Allowed

Neha Arora v. Punjab National Bank

DRT3 Nov 2025SA/231/2025

Case brief

AI extract

What is this about?

The DRT allowed an application challenging the auction sale of secured assets. The court held the sale notice violated Rule 8(7) by failing to disclose known encumbrances (attachment by DRT Mumbai), constituting misrepresentation. The sale was set aside, the bank ordered to refund the bid deposit with interest, and costs awarded.

What did the court decide?

Sale notice, auction, and sale confirmation letter set-aside; refund of ₹3,25,92,500 with interest; cost of ₹1.00 lac awarded to applicant.

Neha Arora versus Punjab National Bank — Banking and Recovery | DRT (2025)

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DEBTS RECOVERY TRIBUNAL LUCKNOW

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Dateoforderor proceeding	Orderwithsignatureofcourt		Officeaction takenwith date
S.A. No. 231/2025 03.11.2025 SI.No.7	The Judgment is signed pronounced on separate sh Separately attachedin06sheets. Order be uploaded on the Tribu website. (Dictated) (Pravas Kuma _ PresidingOffic (Manoj)	and eets. nal’s .,lgh) er

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S.A. No. 231 of 2025

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IN THE DEBTS RECOVERY TRIBUNAL, AT LUCKNOW

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Present: Pravas Kumar Singh,

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Presiding Officer

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Securitization Application No.231of2025 Dated03.11.2025
1. Neha Arora C/o RenuJalotaFIat No.404, 373/3,Shakti Nagar, Indira Nagar,Lucknow, U.P.226016. ––-- Applicants Versus 1. Authorized Officer, Punjab National Bank, Zonal Sastra Centre, Vibhuti Khand, (Jomti Nagar, Lucknow, UttarPradesh-226010
2. M/s T S Motors,ThroughRohit Arora, FirstFloor of H No.510/196-2,New Hyderabad,Lucknowp U.P.– 226007.
3. M/s T. S.MotorsPvt. Ltd.ThroughRohit Arora, First Floor of H No. 510/196-2, New Hyderabad9 Lucknow, U.P.-226007
4. M/s T S Auto Accessories Pvt. Ltd. (Guarantor M/s TSMotorsPvt. Ltd.)SmtRitaArora,W/o Late ShriSureshPal Arora, R/o FirstFloorof H No. 510/196-2, New Hyderabad, Lucknow) U.P 226007
5. Shri Rohit Arora, 5/o Late ShriSureshPal Arora, R/o First Floor of H No.510/196,29New Hyderabad, Lucknow, U.P-226007
6. Shri Sumit Arora,S/oLate ShriSureshPal Arora, R/o First Floor of H No. 510/196-2, New Hyderabad, Lucknow, U.P.-226007
7. Smt Rita Arora, W/o Late Shri Suresh Pal Arora9

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S.A. No. 231 of 2025

IUo First Floor of H No. 510/196-2, New Hyderabad, Lucknow, U.P-226007

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All legal Representatives of Late Smt. Krishna Rani Arora, W/o Late Shri Om Prakash Arora, First Floor of H No. 510/196-2, New Hyderabad, Lucknow, UP-226007

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-––-- Respondent.

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Counsel for applicants: Mr. Rana Rahul Singh, Advocate. Counsel for respondent Bank : Mr. Akshay Bajpai, Advocate, Counsel for respondent no. 3 & 6: Mr. Rajeev Saran, Advocate,

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JUDGMENT

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The present Securitization Application has been filed by the applicants under Section 17(1) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short SARFAESI Act).

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This S. A. has been brought by the applicant for reliefs directing the respondent bank to refund the 25% of the amount i.e. 3,25,92,500/of the bid amount in pursuance of auction sale dated 30.12.2024. Further directing the respondent bank not to forfeit the amount and allow the SA with cost.

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The detailed written objection has been filed by the respondent bank.

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The facts of the case are either admitted /not denied or proved. The applicant participated in the e-auction proceedings for which a paper publication dated 14.12.2024 was published in the newspaper for the property listed on SI. No. 6, wherein the applicant was declared highest bidder and he deposited the 25% of the bid amount i.e Rs. 3,25,92, 500/-, the sale confirmation letter was issued in favour of the auction purchaser. Admittedly, the applicant has filed an application before respondent bank for extension of time, which was acknowledged by the respondent bank and the date for deposit

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S.A. No. 23 1 of 2025

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the amount was extended upto 30.03.2025. Further case being that respondent bank vide letter dated 13.01.2025 asked the applicant to deposit the rest amount at the earliest and by another letter dated 14.01.2025, directed to deposit 75% of the bid amount by 08.02.2025.

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It is stated that in the meantime, applicant received a letter dated 11.02.2025 said to be given by one Advocate practicing at Mumbai, informing that the property which has been purchased by the applicant, was already attached by the DRT-1 Mumbai. The applicant visited the DRT Mumbai and found that property has been attached by the DRT Mumbai. Applicant further came to know that SA No. 562/2018 regarding the property is pending before this Tribunal and this Tribunal after making some observations had directed that sale made by the respondent bank shall be subject to final out come of the S. A.

