Hc Upholds Auction Of Bandla Ganesh Family Property

The Telangana High Court has upheld the auction of a prime property belonging to the family of Tollywood producer and businessman Bandla Ganesh in Hyderabad’s upscale Jubilee Hills, dealing a significant legal setback to the producer and his relatives.

A division bench comprising Justice Moushumi Bhattacharya and Justice Gadi Praveen Kumar set aside an earlier order of the Debt Recovery Tribunal, which had cancelled the auction, and ruled in favour of Union Bank of India. The judgment was delivered on Friday.

The dispute arose from loans obtained from Union Bank of India by Sri Parameshwara Poultry Farm Private Limited, a company belonging to Bandla Ganesh’s family.

Following defaults in loan repayment, the bank initiated recovery proceedings under the SARFAESI Act. As Bandla Ganesh, his father and his brother had stood as guarantors, the bank took possession of their Jubilee Hills property in 2019.

The property was subsequently auctioned in 2022 for Rs 8.51 crore. During the recovery process, Bandla Ganesh’s family proposed a one-time settlement. The bank clarified that the Rs 8.51 crore realised through the auction would be adjusted against the settlement amount.

According to the bank, the family agreed to this arrangement and also undertook to withdraw all pending legal proceedings. However, they later approached the Debt Recovery Tribunal challenging the auction.

The DRT subsequently cancelled the auction and directed that the auction proceeds be refunded, prompting Union Bank to challenge the order before the High Court.

Appearing for the bank, senior advocate B.S. Prasad argued that the DRT had failed to properly examine crucial documentary evidence and the applicable legal provisions before passing its order.

He also rejected the contention raised on behalf of Bandla Ganesh that the auction was invalid because insolvency proceedings were pending before the National Company Law Tribunal.

He argued that the property in question belonged to the individual guarantors and not to the company undergoing insolvency proceedings. Therefore, there was no legal bar on its sale under the SARFAESI Act.

After considering the submissions of both sides and examining the statutory provisions, the High Court concluded that Union Bank had acted in accordance with the SARFAESI Act while conducting the auction.

Holding that the Debt Recovery Tribunal’s order was legally unsustainable, the division bench quashed the DRT’s directions and upheld the validity of the auction conducted by Union Bank, bringing the prolonged legal dispute to a close in the bank’s favour.

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