Dismissed

Om Hare Ram Hare Krishna v. State Bank of India

DRT5 Jul 2025SA/322/2025

Case brief

AI extract

What is this about?

Applicants sought to quash an auction notice and possession order under the SARFAESI Act regarding mortgaged properties. The Tribunal held the bank followed due procedure, affirmed the sale of two properties, and dismissed the application.

What did the court decide?

Securitisation Application No.322/2025 dismissed with no order as to costs.

Om Hare Ram Hare Krishna versus State Bank of India — Contract and Commercial Disputes | DRT (2025)

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Presented on: 23.12.2022 Registered on: 05.05.2025 Decided on: 05.07.2025 Duration: Y M D 02 06 13

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IN THE DEBTS RECOVERY TRIBUNAL AT AURANGABAD (Before Dr. J.R. Chauhan Presiding officer)

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SECURITISATION APPLICATION No.322/2025

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M/s. Om Hare Ram Hare Krishna, Prop. Sopan Shekuji Tayade, Age : 61 Years, Occu. Business, R/o : Krishi Utpanna Bazar Samiti, Mrketyard, Kannad, Tq. Kannad, District Aurangabad.

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Sopan Shekuji Tayade, Age : 61 Years, Occu. Business, R/o : Brahmin Galli, Shivaji Nagar, Kannad, District Aurangabad.

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Meerabai Sopan Tayade, Age : 54 Years, Occu : Household, R/o : Brahmin Galli, Shivaji Nagar, Kannad, District Aurangabad

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Bhagwan Shekuji Tayade, Age : 58 Years, Occu. Business, R/o : Brahmin Galli, Shivaji Nagar, Kannad, District Aurangabad.

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Badrinarayan @ Badrinath s/o Sopan Tayade, Deceased through LRs.

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5A. Meerabai Sopan Tayade, Age : 54 Years, Occu. Household, R/o : Palaskar Building, Brahmin Galli, Shivaji Nagar, Kannad, District Aurangabad 6. Purushottam Sopan Tayade, Age : 22 Years, Occu. Business, R/o : Brahmin Galli, Shivaji Nagar, Kannad, District Aurangabad … Applicants Versus 01. State Bank of India, Stressed Assets Recovery Branch, Aurangabad, At Plot No.1, Ground Floor, Administrative Building, Town Centre, N-5, CIDCO, Aurangabad. Through Authorized Officer. 02. Smt. Vaishnavi Badrinarayan Tayade, Age : 25 Years, Occu : Household, R/o : Brahmin Galli, Shivaji Nagar, Kannad, District … Respondents Aurangabad. APPEARANCES For the Applicant Nos.1 to 6 Mr. Nikhilesh K. Tungar - Advocate For Respondent No.1 Mr. S.R. Deshpande – Advocate For Respondent No.2 None

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JUDGMENT (Delivered on 05^th July, 2025)

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This Securitization Application No.322/2025 has filed by the applicants quashing and set aside the E-Auction Notice dated 07.12.2022 thereby putting the properties of the applicants mentioned in Paragraph No.5.6 of the SA scheduled on 27.12.2022 and also to quash and set-aside the order of the District Magistrate, Aurangabad in SA No.215/2021 passed on 25.04.2022 under Section 14 of the Securitization And Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2022 (For Short : SARFAESI Act, 2002). So also the prayed for quashing and set-aside the Notice of the Circle Officer, Kannad dated 02.11.2022.

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Brief facts of the application are as under :

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The applicants submitted that the applicants were in need of financial assistance for the business purpose and hence approached the respondent bank which was formerly known and named as State Bank of Hyderabad. In view of the notification, the State Bank of Hyderabad merged into the State Bank of India in the year 2017. After scrutinized the loan application and supporting documents, the then

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officers of the State Bank of Hyderabad sanctioned the Working Capital loan of Rs.40,00,000/- (Rupees Forty Lacs only) to the applicants.

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To secure the loan facility the applicants executed Demand Promissory Note on 13.12.2008 and agreed to pay the amount with interest @16.25% p.a. with monthly rests. The applicants also executed Agreement of Hypothecation and registered Mortgage Deed bearing Day Book Entry No.04752/2008 on 11.12.2008.

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It is further submitted by the applicants that the applicants were regular in repayment of loan amount and their business was also running good and hence the applicants applied for additional working capital. Considering the requirement and satisfactory reports, the respondent bank vide sanction letter dated 15.04.2010 enhanced the loan facility to Rs.50,00,000/- (Rupees Fifty Lacs only). The for the enhanced was

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primary security facility hypothecation of stock in trade, finished products, semifinished products, book debts, receivables, current assets, other movables, furniture and fixtures.

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The applicants further submitted that the then State Bank of

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Hyderabad Branch Kannad District Aurangabad, vide its Sanction Letter dated 26.04.2013 renewed the Working Capital Loan facility to Rs.1,00,00,000/- (Rupees One Crore only) to the applicants. The primary security for the enhanced facility was of hypothecation of stock in trade, finished products, semi-finished products, book debts, receivables, current assets, other movables, furniture and fixtures. The facility was with further security of already mortgaged properties.

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The applicant further submitted that considering representation of the applicants, the then State Bank of Hyderabad Branch Kannad District Aurangabad renewed the Working Capital Loan facility to Rs.2,00,00,000/(Rupees Two Crores only) to the applicants vide its Sanction Letter dated 28.03.2014. The enhanced facility was on the primary security of hypothecation of stock in trade, finished products, semi-finished products, book debts, receivables, current assets, other movables, furniture and fixtures. This facility was with further security of already mortgaged properties. The Working Capital Loan facility of Rs.2 Crore (Rupees Two Crores only) renewed by the then State Bank of Hyderabad by issuing letter of Arrangement

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on 16.05.2016.

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It is further submitted by the applicants that as the business of the applicant was abridged, on the application of the applicants for reducing the working capital to Rs.1.20 Crores from Rs.2.00 Crores, the respondent bank reduced Working Capital facility vide Letter of Arrangement dated 21.02.2019.

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The respondent bank vide Arrangement Letter dated 21.02.2019 reduced the Working Capital Loan facility and mortgaged following properties of the applicants.

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(a) Commercial Building bearing Survey No.12/02, situated at Narsingpur, on Brahmanwadi Road, Kannad, District Aurangabad, admeasuring 40 R and construction thereon Weigh Bridge + Godown 6618.76 Sq. Ft., which are bounded as under:

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East		West	South		North
Land	of Seed	Road	Land of	Narayan	Land	of
Farm			Yelaskar		Khandagale

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(b) Leasehold Commercial Building at Plot No.04, S.R. No.07, Ward No.01, S.No.7/4 @ Market Yard (APMC) Near SBI Bank, Kannad, District Aurangabad. Total admeasuring 1750 Sq. Ft., which are bounded as under :

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East	West	South	North
Boundary of Kannad Court	Road	Plot No.03	Plot No.5

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(c) Residential Cum Commercial Property situated at Plot No.03, Part, M.H. No. A-105, S.No.39/06 @ Vivekanand Nagar, Behind Savitribai Phule Kanya Vidyalaya, Near Jagrut Hanum an Mandir & Pishor Road, Kannad, District Aurangabad. Total admeasuring 1385 Sq. Ft. and construction thereon which are bounded as under:

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East	West	South		North
Road	Residence of Bhausaheb	Open	land	Residence of Vasant
	Eknath Pawar	and School	Girls	Panditrao Pawar

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(d) Residential Cum Commercial Building bearing Survey No.269 (old) New G.P. H. No.05, situated at Makaranpur, on Dhule Solapur Highway Road, Kannad, District Aurangabad admeasuring 58.06 Sq. Mtrs and Construction of 116.12 Sq. Mts., which are bounded as under:

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East	West	South	North
Road	House of Rangnath Sampatrao	Road	House of Supadrao Ramchandra

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It is further submitted by the applicant that the respondent bank filed application under section 14 of the SARFAESI Act, 2002 before the District Magistrate, Aurangabad on 02.08.2021 for taking physical possession of the above properties and the same was allowed by the District Magistrate, Aurangabad vide his order dated 25^th April,

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2022 and authorized the Tahsildar Kannad to take possession and deliver the same to the respondent bank. The Tahsildar Kannand issued notice to the Circle Officer Kannad on 15.07.2022 to take possession of the secured assets and hand it over to the respondent bank. The Circle Officer issued notice on 02.11.2022 for taking possession of the secured assets which was to be handed over to the bank on 22.11.2022. Thereafter the applicant had been to the office of the District Magistrate, Aurangabad 01.12.2022 and obtained the certified copies of the S.A. No.215/2021.

