Allowed

Bsb industries and others v. Uco Bank

DRT12 Aug 2026SA/537/2025

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed a securitization application challenging auction proceedings. The court held the bank failed to prove affixture of the possession notice as required by law, setting aside the notice and consequential sales measure.

What did the court decide?

Allowance of the Securitisation Application by setting aside the possession notice dated 21.05.2022 and consequential proceedings. Liberty granted to the bank to issue a fresh compliance notice.

Bsb industries and others versus Uco 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 12TH DAY OF AUGUST, 2026

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

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Securitization Application No. 537 OF 2025

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M/s. BSB Industries, Rep by its proprietor

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Mr. Battula Venkata Satyanarayana, 5-3-395 An 3 1 Ambedkar Nagar,

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Kukatpally Hyderabad, Telangana-500072

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Battula Venkata Satyanarayana,

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S/o B. Veeraiah, Occ: Business, R/o Plot No. 860/D, H.No.5-112/2, Vivekananda Nagar Colony, Kukatpally Flat No.21Bllig, Block No.11/A, Vaddepally, Hyderabad, Telangana-500072.

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Battula Bhulakshmi,

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W/o Battula Venkata Satyanarayana,

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Occ: Business, R/O Plot No.B60/D,

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H.No.5-112/2, Vivekananda Nagar Colony, Kukatpally, Flat No.21Bllig, Block No.11/A, Vaddepally, Hyderabad Telangana-500072 ..........Appllcants

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Versus

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UCO Bank , S.D. Branch, D.No. 9- 1-38, YMCA Complex, SP Road, Secunderabad, Hyderabad -500003 .....Respondent

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Counsel for the Applicants : Smt. R. Rajani Counsel for Respondent : Smt. Tarangini Pisipati

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-:ORDER:-

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The present Securitization Application is filed by the Applicants u/s.17 of the Securitisation and Reconstruction of Financial Assets 1$

Page 2 of6

SA No' 537/2025

and Enforcement of^{SecurityInterest Act, 2002 ("Act" hereinafterfor} short) assailing sale^{notice dated 24.10.2025,fixing the auction on} 28.11.2025 in respect^{of the SA Schedule properties.}

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The averments of the^{application, in brief, are that Applicants} No.2, being the^{proprietorof ApplicantsNo.1, availed four credit} facilities from the^{RespondentBank,and secured the facilitiesby} mortgaging the S.A. Schedule^{Properties.Theyassertthat the} accounts were initially^{servicedregularly but, owing to adverse} businessconditions,theysubsequentlyfaceddifficultyinrepayment and repeatedly^{sought time from the Bank to regularisethe dues. The} Applicants allege that^{they first came to know of the SARFAESI} proceedingsonlyuponseeingthee-auctionpublicationdated 27.t0.2025 and contend^{that no DemandNotice undersection13(2)} or Possession^{Noticeunder Section 13(4) of the SARFAESI Act was} ever served upon them^{and that the accountswere not validly} classified as NPA^{prior to initiationof the enforcementmeasures.} They further allege^{non-compliancewith Rules8(1), B(2) and 8(5) of} the security Interest^{(Enforcement)Rules, 2002, (hereinafter "Rules"} for short) including^{failure to affix and publish the Possession Notice} as required, and^{contend that the Bank improperly clubbed the home} loan and business loan facilities.^{on these grounds,the applicants} pray for setting aside the measures^{initiated by the respondentbank} against the schedule Properties.

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The Respondent^{Bank filed its reply statement along with} supporting documents'^{The avermentsthereof, in brief, are that the} s.A. is not maintainable^{and is barredby limitation,particularlyin} view of the earlier^{order dated20.04.2023passed by the Tribunalin} O.A. No.458 of^{2022 affirming the Applicants'liabilityand the Bank's} rightsovertheScheduleProperties.TheBankStatesthatthe ffitru

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Page 3 of 6

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SA No. s37l2025

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Applicants committed defaults and their loan accounts were classified as NPA on 03.07.2021, pursuant to which a Demand Notice dated 29.09.2021 under Section 13(2) of the SARFAESI Act, was duly issued and served. Thereafter, upon failure to discharge the liability, a Possession Notice dated 2L.05.2022 under Section 13(4) was issued, served, published in The New Indian Express and Namasthe Telangana on 26.05.2022 and affixed on the Schedule Properties. As the Applicants failed to redeem the secured assets, the Bank subsequently issued Sale Notice dated 24.L0.2025 fixing the auction on 28.11.2025, which was affixed on the Schedule Properties in the presence of the Applicants and published in Eenadu and The Hindu on 27.10.2025. The Bank further relies upon the CERSAI records to establish registration of its charge over the Schedule Properties. Accordingly, the Respondent contends that all statutory requirements under the Act and the Rules, 2002 were duly complied with and that the present S.A. has been filed only to delay and obstruct the recovery proceedings, despite the subsisting liability and the earlier decree ln O.A. No.458 of 2022.

