Dismissed

Zubari Ali v. Karur Vysya Bank

DRT11 Aug 2026SA/368/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed the Securitization Application challenging an auction sale. The Tribunal held that the applicant was time-barred in challenging prior notices, the OTS rejection was within the bank's wisdom, valuation was valid, and procedural requirements under the SIE Rules regarding sale notices and affixation were complied with.

What did the court decide?

The Securitization Application seeking to set aside the auction sale on 30.06.2023 was dismissed.

Zubari Ali versus Karur Vysya Bank — Specific Performance | DRT (2026)

SA No.368/2023

11.08.2026

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 11^th day of August, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SA No. 368 of 2023

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Mr. S. S. Zubari Ali, S/o Late Mr. S. A. Sheikh Abdul Kadar, No.14, Oil Mill Street, Tamil Nadu Illam, West Tambaram, Chennai – 600 045.

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…Applicant

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-Vs-

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The Authorised Officer, Karur Vysya Bank., Asset Recovery Branch, No.1, Padmavathiyar Road, 2^nd Floor, (Off. Peters Road), Gopalapuram, Chennai – 600 086.

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…Respondent

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Counsels on record / appeared:

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Counsel for Applicant : Mr. R.K.M. Suresh Counsel for Respondent : Mr. R. Umasuthan

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ORDER ON SA 368 /2023

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The present Securitization Application [SA] is filed under sub section [1] of S.17 of the Securitization and Reconstruction of Financial Asset and Enforcement of Security Interest Act,2002 (for short the ‘Act’) challenging

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the action and the measure taken by the secured creditor under the Security Interest Enforcement Rules, 2002 [for short the Rules].

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SA No.368/2023

11.08.2026

The applicant has challenged the Sale held on 30.06.2023 pursuant to the Sale notice dated 05.06.2023 and the outstanding amount due as per Sale notice is Rs.5,78,14,591.36/-

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It is submitted that the applicant is the owner of the property who has availed various credit facilities from the respondent bank in the year 2018 to 2021 and mortgaged his property to secure the repayments. It is contended that the applicant was regular in repayment and due to Covid19 pandemic in the year 2020 defaulted in repaying the interest portions. In spite of difficulties, the applicant has made several payments.

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The applicant has given OTS proposal for Schedule A property for Rs.1.70 crores and Schedule B property for Rs.1.20 crores which was rejected by the respondent bank. Further, the applicant has sent OTS letter dated 10.06.2023 for Rs.2,80,00,000/- and during the pendency of OTS letter, the respondent bank has issued Sale notice dated 05.06.2023 and also sold the Schedule A property on 30.06.2023 for Rs.1,45,50,000/inspite of applicants intention to settle the entire loan account within a reasonable time

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In the grounds, it is contended that the respondent bank has failed to intimate about status of the loan account which is in violation of RBI guidelines. The outstanding amount mentioned in the sale notice is incorrect and also failed to obtained fresh valuation report before issuing the sale notice dated 05.06.2023 which is in violation of Rule 8(5).

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SA No.368/2023

11.08.2026

The Authorized officer of the respondent bank has undervalued the property and fixed lower reserve price and also failed to give clear 30 days sale notice which is in violation of Rule 9(1) of SIE Rules. Further, the respondent bank has failed to issue Section 13(2) Demand Notice and Section 13(4) Possession Notice, failed to affix the possession notice and sale notice on the property and also failed to follow Rule 9(3) and (4) of SIE Rules. Hence, on these grounds the applicant prays to set aside the auction sale held on 30.06.2023 pursuant to sale notice dated 05.06.2023.

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The respondent bank has filed a detailed counter inter alia contending that M/s. Tamilnadu Cloth Stores, M/s. Tamilnadu Dresses, M/s. Tamilnadu Pharmacy and Footwear and M/s. Maharaja Medicals are partnership firms of Mr. S.S. Haris Ali, Mr. S.S. Zubar Ali, Mr. S.S. Abdul Razak, Mrs. SAS Sowthamma Begum are partners who had availed Rs.2,81,10,000/- from the respondent bank.

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Mr. S.S. Haris Ali, Mr. S.S. Zubar Ali, Mr. S.S. Abdul Razak, Mrs. SAS Sowthamma Begum stood as guarantors for the repayment of the credit facilities availed by the borrowers. The applicant Mr. S.S. Zubar Ali has mortgaged his property to secure the repayment of the credit facilities availed by borrower and Mr. Abdul Razack, Mr. Haris Ali and Mr. Zubair Ali has also mortgaged their property for securing the repayment of the credit facilities availed by the borrower.

