Dismissed

Ms Gsk Projects and Engineering P Ltf v. Canara Bank

DRT19 May 2026SA/332/2025

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal dismissed a Securitization Application challenging an auction sale of a mortgaged property. The Tribunal held that the bank followed the correct procedural steps, including valuation and notice issuance, and the NPA classification was justified based on the account statements.

What did the court decide?

The Securitization Application stood dismissed and all pending interim applications were closed.

Ms Gsk Projects and Engineering P Ltf versus Canara Bank — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL-II, BANGALORE

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Dated this 19^th Day of May, 2026

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PRESENT: SHRI T. RAJESH Hon’ble Presiding Officer

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S.A. No. 332 of 2025

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M/s. GSK Projects & Engineering (P) Ltd., Door No. 530, 15^th Main 1^st Block, 3^rd Stage, Manjunath Nagar, Bengaluru -560010, Karnataka.

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Rep. by its Managing Director, Mr. Girish, S/o. Rameswarappa. G, R/a. No.4, 2^nd Floor, 9^th Cross, Maahalakshmi Layout, Further Extension, Bengaluru -560086. Shed No. 2/1, Sy No. 27/2, Ramaiah Industrial Area, Herohalli Cross, Mahadeswar Nagar, Vishwaneedam Post, Bengaluru -560091.

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. . . Applicant

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Versus

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Canara Bank, Assets Recovery Manager -II, 2^nd Floor, Spencer Towers, No.86, MG Road, Bangalore -560001.

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The General Manager, Canara Bank, Head Office, J. C. Road, Bangalore -560002.

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SA No. 332/2025

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Smt. Kavitha Moyal (Auction Purchaser), W/o. Manoj Kumar Moyal, R/at. No. 24/1 1^st Main Road, CKC Garden Bangalore South, Wilson Garden, Bangalore -560027.

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. . . Respondents

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Ld. Counsels on record / appeared :- Counsel for Applicant :- V. Balakrishna, Syeda Shehnaz Counsel for Respondent No.1 :- Malini Vinay Counsel for Respondent No.3 : E. Devaraja

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: - O R D E R - :

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The E-auction sale notice dated 02.07.2025 and sale dated 23.07.2025

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conducted by the 1^st respondent invoking the provisions of “Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 herein after been referred to as the SARFAESI Act or in short the Act is under challenge in this Securitization Application.

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it is the case for the applicant that the applicant though applied for a business loan for Rs.2,50,00,000/- (Rupees two crore fifty lakh only) the bank had sanctioned Rs.1,80,00,000/- (Rupees one crore eighty lakh only) and disbursed Rs.1,25,00,000/- (Rupees one crore twenty-five lakh only). It is also

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contended that the applicant had made repayments to the tune of Rs.1,05,00,000/- (Rupees one crore five lakh only). It is also stated that after the Covid-19 and due to the illness of the Managing Director the repayments

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SA No. 332/2025

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were defaulted resulting the account being classified as NPA and an OA being filed by the Bank seeking recovery of the alleged due amounts.

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It is also contended that despite the payments made in between the bank had issued a sale notice dated 06.09.2024 which stood assailed in a writ petition before the Hon’ble High Court and the same being dismissed as infructuous as no sale took place pursuant to the same. Another sale notice came to be issued on 25.09.2024 resulting filing a Writ Petition which also became infructuous as no sale took place pursuant to the same. The subsequent sale notice dated 07.02.2025, 14.02.2025, 19.05.2025,12.06.2025, 02.07.2025, out of which the last but all other sale notices were under challenge in different writ petitions. Even though the sale notice dated 02.07.2025 was also challenged wherein the Hon’ble High Court passed an order directing the 1^st respondent not too issue the sale certificate for four weeks to enable applicant to seeks appropriate remedy before this Tribunal. in respect of the measures it

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is the case of the applicant that the applicant had been regular and has paid substantial amount towards the loan account. It is also contended that the bank had also attached gold account and father’s pension account.

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Hence according to the applicant the applicant had made excess payments to the tune of Rs.62,55,405/-. It is also the case of the applicant that the repayment was made by the applicant despite, the moratorium as declared

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SA No. 332/2025

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by RBI. The applicant had also pointed out that even after the alleged NPA classification substantial remittances were made.

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The applicant also alleged non compliance of Rule 3A of the rules. The NPA classification as made by the Secured creditor is also under challenge. In the grounds to the SA the applicant is contending that the procedure adopted by respondent is illegal and the applicant had made repayments perfectly on 22 quarterly installments. It is also contended that the Authorized officer had wrongly considered working capital also for NPA classification. Along with the

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SA, the applicant had produced the following documents.

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Copy of statement of term loan and working capital account.

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Copy of demand notice dated 01.01.2020.

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Copy of possession notice dated 17.03.2020.

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Copy of e-auction notice dated 02.07.2025.

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Copy of email replay notice.

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Copy of legal notice, paper publication, legal notice, acknowledgment.

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Copy of reply notice dated 21.07.2023.

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Copy of order dated 18.08.2023.

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Copy of the order passed by the Hon’ble High court in the WP.25943/2024 dated 20.09.2024.

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SA No. 332/2025

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Copy of the order passed by the Hon’ble High court in the WP.27597/2024 date 14.10.2024.