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The applicants further submitted that the Circle Officer had not been to the secured assets on 22.11.20202 and thereafter also and therefore the possession of the secured assets are still with the applicants. Thereafter the applicants received Auction Notice dated 07.12.2022 received by the applicant on 13.12.2022 and the e-auction of the secured assets was scheduled on 27.12.2022 by the respondent bank. The applicant submits that as per the demand notice, the amount of Rs.1,35,99,437.50 Ps. was due as on 05.12.2019 whereas in the statement of account due amount is shown different.

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It is further submitted by the applicants that they never served with the possession notice the same was not published in newspaper as per rules. The procedure adopted by the State Authority is contrary to the settled principal of law. The District Magistrate delegated powers to the Tahsildar, Kannad, the Tahsildar Kannad ought not to have delegate the powers to handover possession and as such the entire procedure is required to be quashed.

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It is further submitted by the applicants that the government valuation of the properties which was put to e-auction is much higher but the respondent bank ventured to put the properties for auction for meager amount with ill will and malafide intention. The applicant has annexed herewith the government valuation report of Gram Panchayat Property bearing No.1115/1 from Village Narsingpur which shows the government valuation of Rs.1,51,48,103/- for the year 2020. But the reserve price of this property was fixed at Rs.70,00,000/- (Rupees Seventy Lacs only) in the year 2022.

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Aggrieved by the illegalities and procedure adopted by the respondent bank for auctioning the secured assets owned by the applicants, the applicant has filed this SA challenging

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the same on the following Grounds:

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GROUNDS

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I) The valuation of the properties of the applicants is much more than the reserve price fixed by the respondent bank. The government valuation of the properties was Rs.1,51,48,103/- for the year 2020, thus the market value can be presumed to be more than it and now in the year 2022 the valuation of the properties was increased undoubtedly. The respondent bank to sell out the property to some interested persons at meager rate with ill motive quoted less reserve price.

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II) As per the NPA Certificate, dated 23.03.2022 the outstanding amount in the loan accounts of the applicants was of Rs.1,35,99,437.50Ps. This amount can be recovered by auctioning one of the property of the applicant but the respondent bank with ill motive put all the secured assets for auction.

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III) There is one Special Civil Suit No.71/2016 is pending between the applicants with their relatives and the Learned Civil Court has passed some

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interim orders as to stay in that proceeding. This fact was already brought to the notice of the respondent bank.

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IV) The applicants never received any notice under section 13(4) of SARFAESI Act. In fact the respondent never issued any notice under section 13(4) of the SARFAESI Act to the applicant. The respondent adopted unknown procedure of law and issued possession notice under Rule 8 (1) and it is required to be quashed and set aside.

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V) It is required to be considered that the respondent bank issued NPA Certificate on 23.03.2022 wherein the amount is mentioned as outstanding Rs.1,35,99,437.50Ps. The said amount can be recovered if one of the property is put for auction with the correct valuation. It is not necessary to put all the properties for auction at a time.

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VI) The applicant has made various representations / application to the respondent bank to apply for One Time Settlement to the applicants but the respondent bank is not in mood to settle the loan

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account of the applicant in OTS for the reasons best known to the bank.

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VII) The respondent bank engaged private recovery Company namely “Success Associates”. To settle, the loan account, the applicant deposited Rs.20 Lacs in the account of recovery person acting for the respondent bank but the said recovery agency has not credited the amount in the loan account of the applicant maintained by the respondent.

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VIII) The Godown which is mortgaged with respondent bank is also a secured asset was given on lease to the State of Maharashtra. The rent is yet not paid by the State of Maharashtra. The applicant has made various representations to the District Collector, Aurangabad for depositing the amount of rent directly to the respondent bank so that the loan amount can be repaid. The outstanding rent amount is more than Rs.12 Lacs.

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IX) The procedure adopted by the State Authority is contrary to the settled principal of law i.e. „Deligatus Non Potes Deligata‟ means the delegated authority

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cannot further delegate the powers. The District Magistrate delegated powers to the Tahsildar, Kannad, the Tahsildar Kannad ought not to have delegate the powers to handover possession and as such the entire procedure is required to be quashed.

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X) The District Magistrate has not provided an opportunity of hearing to the applicant before passing the impugned order.

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XI) The auction notice is served on the applicant on 13.12.2022 which is a very short notice against the principle of law. The applicant is required to award reasonable opportunity to defend the case and challenge the procedure. By giving short notice of auction great prejudice is caused to applicants.

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XII) The applicants have deposited amount in the loan account time to time also with the recovery agency of the respondent bank but the respondent bank has charged excess interest and charges. The recovery agency has also played fraud on the applicant.

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XIII) The respondent bank has not maintained separate account of principal and interest as per the NPA

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norms.

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XIV) The entire action of the respondent bank is illegal and against the principles of natural justice and principle of law.

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XV) The respondent bank has illegally debited the amounts in the loan account.

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XVI) The action of the respondent bank under challenge is otherwise bad in law and fit to be quashed and set aside.

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XVII) The applicant is having every hope of getting success in the matter. The applicant is having good case on merit. The balance of convenience is in favour of the applicants.

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The applicant has filed the present Securitisation Application and thereby prayed for declaration of the E-Auction Notice of the respondent bank under Rule 8(6) of the Security Interest (Enforcement) Rules dated 07.12.2022 thereby putting the properties of the applicants mentioned in Para No.5.6 for sale, which was scheduled on 27.12.2022 may be set aside.

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The applicant prayed that the impugned order passed by

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the District Magistrate, Aurangabad dated 25.04.2022 in SA No.215/2021 under Section 14 of the SARFAESI Act, 2002 and the Notice of the Circle Officer, Kannad dated 02.11.2022 may be quashed and set aside. The applicants also prayed for declaration of the entire action of recovery of the loan as illegal initiated by the respondent and further consequential action as illegal, arbitrary and unreasonable and may be quashed and set aside.

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The respondent No.1 filed its say/reply, vide Exhibit-05. The respondent No.1 bank denied the allegations of the present Securitisation Application. It is submitted by the respondent No.1 that the SA is based upon false and incorrect averments and filed to mislead the Tribunal by filing fabricated and false documents. The applicants prayed to quash and set aside the order dated 25.04.2022 of the learned District Magistrate, Aurangabad and Notice issued on 02.11.2022 for physical possession of the Main SA. The relief have become infructuous as the respondent bank received the physical possession of the two secured assets on 22.11.2022 as per order dated 25.04.2022. The applicants though fully aware of this aspect have suffered the physical possession and have not amended the SA, and have

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challenged the measure of physical possession on this ground also the SA is liable to be rejected.

