred by limitation, and the sale measures were upheld.

Sri Ayyanna Konidala versus Union Bank of India — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERY^{TRIBUNAL_ II AT HYDERABAD}

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DATED THIS THE 15TH^{DAY OF SEPTEMBER, 2026}

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PRESENT: SH. RAMESHWAR^{KOTHE,B.com, L.LB(Hons ), M A'} PRESIDING OFFiCER

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SECURITIZATION^{APPLICATION NO.2O5 OF 2025}

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Sri Aya nna Konida^la S/o K. Rosaiah, Aged⁵⁸ Years Occ:Business,^{Rlo 2-3-273,Ananthala Colony} Near Nagote Road^{No.3,Hyderabad500068}

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.......APPlicant

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Versus

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Union Bank of^India Station Road Secunderabad^Branch Olo 9-4-1402 to^{1402,RegimentalBazar} Adj to Sikh Gurdwara,^{Secunderabad500003} Rep by its Authorized^Offlcer

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lvls. Maheswari Dubbaka^Laxman S/o Venkatesh^{Laxman RaoDubbaka} Aged 27 Years,^{R/o 8-1-256& 257} Shivaji Nagar,^Secunderabad Telangana 500003 Gmple;ded^{as per ordersdated06.11.25 in IA 2915/2025)} ....Res?ondents'

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counset for the Applicant^{: Mr.Abhay Singh} Counsel for 7't Respondent^{: Mr.Hemanth Kumar Vemuri} Counsel for 2nd Respondent^{: Mr'VanamRamesh}

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-: ol-9EB:-

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The Applicant^filed the^{present Securitlsation Applicationu/s 17} of the Securitization and^{Reconstruction of FinancialAssets and} Enforcement of Security^{Interest Act, 2OO2(hereinafter referredto as} "the Act") to declare^{the impugned e-auction sale noticedated} 07,04.2025 fixing auctlon of^{application schedulepropertyon} 15.05.2025 as arbitrary,^{illegal, null and void and againstthe} ffia*

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provisions of the Act, 2002 and set aside the defecuve possession notice dated 20.o1.2025.

¶16

The case of the applicant, in brief, is that the applicant availed loan facility against mortgage of the SA schedule property. In spite of regular payments, the respondent bank issued possession notice dated 20.01.2025 by affixture, and prior to that no demand notice under Sec.13(2) was served. The possession notice was neither served nor published as per Rule 8(2) of the Security Interest (Enforcement) Rules, 2002 ("Rules,, for short hereinafter). The respondent bank failed to serve 3o-days notice under Rule g(6). The respondent bank also failed to serve publish and affix the impugned e-auction sale notice as required under Rules g(7) and 9(1). The reserve price fixed at Rs.84 lakhs was meagre whereas the market value of the property is about Rs.1.5 crores and below the reasonable market value of Rs.88.38 lakhs thus, respondent bank failed to follow Rule 8(5) of the Rules, 2002. The respondent bank took physicat possession of the schedule property on 29.07,2025 through advocate commissioner in Crl.Mp No.63/2025 in a high handed manner in respect of third floor and penthouse also whereas the Warrant speaks about only ground and first floor. No panchanama was served. There is violation of Rules^g(3) and 9(4) of the Rules, 2OO2 in payment of 25o/o of bid amount and balance sale consideration. Hence this SA.

¶17

The 1st respondent bank filed reply statement and additional reply statement. The submissions, inter-alia. are that the applicant along with two others availed mortgage loan of Rs.29.gO lakhs and defaulted in repayment therefore account became NpA on 29.O7 .2024 as per RBI guidelines followed by initiation of Securitization proceedings by issuing demand notice dated 01.0g.2024 under

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Sec.13(2) of the Act,^{2002. As the demand notice was returnedas} unserved, the same^{was publishedin two newspapers besides} afflxture as^{perRule 3 of the Rules,2OO2' As no payment was made} respondent bank^{issued possessionnotice dated 20.01.2025, sent by} registered post to the^{applicant which wasreturnedunserved;and} the same was duly affixed^{on the conspicuouspart of the secured} asset and^{published in English and Telugu (vernacular) newspapers} on 25.01.2025.^{Thereafter respondent bank obtalned valuationreport} from the approved valuer^{on 7403.2024 strictly in accordance with} the^{prescribed Rule8(5)and principle laid down by Hon'ble Karnataka} High Court in^{Soumya Engineeringand Ors' vs The Chief Manager'} Indian Bank and Ors.^{(MANU/KA/1044/2022) and confirmedby the} Hon'ble Supreme^{Courtin SLP(C)No.11930of 2022'The Rule 8(6)} notice was sent by^{registered post therebyprovidingopportunity} under Sec.13(8)^{of the Act to exerciseright of redemption but to no} avail. Hence the^{respondentbank issued e-auction sale notice dated} 07.04.2025 fixing^{auction of the scheduleproperty on 15 05 2025'} sent the same^{by registeredpost to the applicant, affixed on the} schedule^{propertyand publishedin two newspapers on 11 04 2025'} The present application^{challenging the demandnoticedated} 01.08.2024,^{possessionnotice dated 20 'Ol '2024and Rule8(6) notice} dated 30.01.2025^{is barred by limitation' A public auctioncan only be} set aside where the^{materialon recordclearly reveals undervaluation'} fraud or collusion^{wherethe applicantfailed to prove any suchthing'} Accordingly application^{is liableto be dismissedwithcosts'}

