Allowed

Vidyadhar Pandey and others v. Indian Bank

DRT24 Jul 2025SA/24/2024

Case brief

AI extract

What is this about?

In an application under the SARFAESI Act, the Debts Recovery Tribunal allowed the quashing of the bank's SARFAESI action, possession notice, and subsequent sale notice quash orders. The Tribunal held that the bank failed to prove proper service and affixation of the possession notice, despite filing newspaper publications, rendering the action and related notices invalid.

What did the court decide?

SARFAESI action set aside with costs; respondent barred from recovering expenses or charges for the challenged action.

Vidyadhar Pandey and others versus Indian Bank — Banking and Recovery | DRT (2025)

SA 24 of 2024 IJI

ORT. PATNA

DEBTSRECOVERYTRIBUNALPATNA

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PresidingOfficer: Shri Kaushalendra Yadav

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SA-24 of 2024

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Vidyadhar Pandey, Sio Sri Madhusudhan Pandey, permanent resident of Village: Pariyawan, P.O. : Atiama, P.S. : Ghosi, District: Jehanabad & at present resident of 'Manudhar Bhawan', Hasanpura, P.O. + P.S. : Beur, Town & District: Patna (Bihar).

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Smt. Mannu Devi, Wlo Vidyadhar Pandey, Sio Sri Madhusudhan Pandey, permanent resident of Village : Pariyawan, P.O. : Atiama, P.S. : Ghosi, District: Jehanabad & at present resident of 'Manudhar Bhawan', Hasanpura, P.O. + P.S. : Beur, Town & District Patna (Bihar).

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. Applicants

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Versus

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The Authorized Officer of Indian Bank, Main Branch, Buddh Marg, situated at Near Kotwali, Neharu Path, Town & District: Patna - 800001.

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The Branch Manager, Indian Bank, Patliputra Colony, House No. 226, Surya Complex, Patna - 800013.

•

--respondents

Present:

For the Applicant : Sh.RakeshRanjan,Advocate For the Respondent Bank :Dr.BinodKr. Jha,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 possession notice and sale notice issued in the matter.

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The brief fact of the case is that the borrowers availed the Term Loan facility to the tune of Rs.13 lacs, Cash Credit facility to the tune of Rs. 2.5 lacs and another Cash Credit facility for Rs. I lac from the respondent Bank. To secure the loan facility, the applicant mortgaged the property with the Bank. ~/ ;"..1'>

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ORT. PATNA

SA 24 of 2024 PI

Due to default in repayment of dues of the Bank, the account was classified as NPA on 30.03.2019. In order to recover outstanding dues the respondent Bank initiated SARFAESI Action against the borrower by issuing Demand Notice dated 05.11.2021 U/S l3(2) of the act calling upon the borrowers to make the payment of Rs.2l,95,805.00. Thereafter, the respondent took possession of the property on 24.01.2022 by issuing Possession Notice U/S 13(4) of the SARFAESI Act. Further, the property was put on auction sale by issuing an auction sale notice dated 06.01.2024 fixing the date of auction sale on 24.01.2024. Aggrieved from the sale notice, present SA has been filed by the applicants.

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It is submitted by the Ld. Counsel of applicants that the respondent Bank issued Demand Notice 05.11.2021 mentioning the date ofNPA as 30.03.2019 but NPA amount has not been disclosed in the Demand Notice which is against the guidelines of RBI. The amount shown in the demand notice is not correct i.e. inflated amount. The Possession Notice issued by the Bank has neither been served upon applicants nor affixed on secured assets. In the sale notice dated 05.01.2024, the respondent Bank has mentioned the demand notice dated 07.03.2023 while the demand notice was issued on 05.11.2021. Without obtaining the valuation of the property, sale notice has been issued by the Bank. The sale notice is also not in appendix - IV as prescribed under act.

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On the contrary, Id. Counsel of the respondent Bank submits that the loan was availed by the borrowers but failed to repay the dues of the Bank, hence, the account was classified as NPA. Thereafter, the respondent Bank initiated SARFAESI action against the borrower by issuing Demand Notice dated 05.11.2021 U/S l3(2) of the act. The said Demand Notice was duly served to the applicant. Despite service of demand notice, the applicant failed to repay the dues of the Bank. Hence, the respondent Bank proceeded further and took symbolic possession of the property on 24.01.2022. The possession notice was served to the applicants and affixed on secured asset. The possession notice was also published in two leading newspapers. After issuance of possession notice, the applicant approached the Bank for settlement under the OTS scheme. The OTS was accepted and sanctioned by

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SA 24 of 2024 [J)

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DRT. PATNA

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the Bank on 26.12.2022 to the tune ofRs.13.90 lacs but the borrower failed to deposit the OTS amount as per terms of compromise. Hence, the respondent Bank issued a sale notice dated 06.01.2024 fixing the date of auction sale on 24.01.2024. The sale notice was affixed on secured assets and published in two leading newspapers and also sent to the applicants through post. Before putting the property on auction sale, valuation of the property was also obtained by the Bank from its approved valuer on 05.10.2023. Accordingly, the reserve price was fixed for Rs.23.98 lacs. The applicants failed to comply with the order dated 23.01.2024 of this Tribunal as the applicant was required to deposit Rs.6 lacs before the auction sale but the applicant has deposited only Rs.3,78,4111-only.

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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 the no amount ofNPA has been disclosed by the respondent bank in the Demand Notice. The amount shown in the demand notice is not correct. The Possession Notice has neither been served upon applicants nor affixed on secured asset. The date of demand notice was wrongly mentioned in the sale notice dated 05.01.2024. Without obtaining the valuation of the property, sale notice has been issued by the Bank. The sale notice is also not in appendix - IV as prescribed under act

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On perusal of records, it appears that demand notice was served upon the applicants as evident from the annexure - I, page 15 annexed with S. application by the applicants. But the applicants did not raise any objection against the demand notice which has been raised herein that the amount in the demand notice has been inflated.

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The possession notice was issued 21.01.2022 but the respondent Bank failed to file any service proof of possession notice upon the applicants and its affixation on secured assets despite specific allegation of applicants in this regard. However, the respondent Bank filed the copy of publication of possession notice which shows that the possession notice was published in Indian Express and Prabhat Khabar on 26.01.2022.

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So far as sale notice is concerned, neither the applicants nor the respondent Bank informed to this Tribunal whether the sale has taken place or not in

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SA 24 of 2024 [J)

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DRT,PATNA

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pursuance to the sale notice dated 06.01.2024. It appears that no sale has taken place, hence the sale allegation regarding valuation of the property and sale notice become infructuous.

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10.In view of the above discussion, as the respondent could not prove the delivery and affixation of Possession notice, the present application deserves to be allowed.

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ORDER

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The application SA 24 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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[KaushalendraYadav]

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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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[KaushalendraYadav]

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Presiding Officer Debts Recovery Tribunal, Patna

Vidyadhar Pandey and others v. Indian Bank

Case brief

What is this about?

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Vidyadhar Pandey and others v. Indian Bank

Case brief

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