Dismissed

Ananthababu v. Uco Bank

DRT19 Jan 2026SA/440/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed a secritization application challenging a Sale Notice issued by UCO Bank under the SARFAESI Act. The court found that the bank duly served notices, published them in newspapers, affixed them, and obtained valuation reports, adhering to all statutory procedures.

What did the court decide?

The Securitization Application was dismissed; the Interim Order stood vacated.

Ananthababu versus Uco Bank — DRT (2026) — LawSathi Research

SA No.440/2023

19.01.2026

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 19^th day of January, 2026

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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SARFAESI APPLICATION No. 440 of 2023

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Mr. Ananthababu Subramaniam, S/o. Subramaniyan, At BP-6, 4^th Floor, Metropolis Apartments, Bharathidasan Colony, K.K.Nagar, Chennai -600 078. ….Applicant -VsThe Authorized Officer, UCO Bank, Adyar Branch, Old No.37, New No.85, 1^st Main Road, Gandhi Nagar, Adyar, Chennai -600 020. ….Respondent

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Counsels on record / appeared:

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Counsel for Applicant : M/s. G. Sanjeevi Counsel for respondent : M/s. G. Pramila

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ORDER ON SA 440/2023

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The present Securitization Application [SA] is filed on 22.08.2023 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 order dated 25.07.2023 fixing the sale on 25.08.2023 and the outstanding amount due as per Sale Notice is Rs.81,36,000/-

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Pleadings of the applicant:

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The applicant is the borrower running Sony repair system and service center in the name and style of M/s. Paragon Enterprises had availed OD facility of Rs.83 Lakhs. After availing the loan, the applicant was regularly repaying the loan amount in advance and never allowed their account to become an NPA and also made a payment even during the covid period without default.

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Applicant have offered the property as collateral security towards the credit facilities and due to default in repayment, the bank has classified the loan account as NPA without following the RBI guidelines, and have issued the sale notice contending that the account has become an NPA.

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The respondent did not serve or published the impugned sale notice as mandated under rule 8(6) of the SIE Rules and without following the procedures have put the property to auction, hence the applicant have challenged the sale notice dated 25.07.2023.

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The respondent can initiated the measures under the SARFAESI Act only after the registration of the security interest before the central registry and as the respondent have not registered the charge in the central registry they cannot proceed under the SARFAESI Act.

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After classifying the account as NPA, the respondent have issued the sale notice dated 25.07.2023 arbitrarily and mechanically fixing the reserve price at thrown away price when the property was valued at

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Rs.1,80,00,000/- at the time of sanction. The value of the immovable property is located in the prime area should only upgrade, however the bank had valued at very low.

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In the grounds, it is contented that the classification is against the RBI guidelines and the sale notice is issued without following the procedures and no statutory notices have issued to the applicant prior to the sale notice.

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The bank without following Rule 9(1) and even before the expiry of 30 days’ notice has proceeded to be sold on 25.08.2023; there is no proper valuation from an approved valuer, not affixed the sale notice nor published in the two newspapers as required under Rule 8(6) of SIE Rules.

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The secured creditor without complying Rule8(5), 8(6), 8(7) of SIE Rules have issued the sale notice.Hence on these grounds the applicant prays to set aside the sale notice.

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Objections of the respondent bank:

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The respondent bank has filed detail counter inter alia denying all the averments made in the SA. It is contented that the applicant was irregular in remitting the payments as per the terms of the sanction and committed default resulting in the classification of the loan account as NPA on 29.10.2022.

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The contention that the applicant was made to sign the blank papers is denied and he has executed all the loan documents guaranteeing the due repayment. Applicant relative have created mortgage over the property towards the credit facility availed by the applicant, the account was declared as NPA on 29.10.2022 and statutory notices under sec.13(2) Demand Notice was issued on 10.11.2022 calling upon the applicants to make a payment of Rs.74,53,130.36 due as on 30.09.2022 together with interest.

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The Sec.13(2) demand notice was duly served on the applicant and the guarantors on 16.11.2022, as they failed to clear the overdue even after receipt of S.13(2) notice, bank have issued Sec.13(4) in accordance with the Act and took symbolic possession on 18.01.2023. The possession notice was served on the applicants on 20.01.2023; affixed on property on 19.01.2023, the possession notice published in two newspapers one in “The New Indian Express” and another one in “Dinamani” both dated 22.01.2023.

