Dismissed

Ms Dashmesh Plywood Industries v. Punjab National Bank

DRT26 Nov 2025SA/124/2025

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal dismissed the Securitization Application challenging the Bank's SARFAESI action. The Court held that service of notices was proper via tracking reports and photographs, objections were duly responded to, and the secured asset was operational industrial land.

What did the court decide?

The Securitization Application under Section 17 SARFAESI Act was dismissed; all pending IAs disposed of.

Ms Dashmesh Plywood Industries versus Punjab National Bank — Banking and Recovery | DRT (2025)

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SA No. 124 of 2025

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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SA No. 124 of 2025 M/s Dashmesh Plywood Industries and others Versus Punjab National Bank

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Dated: 26.11.2025

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Item No. 22

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Argued by: Mr.Shubham Pabbi, Counsel for the Applicants.

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Mr.Arvind Rajotia & Mr.Sachin Rana, Counsel for the Respondent Bank.

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M/s Dashmesh Plywood Industries and others (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 Punjab National Bank (Respondent).

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Applicant No. 1 is a partnership firm, comprising Applicant No. 2 and 3 as its partners. As per the Applicants, Applicant No.1 is an MSME unit. In the year 2017, Respondent had sanctioned a CC Limit of Rs. 1.50 crores; Term Loan-I of Rs. 2.50 crores; Term Loan-II of Rs. 10.50 lacs and Term Loan-III of Rs. 15.00 lacs (Annexure A-2) to Applicant No.1. The Term Loan was secured by mortgage of leased commercial property measuring 27 kanals 05 marlas, owned by Shri Karanveer Singh, in favour of Applicant No. 1, vide lease deed dated 12.05.2017, for 30 years. These facilities were also secured by collateral security in the shape of agricultural land total measuring 123 kanals 23 marlas, situated at village Sadana, Tehsil and District Gurdaspur. Applicants have alleged that District Town Planner, Gurdaspur vide permission dated 31.03.2015 had granted CLU certificate for setting up a manufacturing plyboard and plywood factory at site. Applicants state that due to Covid, the business operations of Applicant No. 1 suffered badly and they could not repay the dues. They had

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SA No. 124 of 2025

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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apprised the Bank about the stress in their account. Applicants have alleged that as per RBI guidelines, Bank was under obligation to forward their account to the designated committee for corrective action plan. However, the Bank failed to get the account restructured and illegally declared their account NPA. No notice was issued before declaring the account NPA. They had deposited Rs. 1.25 crores from 2021-22, 2022-23. Applicants alleged that though they were eligible for ECLGS and CFITL, yet, the Bank did not grant the same against the RBI guidelines. On 04.06.2021, Respondent issued the notice under Section 13(2) of the SARFAESI Act, demanding a sum of Rs. 4,23,44,127.72p. On 28.01.2022, Respondent issued the notice under Section 13(4) of the SARFAESI Act. The Bank had not got the property registered with the Central Registry. Accordingly, they could not proceed under the SARFAESI Act. Earlier, they had filed SA No. 116-2024, which was allowed by this Tribunal vide order dated 13.11.2024. Bank has also filed OA against them. Despite the fact that earlier notice under Section 13(2) was set aside by this Tribunal vide order dated 13.11.2024, the Respondent issued yet another notice under Section 13(2) on 02.01.2025. The second notice was also defective as in the same the date of NPA has been wrongly mentioned as 10.05.2021 instead of 31.03.2021. Applicants alleged that they had filed objections to the notice under Section 13(2). However, the Bank did not respond to the same. Since, the payment was not made, on 20.03.2025, Respondent issued the notice under Section 13(4) of the SARFAESI Act. Applicants alleged that the possession notice was not served upon them. The secured asset is agricultural land and as such the Bank could not initiate the SARFAESI action.

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On these facts, Applicants filed the present SA wherein they prayed

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that the SARFAESI action be set aside.

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SA No. 124 of 2025

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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Bank, in reply to the Application, has denied the case of the Applicants. It is stated that though this Tribunal had set aside the SARFAESI action earlier, yet, it had ordered that the Bank would be within its right to initiate SARFAESI action again after getting the CERSAI registration done in a proper manner. They have also denied that the secured asset is agricultural land as well as the fact that it had not granted the benefit of GECL and CFITL. It is stated that the Bank had granted Term Loan (GECL) of Rs. 15 lacs and Term Loan (CFITL) of Rs. 8,16,995/- to the Applicants.

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I have heard Mr.Shubham Pabbi, counsel for the Applicants and Mr.Arvind Rajotia, counsel for the Respondent Bank.

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Mr.Pabbi, counsel for the Applicants has argued that the secured asset is agricultural land. There was no proper CERSAI registration. The possession notice under Section 13(4) was not served upon the Applicants. Applicant is MSME unit and the Bank was under obligation to refer the matter to the designated committee. However, it was not done. Accordingly, it is submitted that the SARFAESI action be set aside.

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Per contra , Mr.Rajotia, counsel for the Respondent Bank has argued that though SARFAESI action was set aside by this Tribunal vide order dated 13.11.2024 passed in SA No. 116-2024, yet, it was ordered that the Bank would be within its right to initiate the SARFAESI action again after CERSAI registration. Bank has got the CERSAI registration done. There is no material on the record that the secured asset is agricultural land. In fact, Applicants had been running its plywood factory over the same. Applicants have admitted that they were served with the notice under Section 13(2). In fact, they had filed objections to the notice under Section 13(2). Bank had

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SA No. 124 of 2025

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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responded to the same. Bank has produced on the record the reply to the objections. It is stated that the Bank has complied with all the provisions 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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Applicants have challenged the SARFAESI action on the ground that the Respondent did not serve the notice under Section 13(4) of the SARFAESI Act. However, Respondent has produced on the record the possession notice alongwith tracking report (Annexure R-3). A look at the track report would show that the notices were duly served upon the Applicants. Respondent has also produced on the record the photographs showing affixation of the possession notice on the property as well as publication in the two newspapers. Applicants have also alleged that the secured asset is agricultural land. However, it is admitted on the record that there exists plywood factory over the same. Further, Applicants have failed to show that they ever moved the Bank for referring the matter to the designated committee. I am of the considered view that there is no force in the contentions of Mr.Pabbi, counsel for the Applicants that in the earlier notice dated 04.06.2021, Bank had mentioned the date of NPA as 31.03.2021 and in the second notice Bank has given the date of NPA as 10.05.2021. Admittedly, the earlier notice under Section 13(2), dated 04.06.2021 has been set aside by this Tribunal vide order dated 13.11.2024 passed in SA No. 116-2024. Applicants have alleged that the Bank has not responded to their objections. Bank has produced on the record their reply to the objections which show that the Bank has responded to the objections.

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Having considered all the aspects of the matter, I am of the considered view that there is no merit in the present SA. The same is 4

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SA No. 124 of 2025

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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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: 26.11.2025

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

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Ms Dashmesh Plywood Industries v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

Ms Dashmesh Plywood Industries v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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