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It is further submitted by the respondent No.1 bank that the applicants have executed various security documents to secure the loan facility availed by them which are Supplemental Agreement of Loan Cum Hypothecation for over-all credit limit executed on 28.03.2014 and Deed of Further Charge registered with Sub Registrar Office, Kannad, District Aurangabad vide Day Book No.1497/2014 dated 28.03.2014 in favour of the respondent bank.

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After non-compliance of Demand Notice dated 05.12.2019, the respondent No.1 has taken symbolic possession of all secured assets on 07.11.2020. The respondent bank filed on record the copies of Symbolic Possession Notice dated 07.11.2020 of Plot No.3 situated in Vivekanand Colony, Kannad, District Aurangabad, Possession Notice dated 07.11.2020 of New Gram Panchayat House No.5 at Makranpur, Taluka Kannad, District Aurangabad, Copy of Daily Pudhari and Daily Indian Express Newspapers dated 12.11.2020 wherein the Symbolic Possession Notice dated 07.11.2020 are published. The applicants have not

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challenged the same.

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The respondent No.1 bank further submitted that it has received Physical Possession of two secured assets from the Revenue Authorities on 22.11.2022. The copy of the possession notice of Commercial Building Constructed on Survey No.12/2 at Narsingpur, Bramhanwadi Road, Kannad, in the name of deceased applicant No.5 Badrinarayan Sopan Tayade, through applicant No.3 Meerabai Tayade (Mother of the deceased) and the respondent No.2 Smt. Vaishnavi Tayade (widow of deceased) is filed in the SA as Annexure R-6. The respondent bank filed on record the copies of Possession Notice of Plot No.3 from part of Municipal House No. A/105, Vivekanand Nagar, Behind Savitribai Phule Kanya Vidyalaya, Pishore Road, Kannad, Dist. Aurangabad. The copy of Photographs of taking physical possessions of the secured assets on 22.11.2022 and affixing possession notice on the secured assets are also filed at Annexure A-8. The respondent bank filed on record the copies of Possession Notice dated 22.11.2022 and Copy of Daily Loksatta and Daily Indian Express Newspapers wherein the Possession Notice are published. The respondent bank also filed on

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record the copies of postal envelopes of applicants on which the endorsements of postal authorizes dated 28.11.2022 and 29.11.2022 of intimation given to the applicants and further endorsement dated 30.11.2022 that applicants have avoided to accept the RPAD Notices.

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The respondent no.1 bank submitted that the applicants prayed in Prayer Clause “C” that Auction Notice issued by the respondent bank dated 07.12.2022 and the auction sale was fixed on 27.12.2022 be quashed and set aside. It is submitted by the respondent No.1 bank that the respondent bank has conducted sale of two properties / secured assets. The first property sold is Plot No.3 at Vivekanand Nagar, Pishore Road, Kannad, Dist. Aurangabad for Rs.31.79 Lackhs and Second property is Gram Panchayat House No.5 at Makranpur, Taluka Kannad, District Aurangabad, which is sold for Rs.39.38 Lakhs as against the reserve price of Rs.18.13 Lakhs. Thus, this relief has also become infructuous. The respondent has also filed IA No.499/2024 for seeking permission to confirm the sale and to proceed further under Securitisation Act, 2002 for recovery of its dues. The said IA No.499/2024 is subjudice and as such the main Securitisation Application deserves to be rejected. The

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applicants have suffered sale of aforesaid two properties / secured assets as by amending the Securitisation Application, the sale conducted by the respondent is not challenged and on this ground also the Securitisation Application is liable to be rejected.

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The respondent No.1 has filed para-wise written statement in these proceedings. The contents in Para Nos.5.1 to 5.5 of the Securitisation Application are admitted by the respondent bank. The respondent bank has sanctioned the Working Capital Loan facility of Rs.40 Lacs (Rupees Forty Lacs only) vide sanction letter dated 13.12.2008 to the applicants and the applicants have executed security documents i.e. Registered Mortgage Deed dated 11.12.2008 registered with Sub Registrar Office, Kannad, District Aurangabad vide Day Book No.4752/2008 and Agreement of Hypothecation of Goods and Assets on 13.12.2008 in favour of the respondent bank and the same has been filed by the respondent bank in the OA No.533/2020.

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The respondent bank further submitted that at the request and the representation of the applicants dated 15.04.2010, the said Working Capital Loan facility of Rs.40 Lacs (Rupees Forty Lacs only) was enhanced to Rs.50 Lacs (Rupees Fifty

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Lacs only) and for which the applicants executed Supplemental Agreement of Hypothecation of Goods and Assets for increase in overall limit on 15.04.2010 and Mortgage Deed registered with Sub Registrar Office, Kannad, District Aurangabad vide Day Book No.1853/2010 dated 15.04.2010 and the said documents are filed in the OA No.533/2020.

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The respondent bank further submitted that again, at the request and the representation of the applicants, the said Working Capital Loan facility of Rs.50 Lacs (Rupees Fifty Lacs only) was enhanced to Rs.1.00 Crore (Rupees One Crore only) vide Letter of Agreement dated 26.04.2013 and for which the applicants executed Agreement of Loan Cum Hypothecation for increase in overall limit on 26.04.2010 and also Deed of Further Charge is registered with Sub Registrar Office, Kannad, District Aurangabad vide Day Book No.1951/2013 dated 20.04.2013 in favour of the respondent bank and the said documents are filed in the OA No.533/2020.

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The respondent bank further submitted that again, at the request and the representation of the applicants, the said Working Capital Loan facility of Rs.1.00 Crore (Rupees One Crore only) was enhanced to Rs.2.00 Crore (Rupees Two Crore only) vide Letter of Agreement dated 28.03.2014 and for which the applicants executed Supplemental Agreement of Loan Cum Hypothecation for overall limit on 28.03.2010 and also Deed of Further Charge is registered with Sub Registrar Office, Kannad, District Aurangabad vide Day Book No.1497/2014 dated 28.03.2014 and thereby created first mortgage charge on various immovable properties in favour of the respondent bank and the said documents are filed in the OA No.533/2020.

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The respondent No.1 bank further submitted that the contents of Para No.5.6 are incorrectly contended that “Respondent Bank Mortgaged following Properties”. From the above contents it will be cleared, each and every security interest is created by the registered instruments and despite of same it is contended that “Respondent Bank has mortgaged”, in fact applicants have mortgaged their respective properties and have availed loan facilities from the respondent bank. It also needs to be brought to the

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notice of this Tribunal that the applicants despite of this aspect have submitted during the arguments that two properties i.e. properties at Serial Nos.2 and 4 described on page Nos.37 and 38 are mortgaged with the respondent bank.

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The respondent bank admitted the initial contents of Para No.5.7 that the respondent bank filed an Application as prescribed under section 14 of the Securitisation Act, 2002 before the Learned District Magistrate, Aurangabad and after verifying that, entire requirements as per Section 14 are fulfilled, the Learned District Magistrate, Aurangabad allowed Application under Section 14 on 25.04.2022. The remaining contents of the Para No.5.7 that the District Magistrate, Aurangabad authorized its Sub-ordinate Revenue Authorities to execute order dated 25.04.2022 is true and correct. The contents of Para No.5.8 regarding issuance of notice by the Revenue Authorities for execution of order of the District Magistrate, Aurangabad dated 25.04.2022 is true and correct. The contents of Para No.5.9 in respect of issuance of notice by the Tahsildar Kannad on 02.11.2022 and intimation on 22.11.2022 for taking physical possession of secured assets are true and correct.

