Dismissed

Hemalatha Granites and Another v. Indian Overseas Bank

DRT26 Mar 2026SA/236/2024

Case brief

AI extract

What is this about?

Debts Recovery Tribunal dismissed the applicants petition challenging the sale notice issued by a bank under the SARFAESI Act. The court noted the auction failed due to lack of bidders, rendering the plea infructuous without adjudicating the notice's validity, but directed the bank to issue a fresh notice following proper procedure.

What did the court decide?

Response to the sale notice filed by the bank became infructuous due to a failed auction. The petition was dismissed and the bank was directed to issue a fresh sale notice.

Hemalatha Granites and Another versus Indian Overseas Bank — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERYTRIBUNAL- I AT HYDERABAD

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DATED THIS THE 26TH DAY OF MARCH, 2026

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PRESENT: SRI GUMMADI GoPICHAND, PRESIDING oFFICER

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sA.No.236./2024

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M/s Hemalatha Granites Rep. by its Proprietor Siddineni Karuna Kumar, S/o Kotaiah, aged 45 years, Occ:business, O/o Sy.No.40, Adjacent to Gollapadu Road, M.Venkatayapalem, Khammam rural Mandal, Khammam District.

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Siddineni Karuna Kumar, S/o Kotaiha, aged 45 years, Occ:business , R/ o 3-82 , Block No. 1 to 3, Gudurupadu(V), Khammam District. ... Applicants

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Versus

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Indian Overseas Bank Naidupet branch, Naidupet, Khammam-507003 Rep. by its Authorized Officer

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.. . Respondent

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Counsel for the Applicant Counselfor Respondent

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: Si K.Kranthi latmar : SiA. Venkataramagg a

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Reseraed on Pronounced on Uploaded to tle website on

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:28.01.2O26 : 26.03.2026 :26.03.2O26

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ORDER

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This 17 ofthe Securitization and Reconstruction of Assef,ff and rcement of Security Interest Act,2OO2 ESI Act,2002) the Sale Notice dt. 17.05.2024 issued by 26ilAH

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the Respondent Bank for conducting auction of the schedule property on 25.06.2024 and to declare the same as null and void.

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The averments made by the Applicants in brief are as follows:

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Applicant No. I represented by Applicant No.2 availed credit facilities from the Respondent Bank by creating mortgage in respect of the schedule property in the year 2ol2 for development of business. Due to loss in the business, the Applicants could not pay some instalments and the Respondent classified the loan account as NpA without following the guidelines of RBI. without issuing demand notice, possession notice and notice u/r 8(6), the Respondent straightaway, issued Sale Notice dt.t7.05.2o24 and the said notice was neither affixed on the schedule property nor published in two reading newspapers. The Respondent bank failed to follow Rule 8(1x2x6x7)&9(l) of Security Interest (Enforcement) Rules, 2002. The Respondent bank undervarued the schedule property and the reserve price fixed is very low. Hence the SA.

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Respondent Bank filed their Reply denying a[ the adverse aflegations made in the sA and contended that the Appricants ava ed rerm loan by creating mortgage in respect of the schedule propert5r. In view of the default committed by the Applicants in repaying the 10an dues, the 10an account was declared as NpA on 30.09.2016 and 30.04.20rg and later, the same was regularized. Thereafter, again, the 10an account of the Applicants was classilied as NpA on 31.o7.201g as per the RBI guidelines and the Bank initiated proceedings under the provisions of sARFAESI Act, 2002 and issued demand notice dt.07.os.201g and possession notice dt.2g.03.2019 and the said t to the Applicants and other guarantors through ion notice was published in Sakshi and and also affxed on the schedule Sale Notices several times on 28 .08 S::iH{u'kr,TI 0 and got failed every time due to WrtsP

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want of bidders. Thereafter, the Applicants requested the Bank for oTS and the Bank sanctioned the same but the Applicants failed to pay the orS amount and so, the ors got expired.. Thereafter, the bank issued the impugned sale Notice dt.17.05.2024 and sent the said notice to the Applicants through Regd.post and the said notice was duly published in two leading newspapers. Thus, the Respondent Bank has duly followed the procedure prescribed under the provisions of SARFAESI Act, 2OO2 and Rules made thereunder in issuing the impugned sale notice for conducting auction of the schedule property. Accordingly, Ld. counsel prayed to dismiss the SA.

