Mohd. Rais v. Union Bank of India Stressed Assets Management Branch Lko. and 2 Others

Allahabad HC27 Aug 2025WRIC/8078/2025

Case brief

AI extract

What is this about?

Keywords: SARFAESI Act Section 14; Section 17; DRT Lucknow; SA No. 268 of 2025; interim relief application rejected; auction; sale certificate dated 19.05.2025; Celir LLP v. Bafana Motors (2024) 2 SCC 1; Article 226; writ disposed; interim protection from dispossession; remanded four weeks; no coercive action; Allahabad High Court Lucknow Bench; Court No. 6; Pankaj Bhatia; Mohd. Rais; Union Bank of India Stressed Assets Management Branch.

What did the court decide?

Impugned DRT order set aside; matter remanded to the DRT for a fresh order on the interim application within four weeks; interim protection ordered — no coercive dispossession of the petitioner until the fresh order is passed. ¶¶23

Mohd. Rais Vs Union Bank of India Stressed Assets… — Banking and Recovery | Allahabad HC (2025)

What the court decided

AI extract

Outcome

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Issue for consideration

Whether the DRT's rejection of the petitioner's interim relief application (order dated 23.06.2025, modified 24.06.2025), rendered without considering the petitioner's contentions regarding alleged impropriety in the initiation of proceedings, conduct of sale and issuance of the sale certificate, was a justifiable exercise of the power vested in the DRT under Section 17 of the Act. +1 more

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Court's answer

Since the impugned order does not consider the petitioner's contentions regarding alleged impropriety in initiation of the proceedings, conduct of sale and issuance of the sale certificate, it is prima facie not a justifiable exercise of the power vested in the DRT by virtue of Section 17 of the Act; on that limited ground the order impugned cannot be sustained and is set aside.

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Ratio / Principle

The matter is remanded to the DRT to pass a fresh order on the petitioner's interim application, considering the contentions raised in the SA and the subsequent amendment, the challenge to the Section 14 order on its own merit, and the respondent's arguments including alleged material concealment by the petitioner in the interim application; the fresh order shall be passed within four weeks.

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Key takeaways

Until the DRT passes the fresh order as directed, no coercive action of dispossessing the petitioner shall be carried out.ratio¶¶20

Detailed headnote1 paragraphs

Allahabad High Court (Lucknow Bench), Writ-C No. 8078 of 2025 (Pankaj Bhatia, J.), decided August 27, 2025 — disposed. The DRT Lucknow's order of 23.06.2025 (modified 24.06.2025) rejecting the petitioner-borrower's interim relief application in SA No. 268 of 2025 — grounded on Celir LLP v. Bafana Motors ((2024) 2 SCC 1) and the issuance of a sale certificate — was set aside as prima facie not a justifiable exercise of the DRT's power under Section 17 of the SARFAESI Act, because the petitioner's contentions on alleged impropriety in initiation of proceedings, conduct of sale and issuance of the sale certificate went unconsidered. The matter was remanded for a fresh order within four weeks, taking in the SA contentions, the amendment, the challenge to the Section 14 order on its own merits, and the bank's plea of material concealment; until then, no coercive dispossession of the petitioner was to be carried out.

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HIGH COURT OF JUDICATURE AT ALLAHABAD LUCKNOW

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WRIT - C No. - 8078 of 2025

Mohd. Rais

.....Petitioner(s)

Versus

Union Bank Of India Stressed Assets Management Branch Lko. And 2 Others

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ranc o. n ers		.....Respondent(s)
Counsel for Petitioner(s)	: Kushagra Dikshit,	Piyush Kishor
Counsel for Respondent(s)	: Kapish Srivastava,	C.S.C.

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Court No. - 6

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HON'BLE PANKAJ BHATIA, J.

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1. Supplementary Affidavit filed in court is taken on record.

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2. Heard the counsel for the petitioner and Sri Akshay Bajpai who appears for the respondent no.1.

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3. The present petition has been filed by the petitioner challenging the order dated 23.06.2025, subsequently modified vide order dated 24.06.2025.

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4. The contention of the counsel for the petitioner is that challenging the action of recovery of the respondent no.1, the petitioner had approached the DRT, Lucknow by filing SA No.268 of 2025. It is stated that in the said SA, the petitioner had pointed out the deficiency in the manner in which the proceedings were initiated by the respondent bank. It is stated that during the pendency of the said SA, the respondent bank proceeded to auction the property and a sale certificate was also issued. The petitioner thereafter moved an amendment application and challenged the action of the sale and the issuance of a sale certificate. It is stated that while the SA was pending, the respondent bank obtained an order under section 14 of the SARFAESI Act and as, the petitioner was apprehending immediate dispossession, the petitioner challenged the order under section

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WRIC No. 8078 of 2025

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14 of the Act and also filed an interim application for grant of interim protection from dispossession till the consideration of the interim relief application.

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5. The DRT by means of the order dated 23.06.2025, observed that in view law laid down by the Apex Court in the case of CELIR LLP Vs. Bafana Motors (Mumbai) Pvt. Ltd. and others; (2024) 2 SCC 1 coupled with the fact that a sale certificate has already been issued, no interim order was required. The court had also noticed that the petitioner had invoked the jurisdiction of the Hon'ble Supreme Court under Article 226 wherein, the sale certificate was challenged. Thus, on the said two grounds, the interim application was rejected. Subsequently, the DRT noticed its typographical error and removed the part of the order wherein it was mentioned that the petitioner had approached the High Court under Article 226 challenging the sale certificate dated 19.05.2025. The said modification was carried out on 24.06.2025.

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6. Considering the fact that the order impugned does not consider the contentions of the petitioner with regard to the alleged impropriety in initiation of the proceedings and conducting of sale and issuance of sale certificate, prima-facie, the same cannot be said to be a justifiable exercise of power vested in DRT by virtue of Section 17 of the Act. Thus, on the said limited ground, the order impugned cannot be sustained and is set aside. The matter is remanded to the DRT to pass a fresh order on the interim application filed by the petitioner.

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7. While doing so, the DRT would consider the contentions of the petitioner, as raised in the SA, as well as the amendment carried out thereafter. The DRT would also consider the challenge to the order passed under Section 14 on its own merit, as may be argued by the petitioner. The respondent would also be at liberty to argue their case including the arguments that there was some material concealment by the petitioner in the interim application. All these facts shall be reconsidered by the DRT and the fresh order shall be passed within a period of four weeks.

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8. Till passing of the fresh order, as directed above, no coercive action of dispossessing the petitioner shall be carried out.

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WRIC No. 8078 of 2025

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9. With the said observations, the writ petition stands disposed off.

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(Pankaj Bhatia,J.)

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August 27, 2025

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VNP/-

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Digitally signed by :- VISHVANATH PRASAD SHUKLA High Court of Judicature at Allahabad, Lucknow Bench

Mohd. Rais v. Union Bank of India Stressed Assets Management Branch Lko. and 2 Others

Case brief

What is this about?

What did the court decide?

Mohd. Rais v. Union Bank of India Stressed Assets Management Branch Lko. and 2 Others

Case brief

What is this about?

What did the court decide?

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What the court decided

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