Dismissed

Yagatti Siva Prasad v. Karnataka Bank Limited

DRT6 May 2026SA/460/2024

Case brief

AI extract

What is this about?

In a Securitization Application filed under Section 77 of the SARFESI Act, 2002, the applicant challenged a bank's auction notices and sale proceedings for schedule properties. The tribunal observed that the bank followed statutory procedures for notice and publication as per Sections 13(2), 13(4) of the Act and Rules B(1) and B(2). Consequently, the application was dismissed.</summary>

What did the court decide?

The Securitization Application was dismissed without any order as to costs.

Yagatti Siva Prasad versus Karnataka Bank Limited — Specific Performance | DRT (2026)

¶1

IN THE DEBTS RECOVERY^TRIBUNAL -^{II AT HYDERABAD}

¶2

DATED THIS THE O6th^{DAY OF MAY,2026}

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PRESENT: SH. RAMESHWAR^{KOTHE, B.Com, L.LB. (Hons'),M'A'} PRESIDING OFFICER

¶4

Securitization Applicatlon^{No. 460 OF 2024}

¶5

Mr. Yagati Siva Prasad S/o Y. Radhachappa, Aged 36^years Occ. Business R/o H.No.2/270, Mandigiri, Adoni, Andhra Pradesh s 18301 .

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.......Applicant.

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Versus

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Karnataka Bank^Ltd., Plot No.50 Srinagar Colony Road, Banjara^Hills, Hydera bad- 500073, Rep. by its Authorized^Officer.

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M/s Sree Veerabhadreswara Commission Agents, Rep. by its Partner^Veera Bhadrappa, New Mini^Powder No.12, APMC Market^Yard, Adoni-518301, Andhra^Pradesh.

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Mr. Veera BhadraPPa^{P K,} S/o. SiddaramaPPa, Aged 65^years Occ. Business, R/o. H.No.21/2308, Mandigiri, Adoni-518301, Andhra Pradesh

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......ResPondents.

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Counsel for the^APP|icant : Mr. T. Sridhar^ReddY Counsel for^{ResPondent No.7} : Sri N. Rama Rao Respondents 2 & 3 : Ex parte ow*

Page 2 of 5

sA No.460/2024

.:ORDER:-

The present Securitization Application is filed by the Applicant u/s.77 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ("Act,, hereinafter for short) to declare the proceedings initiated by the respondent bank against SA schedule properties including sale notice dated 2L.t0.2024 fixing auction on 27.11.2024, as null and void, illegal and a rbitrary.

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The averments of the application, briefly, are that respondent no.1 ("respondent bank" hereinafter) sanctioned the Over Draft Limit facility to the respondent no.2 and the applicant and the respondent no.3 stood as guarantors. After making substantial repayment, there was overdue of instalments due to covid-19 pandemic. The respondent bank issued sale notice on 08.09.2022 under rule 9(1) of the Rules, 2002 and fixing the auction on 18.10.2022 in respect of the schedule property and the same was challenged by 2nd respondent by filing SA No.301/2022 which was disposed of. While the applicant was negotiating for settlement of account, respondent bank again published the auction sale notice dated 21.10.2024 on 23.t0.2024 fixing the sale of SA schedule properties on 27.tl 2024 with undervaluation of the properties. No opportunity was given to raise objections, and the possession notice and sale notice were not affixed on the schedule properties and not published the same in two leading newspapers within stipurated time. There is vioration of Secs.13(2) and 13(4) Rutes 8(1), B(2), B(7) and 9(1) of the Rutes, 2002' Hence this sA to set aside all the measures against the SA schedule properties.