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It is submitted that respondent bank has classified the loan accounts

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as NPA of M/s. Tamilnadu Enterprises on 02.05.2018, M/s. Tamilnadu

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SA No.368/2023

11.08.2026

Dresses on 09.05.2018, M/s. Maharaja Medicals on 30.05.2018, M/s. Tamilnadu Pharmacy Footwear on 19.01.2020, M/s. Tamilnadu Cloth Stores on 23.03.2021. Further, the respondent has issued Section 13(2) Demand Notices dated 22.05.2018, 15.07.2019, 05.06.2021 calling upon the borrowers to discharge their entire liabilities within period of 60 days.

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The borrowers failed to discharge their entire liabilities and the bank has issued Section 13(4) Possession notices dated 13.03.2019, 28.10.2019, 28.09.2021. Though the security for the credit facilities is common for the loan accounts, the respondent bank has issued separate Possession notice and took possession of the property separately. Further, the Possession Notices were affixed on the property and also published in Newspapers. The respondent bank has obtained valuation report from approved valuer and fixed the reserve price for the properties and issued sale notices dated 23.09.2020, 31.10.2020, 14.10.2022, scheduling the sale to be held on 29.10.2020, 27.11.2020, 19.11.2022.

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It is submitted that the earlier sale notices did not materialize, hence the bank has issued 4^th Sale notice dated 05.06.2023 scheduling the sale to be held on 30.06.2023. Further, the auction sale was successfully held on 30.06.2023 for sale consideration of Rs.1,46,00,000/- and sale certificate was issued in favor of the auction purchaser which was registered as Doc.No.6116/2023 dated 28.07.2023 before the SRO, Tambaram. Further, the respondent bank has countered every allegation made by the applicant with supporting documents and prays for dismissal of the present SA.

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SA No.368/2023

11.08.2026

Heard both sides of the Counsels and perused the records of

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the case.

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It is manifested from the records that the applicant is the owner of the property who has availed various credit facilities from the respondent bank and also mortgaged the property in favor of the respondent bank which is undisputed fact by the applicant and also admitted at Para No.1 in Page No.2 of the present SA. M/s. Tamilnadu Cloth Stores, M/s. Tamilnadu Dresses, M/s. Tamilnadu Pharmacy and Footwear and M/s. Maharaja Medicals are partnership firms of Mr. S.S. Haris Ali, Mr. S.S. Zubar Ali, Mr. S.S. Abdul Razak, Mrs. SAS Sowthamma Begum are partners who had availed Rs.2,81,10,000/- from the respondent bank.

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Further, the applicant Mr. S.S. Zubar Ali has mortgaged his property to secure the repayment of the credit facilities availed by borrower and Mr. Abdul Razack, Mr. Haris Ali and Mr. Zubair Ali has also mortgaged their property for securing the repayment of the credit facilities availed by the borrower

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Due to default in the repayment, the respondent bank has classified the loan accounts of the applicant as NPA on 02.05.2018, 09.05.2018, 30.05.2018, 19.01.2020, 23.03.2021. After classifying the loan accounts as NPA, the respondent bank has issued Section 13(2) Demand Notices dated 22.05.2018, 15.07.2019, 05.06.2021 to the borrowers and guarantors/mortgagors. Further, the respondent bank has issued Section 13(4) Possession Notices dated 13.03.2019, 28.10.2019, 28.09.2021 to the borrowers, guarantors/mortgagors.

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SA No.368/2023

11.08.2026

It is pertinent to note that the applicant has challenged the sale held on 30.06.2023 pursuant to the sale notice dated 05.06.2023 and raised the contentions with regard to the issuance of Demand Notice and Possession Notice which is not sustainable and the same is not challenged within the period of 45 days as required under S.17 of the Act. Hence, the contention of the applicant with regard to the issuance of the Demand Notice and Possession Notice is barred by limitation.

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Further, the respondent has issued Sale notice dated 05.06.2023 scheduling the sale to be held on 30.06.2023 which is challenged by the applicant contending that the respondent bank has failed to consider the OTS proposal which is countered by the bank that proposal made by the applicant is low when compared to the total outstanding amount. Further, the first contention in challenging the sale held on 30.06.2023 in the present SA is non consideration of the OTS cannot sustain as it is the wisdom of the bank to accept or reject the OTS in terms of RBI guidelines. The applicants are giving repeated OTS proposals without any serious intention to the settle the liability. Hence, the contention of the applicants with regard to the rejection of OTS proposal fails.

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Secondly, the contention that the total outstanding amount mentioned is incorrect is not supported by any documents and the bank has calculated the total outstanding amount of Rs.5,78,14,591.36/- as per the statement of accounts. Further, a mere statement of applicant that the total outstanding amount is incorrect would not aid the applicant herein. It

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is seen that the applicant has sent OTS proposal dated 10.06.2023 for

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SA No.368/2023

11.08.2026

Rs.2,80,00,000/- admitting the labiality after the issuance of Sale notice dated 05.06.2023. Hence, the contention of the applicant that the total outstanding amount is incorrect is not sustainable and fails.