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As the applicant failed to clear the liability in spite of the service of the Demand Notice and Possession Notice, the bank issued the Sale Notice dated 25.07.2023 by RPAD on 26.07.2023 which is received as per the acknowledgement card.

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The respondent fixed the reserve price for the auction by following the prescribed procedures and has obtained the valuation report from

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approved valuer for both the properties and on the basis of the valuation the reserve price was fixed as in accordance with law.

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The sale was successfully held and the successful bidder has paid the sale amount and sale certificate is also executed in favour of the successful bidder for Item No. II for an amount of Rs.45 lakhs and the sale certificate is also issued to the successful bidder completing the sale transaction.

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The bank denies all the allegations in the SA as Sec.13(2) Demand Notice and Sec.13(4) Possession Notice is duly served and the action is taken by the respondent under the Act are perfectly legal and as per the procedures. As the respondent have followed all the procedures in accordance with act prays for dismissal of the SA.

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

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It is seen from Sec.13(2) Demand Notice that M/s. Paragon Enterprises, is a partnership firm represented by its managing partner Mr. A Ananthababu Subramaniam the applicant herein. The applicant representing M/s. Paragon Enterprises, had approached the respondent bank for availing a working capital and Term Loan, which was sanctioned and in acceptance of the same the applicant had executed all the loan documents in favoring the respondent bank and two Properties as described in the Sale Notice was offered as collateral security by the applicant.

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In fact the applicant do not dispute the availing of the credit facility, mortgage of the properties as collateral security towards the credit facilities availed by the borrower. Due to continuous default in the repayment, the loan account of the applicant was classified as NPA on 29.10.2022.

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The respondent subsequent to classification of the account as NPA has issued the Sec.13(2) Demand Notice dated 10.11.2022 demanding an amount of Rs.74,53,130.36/- due as on 31.10.2022 to be repaid within a period 60 days. It seen from the records that the Sec.13(2)Demand Notice is sent by RPAD which the applicant have received the Demand Notice as per the Acknowledgement card produced at Pg.14-21 of counter.

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Even after the receipt of the 13(2) demand notice, the borrower and the guarantors did not liquated the liability within the period of 60 days nor raised any objections to the demand made by the respondent bank. Hence, the bank has issued the Sec.13(4) Possession Notice on 18.01.2023 which was duly served, Acknowledgement Cards are produced at Pg.26-33 of counter, and Possession Notice is also published in two newspapers one in English “The New Indian Express” and another one in Tamil “Dinamani” both dated 22.01.2023.

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It is an admitted fact that applicant has not challenged the Sec.13(4) possession notice dated 18.01.2023 within the period of 45 days as required under section 17(1) of the SARFAESI Act. However, the

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respondent have establish the due compliance of the procedure in issuing the statutory notices with supporting documents resulting in upholding the Sec.13(2) Demand Notice dated 10.11.2022 and 13(4) Possession Notice dated 18.01.2023 as valid notices issued under the Act and Rules.

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Now considering the challenged to the Sale Notice dated 25.07.2023 in the present SA. It is the case of the applicant that the bank have not affixed the sale notice nor have published in the two newspaper as required under the Rules is not sustainable. It is seen from the records produced by the bank that the sale notice is sent by RPAD which was duly served, Acknowledgement Cards are produced at Pg.6267 of counter, Sale Notice is also published in two newspapers one in English “The New Indian Express” and another one in Tamil “Dinamani” both dated 27.07.2023, and photo of affixture of Sale Notice produced at Pg.70 and 71 evidences due service of Sale Notice.

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Thus the respondent bank have countered the specific contention of the applicant that the sale notice was not affixed nor published in the newspapers with the supporting documents which has supported the case of the respondent bank in compliance of the Rule (9) of the sale notice.

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The sale was successfully held as scheduled and Mrs.Dhivya. V is the successful bidder for the Item No.2 property as described in the sale notice all that piece and portion of MIG flat No.L in the second floor of the Building and Block No.M.56, Bharathidasan Colony, K.K. Nagar, Chennai-

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600 078, erected on the land in survey No.297/1A part at Kodambakkam Village, K.K. Nagar, Chennai City.

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It seen that the item No.2 property was put to sale with a reserve price of Rs.39 lakhs and the auction successful bidder as bid the property for Rs.45 lakhs which is more than the reserve price fixed by the secured creditor. On completion of the sale proceedings and after the payment of the entire sale consideration, the sale certificate in favoring the auction purchaser Mrs. Dhivya .V is issued on 12.09.2023. Thus the respondent have followed the procedures in issuing the sale notice as prescribed under the Acts.

