Allowed

Vivek Bhal Chandra v. Punjab National Bank

DRT6 Dec 2025APPEAL/4/2025

Case brief

AI extract

What is this about?

The Tribunal set aside an auction conducted under the SARFAESI Act due to non-disclosure of material information and failure to upload notices on the website. It directed the bank to refund the auction amount with interest and permitted the applicant to purchase the property under private treaty.

What did the court decide?

Auction set aside; auction refund with 9% interest directed; private treaty sale ordered at agreed price; poundage fees to be returned.

Vivek Bhal Chandra versus Punjab National Bank — Banking and Recovery | DRT (2025)

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APPEAL NO. 04/2025

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DEBTS RECOVERY TRIBUNAL, JAIPUR PRESIDING OFFICER: SH. VIMAL GUPTA

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APPEAL No.- 04/2025

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OA No. 104/2020

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Vivek Bhalchandra Gangurde, Proprietor of M/s Samarth Industries, Plot No. 39, Gut No. 499, Near Water Tank, Ashok Nagar, Nashik - 422 012 (Maharashtra)

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………Applicants

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Versus

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Punjab National Bank, ARM Branch, Ist Floor, Nehru Place, Tonk Road, Jaipur through its Chief Manager (RC Holder Bank)

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Smt. Praydarshni Avinash Patil W/o Avinash Patil, P. No. 299, Sector N-3, Jalna Road, Aurangabad (Auction Purchaser)

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..….. Respondent

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Present:

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Shri Anil Kumar Sharma, Counsel for the Applicant

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Shri Raj Kumar, Counsel for the Respondent Bank/FI Shri Satyjit, Counsel for auction purchaser

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APPEAL NO. 04/2025

(Final Order)

(06.12.2025)

This is an appeal filed against the order passed by Recovery Officer-II, DRT, Jaipur in RC No. 384/2022 titled as PNB Vs Super Choco Food & Others wherein the Recovery Officer has sold the property in favour of respondent no. 2.

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It is submitted that the Applicant is a small businessman running the business in the name and style of M/s. Samarth Industries at Nashik. In the present auction proceedings, the applicant is third & interested party because his interest is affected by the present auction. Earlier, the RC Holder Bank being secured creditor had conducted a public auction of the Plant and Machinery and Industrial Land & Building situated at Plot No. F-109/3, MIDC-Nashik Industrial Area, Village-Satpur, DistrictNashik admeasuring 1385 sq. Meters (secured asset/property in short) under the provisions of Securitization Act, 2002 in which the Applicant participated and was declared as successful bidder by RC Holder Bank.

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It is further submitted that Ld. Recovery Officer has not dealt with the fact that the Respondent Bank has not obtained the NOC from MIDC at the time of mortgage of the property, if the Bank was having the NOС from MIDC then the auction proceedings conduct under SARFAESI Act would have been completed, the Appellant deposited the amount. The MIDC has refused to issue the NOC to the Appellant and Bank has failed to provide such NOC to the Appellant. Hence the order dated 08.07.2025 deserve to be quashed and set aside.

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APPEAL NO. 04/2025

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It is prayed by the appellant to quash and set aside the orders dated 08.07.2025 and 17.07.2025 passed by the Ld. Recovery Officer, IInd in Recovery Case No. 384/2022 in the case PNB V/s Super Choco Food & others and the objections filed by the Appellant be allowed and to set aside the auction conducted on 09.06.2025.

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Reply filed by the respondent no. 1 on the record.

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Respondent no. 2 has filed reply and the same is taken on record. On the last date of hearing, the Tribunal has observed that the issue raised by the respondent bank about non-disclosure of the fact of Securitization Application pending before the DRT, Mumbai goes to the very root of the legality of the proceedings before Recovery Officer. Further, during the course of the arguments also it was contended that it is mandatory to put the auction notice on the website, but the same has also not been done.