¶21

The^{2nd respondent-auction purchaser filed reply statement'} The submissions briefly^{are that she participated in the auction held} by respondent^{bank on 15.05.2025 afterdepositingEMD of Rs 8'40} lakhs and. stood^{as successfulbidder. She} '^{paid 25o/o olbid amounton} Tflwottt

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16.05.2025 and vide letter dated 26.05.2025 sought three months, time to pay the balance amount due to litigation created by the applicant. Time granted by the bank was well within time prescribed under Rule 9(4) of the Rules, 2002. The applicant was residing in ground floor the schedule property, and the respondent bank legally got vacated the applicant and the tenants. The 2nd respondent won the bidding at Rs.1,10,04,000/- which was more than the market value and far higher than the vatue of Rs.4O,44,2OO/- obtained by the 2nd respondent on 05.12.2025 from SRO, Uppal. Even after obtaining sale certificate the 2nd respondent was not able to take possession of the ground floor as the applicant did not remove the furniture in spite of assurance that he had given which forced the 1.t respondent bank to file a complaint at Nagole pS. The applicant collusively got filed OS No,709/2025 against him through a third party, for speciftc performance basing on a created agreement of sale of ZO22. Though there is ad interim injunction order in OS against the applicant, the same is not binding either on 1.t respondent or the 2nd respondent as they are not parties to the said civil suit. The applicant approached the Tribunal with unclean hand hence application is liable to be dismissed with costs.

¶25

Heard learned counsel for the applicant, learned counsel for the 1't respondent bank as well as learned counsel for the 2nd respondent-auction purchaser. perused the written arguments filed on behalf of each of the parties along with the material brought on record.

¶26

The learned counsel for the Applicant contended that the demand notice dated 01.08.2024 was not duly served upon the Applicant. Though the Respondent No.1 has produced the demand

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notice and certain^{postaldocuments, the postal covers and} endorsements^{relied upon by the Respondentdo not establishvalid} and effective^{serviceupon the Appllcant. Where the authorized officer} has reason to^{believethat the borrower or his agent is avoidlng} service, or^{where service cannot otherwisebe effected,the proviso to} Rule 3 contemplates^{affixture of a copy of the demand noticeon the} outer door or^{some other conspicuous part of the house or building} where the borrower^{ordinarilyresidesor carries on business'coupled} with^{publicationin two leading newspapers'Consequently' itis} argued that^{all subsequent measuresfounded upon the alleged} service of^{the demand notice are liable to be interferedwith'}

¶31

Learned^{counselfurther submitted that although the} Respondent^{No'1 has relied uponPostal documentsto contend that} the^{possessionnotice was served,the postat endorsementsrelied} upon by the^{Respondentare not tegible' the photograph relied upon} by the^{Respondentdoes not establishwhen and in what manner the} possession notice^{was affixed' Thus'the Respondenthas failedto} establishcompliancewiththeStatutoryproceduregoverningthe service and^{afFixture of the possession notice'}

¶32

The Applicant's^{specific arievance is that the Respondent failed} to compty^{with the safeguards and did not establish that the requisite} panchnama/inventory^{was preparedand served uponthe Applicantas} mandatedunderRule4ofthesecuritylnterest(Enforcement)RUleS. It is also^{contended that the Advocate Commissioner exceeded the} mandate^{of the warrantby takingpossessionof other floor other than} the^{ground floor and first floor of the oropertya-s- per the Warrant'} /$"*

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One of the principal grounds urged by the Applicant concerns the valuation of the secured asset. The Applicant relies upon Rule 8(5) of the Security Interest (Enforcement) Rules, 2002, which requires the authorized officer, before effecting sale of the immovable secured asset, to obtain the valuation of the property from an approved valuer and, in consultation with the secured creditor, fix the reserve price. It is contended that as per chronology of events i.e, Inspection of property - 06.02.2024; Vatuation _ t4.O3.20241 Demand notice - OI.O1.2O24; possession notice _ 20.07.2025; Auction - 15.05.2025; the valuation relied upon by the Respondent was prepared before even the issuance of the demand notice and approximately fourteen months before the auction. Learned counsel therefore submits that the valuation ought to have been obtained proximate to the proposed sale so as to reflect the prevailing market value and enable the authorized officer to take an informed decision regarding the reserve price. In support of the above submission, learned counsel relies upon the judgment of the Telangana High court in venshiv pharma chem (p) Ltd. v. state Bank of rndia, w.p. No.36677 of 2077, judgment dated 06.04.2018 and the principle emerging from the judgment that, before effecting sale, the authorized offlcer is required to obtain an appropriate valuation and fix the reserve price in consultation with the secured creditor. The Applicant particularly relies upon the observation that a vatuation which is considerably old can rixi n s the reserve price, r,.,. J:T, H;lT :i}fi ;:T,:i:: JI and volatility of the real ( acknowredses that the sa id r rortllt", ;:t:::rJ::r#:ff::J :: an SLP and that the matter rhererore, the Appricant ."",,JT".':t:i:j ;"il::l ji: :iff: precedent but submits that the reasoning ,entained therein

