Dismissed

Krishna Kant v. Punjab National Bank

DRT23 Jul 2025SA/237/2022

Case brief

AI extract

What is this about?

This application sought to quash SARFAESI actions taken by a bank, alleging improper service of notices, procedural violations, and low property valuation. The court found evidence gaps regarding notice service but dismissed the application due to the non-joinder of necessary partners.

What did the court decide?

Application dismissed. No order for costs.

Krishna Kant versus Punjab National Bank — Banking and Recovery | DRT (2025)

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ORT, PATNA

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SA 237 of 2022 [J]

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DEBTSRECOVERYTRIBUNALPATNA

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PresidingOfficer :Shri Kaushalendra Yadav

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SA- 237 of 2022

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1. Krishna Kant, Son of Binay Kumar Sharma, Resident of Indu Niwas, Kusumpuri, Adarsh Nagar, Road No.1, Near Mangal Chowk, Khemani Chak, New Jaganpura, District - Patna. State - Bihar, Pin Code -' 800027.

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. Applicant

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Versus

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Authorized Signatory Chief Manager, MID Coroporate Centre, MCC, Patna, Punjan National Bank, 2nd Floor, Chandan Bhawan, Boring Canal Road Chauraha, District - Patna - 800001.

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Nisha Kumari, Address - Flat No. 3A, Sushila Residency, Kandamkuan, District - Patna.

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=respondents

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Present:

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For the Applicant : Sh. SarojKr. Upadhyay,Advocate For the Respondent Hank : Sh.UmapatiJha,Advocate For the Respondent No.2 : Sh.SanjaySinghThakur,Advocate

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Dated: 23.07.2025

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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 of applicant alongwith the possession notice issued by the respondent bank.

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The brief fact of the case is that the applicant availed Term Loan facility of Rs.85 lacs and GECL facility to the tune of Rs.17,39,712/-. To secure the loan facility, the applicant mortgaged his property with the Bank. Due to default in repayment of dues of the bank, the accounts were classified as NPA on 10.05.2021. In order to recover outstanding dues the respondent bank initiated SARFAESI Action against the borrower by issuing Demand

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ORT, PATNA

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SA 237 of 2022 [J]

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Notice dated 01.06.2021 uls 13(2) of the act calling upon the borrower to make the payment of Rs.1,06,47,813.44. Thereafter, the respondent took possession of the property by issuing Possession Notice dated 30.09.2021 uls 13(4)of the SARFAESI Act. The respondent bank proceeded further and put the property on auction sale on 28.08.2022 by issuing auction sale notice dated 12.07.2022. Thereafter, the respondent Bank issued Rule 8(6) notice of the Security Interest (Enforcement) Rules and sent to the applicant. Aggrieved from the Rule 8(6) notice present SA has been filed by the applicant.

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It is submitted by the Ld. Counsel of the applicant that neither the Demand Notice nor the Possession notice has been served upon the applicant. The respondent Bank directly served the notice under Rule 8(6) to the applicant thereafter, the applicant could know about the SARFAESI action of the Bank. The Possession Notice has also not been published in two leading newspapers. The value of the property in question is of several crores rupees but the Bank with connivance of land mafia wants to grab the property in question. The excess interest has been charged violating the RBI guidelines. The applicant had submitted its compromise proposal with the Bank disclosing the compromise amount of Rs.82 lacs alongwith token amount of Rs.12.50 lacs which was received by the Respondent Bank on 02.02.2023. The applicant had further deposited Rs.10 lacs on 14.06.2023 towards the compromise amount. Despite the receipt of the compromise proposal as well as token amount, the respondent did not communicate regarding acceptance or rejection of the compromise proposal. On visit of Branch on 18.10.2023, the respondent Bank informed the applicant that the property has already been auctioned on 21.09.2023 without any notice to the applicant. It has also come to notice that the property has been auctioned for Rs.67 lacs while the value to the property is much more. The valuation has also not been obtained from approved valuer.

