Dismissed

Sri Vuppu Prudhvi Raj v. Uco Bank

DRT16 Jul 2026SA/283/2023

Case brief

AI extract

What is this about?

The Tribunal dismissed a Securitisation Application filed under Section 17 of the SARFAESI Act challenging recovery measures. It held the application was time-barred as filed within 45 days of the sale notice but rejected the claim of non-compliance due to proof of service.

What did the court decide?

The Securitisation Application was dismissed; the stay impeding auction proceedings was vacated.

Sri Vuppu Prudhvi Raj versus Uco Bank — Company and Corporate | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL^_ II AT HYDEMBAD

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DATED THIS THE 16.rH DAY OF JULY, 2026

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PRESENT: SH. RAMESHWAR KOTHE, B.Com, L.LB. (Hons.), M.A. PRESIDING OFFICER

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Securitizatlon Application No.283 OF 2023

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Sri. Vuppu Prudhvi Raj, S/o V. Ramaiah, Aged about 40 years, Occ: Partner of E- Ma ke, R/o H. No. 7-7 -7AalA, Near Ambedkar Statue, Khammam'X'Road, Surya pet District

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Applica nt

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Versus

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UCO Bank, Rep. by its authorized Officer, Bandlaguda Branch, Situated at GSI Complex, Near Nagole, Bandlaguda, Hyderabad - 500068

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.....Respondent

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Counsel for the Applicant : Sri. D. Raghavulu Counsel for Respondent : Smt. K. Nandini

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-:ORDER:-

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The^present Securitization Application is filed by the Applicant uls.77 of the Securitisation and Reconstruction of Financlal Assets and Enforcement of Security Interest Act, 2002 ("Act" hereinafter for short) to set aside all the measures initiated by the Respondent Bank under section 13(4) of the Act, including the sale notice dated 02.06.2023 fixing the auctiollon 06.07.2023 in respect of the SA //Awv -./, Sched ule Properties. (//r 16*

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Page 2 of 7

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SA No. 283/2023

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The averments of the application, briefly, are that the Respondent Bank had sanctioned a Cash Credit facility of Rs.45 takhs in the year 2018 for running the business of M/s E. Make, which was secured by an equitable mortgage of SA Schedule properties. The Applicant contends that the loan account was regularly serviced till March, 2019, but due to a serious accident, the subsequent COVID_ 19 pandemic, and the absconding of the business partner, the business suffered severe financial setbacks resulting in default. The Applicant further asserts that, despite making substantial repayments and requesting restructuring of the loan accountr the Respondent Bank proceeded with recovery measures without furnishing updated statements of account. It is further contended that the mortgaged properties are the subject matter of pending civil and criminal proceedings concerning tifle and possession, which were duly brought to the notice of the Respondent Bank. The Applicant also alleges that the Respondent Bank failed to comply with the mandatory provisions of sections 13(2), 13(34) and 13(4) of the SARFAESI Act, 2oo2 read with Rules B(1), 8(2), 8(6), B(7) and other applicabte provisions of the Security Interest (Enforcement) Rules, 2002, (hereinafter,,Rules,, for short) inasmuch as the demand notice, possession notice and sale notice were not duly served, the possession notice was neither properly affixed nor published in accordance with law, the mandatory 30-day sale notice was not issued, the reserve price was arbitrarily fixed, and the auction notice failed to disclose the pending litigations relating to the secured assets. Hence, Applicant pray for setting aside the measures initiated by the respondent against the SA Schedule Properties.

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The Respondent Bank filed reply statement along with documents. The averments thereof, briefly, are that the Applicant, along with the other partner of M/s E Make, had availed a Cash Credit 1ffi.*

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Page 3 of7

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5A No. 283/2023

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facility of Rs.45 lakhs under the UCO Trader Scheme by executing the requisite loan and security documents, including^{personal guarantees} and an equitable mortgage over the secured assets. It is further averred that, during the COVID-19^pandemic/ a FITL loan of Rs.3,03,500/- was also sanctioned under the COVID Regulatory Scheme. The Respondent asserts that the borrowers committed persistent defaults in repayment, resulting in the loan accounts being classified as NPA on 31.03.2021. Thereafter, the Respondent^Bank issued a recall notice dated 03.05.2021, demand notice under Section 13(2) of the SARFAESI Act dated 77.02.2022,^possession notice under Sectlon 13(4) dated 21.O4.2022,^pre-auction notice^dated t9.04.2023 and e-auction sale notice dated 02.06.2023, all of^which were duly served and^published in accordance with the^provisions of the SARFAESI Act, and Rules, 2002. The Respondent specifically denies the allegations regarding non-service of statutory^notices, procedural irregularities, wrongful classiflcation of the loan account as NPA, and the effect of pending civll disputes or the COVID-19 pandemic, and contends that all measures under Sections 13(2) and 13(4) of the SARFAESI Act were initiated strictly in accordance with law. The Respondent further raises a^preliminary objection that^the present SA is barred by limitation under Section 17(1) of the SARFAESI Act, as the^possession notice dated 21.O4.2022^has been challenged after expiry of the^{prescribed period} of 45 days. It^is further contended that the^proposed e-auction dated 06.07.2023^was not conducted and, therefore, the challenge to the^auction proceedings has become infructuous. Accordingly, the Respondent prays for dismissal of the SA.

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Heard both learned counsel for the applicant and^learned counsel for the respondent. Perused the writLen arguments filed by

1fu;o,ru

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sA No. 283/2023

the Respondent Bank, respondent and also perused the material brought on record.

