Dismissed

Vaishnavi Agarwal v. Canara Bank

DRT11 Feb 2026SA/300/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed the Special Application filed by legal heirs of a guarantor/mortgagor. The court held that applicants lacked locus standi to challenge the auction sale notice under the SARFAESI Act without first obtaining a civil court declaration establishing their title or share in the mortgaged properties.

What did the court decide?

Special Application No.300/2022 was dismissed as the applicants have no locus standi.

Vaishnavi Agarwal versus Canara Bank — Partition | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL - I AT HYDERABAD DATED THIS THE 1 1^TH DAY OF FEBRUARY, 2026

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PRESENT: SRI GUMMADI GOPICHAND, PRESIDING OFFICER

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SA.No.3OO/2022

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Between

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VAISHNAVI AGARWAL,

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D/o. Mr. Dinesh Kumar Agarwal & Late Monica Agarwal, Aged 25 years, Occ :Student,

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R/o. H.No.19-5-9110, H.B Colony, Bhadurpura,

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Hyderabad, Telangana

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OM ANMOL AGARWAL,

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S/o. Mr. Dinesh Kumar Agarwal & Late Monica Agarwal, Aged 28 years, Occ :Business,

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R/o. H.No.19-5-9110, H.B Colony, Bhadurpura, Hyderabad, Telangana.

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Applicants

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VERSUS

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Canara Bank,

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ARM Branch,

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Ground floor, Circle Otfice Building,

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Beside Rail Nilayam, Secunderabad - 500026

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Rep. by its Authorized Officer.

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Sailesh Kumar Agarvral, S/o. Late Mr. Mahesh Chand Agarwal & Late Rajkumari Agarwal,

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Aged about 49 years, Occ. Business,

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R/o. H.No .8-2-269 I 3/56, Plot No. 56, Road No. 2, Banjara Hills, Hyderabad

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Dinesh Kumar Agari. .,1, S/o. Late Mr. Mahesh Chand Agarwal & Late Rajkumari Agarwal, Aged about 45 years, Occ. Business,

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R/o. H.No .8-2-269 I 3/56, Plot No. 56,

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Road No. 2, Banjara Hills, Hyderabad, Telangana.

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Rupesh Kumar Agarwal, S/o. Late Mr. Mahesh Chand Agarwal & Late Rajkumari Agarwal, Aged about 49 years, Occ. Business, R/o. H.No .8-2-269 I 3/56, Plot No. 56, Road No. 2, Banjara Hills, Hyderabad, Telangana. (Impleaded as per orders in I.A.No.282 of 2023 dated O9.O3.2O23)

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Thunga Venkata Rami Reddy, S/o. T.Pulla Reddy, Aged Major, , Rl o. 2-1-899- 1, Maheswar Nagar, Yerraguntal, Kadapa, Andhra Pradesh - 516 309.

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Smt.Thunga Amrutha lakshmi, W/o. T.Venkata Rami Reddy, Aged Major, Rlo.2- 1-899-1, Maheswar Nagar, Yerraguntal, Kadapa, Andhra Pradesh - 516 3O9 Respondents

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Counsel for the Applicants : Smt.M.Srauanthi Counsel for Respondents No. 1&2 : SriA.Y.S.S Prasad Counsel for Respondents No.2 to 4 Sri V. Rauinder Counsel for Respondents No.5&6 Si A.Naresh Reserued on 02.02.2025 Pronounced on 1 1.02.2026 Uploaded to the utebsite on 1 1.02.2026

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ORDER

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This Application is filed uls.l7 of the Securitization and Reconstruction of Financial Assets and Enforcernent of Security Interest Act,2OO2 (SARFAESI Act,2OO2) challenging the e Auction Sale Notice dt.31 7O.2022 issued by the 1"t Respondent Bank for conducting auction of the schedule properties on 14.12.2022 and to declare the same as null and void.

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Applicants in brief are as follows:
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sA30ol22

