Dismissed

Ms Narhari Jewellers v. Au Small Finance Bank Limited

DRT25 Apr 2025SA/419/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed a Securitisation Application filed by a borrower challenging a bank's e-auction sale, possession notice, and Demand Notice under the SARFAESI Act. The court held that the bank complied with all statutory requirements and notice periods, thereby validating the sale and dismissal of the application.

What did the court decide?

The Securitisation Application No.419/2024 was dismissed; interlocutory applications were disposed of; all pending applications concluded.

Ms Narhari Jewellers versus Au Small Finance Bank Limited — Company and Corporate | DRT (2025)

¶1

Presented on: 13.12.2024 Registered on: 17.12.2024 Decided on: 25.04.2025 Duration: Y M D 00 04 13

¶2

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

¶3

SECURITISATION APPLICATION No.419/2024

¶4

M/s. Narhari Jewellers, Through its Proprietor Shri Ajay Bandurao Maid, Age : 40 years, Occu : Business,. R/o. Plot No. 4/P, S. No. 191/4, Shiveshwar Colony, Mayur Park, Tuljabhawani Chowk, Harsul Parisar, Aurangabad.

¶5

Shri Ajay Bandurao Maid, Age : 40 years, Occu : Business,. R/o. Plot No. 4/P, S. No. 191/4, Shiveshwar Colony, …Applicants

¶6

Mayur Park, Tuljabhawani Chowk, Harsul Parisar, Aurangabad.

¶7

Versus

¶8

AU Small Finance Bank Ltd. Registered Office at 19-A, Dhuleshwar Garden, Ajmer Road, Jaipur- 302001. 2. AU Small Finance Bank Ltd. Office at P-1/3, SMS Arcade, Vidhya Vijay Nagar, Seven Hills, Jalna Road, Aurangabad Through its authorized officer

¶9

[SBJ] (SA No.419/2024) Page 1 of 29

¶10

Mr. Sanjay S/o Sahebrao Shelke, Age : 36 years, Occu : Business, R/o. Plot No.133, Galli No.2, Palshi, Taluka and District Chhatrapati Sambhajinagar.

¶11

… Respondents

¶12

APPEARANCES

¶13

For the Applicant Mr. R.D. Sakhare - Advocate For Respondent No.1 & 2 Mr. U.N. Shete – Advocate For Respondent No.3 Mr. Ravi Gite - Advocate

¶14

JUDGMENT (Delivered on 25^th April, 2025)

¶15

1 This Securitization Application (for short: “SA") has filed by the applicants under Section 17 of the Securitization And Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Hereinafter referred as “SARFAESI Act”) for seeking following reliefs:

¶16

A. By an order of this Hon’ble Tribunal, kindly quash and set aside the alleged Auction notice issued on 24.10.2024 referring Section 13(4) of the Act of 2002 and consequential impugned order dated 20.06.2023 issued by District Collector, Aurangabad under Section 14 and consequently present Securitization Application presented by the Applicant under Section 17 of the SARFAESI Act,

¶17

[SBJ] (SA No.419/2024) Page 2 of 29

¶18

2002 challenging the measures professed to be adopted by Respondents under Section 13(4) and 14 of the said Act, may kindly be allowed.

¶19

B. The impugned Demand Notice under section 13(2) of SARFAESI Act dated 06.07.2024 and 21.07.2024 allegedly issued to applicant may kindly be quashed and set-aside.

¶20

C. It be held that the measures adopted by respondents under Section 13(4) and 14 of the s aid Act, i.e. impugned alleged Auction Notice issued on 24.10.2024 and the impugned order dated 20.06.2023 are not in accordance with the procedure prescribed under the SARFAESI Act, 2002 and the rules made thereunder which are invalid, illegal and void and thus the action be set-aside.

¶21

D. The applicant be compensated with cost as it deems fit and proper.

¶22

E. Any other equitable relief as may be deemed fit by this Hon’ble Tribunal be granted in favour of the Applicant in the circumstances of this case.