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Learned counsel for the applicants filed written arguments. Heard learned counsel for the respondent. Perused the written arguments filed by the applicants and also perused the matdriSi

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Learned counsel for the applicants reiterated the content of its application and alleges that the loan account was initially serviced regularly, but due to a temporary slowdown in business they faced difficulty in repayment and Applicant No.2 repeatedly approached the Bank seeking time to clear the dues, They allege that the Bank failed to accommodate their request and that they came to know of the enforcement proceedings only upon seeing the e-auction publicatidn : OY#

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Page 4 of 6

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SA No.537/2025

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dated 27,10.2025,^{The Applicants dispute service of the Demand} Notice under Section^{13(2), PossessionNotice under Section13(4)} and sale notice,^{and put the Bank to strict proof thereof. They further} allege that the^{Bank failed to obtain monthly stock statements,did} not provide^{properguidanceand improperly clubbed the homeloan} and business loan accounts,^{thereby renderingtheSARFAESI} measures illegal and arbitrary.^{The Applicantsfurther rely upon the} paymentSmadepursuanttotheTribunal'sdirections,inc|udin9 Rs.7,00,000/- deposited^{on 14.12.2025and subsequentpayments} towards EMIS between^{30.12.2025and 30.03.2026,contendingthat} the same demonstrate^{their bona fides and intention to regularise the} accounts.TheyalsoallegethattheBankrepresentedthatthe housing loan had been^{regularised and continuedto send EMI} reminders. Accordingly,^{the Applicantsseek setting aside of the} DemandNotice,PossessionNoticeande-auctionproceedingsonthe ground of non-service and^{alleged proceduralviolations'}

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Learned counsel^{for the Respondent Bank deniedthe averments} of the Applicants and^{places relianceupon the materialpapers} annexedwiththereplystatement.ItissubmittedthattheApplicants, account was classified^{as NPA in accordancewith RBI guidelinesand} that the Respondent^{Bank had strictly followedthe due procedure} prescribed under the SARFAESI^{Act, 2OO2 and the Rules framed} thereunder. Accordingly,^{sought for dismissalof the S'A'}

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The^points for^{consideration are as follows : -}

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i) Whether the^A\Plicants made out anY valid^{ground to} quashing of sale notice dated 24.70.2025,^fixingthe auction on 28.11.2025 in resDect of the SA^Schedule properties? ffi*r\

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ii) To what relief?

Page 5 of 6

sA No. 537/2025

Point No.(i):

B. During the course of proceedings it was reported that the auction scheduled on 28.11.2025 pursuant to sale notice dated 24.t0.2025 was not successful due to want of bidders. Under such circumstances, the contention of non-compliance of Rule B(5), 8(6) 8(7) & 9(1) of the Rules^pertaining to the impugned auction need no consideration and SA has become infructuous to that extent.

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One of the^principal contentions raised by the Applicants is that the housing loan account had been regularised, for which reliance is placed upon photocopies of certain payment receipts. However, the said documents, by themselves, are insufficient to establish that the loan account was in fact regularised in accordance with the terms of the loan agreement. In the absence of any cogent material or authenticated statement of account evidencing such regularisation, this Tribunal cannot accept the said contention. Accordingly, the contention of the Applicants that the housing loan account stood regularised is rejected.

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The other contentions of the Applicants are non-compliance of section 13(2) & 13(a) of the Act read with Rules 3, B(1) & B(2)':6f [h6 Rules, 2002. The Respondent Bank relied on copies of documents annexed with the reply statement, Pages 5 to 11 of the material paper annexed to the reply statement are the Photostat copies of postal receipts and track reports proving service of demand notice. Similarly, Pages 12 to 16 are the Photostat copies of possession notice being served via registered post and publication of the same in English and Telugu (vernacular language) newspapers on 26.05.2022. However, the Applicants specifically dispute affixture of the Possession Notice at a consDicuous Dart of the Schedufe

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Page 6 of 6

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SA No. 5371202s

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Properties. Though the Respondent Bank has asserted compliance with the said requirement, no documentary or photographic evidence has been produced to establish such affixture. In the absence of cogent evidence demonstrating compliance with the mandatory requirement under Rule B(1), this Tribunal holds that the Respondent Bank has failed to establish due affixture of the Possession Notice. Accordingly, the symbolic Possession Notice dated 21.05.2022 is liable to be set aside and the present Securitisation Application deserves to be allowed.

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Point No.(ii):

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In the result, the Securitisation Application is allowed by setting aside the possession notice dated 21.05.2022 under section 13(4) of the Act, 2002 in respect of the SA Schedule Properties and consequential proceedings, if any.

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L2. Respondent is at liberty to issue fresh possession notice strictly in accordance to the law.

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Consequently, Interlocutory Applications pending, if any, shall stand closed.

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No order as 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 the steno, corrected, signed and pronounced by me in the open court on this the 72th doy of August,2026).

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,fr,yoa.r*, \L-v" |⁽ '/ (RAMESHWAR KOTHE) PRESIDING OFFICER

Bsb industries and others v. Uco Bank

Case brief

What is this about?

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Bsb industries and others v. Uco Bank

Case brief

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