Dismissed

Vinod Sharma v. Karur Vysya Bank

DRT24 Jul 2026SA/434/2023

Case brief

AI extract

What is this about?

In an application under Section 17 of the SARFAESI Act, applicants challenged a bank's sale notice and auction sale. The Tribunal examined allegations regarding account status, outstanding amount, valuation, and notice period. Finding the bank complied with statutory procedures and rules, the Tribunal dismissed the challenge and upheld the validity of the sale certificate.

What did the court decide?

The Securitization Application was dismissed; the auction sale held on 25.08.2023 and the sale certificate dated 21.02.2025 are held as valid.

Vinod Sharma versus Karur Vysya Bank — Contract and Commercial Disputes | DRT (2026)

SA No.434/2023

24.07.2026

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 24^th day of July, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SA No. 434 of 2023

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Mr. Vinod Sharma, S/o. Mr. M. Vishnu Sharma

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Mr. Vivek Sharma, S/o. Mr. Vishnu Sharma

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Mrs. Sharmila Sharma, W/o. V. Vinod Sharma

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Mrs. Samedh Sharma, (Sammath Bai) W/o Mr. V. Vishnu Shamra

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All Mr. Vinod sharma, Mr. Vivek Sharma, Mrs. Sharmila Sharma, Mrs. Samedh Sharma residing at:

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No.201 Poonamalle High Road, Near Chinnamman Koil Street, Avadi, Thiruvallur – 600 054.

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…Applicants

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-Vs-

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The Authorised Officer, Karur Vysya Bank Ltd., No.1, Padmavathiyar Road, 2^nd Floor, Gopalapuram, Chennai – 600 086.

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Mr. Vasantharaj, S/o, Velayutham,

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Mrs. V. Saranya, W/o Vasantharaj

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Both Mr. Vasantharaj and Mrs. V. Saranya residing at:

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No.72, Pillaiyar Koil Street,

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Melchettipattu,

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Thiruvannamalai – 600 707.

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…Respondents

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Counsels on record / appeared:

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Counsel for Applicant	: Mr. R.K.M. Suresh
Counsel for Respondent	: M/s. T. Gopalan & Co
Counsel for 2^nd, 3^rdRespondents	: Mr. S. Sathiyanarayanan

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ORDER ON SA 434 /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 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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The applicant has challenged the Sale notice dated 21.07.2023 fixing the sale on 25.08.2023 and the outstanding amount due as per Sale notice is Rs.4,36,45,552.44/-

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3. Pleadings of the applicant:

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3.1 The borrower is running business in M/s. Kamadhenu Gems and

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Jewels in Avadi had availed loan to which the applicants mortgaged the property towards the loan. The borrower was regular in repayment, due to the business loss, covid-19 pandemic the borrower defaulted in regular payments towards interest portions.

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3.2 The applicants/ guarantors requested respondent bank several time to settle the liability and also to regularize the loan account from NPA. However, the respondent bank has issued sale notice dated 21.07.2023

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fixing the sale to be held on 25.08.2023 under Section 13(4) of Act calling upon the applicants to pay Rs.4,36,45,552.44/- as on 25.08.2023.

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3.3 In the grounds it is contended that the respondent bank failed to intimate the status of the loan accounts which is against the RBI guidelines. The outstanding amount as claimed by the bank in sale notice dated 21.07.2023 is imaginary and incorrect.

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3.4 It is submitted that the respondent bank has failed to give clear 30 days’ notice to the applicants which is in violation of Rule 8(6) and 9(1) of SIE Rules. The respondent bank failed to obtain proper valuation as per Rule 8(5) of SIE Rules and the price fixed by the bank is lower than the market value of the property. The respondent bank was never been fair or reasonable and prays to set aside sale notice dated 21.07.2023 fixing the sale to be held on 25.08.2023.

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4. Objections of the respondent bank:

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4.1 The respondent bank in their counter contended it sanctioned Rs.3,90,70,000/- i.e., secured OD limit of Rs.3.00 crores and two WTL of Rs.90.70 lakhs in the year 2017 to M/s. Kamadhenu Gems and Jewels proprietorship of Vinod Sharma & Sons HUF. The credit facilities were guaranteed by the applicants individually and mortgaged their properties to secure the repayment of the credit facilities, interest and other charges.

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4.2 In spite of repeated reminders the loan accounts, the repayment was irregular , hence the bank has classified the accounts as NPA on 25.08.2022 in accordance with RBI guidelines and issued Section 13(2) Demand Notice

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on 17.11.2022 calling upon the borrowers, mortgagors, guarantors to repay the outstanding amount of Rs.3,94,27,233.82/- within a period of 60 days and informed if the applicants defaulted in complying the terms in demand notice, the schedule property will be put for auction sale.