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The third contention is that the respondent bank has failed to obtain valuation report and issued sale notice dated 05.06.2023 which is duly countered by the bank by producing the valuation report dated 06.10.2022 and the valuator has considered the Market value, Guideline value and fixed the Forced sale value of the property at Rs.1,16,00,000/-. The Authorized officer after considering the failure of earlier sale notices and also the valuation report dated 06.10.2022 has fixed the reserve price of schedule 1 property at Rs.1,45,00,000/-. It is pertinent to note that the applicant has raised a contention that the respondent bank has undervalued the property to which the applicant has failed to produce any valuation to counter the valuation report of respondent bank. Further, the mere contention of the applicant that the respondent bank has undervalued the property would come to the aid of the applicant herein. Hence, the contention of the applicant with regard to the under valuation of the property fails.

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Fourthly, the respondent bank has failed to issue 30 days clear sale notice dated 05.06.2023 is not sustainable as it is evident that the impugned notice is the 4^th Sale notice which requires only 15 days clear notice as per Rule 9(1). For better adjudication, Rule 9(1) is extracted hereunder:

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SA No.368/2023

11.08.2026

Rule 9(1):

No sale of immovable property under these rules, in first instance shall take place before the expiry of thirty days from the date on which the public notice of sale is published in newspapers as referred to in the proviso to sub-rule (6) of rule 8 or notice of sale has been served to the borrower:

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Provided further that if sale of immovable property by any one of the methods specified by sub rule (5) of rule 8 fails and sale is required to be conducted again, the authorized officer shall serve, affix and publish notice of sale of not less than fifteen days to the borrower, for any subsequent sale.]

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Hence, the respondent bank has given clear 15 days sale notice as per Rule 9(1) of SIE Rules. Therefore, the contention of the applicant that the respondent bank has failed to issue clear 30 days clear sale notice is not sustainable and fails.

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Fifthly, the respondent bank has failed to affix the impugned sale notice dated 05.06.2023 in the property is contrary to the documents produced by the respondent bank at Page No.115 to 118 of their counter which clearly reflects that the Sale notice dated 05.06.2023 is affixed on the conspicuous place of the property. Hence, the contention of the applicant that the respondent bank has failed to affix the sale notice on the property fails.

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SA No.368/2023

11.08.2026

Sixthly, the respondent bank has failed to comply with Rule 9(3) and (4) of SIE Rules which is duly countered by respondent bank by producing the sale confirmation letter dated 01.07.2023 and Sale Certificate dated 15.07.2023 which reflects that the auction sale was confirmed in favor of the successful bidder after the receipt of 25% of the sale consideration amount on 01.07.2023 as per Rule 9(3). Further, the bank has issued Sale certificate on 15.07.2023 within the period of 15 days as per Rule 9(4) of SIE Rules. Hence, the contention of the applicant with regard to noncompliance of Rule 9(3) (4) of SIE Rules fails.

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Upon examination of the facts, pleadings and the documents produced by the respective parties, the Tribunal comes to inevitable conclusion that the respondent bank as secured creditor has initiated the measures under the Act and have established due compliance of the procedures as mandated under the Acts and Rules made there under, On the other hand the applicant has failed to point out any illegality in the measures taken by the respondent bank in conducting the auction sale on 30.06.2023.

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On perusal of the records it is seen that the applicant’s admits and submitted that there is no infirmities in the procedure adopted by the respondent bank vide proceedings dated 22.03.2024. Hence, the Tribunal concludes that the auction sale notice dated 05.06.2023 and the sale held on 30.06.2023 in favor of the auction purchaser is in accordance with the Act and Rules made thereunder. For the foregoing reasons the present SA is only to be dismissed.

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SA No.368/2023

11.08.2026

Resultantly the present SA is dismissed. Interim Order granted, if any stands vacated, pending IAs are disposed of in terms of this final order. No order as to cost.

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Sd/- (S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI

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(Dictated to Steno (Mogesh), transcribed by him, corrected, signed and pronounced by me on this the 11^th day of August, 2026)

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ANNEXURES

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LIST OF DOCUMENTS PRODUCED BY THE APPLICANT

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Sl.	Description of Documents	Document
No.		No.
1.	Adjacent Property Valuation details	A-1
2.	Impugned Sale notice dated 05.06.2023	A-2

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LIST OF DOCUMENTS PRODUCED BY THE RESPONDENTS

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Sl. No.	Description of Documents	Document No.
1.	Photocopy of the 13(2) notice along with AD card towards proof of delivery on Mr. S.S. Zubar Ali dated 22.05.2018	R-1
2.	Photocopy of the 13(2) notice along with AD card towards proof of delivery on Mr. S.S. Zubar Ali dated 22.05.2018	R-2
3.	Photocopy of the 13(2) notice along with AD card towards proof of delivery on Mr. S.S. Zubar Ali dated 15.07.2019	R-3
4.	Photocopy of the 13(2) notice along with AD card towards proof of delivery on Mr. S.S. Zubar Ali dated 05.06.2021	R-4