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On the contrary, ld. Counsel of the respondent bank submits that due to default in. repayment of dues of the Bank, the accounts were classified as NPA and to recover its dues, the respondent Bank issued Demand Notice

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ORT, PATNA

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SA 237 of 2022 [J]

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dated 01.06.2021 to borrowers and guarantors and the same was sent to the borrower through post on 25.06.2021. Despite of service of Demand Notice, the applicant neither repaid the dues of the Bank nor raised any objection against Demand Notice hence, the respondent Bank issued Possession Notice dated 30.09.2021 uls 13(4) of the act. The possession notice was affixed on secured asset and also served to the applicant through post. The possession notice was also published in 'Prabhat Khabar' and 'Indian Express' on 05.10.2021. Thereafter, the valuation report was obtained by the Bank from its approved value and accordingly, reserve price was fixed and property was put on auction sale vide sale notice dated 15.07.2022 but the same could not be conducted for want of the bidder. Further, the property was again put on auction sale by issuing an auction sale notice dated 24.08.2024 fixing the date of auction sale on 21.09.2023. The said sale notice was served to the applicant through post and also affixed on the secured asset. The sale notice was also published in 'The Indian Express' and 'Dainik Jagran' on 31.08.2023. Accordingly, the property was auctioned on 21.09.2023 to highest bidder Nisha Kumari, Dlo Sri Anil Prasad Gupta for an amount of Rs.69,50,0001-. The auction purchaser deposited the entire amount within time, hence the sale certificate was issued in her favour on 13.10.2023.

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It is further submitted that admittedly the applicant has entered into compromise with the Bank vide OTS proposal dated 02.02.2023 which was considered and sanctioned by the Bank with terms and conditions vide dated 14.02.2023 and the same was acknowledged by the applicant on 21.02.2023. In this regard, the applicant has further executed Supplementary Agreement on 02.03.2023 in favour of Bank but the applicant failed to comply with the terms of OTS approved as well as Supplementary Agreement. As such the respondent Bank reminded the applicant vide its letter dated 17.05.2023 that OTS amount of Rs.82 lacs has to be deposited by 22.05.2023 but till date the applicant has deposited only Rs.12.50 lacs and the applicant has not responded to the said letter. Therefore, the Bank proceeded further by issuing an auction sale notice dated 24.08.2023.

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The application is not maintainable as the other partner namely, Abhishek

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ORT, PATNA

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SA 237 of 2022 [J]

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Kumar has not been impleaded as party in the matter. It is submitted by the ld. Counsel of the auction purchasers that the auction purchaser bonafidely participated in the auction sale held on 21.09.2023 and was declared successful bidder with the bid of Rs.69,50,000/-. The auction purchaser deposited a bid amount of Rs.6,95,000/on 20.09.2023. Further, Rs.1O,62,00/-on 22.09.2023 against the 25% of bid amount. The respondent Bank issued a confirmation letter on 30.09.2023. Accordingly, the auction purchaser deposited the remaining 75% amount by 13.10.2023 i.e. within 15 days from the date of confirmation. Further, the respondent bank issued a Sale Certificate on 'the same day i.e. on 13.l0.2023 in favour of the auction purchaser. The respondent Bank may be directed to hand over the possession of the property as the auction purchaser is a bonafide purchaser.

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

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It is alleged that neither the Demand Notice nor the Possession notice has been served upon the applicant. The applicant could know about the SARFAESI action of the Bank when the notice under Rule 8(6) was served upon the applicant. The Possession Notice was also not published in two leading newspapers. The property in question worth more than crore has been sold on meager price with connivance of land mafia. The matter was compromised with the Bank for an amount of Rs.82 lacs with token amount of Rs.12.50 lacs. In terms of compromise the applicant had also deposited Rs.I0 lacs on 14.06.2023 but the respondent Bank without any communication regarding acceptance/rejection of the compromise proposal sold the property. The property has been auctioned without any notice to the applicant.