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4.3 The borrowers had received the Demand Notice dated 17.11.2022 and failed to make representation, hence the respondent bank has taken symbolic possession of the property on 01.03.2023 by delivering possession notice to the applicants which is also affixed on the property and published in two Newspapers. In spite of receipt of notices, the applicants failed to repay the outstanding amount and the bank has issued sale notice dated 21.07.2023.

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4.4 The mortgaged properties are security to another loan account of M/s. Golden Touch Jewellers and outstanding amount due is Rs.1,73,13,847.89 as on 21.07.2023 which was served to the applicants on 22.07.2023 and also affixed on the property, published in two Newspapers on 25.07.2023. Therefore, the total outstanding amount is Rs.4,36,45,552.44 and the bank has fixed the reserve price at Rs.6,00,00,000/- after obtaining valuation report from authorized valuer. The respondent bank has fixed the EMD amount as Rs.60,00,000/- and two bids was received to the bank for participating in the auction.

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4.5 The respondent bank denied each and every allegation made by the applicants para wise, contending that borrower has availed cash credit facility of Rs.3,00,00,000/- on 11.12.2017 which was renewed on

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09.03.2018, 12.05.2020 and 11.03.2021 and also agreed to convert Open cash credit into secured OD limit of Rs.3,00,00,000/-. Further, the respondent bank has given Emergency Credit line of Rs.60,00,000/- on 23.10.2020 and another loan of Rs.30.70 lakhs on 11.03.2022 by way of Guaranteed Emergency Credit Line extension during the Covid-19 pandemic situation.

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4.6 The applicants were given time to regularize their account and the total outstanding amount of Rs.4,36,45,552.44/- i.e., Rs.3,49,38,742.98/, Rs.53,13,689.15/- and Rs.33,93,120.31/-, further the respondent bank has countered allegation made by the applicant ground wise and for dismissal of the present SA.

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Objections of the 2^nd and 3^rd Respondents:

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4.7 The 2^nd and 3^rd respondents who are auction purchasers has filed counter and denied the allegations/ averments made by the applicants in the present SA. It is submitted that the 2^nd and 3^rd respondents have obtained the interest of the property by way of public auction and relies on the Judgment of Hon’ble Supreme Court in Celir LLP Vs. Sumati Prasad Bafna 2024 SCC online SC 3727 where it is held that any sale by auction is confirmed cannot be set aside unless there is collusive and fraudulent. The applicants has failed to point out any illegality in the auction sale held, further the applicants have also lost their right of redemption under Section 13(8) of SARFAESI Act when the sale notice is published in Newspapers.

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4.8 It is submitted that the respondent bank has duly followed all the procedures under SIE Rules and SARFAESI Act. Hence, the 2^nd and 3^rd respondents prays to dismiss the present SA.

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Heard both sides of the Counsels and perused the records of the case.

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5.1 It is discernible from the records that the applicants are the owners of the property who have mortgaged their properties to secured the repayments of the credit facilities availed by M/s. Kamadhenu Gems and Jewels who has availed Rs.3,90,70,000/- which is an undisputed fact.

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5.2 Due to default in the repayments, the respondent bank has classified the loan accounts as NPA on 25.08.2022 as per the RBI guidelines which is admitted by the applicants at Para No.5 in Page No.3 of the SA. After classifying the loan accounts as NPA, the respondent bank has proceeded further in issuing the Section 13(2) Demand Notice dated 17.11.2022 and Section 13(4) Possession Notice dated 01.03.2023.

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5.3 It is pertinent to note that the applicants have challenged the sale notice dated 21.07.2023 and the allegations/ averments with regard to the issuance of Demand Notice and Possession Notice is not within the period of 45 days as prescribed under Section 17 of the Act and the same is barred by limitation and the same cannot sustain.

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5.4 Even after the issuance of statutory notices, the applicants failed to discharge their entire liabilities, hence the 1^st respondent bank has proceeded further and issued sale notice dated 21.07.2023 fixing the sale

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to be held on 25.08.2023 which was received by the applicants as admitted

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in the Para No.6 at Page No.3 of the present SA.

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5.5 The applicants have challenged the sale notice dated 21.07.2023 in the present SA and the challenge to the sale notice is, firstly the respondent bank has failed to intimate the status of the loan account is contrary to the submission made by the applicants in Para No.5 at Page No.3 of the present SA, the applicants have themselves admitted that several requests were made to bank for regularization of loan account from NPA. Hence, the contention of the applicants that the respondent bank has failed to intimate the status of the loan account fails.

