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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
MOUSHUMI BHATTACHARYA, GADI PRAVEEN KUMAR
Aditya Constructions, rep. by its Proprietor, Hyderabad – Appellant
Versus
Debts Recovery Appellate Tribunal, Kolkata – Respondent
ORDER:
Moushumi Bhattacharya, J.
1. The petitioner in both these Writ Petitions is a Borrower who availed credit facilities from the respondent No.3 – Union Bank of India (formerly Andhra Bank) of about Rs.10.50 crores by mortgaging an asset which was put to auction by the respondent No.3-Bank. The petitioner has filed these Writ Petitions challenging the Common Judgment passed by the Debts Recovery Appellate Tribunal at Kolkata (‘DRAT’) on 04.08.2025 reverting an order passed by the Debts Recovery Tribunal-II at Hyderabad (‘DRT’) on 30.01.2023. The impugned Common Judgment was passed in two Appeals (viz., Appeal Nos.76 of 2023 and 40 of 2023) filed by the respondent No.3-Bank and the respondent No.5-Auction Purchaser, respectively, from the order passed by the DRT on30.01.2023.
Timeline of Relevant Events
2. A detailed timeline of the relevant events is stated below for a better understanding of the facts leading to the impugned Common Judgment passed by the DRAT.
| 17.05.2017 | The loan account of the writ petitioner was classified as a Non-Performing Asset. |
| 20.06.2017 | The respondent No.3-Bank issued a Demand Notice under section 13(2) of The Securitisation and Reconstruction of Financial As |
The court upheld the auction process under the SARFAESI Act, affirming that auctions must follow statutory requirements and can only be challenged on limited grounds such as fraud or procedural irreg....
The auction sale of secured assets was invalid due to violations of statutory procedures, including failure to obtain separate valuations and selling below the reserve price.
Mandatory compliance with procedural requirements under the SARFAESI Act is essential; failure to adhere prejudices borrowers' rights and invalidates auction proceedings.
The auction sale is invalid if not compliant with SARFAESI Act rules on property valuation, requiring distinct treatment of movable and immovable assets without collusion.
Secured creditors must adhere to proper notice and valuation requirements per the SARFAESI Act, as failure to do so invalidates asset sales.
The court reinforced that compliance with statutory notice requirements and fair valuation is essential in property auctions under the SARFAESI Act to protect borrower rights.
The main legal point established in the judgment is the importance of fair valuation, compliance with statutory provisions, and the need to set aside auction-sales with fundamental procedural errors.
The High Court cannot entertain a writ petition under Article 226 when an effective alternative remedy exists under the SARFAESI Act, emphasizing the need for exhaustion of statutory remedies.
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