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The respondent bank submitted that the contents of Para No.5.10 are false and incorrect. There are illegalities and errors in the Section 14 Proceedings and those are revealed after obtaining the certified copies of Section 14 Proceedings filed by the respondent bank. The Section 14 Proceedings are rightly filed by the respondent bank and the same is allowed by the Learned District Magistrate, Aurangabad. The contents of Para No.5.11 are true to the extent that respondent has issued auction notice on 07.12.2022. It is true and correct that the auction was scheduled on 27.12.2002. The applicants did not respondent to the Demand Notice issued under section 13(2) of the SARFAEI Act, 2002 the respondent bank taken symbolic possession as per Section 13(4) of Securitisation Act, 2002. The respondent bank had no option then to put the secured assets for auction sale.

¶104

The contents of Para No.5.12 are false as the different amount are shown in the Demand Notice and statement of Loan Account. The respondent bank cannot debit interest after the loan account became NPA. The respondent bank has filed the entire statement of loan account alongwith the OA No.533/2020 with particulars of rate of interest applied

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to the loan account from time to time in the OA. The respondent bank has rightly issued the Demand Notice and called upon to pay its dues alongwith future interest, costs and expenses within 60 days from the date of demand notice as per the provisions of Section 13(2) of the SARFAESI Act, 2002 and as such denied the contents of Para No.12 in toto.

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The contents of Para No.5.13 denied by the respondent bank as those are false and incorrect. The symbolic possession notice dated 07.11.2020 has been properly served upon the applicants. The applicants have not challenged the measures of the symbolic possession notice dated 07.11.2020. The contentions of applicants in respect of delegation of power by Tahsildar Kannad are false and incorrect. The applicants were served with the Possession Notice dated 02.11.2022. Therefore, the contents of Para No.5.13 are totally false and baseless and hence denied in toto by the respondent bank. So also, the contents of Para No.5.14 in respect of putting the secured assets for auction sale for meager amount with ill-will and malafide intention are totally false and incorrect. The reserve price is fixed by following due procedure of law based upon the valuations

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received to the respondent bank. The contents of Para No.5.15 denied by the respondent bank. The securitization action of the respondent bank is totally legal and by following due procedure of law. The respondent bank submitted that the Securitisation Application is filed with an intention to delay the action of recovery initiated by the respondent bank and to create obstacles in the recovery. The Securitisation Application is being devoid of merits and as such liable to be rejected with costs.

¶110

The respondent bank denied the contents of Ground No.I that Government Valuation of the secured assets in the year 2020 is Rs.1,51,48,103/0 is false and baseless contentions. The respondent bank as per procedure obtained valuation report from the Government approved Valuer and based on the same, the reserve price has fixed and put the secured assets for auction sale. The applicants were well aware about the reserve price despite of same they did not raise objections. The respondent bank had issued notice under Rule 8(6) of the Security Interest (Enforcement) Rules 2002 on 25.04.2022 and had fixed auction sale on 30.05.2022. The reserve price of commercial building at Survey No.12/2 situated at Narsingpur on Bramhanwadi road, Kannad,

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District Aurangabad was fixed at Rs.70.00 Lacs. The reserve price in the present Notice issued under Rule 8(6) of the Security Interest (Enforcement) Rules 2002 on 07.12.2022 is same i.e. Rs.70.00 Lacs. The reserve price of Leasehold Plot No.4 from Ward No.1, Market Yard (APMC) near State Bank of India Branch, Kannad, District Aurangabad was fixed at Rs.38.09 Lacs. The Notice issued by the respondent No.1 under Rule 8(6) of the Security Interest (Enforcement) Rules 2002 on 25.04.2022 to sale the Residential Cum Commercial Property situated at Plot No.3, having Part of Municipal House No. A-105, Vivekanand Nagar, behind Savitribai Phule Kanya Vidyalaya Kannad, District Aurangabad. In this auction notice dated 25.04.2022 also the reserve price was fixed at Rs.31.54 Lacs and in the present Notice dated 07.12.2022, the reserve price is same i.e. Rs.31.54 Lacs. The Notice issued by the respondent No.1 under Rule 8(6) of the Security Interest (Enforcement) Rules 2002 on 25.04.2022 to sale the Residential Cum Commercial Building from Survey No.3269 (Old) New Gram Panchayat House No.5, situated at Makaranpur, On Dhule-Solapur Highway, Kannad, District Aurangabad. In the auction notice dated 25.04.2022 also the reserve price was fixed at

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Rs.18.13 Lacs and in the present Notice dated 07.12.2022, the reserve price is same i.e. Rs.18.13 Lacs. The respondent bank submits that the present applicants did not raise any objections to the reserved price fixed in the earlier auction notice dated 25.04.2022 and to the present auction notice dated 07.12.2022 and when they realized, sale is taking place, they have raised objections by present proceedings to the reserve price by contending that to some interested persons, the respondent is trying to sell the secured assets. If the applicants contend that the reserve price for secured asset fixed by the respondent bank is at lower side, they should brought their purchasers for the amount of Rs.1.51 Crores and above. The Ground No.1 has no substance and is liable to be rejected.

¶115

The respondent bank denied the contents of Ground No.II and submitted that the respondent bank has issued the NPA Certificate on 23.03.2022 and the amount mentioned can be recovered by selling one of the property is totally false and baseless. The respondent bank has produced the Possession Notice dated 22.11.2022 of secured asset in which it is specifically mentioned on 05.12.2019 that respondent bank has issued Demand Notice U/Sec. 13 (2) of the SARFAESI

¶116

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¶117

Act, 2002 and called upon the applicants to pay Rs.1,35,99,437.50 Ps., and interest from 05.12.2019 onwards until realization of the entire amount. Similar objection found in the orders of the District Magistrate, Aurangabad in Securitisation Application No.215/2021 U/Section 14 of the Securitisation Act, 2002. The NPA Certificate relied by the applicants in the main Securitisation Application also reflects the same amount i.e. Rs.1,35,99,437.50 Ps., as mentioned in Demand Notice dated 05.12.2019. Thus, this is not the outstanding on the date of issuance of NPA certificate on 23.03.2022 but the said outstanding was at the time of issuance of Demand Notice and therefore, future interest from 05.12.2019 onwards until realization of entire amount is demanded from the applicants. The applicants have wrongly interpreted the NPA Certificate dated 23.03.2022. After the loan account becomes NPA, interest cannot be debited to the loan account. Hence, the Ground No.II is liable to be rejected.

¶118

The contents of Ground No. III are regarding the pendency of Special Civil Suit No.71/2016. It is not stated by the applicants that whether the respondent No.1 bank is party to the said Special Civil Suit and after hearing the

¶119

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¶120

respondent No.1, the said stay order is passed. The applicants have not filed the papers of Special Civil Suit No.71/2016 nor the orders on which they are relying upon and as such, the Ground No.III is liable to be rejected.

¶121

The respondent bank denied the contents of Ground No.IV. The applicants contentions that they have not received notice under section 13(4) of the SARFAESI Act, 2002 is totally false and incorrect. Furthermore, the remaining contentions that procedure has not being followed, is also false and incorrect. The respondent No.1 has followed the entire procedure and the securitization action is as per procedure.

¶122

The respondent No.1 prayed for rejections of contentions of Ground No.V as the same are repetition of ground No.II. The contentions of Ground No.VI are false and incorrect as that the respondent has not provided benefits of One Time Settlement and settled the loan account.