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The specific contention of the applicant that the bank has not valued and have not obtained the valuation report is also counted by the bank by producing to valuation reports dated 05.06.2023 vide two different valuers which is produced from pg.36-55. On perusal of the valuation report, it is evident that the valuator has considered all the requirements and parameters including the guideline value and market value in assessing the property while fixing the reserve price.

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The authorized officer after obtaining the valuation report from the approved valuer has fixed the reserve price and evidently the property is sold for more than the reserve price. Thought the applicant has taken a contention that the property is undervalued have not produced any independent valuators report to counter valuation of the respondent bank.

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A mere statement that the violation of Rule 8(5), 8(6), and 8(7) violation of all the procedures would not come to the aid of the applicant without specifying the violation of the irregularities in following the procedures under the Act.

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On the other hand, the respondent bank have established with supporting documents that the measure initiated after the classification of the account as NPA till the date of issuance of the sale certificate are in due compliance of the procedures as mandated under the Act and Rules.

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For the foregoing reasons, 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. Sd/-

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

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( Dictated to Steno (Suriya), transcribed by him, corrected, signed and pronounced by me on this the 19^th day of January, 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	Documents
No.		No.
1.	Notice Under Section 13(2) of the SARFAESI Act 2002, dated 10.11.2022.	A-1
2.	Possession Notice dated 18.01.2023.	A-2
3.	Impugned Sale Notice dated 25.07.2023.	A-3

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LIST OF DOCUMENTS PRODUCED BY THE RESPONDNET

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Sl. No.	Description of Documents	Documents No.
1.	Demand Notice issued U/s.13(2) of SARFAESI Act dated 10.11.2022.	R-1
2.	Copies of the Postal acknowledgement received as proof of service of the demand notice dated	R-2

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	16.11.2022.
3.	Possession Notice U/s.13(4) of SARFAESI Act dated 18.01.2023.	R-3
4.	Postal Acknowledgement received as proof of service of the Possession Notice dated 20.01.2023.	R-4
5.	Possession Notice in Newspaper publication in Tamil (Dinamani) and English (The New Indian Express) dated 22.01.2023.	R-5
6.	Valuation report – Property -1 dated 05.06.2023.	R-6
7.	Valuation report – Property -II dated 05.06.2023.	R-7
8.	Sale notice issued by respondent bank dated 25.07.2023.	R-8
9.	Copies of the Postal acknowledgement received as proof of service of sale notice dated 26.07.2023.	R-9
10.	Sale Notice in Newspaper Publication in Tamil (Dinamani) and English (The New Indian Express) dated 27.07.2023.	R-10
11.	Sale Notice affixture in properties 1 and 2 dated 26.07.2023.	R-11
12.	Sale Certificate issued to successful bidder by respondent bank dated 12.09.2023.	R-12

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SCHEDULE OF PROPERTIES

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Property I

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All that piece and parcel of property in flat No.1 in first floor, western side admeasuring 875 Sq.ft., of plinth area (including the common area) and an undivided share of land of 685 sq.ft., out of the total extent of 5480 sq.ft., ib Plot Nos.12 & 13, Balaji Nagar, Valasaravakkam, Chennai in layout D.D.T.P.202/74 approved by the Director of Town Planning and comprised in S.No.½ of Valasaravakkam Village, Saidapet Taluk, Chengalpet District, bounded on the

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North by : Nerkundram Village South by : 24 ft Road East by : Plot No.14 and West by : Plot No.11

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Situated within the Registration District of Chennai South and SubRegistration District of Virugambakkam.

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Property II

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All that piece and portion of MIG flat No.L in the second floor of the Building and Block No.M.56, Bharathidasan Colony, K.K. Nagar, Chennai600 078, erected on the land in survey No.297/1A part at Kodambakkam Village, K.K. Nagar, Chennai City, flat measuring 360 sq.ft., and this land being Bounded on the

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North by : 50 ft Road South by : MIG flat No.56/1 East by : MIG flat No.56/K West by : MIG flat No.55/1

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Within the Registration District of Chennai central and Sub Registration District of Ashok Nagar.

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

Ananthababu v. Uco Bank

Case brief

What is this about?

What did the court decide?

Ananthababu v. Uco Bank

Case brief

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