Dismissed

Urmila Mishra v. State Bank of India

DRT23 Jul 2025SA/159/2024

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal dismissed an application filed by a guarantor seeking to quash an e-auction sale of her mortgaged property under the SARFAESI Act. The court held that the application was barred by limitation and lacked merit as due notices had been served.

What the court decided

AI extract

Urmila Mishra versus State Bank of India — Cheque Dishonour | DRT (2025)

DRT, PATNA

SA 159 of 2024 [J]

DEBTS RECOVERY TRIBUNAL PATNA

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Presiding Officer: Shri Kaushalendra Yadav

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SA- 159 of 2024

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Urmila Mishra, Wife of - Dr. Satyendra Nath Mishra, At present resident C/o - late A.B. Mishra, Village - Kothra, Post - Mokar, P.S. - Agrer, District - Rohtas, Pin - 821113.

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......... Applicant

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Versus

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The State Bank of India through Authorized Officer - cum- Chief Manager, Stressed Assets Recovery Branch, 2nd Floor, Patna Main Branch, State Bank of India Building, West Gandhi Maidan, Patna - 800001.

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The Chief Branch Manager, State Bank of India, Branch - Gaurakshini, P.O. - Sasaram, District - Rohtas, Pin - 821115.

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3. Mis Dr. A.B. Mishra Diagnostic Centre, Ravi Shankar Complex, Civil Lines, Old G.T. Road, Post - Sasaram, District - Rohtas, Pin - 821115. (FirmlBorrower)

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Dr. Satyendra Nath Mishra, Sio Late Dr. A.B. Mishra, Resident of Mohalla, Gajrah, Gaurakshini, Post - Sasaram, District - Rohtas, Pin - 821115. (Proprietor & Guarantor of Mis Dr. A.B. Mishra Diagnostic Centre)

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Mr. Rupesh Singh, Sio - Shri Bhagwan Singh, Resident of - Premchand Path, Near Railway Station, Gaurakashini, Post - Sasaram, District - Rohtas, Pin - 821115. (Purchaser).

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--respondents

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Present:

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For the Applicant : Sh. Sanjay Kr. Pandey, Advocate For the Respondent Bank : Sh. Santosh Kr. Singh, Advocate For the Auction Purchaser : Sh. S.K. Srivastava, Advocate

Dated: 23.07.2025

ORT, PATNA

SA 159 of 2024 [J]

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JUDGMENT

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Present application has been filed with a prayer to quash entire SARFAESI action taken against the properties alongwith the Sale notice dated 20.05.2022 issued by the respondent bank. Alongwith present application, the applicant has also filed Limitation Petition by way IA 302/2024 with the prayer to condone the delay in filing of application.

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The brief fact of the case is that the respondent Bank granted Term Loan Facility to the tune of Rs.l.60 Crores to Dr. Satyendra Nath Mishra proprietor of Mis Dr. A.B. Mishra Diagnostic Centre respondent no. 3 herein. The applicant stood as a guarantor to the loan account in question and mortgaged her immovable property. On default in repayment of the dues of the bank, the account of the applicant was declared as NPA on 27.09.2019. Subsequently, the bank invoked SARFAESI Action against the borrower and guarantor. Aggrieved from the possession notice, the borrower respondent no. 3 & 4 herein challenged the SARFAESI action of the Bank without impleading the guarantor (present applicant) before this Tribunal by filing SA 17/2021. During pendency of the SA 17/2021 the property was auctioned by the Bank to the auction purchaser, respondent no. 5. The said SA was finally decided and dismissed vide order dated 21.10.2022. The order dated 21.10.2022 passed in SA 17/2021 was challenged by the present applicant before Hon'ble High Court of Patna by filing CWJC No. 870/2023 which was disposed of on 02.05.2024. Accordingly, the present SA has been filed by the applicant challenging the sale proceeding.