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During the course of arguments, learned counsel for the Applicant reiterated the averments made in the SA and contended that the Respondent Bank failed to afford the Applicant a reasonable opportunity to regularise the loan account and clear the outstanding dues. It was further argued that the Respondent Bank had not complied with the mandatory provisions of Secuons 13(2), 13(3A), 13(4) and 14 of the SARFAESI Act, 2OO2 read with the Rutes, 2002. On the aforesaid grounds, learned counsel prayed that the measures initiated by the Respondent Bank against the S.A. schedule properties be declared illegal, null and void and be set aside.

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Per contra, learned counsel for the Respondent Bank denied the averments made by the Applicant, reiterated the contents of the reply statement, and placed reliance on the documents annexed thereto. As a preliminary objection, learned counsel for the Respondent Bank contended that the present Securiflsation Application is barred by limitation under Section 77 (7) of the SARFAESI Act, 2002, as the symbolic possession notice under Section 13(4) was issued on 21,.04.2022, whereas the present S.A. was filed only on 30.06.2023, after a delay of about 390 days. It was argued that the period of limitation commences from the date on which the measure under Sectlon 13(4) is taken and not from the subsequent e-auction sale notice dated 02.06.2023. In support of the said contention, learned counsel placed reliance upon the judgments in Bank of Baroda and Anr. V. Parasaadilal Tursiram Sheetgrah pvt. Ltd. and Ors. and Atindra Container pvt. Ltd. v. punjab National Bank, to contend that an application under Section 17 of the SARFAESI Act is required to be filed within the statutory period of 45 days from^tle date of the

QtW$'\t

page 5 of 7

SA No. 283/2023

impugned measure. It was contended that the loan accounts were rightly classified as NpA in accordance with the RBI guidelines and that all measures under Sections 13(2), 13(3A), 13(4) and 14 of the SARFAESI Act, 2002 were initiated after strict compliance with the provisions of the Act and the Rules, 2002. Accordingly, learned counsel prayed for dismissal of the SA.

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The points for consideration are as follows : _

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i) whether the . appticant made out any varid ground to quash any of^thg rle?surii-iriiit"l,oy the respondent against the SA schedut" prop.iil.Ji ptrayed for?

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ii) To what retief .?

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Point No.(i):

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B. Learned counsel for the Respondent Bank, in the reply statement as well as the written arguments, reiterated the preriminary objection that the present sA is barred by rimitation. This Tribunal has considered the said contention and finds that the e_ auction sare notice dated 02.06.2023 constitutes the ratest measure initiated by the Respondent Bank under the SARFAESI Act. The present Securitisation Application was instituted on 30.06.2023, which is within the statutory period of 45 days prescribed under Section 17(1) of the SARFAESI Act, 2002. Accordingly, the objection regarding limitation is devoid of merit and stands rejected.

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During the course of proceedings it was reported that the auction scheduled on 06.07.2023 pursuant to sare notice dated 02'06'2023 was not successfur due to want of bidders. Under such circumstances, the contention of non_compliq]nce of Rule B(5), B(6) v\J'" ",\" ful*--

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Page⁶ of7

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sA No'^283/2023

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8(7)^{& 9(1) of the Rules pertainingto the impugned auctionneedno} consideration^{and SA hasbecome infructuous to that extent'}

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10.^{The other contention of the applicant is non-compliance of} section^{13(2) & 13(4) of the Act and Rules 3' 8(1) & 8(2) of the} Rules,2oo2'^{The RespondentBankrelied on copies of documents} annexedwiththereplyStatement.Pages16to23ofthematerial paper filed^{separately are the Photostat copiesof postal receiptsand} publication^{of the same in Englishand Telugu (vernacularlanguage)} newspapers^{on 17 '02'20:22 and 1802'2022 proving serviceof} demandnotice.Similarly,Pages24to3larethePhotostatcopiesof postal^{receipt of PossessionNotice dated 2l'O4'2022'photographsas} proof of affixture^{on secured assets and publication of the samein} English^{and Telugu (vernacular language)newspaperson} 25.04.20:22'^{In view of sufficient proof place on record' I find no} infraction^{of section13(2) & 13(4) of the Act and Rules3' 8(1)& 8(2)} of the^{Rules, 2OO2' As a securedcreditor the RespondentBank} initiated^{the SARFESIproceedings'which cannotbe categorizedas} illeqal^{or arbitrarY'}

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11.^{In view of the above observations'it is concludedthat the} Applicant^{has failed to establish any valid ground to interdictthe} measuresinitiatedby.n"*".pono"n.Bankundertheprovisionsof theActagainsttn"sns.neoureproperties.Accordingly,theSAis liable^{to be dlsmissed'}

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Poinllle:glr

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12.^{In the result' the Securitisation Aeltt(;u'itz,llffi.d is herebv} dismissed

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page 7 of 7

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SA No.283/2023

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ConsequenUy, stay .granted vide order dated 05.07 .2023 in IA.No.1931 of 2023 .^{in the SA stands vacated} anO rnterLiulo.v --"---''' l Applications pending, if any, shall stand closed.

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No order as to costs.

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Communicate a copy of this order to the parties concerned and upload in the official website.

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(Typed to my dictdtion by the Steno

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in^the open court on this i-"rrtt esrir,lnel{'loftrel PRESIDING OFFICER

Sri Vuppu Prudhvi Raj v. Uco Bank

Case brief

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Sri Vuppu Prudhvi Raj v. Uco Bank

Case brief

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