Allowed

Ms Maa Gayatri Steel and others v. Bank of Baroda

DRT24 Jul 2025SA/1/2024

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed an application to quash SARFAESI action by Bank of Baroda. The Tribunal set aside the proceedings because the Bank failed to prove delivery of the possession notice to applicants no. 2 to 5, rendering the action against them invalid.

What did the court decide?

SARFAESI action against applicants is set aside; respondent Bank not entitled to expenses or recovery charges.

Ms Maa Gayatri Steel and others versus Bank of Baroda — Banking and Recovery | DRT (2025)

SA01 of 2024 [J]

DRT,PATNA

DEBTSRECOVERYTRIBUNALPATNA

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Presiding Officer: Shri Kaushalendra Yadav

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SA- 01 of2024

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MIs Maa Gayatri Steel Proprietor Bharat Kumar, resident of Sharma Complex, Old City Court, Gulzarbagh, P.S. Alamganj, District - Patna - 800008. (Borrower)

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Sri Bharat Kumar, Son of Late Sudama Singh, resident of Bari Patan Devi Gardha, P.S. Alamganj, Gulzarbagh, Patna City, District - Patna - 800007. (Guarantor)

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Kumar Gaurav Singh, Son of Bharat Kumar, resident of Bari Patan Devi Gardha, P.S. Alamganj, Gulzarbagh, Patna City, District - Patna - 800007. (Guarantor)

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Gautam Kumar, Son of Bharat Kumar, resident ofBari Patan Devi Gardha, P.S. Alamganj, Gulzarbagh, Patna City, District - Patna - 800007. (Guarantor)

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Mrs. Garima Kumari, daughter of Bharat Kumar, resident of Bari Patan Devi Gardha, P.S. Alamganj, Gulzarbagh, Patna City, District - Patna - 800007. (Guarantor)

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......... Applicants

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Versus

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The Authorized Officer, Bank of Baroda, Gulzarbagh Branch, B.N.R. Complex, Gudri, Patna City - 800008.

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--respondent

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Present:

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For the Applicant : Sh. Satish Nr. Sinha, Advocate For the Respondent Bank : Sh. Sanjay Singh Thakur, Advocate

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Dated: 24.07.2025

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JUDGMENT

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I. Present application has been filed with a prayer to quash entire SARFAESI action taken against the properties of applicant alongwith the possession /'

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DRT,PATNA

SA 01 of 2024 [Jl

notice issued by the respondent Bank.

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During pendency of SA, the applicant has filed IA 532 of 2024 for setting aside the sale notice dated 09.08.2024 issued by the respondent Bank. Further, IA 707/2024 has been filed by the applicant for setting aside the sale notice dated 16.11.2024 issued by the Bank.

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The brief fact of the case is that the applicant no.I through its proprietor Bharat Kumar, applicant no.2 availed the Cash Credit facility to the tune of Rs.25 lacs from the respondent Bank. To secure the loan facility, the applicant no.2 to 5 mortgaged their property with the Bank and also stood as guarantors to the loan in question. Due to default in repayment of dues of the Bank, the account was classified as NPA on 09.05.2023. In order to recover outstanding dues the respondent Bank initiated SARFAESI Action against the borrower and guarantors by issuing Demand Notice dated 24.05.2023 u/s 13(2) of the act calling upon the borrowers to make the payment of Rs.26,04,870.38. Thereafter, the respondent took possession of the property on 14.11.2023 by issuing Possession Notice u/s 13(4) of the SARFAESI Act. Aggrieved from the possession notice, present SA has been filed by the applicants.