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The main grievances of the applicant being that applicant was not apprised with all the incumbrances upon the secured assets and a shadow has been casted upon his purchase.

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Written Objection has been filed mainly stating therein that respondent bank has having first charge over the property. It is submitted that O. A. 125/2010 was brought by the respondent bank and DRC No. 165/2014 was initiated by the Recovery Officer and M. A. was filed by the borrowers vide which exparte order was recalled and Appeal was preferred before the Hon’ble DRAT and the order passed by this Tribunal has attained finality.

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It is stated that HSBC Bank instituted O. A. No. 45/2009 before the DRT-I, Mumbai and obtained a decree dated 24.03.2010. The borrowers appeared in the recovery proceeding where it was stated that property is already attached by PNB Luckrow (respondent no. 1). A court receiver was appointed and it has been decided that respondent bank was having first charge over the property. It is

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S.A. No. 231 of 2025

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alleged that the applicant is making self-contradictory statements on different forums.

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1 have considered the rival submissions of the parties and perused the record.

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The Rule 8(7) provides that what information has to be given in the sale notice9 Rule 8(7)(a) reads as under: The description of the immovable property to be sold including the details of the encumbrances known to the secured creditor.

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The sale notice is to be given in Appendix IVA of the Security Interest (Enforcement) Rules, 2002. It is specifically mentioned in the said appendix that details of the mortgaged /charged to the secured creditor has to be described in the sale notice alongwith known encumbrances, if any. The sale notice in pursuance of which sale has been done is annexed with the S.A.

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It is pointed out that DRT Mumbai has attached the property on 28.12.2022 and respondent bank has appeared in the case on 14.06.2023 but the said fact has not been mentioned in the sale notr ce.

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1 find that in the sale notice it has been described that property no. 1 is free hold property and property no. 2 is the lease property but any details of the pendency of the case before the Hon’ble DRT Mumbai has not been mentioned. It is not described that the respondent bank is having first charge of the property.

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1 find that respondent bank has proceeded for e-auction in defiance to the Rule 8(7)(a), as necessary encumbrances have not been mentioned and further the sale notice is not in accordance with law as per Appendix -IVA in terms of Rule 8(6) of the Security Interest (Enforcement) Rule, 2002. Any reason for not describing the encumbrances has neither been pleaded nor proved by the respondent bank.

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1 am of the view that case is covered within the meaning of missrepresentation, as the applicant was entitled to know regarding all

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S.A. No. 231 of 2025

the encumbrances upon the secured assets for which he has participated in the bid. The act of the respondent bank is covered under the definition of misrepresentation within the meaning of Section 18 of The Indian Contract Act.

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Another circumstance of the case makes transactions further suspicious. Admittedly on 31.12.2024, the confirmation letter was given to the applicant and on 01.01.2025, the applicant filed an application for time extension by letter dated 03.01.2025, which has been specifically stated that “ IS days stipulated period from 30.12.2024, i.e. the date of auction, expires on 14.01.2025 and as such further extension of three months from the date of auction will be upto 30. 03.2025 ”. Just after 10 days i.e. on 13.01.2025, applicant was directed to deposit 75% of the bid amount on or before 14.01.2025. Vide letter dated 14.01.2025, the applicant was further directed to deposit 75% of the amount by 08.02.2025. The fluctuating attitude of the respondent bank could not be explained in the written objection. It gives an inkling towards unfair and tainted conduct of the respondent bark.

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In the above discussions I find that S.A. is fit to be allowed Accordingly, it is ordered:

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ORDER

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The SA is allowed on contest.

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The sale notice qua the property mentioned at SI. No. 6 and the auction held 30.12.2024 qua the property and the sale confirmation letter issued in favour of the applicant is set-aside. The respondent bank is at liberty to move afresh.

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IH Respondent Bank is directed to refund 25% of the bid amount i.e Rs. 3,25,92, 500/- within 15 days of this order and to pay 9% per annum pendent-lite and future interest to be compounded quarterly.

S.A. No. 231 of 2025

IV. Respondent Bank is further directed to pay cost of Rs. 1.00 Lac to the applicant and to deposit Rs. 1.00 Lac in the cost fund of U.P State Legal Services Authority within 15 days of this order, since I find that procedure adopted by the respondent bank has caused a dent over the functioning of the second largest Public Sector Bank.

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Accordingly, all the pending IAs if any, is also disposed of.

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File be consigned to the record room.

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[Pravas Kumar gingh] Presiding Officer Debts Recovery Tribunal, Lucknow.

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Judgment signed, sealed, dated and pronounced in the open court on this 03rd Day of November, 2025.

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[Pravas Kumar Singh] Presiding Officer Debts Recovery Tribunal, Lucknow.

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(Marloi)

Neha Arora v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

Neha Arora v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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