M N ANJAIAH v. UNION BANK OF INDIA

IN THE DEBTS RECOVERY TRIBUNAL _ II AT HYDERABAD

DATED THIS THE 23.d DAY OF APRIL, 2026 PRESENT: SH. RAI.4ESHWAR KOTHE, B.Com, L.LB. (HONS.), 14.A.

PRESIDING OFFICER

Securitization Application No. 432 OF 2024 M.N. Anja iah

S/o. Late N. Narsimha,

Aged 78 Years, Occ: Pensioner, R/0. H. No.1-5- 1003/393,

Alwal Hills, Old Alwal, R.R. District, Secunderabad- 500010

Versus

1. Br. Manager U nion Bank of India l-6-708/2, Bantia Ba kery, 1't floor, Mr, Krishna Road, Sa inagar, Alwal,

Secunderabad - 500010

2. The Regional Manger Union Bank of India, SD Road, Near Park Lane, Secunderabad, Telangana- 500003 ......Respondents Counsel for the Applicant : Mr. K. Sridhar Counsel for Respondent : Mr,Dhananjay Chavan -: ot_q-E3:-

1. The present Securitization Application is filed by the Applicant uls.77 ot the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ("Act" hereinafter for short) to set aside all the measure initiated by the respondent bank including the advocate commissioner notice dated 07.10.2024 vide Crl.M.P No.110/2024 on the file of Hon'ble Senior Civil Judge^cum additional Chief Judicial Magistrate and the sale notice dated 2V,r*.Nul $'-

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page 2 of8 SA No. 43212024 20.10.2024, fixing the auction on 29,L0.2024 in respect of the SA schedule property.

2. The averments of the application, briefly, are that the Applicant in 2008, upon the establishment of the Respondent Bank's branch, he extended substantial support by depositing over Rs.3O lakhs and introducing other customers, positioning himself as a privileged and long-standing relationship client. 1n 2010, when he sought to withdraw funds for the construction of his house and was considering availing a housing loan from State Bank of Hyderabad, the Respondent Bank persuaded him to take a home loan instead from them, assuring an interest rale ot 7.5o/o per annum plus an additional senior citizen rebate. Relying on these representations, the Applicant obtained a home loan of Rs.15,00,000, repayable in 120 EMIs. However, despite the promised rate, the Bank reportedly fixed a higher E[4I of Rs.20,715, which is inconsistent with the contractual rate; and it allegedly failed to hand over the sanction letter or other formal sanction related documents at the time of disbursement. The Applicant contends that, after the Reserve Bank of India subsequenUy reduced interest rates and the Bank undertook to adjust El.4Is and account for excess payments, no proper adjustment was actually eFfected. lnstead, he continued to pay the higher EMIS, leading to substantial over recovery. He further availed two additional loans- CGSHB of Rs.4,00,000 and CGSAN of Rs.3,00, OOO-wh ich were both repaid in advance, yet the Bank again collected excess EMIs, with a significant balance of Rs.1,16,618 remaining un-credited despite a partial refund by cheque. The Applicant alleges that the Bank deliberately withheld detailed loan statements and failed to disclose the appropriation of payments, despite repeated representations, legal notices, and RTI applications, thereby causing financial loss and mental harassment. The dispute escalated when the Respondent Bank allegedly initiated coercive recovery,^rroceedings, including

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Page 3 of8 SA No. 43212024 unauthorised deductions from the Applicant's wife's independent overdraft account (No. 110001), even after she had fully discharged that facility, which caused severe mental distress and culmlnated in a stroke requiring hospitalisation and costly cardiac treatment.^The appllcant relied on Saraswati Co. Op Bank Ltd. Vs. Dean Leslie^RoY, 2008 (1) CLT 608 (NC), wherein it was held that bank cannot deduct any amount with the account holder consent Aggrieved, the Applicant originally approached the High Court by way of a writ petition, wherein the Court directed the matter to be referred^to DRT-II, Hyderabad. The Applicant thereafter filed S.A. No. 136/2022 in this tribunal wherein an ex-parte order was passed in favour of the applicant as per order dated 03.01.2023. Despite this judicial intervention, the Applicant alleges that the Bank has continued unlawful conduct, includinq attempts to take possesslon of the secured asset, issuing defective and allegedly fabricated notices, and initiatlng auction proceedings without complying with the mandatory requirements under the SARFAESI Act and Rules-particularly^the non-issuance of a valid 3o-day notice under Rule 8(6) and the non- adherence to proper publication and service norms. The Applicant further submlts that, upon proper recalculation of the account,^no amount is legally due; rather, the Bank has collected an aggregate excess of approximately Rs.5,05,526, out of which Rs.z,20 '646 remains refundable after adjusting EMIs. He contends that the^loan account was never validly classified as a NPA, whlch, in his view, renders the entire SARFAESI based action illegal and without jurisdiction. The Respondent Bank's conduct, including alleged violation of court orders, attempted dispossession, and continued harassment through coercive and extra-legal means, is characterlsed as arbitrary, mala fide, and in breach of the principles of natural justice, for which the Applicant seeks comprehenslve relief from^the rribunar. ffi(*tt