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Heard Ld' Counsel for the Applicants and Ld. Counsel for the Respondent. Perused the material brought on record.

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Now the points that arise for consideration are

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ii. whetlrcr the Applicants haue establislrcd. ang uatid ground.s for challenging the impugned. sale Notice d.t.r7.0s.2024 issued. bg the Respondent against ttrc schedule propertg?

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iii. To what relief?

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Polnt lVo.(i|:-

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During the course of arguments, Ld. counser for the Applicants and Ld. Counsel for the Respondent reiterated their respective versions as stated supra.

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There is no dispute regarding the fact that the Applicants availed credit facilitiesfffitagainstthemortgageofschedu1eproperty and ult in repaying the loan dues. After clas Applicants as NpA, the Bank issued the

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t*.t*90d, vfi$zoz+ for conducting auction of the

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schedule property and challenging the same, the Applicants filed the present SA.

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The specific contention of the Applicants is that the Respondent issued the impugned Sale Notice dt.17.O5.2O24 for conducting auction of the schedule property without issuing any prior notices and without following the procedure contemplated under the provisions of SARFAESI Act,2OO2 and Rules made thereunder and so, the said sale notice is not legal and valid and liable to be set aside.

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But the Respondent contended that they have issued all the statutory notices to the Applicants under the provisions of SARFAESI Act,2002 and Rules made thereunder.

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To substantiate their contention, the Respondent Bank filed material documents along with the Reply filed by them. As per the said documents, it is clear that the Bank issued demand notice dt.07.05.2018 u/s 13(2) of the SARFAESI Act, 2OO2 and the said notice was received by the applicant No.2 personally as evidenced by his signature on the copy of the said notice filed by the Bank. When there is no response to the said demand notice, Respondent issued Possession Notice dt.28.03.2019 in respect of the schedule property and sent the said notice to the Applicants through Regd. Post as evidenced by the postal track reports filed by the Bank. The said possession notice was published in English and Telugu daily newspapers as evidenced by the copies of paper publication liled by the Bank. However, the said demand notice and possession notice issued in the y challenged now in the present SA, as the same 1S ,^{the Bank issuedseveral sale notices} .20t 16.O1.2O2O, however, the auction fixed not materialized. So, the Bank ?,t fresh sale notice t7.05.2024 for conducting auction of the

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&'m#

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schedule property or\ 2s.o6.2o24 and the said sale notice was sent to the Applicants by Regd. post as evidenced by the postal track reports filed by the Respondent.

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1 1 . However, in pursuance of the impugned Sale Notice dt.rz .os.2o24, auction as scheduled by the Bank on 2s.o6.2o24 was not materialized for want of bidders. As the auction in respect of the schedule property in pursuance of the impugned Sale Notice dI.IZ.OS.2O24 was not materialized, the relief claimed by the Appricants in the SA becomes infructuous and nothing survives in the present sA for adjudication and there is no need to decide the validity or otherwise of the impugned sare notice. Hence, I am of the opinion that the rerief claimed by the Applicants in the present SA becomes infructuous and the SA is riable to be dismissed. Suffice, if a direction is given to the Respondent bank to issue fresh sale notice for conducting auction of the schedule property by strictly following the procedure contemplated under the provisions of SARFAESI Act,2OO2 and Rules made thereunder.

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Potnt No.(it):-

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In the result, SA 236 / 24 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, court on this $ffi":lf;;;;i"cted'' sisned' and pronounced. bs me inthe open ,f"i*\ sd/-

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sd/(c. coPr cHANDf COPY PRESIDING OFFICER ,y"^{2 6 ilAB )t26 nii} '.'.1, 7ll -?'-L+ 5 6Ff-t. W**

Hemalatha Granites and Another v. Indian Overseas Bank

Case brief

What is this about?

What did the court decide?

Hemalatha Granites and Another v. Indian Overseas Bank

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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