Dismissed

Goka Sushanth Reddy v. City Union Bank Limited

DRT14 Jul 2026SA/260/2025

Case brief

AI extract

What is this about?

Debts Recovery Tribunal dismissed an application filed by legal heirs of a deceased borrower challenging SARFAESI proceedings. The Tribunal held that since the bank properly served notices to the deceased borrower who was alive when notices were issued, and the living guarantor was included, no fresh notices to legal heirs were required.

What did the court decide?

SA dismissed as having no merits. Proceedings against schedule property under s. 14 of the SARFAESI Act remain untouched.

Goka Sushanth Reddy versus City Union Bank Limited — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL^_ 1 AT HYDERABAD

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DATEDTHISTHE 14TH DAYOFJULY. 2026

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PRESENT: SRI GUMMADI GOPICHAND, PRESIDING OFFICER

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sA.No.260,/2025

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Goka Sushanth Reddy, S/o late Goka Mahender Reddy, Aged 26 years, H.No.7-7 -44 I 48 I 1 I 18, Vidya nagar,Beside Bus Deopt, Vidya nagar, Adilabad.

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... Applicant

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Versus

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City Union Bank Ltd., Rep. by its Authorized Officer Adilabad branch, 4-3-75 I 2, Hameedpura, Near Nethaji Chowk, Adiiabad-504O01.

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... Respondent

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Counsel for tte Applicant : SnPHaishGoud Counsel for the Respondent : Si C. Prabhakar

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Reserued on : O7.07.2026 Pronounced on : 14.07.2026 Uploaded to the uebsite on :14.07.2026

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ORDER

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This Application is liled u/ s. 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2OO2 (SARFAESI Act, 2OO2l challenging the proceedings initiated by the physical possession of the schedule property CJM, Adilabad in Cr1.M.P.No.92 125 and to id.

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i^lrJ&zml '

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lication in brief are as follows:

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The Applicant is neither borrower nor guarantor to the loan facilities sanctioned by the Bank. The Applicant is the legal heir of late Sri Goka Mahender Reddy who was the mortgagor to the facilities sanctioned by the Bank to M/s Sai Sushant Agro Tenders. Sri Goka Mahender Reddy passed away due to ill health on 07.O2.2025 leaving behind the Applicant along with his wife and daughter as 1ega1 heirs. In the meanwhile, the oflicials of the bank along with the advocate commissioner visited the schedule property and the advocate commissioner issued vacate notice dt.14.06.2025. Without serving fresh demand notice and possession notice to the Applicant, the Bank initiated proceedings u/s 14 of the SARFAESI Act, 2OO2 and so, the said proceedings are not iegal and valid. Hence the SA.

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The Respondent Bank filed their Reply denying all the adverse allegations made in the SA and contended that the M/s Sai Sushanth Agro Traders, a proprietary concern rep.by its Proprietor Sri Goka Mahender Reddy availed secured OD limit of Rs.50 lakhs from the bank for running their business. Smt.Goka Vijayalakshmi who is the mother of the Applicant herein stood as guarantor to the said loan and executed loan documents. Sri Goka Mahender and Smt. Vijayalaxmi committed default in repaying the loan dues and so, the Bank classified the loan account as NPA or 3O.O4.2O24 as per the guidelines of RBI and issued demand notice dt.3O.O7.2024 afld the said notice was sent to all the parties and also published in two leading newspapers. Thereafter, the Respondent issued possession notice dt.2 1 . 1 1.2024 and the said notice sent to the borrower and others through Regd. returned unserved. The said possession notice was Express and Andhra Jyoti daily newspapers and aiso ,/ '(a'ci .1,,. Z4pxea ff,ftne property. The Bank thereafter issued Sale Notice du,.sr.or-'tzs bvd llowing the procedure. Subsequently, the Bank *p.o44.ffi flfur AESI Act, 2OO2 for taking physical possession ,$rtn. schedule and challenging the same, the Applicant filed the SA. Bank followed the procedure contemplated under

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the provisions of SARFAESI Act, 2OO2 and Rules made thereunder in proceeding u/s 14 of the SARFAESI Act against the schedule propert5r and there are no deviations. Accordingly Respondent Bank prayed to dismiss the SA.

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Heard Ld. Counsel for the Applicant and Ld. Counsel for the Respondent and perused the material brought on record.

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Now the points that arise for consideration are

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i. wLrether the Applicant has established ang ualid grounds for challenging tle proceedings initiated bg the Bank for taking physical possesslon of the scttedule propertA u/s 14 of tlrc SARFAESI Act, 2002?

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To what relief ?