¶123

The contents of Ground No.VI are false and incorrect that respondent has not provided benefits of One Time Settlement and settled the loan account. The respondent has replied to all the representations of the applicants.

¶124

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¶125

Section 13(8) does not provide redemption after the auction notice is issued. The respondent has filed auction notices issued on 25.04.2022 with the Written Statement and the applicants have filed the auction notices dated 07.12.2022 alongwith the main Securitisation Application. It is submitted by the respondent that in view of the Judgment in the matter of CELIR LLP. Vs. Bafana Motors of the Hon‟ble Supreme Court of India, the legal position has been settled and hence the Ground No.VI shall be rejected.

¶126

In respect of Ground No.VII, the respondent bank submitted that the contents mentioned are totally false and incorrect. The respondent bank has engaged Private Recovery Agencies namely Success Associates and the applicants have deposited Rs.20.00 Lacs to the Success Associates for the respondent bank are totally false and incorrect. This Tribunal vide its Order dated 31.03.2023 directed the respondent bank to file its written explanation regarding this averment of applicants. Pursuantly, on 17.05.2023, the respondent No.1 filed document vide Diary No.1162/2023 thereby submitted its explanation with supporting documents. Alongwith this reply, the letter dated 17.04.2023 of said Sanjay Ingale Proprietor of Success

¶127

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¶128

Financial Services is also filed. It is clarified that the Success Financial Services is not Empanel Resolution Agent since 2019 on account of non-renewal of Empanelment by the respondent bank and the said transaction conducted by applicants was personal and had no concern with the respondent No.1. It is also stated in the Letter dated 17.04.2023 by Shri Sanjay Ingale that on 28.11.2022 Rs.3.50 Lacs are returned by him to the Applicant No.06 Purshottam Tayade. Furthermore, Rs.3.00 Lacs are also transferred online by Sanjay Ingle to the said Applicant No.6 and balance amount he had assured to transfer by 30.06.2023 as such, the Ground No. VII is false and hence denied in toto.

¶129

The respondent bank prayed for rejection of the Ground No.VIII. It is submitted by the respondent bank that mortgaged Godown was given on rent to the State of Maharashtra is not within the knowledge of the respondent No.1. Once a property is mortgaged, the mortgagors are not empowered to create third party interest in the mortgaged property. The Act of giving mortgage property on rent is not binding on the respondent No.1. The applicants have not produced alleged representations made

¶130

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¶131

by the applicants to the District Collector, Aurangabad contended by the applicant alongwith the main Securitisation Application. The applicants have also not produced the Lease Deed. The respondent has no concern with the recovery of rent from State of Maharashtra and its payment thereupon to the respondent bank. Therefore, the Ground No.VIII is liable to be rejected.

¶132

The respondent bank submitted that the procedure adopted by the State Authority is contrary to the settle legal position is false. The respondent No.1 has pointed out that the learned District Magistrate by operative Part No.B of its final order dated 25.04.2022 has authorized the Tahsildar Kannad or the Authorised Officer empowered by Tahsildar Kannad to take possession and to comply the prescriptions of the Securitisation Act, 2022. Furthermore, physical possession of two secured assets is already taken by the Revenue Authorities and papers of physical possession are filed on record and as such the Ground No.IX is liable to be rejected.

¶133

The contentions in Ground No.X that District Magistrate has not provided opportunity of hearing to the applicants before passing of the impugned order is a contention,

¶134

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¶135

contrary to the settled legal position. The proceedings under Section 14 of the Securitisation Act, 2002 are of Ministerial nature. The Hon‟ble High Court Bombay right from the first Judgment in the matter of Trade Well India Ltd., has laid down the District Magistrate shall not issue notice to the respondents of Section 14 Application or hear third party before passing of the Order under section 14 of the Securitisation Act, 2002. The Hon‟ble Supreme Court of India has also taken the same view. The Learned District Magistrate thus has rightly passed order dated 25.04.2022 in Securitisation Application No.215/2021 hence the Ground No.X is liable to be rejected.

¶136

The contentions in ground No.XI of the applicants that auction notice is served on the applicants on 13.12.2022 is denied. The applicants have not produced any papers in support of its contentions. The auction notice as per procedure is published in two leading newspapers on 11.12.2022 and the auction was scheduled on 27.12.2022, thus more than 15 days‟ notice was issued. The auction notice was affixed on the conspicuous part of the properties put to auction sale on 27.12.2022. The paper publication, the affixing of auction notices and service by RPAD is well

¶137

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¶138

within time and the applicants had full knowledge about the auction sale scheduled on 27.12.2022. The respondent bank denied the Ground No.XI in toto and hence prayed for rejection of the same.

¶139

The contents made in the Ground No.XII in respect of excess interest and charges are applied to the loan account is denied in toto. It is submitted that the respondent No.1 has charged interest as applicable to the loan account from time to time. The applicants should have pointed out specific entries wherein excess interest is charged to the applicants. The respondent bank in the OA No.533/2020 has mentioned the particulars of interest applied to the loan account from time to time. The contentions that the applicants have paid amount to the Recovery Agency is denied. The respondent bank has never intimated the applicants to pay any amount to the Recovery Agency nor had authorized the Recovery Agency to receive the repayment of loan instead of depositing it in the Loan Account of the applicants. The repayment is to be made in the loan account and not in any other manner. The applicants are businessmen and as pointed out right from the year 2008, applicants are enjoying loan facilities and are

¶140

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¶141

transacting in the loan account, on this background, the contentions that applicants have paid to the Recovery Agency is surprising contention. The remaining contention that the Recovery Agency has played fraud on the applicants is an internal aspect between applicants and said Recovery Agency. The applicants have not stated which legal action is taken by them against the said Recovery Agency, after realizing fraud is committed against applicants including police complaint against the Recovery Agency. The said Recovery Agency is not empaneled since 2019. Therefore, the Ground No.XII be rejected.

¶142

Respondent bank denied the contentions of Ground No.XIII are that respondent has not maintained separate loan account of principal and interest. As per Banking and NPA norms, loan accounts are maintained. Respondent bank denied the contentions in Ground No.XIV that the action of the respondent is illegal and against the principles of law. The entire securitization action of the respondent bank is as per the provisions of Law and principles of natural justice. Therefore Ground No.XIV be rejected. The Ground No.XV denied by the respondent bank. This ground is repetition of the earlier Ground No.XII and therefore the earlier reply to

¶143

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¶144

Ground No.XII is adopted to avoid repetition. The loan account is properly maintained and there are no illegal debit entries as contended by the applicants. The Ground No.XVI, that the securitization action of the respondent bank is bad in law and is fit to be quashed and set aside, is denied in toto by the respondent bank.

¶145

The respondent bank prayed for rejection of the application of the applicants with heavy costs as the applicants have failed to point out any short comings in the securitization action of the respondent bank. The Securitisation Application has no substance and is therefore, liable to be rejected with costs. The respondent bank further prayed that the respondent bank has conducted sale of two secured assets and has filed IA No.499/2024 for confirmation of the sale and modification of the order passed by this Tribunal on 27.12.2022 and also prayed that the respondent bank be permitted to accept the remaining bid amount and to confirm the sale and to complete the prescribed procedure of sale in view of the Judgment in the matter of CELIR LLP Vs. Bafna Motors of the Hon‟ble Supreme Court of India.

