Dismissed

Vijay Aero Block v. Bank of Baroda

DRT13 Mar 2026SA/492/2024

Case brief

AI extract

What is this about?

An application under Section 17 of the SARFAESI Act challenging an auction sale notice and proceedings for taking physical possession of secured properties. The court held that the challenge to the auction was infructuous as no auction was held and dismissed the application for redelivery of possession.

What did the court decide?

The application was dismissed as there were no merits; interlocutory applications disposed of; no order as to costs.

Vijay Aero Block versus Bank of Baroda — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL - I AT HYDERABAD DATED THIS THE 1 3TH DAY OF MARCH,2O26

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PRESENT: SRI GUMMADI GOPICHAND, PRESIDING OFFICER

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sA.No.492/2024

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Between

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1.M/s Vijaya Aero Blocks P.Ltd. Regd. Oflice : 8-2-269 I S I 63 Plot No.63, Sagar Societ5r,, Road No.2, Banjara Hills, Hyderabad-sOo 034. Rep. by its Managing Director Mr.N.Prasanna Kumar Sl lo N.S.M. Prasad Rao

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Smt. Narra Vrjya Lakhsmi, W/o N.S.M.Prasad Rao, Aged 67 years, Occ:house wife, R/o Flat No.402, Jyoti Splendor, Sri nagar Colony, Hyderabad-38 Applicants

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VERSUS

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The Authorized Officer Bank of Baroda Regional Stressed Assets Recovery Branch (ROSARB) 3-5-82215, 1sr Floor, Hyderguda Main Road, Hyderguda, Hydera tizg 2. The Chief Manager,The Chief Manager,Chief Manager,Manager, Bank of Baorda, Khairatabad Secretariat Road, Hyderabad. Counsel for the Applicants : Si Abhay Singh

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Counsel for Respondents No. 1&2 : Si Triuikram Chitturu Reserued on : 16.02.2O25

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Pronounced on : 13.O3.2026

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Uploaded to the website on : 13.O3.2026

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The Chief Manager,The Chief Manager,Chief Manager,Manager,

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sA 492/24

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ORDER

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This Application is filed u/s.17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act,2oo2 (SARFAESI Act,2002) challenging the E Auction Sale Notice dt.19.11 .2024 issued by the Respondents for conducting auction of the schedule A property on 24.12.2024 and to declare the same as null and void and also the proceedings initiated by the Respondents for taking physical possession of the schedule B property pursuant to the orders of Ld.lll Addl.CJM, Nampally, Hyderabad in Cr1.M.P.No.l48O 124 and for redelivery of the said property to the Applicants.

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The averments made by the Applicants in brief are as follows:

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(i) Applicant No.1 is the owner of the application A schedule property and Applicant No.2 is the owner of the B schedule property. Applicants availed Term loan of Rs.24.50 crores and working capital of Rs.S crores from the Respondent No.2. Due to liquidity crunch, there was delay on the part of the Applicants in repayment of dues. So, there was a proposal for OTS which was accepted by the Respondents but the 1"t Respondent issued Sale Notice dt.29.06.2019 and challenging the same, the Applicants liled SA 69 l20 19. After filing of the SA, there was a settlement between the Applicants and Respondents and so, the SA was withdrawn by the Applicants. The Respondents again initiated proceedings under the provisions of SARFAESI Act,2OO2 by issuing Auction Sale Notice dt.10.07.2o2o and challenging the same, the Applicants and others filed SA l33l2o on the fite of DRT-II,

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,"iI"* F{glabad.^{Duringthe pendency of the SA l33l2o,there wasa} ;.;:;il"'";;;";";'.'. .. Rs 15 20

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-:l'^'''";": ,t,,', ! CfOreq the Applicants paid a sum of Rs.1O.9O crores to the 1.t by 3O.03.2024. The Respondents failed to release the

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1 I ilf,R fi[fo' Bowra property immediately after realising the amounts paid by

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sA492124

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the Applicants due to which, the Applicants suffered serious financial loss. Thereafter, the Respondents issued another sale notice dt.06.09.2024 for auction of other properties and challenging the said notice, the Applicants filed SA 375124 on the file of this Tribunal. Again, the Respondents issued Sale Notice dt. 19. 1 1 .2024 by fixing the date of auction on 24.12.2024 in respect of A schedule proerty which was published in Mana Telangana daily newspaper. The Respondents also approached Ld.lll Addl.cMM, Nampally and obtained order dt.11.11.2024 for appointment of advocate commissioner for taking physical possession of B schedule property. The advocate commissioner on 25.04.2025 executed warrant in a high handed manner and took physical possession of the B schedule property without following the due process of law.

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(ii)

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The Respondents have not affixed the possession notice on the schedule property and the same was not published in two daily newspapers. No panchanama was conduced in respect of plant and machinery of the schedule property. The Respondents have grossly undervalued the value of the A schedule property.