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Point .l\Io.(if :-

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During the course of arguments, Ld. Counsel for the Applicant 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 M/s Sai Sushant Agro Traders availed loan facilities from the Respondent whereas Sri Goka Mahender Reddy created against the schedule property and thereafter, Sri Goka M on O7.O2.2O25 and the Applicant herein is one of borrower. In view of the default r&aTffirs Jq by thdi8brrowerj bank issued demand notice, possession

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noti fnd {reqeflEr u/s 14 of the Act for taking physical of the sched through advocate commissioner.

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The contention of the Applicant is that without serving^{fresh demand} notice and possession notice to the legal^{heirs of the deceased borrower,} the Bank straightaway proceeded u/s 14 of the SARFAESI^{Act, 2OO2 for} taking physical possession of the schedule^property and^{so, the said} proceedings are not legal and valid.

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But the Respondent contended that the Bank^{issued demand notice and} possession notice to the borrower and guarantors by duly following the procedure as contemplated under the provisions of SARFAESI Act,2OO2 and Rules made thereunder and there are^{no violations.}

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A perusal of the record makes it clear that Sri Goka^{MahenderReddy,} who is the borrower died on 07.O2.2O25 leaving behind the^Applicantas one of the legal heirs whereas Smt. Goka Vijayalakshmi^{who is the wife} of the deceased borrower is already a^party to all the^{statutory notices} issued by the Bank and also proceedings u/s 14 of the SARFASI^Act, 20O2 initiated by the Bank for taking physical^possession of the schedule property. In fact all the notices in challenge such as demand notice, possession and notice were issued when Mr.Goka Mahender Reddy was alive and hence all the notices are valid and legal and^{there is no need to} issue fresh demand notice and^possession notice to the legal^{heirs of the} deceased borrower including the Applicant herein.

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In order to prove their contention, the Respondent Bank hled material documents along with the Reply filed by them. As^per the said material documents, t the Respondent Bank issued demand notice dt.30.07. .*'sip(4" SARFAESI Act, 2OO2 and sent the said notice orror.r,llf Sri der Reddy and others including the rr Smt.Gok5. Viiavalaimi ugh Regd.Post as evidenced by the

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postal i""*f,&"ffi"20m,.0 il e Bank and the said notice was also pub as evidenced by the copies of paper publi s there is valid service of demand notice on the bo Thereafter, the Respondent Bank issued

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possession notice dt.2 1 . 1 1.2024 u/ s 13(4) of the SARFAESI Act, 2O02 and sent the said notice to the borrower and others through Regd. post as evidenced by the postal returned covers filed by the Bank. The said possession notice was published in Telugu and English daily newspapers as evidenced by the copies of the paper publication filed by the Respondent and the said notice was also affixed on the schedule property as depicted in the copies of photographs l-rled by the Bank. Thus it is quite clear that the Respondent has scrupulously followed the procedure laid down under the provisions of SARFAESI Act, 2002 and Rules made thereunder in issuing possession notice dt.21.11.2024 u/s 13(4) of the Act.

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As per the provisions of Section 14 of SARFAESI Act, 2002, after issuance of possession notice u/s 13(a) of the SARFAESI Act, 2OO2, the secured creditor is at liberty to approach the concerned District Magistrate or chief Judicial Magistrate for taking physical possession of the secured assets. In the instant case, after issuing demand notice and possession notice to the borrower and others, the Respondent being secured creditor, approached Ld.CJM, Aditabad u/s 14 of the SARFAESI Act, 2002 by fiting Cr1.M.P.No.92 125 for appointment of advocate commissioner for taking physical possession of three schedule property. Ld.CJM, Adilabad after considering the material on record, appointed advocate commissioner for taking physical possession of the schedule propert5r and the said advocate commissioner issued notice to the borrower and others to vacate the schedule property. So, the said proceedings are perfectly legal and vaiid. Thereafter, also proceeded for conducting auction of the sched ing sale notice but however, the said sale notice dbv plicant in the present SA.

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t2. tances, I am of the opinion that the is not enti reiief as there are no merits in the SA. interference of this Tribunal with the

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proceedings initiated by the Respondent for taking physical^possession of. the schedule property u/s 14 of the SARPAESI^{Act,2002pursuant to the} orders in Crl.M.P.No.92/25. Accordingly,^{this point is answeredin favour} of the Respondent and against the Applicant.

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Polnt l,lo.(tl)t

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In the result, SA 260125 is dismissed^{as there are no merits in the SA.} Consequently, the Interlocutory^{Applications, pendingif any, shall stand} disposed of. No order as to^costs.

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Communicate a copy of this order^{to the partiesconcerned.}

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(Dictated to the P.S, transcibed. by her, corrected,^{signed and pronounced bg me in the open} court on this the 74th^dag of July,^2O26)

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sd/_ (G. GOPI CHAND) PRF,SIDING OFFICER

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Goka Sushanth Reddy v. City Union Bank Limited

Case brief

What is this about?

What did the court decide?

Goka Sushanth Reddy v. City Union Bank Limited

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

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Case details

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