Allowed

Seven Hills Medical General Store and Others v. Canara Bank

DRT24 Apr 2026SA/53/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal set aside a possession notice dated 08.09.2022 issued by Central Bank Ameerpet Branch under Section 13(4) of the SARFAESI Act. The tribunal held the notice was void because the bank failed to provide proof of affixing it on the secured property as mandated by Rule 8(1) of the Security Interest (Enforcement) Rules, 2002, despite applicant contention. Subsequent measures w

What did the court decide?

The security application was allowed by setting aside the possession notice dated 08.09.2022 issued under Section 13(4) of the SARFAESI Act. Pending interim applications were closed.

Seven Hills Medical General Store and Others versus Canara Bank — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERY^TRIBUNAL -^II AT HYDERABAD

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DATED THIS THE 24TH DAY^{OF APRIL,2026}

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PRESENT: SH. RAMESHWAR^{KOTHE, B.COM.,L'LB' (HONS.), M.A.}

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PRESIDING OFFICER

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SECURITISATION^{APPLICATION No. 53 OF 2023}

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Between:

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M/s. Seven Hills Medical and General Store,^{ReP. bY its} Proprietor Ms. Rekha

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H. No. 6-i-665/6 Ground^Floor

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Pa nj a g utta, Hydera bad^- 500082.

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Ms. Rekha, D/o Sri Sonkar^Ganesh Age: Major, Occ: Business

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H. No. 1 1^- 1^-B0B/ 10^Chilkalguda Secunderabad.

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Mr. G. Mahesh Babu S/o G. Chinna^Rao

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Age: Major, Occ: Business

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H. No. 3-19, Flat^{No. 203} Sri Balaji ResidencY Madeeiaguda, R.R. Dist.400049. ."....Applicants'

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And

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Central Bank Ameerpet Branch #6-3-852lA, SY. No.201 Viswas Central Institute of Genetics^Road Ameerpet, Hyderabad-¹⁶ Rep by its Authorised^Officer'

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. ... . .Res?ondent.

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Counsel for the^{Applicants: Mr. D. Raghavulu'} Counsel for Respondent^{: Mr' T. Nagend-er'} O%u,.o

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sA. 53/2023

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-:ORDER:-

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The Applicants filed the present Securitisation Application u/s. 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2OO2 (hereinafter referred to as^,,SARFAESI Act 2002,,) assailing the actions of respondent bank in issuing the E_Auction Sale Notice dated 24.06.2024 fixing the auction on 3t.07.2024 and the proposed action of taking oF physical possession of the secured asset through Advocate Commissioner pursuant to notice dated 24.07.2024 in furtherance of orders in Cr.M.p. No.416 of 2024 on the file of the learned Chief Metropolitan Magistrate, Ranga Reddy District Courts at L B Nagar.

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The case of the applicants, in brief, is that the applicants were making payments on the demand of the respondent from time to time. However, some persons came to the schedule property demanding vacation of the premises citing the sale notice dated 07.0I.2023 for sate of property on t3.02.2O23. At the request of the applicants, they were provided with a copy of sale notice dated 07.01.2023. Thus, applicants were not served with the sale notice dated 07.Ol.?023 as per law. It is mentioned in the sale notice that the same may be treated as notice u/r 8(6) and 9(1) of the Security Interest (Enforcement) Rules, 2002. As per the sale notice, the outstanding dues were Rs.80,34,014/_ as on 07.01.2023. The respondent issued the sale notice dated 07.01.2023 undervaluing the property by fixing the reserve price at Rs.63,36,000/- being much less than the market value and without obtaining present valuation report, amounting to a clear violation of the provisions of the SARFAESI Act and the ,2Er.-..L! i^/-/ -$L'<sup>-

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sA,53l2OZ3

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Rules, 2002. Admittedly,^{respondent has not issued 30 days} prior notice u/r 8(6) ofthe SARFAESI^{Rules, 2002. Therefore,} violation of Rule 8(6)^{is agalnst the ratio in the judgements of} the Apex Court and^{Hon'ble High Court at Hyderabad reported} in 2016 (6) ALD 409.^{Therefore, conducting auction by the} respondent bank is contrary to^{the judgementsof the} Supreme Court. The^{respondent bank has not affixedthe} possesslon notice and sale notice on the outer^{door of the} schedule property constituting^{to violationof Rules 8(1)and} 8(7) of the Act and^{Rules. Respondentbank failed to publish} possession notice in leading newspapers^{within the stipulated} time. Thus, the^{respondent bank clearly violatedthe} provisions of the SARFAESI Act.^{The loan accountwas never} declared as^{NPA as} the^{alleged outstanding due amountwas} not moTe than^20olo of^{the total amount. The e-auctionsale} notice dated 24.06.2024^{was not servedon the applicants,} aFflxed on the^{property.No 30 days prior notice was served} on the applicants as^{per Rule 8(6) of the Security Interest} (Enforcement) Rules, 2002 Pendency of^{SA wasnot} mentioned in the sale^{notice dated24.06.2024.Obtaining} orders u/s^{14 of the SARFAESIAct during the pendencyof SA} and without^{disclosingthe pendencyof SA is illegaland} violation of the rules^{and law The measurestaken by the} respondent are defective.^{As such the notices issued by the} respondent are liable to^{be set aside.}

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Respondent bank filed^{reply statement.The submissionsoF} the respondent bank,^{in brief are; that all the repeated} requests and demands^{made by the respondent bankto} regularise the accounts^{were not bothered by the applicants'}

