Dismissed

M S Tejaswi Techno Fab Industries v. Bank of Maharashtra

DRT29 Jun 2026SA/70/2024

Case brief

AI extract

What is this about?

Applicants challenged the Respondent Bank's notice for auction and proceedings to take physical possession of schedule properties, alleging violations of the SARFAESI Act. The Tribunal noted the auction in pursuance of the notice was not materialized, rendering the reliefs infructuous, and allowed a direction to issue a fresh notice.

What did the court decide?

Direction to the Respondent to issue a fresh sale notice for conducting auction of the schedule properties strictly following the procedure under the Act and Rules.

M S Tejaswi Techno Fab Industries versus Bank of Maharashtra — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERYTRIBUNAL^_ 1 AT HYDERABAD

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DATEDTHISTHE 2gTH DAYOFJUNE. 2026

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PRESENT: SRI GUMMADI GOPICHAND, PRESIDING OFFICER

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SA.No.7O./2024

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M/s Tejaswi Techno Fab Industries Rep. by its Managing Partners Sri Potluri Subramanyeswara Rao. Plot No.206/ 1, Phase II, IDA, Cherlapally, Hyderabad-S0O 05 1.

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Sri Subramanyeswara Rao, S/o Sri late P.Krishna Murthy, Aged 60years, Occ: business, R/o H.No. 1-24 I I 269&27 O, Bhavani Nagar, Kapra, ECIL(PO), R.R. District, Hyderabad-S0O 062.

... Applicants

Versus

Bank of Maharashtra.

Rep. by its Authorized officer Zonal office,H.No.4-3-448 to 460 & 466 to 468, 1s floor, Vinoothna Pittle's Majesty, Gopal bagh, Near Bank Street, Koti, Hyderabad-SOO 00 1.

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... Respondent

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Counsel for tlrc Applicants Counsel for the Respondent

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: Sri B. Sanjag Kumar : Si G. Adian Kiran Raj

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Reserued on Pronounced on Uploaded to the u.tebsite on

:09.O4.2026

:29.06.2O26

:30.06.2O26

ORDER

Securitization and Reconstruction of of Security Interest Act,2OO2

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e Auction Sale Notice &.Oa.O2.2O24

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issued by the Respondent for conducting auction of the schedule properties on 27.O2.2024 and also the proceedings initiated by the Bank for taking physical possession of the schedule properties^pursuant to the orders of Ld.CMM, Medchal-Malkajgiri in Crl.M.P.No.38l24 and to declare the same as nul1 and void.

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

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The Applicant No.l is a technical industry and availed various credit facilities to a total sum of Rs.825 Lakhs from the Respondent Bank and they are making regular payments to the loan account. Suddenly the bank issued the impugned demand notice dt.25.05.2022 by classiffing the loan accounts of the applicant No. 1 as NPA on O2.O5.2O22 which is against the guidelines of RBI. The impugned demand notice was not served on the guarantors and so the same is illegal. After receiving the said demand notice, the applicants sent reply/ objections dt.O3.O6.2O22 under Section 13(3A') of the SARFAESI Act,2OO2 but the bank failed to give any reply to the said objections and thereby the bank violated Section 13(3A) of the SARFAESI Act which is mandatory. Thereafter the bank issued possession notice dt. 18.08.2022 and the said notice was not published in two daily newspapers and the said notice was also not affixed on the schedule properties. Without following Rule 8(1) & (2) of Security Interest Enforcement Rules, 2002 the bank proceeded under section 14 of the SARFAESI Act, 2OO2 for taking physical possession the schedule properties and obtained orders dt.25.03.2023 from the Hon'ble Collector and the District Magistrate, Medchal Malkajgiri without following the procedure. Challenging the said proceedings, the Applicants hled SA 32312023 on the file of DRT -ll Hyderabad and the same is pending. Ld. DRT-ll Hyderabad passed conditional stay order dt.03.08.2023 but e said order, the Respondent bank had taken physical e scheduie properties forcefully without issuing any notice inst the provisions of SARFAESI Act,2OO2. Thereafter, the above said fact, filed Crl.M.P.No.38l 2024 on 2 Si1fll$altBsuv ,^{Medchal-Malkajgirifor taking physical possessionof}