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Applicants herein are the legal heirs of late Smt.Rajkumari Agarwal who was the alleged guarantor and mortgagor to the loan facilities sanctioned by the 1"t Respondent to M/s Dinesh Jewellers & M/s Dinesh Gold. Smt. Rajkumari Agarwal passed away on 23.12.20 13 leaving behind three sons who are Respondents No.2 to 4 herein and one daughter i.e Monica Agarwal. The said Monica Agarwal passed away on 16.03.2014 leaving behind the Applicants herein as her only legal heirs. The Applicants being legal heirs and grandchildren of late Smt.Rajkumari Agarwal, are entitled to claim share in the schedule properties. The Applicants requested Respondents No.2 to 4 for their share in the schedule properties but the Respondents No.2 to 4 are making attempts to alienate the schedule properties. So the Applicants filed O.S.No.l33l2O2O on the file of Hon'ble IV Sr.Judge, City Civil Court, Hyderabad for partition of the schedule properties. The Applicants obtained statusquo orders in the said suit and the said suit is pending adjudication. The Applicants carne to know about the sale notice dt.31.7O.2O22 issued by the l"t Respondent bank for conducting auction in respect of the schedule properties on 74.12.2022. No notices are issued to the Applicants and hence the said sale notice^is nu1l and void and not binding on the Applicants. The Authorized officer of the 1st Respondent has not issued demand notice and^possession notice to the Appiicants. The impugned sa-le notice was not affixecl on the schedule properties and it was not served on the Applicants. Hence the SA.

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The Respondents No.1&2 Iiled counter I.A. 1844122 and later filed memo adopting the said counter as Reply in the SA and the contentions of the Bank are that:

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M/s Dinesh Jewellers and M/s Dinesh Gold availed^loan facilities^{from the} 1"t Respondent Bank and Respondents No.2 to 4^are the^{partners of the} said firms-ffiqqgt-e guarantors along with Smt.Seema Agarwal, Smt.Aslfifa qru**Srt.Rekha Agrwal. The mortgagors sot the ,.;,"rt{#,;;m";%Ury11,rrralPmlii*ill executed b vy Smt. Ra ji kumari Agarwa rl 1 1 FEB 2026

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sA300122

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and mortgage was created by the owners. While enforcing the mortgage, OA.94512018 was filed on 21.I2.2OL8 on the file of this Tribunal against M/s Dinesh Gold and Respondents No.2 to 4 and others and the same was decreed on23.07.2019. Similarly OA.92312018 was filed on 2L.12.2018 against M/s. Dinesh Jewellers and Respondents No.2 to 4 and others and the said O.A. was allowed on 27.O3.2O19. The bequest made by Smt. Rajkumari Agarwal in favour of the mortgagors/^guarantors through will was confirmed in the said OAs. The Respondents No.l & 2 flJed the said OAs when the will was executed by Smt Rajkumari Agarwal.^The Applicants herein in collusion with Respondents No.2 to 4 filed the^present SA. In the suit filed by the Applicants before the City^{Civil Court,} Hyderabad, Respondents No.l & 2 are not made parties. The^1"t Respondent Bank initiated proceedings under the^{provisions of SARFAESI} Act,2OO2 in respect of the schedule properties by issuing demand^notice & possession notice by duly complying with the^{provisions of SARFAESI} Act,2OO2 and Rules made thereunder and ultimately,^{sale notice dated} 3L.LO.2022 was issued to the concerned^{parties by fixing the auctionon} 14.12.2022 in respect of schedule properties and the^{said sale notice was} published in two leading newspapers and also affixed on^{the schedule} properties. The alleged right of the Applicants in respect^{of schedule} properties was never brought^to the notice of this^{Tribunal in the earlier} SA.No.70/2O2O or in the proceedings before^{the Hon'bleHigh Court.} Hence the SA is liable to be dismissed.

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Respondents No.S & 6 filed common reply^{denying all the adverse} allegations made in the SA and^{contended that lst Respondentbank} conducted auction in respect of the^{schedulepropertieson 14.12.2022in} pursuance of the Sale Notrce dated 31.1O.2022^{and in the said auctron,} Respondents No.S & 6 are declared^as successful^{bidders for a valid sale} consideration of Rs.6,82,00,000/- and they^{patd 25%o of the bid amount} and ed in their favour. Subsequently,^Respondents id amount and sale certificate was also issued & 6 and the same was registered in^respect A

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1 1 tt8 70?6

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of Lot No.1 of SA schedule properties. Physical possession of Lot No.1 of schedule properties was also handed over to the Respondents No.5 &6. Hence the SA is liable to be dismissed.

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Heard Ld. Counsel for the Applicants and Ld. Counsel for the Respondents No.1 & 2 and Ld.Counsel for Respondents No.5&6 whereas Respondents No.2 to4 reported no Counter and Reply.. Perused the material brought on record.

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Now the points that arise for consideration are

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ii. uthether the Applicants are hauing ang locus standi to chaltenge the impugned Sale Notice dated 31.10.2022 issued bg the 1"t Respondent bank for conducting auction of the schedule properties?

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iii. To what relief?

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Point JVo.(i):-

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During the course of arguments, Ld. Counsel for the Applicants and Ld. Counsel for the Respondents No.1&2 and Ld. counsel for Respondents No.5&6 reiterated their respective versions as s'"ated supra.

