Allowed

Manik Roy and another v. Union Bank of India

DRT22 Jul 2025SA/268/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed an application to quash a SARFAESI action where the bank failed to prove proper service of notices and publication in newspapers. Consequently, the auction sale was set aside, and the bank was directed to return the purchaser's deposit with interest.

What did the court decide?

The SARFAESI action including sale is set aside. The Respondent Bank is directed to return the amount deposited by the Auction purchaser with simple interest @10% p.a. within 30 days.

Manik Roy and another versus Union Bank of India — Banking and Recovery | DRT (2025)

SA268 of 2022 U]

ORT, PATNA

DEBTSRECOVERYTRIBUNALPATNA

¶5

Presiding Officer :Shri KaushaLendraYadav

¶6

SA- 268 of 2022

¶7

Manik Roy, Son of Shri Sudhir Chandra Roy,

¶8

Rekha Roy, Wife of Manik Roy, both resident of Vivekanand Colony, Near Rajni Chowk, P.O. Bhatta Bazar, P.S. K. Hat, District - Purnea - 85301.

¶9

.........Applicants

¶10

Versus

¶11

The Authorised Officer, Union Bank of India, Regional Office, 1 st Floor, Gayatri Complex, Opposite Head Post Office, M.G. Road, Bhagalpur.

¶12

The Branch Manager, Union Bank of India, Kali Bari Chowk, Bhatta Bazar, Purnea - 854301.

¶13

Shri Mithilesh Kumar, S/o Shri Pradeep Prasad, R/o Keshav, New Tola, Arajpur, Purnea, Bihar 853204 ..

¶14

--respondents

¶15

Present:

¶16

For the AppLicant	: Sh. Satish Nr. Sinha,Advocate
For the Respondent Bank	: Sh. Shiv Pratap, Advocate
For the Auction Purchaser	: Sh. Rabindra Kumar, Advocate

¶17

Dated: 22.07.2025

¶18

JUDGMENT

¶19

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.

¶20

The brief fact of the case is that the applicant availed Cash Credit facility to the tune of Rs.10lacs from the respondent Bank. To secure the loan facility, the applicant no. 2 mortqaqsd her property in favour of respondent Bank.. Due to default in repayment of dues of the bank,

¶21

~/
-/')
" <;-'t-\7<br>

¶22

¶23

ORT, PATNA

¶24

SA 268 of 2022 [J]

¶25

the account was classified as NPA on 01.03.2021. In order to recover outstanding dues the respondent bank initiated SARFAESI Action against the borrower and issued Demand Notice dated 20.04.2021 u/s 13(2) of the act calling upon the borrower to make the payment of Rs.11.42,929.51. Thereafter, the respondent took possession of the property by issuing Possession Notice dated 29.10.2021 u/s 13(4) of the SARFAESI Act. The respondent bank proceeded further and put the property on auction sale on 16.12.2021by issuing auction sale notice dated 06.11.2021. Accordingly, the property was auctioned on 16.12.2021successful bidder Mithilesh Kumar respondent no. 3 herein. Further, the respondent Bank took physical possession of the property on 25.06.2022 by aid of police force deployed under order dated 19.05.2022 passed by District Administration. Aggrieved from the physical possession, the applicant no.1 herein approached Hon'ble High Court of Patna by filing CWJC No. 9624 of 2022 which was disposed of on 05.08.2022 with the liberty to approach the Debts Recovery Tribunal. Accordingly, present SA has been filed by the applicant.

