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Hyderabad: The Supreme Court has dismissed a special leave petition (SLP) filed by actor-producer in the Telugu Film Industry, commonly known as TFI, Bandla Ganesh, challenging the Telangana High Court’s order upholding the auction of his Hyderabad property by Union Bank of India for recovery of loan dues.

A Bench of Justices PS Narasimha and Alok Aradhe passed the order on Thursday, July 23, refusing to interfere with the High Court’s July 3 judgment, which had upheld the bank’s action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act.

The dispute relates to loans extended by Union Bank of India to Parameswara Poultry Farm Pvt. Ltd., a company headed by Bandla Ganesh, against mortgaged properties. After the borrower allegedly defaulted on repayments, the bank took possession of the secured assets and auctioned them under the SARFAESI Act.

Bandla Ganesh challenged the auction, arguing that the bank could not simultaneously initiate a Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC) while also proceeding with the auction of secured assets under the SARFAESI Act.

He had initially secured relief from the Debt Recovery Tribunal (DRT), which ruled in his favour. However, Union Bank challenged the DRT’s order before the Telangana High Court, which set aside the tribunal’s ruling and upheld the auction process.

Before the Supreme Court, senior advocate Naveen Pawa, appearing for Bandla Ganesh, argued that the bank should have approached the Debt Recovery Appellate Tribunal (DRAT) instead of directly moving the High Court. He also contended that once the bank initiated CIRP on September 17, 2019, a moratorium came into effect, barring further recovery proceedings under the SARFAESI Act.

Union Bank opposes plea

Opposing the plea, Solicitor General Tushar Mehta, appearing for Union Bank, argued that the purchaser of the auctioned property had already challenged the DRT’s common order before the DRAT and later the High Court, making the bank’s approach to the High Court legally justified. He further submitted that the moratorium under the IBC does not prevent secured creditors from enforcing their rights under the applicable legal framework in the manner argued by the petitioner.

Accepting the bank’s submissions, the Supreme Court dismissed Bandla Ganesh’s SLP, effectively affirming the Telangana High Court’s ruling in favour of Union Bank.