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SA No.368/2023

11.08.2026

5.	Photocopy of the 13(2) notice along with AD card towards proof of delivery on Mr. S.S. Zubar Ali dated 05.06.2021	R-5
6.	Photocopy of the Possession notice along with AD card towards proof of delivery on Mr. S.S. Zubar Ali dated 13.03.2019	R-6
7.	Photocopy of the Possession notice along with AD card towards proof of delivery on Mr. S.S. Zubar Ali dated 13.03.2019	R-7
8.	Publication of Possession notice dated 13.03.2019 in English and Vernacular Dailies dated 15.03.2019	R-8
9.	Photocopy of the Possession notice along with AD card towards proof of delivery on Mr. S.S. Zubar Ali dated 28.10.2019	R-9
10.	Publication of possession notice dated 28.10.2019 in English and vernacular dailies	R-10
11.	Photograph relating to affixture of 13(4) notice dated 28.10.2019	R-11
12.	Photocopy of the possession notice along with AD card towards proof of delivery on Mr. S.S. Zubar Ali dated 28.09.2021	R-12
13.	Photocopy of the possession notice along with AD card towards proof of delivery on Mr. S.S. Zubar Ali dated 28.09.2021	R-13
14.	Publication of Possession notice dated 28.09.2021 in English and Vernacular Dailies	R-14
15.	Photo copy of the valuation report	R-15
16.	Photo copy of 1^ste-auction sale notice	R-16
17.	Photo copy of 2^nde-auction sale notice	R-17
18.	Photo copy of 3^rde-auction sale notice	R-18
19.	Photo copy of 4^the-auction sale notice dated 05.06.2023	R-19
20.	Photo copy of the photo relating to affixture of sale notice dated 05.06.2023	R-20
21.	Publication of e-auction sale notice made in English and Vernacular Dailies	R-21
22.	Photo copy of the AD card relating to the service of e-auction sale notice on the applicant	R-22
23.	Photo copy of the auction proceedings dated 30.06.2023	R-23
24.	Photo copy of the sale confirmation letter	R-24
25.	Photo copy of the sale certificate issued to the auction purchaser	R-25
26.	Photo copy of the notice issued to the applicant and borrowers demanding the balance payment dated 19.08.2023	R-26

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SA No.368/2023

11.08.2026

SCHEDULE OF PROPERTY

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Property No.1

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All that part and parcel of the residential land and building measuring an extent of 3045 sq.ft., comprised in S.F.No.229,230/2 part 1, No.133, Plot No.14, Oil Mill Street, West Tambaram, Chennai – 600 045. Situated within the registration district of South Chennai and Sub-registration district of Tambaram with the following four boundaries:

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On the North: Oil Mill Street On the South: Plot No.13, On the East: Oil Mill Street, On the West: Plot No.15,

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Measuring:

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North: 45 feet South: 43 feet East: 65 feet West: 73 feet

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Property No.2

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Item No.1

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All that part and parcel of the residential land and building with an extent of 931 sq.ft., being western portion of the total extent of acre 0.04 ¼ cents (1862 sq.ft.,) comprised in Gramanatham S.No.300, Plot No.33A, Old No.166, New No.133, Lakshmipuram, West Tambaram, Chennai – 600 045. Situated within the registration district of South Chennai and SubRegistration District of Tambaram with the following Boundaries:

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SA No.368/2023

11.08.2026

On the North: Playground of Sevasadan School, On the South: Lakshmipuram road, On the East: Property belonging to Mrs. S.A.M. Akeetha Begum, On the West: Property belonging to Mr. Balu

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Item No.2:

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All that part and parcel of the residential land and building with an extent of 932 sq.ft., being eastern portion of the total extent of Acre 0.04 ¼ cents (1862 sq.ft.,) comprised in Gramanatham S.No.300, Plot No.33A, Old No.166, New No.133, Lakshmipuram, West Tambaram, Chennai 600 045. Situated within the registration district of South Chennai and SubRegistration district of Tambaram with the following four boundaries:

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On the North:	Playground of Sevasadan School,
On the South:	Lakshmipuram Road
On the East:	Property belonging to Mr. Krishnan
On the West:	Property belonging to Mrs. Southamme Begum
Measuring:
On the North:	19 Feet
On the South:	19 Feet
On the East:	49 Feet
On the West:	49 Feet

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Sd/(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI

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Zubari Ali v. Karur Vysya Bank

Case brief

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Zubari Ali v. Karur Vysya Bank

Case brief

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