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constitutes useful^{guldancein appreciatingthe requirements of Rule} 8(s).

¶40

It is further contended^{that in the decisionof the Hon'bleDebts} Recovery Appellate^{Tribunal, Kolkatain Abhyiyudha FarmsPvt'} Ltd. v. Kanaka Mahalakshmi^{Agro Industries & Ors', reliedupon} by the Respondent^{Bank, the facts are distinguishable' According to} the Applicant,^{in the said case the valuation was obtained on} 25.Og.2)lg, whlte^{the auctionwas fixed on 30'06'2020,thereby} leaving approximately^{nine monthsbetweenvaluation and auction' In} the present case,^{however, the valuationwas dated L4'03'2024'} whereas the auction^{was conducted on 15'05 2025,i e' morethana} year later, and importantly^{the valuation itselfwas obtainedeven} before the demand^{notice dated 01'08'2024'The learnedcounsel} also submits^{that the judgmentrelled upon by respondent bank in} Soumya Engineering^{& Ors. v' Chief Manager, IndianBank &} Ors, is distinguishable^{because, in that case' the valuation was} obtained^{relatively close to the date of sale'}

¶41

The^{learnedcounselalso contendedthat the valuation report} itself disclosed^{that the} Property^{comprised three floors'whereas the} amount allegedly^{due underthe demand noticewas approximately} Rs.17,04,190.46.^{According to the Applicant,the authorizedofficer} was required to^{apply his mlndas to whetherthe entire property was} necessary to^{satisfythe outstandingdebt or whether a smaller} portion of the^{property would have been sufFicientLearnedcounsel} for the Applicant^{relies upon the princiPle that the secured creditor} should not sell^{more of the securedpropertythan is reasonably} necessary for^{recoveryof the outstandingduesReliance placedupon} the Supreme^{court judgmentreported in arn} r#f-.,sc.r_\119' Lt/'n';'

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concerning the sale of only such portion of property as is necessary to satisfy the decree, and upon Swastik Agency v. State Bank of India, AIR 2009 Ori 147. The submission is that the statutory power of sale cannot be exercised mechanically. The authorized officer is required to consider the extent of property necessary for recovery of the debt and cannot blindly put the entire secured asset to sale when a portion may be sufficient to satisfy the outstanding liability.

¶45

The learned counsel specifically challenges the validity of the sale notice under Rule g(6). The sale notice is stated to be dated 07.O4.2025. The Applicant contends that the notice was served upon hlm only on 15.04.2025, whereas the auction was conducted on 15.05.2025. Thus, the statutory period of thirty clear days was not properly complied with. The Applicant therefore contends that conducting the auction on 15.05.2025, after service of the notice on 75.04.2025, amounted to conducting the sale before expiry of the mandatory notice period. He placed reliance upon the decision of the Hon'ble Telangana High Court in Kalyani Renewable Energy India Pvt. Ltd. & 2 Others v, Authorised Officer, State Bank of India & Another, W.p. No.22OO3 of 2}tg, judgment dated 16.12.2019. wherein the principle laid is that while computing the statutory period of thirty days, the relevant dates of publication and sale have to be properly considered and the statutory requirement of a clear thirtyday interval has to be satisfied. The learned counsel further relies upon the judgment of the Hon,ble Kerala High Court in E.K, Rajan v. Authorised Officer, Canara Bank, wherein the principles ftowing from Mathew Varghese v. M. Amritha Kumar were considered. Accordingly, any sale conducted without giving the borrower the complete statutory notice period would materially prejudice the (&'-'t

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borrower's right^{of redemptionand cannotbe treated as a mere} technical^{irregularitY.}

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Learned^{counselfurtherpleadedviolation of Rule8(7) of the} Security Interest^{(Enforcement) Rules,2002 It is submitted that the} Respondent^{No.1 has not producedsumcient documentary materialto} establish that^{the mandatory requirementsunder Rule 8(7) were} complied^with.