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5.6 Secondly, the outstanding amount as claimed by the respondent bank in sale notice dated 21.07.2023 is incorrect which is duly countered by the respondent bank that total outstanding amount is calculated as per the statement of accounts produced at Page No.67 to 72 of respondent’s counter and the interest charged is as per the agreed terms and conditions of the sanction letter dated 08.03.2022.

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5.7 Thirdly, the respondent bank has issued sale notice dated 21.07.2023 without obtaining fresh valuation report as per Rule 8(5) which is in contrary to the valuation report produced at Page No.34 to 44 of respondent’s counter, the bank has obtained valuation report from an approved valuator dated 05.07.2023. The valuator has considered the market value at Rs.6,50,39,400/-, Forced sale value at Rs.5,52,83,520/-

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and fixed the reserve price at Rs.6,00,00,000/-. It is pertinent to note that

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applicants have failed to produce any valuation report to support their contention, on the other hand the respondent as a secured creditor has obtained valuation report before the issuance of sale notice dated 21.07.2023 as per Rule 8(5) of SIE Rules. Hence, the contention of the applicant that respondent bank has failed to obtain valuation report as per Rule 8(5) is not sustainable and fails.

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5.8 Fourthly, the respondent bank has failed to give clear 30 days notice to the applicants is not sustainable, the respondent bank has issued sale notice dated 21.07.2023 fixing the sale to be held on 25.08.2023 which constitutes clear 30 days notice. Further, the respondent bank has affixed the sale notice dated 21.07.2023 as per Rule 8(7) on the same day which is evident from the photograph of affixture produced at Page No.62 to 64 of respondent’s counter. The sale notice is also published in two Newspapers on 25.07.2023 as per Rule 8(6) as evident from paper publications produced at Page No.65 to 66 of respondent’s counter. For better adjudication, Rule 8(6) of SIE Rules is extracted hereunder:

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Rule 8(6):

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The authorized officer shall serve to the borrower a notice of thirty days for sale of the immovable secured assets, under sub-rule (5):

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Hence, the respondent bank has provided clear 30 days to the applicants herein in issuing the sale notice dated 21.07.2023 scheduling the sale to be held on 25.08.2023 as per Rule 8(6) of SIE Rules.

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5.9 The auction sale was successfully held on 25.08.2023 in favor of 2^nd and 3^rd respondents herein for a sale consideration of Rs.6,15,00,000/-. The respondent bank has confirmed the auction sale on 28.08.2023 and issued Sale certificate 22.11.2023, after the receipt of entire sale consideration amount the respondent bank has registered the sale certificate on 21.02.2025 vide Doc.No.2803 of 2025 before the SRO, Avadi.

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5.10 On perusal 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 after classifying the loan account as NPA 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 issuing the sale notice dated 21.07.2023 and conducting the auction sale on 25.08.2023.

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5.11 Accordingly, the Tribunal concludes that the auction sale held on 25.08.2023 pursuant to the sale notice dated 21.07.2023 is in accordance with the Act and Rules made thereunder and the sale certificate dated 19.02.2025 in favor of the 2^nd and 3^rd respondents is held as valid certificate issued in accordance with the Act. For the foregoing reasons the present SA is only to be dismissed.

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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 24^th day of July, 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.	Impugned Sale notice dated 21.07.2023	A-1

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LIST OF ADDITIONAL DOCUMENTS PRODUCED BY THE

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APPLICANT

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Sl.	Description of Documents	Document
No.		No.
1.	Sanction letter dated 08.03.2022	R-1
2.	Sale Certificate dated 19.02.2025	R-2

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LIST OF JUDGMENTS PRODUCED BY THE APPLICANT

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Sl.	Description of Documents	Document
No.		No.
1.	MANU/SC/0035/1977 Takkaseela Pedda Subba Reddi Vs. Pujari Padmavathamma and Ors., dated 28.04.1977	A-1
2.	MANU/SC/0025/1990 Ambati Narasayya Vs. M. Subba Rao and Ors., dated 16.10.1989	A-2

