D S Enterprises Rep by its Proprietrix Mr.Katari Triveni vs CANARA BANK on 5 November 2026

IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI

I IA 221/2026 (Waiver) in A.IR:90/2026

D S Enterprises & 2 ors V/S Canara Bank & anr 05/11/2026

Learned Counsel for both sides are present.

This appeal is filed against the final order dated 31.12.2025 passed by the Learned Presiding Officer, DRT-I, Karnataka at Bengaluru in SA No. 328 of 2025.

SA No.328 of 2025 has been filed to set aside the e-auction sale notice dated 27.6.2025 for recovery of Rs. 1,76,91,806.87p, as on 26.6.2025.

Petitioners filed IA No. 1733 of 2025 for staying further proceedings in SA No. 328 of 2025. The Learned Presiding Officer, DRT-I, Karnataka at Bengaluru passed an order dated 21.7.2025 permitting the sale scheduled on 5.8.2025 to go on. However, the confirmation of the sale was stayed subject to the condition of the Petitioner paying 25% of the approximate outstanding debt due at Rs. 44,22,950/- in two instalments. When the stay order is in force, the Bank sent intimation to the auction purchaser asking the auction purchaser to pay the balance sale consideration of 75% within the stipulated time frame. This amounts to violating the conditional order passed by the Learned Presiding Officer, DRT-I, Karnataka at Bengaluru.

At the time of availing the loan, the property was valued at Rs. 3,25,43,000/- in the year 2021. However, when the fresh valuation report was obtained prior to the issuance of sale notice, the market value was fixed at Rs. 3,21,45,583/-. This reduction is not supported by any material evidence. The value the property would fetch will be more year after year from 2021 to 2025. There is also violation of Rules 9(3) and 9(4) of the Security Interest (Enforcement) Rules, 2002 and the auction purchaser has not paid the balance sale consideration of 75% within the time stipulated. However, Learned Counsel for the Petitioner is not able to justify this contention by production of payment details. On these grounds, Learned Counsel for the Petitioner seeks a waiver of pre-deposit. No other ground is urged in support of waiver of pre-deposit.

Learned Counsel for the Respondent Bank opposed the waiver of pre-deposit on the ground that sale was held by following the necessary and mandatory procedures. Property was sold to the auction purchaser for Rs. 3,60,23,000/-. Third party interest has been created. The sale certificate was issued only after the dismissal of SA No. 328 of 2025.

The contentions raised by the Learned Counsel for Petitioner with regard to violating the conditional order passed by the Learned Presiding Officer, DRT-I, Karnataka at Bengaluru, and the alleged delayed payment of 75% of the balance sale consideration, are not true.

There is no violation of the conditional order passed by the Learned Presiding Officer, DRT-I, Karnataka at Bengaluru, and the balance 75% of the sale consideration was paid, as per rules. Thus, he seeks to dismiss the waiver application.

Considered the rival submissions and perused the records.

The challenge in the Securitisation Application is issuance of sale notice for recovery of Rs. 1,76,91,806.87p. The issues raised on the merits of the appeal like the alleged violation of the conditional order passed by the Learned Presiding Officer, DRT-I, Karnataka at Bengaluru, under-valuation, and violation of Rules 9(3) and 9(4) of the Security Interest (Enforcement) Rules, 2002 will be considered in the main appeal.

Pre-deposit is mandatory for entertaining this appeal under Section 18(1) of the SARFAESI Act, 2002. The debt due is inclusive of interest as per the definition of debt under Section 2(1)(ha) of the SARFAESI Act, 2002, read with Section 2(g) of the RDB Act 1993, which had been settled by the Hon’ble Supreme Court of India in re, M/s. Sidha Neelkanth Paper Industries Private Limited & Another Vs. Prudent ARC Limited & Others (Civil Appeal No. 8969 of 2022, decided on 05.01.2023) reported in 2023 SCC Online SC 12.

The property is sold and third-party interest is created. It appears that the auction purchaser has not been impleaded before the DRT-I, Karnataka at Bengaluru. Taking all these factors into consideration, and as per the submission of the Learned Counsel for the Respondent that the amount due is Rs. 1,74,66,893.48p without considering the sale price and that the Petitioner is said to have made payments of Rs.44,22,950/- and Rs.21,17,537/-, totalling to Rs.65,40,487/-, this Tribunal deducts this amount from Rs. 1,74,66,893.48p, which comes to Rs.1,09,26,406.48p, and directs the Petitioner to make the pre-deposit of 30% of Rs.1,09,26,406.48p in two equal instalments within a period of four weeks from today, failing which this appeal would stand rejected.

30% of Rs.1,09,26,406.48p comes to Rs.32,77,921.94p, rounded off to Rs.32,77,922/-, out of which the first instalment of Rs.16,38,961/- is to be made on or before 19.11.2026, and the second instalment of Rs.16,38,961/- is to be made on or before 3.12.2026.

The said pre-deposit should be made in the form of Demand Draft in favour of Registrar, DRAT, Chennai, payable at Chennai. In case pre-deposit is made within the stipulated period, Registrar shall invest the same in a Nationalized Bank for a reasonable period and renew it periodically, till further orders are passed.

Post the matter on 7.12.2026 for compliance. Sd/-

Chairperson