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On the point of limitation it is submitted by the ld. Counsel of the applicant that the applicant had no knowledge about the SARFAESI action of the Bank as she has not been served any notice issued under SARFAESI Act. The applicant got the knowledge about the judgment dated 22.10.2022 passed in SA 17/2021 dismissing the application on the ground of nonjoinder of applicant being guarantor to the loan account in question. As and when it came to knowledge of the applicant she applied for the certified copy of order on 11.11.2022which was delivered on 19.11.2022. After obtaining the certified copy of order dated 22.10.2022, the applicant filed CWJC No. 870/2023 before Hon'ble High Court ofPatna which was disposed of on 02.05.2024. The said order was pronounced on 06.05.2024 and made available to the applicant. Accordingly, present SA

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ORT, PATNA

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SA 159 of 2024 [J]

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has been filed on 2l.05.2024 i.e. within the limitation from the date of order passed by Hon'ble High Court ofPatna. The delay occurred in the matter is not intentional or latches on the part of the applicant. Hence, delay may be condoned.

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It is submitted by the Ld. Counsel of applicant that the guarantee agreement executed against the loan in question by the applicant was not prepared in accordance with law, hence the said guarantee agreement is not sustainable in the eye of law. Prior to declaration of account as NPA no notice was served upon applicant. It is further submitted that the demand notice dated 21.09.2020 and possession notice dated 05.12.2020 was never served to the applicant. Without withdrawing earlier two possession notices, the respondent bank issued aforesaid third possession notice which is against the Rule. Without serving the 30 day's sale notice to the applicant, the property was auctioned on 08.06.2022 at a very low price. At the time of sanctioning the loan in the year 2016 the realizable value of the property was Rs.l,18,12,5001- but the property has been .sold for Rs.l,00,20,999/-. Presently, the applicant has also obtained valuation of the property from approved valuer vide which the realizable value of the property is Rs.l,86,23,3301-.

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On the contrary, Ld. Counsel of the respondent bank submits that the application is not maintainable and barred by limitation. The present SA is also hit by the Principle of Res Judicata as the issue raised in this applicant has already been decided by this Tribunal in SA 17/2021 filed by the husband of the applicant and the applicant did not choose to intervene in the matter. Both the husband and wife are living under the same roof. They are not separated either by Divorce or by judicial separation. The applicant alongwith her husband had approached the Bank for compromise on 19.07.2021 and submitted an settlement offer of Rs.l.30 Crore with the Bank. Hence, it is a false statement that she was not residing with her husband. .

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It is further submitted that the loan was granted to the borrower Mis Dr. A.B. Mishra Diagnostic Centre, Sasaram and in order to secure the loan present applicant stood as guarantor and mortgaged her property with the Bank. Since, the borrower failed to maintain the account properly and towards repayment of dues, the account was classified as NPA on 27.09.2019. Subsequently, demand notice uls l3(2) was issued on 2l.09.2020 which was sent to the applicant

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DRT, PATNA

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SA 159 of 2024 [J]

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through post on 22.09.2020 and the same was delivered to applicant on 24.09.2020 as evident from the tracking report filed with counter affidavit. The applicant didn't raise any objection against the said demand notice. Hence, the respondent bank proceeded further and took symbolic possession of the mortgaged property on 04.12.2020 by pasting the possession notice at the outer door of the said property. The possession notice was sent to the applicant through post on 08.12.2020. The possession notice was published in 'Times of India' and 'Dainik Bhaskar' on 06.12.2020. Thereafter, valuation of the property was obtained on 23.03.2021 from its approved valuer. In the meantime the applicant herself alongwith borrower submitted a c compromise offer before the Bank on 19.07.2021. The offer was accepted and approved by the Bank and accordingly, it was communicated to the vide letter dated 31.08.2021 and the terms and conditions of compromise were also accepted by the borrowers including applicant by putting their signature of the Bank's approval letter dated 31.08.2021. The borrower failed to comply with the terms & condition of the compromise despite reminder letter 01.11.2021. So the termination of the compromise settlement was communicated to the borrower vide letter dated 01.12.2021. Thereafter, property was put on auction sale on 08.06.2022 by issuing auction sale notice dated 20.05.2022 and it was pasted on the secured asset on the same day. Sale notice was sent to the applicant on 21.05.2022 through post and the same was delivered to applicant on 24.05.2022 as per tracking report annexed with counter affidavit. Sale notice was published in 'Indian Express' and 'Hindustan' on 24.05.2022. The property was auctioned for Rs.l,00,20,0001- as against the reserve price of Rs.99,00,0001- on 08.06.2022 and sale was confirmed on the same day in favour of the highest bidder. Further, the auction purchaser deposited the entire consideration amount within time. So, the Sale Certificate was also issued in his favour on 06.08.2022. The physical possession of the property has also been handed over to the auction purchaser on 17.08.2022. The property has been auctioned after getting value from the approved valuer of the bank. The amount deposited by the borrower has been accounted for by the respondent bank. The right of redemption came to an end with the publication of sale notice on 24.05.2022.

