Allowed

Mrs a v. S J Sirisha and Mr Kiran Kumar v Union Bank of India

DRT29 Jul 2026SA/339/2025

Case brief

AI extract

What is this about?

In a Securitization Application under Section 13 of the SARFAESI Act, the Debts Recovery Tribunal set aside the sale notice and consequential possession notice of Union Bank of India. The Tribunal held that the bank failed to demonstrate compliance with Rule 8(1) of the 2002 Rules regarding the affixation of the possession notice on the asset.

What did the court decide?

The Securitization Application is allowed by setting aside the possession notice dated 24.07.2019 under section 13(4) of the Act, 2002 and consequential proceedings, if any. Respondent is at liberty t

Mrs a v S J Sirisha and Mr Kiran Kumar versus Union Bank of… — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL^_ II AT HYDERABAD

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DATED THIS THE 29TH DAY OF ]ULY, 2026

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

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Securitization Application No. 339 OF 2025

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Smt. AVSJ Sirisha, W/o Arcot Kiran Kumar, Aged about 41 Years, Occ: House Wife, R/o H. No. 10-3-3t3/8, Masab Tank, Hyderabad - 500057

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Sri. Arcot Kiran Kumar, S/o AD Naresh Kumar, Aged about 44 Years, Occ: Business, R/o H. No. 10-3-3t3/8, Masab Tank, Hyderabad - 500057 ...Applicants

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Versus

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Union Bank of India, Rep. by its authorized officer, Asset Recovery Branch, Situated at 249/3RT, 1st Floor, S.R. Nagar, Main Road, Hyderabad - 500038 .....Respondent

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Counsel for the Applicant : M/s. Raghavulu Devalla Counsel for Respondent : M/s. Momin Mohammed Rafiq

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-:ORDER:-

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The present Securitization Application is filed by the Applicants u/s.L7 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ("Act" hereinafter for short) to set aside all the measures initiated by lhe respondent bank

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SA No. 33912o2s

the sale notice dated^{t9.07.2025, fixing the} under the Act,^including auction on 14.08.2025ⁱⁿ respect of the SA Schedule^Property.

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The averments^{of the application, in brief, are that applicants} availed a housing^{loan of Rs. 42,00,000 from the respondentBankin} the year 201B and^{had repaid substantialamounts towards the loan} account. It is contended^{that, upon default in certain instalments,the} respondent offered a^{One-Time Settlement (OTS) for Rs. 37,50,000,} pursuant to which the applicants^{paid Rs. 4,00,000 as the upfront} amount on^{15.03.2027 on the assurancethat an OTS sanction letter} would be issued.^{However, the respondent allegedlyfailed to honour} the OTS^proposal and^{instead classified the loan account as a NPA,} which the applicants^{contend is contraryto the RBI guidelines.The} applicants further^{allege that, despite making subsequentpayments} and requesting^{regularisation of the account, the respondent} proceeded with coercive recovery^{measuresand issued an E-Auction} Sale Notice dated^{t9.07.2025 proposingto auction the secured asset} on 14.08.2025. It^{is contended that the impugned SARFAESI} measures are vitiated^{by non-compliancewith the mandatory} provisions of the SARFAESI^{Act, 2OOZand the SecurityInterest} (Enforcement) Rules, 2002,^{(hereinafter "Rules"for short) including} non-service of the^{demandnotice under Section t3(2), possession} notice.under Section^{13(4), and violationof RulesB(1), B(2) and B(6)} of the Rules relating^{to service, affixture, publication and sale notice.} The applicants further^{contend that the propertyhas been} undervalued, the^{description of the securedasset is defective,and} the respondent acted^{arbitrarilyin classifying the account as NPA and} initiating recovery^{proceedings. On these grounds, the applicants} seek to set aside the^{sale notice dated 19.07.2025,fixing the auction} on 14.08 .2[25in^{respectof the SA SchedulePrope} 'W1fu61l