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sa. s3l2023

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Due to non-service of interest, the account became NpA on 30.05.2022. As there was no response to the recall notice, the respondent bank issued demand notice u/s 13(2) dated 75.06.2022 and possession notice u/s 13(4) dated 08.09.2022. The demand notice is not disputed by the applicants. The demand notice was published in two newspapers. The possession notice dated 0g.0g.2022 was published in Mana Telangana and Financial Express dailies on 73.O9.2022, As there was no response from the applicants, respondent bank issued sale notice on 04.!7.2022 for sale of mortgaged properties on 12.72.2022. The valuation of the property was done as early as 14.I0,2022. The official valuer has taken the prevailing market value of the properties into consideration. The sale notice dated 04.71.2022 was published in the Hindu and Namaste Telangana on 7!.77.2022- Due to lack of bidders to the auction sale notified vide notice daled 04.t12022, respondent bank issued fresh sale notice on 07.Ot.2023 putting the mortgaged properties for sale on 13.02.2023. The sale notice was published in The Hindu and Namaste Telangana dailies on 08.01.2023. The SA is filed to prevent the respondent bank to recover its outstanding dues. The applicants did not have any intention to pay the debt and committed default in discharge of the debt due under the loan facilities. Accordingly, respondent bank prayed for dismissal of the SA with costs.

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The respondent bank did not choose to file additional reply

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statement in the post amended SA.

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Both side counsel reported no oral arguments. perused the materiat ptaced on record. (/Y""-S

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sA. s3l2023

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Now the^points that arise^for adjudication^are:-

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i) Ilhether the Applicants made oul any valid ground for setting aside the sale notice dated 24.06.2024?

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To what reliefl ii)

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Point No. (i):

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As per the reply statement, respondent bank^{issued first sale} notice on 04.LL.2022^putting the mortgaged^{properties for} auction sale on 12.t2.2022. The auction^{sale proceedings} scheduled on 12.t2.2022 were not^{materialised for want of} bidders. Subsequently, respondent bank^{issued fresh sale} notice dated 07.0t.2023 fixing the auction^sale on^L3.02.2023 the subject matter of the SA.^During the^{proceedings held on} 13.02.2023, learned counsel appearing^{for the respondent} bank reported that there were no bidders^{for the auction} scheduled on 13.02.2023.^{Accordingly, the matterwas posted} for arguments in the SA on 12.02.2024' On^{L2.02.2024,lAs} 359 and 360 of 2024 moved by applicants^{for amendmentand} stay of sale notice dated 01.02.2024^{for auctionproceedings} scheduled on L9.02.2024 were^posted for^counterson t9.02.2024. During the^{proceedingsheld} on^L9.02.2024, respondent bank reported there^{were no bidders for the} auction on 19.02.2024. Accordingly,^{IAs 359 and 360 of 2024} were dismissed as infructuous and^{the SA was posted for} arguments on 2t.03.2024.^{Thereafter, the matterwas} adjourned to 07.06.2Q24^and then lo^{12.08.2024.However,} applicants moved lA.220612024^{seeking advancementof the} hearing^posted for 12.08.2024'^{The advancementpetition was} allowed on 31.Q7.2024, wherein IA^{No.220912024moved by} /fr{ffior\

(-Y r"

sA.53/2023

applicants seeking stay of proceedings pursuant to sale notice dated 24.06.2024 fixing the auction on 37.07.2024 was taken up for hearing. Upon being reported the auction was not being materialised on 3t.07.2024, the IA.22O1/2O24 was dismissed as infructuous.

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As can be seen from the preceding paragraph, all the attempts of respondent to put the mortgaged assets for sale were not materialised. Hence, the grievances against violation of provisions of Rules 8(5), 8(6), 8(7) and 9(1) of the Securjty Interest (Enforcement) Rules, 2002, need no consideration. So what is left out in the SA is about violation of Rules B(1) and 8(2) for affixture and publication of possession notice. According to respondent bank, the possession notice was issued on 0g.O9.2OZZ and published in Mana Telengana Telugu daily and the Financial Express English daily on 73.09.2022, photostat copies of which are placed at pages 18 and 19 of the material papers annexed to the reply statement. These documents are not disputed by the applicants. However, despite there being a specific contention from the applicants side, respondent bank did not choose to f e proof of affixture of possession notice on the secured property as mandated u/r 8(1) of the Security Interest (Enforcement) Rules, 2002 nor was there any pleading contrary to the said contention of the applicants. Therefore, it can safely be construed that the respondent bank did not comply Rule g(1) of the Security Interest (Enforcement) Rules, 2002 in affixing the possession notice dated Og.Og.2022 on the secured asset. Thus, the possession notice dated 08.09.2022 is to be considered as void and not valid. Accordingly, all subsequent ,/ri095,r^.r*\ ---.!4.'

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sA. s3/2O23

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¶46

SARFAESI measures are vitiated. Therefore, applicants have made out a valid ground for setting aside the possession notice dated 08.09.2022. Accordingly the SA deserves to be allowed by setting aside the possession notice dated 08.09.2022 issued u/s 14 of the SARFAESI Act.

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Point No.(ii):

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In the result, SA is allowed by setting aside the possession notice dated 08.09.2022 issued u/s 13(4) of the SARFAESI Act. However, this order does not preclude the respondent bank from issuing possession notice afresh stricUy in accordance with the provisions of Section 13(4) of the SARFAESI Act and the Rules, 2002 thereunder.

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Consequently, Interim Applications pending if any, shall stand closed. No order as to costs.

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Communicate a copy of this order to the parties concerned and upload in official Web Site.

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(Dictoted to the Steno, signed ond pronounced by me in the open court on this the 24th doy of April, 2026).

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,?*ry!-...ot\ / /---tt"'ts''

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(RA|VTESHWAR KorHE) PRESIDING OFFICER

Seven Hills Medical General Store and Others v. Canara Bank

Case brief

What is this about?

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Seven Hills Medical General Store and Others v. Canara Bank

Case brief

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