¶23

Brief facts of the application are as under :

¶24

2 The applicant is Proprietor of M/s. Narhari Jewellers. It is submitted by the applicant that his entire livelihood is on

¶25

[SBJ] (SA No.419/2024) Page 3 of 29

¶26

the said business which is being run in the shop premises i.e. Shop No.04 admeasuring 23.33 sq. yard, Ground Floor, Hriom Corner, Mauje Harsul, Survey No.191/2, Aurangabad. This small business is being run by the applicant with the help of employees. The applicant No.2 is the co-borrower with the principal borrower i.e. the applicant No.1.

¶27

3 Vide Application of the applicants dated 24.07.2019 under the MSME Business Loan, the respondent No.1 bank sanctioned the loan of Rs.21,60,000/- (Rupees Twenty-One Lacs Sixty Thousand only) and for the said loan, the applicants executed Mortgage Deed of the property mentioned in the Demand Notice. Thereafter, the respondent bank disbursed the amount of Rs.16,87,976/(Rupees Sixteen Lacs Eighty-Seven Thousand Nine Hundred Seventy-Six only) to the applicants on 24.07.2019 and also disbursed the amount of Rs.4,72,000/- (Rupees Four Lacs Seventy-Two Thousand only) to the applicants on 30.08.2019.

¶28

4 The applicants submitted that the applicants have paid the first installment of Rs.26,152/- towards the bank. Thereafter the applicants have paid the regular installment.

¶29

[SBJ] (SA No.419/2024) Page 4 of 29

¶30

But during the Covid-19 Pandemic period, the applicant has faced many financial difficulties in the business so also in his personal life and his financial condition became poor. The applicant has paid regular installment till 03.03.2022 and meanwhile the applicant has taken the moratorium facility for payment of the installment of the respondent bank till 03.03.2022. But unfortunately the applicant for the first time made the default of loan on 03.04.2024 and as such the loan account of the applicants classified as Non-Performing Asset (NPA) on 02.07.2022.

¶31

5 It is submitted by the applicants that thereafter, the respondent bank had issued Demand Notice under Section 13(2) of the SARFAESI Act on 06.07.2022 for an amount of Rs.23,07,689/(Rupees Twenty-Three Lacs Seven Thousand Six Hundred Eighty-Nine only). It is further submitted by the applicants that the respondent bank never sent the demand notice to the applicant and the applicant has never received any demand notice from the respondent bank under Section 13(2) of the SARFAESI Act.

¶32

6 It is further submitted by the applicants that if the applicant has received demand notice he would have raised the strong objection regarding miscalculation of the

¶33

[SBJ] (SA No.419/2024) Page 5 of 29

¶34

amount and unnecessary charges which are placed by the bank and played a fraud with the applicants. The applicant would have raised the objection regarding the legal charges of Rs.13,000/- mentioned on 08.03.2022 which itself shows the miscalculation.

¶35

7 The applicants further submitted that the applicants have deposited approximately Rs.11,00,000/- towards the said loan account in cash. The respondent bank without adhering the statutory compliances as envisaged under the statute has classified the account as NPA. The applicants submitted that “debt “ construed / alleged by the respondent No.1 bank cannot be classified or construed to be debt as defined U/Sec. 2(1) (ha) r/w Section 2(g) of SARFAESI Act, 2002 and RDBFI Act of 1993 respectively. The respondent No.1 bank has wrongly classified the loan account of the applicants as NPA. The action undertaken by the respondent No.1 bank cannot be termed to be the loan account classify as “Recoverable debt”. Even otherwise, Section 2 (j) of the Act of 2002 wherein definition of default has been given and the same has also not been properly adhered by the respondent No.1 bank and the same is in contravention to the Circular dated

¶36

[SBJ] (SA No.419/2024) Page 6 of 29

¶37

04.07.2011 which is known as Master Circular issued by the Reserve Bank of India, wherein Clause No.4 has been explained and enumerated regarding classification of assets.