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Page 3 of 5

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SA No.339/2025

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The Respondent Bank filed reply statement along with documents. The averments thereof, briefly, are that the applicants committed persistent defaults in repayment of the loan, resulting in the loan account being classified as a NPA on 28.02.2019 in accordance with the RBI prudential norms. It is asserted that a demand notice under Section 13(2) of the SARFAESI Act was issued on 05,03.2019 through RPAD and, upon its return, was duly published in The Hans India and Nava Telangana on 16.03.2019. It is further contended that, after expiry of the statutory^period, a possession notice under Section 13(4) was issued on 24.07.2019 and published on 31.07.2019, followed by an intending sale notice dated 18.12.2024 under Rules 6(2) and 8(6) of the Rules, 2002, a valuation of the secured asset, and a statutory sale notice dated L9.07.2025 under Rules 8(6) and 9(1) fixing the e-auction on 14.08.2025.^The respondent denies the applicant's allegations regarding the^proposed OTS, the alleged procedural irregularities in the SARFAESI proceedings, and the conduct of its officials, and specifically contends that the OTS^proposal stood rejected on 24.06.2025 and that all measures under the SARFAESI Act and the Rules were undertaken in strict compliance with the statutory procedure. Accordingly, the respondent seeks dismissal of the S.A. with costs.

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Applicants' right to adduce oral arguments was fofeited on 23.05.2026 after affording ample opportunities. Learned counsel foi the respondent reported that orders may be passed based on records. Perused the material brought on record.

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The points for consideration are as follows : -

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Whether the applicant made out any valid^ground for quashing sale notice dated 19.07.2025, fixing the auction on 14.08.2025 in respect of the SA Schedule flpperty? 'N*

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SA No.339/2025

ii) To what relief?

Point No.(i):

During the course of^{proceedings it was reportedthat the} auction scheduled on^{14.08'2025 pursuant to sale notice dated} 1g.07.2025 was not^{successful due to want of bidders.Undersuch} circumstances, the^{contention of non-complianceof Rule 8(5), 8(6)} B(7) & 9(1) of the^{Rules pertainingto the impugnedauction need no} consideration and SA^{has become infructuous to that extent'}

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The Respondent Bank has^{filed material documents to prove the} compliance of the SARFESI^{Act and Rules, thereunder.Pages3 to 10} are the Photostat copies of^{return cover and paper publicationof the} same in English and Telugu^{(vernacular language) newspaper on} 16.03.2019^proving service^{of demandnotice. Similarly,Pages 11 to} !7, are the Photostat^{copies of possessionnotice dated 24.07'20t9} being served via registered^{post and publication of the same in} English and Telugu^{(vernacular language)newspapers on} 3l.O7.21lg. One of the^{principal contentions raised by the applicants} is that the respondent^{Bank failed to affix the possessionnotice on} the secured asset as^{mandatedunder Rule 8(1) of the Rules, 2002'} Though the respondent^{has deniedthe said allegationin its reply and} asserted due compliance^{with the statutory requirement, a perusalof} the material available on^{record reveals that no photographic} evidence or any other^{contemporaneous materialhas been produced} to establish that the^{possessionnotice was affixed on the secured} asset in accordance with^{Rule B(1) of the &Lrles. In the absenceof} any cogent evidence^{demonstrating such compliance, this Tribunalis} constrained to hold that^{the respondent has faiJgd to establish}

[fu3oltt

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SA No.339/2025

adherence to the mandatory requirement prescribed under Rule B(1) oF the Rules, 2002. Consequently, the symbolic^possession notice dated 24.07.2019 is liable to be set aside and^present SA deserves to be allowed.

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Point No.(ii):

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B. In the result, the Securitisation Application is allowed by setting aside the possession notice dated 24.07.20L9 under section 13(4) of the Act, 2002 and consequential proceedings, if any.

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Respondent ls at liberty to issue fresh possession notice strictly in accordance to the law.

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Consequently, Interlocutory 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 dictation by the steno., corrected, signed ond pronounced by me in the open court on this the 2g'h doy of luly,2026).

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17S'ot*t (RAIhESHWAR KOTHE) PRESIDING OFFICER

Mrs a v. S J Sirisha and Mr Kiran Kumar v Union Bank of India

Case brief

What is this about?

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Mrs a v. S J Sirisha and Mr Kiran Kumar v Union Bank of India

Case brief

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