¶50

L4. Learned^{counselfurtherpoints out that the entiresale} consideration^{was allegedly received only on 13 08 2025' whereas} the Sale^{CertiRcatewas issuedon 12'08'2025' Thus' accordingto the} Applicant,^{the Sale Certificate wasissued one day before receipt of} theentiresaleconsideration'TheAPplicantsubmitsthatunderRule 9(6), the^{sale certificate is to be issued uponconfirmation of sale and} compliance^{with the terms of payment' A sale certificate could not'} according^{to the Applicant, have been validlyissuedin antlcipationof} receipt of^{the balance consideration Learnedcounsel specifically} reliesUpontheStatutorylanguageofRuleg(4),underwhichthe balance^{purchaseprice is required to be paid withinthe prescribed} period, subject^{to the permissibleextensionRule 9(6) contemplates} lssuanceofthesalecertificateonlyuponconnrmationofthesaleand compliance^{with the terms of payment Therefore' the Applicant} argues that^{the sequenceadopted by the Respondent is legally} imPermissible:

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l5.ThelearnedcounselfortheApplicantseekstodistinguishthe decisions^{relied upon by the RespondentBank in celir LLP v' Bafna} Motors^{(Mumbai) Pvt' Ltd' and other judgmentsincludingM'} nuj"nOr"n.v.^{KPK Oils and Proteins hdia Pvt' Ltd' on the}

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9round that they dealt with circumstances where the sale had attained a substantially different level of finality and where the statutory requirements relating to payment and issuance/registration of the sale certificate had already been substantially fulfilled. The Applicant relies upon the Supreme Court,s discussion in E. Muthurathinasabathy & Ors. v. Sri fnternational & Ors., as extracted in the apprication. to contend that statutory timerines governing payment of the sale consideration cannot be casually disregarded. Learned counset specifically argues that reliance on M. Raiendran v. KpK Oils and proteins India pvt, Ltd. is misplaced. According to him, the Supreme Court in that case was concerned primarily with the interpretation of Section 13(8) and the stage at which the borrower's right of redemption stands curtaired in the context of a completed statutory auction process. According to learned counsel, the principle in M. Rajendran case cannot be mechanically applied to validat conducted contrary to,n" r"";;; ::::J:.ffiH:::rT: SARFAESI Act and Ru|es.

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Learned counsel furthe demonstrated tris wirinsness,"':1I,,.],.J";"tT"lTff[^t;: deposited Rs.2,15,000/_ on 30. 06. 2o2s; and Rs. s4,ooo7- l" ;: T;::' r. ff :.ttJ:,t:;,,, ": request that the amount be transferred to the loan account.

¶57

The learned counsel for t or the supreme court in ".I T:J:il[lT.'il1""llTI-J otficer, 2026 INSC 633 wherein it was considered iir, an" :::::::.:::rict and the equities surroundine the auction sare, the Tribunal and Court should e xamin p e the rha ^,*.._--: circumstances _^'"" :'''"""in their

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entirety. The^{Applicantsubmits that the record discloses repeated} attempts on^{his part to secure an opportunity to redeem the property} and discharge^{the liability. Therefore, the Applicant argues that the} matter cannot^{be rejected merelyon the ground that the auctionhad} already been^{conducted, particularly wherethe statutory procedure} itself is alleged^{to have been breachedat several stages'}

¶62

On the^{basisof the above submissions,the Applicantultimately} seeks settlng^{aside of the SARFAESIproceedingsand the Sale} certificateandrestorationofpossessionoftheApplicationSchedule Property.

¶63

Per contra,^{Iearned counsel for the 1't RespondentBank} submitted that^{the Applicant,alongwith two other persons'namely} Mr. Dasu^{Konidala and Mr' Israel Konidala'availed a MortgageLoan} of RS.29,8O,OO0/-^{from the RespondentBank It is submitted that the} Application^{Schedule Propertywas duly mortgagedin favourof the} Respondent^{Bank as security for repaymentof the said mortgage} loan.TheSecurityinterestcreatedovertheApplicationSchedule Property^{was also duly registeredwith the Central Registry under the} provisions of the^{SARFAESI Act on 1O'12 2014 Therefore'according} to the Bank,^{thereis no dispute regarding the existence of a valid and} enforceable^{security interest in favourof the Bank'}

¶64

The^{learnedcounsel for the Respondent Bank raisesa} preliminary and^{specific objection that the presentS'A' challenging} thedemandnotice,possessionnotice,Rules(6)noticeisbarredby limitation^{as section17 of the SARFAESIAct provides only a period of} 45 days^{for an aggrieved person to approach the Debts Recovery} rribunal against^{the measurestaken under t%Ui,t?} ""

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Applicant cannot wait beyond the statutory limitation period and subsequently challenge earlier SARFAESI measures after the enforcement process has progressed substantially. The Bank accordingly seeks rejection of the challenges to the earlier measures as being barred by limitation.

¶69

The learned counsel for the Respondent Bank submits that the Applicant committed persistent defaults in repayment of the interest/EMI amounts. Consequenuy, in accordance with the applicable Reserve Bank of India guidelines, the loan account was classified as Non-performing Asset (NpA) with effect from 29.07.2024. It is therefore submitted that the SARFAESI proceedings were not initiated arbitrarily or prematurely but only after the Applicant's failure to discharge his contractual repayment obligations.

