Allowed

Valluri Venkata Gopal Rao and Another v. Union Bank of India

DRT16 Jul 2026SA/73/2026

Case brief

AI extract

What is this about?

This Debt Recovery Tribunal allowed the Applicants' Securitization Application, setting aside the Respondent Bank's demand and possession notices. The Tribunal found the Bank's allegations unchallenged due to ex parte disposal after the Bank failed to appear or file a reply, confirming the Bank did not comply with statutory provisions.

What did the court decide?

Set aside the demand notice dated 05.08.2025 u/s. 13(2) and the possession notice dated 04.02.2026 u/s. 13(4) of the Act.

Valluri Venkata Gopal Rao and Another versus Union Bank of India — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL^_ II AT HYDERABAD

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DATED THIS THE 16TH DAY OF ]ULY, 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. 73 OF 2026

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Mr. Valluri Venkata Gopal Rao S/o. Late Sahadevudu, Aged^yrs., Gender: Male, Occ: Business,

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Mrs. Valluri Sridevi W/o. Valluri Venkata Gopal Rao Aged yrs., Gender: Female occ: Household

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Both Applicants are R/o. Plot No.18, Survey No. 389, Venkata Ramana Colony Phase - I, Post Dammaiguda, Nagaram Village, Keesara Mandal Rangareddy Dist, Telangana - 500083 ........Applicants

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Versus

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Union Bank of India Serilingampally Branch Plot No. 12-C, Sai Raghava Towers, Serilingampally - 500 019 Rep. by its Authorlsed Officer .....Respondent

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Counsel for the Applicants : Mr. Ramesh Anand M.G. Counsel for Respondent : Ex-parte

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-: Q-B-D-EB:-

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The present Securitization Application is filed by the Applicants u/s.t7 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ("Act" hereinafter for short) assailing demand notice dated 05.08.2025 under section 13(2) OW"

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PaEe 2 of4

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SA No. 7312026

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and possession notice dated 04.02.2026 under section 13(4) of the Act in respect of the SA Schedule property.

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The averments in the applicauon, brlefly stated, are that the applicants availed a Term Loan of Rs. 22 lakhs from the Respondent Bank under the Union Mortgage Loan Scheme pursuant to the sanction letter dated 20.10.2015 by creating an equitable mortgage over the S.A. schedule property. They contend that though the Respondent Bank had obtained a Recovery Certificate in O.A. No.362 of 2019 and initiated recovery proceedings in R.C. No. 797 of ZO2O, they had deposlted a total sum of Rs. 2O lakhs pursuant to the orders passed by the Hon'ble High Court. The Applicants further assert that, desplte the pendency of the recovery proceedings and without gtving due credit to the amounts already deposited, the Respondent Bank illegally classified the loan account as NpA on 29.11.2023 and initiated fresh measures under Sections 13(2) and 13(4) of the SARFAESI Acl, 2002 by issuing demand notice dated 23.02.2024 and possession notice dated 09.05.2024. It is further contended that, pursuant to the order passed by this Tribunal in S.A. No. 262 of 2024, the earlier SARFAESI proceedings stood withdrawn and the Respondent Bank itself admitted that the loan account had become regular. However, the Appltcants allege that the Respondent Bank again declared the account as NpA with effect from 29.O7.ZOZS and issued the impugned demand notice dated 05.08.2025 followed by the possession notice dated 04.02.2026 without properly computing the outstanding dues in accordance with the directions issued by this Tribunal. The Applicants further contend that the Respondent Bank failed to comply with the mandatory provisions of Sections 13(2) and 13(4) of the SARFAESI Act read with Rutes 8(1) and B(2) of the Security Interest (Enforcement) Rules, 2002, as the possession notice was neither duly affixed nor properly published, and was not issued by a duly authorised officer. Hence, applicants pray,Jpr interdicting //x\9..:\ U//''\6\^t''

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Page 3 of4

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sA No. 73/2026

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the measures initiated by the respondent against the SA Schedule Property.

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Summons were issued to the Respondent Bank and duly served. The Respondent Bank, being the caveator, entered appearance through its learned counsel and received the material papers. However, despite entering appearance, the Respondent Bank failed to make any representation when the matter was taken up for hearing. Though sufficient opportunities were afforded, learned counsel for the Respondent Bank failed to file its reply statement. Consequently, by order dated 15.06.2026, the right of the Respondent Bank to file a reply statement was forfeited and it was set ex parte.

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Heard learned counsel for the applicants. Perused the material brought on record.

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Learned counsel for the appllcants reiterated the content of its application and submits that Respondent Bank wrongfully classified the account as NPA. Learned counsel alleges respondent bank having failed to serve the demand notice under section 13(2), possession notice under section 13(4) of the Act and compliance of the Rule 8(1) and 8(2) of the Rules, hence the measures initiated by the Respondent Bank against the SA Schedule Property is to be interdicted.

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I have consldered the submissions advanced by the learned counsel for the applicants and perused the material available on record. The principal contention of the applicants is that the Respondent Bank has failed to comply with the mandatory provisions of the SARFAESI Act and Rules, 2002 while initiating measures agalnst the secured asset. It is well settled that-the secured creditor

1ffi.0,,r\

Page 4 of4

sA No. 7312028

is bound to strictly adhere to the procedure prescribed under the Act and the Rules, and any deviation from the mandatory provisions would vitiate the measures initiated thereunder. In the present case, despite due service of summons, the Respondent Bank failed to file its reply statement and make any appearance when matter called for hearing. Accordingly, having faired to avair the opportunities granted by this Tribunal, the Respondent Bank was set ex parte. consequently, there is no materiar praced on record to controvert or disprove the specific allegations of non-compliance with the statutory provisions' The averments made by the applicants, therefore, remain unrebutted and unchallenged. In the absence of any evidence to the contrary, this Tribunal finds no reason to disbelieve the case set up by the applicants. Accordingry, the securitisation Application deserves to be allowed.

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In the result, the present Securitisation Apprication is ailowed by setting aside the demand notice dated 05.08.2025 under section 13(2) and possession notice dated 04.02.2026 under section 13(a) of the Act.

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Consequently, Interlocutory Applications pending, if any, shall sta nd closed.

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B. 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, siqned ond pronounced by the 16"' doy ol July, 2026).

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open court on this Kr"d ESHWAR KOTHE) PRESIDING OFFICER

Valluri Venkata Gopal Rao and Another v. Union Bank of India

Case brief

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Valluri Venkata Gopal Rao and Another v. Union Bank of India

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