Dismissed

Mrs Muneeza Khanam v. Karnataka Bank Limited

DRT17 Aug 2026SA/419/2025

Case brief

AI extract

What is this about?

This application under Section 17 of the SARFAESI Act, 2002, challenged a Sale Notice and physical possession proceedings initiated by the bank for default on a home loan. The Tribunal found that the bank had duly complied with notice requirements and rules, rendering the applicant's grievance meritless. Consequently, the application was dismissed, though the applicant was not barred from a fresh

What did the court decide?

Application dismissed; Respondent Bank is at liberty to issue a fresh sale notice by following the due procedure under the SARFAESI Act, 2002 and Rules thereunder.

Mrs Muneeza Khanam versus Karnataka Bank Limited — Banking and Recovery | DRT (2026)

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INTHE DEBTS RECOVERYTRIBUNAL - I AT HYDERABAD DATEDTHISTHE 17TH DAYOFAUGUST, 2026

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PRESENT: SRI GUMMADI GoPICHAND, PRESIDING oFFICER

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sA.No.419/2025

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Mrs. Muneeza Khanam, W/ o Mohd.Imamuddin Siddiqui, Aged 35 years, occ:house wife, R/o flat No.402, 4s floor, Falcon Crest, H.No.5- 1-564/C&5-1-561/D, Kuche Syed Jung, Troop Bazar, Hyderabad-S0O 005.

... Applicant

Versus

Karnataka Bank Ltd.

Rep. by its Authorized officer Asset Recovery Management Branch, Plot No.50, Srinagar Colony, Road No.3, Banjara Hills, Hyderabad-500 034

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.. . Respondent

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Counsel for the Applicant : SiT. Sidhar Reddg Counsel for Respondent : Si N.Rama Rao

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Reserued on : 13.07.2026 Pronounced on : 17.08.2026 Uploaded on : 17.08.2O26

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ORDER

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This application is filed by the Applicant u/s.17 of the SARFAESI Act, 2oo2, challenging the Sale Notice dt.29.O8.2o25 issued by the Respondent Bank for conducting auction of the schedule^propert5r on t7.to.2 .^{proceedings initiated by the Respondent for} r\rof the schedule property through Advocate orders of Ld.lI Addl.CJM, Hyderabad and void.

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

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Applicant herein availe'd credit fac ities from the Respondent and the Applicant was regularly paying the instalments. Without serving demand notice and possession notice to the Applicant, the Respondent straightaway proceeded for taking physical possession of schedule property pursuant to the orders of Ld.II Addl.CJM, Hyderabad which is illegal and arbitrary and so, the said proceedings are not legal and valid. The impugned possession notice was not pubrished in two daily newspapers and also not affixed on the schedule property as contemplated u/r 8(1)&(2) of Security Interest (Enforcement) Rules, 2oo2. The Respondent Bank also issued Sare Notice dt.29. og.2o2s without issuing redemption notice and the said sale notice was not served on the Applicant and also not affixed on the schedule property. The Respondent railed to follow Rule 8(s)(6)&9(1) of Security Interest (Enforcement) Rules, 2OO2. Hence the SA.

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The Respondent Bank filed their Reply denying all the adverse allegations made in the SA and contended that Applicant availed Home roan of Rs.4o lakhs against the mortgage of schedure property as securit5r for the repayment of the loan. After availing roan from the Respondent, Applicant committed defaurt in repayment of roan dues and the loan account was classified as NpA on 29.05.2023. So, the Respondent issued demand notice and possession notice to the Appricant by dury following the procedure. Thereafter, the bank issued sare Notice dt.29.O8.2O25 fixing the date of auction of the schedule property on 17.10.2025 and sent the same to the Applicant and guarantors and the published the said notice in two daily newspapers. Thereafter, the Respondent proceeded u/s 14 of the Act, 2OO2 and obtained orders from ,^Hyderabad for appointment of advocate cal possession of the schedule property said ocate issioner issued notice to the Applicant to *l 17 ,j

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vacate the schedule property and thus there are no violations. Accordingly, Respondent prayed to dismiss the SA.

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Heard Ld. Counsel for the Applicant and Ld.Counsel for the Respondent Bank. perused the material brought on record.

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Now the points that arise for consideration are

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whether the Applicant has established ang ualid grounds for challenging the SaIe Notice dt.29.08.2025 issued bg the bank for conducting auction of the schedule propertg and. also tte proceedings initiated by the Respondent for taking phgsical possession of the scLredule propertg u/s 14 of the SARMESIAct, 2002?