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(iii) The Application B schedule property was in the occupation of tenant by name Sri Krishna Boys Hostel/BLA Executive Mens Hostel. No panchnama was served to the Applicants or the tenants after taking physical possession of the schedule B property. Hence the SA.

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Respondents No.1&2 filed their Reply denying all the adverse allegations *g:..M:e"gn^{tne SA and contendedthat after classificationof the loan account} +'-r-s€6t{tf,pffi.cants as NPA, demand notice u/s 13(2) of the SARFAESI Act, ^ ip- i,ffi.d and the validity of the said notice was decided in the i ri'i" {l * ehflier SA d64h19 on the file of DRT-I, Hyderabad and SA 133/2o on the ii 4a iiUi^{f3 ilffi"flmT If q[.a.."u"d. The Applicants failed to pay the entire oTS and} \ur \t'\(\.

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sA492/24

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so the OTS got frustrated and the Respondents proceeded for the recovery of dues by taking necessary steps under the provisions of SARFAESI Act, 2oo2 and Rules made thereunder. Accordingly, the Bank issued Sale Notice dt.06.09.2024 in respect of some of the schedule properties and auction was successfully held on 25.09.2024 and the said auction is subject matter of the SA 375124 on the lile of this Tribunal.

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The Respondents considering the fact of disposal of OA 48L118 filed against the Applicants, have issued possession notice in respect of the properties in this SA and SA 375124 by following due process of law. Thereafter, the Respondents issued notice u/r 8(6) of Rules,2oo2 on o7.1o.2o24 in accordance with law for giving an opportunity to the Applicants to redeem the schedule A property. After expiry of 30 days, the Bank proceeded by issuing Sale Notice dt.19.1 1 .2024 fixing the date of auction on 24.12.2024. The Respondents also proceeded u/s 14 of the SARFAESI Act, 2OO2 for taking physical possession of the schedule B property which belongs to the Applicant No.2. The auction in pursuance of the sale notice dt. 19. | | .2024 was failed for want of bidders. possession Notice dt.17.O1.2024 was published in two leading newspapers and also affixed on the schedule property. Notice ulr g(6) of Rules, 2oo2 dt.O7.lO.2O24 was served to the Applicants and similarly, Sale notice dt.19.11.2024 was also served to the Applicants and published in daily newspapers and also affixed on the schedule property. During the pendency of the SA, the 1"t Respondent Bank took physical possession of the B Schedule property in accordance with law. The tenant who was in possession of the B schedule property has no grievance and accordingly, Respondents prayed to dismiss the SA.

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and perused the material brought on record.

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4ij"

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ft8*mm ffits tllat arise for consideration are

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sA 492/24

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whether the Applicants haue established ang ualid grounds for challenging the Auction Sale Notice dt.19.11.2024 issued by the Respondents in respect of the A schedule propertg?

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u. Wh.ether the Applicants haue established any ualid grounds for challenging the action of the Respondents in taking phgsical possession of tlrc B sclrcdule propertg?

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iii. Whether tlte Applicants are entitled for re-deliuery of thepossession of the B schedule propertg?

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tu. To what relief ?

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Point IVo.(i|:-

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During the course of arguments, both the Ld. counsel submitted that in pursuance of the impugned Auction Sale Notice dt.19.11.2o24, no auctions was conducted by the 1"t Respondent Bank. So in view of the fact that no auction was conducted by the Bank in respect of schedule A propert5r, there is no need to decide the validity or otherwise of the impugned Sale Notice dt.19.11.2024 and accordingly, the relief claim by the Applicants in challenging the sale notice dt.19.11.2o24 becomes infructuous. Suffice, if a direction is given to the Respondents to scrupulously follow the procedure in taking fresh steps for conducting auction of the A schedule property.

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Point No.(ii):-

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Ld. counsel for the Applicants argued that the impugned Possession Notice dt.17.01.2024 issued by the 1st Respondent does not contain the .,,;.^' ..,AaIF L^{qr+")iflAtph,} .L; ^i!^{possessionwas taken and so, the same is not a valid notice} tL o'ffi"lffi$tn such notice, physical possession of the B schedule 'liv pr4$.rtv .ffit u. taken by the advocate commissioner. He further :'i | 3"mp"ltl/,:nt^{whenspecific procedure is laid down for taking physical}

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sA492124

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possession of the secured asset, the Respondents cannot violate the said procedure. He further argued that there is a tenant in the B schedule property and so, the Respondents are not entitled to vacate the said tenant from the B schedule property without following the due process of law. He further argued that the warrant entrusted to the advocate commissioner was expired and the same was revalidated on the memo filed by the Bank, however, III Addl.cJMM, Nampally is not expected to pass any judicial order on the memo and so, the advocate commissioner has no authority to take physical possession of the B schedule property and so, possession of the B schedule property is liable to be re-delivered to the Applicants.