¶70

The learned counsel for Respondent No.1 would submit that the Bank issued a Demand Notice dated 01.08.2024 under Section 13(2) of the SARFAESI Act, 2002. The notice was duly sent to the correct address of the Applicant which is same as in the cause tiUe, through Registered post. Due to return of the same as unserved, the Bank thereafter caused publication of the Demand Notice dated Ol.OA.2O24 in two newspapers on 14,09.2024. Thus, according to the Respondent, all reasonable and prescribed steps were taken to bring the demand notice to the knowledge of the Applicant. Learned counsel further submits that, after giving the Applicant more than the statutory period of 60 days, it issued the possession Notice dated 20'01 2025 under section 73(4) of the SARFAESI Act and thereby took symbolic possession of the Application Schedule propefty. According to the Respondent, the possession notice was duly dispatched to the Appticant through Registered f?it. Though the

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postal article was returned^{unserved/ the Bank Proceededto comply} with the alternative^{statutory requirements'The PossessionNotlce} was affixed at a^{conspicuouspart of the ApplicationSchedule} Property; and^{published in one Engllsh newspaperand one vernacular} Telugu newspaper^{on 25.01'2025Learned counseltherefore} contends that^{the statutoryrequirementsrelating to possession} notice were^{duly comPliedwith.}

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Learned^{counsel also submits that the Bank duly obtained} valuation of^{the Application Schedule ProPerty from its approved} Valuerandfixedthereservepriceinaccordancewiththeprocedure adopted by^{the securedcreditorand its Board-apProvedpolicy'} Therefore the^{statutory requirement regardingvaluation and fixation} ofreservepriceWasdulyfollowed.Hereliesuponthejudgmentof the Division^{Bench of the Hon'ble Karnataka HighCourt in Soumya} Engineering^{& Ors. v. Chief Manager'Indian Bank & Ors"} MANU/KA/1044 12022,^{which, accordingto the Respondent'was} subsequently^{upheld by the Hon'ble SupremeCourt in SLP(C)} No'llg3ool2r,22,TheBankreliesupontheprinciplethatRuleS(5) requires^{the authorised officer to obtain valuationfrom an approved} valuer and,^{in consultation with the secured creditor' fix the reserve} prlce. The learned^{counsel particularlyrelies upon the reasoning that} Rule 8(5)^{does not contemplate obtaining a fresh valuation report for} each and^{every sale notice He refers to a situation where the} valuation had^{been obtained one year and three months prior to the} sale notice, and^{the Courtheld that there was no requirement of} obtaining^{a fresh valuation merely becausesometime had elapsed'} Therefore,^{according to the learned counselfor the Bank'the} Applicant's^{contention that the valuation was invalid tlx:l'outu""} it was obtained^{earlf er in timeis legally unsuslainabb/m"r'*}

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¶78

Learned counsel submits that the judgments relied upon by the Applicant, inctuding the judgment reported in AIR 1990 SC 119 and the decision in Swastik Agencies, have no application to the facts of the present case. The Bank,s specific submission is that the Application Schedule property is the only property mortgaged by the Applicant as security for the credit facility. It is not a case where the Applicant mortgaged separate floors as independent units capable of being separately sold. According to the Bank, the Applicant mortgaged the entire building as one single unit, and not muttiple independent units consisting of one floor each with corresponding undivided shares. Therefore, the argument that the Bank should have sold only one floor instead of the entire building is, according to the Respondent, legally and practically untenable. The learned counset further submits that dividing the building into individual floors and selling only one floor would be impractical because the property was mortgaged as a single composite security. The Bank therefore contends that it cannot be compelled to artificially divide the secured asset merely because the Applicant now seeks to contend that a smaller portion should have been sold.

¶79

The learned counsel for the Bank submits that, since the Applicant failed to repay the amount demanded under the Demand Notice and^possession Notice, the Respondent was left with no alternative but to proceed with the sale process. Accordingly, the Bank issued the Notice Before sale dated 30.01.2025 unAer Rute e1o) of the security Interest (Enforcement) Rures, 2002. The notice was sent to the Applicant through Registered post and thereby provided the Appricant an opportunity to exercise the right avairabre under section 13(8) of the SARFAEST Act. The Bank,s case is that despite ffi'**

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being given sufficient^{opportunity,the Applicantdid not clear the} dues.