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During the course of the arguments, it was alleged by the appellant that there was pendency of Securitization Application in DRT Mumbai, wherein the action of the bank was challenged regarding forfeiture of the bid amount. It is contended that the bank could not have forfeited the amount as they failed to disclose the NOC/dues of MIDC

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Counsel for the Respondent no. 2 submits that the same is the case with their auction and they are further alleged on the ground that MIDC dues were not being disclosed, nor the bank is ready and willing to accept the responsibility of non-disclosure.

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The recent judgment of Hon’ble Supreme Court in the matter of Delhi Development Authority versus Corporation Bank & Ors. has categorically held that non-disclosure of material information go to the root of auction and auction

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APPEAL NO. 04/2025

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can be set aside. The Conclusion of the judgment is reproduced here as under:-

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10. 32. In the result, impugned order dated 11.08.2014 passed by the High Court in Writ Petition (C) No. 5005 of 2014, the e-auction notice dated 27.09.2012 as well as the e- auction conducted by the Recovery Officer, DRT on 09.11.2012, the confirmation of sale and sale certificate dated 08.07.2013 and 12.07.2013 respectively issued in favour of the Auction Purchaser are quashed and set aside. We direct the bank to refund the entire amount lying in deposit to the Auction Purchaser. The Auction Purchaser has been deprived of the use of its money for a considerable time, the money which would have earned value elsewhere. Therefore, the Auction Purchaser is entitled to interest on the balance amount which is lying in the deposit of the Bank. We, therefore, direct that the balance amount deposited by the Auction Purchaser which is with the bank be returned to the Auction Purchaser with an interest at the rate of 9% per annum within a month to be reckoned from the date of deposit till repayment.

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After going through the records, it is observed that not only pendency of SA before Ld. DRT-III is not finding any mention, but also subject sale notice was not even uploaded on the website which again material irregularity. It is mandatory for the Recovery Officer to upload the notice on the website of DRT-III. Interestingly, the Tribunal has not find a single auction notice uploaded on the website. This shows the non-compliance of statutory provisions. Therefore, the auction dated 09.06.2025 is set aside, the amount of auction purchaser be refunded with 9% interest from the date of deposit. It is made clear that as and when

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APPEAL NO. 04/2025

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the payment has come, the interest will start accruing from that date.

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There was a proposal of the appellant which was to be accepted by the bank, however the bank has not accepted the proposal stating that it is the conditional proposal wherein the MIDC dues are to be paid by the bank for which they are not agreeable. Though, they agreed that the forfeited amount can be adjusted and the property can be sold under the private treaty to the present appellant.

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Be that it may be, the present appellant is ready and willing to purchase the property at a higher price which will take care of MIDC dues, therefore Tribunal is of the opinion that MIDC dues can be paid out of proceeds which will be received by the bank from the appellant.

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In view of the bank is directed to consider the request of the appellant to sale the property within two weeks time at a price which was agreed upon, matching the amount at which property was sold to the present respondent no. 2, whose auction has already been set aside as above. In view of this, this Appeal stands disposed of as allowed

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At this stage, Counsel for the bank submits that the Tribunal may fix the dues on the property up to Rs. 10.00 Lac to be borne by the bank and rest to be borne by the appellant.

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Poundage fees of Rs. 2,75,010/- shall be returned by the Registry within a period of four weeks from today. In case the MIDC transfer after the sale being conducted by the bank or sale deed being executed by the bank, parties will be at liberty to move the MA seeking directions to the MIDC.

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APPEAL NO. 04/2025

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The private treaty be done at the terms agreed between the parties.

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Accordingly, Appeal stands disposed off, all pending IAs also stands disposed off, if any.

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File be consigned to record as per rules. Copy of order be uploaded on website.

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(Vimal Gupta) Presiding Officer Debts Recovery Tribunal, Jaipur

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signed and uploaded on 09.12.2025

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Vivek Bhal Chandra v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

Vivek Bhal Chandra v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

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