¶26

It is submitted by the Ld. Counsel of applicant that due to pandemic of Covid-19, the account could not maintain properly. Hence, declared as NPA on 01.03.2021 which is against the mandate of Hon'ble Supreme Court of India as well as RBI laid down during the period of Covid. The respondent Bank without serving the Demand Notice issued possession notice dated 29.10.2021. The said possession notice was neither affixed on secured assets nor published in two newspapers. Further, the respondent Bank issued sale notice dated 06.11.2021·but the said sale notice neither affixed on secured asset nor published in two newspapers. The 30 day's notice has also not been served upon the applicants. The property having value more than RS.50 lacs has been auctioned on 03.12.2021 against the outstanding amount of Rs.11.42,929/- only which is against the principle of Apex Court direction reported in 2006 SCC (volume 3)

¶27

¶28

DRT. PATNA

¶29

SA 268 of 2022 [J]

¶30

page 49. As per sale notice the date of auction sale was fixed on 16.12.2021but the respondent Bank while replying the legal notice of applicant informed the applicant that the property has been auctioned on 03.12.2021i.e. prior to the date fixed.

¶31

On the contrary, ld. Counsel of respondent bank submits that due to default in repayment of dues of the Bank, the account was declared as NPA on 01.03.2021followed by issuance of Demand Notice dated 20.04.2021 u/s 13(2) of the SARFAESI Act. The said demand notice was sent to the applicant on 23.04.2021 through post. . Since the borrower failed to repay the dues of the Bank despite issuance of Demand Notice therefore,' the respondent Bank took symbolic possession of the property u/s 13(4) of act by issuing possession notice dated 29.10.2021. The said possession notice was affixed on the secured asset and also sent to the applicant through post on 01.11.2021. The possession notice was also published in Prabhat Khabar and The Times of India on 30.10.2021. Thereafter, the respondent Bank issued sale notice dated 06.11.2021fixing the date of auction sale on 16.12.2021. The said sale notice was served upon applicant, affixed on secured asset and also got published in two newspapers. The property was auctioned on 16.12.2021to successful bidder Mithlesh Kumar for an amount of Rs.17.85 lacs. Accordingly, Sale Certificate dated 13.01.2022 has been issued in favour of the auction purchaser and physical possession of the property has also been handed over to him with the help of District Administration.

¶32

It is submitted by the ld. Counsel of the auction purchasers that this application is not maintainable and barred the principle of estoppels, waiver and acqui.escence. The applicants have neither denied the loan amount nor overdue amount. Due to default in repayment of dues of the Bank, the respondent Bank took all the measures under SARFAESI act as per law and rules before the auction sale to recover its dues. There is also no violation of any acts. and rules by the auction purchaser. On auction notice, the auction purchaser //

_,vA."J_

ORT, PATNA

SA 268 of 2022 [J]

¶37

participated in the auction sale and purchased the property on 16.12.2021for RS.17.85lacs. The auction purchaser deposited 25% of the auction amount on 17.12.2021 including EMD. Further the remaining 75% amount was deposited by 30.12.2021. Accordingly, the Bank issued a Sale Certificate and also executed the Sale Deed. The auction purchaser is in possession of the property and utilizing it. After amendment of Section 13(8) the right to redeem the secured asset is not available after sale and confirmation of sale which has been completed by the Bank. A confirmed sale deed only can be set aside by a Competent Court or under SARFAESI Act.

¶38

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

¶39

It is alleged that the account was declared as NPA on 01.03.2021,is against the mandate of Hon'ble Supreme Court of India as well as RBI laid down during the period of Covid. Without serving the Demand Notice, the respondent Bank issued possession notice dated 29.10.2021.. The possession notice 'was neither affixed on secured asset nor published in two newspapers. The sale notice was neither affixed on the secured asset nor published in two newspapers. The 30 day's notice has not been served upon the applicants. As per sale notice the date of auction sale was fixed on 16.12.2021but the property has been auctioned on 03.12.2021i.e. prior to the date fixed.

¶40

On perusal of records it appears that the Demand Notice was issued on 20.04.2021 against the borrower and guarantor and the same was sent to the applicants through post on 23.04.2021 as evident from the postal receipt annexed with counter affidavit as annexure - 4, page 21.

¶41

Thereafter, possession of the property was taken on 29.10.2021 by issuing possession notice dated 29.10.2021. The possession notice was sent to the applicants through post on 01.11.2021as evident from annexure - 2, page 16 of counter affidavit filed by the Bank. But the respondent Bank failed to file the proof of affixation of possession

¶42

/ _rA"\ rI_

¶43

¶44

SA 268 of 2022 [J]

¶45

ORT, PATNA

¶46

notice on the secured asset.