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Ld. Counsel of the auction purchaser submits that the present SA is barred by law of limitation. The Hon'ble High Court has also not condoned the delay in

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DRT, PATNA

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SA 159 of 2024 [J]

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the matter. The limitation petition filed by the applicant is devoid of merit and there is no credible reason to condone the delay. The auction purchaser participated in the online auction held on 08.06.2022 for the aforesaid property and bid the amount of Rs.l,00,20,0001- and being the highest bidder of the aforesaid property, sale was confirmed in his favour by the respondent bank. The auction purchaser deposited the entire amount by 22.06.2022 i.e. within time in the account of the respondent bank. Hence, the Sale Certificate was issued in his favour on 06.08.2022. Further, the physical possession has also been handed over to him on 17.08.2022

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I have heard Ld. Counsel for the parties and gone through the record.

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Before entering into controversy let us examine whether the present application was filed within the period of limitation or it is beyond the limitation that requires any kind of condonation of delay.

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For the purpose of filing of the securitization application under section 17 of the SARFAESI Act (hereinafter referred as Act), the application has to be filed within the period of 45 days from the measures taken under section 13(4) of the Act. As such for the purpose of determining the date from which the limitation will start running, depends upon the fact that when the measures uls 13(4)of the Act were initiated and when such measures were brought into the knowledge of the applicant. It is also important to consider that the measures under the Act when are said to be initiated and when it comes to an end.

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The SARFAESI Action can be challenged under Section 17 of the SARFAESI Act. which runs as under:-

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"17. [Application against measures to recover secured debts]. - (1) Any person (including borrower), aggrieved by any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor or his authorized officer under this Chapter, [may make an ,

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application alongwith such fee, as may be prescribed,] to the Debts Recovery Tribunal having jurisdiction in the matter within forty-five days from the date on which such measures had been taken."

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1. It is clear that any person who is aggrieved by measures referred to in subsection 4 of the section 13 taken by secured creditor, may file the application under this provision. The sub-section (4) of section 13=>:

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SA 159 of 2024 UJ

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ORT, PATNA

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13(4) In case the borrower fail to discharge his liability in full within the period specified in sub-section (2), the secured creditor may take recourse to one or more of the following measures to recover his secured debt, namely:-

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(a) take possession of the secured assets of the borrow including the right to transfer by way of lease, assignment or sale for realizing the secured right 0 transfer by way of lease, assignment or sale for realizing the secured asset;

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(b) ....

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It is clear that subsection (4) of section 13 authorizes the secured creditor to take recourse to one or more of the measures for recovery of dues. Under these measures, the secured creditor may take possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realization of dues.

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12.Ld counsel for the applicant has further submitted that the right to challenge the SARFAESI action from very inception, still subsists as the SARFAESI Action has not come to an end till the application is filed.

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It is pertinent to mention here that u/s.13(7) of SARFAESI Act provides that-

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(7) Where any action has been taken against a borrower under the provisions of sub-section (4), all costs, charges and expenses which, in the opinion of the secured creditor, have been properly incurred by him or any expenses incidental thereto, shall be recoverable from the borrower and the money which is received by the secured creditor shall, in the absence of any contract to the contrary, be held by him in trust, to be applied, firstly, in payment of such costs, charges and expenses and secondly, in discharge of the dues of the secured creditor and the residue of the money so received shall be paid to the person entitled thereto in accordance with his rights and interests.

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In view of the above provision, the SARFAESI action uls 13(4) comes to an end only after the stage of u/s.l3(7) of SARFAESI Act. The application Uls 17 of SARFAESI Act can be filed till the auction money is appropriated and residue is paid to the mortgagor after adjustment according to section 13(7). In

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SA 159 of 2024 [J]

DRT. PATNA

the present matter neither such averment has been made nor any evidence has been filed.