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Page 4 ofB SA No. 43212024

3. The Respondent Bank filed reply statement in the SA. The averments contained therein are briefly, that the Applicant, along with his wife as co-borrower, had availed a housing loan of Rs.15 lakhs in 2010 from the Respondent Bank, repayable through Elvlls at a floating rate of interest. However, the borrowers consistenuy defaulted in repayment, failed to adhere to the agreed terms, and allowed the account to accumulate substantial outstanding dues. As a result, the loan account was legitimately classified as a NpA on 0l-04-2027 in accordance with the RBI,S prudential norms on income recognition and asset classification. Thereafter, the Bank initiated recovery proceedings under the SARFAESI Act, including issuance of the requisite statutory notices and taking of symbolic possession of the secured asset. Despite due service of the notices (including through publication) and the grant of an opportunity to comply, the Applicant neither cleared the dues nor challenged key steps such as the Possession Notice before the Tribunal. The Respondent further contends that the Applicant approached the Tribunal with unclean hands, suppressing the pendency of parallel proceedings before the Consumer Forum, and has sought to stall the lawful SARFAESI_based recovery through delay tactics. It is emphasized that the Applicant failed to timely challenge the exercise of statutory powers under Section 13(4) and the steps taken under Section 14, including the taking of possession through an Advocate Commissioner after due notice, thereby rendering those proceedings final and binding in his own default. A significant development hightighted by the Respondent is that the e-auction scheduled for 29-70-2024, which forms the sole stated basis of challenge in the present SA, did not materialise due to lack of bidders and therefore never culminated in a sale. On this ground, the Bank argues that the cause of action in respect of the auction has either ceased to exist or become infructuous, and that both the main S.A. and the interim apptication (I.A^ryo. 3OIO/2024) /Xh^- -t /./ <<\l't:s

-/ F'

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Page 5 of8 SA No. 43212024 have lost their operative substratum. The Tribunal has reportedly already dismissed the interim application as infructuous on the^same footing. Relying on settled principles of law that rellef^must correspond to a subsisting cause of action, the Respondent submits that continuation of the S.A. amounts to an abuse of the process^of the Tribunal. The Bank characterized the Applicant's allegations- particularly those relating to an assured rale of 7.5o/o, incorrect^EMI, and non-receipt of sanction documents-as factually false, frivolous, and made with an ulterior motive aimed at securing illegal financial gain or relief. Additionally, the Respondent raises objections regarding non-joinder of necessary parties, particularly the co- borroweT (the Applicant's wife) and other entities connected with the secured asset, which, it is contended, vitiates the proceedings and warrants rejection of the S.A. on this threshold ground. The Bank also relies on the decision in Nobel Kumar v. Standard Chartered Bank lo justify the legality of the possession proceedings and to emphasise that the Applicant's faiture to approach the statutory forum in time debars him from raising belated challenges at this stage.^The Respondent accordingly prays for dismissal of the SA and liberty to continue with the recovery measures. The Bank submltted that^the Applicant and his wife had duly acknowledged the Sanction Letter^and executed the Term Loan Agreement, whlch expressly stipulated a loan tenor of 120 months (inclusive of a 12-month premium/interest holiday period) and repayment by 108 EMIs of Rs.20,715 per month at a floating interest rate of 9.50o/o per annum.