¶83

Since the Applicant^{continued to remain in default, the} Respondent Bank^{issued an e-AuctionNoticedated07'04 2025 under} Rule 9(1) of the^{SecurityInterest (Enforcement) Rules, 2002' The} publlc e-auction was scheduled^{for 15.05.2025' The Bank submits} that the e-Auction^{Noticewas duly sent to the Applicantthrough} Registered Post; atfixed^{at a conspicuousplace of the Application} Schedule Property;^{and published in two newspaperson 11'042025'} Therefore, accordlng^{to the Respondent,the requirements governing} publication and service^{of the sale notice were duly complied with'} 27. According^{to the Bank, the Applicant approachedthe Tribunalat} the fag end of^{the proceedingswith the objectof delayingthe} legitimate^{recoveryaction of the Bankratherthan with a genuine} intention to^{dischargethe liabilityThe Bank therefore submits that} the conduct of^{the Applicant disentltles him from obtaining} discretionary^{relief from the Tribunal'}

¶84

2A. According^{to the RespondentBank' the e-Auction Notice was} daled 07.04.2025,^{was duly dispatched to the Applicant'and was} thereafter^{publishedin two newspapers on 11 04'2025The auction} was conducted^{on 15.05'2025 The Bank therefore submits that the} auctionwasheldaftertheexpiryoftheprescribedthirty.dayperiod andthattherewasnoViolationofRule8(6).Learnedcounselplaced reliance upon^{the Hon'ble Supreme Courtjudgmentin M' Rajendran} v. M/s^{KPK Oils and Proteins India Pvt' Ltd'' 2025 INSC 113'} TheBankreliesupontheHon,blesupremecourt'sinterpretationof Rules I and 9^{of the SARFAESIRules' particularly the scheme} governing notice^{of sale.The Respondentrelies l*en-the principle} //XV-xt\t U'r9'"

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that, under the scheme of the SARFAESI Rutes, Rule 8(6) is the relevant provision governing the notice of sale, while Rule 9 deals with the sale itself and the subsequent formalities. The Bank particularly relies upon the Supreme Court,s observation that the reference to^,'public notice,, in Rule 9(1) does not create a requirement for an entirely separate and independent notice apart from the notice contemplated under Rule 8(6). Accordingty, the Respondent contends that the Applicant cannot insist upon a separate notice in addition to the valid notice of sale already issued under Rule 8(6). According to the learned counset, Rule 8(6) is the principal provision requiring the notice of sale; Rule g(7) regulates the manner in which such notice is to be affixed/published; and Rule 9(1) refers back to the notice contemplated under Rule g(6). Therefore, the Bank submits that the Applicant,s attempt to treat the provisions as requiring multiple independent sale notices is contrary to the statutory scheme as explained by the Supreme Court.

¶88

The learned counsel further states that in fact the Applicant and his associates ilegaly and forcibry interfered with the Bank,s rawfur possession of the Application Schedule property, including allegedly threatening the Bank officials with dire consequences. The Bank therefore submits that the Applicant cannot seek equitable relief by relying upon his own areged obstruction of the rawfur enforcement proceedings.

¶89

The learned counsel for the Respondent Bank submits that the auction process culminated in a successful public auction and that the Tribunal should be slow to interfere with a concluded auction untess the Applicant establishes a substantial and legally recognised ground for doing so. For this proposition, learneg,f,ounsel ."1,". ,p;" ;;;

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recent^judgment of the^{Hon'ble Division Bench of the Telangana High} court dated^{28.07.2026 in W'P. Nos.24552 and 24642 ot 2025'} M/s Aditya Constructions^{v. DRATKolkata & Others'TheBank} relles upon the^{principle that a confirmed auction can ordinarily be} interfered with only^{on extremely limited grounds because repeated} interference with^{public auctions would defeat their very purpose and} undermine^{public confidence in the auctionprocess'}

¶93

Learned^{counselalso relies upon the judgementin Celir LLP v'} Bafna Motors^{(Mumbai)Pvt. Ltd' He submltsthat an auction} conducted through a^{public processcannot be lightly disturbed} merely because^{the borrower subsequentlyseeks to raise objections'} According to the^{Respondent,interferencewould be justified only} where the record^{establishes circumstances such as sale for a wholly} inadequate or^{unrealistic conslderation; fraud; collusion;or material} irregularity/illegality^{in conductlng the auction ln the absenceof such} circumstances,^{the sanctity of the public auction ought to be} protected.

¶94

With^{the above} submissions,^{the learnedcounsel for the} that the S.A.^{be dismissedwith costs'} Respondent^Bank Prays

¶95

Learned counsel^{for the Respondent-AuctionPurchaser} submitted^{that the 2nd Respondentis a bonafide purchaser of the} application^{schedulepropertyfor a value considerationthrougha} public auction conducted^{on 15 05 2025 by the 1't RespondentBank} pursuant to^{publication of e-auction sale notice She depositedEMD} ofRS.S.4Olakhsonl3.o5.2O25,afteremerglngassuccessfulbidder she further^{paid 25o/o of the bid amount' including EMDon} 16,O5,2ll6.Thereafter,duetolitlqatloncreatedby![eApplicant'2"d

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SA No.20sl2025

Respondent sought extension of time and accordingly paid the balance 75olo of the sale price i.e., Rs. B2,53.OOO/- well within the maximum statutory period of 90 days allowed under Rule 9(4) of the Security Interest (Enforcement) Rules, 2002. The extension request submitted on 26.05.2025 was necessitated by the Applicant,s failure to vacate the premises, which delayed the private bank,s evaluation of the physical dimensions for home loan clearance. The secured creditor (Union Bank of India) formally accepted and permitted the extension on 28.05.2025, validating the timeline extension up to 13.08.20 2 5.