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On perusal of records it appears that the Demand Notice dated 01.06.2021 was issued calling from the borrower to repay the dues amount. The said demand notice was sent to the applicant through post on 25.06.2021 as evident from the postal receipt annexed with the counter affidavit as annexure A, page 7.

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Thereafter, possession of the property was taken on 30.09.2021 by issuing possession notice dated 30.09.2021. To prove the service of possession

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DRT, PATNA

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SA 237 of 2022 [J]

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notice, the respondent Bank annexed the postal tracking report but no postal receipt has been filed to show that to whom consignment was addressed. Also no proof of affixation has been filed.

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The property was put on auction sale vide sale notice 24.08.2023 fixing the date of auction sale on 21.09.2023. The said sale notice was sent to the applicant through post on 30.08.2023 as evidentfrom postal receipt filed with Reply of IA 30112024 as annexure 4IR, page 20. It is pertinent to be mentioned here that the respondent Bank annexed the copy of tracking report to prove the service of sale notice as annexure - 4IR, page 21 but on perusal of said tracking report it shows that the said consignment was sent to "Balaje Marble" but the applicant herein is Krishna Kant. No tracking report with regard to consignment sent to Krishna Kant has been filed by the respondent Bank.

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The proof of affixation filed by the Bank with regard to sale notice is also faint. It has been filed in a very casual manner. The publication was not made of that sale notice which was sent to the applicant. The different notice and the different format was published in contravention of the format prescribed under Appendix-IVA of the Security Interest (Enforcement) Rules 2002. The said Rule does not permit any deviation as permissible for Appendix-IVA. It has been provided to draw the attention of a larger number of public as an effort to fetch maximum number of bidders and maximum sale price of the secured assets. This purpose is not served by composite notice for sale of many other properties of different cases.

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The property was auction sold on 21.09.2023 and Nisha Kumari, D/o Sri Anil Prasad Gupta was declared successful bidder in respect of the property but as far as payment made by the auction purchaser is concerned, the respondent Bank neither stated in its counter affidavit/reply nor filed any document with regard to details of payment made by auction purchaser. Merely stated in reply of IA that the auction purchaser deposited the entire amount within time but no detail has been filed. However, the auction purchaser in its counter .

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affidavit stated that the auction purchaser deposited a bid amount of Rs.6,95,OOOI- on 20.09.2023. Further, Rs.I0,62,001- on 22.09.2023 against

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ORT, PATNA

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SA 237 of 2022 [J]

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the 25% of bid amount. Since, the respondent Bank issued confirmation letter on 30.09.2023 thereafter, the auction purchaser deposited the remaining 75% amount by 13.l0.2023 i.e. within 15 days from the date of confirmation.

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Here again respondent Bank failed to clarify in what circumstance, the confirmation was made so delayed while the 25% amount was deposited well within time i.e. 22.09.2023 as stated by the auction purchaser.

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The respondent Bank also did not bring the valuation on record as there is allegation with regard to low valuation of the property in question.

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At the same time it is not out of place to consider the effect of non- joinder of the borrower firm, and its partner Abhishek Kumar in the present application. Non-joinder of aforesaid necessary parties gives rise to the multiplicity of judicial proceedings. At the same time the possibility of willingness of other stakeholders to pay the dues as demanded by the respondent cannot be ruled out. If they are willing the purpose of the present SARF AESI Application will get infructuous. Application is not maintainable without impleading the firm through its partners and the borrower. In the above circumstances despite the aforesaid infirmities, no relief can be granted to the applicant.

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16.In view of the above discussion, the present application is liable to be dismissed.

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ORDER

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The application SA 237 of 2022, is dismissed. No order for costs.

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[Kaushalendra Yadav]

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Presiding Officer

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Debts Recovery Tribunal, Patna

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Judgment signed, sealed, dated and pronounced in the open court on this / 23RD Day of July, 2025. ~'7

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r-y-"? ')

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[Kaushalendra Yadav ]

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Presiding Officer

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Debts Recovery Tribunal, Patna

Krishna Kant v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

Krishna Kant v. Punjab National Bank

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

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