Dismissed

Ujwal Agarwal v. Agarwal

DRT2 Feb 2026SA/411/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal dismissed the applicant's application challenging the bank's sale notice issued under the SARFAESI Act. The court held that an unregistered agreement of sale does not confer title and the applicant lacked locus standi, while also rejecting the claim that the property was agricultural.

What did the court decide?

The Securitisation Application and pending interlocutory applications were dismissed.

Ujwal Agarwal versus Agarwal — DRT (2026) — LawSathi Research

¶1

IN THE DEBTS RECOVERYTRIBUNAL.IAT HYDERABAD

¶2

DATED THIS THE 2ND DAY OF FEBRUARY, 2026

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PRESENT: GUMMADI GOPICHAND, PRESIDING OFFICER

¶4

SA.No.41 1/2C23

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Ujwal Agarwal, S/o Sri Rajesh Agarwai Aged 34 years, Occ:business, R/o H.No.2l-6-455, Ghansi Bazar, Hyderabad

¶6

..Applicant

¶7

Versus

¶8

l.Canara Balk, Rep. by its Authorized Officer, Basheerbagh branch, Hyderabad.

¶9

Mls Trinetra Jewellers Rep. by its Proprietor Mr.Vikas Kumar Agarwal, S/o late Vishnu Kumar Agarwal, Occ:business, H.No. 5-9 -48 I 2, Opp.Shanbagh Hotel Main Road, Basheerbagh, Hyderabad-S0O029.

¶10

..Respondents.

¶11

Counsel for the 7"t Respondent Bank: Counsel for the 2"d Respondent :

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Smt.Ch.Vedauani Smt.Tarangini P. Sri Abhag singh

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Reserued on Pronounced on Uploaded on

:12.12.2O25

: 02.02.2026

:02.02.2026

.:ORDER.-

1l. This e Applicant u/s.17 of the SARFABSI Act,
2002, Sale Notice dt.18.1O.2023 issued by
the 1 ndricting auction of the schedule
,ff"Ror't
pro on 3O.11. 3 and to are the same as illegal and void.
0 2 FtB 7028

¶19

The averments made in the application, in brief, are that:

¶20

The Applicant is a 3'd party to the transaction between the Respondent No.1 and Respondent No.2. He is doing real estate business and shocked to know about the auction of the schedule propert5r detailed in S.No.l of the Auction Notice dt.18.1O.2O23 issued by the 1st Respondent Bank. Respondent No.2 being a borrower of the Respondent No.1 bank and on default of the loan dues, Respondent No.1 bank initiated steps under the provisions of SARFAESI Act,2OO2 for recovery of its dues. The schedule property is purchased by the Applicant under unregistered agreement of sale dt.27.08.2o19 from his cousin brother Mr.Vikas Agarwa,l, Respondent No.2 herein for a sale consideration of Rs.1,25,0O,000/- and the sale must be concluded within three months from the date of execution of agreement of sale i.e. 27 .O8.2O 19 and the original document No.1043 I 1998 dt.27 .O1.1999 of the said property was handed over to the Applicant with the possession of the property being vacant and agricultural property. Due to some unavoidable circumstances, the Applicant could not pay the batance sale consideration within the period stipulated in the Agreement and as such, Respondent No.2 and the Applicant entered into a Memorandum of Un,lerstanding dt.23.11.2O19 extending the tjme for execution of the sale for further period of 45 days. When the Respondent No.2 had not turned up to execute the sale deed, the Applicant herein filed O.S.No.S/2O2O on the file of Hon'ble III District Judge, R.R.District which is pending. When the original documents are handed over to the Applicant by the Respondent No.2 through agreement of sale, the bank cannot sanction loan to the borrower basing on the mortgage created in favour of the Bank in respecf of the said property and the Bank has gainst the schedule property under Section 31(i) since the same is agricultural property. 0 2 FrB^2[76

¶21

aJ.

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1"t Respondent Bank filed their Reply denying all the adverse allegations made in the SA. The contentions of the 1st Respondent Bank in brief are that, M/s Trinetra Jewellers represented by its Proprietor Vikas Kumar Agarwal i.e. Respondent No.2 herein as borrower and Mr.Vishal Kumar Agarwal as guarantor availed loan facilities from the Bank and in view of the default committed by them, the Bank initiated proceedings under the provisions of SARFAESI Act,2OO2 and issued all the statutory notices to the borrowers and guarantors including Sale Notice dt.18.1O.2023 for conduiting auction of the properties including the schedule property on 30.11 .2023 by duly following the procedure prescribed under the provisions of SARFAESI Act,2OO2 and Rules made thereunder. The schedule property was acquired by Vikas Agarwal i.e. Respondent No.2 vide Sale Deed No.1043/1998 and the same is not agricultural land. In the year 2O11, the borrowers/guarantors have availed loan facilities of Rs.50 lakhs and created mortgage over the schedule property vide Simple Mortgage Deed dt.29.08.2011 and the said mortgage was also renewed from time to time and the said registered mortgages are also recorded with CERSAI and in the description of the pioperty, it is nowhere mentioned as agricultural property. The Applicant has not acquired any right or title over the schedule property as the alleged agreement of sale is an unregistered agreement and hence no rights are conveyed or created. In the suit filed by the Applicant, the Bank was never made a party to the said suit despite having charge over the schedule property through registered documents. So the Applicant is not a genuine purchaser and has no locus standi to file the present SA. Accordingly, the 1"t Respondent Bank prayed to dismiss the SA.