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3.	MANU/SC/0572/2004 S. Mariyappa (Dead) by Lrs and Ors., Vs. Sidappa and Ors., dated 11.02.2004	A-3
4.	MANU/SC/0494/2012 Ram Kishun and Ors., Vs. State of U.P. and Ors., dated 24.05.2012	A-4
5.	MANU/SC/0494/2012 Vasu P. Shetty Vs. Hotel Vandana Palace and Ors. Dated 22.04.2014	A-5
6.	MANU/SC/0207/2014 J. Rajiv Subramani and Ors., Vs. Pandiyas and Ors., dated 14.03.2014	A-6
7.	Judgment in RA (SA) 41 of 2017 order passed by DRAT Chennai dated 30.06.2022	A-7
8.	Judgment in RA (SA) 09 of 2024 order passed by DRAT Chennai dated 05.08.2025	A-8
9.	SA No.396 of 2025 (Thulasiram. V Vs. The Authorized Officer, Canara Bank) dated 13.12.2025	A-9
10.	RA(SA) 133 of 2013 (The Karnataka Bank Limited Vs. M/s. Mahadeshwara Bricks) dated 20.08.2025	A-10
11.	Civil Appeal No.3685 of 2014 (J. Rajiv Subramaniyan & Anr Vs. M/s. Pandiyas & Ors) dated 14.03.2014	A-11
12.	Civil Appeal No.4679 of 2014 (Vasu P. Shetty Vs. M/s. Vandana Palace & Ors) dated 22.04.2014	A-12
13.	RA(SA) 63 of 2017 the authorized officer vs. Mrs. Jamuna and Ors. Dated 28.08.2025.	A-13

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LIST OF DOCUMENTS PRODUCED BY THE 1^st RESPONDENT

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Sl. No.	Description of Documents	Document No.
1.	Copy of Demand Notice dated 17.11.2022	R-1
2.	Proof of service of Demand Notice dated 18.11.2022	R-2
3.	Postal receipts and tracking consignment dated 19.11.2022	R-3
4.	Copy of Possession dated 01.03.2023	R-4
5.	Photographs showing affixture of possession notices dated 01.03.2023	R-5
6.	Proof of service of Possession notice dated 03.03.2023	R-6
7.	Newspaper publication of possession notice – Tamil and English dated 05.03.2023	R-7
8.	Valuation report dated 05.07.2023	R-8
9.	E-Auction sale notice dated 21.07.2023	R-9
10.	Proof of service of sale notice dated 21.07.2023	R-10

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11.	Photographs showing affixture of sale notice dated 21.07.2023	R-11
12.	Newspaper publication of E-Auction Sale notices –Tamil and English dated 25.07.2023	R-12
13.	Statement of Accounts dated 01.08.2023 to 24.08.2023	R-13

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SCHEDULE OF PROPERTY

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All that piece and parcel of land measuring an extent of 5.72 ½ acres with building comprised in the following items 1 to 4

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Item No.1

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Land measuring to an extent of Acre 1.02 cents (i.e., 44472 sq.ft.,) Comprised in S.No.329/3, as per Patta No.463, Presently Patta No.7456, Survey No.329/3A, No.13 Vellanur Village, Ambattur Taluk, Thiruvallur District, Lying within the registration district of Chennai South and SubRegistration District of Avadi, standing in the name of Mrs. V. Samedh harma @ Sammath Bai.

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Item No.2

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Land measuring to an extent of Acre 0.89 cents (i.e, 36188 Sq.ft.,) and Acre 1.00 cents (i.e., 43600 Sq.ft.,) in Total Acre 1.89 cents (i.e., 79788 Sq.ft.,) comprised in Old Survey No.329/3 as per Patta No.167 as per present Patta No.8574; Survey No.329/3B, =0.89 Cents and 329/3C= 1.00 Acre, situated in No.13, Vellanur Village, Ambattur Taluk, Thiruvallur District, lying within the Registration District of Chennai South and Karur. Sub Registration district of Avadi, standing in the name of Mr. V. Vivek Sharma.

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Item No.3

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Land measuring to an extent of Acre 2.31 ½ cents land (Comprised in Old Survey No.330/2, Old Patta No.190, as per present Patta No.8576, New survey No.330/2B=0.89 Cents, New Survey No.330/2A=0.64 cents

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and New Survey No.330/2C=0.89 Cents, New Survey No.330/2A=0.64 cents and New Survey No.330/2C=0.78 ½ cents, situated at No.13, Vellanur Village, Ambattur Taluk, Thiruvallur district, lying within the Registration District of Chennai South and Sub-Registration District of Avadi, standing in the name of Mr. V. Vinod Sharma.

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Item No.4

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Land measuring to an extent of Acre 0.50 cents comprised in Survey No.91/2D, based on Patta No.463, Survey No.91/2D1=0.34, Patta No.190, New Survey No.91/2D2=0.16 cents, situated in No.13, Vellanur Village, Ambattur Taluk, Thiruvallur District, lying within the registration district of Chennai south and Sub-registration district of avadi, standing in the name of Mrs. Sharmila Sharma.

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Common Four Boundaries for Item No.1 to 4 bounded on:

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North by: Vacant Land South by: Vacant Land East by: Vacant Land West by: Vacant Land

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

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Vinod Sharma v. Karur Vysya Bank

Case brief

What is this about?

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Vinod Sharma v. Karur Vysya Bank

Case brief

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