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Copy of the order passed by the Hon’ble High court in the WP.5600/2025 dated 24.02.2025.

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Copy of the order passed by the Hon’ble High court in the WP.16505/2025 dated 12.06.2025.

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Copy of the order passed by the Hon’ble High court in the WP.18890/2025 dated 01.07.2025.

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Copy of the order passed by the Hon’ble High court in the WP.21384/2025 dated 25.07.2025.

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The first respondent had filed their objection contending as follows. The applicant had availed a Term loan and a Working Capital Facility by mortgaging the property of the guarantor. Since the applicant had defaulted the payment the account was classified as NPA on 30.12.2019 resulting recovery measures under the Act leading to the issuance of impugned sale notice and conduct of sale. It is also contented that only the above facilities are the subject matter of the measures which are impugned in this SA.

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In respect of the alleged non- compliance of rule 3A, it is stated that by virtue of said reply only further time was sought for repayments. The respondent had also put forth the contention that the applicant though availed

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SA No. 332/2025

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OTS had failed in its compliance. Along with the objection, the respondent had

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filed the following documents.

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sale confirmation letter dated 24.07.2025.

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sanction letter dated 01.09.2017.

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statement of accounts.

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valuation report date 15.07.2024.

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possession notice dated 17.03.2020 along with postal acknowledgment and returned cover.

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publication of possession notice.

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photograph evidencing affixture of possession.

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sale notice dated 02.07.2025 with postal receipts.

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paper publication of sale notice.

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photograph as to affixture of sale notice.

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Pursuant to I.A. No. 3031/2025, the auction purchaser was impleaded as

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the 3rd Respondent to the proceedings and filed objections, inter alia, contending that as follows; Pursuant to the newspaper publication the auction purchaser deposited the EMD and participated. The 3^rd respondent was declared as the highest bidder and sale confirmation was issued on 24.07.2025.

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The auction purchaser had made prompt payments with in the extended time. The 3^rd respondent content that the 1^st respondent had duly complied with the

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SA No. 332/2025

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provisions of the Act and there is no irregularly in the issuance of sale notice

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and conduct of sale. Along with the objection the respondent had produced the following documents.

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letter dated 30.07.2025.

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letter dated 08.08.2025.

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proof of payment of sale consideration.

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Heard the Ld. counsels for the applicant and respondent. The only issue that arose for consideration is as the legality measures leading to the issuance of sale notice and conduct of sale.

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The applicant has no dispute as to the availment of credit facility, though the disbursement is under dispute. No challenge as the creation of security interest is also put forth in the SA. The applicant though contents that the bank had failed to disburse the entire loan, the same cannot be accepted as the Applicant is raising the said objection for the first time and ever when the reply to demand notice is issued on at any, said contention is taken.

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The NPA classification is challenged contenting that the applicant had been making prompt repayments to the Term loan. However, the 1^st respondent had pointed out that the measures are initiated in respect of Term loan and working capital. Hence the contention of the applicant that the NPA

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SA No. 332/2025

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classification is wrong for the reason that the Term loan is regularly served will not come in aid of the applicant in their challenge as to NPA classification.

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The 1^st respondent had along with their objection had produced the statement of accounts Despite the production of the said statement of accounts. The applicant was not able to put forth any anomaly in the statement of accounts. The statement of accounts duly justifies the classification of account of as NPA. Apart from above, it is to be born in mind that the applicants themselves as admitting the defaults occurred in the account.

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The applicant is not putting forth any contention other that the general averments as to the alleged flaws. In the measures it is also to be noted that the successive attempt of the bank to sell the secured asset did not materialize for want of bidders.

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The respondent had also produced the proof as to the compliance of rules

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8(1) and rule 8(2) proof as to the dispatch, publication and affixture of possession notice is produced along with the objection. In respect of service of demand notice is concerned there cannot be any challenge as admittedly a reply is issued before the applicant to the same.

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In respect of the impugned sale notice also the 1^st respondent had produced the proof as to the service, publication and affixture of the sale notice. The respondent had also pointed the proof that they obtained valuation from

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SA No. 332/2025

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an approved valuation from an approved valuer before issuance of sale notice.

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In view of the above this Tribunal is of the view that the 1^st respondent had duly followed the procedure in issuance of sale notice.

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From the documents produced by the respondent as to the procedure followed by them leading. In the conduct of sale, it can be safely concluded that there are no flaws in measures leading to the conduct and finalization of sale.

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In view of the discussions as held in aforementioned paragraphs and findings entered therein, this Tribunal is of the view that there is no merit in the SA and the same is liable to be dismissed.

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In the result SA.332 of 2025 stands dismissed, all pending IAs stands closed. No orders as to cost. Issue copies in accordance with rule 16 of the Debt Recovery

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Tribunal (procedure) rule.

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(Dictated to PY directly on the Computer, after its transcription, corrected and pronounced by me in the open Court on this the 19^th day of May, 2026)

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Sd/-

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(T. RAJESH)

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PRESIDING OFFICER

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Ms Gsk Projects and Engineering P Ltf v. Canara Bank

Case brief

What is this about?

What did the court decide?

Ms Gsk Projects and Engineering P Ltf v. Canara Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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