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the Schedule properties without issuing any notice to the Applicants. The Respondent bank has suppressed the fact that they have already taken physical possession of the schedule properties vide Hon'ble Collector's order dt.25.03.2023 on 03.08.2023. Thereafter the bank also issued the impugned e-auction sale notice dr.O2.O9.2023 which was not materialized for want of bidders. Thereafter the bank again issued sale notice dt.la.Ol.2024 fixing the auction on 06.02.2024, however the said auction was also not materialized. Again the bank issued fresh sale notice dL.O8.O2.2O24 fixing the date of auction 27.O2.2O24 without issuing Rule 8(6) notice. The said sale notice was not published in two leading newspapers and the same was not affixed on the schedule properties and the bank failed to obtain valuation of the schedule properties and the reserved price lxed in respect of the schedule properties is very low. Hence the SA.

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The Respondent filed their Reply contended that the Applicants herein have availed various credit facilities to a total sum of Rs.825 lakhs from the Respondent bank subsequently they committed default and so the loan account of the Applicants has been classilied as NPA ot O2.O5.2O22 as per the guidelines of RBI. Thereafter, the Respondent issued Demand notice dt.25.02.2o22 and the said notice has been duly sent to the Applicants through Regd.Post. Since the objections raised by the applicants in response to the said demand notice questioning the action of the bank and seeking further time for payment of the outstanding dues, the same have no relevance. However the bank rejected the said request vide letter dt. 13.03.2023. Thereafter the bank issued possession notice dt. 18..08.2022 by duly following the Rule 8(1) and (2) of rules, 2O02. Suhsecquently -^ a -..:i_'- 1\ . _ the bank proceeded u/s 14 of the Act for taking physical pqi*E"gi6.S;,.the schedule properties pursuant to the orders in Crl,M.P N".ffi of Z'&Zg\d the said proceedings were challenged by the appticants by filing SA 3ity'0o23. However, the said SA was dismissed for default for the Applicants.

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Earlier the bank issued auction sale notice dt.O2.Og.2023 but due to^lack of bidders, the said auction was not materialized. Finally, the bank^issued the present e-auction sale notice dt.Oa.O2.2024 for conducting auction^on 27.02.2024. Earlier the bank has taken the^{physicalpossession} of^the schedule properties through Tahsildar and the same was handed over^to the Authorized officer of the bank and the Applicant tresspassed^{in the} said premises by creating a theft angle and a criminal case is^pending against the Applicants. Thereafter the bank again obtained the^ordersfrom the Ld.CMM, Medchal-Malkajgiri for taking^{physical possession} of^the schedule properties. Thus the Respondent has duly followed^{the procedure} and there are no violations. Accordingly, Ld. counsel^{prayedto dismiss} the SA.

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Heard Ld. Counsel for the Applicants and Ld.^{Counsel for the Respondent} and perused the material brought on^record.

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Now the points that arise for consideration^are

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ii. uthether th.e Applicants haue^{establishedang ualid ground} for challenging tle proceedings initiated bg^{the bankfortaking phgsical} possession of tte schedule properties u/ s 14 of the^SARFAESIAct' 2OO2 and also the impugned Sale^{Notice dt.O8.O2'2024issuedbg} tle bank for conducting auction of the schedule^propertg?

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iii. To uhat relief?

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Point .t\Io.(il:-

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During the course of arguments, Ld. Counsel^{for the Applicants and Ld.} -,.Gounsel -^tb ..r.{.f -,.9our,r.gel ! l t '". '.. ' r ,^fo^{r the Respondentreiterated their respectiveversions as stated} '{I 'ttq .. ..r-1.. i \HPra ';c.' 'F ,fit ($ the Applicant No. 1 availed J^{L g {tllL#4} ".}lrr,*^{regarding the ract that} uarious g$i'facilities from the Respondent Bank and created mortgage ,?**, 4 'ws}g,'

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against the schedule properties in security to the repayment of the said loan facilities and thereafter, the Applicants committed default in repaying the loan dues. After classifying the loan account of the Applicants as NPA, the Respondent issued the impugned sale notice dt.08. O2.2O24 for conducting auction of the schedule properties and also initiated proceedings for taking physical possession ofthe schedule properties and challenging the same, the Applicants filed the present SA.

