191090005572021_14dfa77b53f89ebe216d737cb0c33699.pdf

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IN THE DEBT RECOVERY APPELLATE TRIBUNAL - 
KOLKATA
HON'BLE Justice Anil Kumar Srivastava, Chairperson 
APPEAL Dy. No. 557 of 2021
(Arising out of S.A. No. 82 of 2019 – DRT-Visakhapatnam)
17.05.2024
                                                                                      
The Authorised Officer, M/s. Eluri Cooperative Urban 
Bank Limited, Macharala Branch, Guntur Dist. D No. 13-
2-170/21, 
Palanadu 
College 
Complex, 
Mecherla –
522426.
... Appellant
--Vs--
1. Sri Gajavali Kishore, residing at D No. 11-1-299, Ward 
No. 11, Mecherla – 522426, Guntur Dist. 
2.Sri Mogulluri Lakshmana Rao, residing at D No. 12-1-
148, Sai Teja Bazar, Macherla – 522426, Guntur Dist. 
... Respondents
For Appellant
: 
Mr. Nemani Srinivas, ld. Adv.
  
For Respondent:
Mr. P Sreenivas, ld. Adv.
                       
The Appellate Tribunal
Instant appeal is filed against the judgement and 
order 
dated 
30.08.2021 
passed 
by 
learned 
DRT, 
Visakhapatnam in S.A. 82 of 2019 [Sri Gajavalli Kishore 
Vs. M/s. The AO, Eluri Cooperative Urban Bank Ltd. & 
Anr.] whereby S.A. was allowed holding the e-auction 
notice dated 09.05.2019 and auction sale held on 
12.06.2019 are illegal.  Further, bank was directed to re-
deliver the physical possession of the scheduled property 
to the SARFAESI applicant i.e. borrower.  It was also held 

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that SARFAESI applicant is entitled to redeem the property 
by paying entire debt due to the bank within three months 
from the date of the order. Feeling aggrieved by the 
direction to re-deliver the possession of the scheduled 
property, appellant bank preferred the appeal.   
2.
Heard learned counsel for the parties and perused the 
records. 
3.
As far as facts of the matter are concerned, there is 
no dispute that the respondent, Gajavalli Kishore, who 
filed the SARFAESI application, was the borrower of the 
bank. Repayment of loan was irregular.  Loan account was 
classified as NPA.  Secured creditor bank proceeded under 
the SARFAESI Act, 2002.  Possession of the secured asset 
was taken by the bank.  E-auction notice was issued on 
09.05.2019 fixing auction sale date on 12.06.2019. 
4.
Learned DRT allowed the SARFAESI application 
setting aside the e-auction notice dated 09.05.2019 and 
auction sale held on 12.06.2019.  Further direction was 
issued to re-deliver the physical possession of the secured 
asset to the SARFAESI applicant.  Further, applicant was 
directed to approach the bank for redemption of the 
scheduled property by making payment of entire debt due 
within three months.  Admittedly this amount was not paid 
by the respondent herein.  Although certain applications 
were made by the respondent, but that did not find favour 

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of the appellant bank.  Ultimate result is that debt due 
amount was not paid.  
5.
As far as issue of re-delivery of possession is 
concerned, no doubt, auction sale notice and auction sale 
were set aside by the learned DRT, but the bank was not 
required to hand over the possession till the debt was due 
against the borrower. Possession was taken by the bank 
from the borrower in accordance with the law.  Further, 
bank was given a liberty to proceed for realization of the 
debt due in accordance with law.  Hence, direction of the 
learned DRT regarding re-delivery of the scheduled 
property is liable to be set aside.  However, there was a 
direction to redeem the scheduled property which should 
have been availed by the borrower.  Learned counsel for 
the bank submitted that auction amount has already been 
refunded to the auction purchaser.  In such circumstances, 
if the borrower makes a proposal for settlement to the 
bank, bank is well advised to consider the same 
sympathetically in accordance with the rule.  Accordingly, 
the appeal is liable to be allowed in part.  
O R D E R
6.
Appeal is partly allowed with the observations made 
in the body of the judgement. Direction issued by the 
learned DRT regarding re-delivery of the schedule property 
is set aside

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