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The undisputed facts of the case are that the Respondents No.2 to 4 are the partners of M/s Dinesh Jewellers and Dinesh Gold and they availed loan facilities from the 1st Respondent bank by creating mortgage against the schedule properties and thereafter committed default in repaying the loan dues. Respondents No.2 to 4 and onc Late Mounica Agarwal are the children of one Late Smt.Rajkumari Agarwal whereas the Appiicants herein ildren of said Mounica Agarwal who died in the year 2014. T in are the grand children of late Rajkumari is dispute regarding the fact that originally, the

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'erties to late Rajkumari Agarwal.

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sA3OO/22

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As M/s Dinesh Gold and Dinesh Jewellers represented by Respondents No.2 to 4 committed default in repaying the loan dues, the 1"t Respondent Bank initiated proceedings against the schedule properties under the provisions of SARFAESI Act, 2OO2 and Rules made thereunder and issued demand notice and possession notice to the concerned parties. On earlier occasion, the 1"t Respondent Bank conducted auction in respect of the schedule properties and challenging the same, Respondents No.2 to 4 and others filed SA 70 /2,O on the file of this Tribunal and the said SA was allowed vide order dt.16.O4.2O22 setting aside the auction conducted by the l"t Respondent Bank in respect of the schedule properties. However opportunity was glven to the l"t Respondent Bank to initiate fresh proceedings for conducting auction of the schedule properties by duly following the procedure laid down under the provisions of SARFAESI Act, 2OO2 and Rules made thereunder. Subsequently, the l"t Respondent Bank issued fresh Sale Notice dt.3l.l}.2o22 for conducting auction of the schedule properties 'on 14.72.2022. In fact, on L4.12.2O22, the 1"t Respondent bank conducted auction of the schedule properties and in the said auction, Respondents No.5&6 became successful bidders in respect of Item No.l of the schedule properties , so they are subsequently impleaded in the present SA and a registered sale certilicate was also issued in their favotrr after receipt of entire sale consideration.

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The Applicants herein are ctraiming that being grand children of Smt.Rajkumari Agarwal, they are entitled to claim share in the schedule properties along with Respondents No.2 to 4. In fact, according to the Applicants, they filed a suit for partition in OS.No. 73312O2O on the file of Ld.IV Senior Judge, City Civil Court, Hyderabad. It is not the case of the Applicants that the said suit was decreed granting partition of the for by the Applicants herein. Even according to the

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[d^{suit is still pending.}

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According to the l"t Respondent Bank, Respondents No.2 to 4 got the schedule properties under the will executed by Smt.Rajkumari Agarwal and so, the Applicants herein are not having any right or title in the schedule properties and on earlier occasions, the Applicants never raised any objection to the proceedings initiated by the 1"t Respondent Bank in respect of the schedule properties and the present SA is filed by the Applicants by colluding with Respondents No.2 to 4. Without establishing any right or share in the schedule properties, the Applicants cannot contend that the 1"t Respondent Bank has not followed the procedure contemplated under the provisions of SAFAESI Act,2OO2 in issuing sale notice for conducting auction of the schedule properties.

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t2. This Tribunal cannot decide the alleged right, title or share of the Applicants in the schedule properties but only a competent civil court can decide whether the Applicants are having any right in the schedule properties or whether the Respondents No.2 to 4 got absolute right in the schedule properties by virtue of the will executed by late Rajkumari Agarwal. So, the Applicants without obtaining valid declaration from the competent civil court to the effect that they are having share in the schedule properties, are not entitled to challenge the proceedings initiated by the 1st Respondent Bank in icspect of the schedule properties. It is pertinent to note that Respondents No.2 to 4 and others frled separate SA 29612022 challenging the same sale notice issued by the 1"t Respondent Bank and also auction conducted in pursuance of the said sale notice.

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So considering the facts and circumstances of the case, I hold that the Applicants are not having any locus standi to challenge the proceedings initiated dent Bank for conducting auction of the t ro the Sale Notice dt.31.7O.2022.

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Paint No.(ii):-

t4. In the result, SA 3OO 122 is dismissed as there are no merits. Consequently, the Interlocutory Applications, pending if any, shali 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, transcibed bg her, corrected, signed and pronounced bg me in the open court on this the 11th dag of Febntary, 2026).

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sd/{G.^{GOPr CHAND)} PRESIDING OFFICER

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Vaishnavi Agarwal v. Canara Bank

Case brief

What is this about?

What did the court decide?

Vaishnavi Agarwal v. Canara Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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