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It is submitted by the Ld. Counsel of applicants that prior to issuance of Demand Notice no information was given by the Bank regarding declaration of account as NPA. It is further submitted that on 25.08.2023 the applicants had received a possession notice sent by the Bank and the same was challenged before this Tribunal by filing SA 35112023. On 08.11.2023, the respondent Bank submitted before this Tribunal that the Bank has withdrawn the possession notice challenged in SA 35112023resulting, the SA 35112023 was dismissed as infructuous however, on the said date the Bank had sought permission to initiate fresh SARFAESI action. In absence of such permission possession notice dated 14.11.2023 issued by the Bank is hit by the principle of law res-judicata. The possession notice dated 14.11.2023has neither been served to all the applicants nor affixed on secured asset nor published in two leading newspapers. The respondent Bank annexed the copy of photograph of publication of possession notice with counter affidavit which indicates that the same is composite notice. The prop~ has not been ~'..., ~

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SA 01 of 2024 [J)

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DRT,PATNA

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registered with CERSAI. It is further submitted that in compliance of order dated 19.09.2024, the applicant has deposited Rs.7 lacs with the Bank but without deducting the said amount, the respondent Bank issued fresh sale notice for Rs.26,04,8701-.

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On the contrary, ld. Counsel of the respondent Bank submits that prior to issuance of demand notice, a legal notice dated 02.05.2023 was sent to applicant with regard to irregularity committed by the applicant in repayment of loan amount. Thereafter, the account was declared as NPA and the demand notice was issued on 24.05.2023 and the same was sent to the applicants through post on 24.05.2023. No objection was raised by the applicants against the demand notice. A possession notice dated 14.11.2023 was given to the applicants but they refused to acknowledge the same and therefore, the possession notice was sent to the applicants through a registered post on 17.11.2023. The possession notice was also affixed on secured assets and published in Hindustan and Hindustan Times on 17.11.2023. The applicants failed to comply with the order dated 20.09.2024 passed in the matter by this Tribunal as the applicants were directed to deposit 7 lacs before the date of auction sale and further Rs.7 lacs on 20 th day of every month. It is admitted fact that the applicants have deposited Rs.7 lacs on first instance but failed to deposit further installments. The property has been registered with CERSAI as evident from the Demand Notice wherein it has been clearly mentioned that the CERSAI ID bearing No.400037909737. The issue raised by the applicants with regard to SA 351 of 2023, the principle of res-judicata will not apply in the present SA as none of the issues were decided in the SA 35112023.

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

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It is alleged that prior to issuance of Demand Notice no notice regarding declaration of account as NPA was given to the applicant. The possession notice dated 14.11.2023 has neither been served to the applicants nor affixed on secured asset. Composite possession notice has been published In newspaper. The property has not been registered with CER'sAI.

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On perusal of records it appears that the applicants hav7here denied the ~

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I ~')

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SA 01 of 2024 [J]

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DRT,PATNA

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receipt of Demand Notice. Hence, it appears that the Demand Notice was served upon applicants as also proves from the post receipt filed by the respondent Bank with counter affidavit as annexure - SIR, page 16A.

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Subsequently, possession notice U/S 13(4) of the Act was issued on 14.11.2023. To prove the service of possession notice the respondent Bank annexed the copy of postal receipt alongwith counter affidavit as annexure - l/R, page 11which shows that the possession notice was sent to applicant no. I, Mis Maa Gayatri on 17.11.2023 but the respondent did not file any proof with regard to service of possession notice to the applicant no. 2 to 5. The possession notice was also affixed on the secured asset and published in "Hindustan" and "Hindustan Times" on 17.11.2023. The property was registered with CERSAI as evident from the annexure - SIR, page 15 of counter affidavit.

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10.In view of the above discussion, as the respondent could not prove the delivery of possession Notice to all the borrowers such as applicant No.2 to 5, the present application deserves to be allowed. With costs.

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ORDER

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The application SA 01 of 2024, is allowed. Sarfaesi Action under challenge against the applicants, is hereby set aside with costs. The respondent will also not be entitled for the expenses and the recovery or any other charges for the Action under challenge. ~ /

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[KaushaIendraYadav]

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Presiding Officer Debts Recovery Tribunal, Patna

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Judgment signed, sealed, dated and pronounced in the open court on this ~ 24THDay of July, 2025.

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J-- 0\i' [KaushaIendraYadav] Presiding Officer

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Debts Recovery Tribunal, Patna

Ms Maa Gayatri Steel and others v. Bank of Baroda

Case brief

What is this about?

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Ms Maa Gayatri Steel and others v. Bank of Baroda

Case brief

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