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The 1't respondent bank filed reply statement. The submissions, briefly, are that the Securitization proceedings had to be initiated

OX,* - oo-

Page 3 of 5

sA No.460/2024

against the applicant due to^{non payment of the OverDraft Loan and} consequent declaration of the^{loan account as NPA on 31'03.2021by} issuing demand notice dated 09.09.2021.^{The demand notice was} duly sent to correct address of the^{applicant by registered post and} was received by the applicant on^{20.09.2021.As no paymentwas} made, respondent bank issued^{possessionnotice under section 13(4)} of the SARFESI Act,^2OO2 dated^{08.03.2022,served through} registered^post, the said^{possession notice was alfixed overscheduled} property and published in 'New Indian Express^{EnglishDaily'and} 'Prajasakti Telugu Daily' English and^{Telugu newspapers on} L3.03.2022 as^per Rules B(1) and^{B(2) of the SecurityInterest} (Enforcement) Rules, 2002. Subsequently, the^{respondent issued e-} auction notice on 08.09.2022^{by fixing the auctionon 20.10.2022 for} recovery of Rs. 4,25,24,233.84^{ps/-' Challenging the possession} notice one of the^partners of^{the M/s. Sree Veerabhadreswara} Commission Agents^{("respondentno.2") filled SA No' 272 of 2022} and SA No. 301 of 2022, and^{due to pendency of the cases the} respondent bank was not able to^{hold auction of the schedule} property. After said SAs were dismissed on^{07.LL.2024and} 19.tL.2024 respectively, bank^{issued fresh e-auction sale notice on} 21.t0.2024 fixing the auction on^{27.11.2024' It is submitted that} applicant is suppressing the^{materialfacts however the respondent} bank has duly followed the^{provisionsof the Act; the SA is liable to be} dismissed.

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Learned counsel. for the applicant^{reported ordersmay be} passed based on records. Heard the learned^{counsel appearing for} the I't respondent bank.^{Perusedthe material brought on record'}

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The^points for consideration^{are as follows ,} -Off'U

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Page 4 of 5

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SA No.450/2024

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i) Whether the applicant made out any valid ground to quash the measures initiated by the 7st respondent bank against the SA schedule properties as prayed forT

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ii) To what relief?

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Point No.(i):

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Admittedly, the 2nd respondent availed credit facility against mortgage of SA schedule properties and the applicant stood as guarantor, there was default in repayment during Covid-19 pandemic. Hence the action of the respondent bank in classifying the account as NPA and initiating Securitization proceedings against the secured assets for recovery of dues cannot be termed as illegal or arbitra ry.

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The respondent bank filed material documents along with reply statement as proof of compliance of due procedure of law. The documents remained undisputed by the applicant. Vide pages 4 to 14 1't respondent bank established service of demand notice. Similarly, vide pages t5 to 27 respondent bank established service, publication and affixture of possession notice. These documents amply prove that the respondent bank has followed Section t3(2), l3(4) of the Act, 2002 and Rules B(1) and B(2) of the Rutes, 2002. pages 28 to 46 are the Photostat copies of postal receipts, postal track reports showing delivery of Sale notice dated 21lO.2024 to the applicant and others, photographs as proof of affixture on secured assets and publication of the same in English and Telugu (vernacular language) newspapers on initiate action under the provisions of the Act against the secured assets for recovery of dues which is public money. It is pertinent to note that this is the third round of litigation crealed by the applicant ffi,*

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Page 5 of 5

¶33

SA No.460/2024

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andrespondents2and3together,withouttherebeinganyvalid grounds.

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B. In the view^{of above observations,it is concluded that the} applicanthasfailedtomakeoutanyvalidgroundtosetasidetheany of the measures^{of the respondent bank under the Act, 2002 against} the SA schedule^{propertiesand accordingly SA is liable to be} dismissed.

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Point No.(ii):

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In the result,^{the Securitisation Applicationfails and is hereby} dismissed.

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il' i' lhti tha

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.o ro. r- Consequently, r-!r^ .,i^.., ^f^{IniSiiolutoiy} '^h^"^ ^l^_^'r'nriana^{Applicationspending'} ^^^^l' 'l.l^tl^{if any' shall} stand closed.^{No orderas to costs'}

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Communicate^{a copy of this order to the parties concerned and} upload in the^{official website'}

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(Typed to my dictotion^{by theP5,corrected,signedond pronounced by me in the opencourt on this the} o6'h doy of MoY,^2026).

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,//l,w^ , , ..^' /l __z- \DL) '^{i '} [hs'*

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(anMesHweR KOTHE) PRESIDING^OFFICER

Yagatti Siva Prasad v. Karnataka Bank Limited

Case brief

What is this about?

What did the court decide?

Yagatti Siva Prasad v. Karnataka Bank Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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Case details

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