In an application challenging a SARFAESI Act Sale Notice, the Tribunal held that since the auction was stayed and not conducted, the relief claimed became infructuous and the application was dismissed without adjudicating the notice's validity.
Application dismissed; direction to issue fresh sale notice following SARFAESI Act and Rules.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE DEBTS RECOVERYTRIBUNAL - 1 AT HYDERABAD
DATED THIS THE 3RD DAY OF FEBRUARY, 2026
PRESENT: SRI GUMMADI GOPICHAND, PRESIDING OFFICER
| SA.No.24/2..J^24 | |
|---|---|
| 1.LMRConstructions | |
| Rep.byis partners Mr.Gaddam RamakrsihnaReddy& Mr.Gaddam MadhusudhanReddy, H.No.l9-l-37,SastryRod, NewPalvancha-So7115 BhadradriKothagudemDistrict. |
|
| 2. Mr.Gaddam RamakrishnaReddy, S/oMr.Gaddam MadhusudhanReddy, Aged43years, H.No.19-l-37,SastryRod, New Palvancha-SO7115 BhadradriKothagudemDistrict |
|
| 3. Mr.Gaddam MadhusudhanReddy, S/oMr.GaddamRamakrishnaReddy Aged72years, H.No.19-l-37,SastryRod, New Palvancha-SO7115 BhadradriKothagudemDistrict .. |
.Applicants |
| Versus |
ORDER
The Applicant No.1 is a partnership firm represented by its partners Applicant No.2&3. Applicants availed credit facilities from the Respondent No.2 and the Applicant No.3 created mortgage in respect of A& B schedule properties whereas Applicant No.2 created mortgage against C to K schedule properties to secure the said loan facilities. Due to Covid-19 pandemic, the Applicants could not pay some insta-lments and the loan accounts were classified as NPA without following the RBI guideiines. The Respondents issued the impugned Sale Notice dt.2o.72.2023 fixing the date of auction on 25.0L.2O24 without following the procedure. The Respondents failed to serve demand notice and possession notice to the Applicants and the said possession notice r,va-s not affixed on the schedule properties. The Respondent bank failed to fcllow Rule 8(6)&9(1) of Security Interest (Enforcement) Rules, 2OO2.'iire Respondent bank has undervalued the schedule properties. Hence the SA.
&2o.o9.?o23u/s 13(2) SARFAESI ltct ,2OO2 and the said notice was 0 3 FfB'1629 L
sent to the Applicants and also published in two daily newspapers. Thereafter, the Respondent issued possession notice dt.13.09.2023 in respect of the mortgaged properties and the said notice was sent to the Applicants and published in two daily newspapers and also affixed on the schedule properties. Thereafter, the bank issued Sale Notice dt.2o.12.2023 for conducting auction of the schedule properties and the said notice was published in two daily 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 properties. Accordingly, Ld. counsel prayed to dismiss the SA.
ddt ArGffih";fiq e loan accounts of the Applicants as NPA, the #rru i""o$ the rm Sale Notice dt.2O.12.2023 for conducting
3
auction of the schedule properties and challenging the sarne, the Applicants filed the present SA.
B. The specific contention of the Applicants is that without issuing demand notice and possession notice, the Respondents issued the impugned sale Notice dt.2o.12.2o23 for conducting auction of the schedule properties 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.
notice and possession notice to the Applicants as per the contemplated procedure, the Bank issued Sale Notice dt.20.12.2023 for conducting auction of the schedule properties.
Point No.(ii):-
(Dictated to the P.S, transcibed bg her, corrected, signed and pronounced bg me in the open court on this the 3d dag of February, 2026).
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2 issues framed by the court
Whether the applicants established valid grounds to challenge the Sale Notice dated 20.12.2023 issued under the SARFAESI Act?
Whether the relief sought by the applicants survives, given that the auction was stayed and not materialized?
4 provisions across 2 enactments
LMR Constructions Rep. by Gaddam Ramakrishna Reddy and Gaddam Madhusudhan Reddy
Union Bank of India
Gummadi Gopichand
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
