Recovery proceedings challenged under SARFAESI Act by a third-party purchaser claiming title via a sale deed executed after the creation of a mortgage. Held that third parties have no locus standi to challenge proceedings; title dispute lies in civil courts.
Securitization application dismissed; interlocutory applications disposed of; no order as to costs.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE DEBTS RECOVERYTRIBUNAL- IAT HYDERABAD
DATED THIS THE 29TH DAY OF JUNE. 2026
PRESENT: GUMMADI GOPICHAND, PRESIDING OFFICER
sA.No.54./2024
Mrs.Burgula Ramulamma, W/o Bhupal Reddy, R/o flat No.202, II floor, Laxmi Apartment, H.No.2- 136/ 11, Plot No.34&35, Sy.No.46 to 48, Balapur Mandal R.R. District.
..Applicant
Versus
l.State Bank of India
Rep. by its Authorized Officer, Stressed Assets Recovery branch, 2.d floor, TSRTC Commuter Amenity Centre, Bus Terminal Complex, Koti, Hyderabad-S00 095
..Respondents.
Counsel for the Applicant Counsel for tle 1st Respondent Bank: Respondents No.2
Abhag Singh & Associates Si C. Sreedhar Exparte
Reserued on
06.04.2026 29.06.2026 30.06.2026
.:ORDER:.
dn* #flrisuno" i$ by the Applicant u/s. 17 of the SARFAESIAct, proceedings initiated by the 1"t Respondent Bank possession of the schedule property through
advocate commissioner pursuant to the orders of Ld.CMM, R.R..District in Crl.M.P.No .4231 2023 and for re-delivery of the said property.
The Applicant is neither a borrower nor a guarantor and she is 3rd party to the proceedings initiated by the 1"t Respondent Bank. The Applicant purchased the schedule property from Mrs.M.Sunitha through her AGPA holder Mr.P.Ramesh under a Regd. Sale Deed No. 1 3456/ 20 1 7 dt. 16. I l.2O 17 duly registered at SRO,L.B. Nagar. After purchasing the schedule property, the Applicant mutated her name in the municipal records and regularly paying property tax in respect of the schedule property. The Applicant was out of station from 27.12.2023 for a week and when she returned on 03.01.2024, she was shocked to learn that the schedule property was locked and notices were affixed on the schedule property stating that the 1"t Respondent bank took possession of the schedule property through advocate commissioner appointed by the Ld.CMM, R.R.. District in Crl.M.P.No.423l23 vide orders dt.12.1O.2023 On enquiry, the Applicant came to know that a housing loan of Rs.S lakhs was sanctioned by the 1st Respondent to the Respondent No.2 and in view of the default made by the Respondent No.2, the loan account was classilied as NPA on 31.03.2005 and the Bank invoked the provisions of SARFAESI Act, 2OO2 and approached Ld.CMM, R.R. District by filing Crl.M.P.No.42 3123 and got appointed an advocate commissioner for taking physical possession of the schedule property. The 1st Respondent bank is claiming mortgage over the schedule property on the basis of a
document No.3343/2003 executed in favour of -e"0il#_ot'Mm'&Vhis vendors, however, the measurements and descripdo'gr ,.e i$fft.tt from those which are claimed by the lst the fact or interest and possession of 1.f.8"1.!t,fitt llpssing the.Applicant herei$/rthe lst Respondent obtained orders from the ,{ .A-$ ,:hroeft$Y
Ld.CMM, R.R. District and took physical possession of the schedule property without following due process of law. Hence the SA.
, 29,.,'uNrnls Lr:';"i;
. Lr:';"i;
W-r"g
3
Point No.(i) t
,/S{"Ftbi*$VEN.tthe said proceedings are not legal and validand
1l # accEFingly &S, for re-delivery of the same. {- .-'. :
Respondent No.2 created mortgage in respect of the schedule property in favour of the 1"t Respondent Bank in security to the home loan availed by him in the year 2O04, much prior to the said sale deed in favour of the Applicant. The Applicant being a 3.d party, has no right or authority to contend that the lst Respondent Bank has not followed the procedure contemplated under the provisions of SAPAESI Act,2OO2 in taking physical possession ofthe schedule property. However, the lst Respondent Bank has specifically averred that the Bank has issued demand notice and possession notice in respect of the schedule property in accordance with the provisions of SARFAESI Act, 2O02 and Rules made thereunder and thereafter took physical possession of the schedule property u/ s 14 of the Act, 2OO2 by duly following the procedure and there are no violations. The alleged Regd. Sale Deed dt. 16.I l.2Ol7 on the basis of which, the Applicant is claiming right over the schedule property is subsequent to the creation of mortgage over the schedule property in favour of the lst Respondent Bank by the Respondent No.2 in security to the loan availed by him from the Bank and so, the Applicant has to approach the competent civil court to decide the title dispute. So, the said sale deed does not have any legal sanctit5r and the Applicant has no locus-standi to challenge the proceedings initiated by the 1st Respondent in respect of the schedule property under the provisions of SARAFAESI Act,2OO2.
w;$y,
Point No.(ii):-
(Dctated to the P.A, transcribed bg her, corrected, signed and pronounced by me in the open court on this the 29h ofJune, 2026).
sd/(G. GOPTCHANDI PRESIDING OFFICER
d?q
6
3 issues framed by the court
Whether the applicant has locus standi to challenge the recovery proceedings initiated by the bank against a third-party property purchaser.
Whether a subsequent sale deed in favor of a third-party purchaser defeats the prior mortgage created by the original borrower.
Whether the bank followed the due process prescribed under the SARFAESI Act in taking possession of the secured asset.
3 provisions across 2 enactments
Mrs. Burgula Ramulamma
State Bank of India
Mr. N. Radha Krishna
Gummadu Gopichand
As recorded by the court registry
2 orders share this CNR
Judgements on the same questions, provisions and authorities, from every court