¶146

The applicants filed rejoinder of Written Statement filed by the respondent bank as Exhibit-6 and again reasserted their

¶147

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¶148

claim and controverted the allegations of the written statement. The applicants have also filed copy of Government Valuation report dated 16.05.2025 pertaining to the property of A-105, Plot No.3.

¶149

I have heard the learned counsels for the parties and gone through the entire material available on record thoroughly and carefully.

¶150

The learned counsel for the applicants argued that the respondent bank has wrongly declared the loan account as Non-Performing Assets (NPA) on 28.08.2019. It was also argued that the respondent bank has charged excess interest as in Demand Notice issued under Section 13(2) of the SARFAESI Act, 2002 was for Rs.1,35,99,437.50Ps. (Rupees One Crore Thirty-Five Lacs, Ninety-Nine Thousand Four Hundred Thirty-Seven and Paisa Fifty only) on 05.12.2019. Whereas application moved before the District Magistrate and in affidavit filed by the Authorised Officer before the District Magistrate is different being Rs.1,46,57,480.65Ps. (Rupees One Crore Forty-Six Lacs Fifty-Seven Thousand Four Hundred Eighty and Paisa Sixty-Five Only). The respondent bank has issued NPA Certificate dated 23.03.2022 (Annexure „E‟) Page No.70 of SA wherein the

¶151

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¶152

outstanding amount has been shown as Rs.1,35,99,437.50Ps. (Rupees One Crore Thirty-Five Lacs, Ninety-Nine Thousand Four Hundred Thirty-Seven and Paisa Fifty only) and hence there are discrepancies in the amount mentioned in Demand Notice and record submitted before the District Magistrate.

¶153

It was further argued on behalf of the applicants that the respondent bank has not produced any evidence that notice of possession and sale notices were served to the applicants and the respondent bank has not made compliance of The Security Interest (Enforcement) Rules, 2002 (For Short: Rules) and the physical possession of the properties was taken on 22.11.2022 is illegal. It was further argued that even auction sale of two properties on 27.12.2022 is of a lesser value as the Government Valuer assessed the market value of Property No. A-105, Plot No.3 as Rs.58,35,721/(Rupees Fifty-Eight Lacs Thirty-Five Thousand Seven Hundred Twenty-One only) vide Report dated 16.05.2025. The Government Valuer has also assessed value of Grampanchayat Property No.1115/1 admeasuring 3521.36 meters as Rs.1,51,48,103/- (Rupees One Crore Fifty-One Lacs Forty-Eight Thousand One Hundred Three Only) vide

¶154

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¶155

Report dated 02.12.2020 and again vide Report dated 22.12.2022, the same property was valued for Rs.1,51,48,103/- (Rupees One Crore Fifty-One Lacs FortyEight Thousand One Hundred Three Only) whereas the respondent bank assessed the reserve price of this property as Rs.70 Lacs (Rupees Seventy Lacs only) and on this ground also the sale conducted by the respondent bank for two properties on 27.12.2022 vide Auction Notice dated 07.12.2022 is illegal and the same is liable to be set aside.

¶156

It was further argued on behalf of the applicants that the applicants had deposited Rs.19,04,000/- (Rupees Nineteen Lacs Four Thousand only) to the Recovery Agent of the bank namely Success Financial Services and this tribunal vide Order dated 06.01.2023 has specifically called the explanation of the bank on this fact and more-so, affidavit of Mr. Sanjay Ingale on behalf of the Recovery Agency has been filed that he wrongly made statement under the pressure of the bank on 17.04.2023 whereas he accepted the amount on behalf of the bank and in this manner the fraud has been played and the Judgment referred by the learned counsel for the respondent bank titled CELIR LLP Vs. Bafna Motors is not applicable. It was submitted that if the

¶157

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amount of Rs.19,04,000/- (Rupees Nineteen Lacs Four Thousand only) had been credited in the loan account of the applicants, the loan account could not have been declared as NPA.

¶159

The learned counsel for the applicants further argued that the Godown was given on rent to State of Maharashtra and the respondent bank was requested to collect the rent amount of Rs.10,72,780/- (Rupees Ten Lacs Seventy-Two Thousand Seven Hundred and Eighty only) lying with the District Magistrate, Aurangabad but that amount was not claimed by the respondent bank. It was further argued that the applicants moved One Time Settlement several times and the same were wrongly rejected. It is also submitted that the Special Civil Suit No.71/2016 is pending between the applicants and their relatives and some interim orders were passed by the Civil Court therein and the same were brought to the notice of the respondent bank but to no effect. It was further argued that the respondent bank has taken possession of the two immovable properties and sold the same in a illegal manner in violation of the SARFAESI Act and Rules made thereunder and all the proceedings are liable to be set aside and prayed for allowing the present

¶160

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¶161

Securitisation Application.

¶162

On the otherside, it was argued on behalf of the respondent bank that the account of the applicants was declared NPA on 28.08.2019. The applicants had mortgaged four immovable properties as reflected in documents as well as in written statement filed by the respondent bank. It was submitted that the Demand Notice under Section 13(2) of the SARFAESI Act was issued to the applicants on 05.12.2019 for Rs.1,35,99,437.50Ps. (Rupees One Crore Thirty-Five Lacs, Ninety-Nine Thousand Four Hundred Thirty-Seven and Paisa Fifty only). In Application moved before District Magistrate as well as in affidavit of the Authorised Officer submitted therein, the outstanding amount has been shown as Rs.1,46,57,480.65Ps. (Rupees One Crore Forty-Six Lacs Fifty-Seven Thousand Four Hundred Eighty and Paisa Sixty-Five only) and in NPA Certificate dated 23.03.2022 and the Demand Notice amount has been shown as Rs.1,35,99,437.50Ps. This has no adverse effect on the recovery proceedings conducted by the respondent bank as per provisions of the SARFAESI Act and Rules made thereunder. The applicants have not responded the Demand Notice dated 05.12.2019. It was also

¶163

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¶164

submitted that symbolic possession was taken on 07.11.2020 and symbolic possession notice was published in two newspaper on 12.11.2020 but that has not been challenged by the applicants in the present Securitisation Application. The respondent bank has obtained District Magistrate, Aurangabad order dated 25.04.2022 and thereafter Possession Notice was issued by the Tahsildar on 02.11.2022 and physical possession of properties was taken on 22.11.2022 and the Possession Notice was published in two leading newspapers Daily Loksatta and Indian Express on 26.11.2022 and the respondent bank has produced copies of postal envelope of applicants having endorsement of the Post Office dated 28.11.2022, 29.11.2022 and 30.11.2022 whereby the applicants avoided to accept RPAD. It was further submitted that the applicants were duly served with the possession notice.

¶165

It was further argued that Auction Notice dated 25.04.2022 pertaining to all the four properties was issued whereby sale was fixed for 30.05.2022 but sale was not successful and even no objections have been raised by the applicants regarding reserve price fixed for the secured assets. It was further argued that again Auction Notice dated 07.12.2022

¶166

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was issued and the same was published in two leading newspapers on 10.12.2022 and being subsequent sale, there was mandatory notice of 15 days and two properties Plot No.3 and Grampanchayat House No.5 were sold in e-auction on 27.12.2022. It was further argued that if reserve price was on lower side, applicants could have brought their purchaser for Rs.1.51 Crorers (Rupees One Crore and Fifty-One Lacs only) as alleged but they have not brought any such purchaser despite the fact that the property was not sold by the bank having Reserve Price of Rs.70 Lacs (Rupees Seventy Lacs only). It was also argued that the applicants have produced Valuation Report pertaining to Property A-105, Plot No.3 dated 16.05.2025 showing valuation as Rs.58,35,721/- (Rupees Fifty-Eight Lacs ThirtyFive Thousand Seven Hundred Twenty-One only) and this valuation was conducted in the year 2025 whereas secured asset was sold in the year 2022 and it cannot be said that the secured asset was sold for a lesser value.

