Bank of India, Vs Smt. A. Padma & Ors.- It also clearly reflects that the Sale Certificate was issued for an area of 230.33 sq.yards. It means that the secured assets were 230.33. sq.yards which includes the roof structure also and the same was auctioned but the valuation was not done for whole of the property which is against specific provisions of law and is accordingly vitiated.

 DRAT Kolkata (2025.07.16) in Bank of India, Vs  Smt. A. Padma & Ors. [Appeal No. 32 of 2023(Arising out of S.A. No. 519 of 2016 in DRT-I, Hyderabad)],held that;

• It also clearly reflects that the Sale Certificate was issued for an area of 230.33 sq.yards. It means that the secured assets were 230.33. sq.yards which includes the roof structure also and the same was auctioned but the valuation was not done for whole of the property which is against specific provisions of law and is accordingly vitiated.

Excerpts of the Order;

Instant Appeal has been preferred against a judgment and order dated 8th March, 2019 passed by Learned DRT-1 Hyderabad allowing S.A. No. 519 of 2016 (Smt. A. Padma versus Bank of India and another).

# 2. As per pleadings of the parties, Respondent No. 1 Smt. A. Padma (Securitisation Applicant) preferred the Securitisation Application under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘the Act’) to set aside the measures initiated by the Appellant Bank in pursuance of the Sale Notice dated 19.10.2016 fixing the date of auction as 30.11.2016. Appellant Bank sanctioned the credit facilities to M/s Mithra Nutraceuticals and Natural Extracts, (Respondent No. 2 in the Appeal) wherein Respondent No. 1 herein stood as guarantor and equitable mortgage was created. Installments were being regularly paid to the Bank. On 28.11.2016, Sale Notice dated 19.10.2016 was served upon the Respondents by the Bank. There was a default in repayment and the loan account was classified as NPA with

effect from 13.11.2015. Proceedings under the SARFAESI Act, 2002 were initiated. Notice under Section 13(2) of the Act was issued on 19.11.2015. No representation was received. Possession notice was issued on 30th January, 2016 and symbolic possession was taken on 30th January, 2016. Possession notice was also affixed on the conspicuous part of the secured assets and were also published in two newspapers “The New Indian Express” in English and “Namaste Telangana” in Telegu on 02.02.2016.

# 3. Pending Securitisation Application, auction scheduled on 30th November, 2016 was cancelled and a fresh auction notice dated 29.12.2017 was published on 07.01.2018 in “Nava Telangana (Telugu) and in “Financial Express (English) fixing 31st January, 2018 as the date for auction and the secured assets were auctioned on the same date. 

# 4. It is pleaded that notice under Rule 8(6) and 9(1) of the Security Interest (Enforcement) Rules, 2002 were not served and are violated. There are violations of Rule 8(5) of the Security Interest (Enforcement) Rules, 2002. The reserve price was fixed at Rs. 50.00 lacs taking valuation of the extent of land admeasuring 194.33 sq.yds and RCC building along with sheds. No valuation is obtained for 36 sq.yds and the building. Learned DRT framed the following issue for consideration:

• “Whether the Applicant made out any valid ground for quashing the action taken by the Respondent Bank against the schedule property under the provisions of SARFAESI Act.”

# 5. Learned DRT arrived at a finding that the Valuation of the property was wrongly obtained by the Bank. Accordingly, Securitisation Application was allowed with a direction to the Bank to refund the bid amount to the auction purchaser with interest @ 12% from the date of the

Order.

# 6. Learned Counsel for the Appellant would submit that the Learned DRT had erred in recording its finding. It is submitted that the valuation of the secured assets was duly obtained by the Appellant Bank. Thereafter, auction was conducted. There is no illegality in the impugned order. 

# 7. Per contra, Learned Counsel for the Respondent No. 1 submits that the auction sale was conducted for 230.33 sq. yds but only 194.33 sq.yds was assessed and valued by the valuer in the western side. It is mentioned that it is partly grave yard and Sale Certificate was also issued for the whole area of 230.33sq.yds. which is not in accordance with law. It is further submitted that the auction tender was submitted by one Mr. Cheruku Dhanamjaiah & others. Letter for depositing the EMD was also issued to them without ascertaining the names of all the bidders. However, the sale Certificate was issued in the name of Mr. Cheruku Dhanamjaiah which is not in accordance with law.

# 8. The only issue to be looked into is as to whether the secured assets were properly valued at the time of e-auction or not? It is not in dispute that in the valuation report valuation of only 194.33 sq.yds. was made by the Valuer Shri D Mohan Raghavaiah on 03.08.2017 while the total area was 230.33 sq.yds. In the valuation report in the boundaries on the western side open land is shown as per the sale deed while as per the actual measurements there was partly grave yard. Total extent of site was shown as ad measuring over a plot are of 230.33 sq yds (restricted to physical area of 194.33 sq.yds). The Valuer also reported that the plot area is considered as 194.33 sq.yds as per the actual plinth area details. It is further reported that the portion of 230.33sq.yds. minus 194.33sq.yds. equals to 36 sq.yds. was not considered for valuation as House Permit Plan was not produced. ACC sheet roof sheds were available on the plot. It is further reported by the Valuer that the secured assets are situated in a developed residential area and nearer to the Mehdipatnam Centre but adjacent to grave yard. In the Sale Certificate issued on 25.07.2018 also description of the immovable property is shown as- 

• “All that house bearing Municipal No. 12-2-398/68 in Plot No. 53 admeasuring 230.33 sq.yards or 192.7 sq mtrs in the lay out of Ramsinghpura Handloom Weavers Co-op production and Sale Society (Weaker Section) situated at Markandeya Nagar (Thallagadda), near Karvan Sahu, Hyderabad and bounded as

• North: House No. 12-2-398/ 67

• South: 12-2-398/ 69

• East: Road

• West: Open land.”

# 9. It also clearly reflects that the Sale Certificate was issued for an area of 230.33 sq.yards. It means that the secured assets were 230.33. sq.yards which includes the roof structure also and the same was auctioned but the valuation was not done for whole of the property which is against specific provisions of law and is accordingly vitiated.

# 10. Learned DRT has rightly recorded a finding that there is a violation that the e-auction conducted by the Appellant Bank suffers from material irregularity and illegality. Accordingly, I do not find any merit in the Appeal. Appeal lacks merit and is liable to be dismissed and is dismissed.

ORDER

Appeal is dismissed. Impugned judgement and order dated 8th March, 2019 passed by Learned DRT-1 Hyderabad in S.A. No. 519 of 2016 (Smt. A. Padma versus Bank of India and another) is confirmed. 

• No Order as to costs.

• File be consigned to Record Room.

• Copy of the order be supplied to Appellant and the Respondents and a copy be also forwarded to the concerned DRT.

• Copy of the Judgment/ Final Order be uploaded in the Tribunal’s Website.

• Order signed and pronounced by me in the open Court on this the 8th day of July, 2025.

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