Dismissed

Gummadi Satyanarayana v. Karnataka Bank Limited

DRT3 Aug 2026SA/70/2025

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal, Hyderabad dismissed a Securitization Application filed by borrowers seeking to quash SARFAESI proceedings. The court found the bank had validly served statutory notices and followed due procedure, rendering the auction claims infructuous.

What did the court decide?

The Securitization Application was dismissed; incidental Interlocutory Applications pending were closed; no order as to costs.

Gummadi Satyanarayana versus Karnataka Bank Limited — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL - II AT HYDERABAD

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DATED THIS THE 4TH 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. 70 OF 2OZs

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GUMMADI SAWANARAYANA, S/o Gummadi Laxmaiah, Flat No.402, H.No.3-B- 16/ A, Godavari Apartments, Nehru Nagar, Ramanthapur, Hyderabad - 500013

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BANDARI SRAVANTHI, W/o. Sri Satyanarayana Flat No.402, H.No.3-B- L6/A, Godavari Apartments, Nehru Nagar, Ramanthapur, Hyderabad - 500013

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Applicants

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Versus

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The Authorized Officer, KARNATAKA BANK LIMITED, Asset Recovery Management Branch, 1st Floor, Plot no.50, Srinagar Colony, Road No.3, Banjara Hills, Hyderabad-500073

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The Branch Manager, KARNATAKA BANK LIMITED, Rajendranagar Branch, Ground Floor, Opp. Pillar No. 210, Mq Splender Rajendranagar, Rangareddy District - 500048

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.....Respondents

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Counsel for the Applicant : Mr. T. Nagender Counsel for Respondent : Mr. N. Meher Mr. N. Meher Meher

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: Mr. N. Meher Mr. N. Meher Meher Prasad

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-:ORDER:-

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The present Securitization Application is filed by the Applicants Assets u/s.17 of the Securitisation and Reconstructi<'/Will'r

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Page 2 of 5

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SA No. 7012025

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and Enforcement of^{SecurityInterestAct, 2002 ("Act" hereinafter for} short) assailing demand^{notice dated 29.06.202t under section} l3(2),^{possessionnotice dated 04.03.2022 under section13(4) and} sale notice dated^{03.o L.2025 fixing the auction on 15.02.2025in} respect of the sA^{Scheduleproperty under Rule 8(6) of the Security} Interest^{(Enforcement)Rules, 2002 (hereinafter "Rules" for short)'}

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The averments of the^{application, in brief, are that applicants} had availed a Mortgage^{Loan of {16,50,000/- from the respondent} bank in the^year 2018,^{and had been regularly servicingthe loan} account. It is contended^{that despite financial difficultiescaused by} the COVID- 19^{pandemic,the applicants continued tomake} substantial repayments^{towards the loan account. The applicants} allege that the respondent^{bank, without issuing any prior intimation} regarding classification^{of the account as a NPA and withoutfollowing} the due^{procedure prescribed underthe SARFAESIAct, directly issued} the Sale Notice dated^{03.01.2025.It is further contendedthat the} respondent bank failed to^{properly account for the paymentsmadeby} the applicants, resulting^{in an inflated outstanding amount, and also} failed to obtain a^{proper valuation of the securedasset, thereby} undervaluing the^{property. The applicants furtherallege that neither} the Demand Notice under^{Section 13(2) nor the PossessionNotice} under Section 13(4)^{of the SARFAESIAct was ever served upon} them, and that the^{Sale Notice dated 03.0L.2025was also not served} in the manner^{prescribed under the Rules, 2002. Itis further} contended that the^{mandatory procedure under Rules B and 9 of the} said Rules, relating to^{possession,valuation and sale of the secured} asset, was not complied^{with. On these grounds,the Applicants seek} setting aside of the SARFAESI^{measuresinitiated;lqainstthe S.A.} y'ffirt'r-l schedure Property.