¶168

It was further argued on behalf of the respondent bank that the applicants have not produced any evidence that the Recovery Agency was authorized to collect the amount of the applicant on behalf of the respondent bank and

¶169

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¶170

Mr. Sanjay Ingale vide letter dated 17.04.2023 has specifically submitted that Success Financial Services was not empaneled agent since 2019 and the said transaction conducted by the applicants was personal and had no concern with the respondent No.1 bank. It was also stated in Letter dated 17.04.2023 by Mr. Sanjay Ingale that on 28.11.2022 he has returned Rs.3,50,000/- (Rupees Three Lacs Fifty Thousand only) to Applicant No.6 Mr. Purushottam Tyade and further Rs.3,00,000/- (Rupees Three Lacs only) were transferred online by him to said Applicant No.6 and for balance amount he had ensured to transfer by 30.06.2023 and if any subsequent affidavit has been filed by Mr. Sanjay Ingale in favour of the applicants cannot be taken into consideration as he has not produced any document that he was authorized to collect the amount from the applicants at a particular time and the respondent bank is not liable for the act of Mr. Sanjay Ingale and applicants have paid the amount to Mr. Sanjay Ingale at their own risk.

¶171

It was also argued on behalf of the respondent bank that the mortgaged Godown was given on rent to the State of Maharashtra is not in the knowledge of the bank and once the property is mortgaged, the mortgagors are not

¶172

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empowered to create third party interest in the mortgaged property and that act is not binding on the respondent bank. It was submitted that the applicants have not produced alleged representation made by the applicants to District Collector, Aurangabad regarding payment of rent and even have not produced Lease Deed. It was submitted that the respondent has no concern with the recovery of rent from the State of Maharashtra and its payment but it was for the applicants to maintain regular account after depositing the amounts and the applicants cannot take any advantage of their illegal act.

¶174

It was further argued that the One Time Settlement proposals moved by the applicants suggesting the very lower amount were rejected by the bank and the same were conveyed accordingly. It was submitted that as regards of pendency of Special Civil Suit No.71/2016, the respondent is not party in that litigation and the applicants have not filed the papers of Special Civil Suit nor they have produced orders passed therein and the pendency of the Special Civil Suit has no adverse effect on the recovery proceedings conducted by the respondent bank. It was further submitted that the confirmation of the E-Auction dated

¶175

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¶176

27.12.2022 has been stayed by this Tribunal and the bank has not accepted the balance bid amount from successful bidder to issue sale certificate and to complete the E-Auction formalities and for that purpose they have filed separate Interlocutory Application No.499/2024 to permit the bank to finalize the sale proceedings and to proceed further against the borrower and for E-Auction sale of remaining two properties. It was argued that the entire proceedings regarding possession and sale of two immovable properties have been conducted in accordance with the SARFAESI Act and Rules made thereunder and the applicants even have lost their right of redemption after publication of the sale notices and reliance was placed on Judgment CELIR LLP. Vs. Bafana Motors (Mumbai) Pvt. Ltd. and Ors. AIR 2023 Supreme Court 4568 and prayed for dismissal of the Securitisation Application of the applicants.

¶177

After having heard both the sides and going through the material on record, I am of the considered view that there is no force in this SA of the applicants and the same is liable to be dismissed for the reasons recorded hereinafter.

¶178

REASONS

¶179

Before proceeding further, it is necessary to make reference

¶180

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¶181

of the properties put to sale by the respondent bank and

¶182

particulars of the same are as under:

¶183

Sr. No.	Particulars of the Property	Reserve price & EMD Rupees	Total Bidders	Highest received	Bid
1	Commercial Building bearing Survey No.12/2, situated at Narsingpur on Bramhanwadi road, Kannad, Dist. Chatrapati Sambhaji Nagar.	Rs.70.00 Lakhs EMD Rs.7.00 Lakhs	Bid not received	Bid received.	not
2	Residential Cum Commercial Property Plot No.3 at Vivekanand Nagar, (Gas Agency) Pishor Road, Kannad, Dist. Chatrapati Sambhaji Nagar.	Rs.31.54 Lakhs EMD Rs.3,15,400/-	One	Rs.31.79 Lakhs
3	Lease Hold Commercial building at Plot No.4, Market Yard (APMC) Near S.B.I. Kannad, Dist. Chatrapati Sambhaji Nagar.	Rs.38.09 Lakhs EMD Rs.3,80,900/-	Auction cancelled by Bank due to technical reasons.	Auction cancelled Bank due technical reasons.	by to
4	Residential and Commercial Building New Gram Panchayat House No.5, situated Makranpur, Kannad, Dist. Chatrapati Sambhaji Nagar.	Rs.18.13 Lakhs EMD Rs.1,81,300/-	Four Bidders	Rs.39.38 Lakhs

¶184

The respondent bank received four bids pertaining to Property at Serial No.4 and a single bid pertaining to Property at Serial No.2. The respondent bank has accepted

¶185

the highest bid of both the properties and only accepted 25% of amount and due to interim stay of this Tribunal, the

¶186

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¶187

bank has not proceeded further.

¶188

It may be noted here that the applicants have not disputed raising of loan from the respondent bank vide sanction letter dated 13.12.2008 and mortgage of the immovable properties as a security for the loan. The applicants committed default in payment of the loan and the loan account was declared as Non-Performing Asset (NPA) on 28.08.2019. Thereafter a Demand Notice under Section 13(2) of the SARFAESI Act for Rs.1,35,99,437.50 Ps. (Rupees One Crore Thirty-Five Lacs Ninety-Nine Thousand Four Hundred Thirty-Seven and Paisa Fifty only) was issued to the applicants on 05.12.2019. The applicants have not responded to this demand notice.

¶189

Thereafter the respondent bank issued notice for symbolic possession under Section 13(4) of the SARFAESI Act on 07.11.2020 and the notice was published in newspapers on 12.11.2020. This Symbolic Possession Notice or symbolic possession has not been challenged by the applicants in the present Securitisation Application.

¶190

The respondent bank moved Application under Section 14 of the SARFAESI Act, 2002 before the District Magistrate,

¶191

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¶192

Aurangabad on 29.07.2021 as Annexure-A, Page 36 to 54 of the SA. The District Magistrate, Aurangabad passed order on 25.04.2022. In compliance of order dated 25.04.2022, possession notice was issued to the applicants on 02.11.2022, (Annexure-B, Page 55 of SA) by Circle Officer, Kannad. It may be noted here that vide order dated 25.04.2022, the District Magistrate, Aurangabad issued directions to the Tahsildar Kannad or his authorized officer to hand over the possession of the secured asset. Therefore, the possession notice was issued as per order of the District Magistrate, Aurangabad and possession of the secured assets was taken on 22.11.2022. It may be noted here that possession notice was published in two leading newspapers namely Daily Loksatta and Indian Express. In order to prove the service of notice to the applicants, the respondent bank has produced on record copies of postal envelopes of applicants bearing endorsement dated 28.11.2022, 29.11.2022 and 30.11.2022 of the postal authorities whereby the applicants avoided to accept RPAD. These copies of postal envelopes have been placed at Page No.109 to 134 of Securitisation Application. From this evidence on record, it is established that the notices were duly published in two leading

¶193

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¶194

newspaper and publication of notice amounts to notice to whole world. More-so, the postal record also proves that the applicants having knowledge of possession notice. Therefore, it does not lie in the mouth of the applicants that demand notice or possession notice were not in their knowledge.

