Pabba Swaroopa vs KARUR VYSYA BANK on 31 July 2026

**JUDGMENT**

**: 31^st July, 2026**


2Misc. Appeal Dy. No. 429 of 2026-DRAT-Kolkata**THE APPELLATE TRIBUNAL:**

1. **1.** Heard the Learned Counsel for the Appellants on admission and perused the records.

2. **2.** Instant appeal is preferred against an order dated 24.03.2026 passed by Learned DRT-II Hyderabad in I.A. No. 3685 of 2025 in S.A. No. 369 of 2018 whereby the I.A. was dismissed.

3. **3.** I.A. No. 3685 of 2025 was filed by the applicants for direction to the bank to produce all the loan documents in the name of eight different unregistered partnership firms along with present status reports. It is alleged that a Securitization application under Section 17 of the SARFAESI Act, 2002 (hereinafter referred to as the 'Act') was filed by the appellants challenging the action taken by the secured creditor and the action in pursuance of the sale notice dated 19.08.2018 for auction to be held on 19.09.2018 and sale notice dated 21.12.2018 for auction to be held on 24.01.2019 be declared null and void. S.A. was filed on different grounds challenging the notice under Section 13(2) of the Act, and violation of Rule 8(6) of the Security Interest(enforcement) Rules, 2002(hereinafter referred to as 'Rules') etc.

4. **4.** Pending S.A. an I.A. was filed stating that the appellants are the owner of the secured assets and loan was sanctioned by the secured creditor in collusion with other respondents without following the procedure established by law. It is further alleged that the property is in possession of different tenants, Respondent No. 3 namely, Sri Jain Hitesh

Ramesh Kumar and Respondent No. 4 namely, Sri Jitin Ramesh Jain who obtained loan from different financial institutions and mortgage the Appellant Company in collusion with the bank officers. Criminal Complaint was lodged. Fraud was committed by the banks, serious irregularities were committed by the bank, accordingly, it was prayed that Respondent No. 1 Bank i.e. The Karur Vysya Bank be directed to produce all loan documents which were sanctioned to the Respondent No. 3 and his family members for better adjudication of the Securitization Applicant.

5. Opposition is filed by the Respondent Bank alleging that the appellants are third party and have no locus standi to file the S.A. The Tribunal can only examine the validity of the action under the SARFAESI Act. The bank is conducting the auction in respect to the secured creditor belonging to Respondent No. 3 Sri Hitesh Ramesh Jain and not of the appellant. S.A. is liable to be dismissed as infructuous since the impugned action was not successful.

6. Learned DRT dismissed the I.A. holding that there may be inter-se dispute between the appellants and Respondent No. 3. Issue of fraud, collusion or title dispute cannot be looked into in an application under Section 17 of the Act. The reliefs sought for by the Appellants are not in accordance with law.

7. Learned Counsel for the Appellant would submit that fraud has been played upon by the appellants in collusion with the bank officers and Respondent No. 3, wherein criminal proceedings are going on. Documents sought to be summoned are relevant for the just decision of the case.

**8.** Appellants preferred a Securitization appeal under Section 17 of the SARFAESI Act. Section 17 of the SARFAESI act reads as under:

**Section 17. [Application against measures to recover secured debts]-**

17. [(1) Any person (including borrower), aggrieved by any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor or his authorised officer under this Chapter, [may make an application alongwith such fee, as may be prescribed,] to the Debts Recovery Tribunal having jurisdiction in the matter within forty-five days from the date on which such measures had been taken:

[Provided that different fees may be prescribed for making the application by the borrower and the person other than the borrower.]

[Explanation.— For the removal of doubts, it is hereby declared that the communication of the reasons to the borrower by the secured creditor for not having accepted his representation or objection or the likely action of the secured creditor at the stage of communication of reasons to the borrower shall not entitle the person (including borrower) to make an application to the Debts Recovery Tribunal under this sub-section.]

**9.** It was held by the Hon'ble High court for state of Telangana at Hyderabad in W.P No. 22458 of 2024, **[V. Ravi Kumar -vs- A.P. Mahesh Co-operative Urban Bank Ltd.]** in para 11 that - "Section 17 of the SARFAESI Act provides for an opportunity by a person, including a borrower, against measures taken by a Secured Creditor for recovery of a Secured Debt. Section 17(1) authorizes a person aggrieved or any other person under section 13(4) initiated by the Secured Creditor to make an application to the jurisdictional DRT within the statutory limit provided under section 17(1) of the SARFAESI Act."

**10.** Bare perusal of the provision would indicate that any person aggrieved by any of the measure taken by secured creditor under Section 13 sub-section (4) of the Act by the secured creditor may make an application under this provision. Learned DRT has to confine itself to the measure undertaken by the secured creditor under Section 13(4) of the Act. If there is inter-se dispute between the Appellant and the Respondent No. 3 or any fraud, as has been alleged, was committed, that has to be looked into at the time of appropriate proceedings. Even if a criminal complaint is filed or is pending, law will take its own course in deciding the same in accordance with law. But as far as summoning of the records of the loan disbursed to Respondent No. 3 and 4 or the details thereof, is concerned, it is in no way connected to the disposal of the Securitization applicant filed by the appellant. Further challenge made in the Securitization Application itself is to be looked into by the Learned DRT as on record that the E-Auction allegedly challenged by the appellants could not be fructified and got frustrated.

**11.** With these observations, we do not find any illegality in the impugned order. Appeal is liable to be dismissed at admission stage.

O R D E R

Appeal is dismissed at admission stage with the observations made in the body of the judgement. Impugned order dated 24.03.2026 passed by Learned DRT-II Hyderabad in I.A. No. 3685 of 2025 in S.A. No. 369 of 2018 (Pabba Swapoopa -vs- The Karur Vysya Bank Limited) is confirmed. However, since the S.A. is pending since 2018, Learned DRT is hereby directed to decide the same expeditiously.

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Misc. Appeal Dy. No. 429 of 2026-DRAT-Kolkata Let a copy of this order be forwarded to the Learned DRT for compliance.

File be consigned to Record room.

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

Order signed, dated and pronounced in open Court.

(Anil Kumar Srivastava, J) Chairperson

Dated: 31^st July, 2026 tk

31.7.26