Big Setback for Bandla Ganesh in High Court
As part of the recovery process, the bank took possession of the Jubilee Hills property in 2019. Later, in 2022, the property was sold in a public auction for ₹8.51 crore.
Film producer and actor Bandla Ganesh and his family have received a major legal setback from the Telangana High Court. The court ruled that the auction of their property in Jubilee Hills by Union Bank was legal. This decision came after the court cancelled an earlier order of the Debt Recovery Tribunal (DRT), which had stopped the auction.
The case is connected to a large loan taken by Sriparameswara Poultry Farm Private Limited. Bandla Ganesh, his father, and his brother had signed as guarantors for the loan. After the loan was not repaid, Union Bank started recovery proceedings under the SARFAESI Act.
As part of the recovery process, the bank took possession of the Jubilee Hills property in 2019. Later, in 2022, the property was sold in a public auction for ₹8.51 crore.
During the hearing, the bank's lawyer told the court that after the auction was completed, Bandla Ganesh's family had agreed to a One-Time Settlement (OTS). The total settlement amount was said to be ₹82 crore. The bank also agreed to adjust the ₹8.51 crore received from the auction against the settlement amount.
However, the bank argued that even after agreeing to withdraw earlier petitions, the family approached the DRT again. According to the bank, the tribunal cancelled the auction without fully examining all the records.
On the other hand, the lawyers representing Bandla Ganesh argued that insolvency proceedings were pending before the National Company Law Tribunal (NCLT). They claimed that a moratorium was in force and that the property should not have been auctioned.
The bank rejected this argument. It said that the auctioned property did not belong to the company that took the loan. Instead, it belonged to the personal guarantors. Therefore, the bank argued that the insolvency process of the company did not stop recovery from the guarantors' personal assets.
After hearing both sides, the Telangana High Court agreed with the bank's arguments. The court set aside the DRT's earlier order and confirmed that the auction conducted by Union Bank was valid.