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In this connection, Ld. Counsel for the Applicants placed his reliance on the following judgements of Honble Supreme Court;

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i) Judgement in Harsho;d Goaardhan Sond.@gar Vs. Interrtational Assets Reconstntction Compang Ltd. & others and.

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ii)iudgement in Selui J. Jayalalitha & others Vs. Stolte of Karnataka &others

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Per contra, Ld. counsel for the Respondents argued that in the earlier SA l33l20 filed by the Applicants herein and others on the file of Ld.DRT-II, Hyderabad, the validity of the demand notice and possession notice issued by the 1st Respondent Bank was upheld vide order dt.l2.or.2023 and so, the Applicants cannot re-agitate about the validity of the possession notice issued by the Respondents. The notice which is described as possession notice dt.17.01.2024 is not a fresh possession notice issued u/s 13(a) of the Act, 2oo2 to the Applicants but it is only a notice giving just prior intimffigp the Applicants before taking physical possession of the B -5i;r-rt_.. sche$uteffipert5r and in fact, regular possession notice dt.O6.07.2O2O wae..illready'i$bued as per the provisions of Section 13(4) of the SARFAESI t StfuR0ffi6which^{was in challenge in SA I33l20. ChiefJudicial Magistrate}

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fu,ffi$

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sA492124

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is authorized to take physical possession of the secured asset by issuing warrant to the advocate commissioner and the Applicants cannot question the authority of the Chief Judicial Magistrate in passing orders on the memo for extension of warrant given to the advocate commissioner for taking physical possession of the schedule B property.

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As per the documents filed by the Respondent Bank, it is clear that on earlier occasion, the Applicants herein and others filed SA 133/20 on the file of DRT-ll, Hyderabad challenging the proceedings initiated by the 1"t Respondent Bank for conducting auction of the schedule properties. After elaborate enquiry, the said SA was partly allowed vide order dt.l2.O7.2023 by setting aside the auction held on 19.08.2O2O and 20.08.2O2O in respect of B&C schedule properties but in the said SA, it is clearly held that all other measures under Section 13(4) of the SARFAESI Act,2OO2 taken up by the 1"t Respondent Bank are upheld and the lst Respondent Bank is at liberty to take fresh steps for conducting auction of the schedule properties. So, demand notice and possession notice issued by the Respondents are upheld by the competent Tribunal in SA l33l2O vide order dt.12.O7.2O23 and so, now the Applicants cannot challenge the possession notice issued by the Respondents in respect of the schedule properties.

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1 1. In fact, there is no need for the Respondents to issue any notice prior to initiating proceedings u/ s 14 of the SARFASI Act, 2OO2 for taking physical possession of the schedule B property. But only to give an opportunity to the Applicants, the Respondents issued notice dt.17.01.2o24 to the Applicants which is styled as possession notice. So, there is no need to decide the validiff of otherwise of the said notice dt.17 .O1.2024 as regular s 13( ) of the Act, 2OO2 was already issued by the same was upheld by the competent Tribunal vide

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13finfr2W

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sA 492124

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There is no dispute regarding^{the propositionlaid downby tJle Hon'ble} Supreme Court, in the decisions relied^{by the t d. counselfor the} Applicants supra but the ratio^{laid down in the said cases is not applicable} to the facts of the^{present case. Even though schedule B propert5rwas in} possession of the tenant, the said tenant voluntarily^{surrenderedthe} possession of the schedule B property and the advocate commissioner^took physical possession of the B schedule^property by following^{the due} process of law.

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Point No.(ttl)r

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So the proceedings initiated by the^{Respondentsfor taking physical} possession of schedule B property u/s 14 of the^{SARFAESIAct,2OO2arc} perfectly legal and valid. So, I see no irregularity or illegibility^{in the} proceedings initiated by the Respondents for taking^{physicalpossessionof} the schedule B property. So in^{tJ:e circumstances, Ihold thatthe} Applicants are not entitled for re-delivery^{of the scheduleB property as} sought for. Accordingly, this^point is^{answered infavour of the} Respondents and against the Applicants.

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Polnt l,lo.(iu)r

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In the result, SA 492124 is^{dismissedas there are no merits.} Consequently, the Interlocutory^{Applications, pendingif any, shall stand} disposed of. No order as to costs.

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Communicate a copy of tJlis order^{to the partiesconcerned.}

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(Dictated to the P.S, transcibed bA her, corrected,^{signed and pronouncedbg me in the open} courT on this the 73th daA^{Marclt"2026).}

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TRUE COPY
CW
n11-1, P{rD6n4rAD

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sd/(G. GOPI CHANDI PRESIDING OFFICER

Vijay Aero Block v. Bank of Baroda

Case brief

What is this about?

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Vijay Aero Block v. Bank of Baroda

Case brief

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