¶100

Learned counsel further submitted that the funds (Rs. 47,53,0O0/- via RTGS and the loan amount of Rs. 36,32,439l-) were fully initiated and processed on 12.0g.2025, which is the exact date the Sale Certificate was issued. The one-day lag showing the debit reflection on 13.08.2025 was stricfly due to banking clearing systems and updates, not due to any omission, negligence, or delay by the purchaser. Under established banking law, initiation of payment within the deadline constitutes compliance.

¶101

It is further submitted that the 2nd Respondent bid an amount higher than the bank,s formal market valuation and above local circle rates. The Applicant,s assertion that the property is worth Rs. 1.5 Crores is completely imaginary, self-serving, and completely unsupported by any certified valuation report or documentary proof.

¶102

The Applicant has approached the Tribunal with unclean hands, suppressing materiar facts to stal a regaly concruded pubric auction. Despite agreeing on Z4.Og.ZO25 to remove their household furniture, the Applicant created a ruckus and illegally re_occupied the ground

Knq'tt

Pate 19 ot 22

sA No.20sl202s

floor. This unlawful activity^{resultedin a formal criminal complaint} being lodged at^{the NagolePoliceStationby the 1't Respondent Bank'}

¶107

With the above^{submissions,learned counselsoughtfor} dismissal of^{the SA withcosts'}

¶108

The^{points for consideration are as follows : -}

¶109

i) Whether the applicant^{madeout any validground.to} quash the measLtres of the 7"^{Respondent Bank including} ihe e-auction^{sale held on 15'05'2025 and consequential} sale ceftificate^{issued in favour of 2nd Respondent-Auction} Purchaser in respect^{of the SA schedule property?}

¶110

ii) To what^relief?

¶111

Point No.(i'l:

¶112

Admittedly^{the Applicantalong with two others availed loan} facility from the^{Respondent Bank against mortgageof the application} schedule ProPertY.

¶113

Section^{17(1) of the SARFAESI Act enforcesa strictlimitation} period of 45 days from^{the datea secure measureis executed' The} possession notice was^{issued on 20} '01'2025^{and publishedin major} newspapers on^{25.01.2025.The Applicant failed to file any} application^{within 45 days of 25 'O1'ZOZ5 'A borrower cannot} deliberately^{wait for the entire auction processto conclude and then} attempt to^{challenge the Pretiminary steps of the enforcementcycle'} The chatlenges^{againstthe notices datedO:.'O8'2024and 20 01 2025} are strictly^{barred by llmitation and SA as far challenge against} demand notice,^{possessionnoticeand Rule 8(6) notiqe is liable to be} dismissed^{on this ground alone.} ffilux\

¶114

page 20 ot 22

¶115

sa No.205/2025

¶116

However, the material placed on record by the 1sr Respondent Bank would connrm that the Applicant was continuously absent at the given address and finally the postal article containing the demand notice was returned with remarks^{..unclaimed,,} on 13.0g.2024. It is settled law that when an article is returned as ..unclaimed,, it is a deemed and proper service. In addition, the 1.t Respondent Bank also got published the demand notice. Hence the contention on non_ service of demand notice does not deserve acceptance. The possession notice dated 2O.O1.2025 was sent by registered post to the address of the Applicant which was returned unserved with postal remarks as "no such person,,. possession notice was published and affixed. In view of the sufficient proof material placed on record, this Tribunal finds no infraction of Secs.13(2), 13(4) of the Act and Rutes 3, 8(1) and 8(2) of the Rules of 2002.

¶117

Regarding the pre-auction window, the e_auction notice was daled 07.04.2025, published on LL.O4.2O2S, and the auction took place on 15.05.2025. Following the Apex Court,s guidance in M, Rajendran (supra), the timeline is calculated from the date of public advertisement and notice to the date of actual sale. A clear 3O_day statutory interval was maintained, making the auction on 15.05.2025 procedurally valid. Admittedly the Applicant received the sale notice. It is not the case of the Applicant after receipt of the notice he exercised right of redemption by clearing the outstanding amount before publication of sale ntoice.

