DRT-I Chandigarh set aside auction of four properties by Citizens Urban Cooperative Bank Ltd due to lack of CERSAI registration. Following Goverdhan Prasad Atal v. Assam Gramin Vikas Bank, court held unregistered security interest bars auction despite prior Sec 13(4) notice.
Auction fixed for 17.03.2025 set aside; Application allowed
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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH
SA/242/2024 MS BHUSHAN TRADING CO Vs THE CITIZENS URBAN CO OPERATIVE BANK LTD 15.03.2025 Item No.8
Present: Sh. J S Sodhi, Counsel for the Applicant. Sh.Arvind Rajotia, Counsel for respondent bank alongwith Sh.Padam, Manager.
It is stated that the respondent bank has fixed the auction of four properties, for 17.03.2025. Out of these four properties, one property is 04 kanals 08 marlas of land situated at village Nagra; one is house; one is shop and another is 150 marlas of plot. Mr.JS Sodhi, counsel for the applicant argues that as far as land situated in village Nagra is concerned, it is agricultural land and it is so mentioned in the sale-deed on the basis of which the security was created in respect of 1/3 share by Kulbushan Aggarwal, in favour of the bank.
As far as the house and shop are concerned, the security interest was created by Kusum Lata in respect of her 4/5 share, in favour of the bank. However, the bank has put up the whole property; house and shop for sale.
As far as 150 marlas of land is concerned, it is stated that Ms.Shikha Aggarwal wife of Kulbhushan Aggarwal had created security in respect of 46 marlas of land, in favour of the bank.
That apart, Mr.Sodhi, argues that there is no CERSAI registration in respect of all these properties. The bank had created security interest on 26.07.2024. Prior to that, bank had issued the notice under Section 13(4) on 06.04.2024. Mr.Sodhi has placed reliance upon the judgment passed by the Hon’ble Gauhati High Court in WP(C) No.182 of 2019, titled Goverdhan Prasad Atal versus Assam Gramin Vikas Bank and another, decided on 02.06.2020, 2021 AIR (Gauhati) 47 , wherein the Hon’ble Gauhati High Court has held that without security interest registration, the property could not be put up for auction.
In view of this, the auction fixed up for 17.03.2025 is hereby set aside. The present SA is allowed. However, it is made clear that this order would not debar the bank from initiating fresh SARFAESI action as per law.
File be consigned to the record room after due compliance.
(A S Narang) Presiding Officer DRT-I, Chandigarh
Pronounced in open court.
MANOJ
3 issues framed by the court
Whether auction can be held when security interest is not registered in CERSAI.
Whether lack of CERSAI registration for all properties is fatal to the auction.
Whether absence of CERSAI registration debarred the bank from auctioning properties despite notice under Section 13(4).
Colour shows how this judgement treated each authority
Goverdhan Prasad Atal versus Assam Gramin Vikas Bank and anotherFollowed¶7
2021 AIR (Gauhati) 47 · Who else cites this
1 provisions across 1 enactments
MS BHUSHAN TRADING CO.
THE CITIZENS URBAN CO OPERATIVE BANK LTD
A S Narang
Manoj
As recorded by the court registry
2 orders share this CNR
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