¶195

After taking possession of the secured assets, the first Auction Notice was issued on 25.04.2022 pertaining to all the four properties and sale date was fixed for 30.05.2022 but sale was not effected. Again, the respondent-bank issued Auction Notice dated 07.12.2022. This auction notice was also published in two leading newspapers on 10.12.2023 and copy of newspaper has been placed on record at Page No.13 of Interlocutory Application No.499/2024. The Reserve Price of Property No.2 was Rs.31.54 Lacs (Rupees Thirty One Lacs Fifty-Four Thousand only) whereas bid was received for Rs.31.79 Lacs (Rupees Thirty One Lacs Seventy-Nine Thousand only). Reserve Price for Property No.4 was Rs.18.13 Lacs (Rupees Eighteen Lacs Thirteen Thousand only) and the four bids were received and highest bid was of Rs.39.38 Lacs (Rupees Thirty-Nine Lacs Thirty-Eight Thousand only). It may be

¶196

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¶197

noted here that no bid was received pertaining to Property No.one having Reserve Price of Rs.70 Lacs (Rupees Seventy Lacs only) and auction pertaining to Property No.3 was cancelled by the bank due to technical reasons. The applicants have produced two valuation report pertaining to Property No.1 dated 02.12.2020 and dated 22.12.2022 at Page No.64 and 67 respectively of the SA and value of the property is the same as Rs.1,51,48,103/- (Rupees One Crore Fifty-One Lacs Forty-Eight Thousand One Hundred Three Only). No bid was received pertaining to this property. Now, the applicants are at liberty to bring purchaser for the amount as per valuation report produced by them as this property is still to be auctioned / sold by the bank if outstanding amount is not adjusted by the sale proceeds of Property No.2 and 4. As regards the valuation of Property No.2, the applicants have produced Government Valuer Report dated 16.05.2025 at Page No.7 of rejoinder whereby the valuer assessed the value as Rs.58,35,721/- (Rupees Fifty-Eight Lacs Thirty-Five Thousand Seven Hundred Twenty-One only) and this value was assessed in the year 2025 whereas sale of Property No.2 was conducted in the year 2022 and it cannot be said that the bank has sold the

¶198

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¶199

Property No.2 at a lesser value as there was a great boom in the real estate sector in the last three years and therefore it cannot be said that the bank has sold away Property No.2 and 4 at a lower value and the submission made by the applicants pertaining to value is not sustainable.

¶200

It has claimed by the applicants that they deposited Rs.19,04,000/- (Rupees Nineteen Lacs Four Thousand only) to the Recovery Agent of the bank namely Success Financial Services but that amount has not been account for by the respondent-bank and this Tribunal vide Order dated 06.01.2023 has sought the explanation of the respondent bank. The respondent-bank has submitted the explanation that the agency was not empaneled for recovery after 2019 and Mr. Sanjay Ingale vide Letter dated 17.04.2023 has specifically stated that he collected the amount from the applicants in personal capacity and he has returned the amount of Rs.3,50,000/- (Rupees Three Lacs Fifty Thousand only) to Applicant No.6, Mr. Purushottam Tyade and Rs.3,00,000/- (Rupees Three Lacs only) by way of online transfer and for remaining amount he would pay to the applicants by 30.06.2023. The applicants have also produced on record Affidavit of Sanjay Ingale in favour of

¶201

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the applicants / borrowers that he submitted the contents of Letter dated 17.04.2023 under the pressure of the bank. The person who is making statement or giving affidavit in favour of both the parties, then his version must be scrutinized carefully as he has already submitted letter dated 17.04.2023 in favour of the bank, thereafter he should have given the affidavit in favour of the applicants supported by documentary evidence. Mr. Sanjay Ingale has not produced any documentary evidence at the relevant time he was competent enough to collect the amounts from the applicants on behalf of the respondent bank when the respondent bank has specifically denied that the recovery agency was not competent and even it was not empaneled for this purpose after 2019. More-so, Mr. Sanjay Ingale has not made any complaint against the bank and hence no fraud in any manner, has been played by the bank with the applicants. Since, the Auction Notice dated 07.12.2022 was published in two leading newspapers on 10.12.2022 and mandatory requirements of 15 days‟ notice for subsequent sale was duly complied with by the respondent bank. Further after publication of this sale notice, the applicants / borrowers have lost their right to redeem the mortgaged

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property in view of Hon‟ble Supreme Court Judgment CELIR LLP. Vs. Bafana Motors (Mumbai) Pvt. Ltd. and

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Ors. case (Supra) .

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If the plea of the applicants pertaining to rent of Godown which was already mortgaged to the bank is taken into consideration, it is established that the applicants have given on rent the mortgaged property to the State of Maharashtra without the permission of the respondent bank. Mere claim that the rent of Rs.10,72,780/- (Rupees Ten Lacs Seventy-Two Thousand Seven Hundred Eighty only) was lying with the District Magistrate but the bank has not claimed the same despite request of the applicants, has no effect on the recovery proceedings conducted by the bank as the respondent bank was not competent directly to claim the rent from the District Magistrate whereas it was the duty of the applicants / borrowers to repay the loan amount by the income accrued by way of rent. Now, the applicants cannot take advantage of this illegal act, when the permission for lease was not taken from the bank. Even, no lease deed pertaining to this Godown has been produced on record. Therefore, the applicants have unnecessary shifting their liability to the bank itself which is not

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sustainable in the eyes of law.

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It may be noted here that the applicants have claimed that they have moved One Time Settlement several times but their account was not settled by the respondent bank and their request was declined without any reason. In Reply / Written Statement, it is specifically alleged by the respondent bank that the bank has replied all the representations of the applicants. It is also submitted on behalf of the respondent bank that the amount for settlement was suggested by the applicants was on lower side and One Time Settlement was not accepted by the bank. Even otherwise, non-acceptance of the One Time Settlement as desired by the borrowers, does not make the recovery proceedings as illegal initiated under the SARFAESI Act and therefore, this plea of non-acceptance of the OTS by the bank does not help the applicants in any manner.

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It may be noted here that the applicants have made reference of pendency of Special Civil Suit No.71/2016 pending between the applicants and other relatives / parties but the applicants have not produced on record complete details of the Special Civil Suit No.71/2016 as well

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as the orders passed by the Civil Court therein and more-so, the civil litigation has no adverse effect on the right of the bank when it is not proved that the respondent bank is party in that litigation. Hence, the applicants have taken various pleas in this Securitisation Application only with the motive to frustrate the recovery proceedings initiated by the bank.

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The respondent bank has filed a separate Interlocutory Application No.499/2024 for vacation of the stay granted vide Order dated 27.12.2022 whereby the respondent bank has been directed to proceed with the E-Auction but the bank shall not confirm the E-Auction. Further, it was observed that the bank can collect the bids and shall not accept the balance amount. As discussed above, the respondent-bank has proceeded against the applicants / borrowers in accordance with the provisions of the SARFAESI Act and Rules made thereunder and has not violated the same, hence, now the respondent bank is permitted to confirm the sale of Property No.2 and 4 conducted vide E-Auction dated 27.12.2022 and to issue sale certificate to successful bidder after accepting balance bid amount and to complete all formalities of E-Auction.

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In view of the above observations, the present Securitisation Application filed by the applicants is not maintainable and the same is liable to be dismissed.

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