¶118

As regards contention of the Applicant on valuation dated 74.03.2024, and the auction took place on 15.05.2025, as established by the Hon,ble Karnataka High Court in Soumya Engineering, a valuation secured roughly a ygjr{ prio.r d.qes not ///Y''un'th. (,>/

¶119

PaEe 2L of²²

¶120

SA No.20sl202s

¶121

automatically^{lose its legal validity,and the Bank ls not required to} pull fresh valuation updates^{for every consecutive sale notice} Furthermore, the^{property is an integrated,multi-floorbuildingunit} mortgaged under^{a singlecompositetitle deed' It does not consist of} independent^{flats wlth separate undivided shares'It is technicallyand} legally impossible^{to compela securedcreditor to split an integrated} building structure^{to execute piecemeal sales for partialdebt} clearances.

¶122

On the^{point whetherthere is any violationin the payment} timelines or the^{execution of the Sale Certificate, thesuccessful} bidder^{paid25olo componentimmediately on 16'05'2025 Due to the} active disruptions^{and hurdles createdby the APplicant'the Bank} Iegally extended^{the balance payment deadline' whichperfectlv} matches the^{go-day structural ceiling allowed under Rule 9(4) The} entire consideration^{was fully transmittedthroughRTGS and loan} clearing channels^{on 12.08'2025, matching the date the Sale} Certificate was^{issued. The single-daylag for the transactionto reflect} on13.0s.2025Wasduetostandardbankingclearinghouseprotocols. Under^{establishedfinanciallaws, the initiationand processing of} funds within^{the deadline constitutes absolute compliance'}

¶123

'Although^{the Applicant claims discretionaryreliefbased on} equity and^{payments ofRS'2,15'OO0/-' Rs 1'OO'000/-'and} Rs.54,000/-,^{the Applicant's conductgives an unfavourable oplnion'} After the^{auction concluded,he breachedhis commitment to clear his} personal effects,^{actively obstructedthe auction purchaser' and} illegally^{re-occupiedthe ground floor' This led to a formal criminal} complaint^{at the Nagole Police StationEquitable and discretionary} //fr9,"6ab

(//",,,.

Page 22 of 22

sA No.20sl2025

interventions cannot be granted to a litigant who displays unclean hands and uses physical force to disrupt the course of law.

¶128

In the light of above discussion, it is held that the Applicant has failed to establish any valid ground to set aside the measures of the 1't Respondent Bank, incruding e-auction sare herd on 15.05.2025, sale certificate issued in favour of 2nd Respondent and to consider restoration of possession of the application schedule property. Accordingly the Securitization Application is liable to be dismissed.

¶129

Point No.(ii):

¶130

In the result, the present Securitisation Application fails and is hereby dismissed.

¶131

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

¶132

No order as to costs.

¶133

50' communicate a copy of this order to the parties concerned and upload in the official website.

¶134

(Typed to my dictotion by the Steno t n" he s,n Tsth ddy aav'oo f iii.^;:.";;;;i., septe.o", ,iiii. corrected, signed and pronounced by me in the open court on this

¶135

.lUdo

¶136

(RAMESHWAR KOTHE) PRESIDING OFFICER

¶137

¶138

sA 205/2s

¶139

to Power failure.^{For orders, call on} 02.09.2026 Orders not Passed^due 1s.09.2026.

¶140

15.09.2026

¶141

Order^{pronouncedvide separate sheets. In the result,the} sA fails and is^{hereby dismissed.consequently,} Interlocutory^{Applications pending, if any, shall stand closed'} No order as to^{costs. communicatea copy of this order to} the^parties concerned^{and upload in the official website'}

¶142

,,,tr),wyL,-,nl'vlb ,' /: '"^"<-1b" P.o.

¶143

	tr) sA.NO.20sl202s
25.06.2026.	Applicant, R1and2reportedready.Duetopaucityof time,callon08.07.2026. ,,lt /i./l)^ P.O>
08.07.2026.	SriSudhir BhanrepresentingAScounselforapplicant requestedtimeforargumentsduetopersonal inconvenience.R1alsorequestedtimeforarguments. Heard argumentsofR2throughSriVRamesh.For appricantandR1 argurnents,cailon20.07.2026asrast chance andfinally andconditionally. Au?.6
20.07.2026. 28.07.202	Counselsforapplicantand1 R2requestedtimeforfiling callon 28.07.2026. reported ready.Counselfor receive documentspetition, 6CounselforapplicantandR1reported readyforarguments. R2filedanIA,check and callon31.07.2026positively. ,^*\o P.O.
07.08.2026 31'07.2026	Sri Virendra representingAS Respondentreportedno counter inIA265t/26.Heardandallowedsubjecttop.ooiana rerevancyandadmissibility, documents aretakenonrecords. Cailon07.08.2026. P.O. Heardtheargumentsof l:I_*,^{and2 prese;;"::lt:ltthroushsri{tr6ySinshin} arsumenrs,.",;;;;;1:J:,r,il;fld[[",ro.r,,tnu. fiw
t 10.08.2026	P.O. rd:ffi{tq%

¶144

P.0.

Sri Ayyanna Konidala v. Union Bank of India

Case brief

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Sri Ayyanna Konidala v. Union Bank of India

Case brief

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