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ii. To uhat relief?

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Point No.lil:-

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6' During the course of arguments, Ld. counser for the Applicant and Ld. counser for the Respondent reiterated their respective versions as stated supra.

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The undisputed facts of the case are that the Applicant ava,ed Home loan
from the Respondent and created mortgage against the schedule property
and thereafter, committed default in repaying the loan dues and so, the
Respondent initiated proceedings under the provisions of SARFAESI Act,
2OO2 and issued Sale notice dt.29i_-8_.pe2!_and also initiated proceedings
u/s 14 of the SARFAE$| m,Sfrfui-nu$B.qqr".cal /.",.-. - t- :::-.- possession of the
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8' The specifrc contention of the Applicant is that the Respondent without serving demand notice and possession notice and without following Rule 8(1)&(2) of Rules, 2002, straightaway, initiated proceedings for taking physical possession of the schedule property through advocate commissioner u/s 14 of the SARFAESI Act, 2oo2 and, also issued sale notice without following the procedure and so, the said proceedings are null and void.

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9' Per contra, Respondent Bank contended that the Appricant committed default in repaying the loan dues and so, the loan account was classified as NPA as per the guidelines of RBI and the Respondent issued demand notice, possession notice and sale notice to the Applicant by duly following the procedure as contemplated under the provisions of SARFAESI Act, 2002 and Rules made thereunder and also initiated proceedings u/s 14 of the SARFAESI Act, 2OO2 for taking physical possession of the schedure propert5r through advocate commissioner by following due process of law.

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To substantiate their contention, the Respondent Bank fired materiar documents along with the Reply filed by them. As per the said documents, it is clear that the Respondent issued demand notice dt.l7.OZ.2023 u/s 13(2) of the SARAFAESI Act, 2oo2 and sent the said notice to the Applicant and guarantors through Regd. post as evidenced by the postal acknowledgements filed by the Respondent and the said notice was also published in two daily newspapers as evidenced by the copies of paper publication filed by the Respondent. Thus there is valid service of demand notice on the Applicant. when the Applicant fa,ed to compry with the said demand notice, the Respondent issued possession notice dt.03.1 l.2o2z u/s 13(4) of13(4) ofof the said possession said possession notice was sent to theto thethe

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u/s 13(4) of13(4) ofof the said possession said possession notice was sent to theto thethe Applicant an4[ o*il post as evidenced by the postal acknowledg6rhents ndent. The said notice was published i"o f7'nh^4fii1, " as evidenced by the copies of

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paper publication filed by the Respondent and the said notice was also affixed on the schedule property as depicted in the copies of photographs filed by the Respondent. Thus, the Respondent has duly followed Rule 8(1)&(2) of Security Interest (Enforcement) Rules, 2OO2 in issuing possession notice in respect the schedule property.

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As per the provisions of Section 14 of SARFAESI Act, 2002, after issuance of possession notice u/s 13( ) of the SARFAESI Act, 2OO2, the secured creditor is at liberty to approach the concerned District Magistrate or Chief Judicial Magistrate for taking physical possession of the secured assets. In the instant case, after issuing demand notice and possession notice to the Applicant, the Respondent being secured creditor, approached Ld.lI Addl.CJM, Hyderabad u/s 14 of the SARFAESI Act, 2002 by Iiling Crl.M.P.No. 1 lL 125 for appointment of advocate commissioner for taking physical possession of the schedule property. The said advocate commissioner issued notice to the Applicant to vacate the schedule property and the said notice was admittedly served on the Applicant and so, the said proceedings are perfectly legal and valid. The Respondent also issued sale notice dt.29.08.2025 for conducting auction of the schedule property, however the proposed auction was not materialized and so, the relief claimed by the Applicant in respect of the said sale notice becomes infructuous.

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L2. So, considering all the circumstances, I am of the opinion that the
Applicant is not entitled to any relief as there are no merits in the SA. So,
I see no ground warranting interference of this Tribunal with the
proceedings initiated by the Respondent for taking physical possession of
the schedule erty u/s 14 of the SARFAESI Act,2OO2. Accordingly, this
point is the Respondent and against the Applicant.
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'Point

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No.(ii):-

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In the result, SA 419125 is dismissed as there are no merits. The Respondent is at liberty to issue fresh sale notice by duly following the procedure contemplated under the provisions of SARFAESI Act, 2OO2 and Rules made thereunder.

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