Dismissed

Gurdev Kaur v. Punjab National Bank

DRT3 Oct 2025SA/109/2025

Case brief

AI extract

What is this about?

In this Securitization Application, the Appellants challenged the SARFAESI action taken by the Punjab National Bank, alleging improper NPA declaration, lack of CERSAI registration, and defective service of notices. The Court examined the default history and service records.

What did the court decide?

The Securitization Application was dismissed. All pending Interim Applications, if any, were disposed of accordingly.

Gurdev Kaur versus Punjab National Bank — Banking and Recovery | DRT (2025)

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SA No. 109 of 2025

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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SA No. 109 of 2025 Gurdev Kaur and another Versus

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A.O. Punjab National Bank

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Dated: 03.10.2025

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Item No. S-1

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Argued by: Sh. Rohit Suri, Counsel for the Applicants.

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Sh. Arvind Rajotia, Counsel for the Respondent Bank.

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Gurdev Kaur and another (Applicants) have filed this Securitization Application under Section 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), against the Authorized Officer, Punjab National Bank (Respondent).

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Admittedly, in the year 2013, Applicants had raised a Term Loan of Rs. 17 lacs and in the year 2014 Overdraft facility of Rs. 5 lacs from the Respondent Bank. It is stated that during Covid, the account was restructured and the rate of interest was reduced to 7.10% in respect of Term Loan account of Rs. 17 lacs. However, despite the reduction in rate of interest, Bank has charged higher rates. The account turned NPA on 30.08.2024. On 05.09.2024, Bank issued the notice under Section 13(2) of the SARFAESI Act. On 12.11.2024, it issued the notice under Section 13(4) of the SARFAESI Act. On 24.03.2025, Bank obtained the order from DM under Section 14 of the SARFAESI Act. Applicants alleged that the housing loan account had not turned NPA. The Bank declared the account NPA against the RBI guidelines. Applicant is an MSME. Bank has applied penal interest and capitalized the same, which is against the judgment passed in Central Bank of India versus Ravindra and others. Bank did not offer any OTS. It is stated that the secured asset was not registered with CERSAI and thus, under Section 26-D of the SARFAESI Act, the Bank

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SA No. 109 of 2025

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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cannot proceeded under the SARFAESI Act. On these facts, Applicants filed the present SA on 11.04.2025 and prayed that the SARFAESI action be set aside and the Bank be directed to withdraw the SARFAESI action.

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Bank, in reply, has denied the case of the Applicants. It is alleged that the account was rightly declared NPA. To secure the loan, Applicant No. 1 had created security interest in respect of land measuring 17 marlas, situated at village Chhouni Kalan, Tehsil and District Hoshiarpur. It is stated that the notices under Section 13(2) and 13(4) of the SARFAESI Act were served upon the Applicants. The charge is duly registered with CERSAI. The Term Loan account had turned NPA as Applicants did not make the payment as per the repayment schedule. Accordingly, it is stated that there is no merit in the present and the same be dismissed.

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Mr.Suri, counsel for the Applicants has argued that the Term Loan account was being paid regularly and it had not turned NPA and despite that Bank declared the Term Loan account NPA. He further argued that there is no proper CERSAI registration. The notices issued under Section 13(2) and 13(4) were not served upon the Applicants. Bank has charged penal interest and also capitalized it, which is not permissible under the law.

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Per contra , Mr.Rajotia, counsel for the Respondent Bank has argued that the present SA was filed on 11.04.2025. Applicant was served with the possession notice on 12.11.2024, which was duly served upon Applicant No. 1. In this regard, Mr.Rajotia has drawn my attention to the copy of possession notice and submitted that a look at the possession notice would show that it is signed by Applicant No. 1. Mr.Rajotia further submitted that the SA is beyond limitation as the notice under Section 13(4) was served

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SA No. 109 of 2025

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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upon the Applicants on 12.11.2024 and the present SA was filed on 11.04.2025. He further submitted that it is not the case wherein the Applicant denies the service of notice under Section 13(4). Since, the Applicant was duly served with the notice under Section 13(4) of the SARFAESI Act, the limitation has to be reckoned from the notice under Section 13(4) and not from the order passed under Section 14 of the SARFAESI Act. Accordingly, it is stated that there is no merit in the present SA and the same be dismissed.

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I have considered the rival contentions.

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I am of the considered view that there is no force in the contention of counsel for the Applicants that their account had not turned NPA. Admittedly, in the year 2013, Respondent had sanctioned Term Loan of Rs. 17 lacs and in the year 2014, Overdraft facility of Rs. 5 lacs to the Applicants. As per the notice under Section 13(2) of the SARFAESI Act, dated 05.09.2024 (Annexure A-3), a sum of Rs. 17,83,769.61p and a sum of Rs. 5,09,620.06p, respectively were due in both the accounts. As per the statement of account of the Term Loan, Applicants did not deposit any money from February 2023 to December 2023 in the Term Loan account. Applicants only deposited Rs. 20,000/- in March 2024 and another sum of Rs. 19,100/- in April 2024. They again deposited Rs. 20,500/- in May 2024 and Rs. 19,500/- in June 2024 and Rs. 19,500/- in July 2024. The balance as on 30.08.2024 was 17,69,119.61p. I am of the considered view that Applicants had certainly made default in the Term Loan account and the Bank has rightly declared the account NPA. Further, the notice under Section 13(4) was duly served upon the Applicant on 12.11.2024. In case, Applicants had not been served with the notice under Section 13(2), Applicants should have raised this issue soon after the service of notice under Section

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SA No. 109 of 2025

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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13(2) upon them. I am of the considered view that there is no merit in the present SA. The same is hereby dismissed . All the pending IAs, if any, are also disposed of, accordingly.

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Registrar is directed to send a copy of this order to both the parties, as per rule. Thereafter, file be consigned to record room after due compliance.

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Pronounced in open court Manoj Dated: 03.10.2025

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(A S Narang) Presiding Officer DRT-I, Chandigarh

Gurdev Kaur v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

Gurdev Kaur v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

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