¶23

nsel for the Applicant and Ld. Counsei for the 1"t
2..1 respondent failed to file their counter and reply
iiicien.t time and hence their right of filing counter
t$. Pen-rsed the material brought on record.
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¶24

Now, the points that arise for consideration are,-

¶25

Whether the Applicant has anA locus-standi to challenge the

¶26

proceedings initiated by the l't Respondent bank for conducting auction of the schedule property pursuant to the Sale Notice dt.18.10.2023?

¶27

ii) To uthat relief.t

¶28

Point No.(i) :-

¶29

During the course of arguments, Ld. Counsel for the Applicant and Ld. Counsel for the 1"t Respondent Bank reiterated their respective versions as stated supra.

¶30

The specific contention of the Applicant is that the 2"d Respondent handed over the original document bearing No.1043/1998 to the Applicant and so, the mortgage created in favour of the 1st Respondent Bank in respect of the schedule property by the 2"d Respondcnt is not valid and further contention is that the schedule property is agricultural property and so, the banll annoL proceed against the same as contemplated u/s 31(i) of the SARFAESI Act,2OO2. It is also contended that the 1"t Respondent Bank has not followed the contemplated procedure prescribed under the provisions of SARAtrSI 'Act, 2OO2 in issuing the impugned Sale Notice dt.18. 10.2023 in respect of the schedr.rle property and so, the said notice is not legal and valid.

¶31

rty nt of

¶32

0 2 YPB"e*ff',

¶33

is clairiring that he entered into Agreement of Sale with the 2nd Respondent for purchase of schedulc consideration of Rs.1,25,0O,OOOI- and paid ar lakhs towards advance. Admittedly, the )rd mortgage in respect of the schedule property in spondent Bank in security to the loan facilitics

¶34

availed by them much prior to the said agreement of sale. Mere agreement of sale does not create any right or title over the schedule property, at the best, it gives right to the Applicant to claim damages fiom the 2nd^'Respondent for executing such agreement of sale subsequent to the mortgage created in favour of the 1"t respondent Bank as security for the loan facilities availed by them. It is also alleged by the Applicant that the schedule property is an agricultural land and so, the Bank cannot proceed against the same as prescribed under Section 31(i) of the SARFAESI Act, 2OO2. But in fact, in the description of the said property, it is nowhere mentioned that the said^{property is} used for agricultural use and the same is agricultural land but it^is clearly classified as industrial area and so, the sarne^{cannot be} considered as agricultural land and hence the steps initiated^{by the 1st} Respondent Bank under the provisions of SARFAEAI^{Act,2OO2 against} the schedule property are valid and legal.^{The Applicantbeing a 3'd} party, has no right or authority to contend that the l"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 property. However, the 1"t^{Respondent Bank has filed} necessary material documents to^{provethat the Bank has issued} demand noiice, itossession notice and^{the impugned sale notice in} respect of the schedule property in^{accordancewith the provisions of} SARFAESI Act, 2002 and Rules made^{thereunderand there are no} violations. It is pertinent to note that^{thoughRespondentNo.2 entered} appea-rance through their counsel, not^{chosen to file counterand reply} and their right of filing counter^{and reply was forfeited. The alleged} Agreement of Sale dt.27.O8.2019 on^{the basis of which, the Applicant} is claiming rights over the schedule^{propertyis an unregistered} document which is^{-subsequentto the creationof mortgage over the} roperty in favour of the^l-"t Respondent^{Bankb5r the lna} d hence the same does not^{haveany legalsanctity and} Appli no locus-standi to challenge^{the proceedings initiated}

¶35

Appli
0 2 FEB 2026

¶36

by the l"t Respondent under the provisions of SARAFAESI Act, 2oo2 by virtue of the said Agreement of Sale dt.27 .OB.2O|9.

¶37

So, considering all the circumstances, I am of the opinion that there are no bonafides on the part of the Applicant in filing the present SA challenging the action of the 1"t Respondent bank in issuing Sale Notice dt. 18. lO.2023 for conducting auction of the schedule property and the Applicant is not entitled for any relief as there are no merits in the SA. Accordingly, this point is answered against the Applicant and in favour of the 1"t Respondent Bank.

¶38

Point No.(ii):-

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In thc result, the present securitizatton Application is dismissed. Consequently, the Interlocutory Applications, pending if any, shall stand disposed of. No order as to costs.

¶40

Communicate a copy of this order to the parties concerncd.

¶41

(Dictrtted to the P.A, transcibed. hg her, corrected, s,t.rcd and, nronounced bg ne itt the open coutt otl this the 2"d daA of 7ebruary,2026).

¶42

sd/-
{G. coPrcHAND}
PRESIDING OFFICER
rvtrry
^#lilvoErrrxBAo'

Ujwal Agarwal v. Agarwal

Case brief

What is this about?

What did the court decide?

Ujwal Agarwal v. Agarwal

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

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Case details

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