Waiver of redemption rights under the un-amended Rules may be inferred from informed conduct and notices; such waiver defeats redemption and can render Section 17 challenges time-barred, with limitation sustaining the dismissal of the application.

JUDGMENT : 3^rd April, 2025

THE APPELLATE TRIBUNAL:

1. Instant appeal has been preferred by the SARFAESI Applicants against judgment and order dated 21^st December, 2017, passed by Learned DRT-II, Hyderabad, dismissing S.A.108 of 2017 (G. Basavaraj & Others -vs- Sri Mahayogi Lakshmamma Co-operative Bank Limited (AVVA Bank) & Another).

2. As per the pleadings of the parties, Securitization Application under Section 17 of the SARFAESI Act, 2002 (hereinafter referred to as the 'Act') was filed challenging the action of the Bank, Respondent No. 1, in returning the cheque dated 18.3.2013 tendered by the Appellants towards redemption of debt and refusing to accept the Demand Draft No. 198222 dated 30.3.2013 for Rs.1.5 lac with a further relief to set aside the sale held on 30^th July, 2004 and also to quash the Demand Notice dated 24^th December, 2003 and Possession Notice dated 12^th April, 2004.

3. It is pleaded that the SARFAESI Applicants are the present owners of the secured assets which is the S.A. Schedule property which was originally owned by the father of Applicant No. 1, namely, G. Busanna, who mortgaged the same with the Respondent No.1/Bank on 1^st December, 1995 as security for loan of Rs.50,000.00 sanctioned to M/s. Veerabhadra Swamy Trades. Appellants No. 2 and 3 are the Partners of M/s. Veerabhadra Swamy Trades. There was default in repayment of the loan. Account was classified as N.Ρ.Α. Notices, under Section 13 (2) and 13 (4) of the Act, Auction Sale Notice and Demand Notice of Rs.1,01,329.00 were issued by the Bank. In the auction sale Respondent No. 2, namely Dr. A. Madusudan, was the highest bidder for Rs.5,60,000.00; although the value of the property was much more. 75% of the bid amount was not deposited within the stipulated period of fifteen days. Sale was not confirmed.

4. Appellants are in physical possession over the secured assets.

5. SARFAESI Applicants vide letter dated 6.3.2013 tendered an amount of Rs.1.50 lac towards demand made by the Respondent No. 1 under Demand Notice dated 24.12.2013 by Cheque No. 550753 dated 22.3.2013 which was not accepted by the Bank. Thereafter, Appellants prepared a Demand Draft on 30^th March, 2013 for Rs.1.5 lac and requested the Bank to receive the same. But the same was not accepted on the ground that they are in process of confirming the sale. Appellants were under the belief that Respondent No. 1 has cancelled the sale dated 30^th July, 2004 as the amount of 75% was not deposited. However, sale was confirmed after a lapse of about eight years and eight months.

6. An amount of Rs.11,143.00 was kept open by the Borrower Firm for deposit with the Respondent No. 1 with a lien to O.D. account. Had the same been appropriated by the Bank towards the loan amount, outstanding liabilities would not have come within the ambit of the SARFAESI Act. Sale was confirmed on 30.3.2013.

7. Respondent Bank filed the reply stating that there are repeated rounds of litigation as far as the schedule assets are concerned. Sale was conducted on 30^th July, 2004 wherein Respondent No. 2, the successful auction bidder, vide letter dated 9.8.2004, sought for time to deposit the balance sale amount. On 11.8.2004 one Smt. Chandramma sent a legal notice to the Bank and the Auction Purchaser stating that the S.A. Schedule Property was attached in O.S. No. 26 of 1988. Thereafter, another notice dated 16.3.2005 was sent by the Applicants, through one Smt. G.M. Lalitha, Advocate, stating that S.A. Schedule Property is a joint property and they are entitled to get 2/3^rd share in the balance sale proceeds to be deposited by the Respondent No. 2, Auction Purchas