4. The Learned Counsel for the Applicant reported no oral arguments but filed written arguments. Heard the learned counsel appearing for the Respondent Bank. Perused the written argument filed by the applicant and also /pmed the material brought on record. (-//'1g'lo'"

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Page 6 of 8

SA No. 432/2024 5, During the course of arguments, learned Counsel for the Applicant reiterated the contents of the SA and submitted that Applicant availed home loan Rs.15 lakhs in June 2010 (120 EMIs @ RBI 6.50o/o p.a.), alleges Bank wrongly fixed EMI Rs.20,715 (v. correct Rs.17,032), excess Rs.3,683/month; plus excess retention from CGSHB/CGSAN prepayments (Mar.2Ol7 cheque Rs.2,39,860, adjusted Rs.1,48,160 only). Total excess Rs.3,67,110 as of May 2020 when loans fully repaid per Applicant. Despite ,'No Dues Certificate"

dt.12.06.2018 confirming closure, Bank fabricated dues, initiated SARFAESI (demand/possession/sale notices May 2020), threatening repossession/auction. Contends harassment, breach of RBI guidelines on fair practices, trauma to senior couple (wifels stroke); CDRC found deficiency/unfair practices. Prays set aside SARFAESI/e-auction notices (20.09.2024/07.I0.2024), return title deeds, release deed, refund excess *LBo/o interest, Rs,5,00o/day detention comp., damages/costs.

6, Per contra, learned Counsel for the Respondent Bank relied upon the material documents annexed with the Reply Statement and submits that, on account of default, the recovery proceedings under the SARFAESI Act were validly initiated. It is further submitted that the Demand Notice and the Possession Notice were duly served on the Appellant, that the Possession Notice was properly affixed on the secured property, and that both notices were published in accordance with the Rules, 2002. In view of the above, it is prayed that the present SA is devoid of merits and accordingly liable to be dismissed.

7. The points for consideration are as follows : -

i) Whether the applicant made out any vatid ground to quash the measures initiated by the respondent bank against the SA schedule property as prayed for?

ii) To what relief?

Cw"

Page 7 of 8

SANo.43212O24 Point No.(i):

8. During the course of proceedings it was reported that^the auction scheduled on 29.10.2024 pursuant to sale notice dated 20.10.2024 was unsuccessful. Under such circumstances,^the contention of non-compliance of Rule B(5), 8(6), B(7) & 9(1) of^the Rules pertaining to the impugned auction need no consideration^and SA has become infructuous to that extent.

9. The primary contention raised by the applicant in its averment is about the due amount of home loan being already paid by^the applicant. To support their contention the applicant filed the Photostat copy of the No Objection Certificate dated 12.06.2018 evidencing the Home Loan bearing the Account No. (C Home 100006). However, on perusal of the record it is found that, after the issuance of the^No Dues Certificate, the Applicant again defaulted in repayment as^a result of which the account was subsequently classified as an NPA on oL-04-2}zl, as evidenced by the photostat copy of the Demand Notice dated tB-03-2024, filed by the Respondent Bank.^With subsequent default, the significance of No Dues Certificate is lost. Accordingly, the Applicant's contention that the loan dues have been cleared cannot be accepted.

10. The Respondent Bank relied on copies of documents annexed with the reply statement as proof of compliance of^due procedure of law. A perusal of the same would confirm that the demand notice under section 13(2) of the Act was duly served via registered post as per photostat copies of postal acknowledgement card and postal receipt. Similarly, photostat copies of paper publication of possession notice in English and Vernacular (Telugu) language and photographs evidence affixture of the possession notice at the conspicuous place of the schedule property. On further scrutiny of the documents, it has been observed that the Applicant himself issued a Reply Notice dated

Page 8 of 8

sA No.43212024 21.08.2024, wherein he specifically objected to the issuance of the Possession Notice dated 02.08.2024 and raised certain objections against the same. Hence it is clear that Applicant had been served with the Possession Notice. In view of sufficient proof place on record, I find no infraction of section 13(2) & 13(4) of the Act and Rules 3, B(1) & 8(2) of the Rules, 2002.

11. As a secured creditor, the respondent bank initiated action under Sec.14 of the Act for taking physical possession of the secured asset and the said action is neither illegal nor arbitrary.

12. In view of above observations, it is concluded that the applicant failed to establish any ground to set aside the measures of the Respondent Bank under the Act, 2002 including possession notice dated 02.08.2024 and action to take physical possession in respect of the SA schedule property and accordingly the SA is liable o be dismissed.

Point No.(ii):

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

14. Consequently, interim stay order dated t]-.lI.2024 in IA.No.3164 of 2024 stands vacated.

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

16. No order as to costs.

17. Communicate a copy of this order to the parties concerned and upload in the official website.

(Typed to my dictotion by the PS, corrected, signed dnd pronounced by me in the open court on this the 23'd doy of April,2026).

Owe

(RAMESHWAR KOTHE)

PRESIDING OFFICER