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Page 3 of 5

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sA No.7012025

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The Respondent Bank filed its reply statement along with supporting documents. The respondent bank, while denying the averments made in the SA, contends that upon the applicants committing default in repayment of the loan, the loan account was classified as a NpA and a Demand Notice dated 29.06.2021 under Section 13(2) of the SARFAESI Act was duly issued. It is submitted that as the appricants faired to discharge the outstanding dues within the statutory period, the respondent bank issued the possession Notice dated 04.03.2022 under Section 13(4) of the Act, which was duly affixed on the secured asset and published in two leading newspapers in compliance with the Rules, 2002. It is further contended that thereafter the respondent bank issued the sare Notice dated 03.01.2025 fixing the e_auction on 15.02.2025, which was also duly affixed on the secured asset and published in two leading newspapers in accordance with the provisions of the Act and the Rules framed thereunder. Having complied with the mandatory provisions of the SARFAESI Act and the Rules, 2002, the respondent bank prays for dismissal of the SA with costs.

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Learned counsel for the applicant reported no oral arguments. Heard rearned counser for the respondent bank. perused the materiar brought on record.

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5' Learned counser for the Respondent Bank denied the averments of the applicants and places reliance upon the material papers annexed with the repry statement. It is submitted that the Appricant,s account was crassified as NpA in accordance with RBI guiderines and that the Respondent Bank had strictry foilowed the due procedure prescribed under the SARFAESI Acr, 2oo2 and the Rures framed thereunder, Accordingly, sought for dismissal of the S.AWU\i

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Page^{4 of 5}

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SA No.7Ol2O25

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

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i) Whether^{the Appticantsmade out a'ny validground ' to} quashanyoftne.m'eii'u'i'iiiitedbytherespondent sa scneauti^{propertYas prayed for?}

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"guin''iii"

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ii) To^{what relief?}

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Point No.(i):

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During^{the course of proceedings it was reportedthat the} auction^{scheduledon t5'02'2025 pursuant to sale notice dated} 03.0t.zozswasnotSuccessfulduetowantofbidders.UnderSuch circumstances,thecontentionofnon-complianceofRuleS(5)'B(6) B(7)&9(1)oftheRulespertainingtotheimpugnedauctionneedno considerationandSAhasbecomeinfructuoustothatextent.

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S.Theothercontentionsoftheapplicantsarenon-complianceof sectionl3(2)&13(4)oftheAct.TheRespondentBankreliedon copies^{of documents annexed with the reply statement'Pages07 to} lzofthematerialpaperannexedtothereplystatementarethe Photostatcopiesofpostalreceiptsandacknowledgementproving service^{of demand notice dated 29'06'2021' similarly' Pages 13 to 18} are the^{Photostat copies of possession notice dated 04'03'2022 being} servedviaregisteredpost,photographsaSproofofaffixtureon securedassetsandpublicationoftheSameinEnglishandTelugu (vernacular^{language)newspapers on 09'03 '2022' In view of} sufficient^{proof place on record, I find no infractionof section13(2) &} 13(4)oftheActandRules3'B(1)&B(2)oftheRules'7002'Asa securedcreditortherespondentbankinitiatedtheSARFESI proceedings,whichcannotbecategorizedasilleqalorarbitrary. rur'L\

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Page 5 of 5

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SA No.7012025

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In view of above observation, it is conclucled that the applicants failed to establish any ground to interdict the measures initiated respondent bank under the Act, 2OO2 against the SA schedule property and accordingry the sA is riabre to be dismissed.

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Point No.fii):

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In the result, the Securitisation Application fails and is hereby dismissed.

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Consequenuy, 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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(.TWel to my dictotion by the steno, corrected, signed and '^r"-" -'tv Ptu'tvu"LEu pronounced by me in the court on this the 4' doy ofAugust, 2026). ,---'.,-

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PRESIDING OFFICER

Gummadi Satyanarayana v. Karnataka Bank Limited

Case brief

What is this about?

What did the court decide?

Gummadi Satyanarayana v. Karnataka Bank Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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