¶47

10.The respondent Bank In its counter affidavit stated that the possession notice was also published in Prabhat Khabar and The Times of India on 30.10.2021and to prove the same annexed a copy of paper publication with counter affidavit as annexure - 3, page 17 but on perusal of said annexure neither the date of publication nor the name of newspaper is appearing. Moreover, it indicates publication only in one newspaper while there is specific allegation of applicants that the possession notice was neither affixed nor published in two newspapers.

¶48

11.The respondent Bank put the property on auction sale by issuing auction sale notice dated 06.11.2021fixing the date of auction sale on 16.12.2021.Although the service of sale notice has not been denied by the applicant but to controvert the allegation of applicant regarding no 30 day's sale notice has been served upon the applicant, the respondent Bank did not file any proof of service of sale notice. The respondent Bank also failed to file the proof of affixation of sale notice on secured asset. The respondent Bank also failed to file any proof of publication of sale notice in two newspapers. The copy of publication which has been annexed with the counter affidavit as annexure -5, page 30 does not contain the name of the newspaper and the date of its publication. The same has also not been disclosed in its counter affidavit.

¶49

12.Apart from this the respondent Bank also failed to submit the details of payment made by the auction purchaser .. However, the auction purchaser has filed a pay-in-slip with written argument to show the details of payment against auction sale. Although filing of any evidence at the stage of arguments, is not permissible but on perusal of said pay-in-slip it appears that the 25% of auction amount was deposited on 17.12.2021through cheque bearing but neither the bank nor the auction purchaser disclosed that when the said cheque was

¶50

/ _r/'.{.)'<_

¶51

¶52

SA 268 of 2022 [J]

¶53

ORT, PATNA

¶54

realized. Same as with the amount of Rs.7,05,000/deposited on 30.12.2021towards the rest 75%was also deposited through cheque.

¶55

13.So far as declaration of account as NPA during the covid period is concerned, It was stayed by Honle Apex Court but at a later stage such stay has been vacated. As such the account turned NPA came into effect from the crucial date retrospectively.

¶56

In view of the above discussion, the respondent could not prove affixation of possession notice on the secured asset, publication in two newspapers, service of individual sale notice. Consequently the entire SARFAESI Action including sate are vitiated due to the fraud undervaluation and collusion. The Securitization application deserves to be allowed with costs.

¶57

ORDER

¶58

The application SA 268 of 2022, IS allowed with costs. The SARFAESI Action including sale in question is set aside. The Respondent Bank is directed to return the amount deposited by the Auction purchaser with simple interest @10%PA. within 30 days and the auction purchaser will hand over the vacant possession of the secured creditor who will thereafter hand over to the borrower. If the auction purchaser fails to hand over the possession within 30 days, he will not be entitled for the interest. ~/

¶59

[KaushalendraYadav]

¶60

Presiding Officer Debts Recovery Tribunal, Patna

¶61

Judgment signed, sealed, dated and pronounced in the open court on this 22NDDay of July, 2025. ,,

¶62

,, / _'"Y.Y?1"~ f~I___,.,J [KaushalendraYadav] Presiding Officer

¶63

Debts Recovery Tribunal, Patna

Manik Roy and another v. Union Bank of India

Case brief

What is this about?

What did the court decide?

Manik Roy and another v. Union Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Harjit Kaur versus Hdfc Housing Development Finance Corporation Ltd.

State Bank of India versus M/S. Dahikar Automobile,through Its Proprietor, Shri Sachin S/O. Vijay Dahikar

Kotak Mahindra Bank Limited versus Sanjay Kumar

Mrs Sangita Biswas versus Bank of Baroda

Sri Binod Kumar Gupta Proprietor of M S Shiv Shakti Enterprise versus Indian Bank

Shri Rajesh Kumar son of Late Shri Rehaman versus the Kangra Central Cooperative Bank Limited