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The specilic contention of the Applicants is that the Respondent issued the impugned Sale Notice dt.O9.O2.2024 for conducting auction of the schedule properties and also proceeded for taking physical possession of the schedule properties without complying with Section 13(3A) of the Act and without following Rule 8(1)(2)(6)&9(1) of Rules,2OO2 and so, the said sale notice is not legal and valid and liable to be set aside.

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But the Respondent Bank contended that they have issued all the statutory notices to the Applicants under the provisions of SARFAESI Act,2OO2 and Rules made thereunder.

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To substantiate their contention, the Respondent bank filed material documents along with the Reply filed by them. As per the said material documents, it is clear that the Respondent issued demand notice dt.25.O5.2O22 and the said notice was admittedly received by the sent

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Applicants. The Applicants alleged that they representation/ objections vide their letter dt.03.06.2o22 in reply to the said demand notice, however, the Applicants have not Iiled original copy not received the alleged letter

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dt.03. 2. Whereas the Applicants hled photocopy of the said letter

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2o beaJing p of the Bank but there is no signature of the official of the there is no date mentioned in the said letter. The Applicants

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also failed to file proof of service of the said letter and in the absence of the same, the alleged letter dt.03.06.2022 cannot be considered and the Applicants cannot sought for compliance of Section 13(3A) of the SARFAESI Act, 2OO2 in response to the alleged letter dt.03.06.2o22. Thereafter, the Respondent issued possession notice dt. 18.08.2022 and the said notice was published in two daily newspapers as evidenced^by the copies of paper publication filed by the Respondent and copy of the said notice was also affixed on the schedule^properties as depicted in^the photographs filed by the Respondent. Thus the Respondent Bank has duly complied with Rule 8( 1)&(2) of Security Interest (Enforcement) Rules, 2OO2. E,arlier the Bank proceeded for taking^{physicalpossession} of the schedule properties through Tahsildar but the Applicants trespassed into the premises alleging theft and a criminal case is pending against the applicants. Thereafter, the Respondent again^{proceededpursuant} to the orders of Ld.CMM, Medchal-Malkajgiri for taking^{physicalpossession} of the schedule properties and the advocate commissioner appointed by the Ld.CMM, Medchal-Malkajgiri issued notice to the Applicants to vacate the schedule properties and so, the said proceedings are^perfectly legal and valid.

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The bank earlier issued sale notice dt.O2.Og.2023 for conducting auction of the schedule properties, however the proposed auction was not materialized for want of bidders. Thereafter, the Bank issued fresh Sale Notice dt.08.02.2024 for conducting auction of the schedule properties on 27.O2.2O24 and challenging the same, the Applicants filed the^present SA. However, during the course of arguments, Ld. counsel for the Respondent submitted that in pursuance of the impugned Sale Notice dt.08.02.2o24,

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. auction as scheduled by the Respondent was not materialized for want of

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...1i'^{,:.' ,,btdd6rs.As the auctionin respect of the scheduleproperties in pursuance} /.: .,ci\ a l.j. , ,t,.J-^{oi$lheimpugnedSale Noticedt.08.02.2024was not materialized,the relief} pplicants in the SA becomes infructuous and nothing no to

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oynq't

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the validity or otherwise of the impugned sale notice. Hence, I am of the opinion that the relief claimed by the Applicants in the present SA becomes infructuous and the SA is liabie to be dismissed. Suffice, if a direction is given to the Respondent to issue fresh sale notice for conducting auction of the schedule properties by strictly foliowing the procedure contemplated under the provisions of SARFAESI Act,2002 and Rules made thereunder.

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Potnt No.(il)r

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t2. In the result, SA7Ol24 is dismissed as there are no merits. Consequently, the Interlocutory Applications, pending if any, shall stand disposed of. No order as to costs.

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Communicate a copy of this order to the parties concerned.

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(Dictated to the P.S, transcibed bg her, corrected, signed and pronounced bA me in the open dag of June, 2026)

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il
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sd/lG.^GOPrCHANDI PRESIDIITG OFFICER

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TRUE COPY

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ls.f. Rogfrfrer NR'!"!, HYDERABAD.

M S Tejaswi Techno Fab Industries v. Bank of Maharashtra

Case brief

What is this about?

What did the court decide?

M S Tejaswi Techno Fab Industries v. Bank of Maharashtra

Case brief

What is this about?

What did the court decide?

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