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15.The applicant stated that due to differences in the family and illness she was not residing at the residential address and when she got the knowledge of final order dated 22.10.2022 passed by this Tribunal in SA 17/2021 which was filed by her husband challenging the same SARFAESI action. After getting knowledge she approached the Hon'ble High Court and filed CWJC No. 870/2023 on 15.12.2022 and the same was disposed of on 02.05.2024. This is beyond 90 days. It has not been shown that the delay in filing the aforesaid writ petition was ever condoned by Hon'ble High Court.

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The Hon'ble Supreme Court of India in the case of Basawaraj&Anr. Versus The Spl. Land Acquisition Officer, [2013]14 see 811 has held as under-

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"The law on the issue can be summarised to the effect that where a case has been presented in the court beyond limitation, the applicant has to explain to the court as to what was the "sufficient cause" which means an adequate and enough reason which prevented him to approach the court within limitation. In case a party is found to be negligent, or for want of bonafide on his part in the facts and circumstances of the case, or found to have not acted diligently or remained inactive, there cannot be a justified ground to condone the delay. No court could be justified in condoning such an inordinate delay by imposing any condition whatsoever. The application is to be decided only within the parameters laid down by this court in regard to the condonation of delay. In case there was no sufficient cause to prevent a litigant to approach the court on time condoning the delay without any justification, putting any condition whatsoever, amounts to passing an order in violation of the statutory provisions and it tantamounts to showing utter disregard to the legislature".

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17.But on perusal of S. application as well as limitation no sufficient cause has been explained. A very vague statement has been given that due to differences and illness she was not residing at the residential address but no documentary proof has been filed with regard to illness and treatment taken at Guwahati as stated in the application. Moreover, it is important to mention that the applicant failed to inform the changed address to the Bank. As such the applicant cannot take advantage of her own lapses. In the above circumstances it is hard to believe that the applicant had no knowledge of the case filed by her husband.

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SA 159 of 2024 [J]

DRT, PATNA

Mor~over it has not been disclosed how she was informed after dismissal of the Securitization application filed by her husband.

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So far as the infirmity in SARFAESI action is concerned, the demand notice was sent to the applicant on 22.09.2020 through post and the same was delivered to the applicant on 24.09.2020 as evident from the tracking report annexed with counter affidavit as annexure - Rl1, page 31 of counter affidavit filed by respondent Bank. The possession notice was also sent to the applicant through post on 07.12.2020 as evident from postal receipt annexed with counter affidavit as annexure Rl4, page 36. The sale notice was sent to the applicant on 21.05.2022 through post and the same was delivered to the applicant on 24.05.2022 as evident from the tracking report annexed with a counter affidavit as annexure RlIO, page 55. So far as affixation of possession and sale notice and its publication are concerned, the same has already been confirmed by this Tribunal while passing final order in SA 17/2021. The property was auctioned for Rs.l,00,20,0001- as against the reserve price of Rs.99,00,0001- on 08.06.2022 and sale was confirmed on the same day in favour of highest bidder. Rest amount was also deposited by the auction purchaser within time which is evident from the annexure - 3, page 15 of counter affidavit filed by auction purchaser.

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In ValjiKhimji and Company v. O.L. of Hindustan Nitro Product (Gujarant) Ltd. { 2008 SCC 2999} Hon'ble Supreme Court has held that the auction sale should be set aside only if there is fundamental error in the procedure of auction, ego not giving wide publication or on evidence .that the property could have fetched more value or there is somebody to offer substantially increased amount and not only a little over the auction price that can by itself suggest that any fraud has been done in holding the auction property or involvement of any kind of fraud. Similar view has been adopted by the Hon'ble Apex Court in the case of Celir LLP v. Ms Sumati Prasad Barna and other (2024) and has held that the confirmed sale under SARFAESI cannot be set aside on mere irregularities except on grounds of collusion, fraud, inadequate pricing or underbidding.

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In view of the foregoing reasons and discussions, this Tribunal holds that the Applicant is not entitled to get the relief of quashing the e-auction sale notice issued in pursuance to the demand notice and that the Applicant is not entitled

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DRT, PATNA

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SA 159 of 2024 [J]

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to any other relief.

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