The Tribunal clarified the procedural validity of auction sales under SARFAESI Act, emphasizing compliance with Rules 8 and 9 regarding notice requirements.

JUDGMENT : 25th February, 2026

THE APPELLATE TRIBUNAL:

1. Since both the appeals are arising against a common judgment and order dated 17.9.2021 passed by Learned DRT, Visakhapatnam allowing S.A. 195 of 2020 (Dr. Golagani Ashok Kumar -vs- Canara Bank & Others) hence both the appeals are being decided by a common judgment.

2. Appeal No. 131 of 2022 is filed by the Secured Creditor, Canara Bank, while Appeal No. 79 of 2022 is filed by Chintala Suresh Kumar and Cheedi Vijaya Deepthi, Auction Purchaser.

3. As per pleadings of the parties, facts of the case are that the Respondent No. 1, namely Dr. Golagani Ashok Kumar, iS one of the Directors/Guarantor of Respondent No. 2, namely M/s. Devara Innovations Private Limited.

Respondents No. 3 and 4, namely D. V. K. Nooka Raju and Smt. D. Naga Sunanda Deviare other Directors of Respondent No. 2. The Appellant, Canara Bank, sanctioned Credit Facilities in the nature of OCC Facility for an amount of Rs.3.95 crore to Respondents No. 1, 3 and 4 vide Sanction Letter dated 31.12.2014 which was duly secured by creating an equitable mortgage by Respondents No. 1 and 3. Respondent No. 2 is the Mortgagor.

4. Loan account became irregular and was classified as N.P.A. on 13% December, 2016; notice under Section 13 (2) of the SARFAESI Act (hereinafter referred to as the ‘Act’) was issued on 19.5.2017 which was duly served and not responded by the Respondents. Then notice under Section 13 (4) of the Act was issued on 4.9.2017 and was also served and published in newspapers “Indian Express” in English and “Shakshi” in Telgu on 6.9.2017. In the meantime, certain proposal for OTS was made by Respondent No. 2 which could not be fructified. E-auction Sale Notice dated 9.8.2018 under Rules 8 (6) and 9 (1) of Security Interest (Enforcement) Rules, 2002 (hereinafter referred to as the ‘Rules’) was issued and published in the ‘The New Sunday Express’ in English and ‘Shakshi’ in Telgu newspapers on 12.8.2018. E-auction was fixed on 15.9.2018 but could not be conducted for want of bidders. In the meantime S.A. 335 of 2018 was filed before the Learned DRT, Visakhapatnam challenging the Sale Notice dated 9.8.2018 which was dismissed on merits holding that the Bank has followed the due procedure prescribed under the law.

5. Second e-auction Sale Notice was issued on 7.6.2019 and published in two newspapers ‘The New Sunday Express’ in English and ‘Shakshi’ in Telgu on 9.6.2021 fixing 28.6.2019 for e-auction. Same could not be conducted for want of bidders.

6. Third e-auction Sale Notice was issued on 12.7.2019. It was also published in two newspapers ‘The New Indian Express’ in English and ‘Shakshi’ in Telgu on 13.7.2019 fixing 31,07.2019 for e-auction but the same could not be fructified for want of bidders.

7. Fourth e-auction Sale Notice was issued on 22.8.2019 fixing 3.10.2019 which also failed for want of bidders.

8. Fifth e-auction Sale Notice dated 1.11.2019 published in two newspapers ‘The New Indian Express’ in English and ‘Eenadu’ in Telgu on 5.11.2019 but the same also failed for want of bidders.

9. After obtaining the valuation rate, sixth e-auction Sale Notice was issued on 7.2.2020 and published in two newspapers ‘The New Sunday Express’ in English and ‘Eenadu in Telgu newspaper published on 9.2.2020. The same was also sent to the Borrowers on 9.2.2020. Respondents No. 5 and 6 were declared as_ highest bidders.Respondents No. 5 and 6 deposited 25% of the bid amount in accordance with law and Sale Certificate wa