Allowed

Sri Bharat Kumar and Others v. Bank of Baroda

DRT24 Jul 2025SA/2/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an application to quash a SARFAESI action and possession notice issued by the Bank of Baroda, citing proof deficiencies in serving the possession notice on all applicants, and directed the bank to bear no recovery expenses.

What did the court decide?

SARFAESI action set aside; respondent bank not entitled to expenses or recovery charges for the action.

Sri Bharat Kumar and Others versus Bank of Baroda — Banking and Recovery | DRT (2025)

•

DRT,PATNA

SA 02 of 2024 !JI

DEBTS RECOVERY TRIBUNAL PATNA

¶6

Presiding Officer: Shri Kaushalendra Yadav

¶7

SA- 02 of 2024

¶8

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

¶9

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

¶10

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

¶11

......... Applicants

¶12

Versus

¶13

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

¶14

The Branch Manager, Bank of Baroda, B.N.R. Complex, Guzri, Patna City - 800008.

¶15

--respondents

¶16

Present:

¶17

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

¶18

Dated: 24.07.2025

¶19

JUDGMENT

¶20

I. Present application has been filed with a prayer to quash entire SARFAESI action taken against the properties of applicant alongwith the possession notice issued by the respondent Bank.

¶21

During pendency of SA, the applicant has filed IA 534 of 2024 for setting aside the sale notice dated 09.08.2024 issued by the respondent Bank. Further, IA 707/2024"'" been filed by the applicant b? aside the sale

~c/'

DRT,PATNA

SA 02 of 2024 (J)

¶27

notice dated 16.11.2024 issued by the Bank.

¶28

The brief fact of the case is that the applicants availed the Term Loan facility to the tune of Rs.40.43 lacs from the respondent Bank. To secure the loan facility, the applicants 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 u1s 13(2) of the act calling upon the borrowers to make the payment of Rs.33,80,624.41. Thereafter, the respondent took possession of the property on 14.11.2023 by issuing Possession Notice u1s 13(4) of the SARFAESI Act. Aggrieved from the possession notice, present SA has been filed by the applicants.

¶29

It is submitted by the Ld. Counsel of applicants that despite the account was within limit, the account was arbitrarily declared as NPA by the Bank without any prior notice to the applicant and further issued Demand Notice dated 24.05.2023. Subsequently, the respondent Bank issued possession notice dated 14.11.2023 but the same was neither served upon applicants nor affixed on secured asset nor published in two leading newspapers. The possession notice issued by the Bank is not in accordance with the appendix - IV as prescribed in rules.

¶30

On the contrary, Id. 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 duly received by the applicant no.1 itself on the same day. Apart from this the Demand Notice was also sent to the applicants through post on 24.05.2023. No objection was raised by the applicants against the demand notice. Thereafter, Possession of the property was taken on 14.11.2023by issuing possession notice. The said possession notice was served to the applicants but they refused to acknowledge the same and therefore, the possession notice was sent to the applicants through registered post on 17.11.2023 which did not return back p:/

~~'1

DRT,PATNA

SA02 of 2024 [JI

signifying deemed service of the same. The possession notice was also affixed on the secured asset and published in "Hindustan" and "Hindustan Times".on 17.11.2023. The applicants failed to comply with the order dated 19.09.2024 passed in the matter by this Tribunal as the applicants were directed to deposit 5 lacs before the date of auction sale and further Rs.4 lacs within three working days. The applicants were further directed to deposit Rs.9 lacs on 20 th day of every month. It is admitted fact that the applicants deposited Rs.3 lacs on 19.09.2024 and Rs.2 lacs on 21.09.2024 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.40024778539.

¶36

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

¶37

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 the newspaper.

¶38

On perusal of records it appears that the applicants have nowhere denied the 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 armexure - 51R,page 18.Although there is no proof of service of Demand Notice to the applicant no. 2, Kumar Gaurav.

¶39

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 armexed the copy of postal receipt alongwith counter affidavit as armexurel/R, page 11which shows that the possession notice was sent to applicants 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.

¶40

In view of the above discussion, as the respond~/t prove the .i->

¶41

¶42

DRT, PATNA

¶43

SA 02 of 2024 !JJ

¶44

delivery of possession Notice to all the borrowers such as applicant No.2 to 5, the present application deserves to be allowed. With costs.

¶45

ORDER

¶46

The application SA 02 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. y//

y// 0'"..a f-

[KaushalendraYadav]

Presiding Officer

Debts Recovery Tribunal, Patna

¶51

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

~.1-0 (Y"'\

[KaushalendraYadav] Presiding Officer Debts Recovery Tribunal, Patna

Sri Bharat Kumar and Others v. Bank of Baroda

Case brief

What is this about?

What did the court decide?

Sri Bharat Kumar and Others v. Bank of Baroda

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Bank of Baroda versus J and R Associates

Punjab National Bank versus M/s S. Enterprises

Icici Bank Limited versus Bhawani Kumar Singh

Vidyadhar Pandey and others versus Indian Bank

Punjab National Bank versus Balam Singh

Hdfc Bank versus Kasmir Singh