¶38

8 It is submitted by the applicants that the respondent bank issued demand notice under section 13(2) of the SARFAESI Act on 06.07.2022 for the Loan Account No. L9001060718081712 and one more demand notice for the loan account No. L9001061124362789. The respondent bank had issued one more demand notice u/s 13(2) of SARFAESI Act in Indian Express on 21^st July, 2022 for an amount of Rs.2,91,611/-. If the applicant would have received the demand notice for Rs.23,07,689/- then there was no need for the respondent to publish the second demand notice in the Newspaper.

¶39

9 The applicants also submitted that respondent has made application before the District Magistrate under section 14 of SARFAESI Act. The said application does not contain the date of delivery of demand notices under section 13(2) issued by the respondent to the applicant. The Ld. District Magistrate mechanically passed the order dated 20.06.2023 in Misc. Application No.94/2023. The Ld. District

¶40

[SBJ] (SA No.419/2024) Page 7 of 29

¶41

Magistrate failed to consider the important factor of delivery of demand notice to applicants and therefore the order passed by him is bad in the eyes of law.

¶42

10 The applicants also further submitted that in the month of March-2022, the applicants went to the respondent bank for clearing the dues as there were some irregularities. After consultation with the respondent, the applicant deposited Rs.1,15,064/- and Rs.8,016/- but the employee of the respondent deposited the amount in the different loan account of applicants.

¶43

11 It is submitted by the applicants that the applicants have not received any notice for the change of interest rate which is necessary for the fair and just contact. The applicants have not received any possession notice from the respondent bank. The authorized officer of the respondent No.1 bank is also under obligation to comply mandatory compliances laid down under Rule 4 (1) and (2) of the Rules of 2002 wherein the authorized officer should make inventory of the property in the form given at Appendix II to the Rules of 2002 and should deliver a copy of those drawn inventory to the borrower. This procedure has also been totally violated / brushed aside by the

¶44

[SBJ] (SA No.419/2024) Page 8 of 29

¶45

respondent No.1 bank. The respondent bank is proceeding with recovery against the applicants as per their whims and desire and convenience which is unsustainable and untenable. .

¶46

12 The applicants further submitted that the respondent bank took possession of mortgaged property on 05.09.2024 and no notice was received by the applicants. On the date of possession, the authorities have taken the signature of the applicant on certain documents which prima facie shows the coercion. The respondent bank has not given any document to the applicant such as Panchanama etc. The applicant has not received any Auction Notice. The auction was scheduled on 18^th December, 2024 and the bid submission was on 16^th December, 2024, the applicant has downloaded the copy of auction notice through website only.

¶47

13 Aggrieved by the impugned order dated 20.06.2023 passed by the respondent No.2 which are certainly the measures under Section 14 of the SARFAESI Act, the applicant is constrained to challenge such action and measures relying on the grounds, which are marked as „I to XVI‟ as mentioned in Paragraph No.23 of this Securitisation

¶48

[SBJ] (SA No.419/2024) Page 9 of 29

¶49

Application.

¶50

14 The respondent No.1 bank filed its say / reply vide Diary No.2651/2025. The respondent No.1 and 2 bank opposed the contentions raised in the application. It is submitted by the respondent bank that the respondent bank sanctioned the Credit facility of Rs.21,60,000/- and Rs.2,60,000/- to the applicants subject to the execution of loan agreements and other necessary documents in favour of the respondent bank. The applicants have executed a mortgage in respect of the property situated at Shop No.04, Ground Floor, Hariom Complex, Mauje Harsul, Survey No.191/2, District Aurangabad admeasuring 23.33 Sqyds owned by Ajay Bandurao Maid. The applicants are the borrowers / guarantors of the respondent bank and the respondent bank is a secured creditor. As admitted by the applicants they have to make regular payment of the EMI‟s however the applicants committed default in repayment of the loan amount and as such the loan account of the applicant was classified as NPA on 02.07.2022 as per the norms of the Reserve Bank of India.

¶51

[SBJ] (SA No.419/2024) Page 10 of 29

¶52

15 The respondent bank further submitted that the applicants have not come before this Tribunal with clean hands and falsely pleaded that they have not been served with any demand notice U/sec. 13(2) of the SARFAESI Act, 2002. The demand notices dated 06.07.2022 are duly served on the applicants. The respondent bank had also published demand notice in two leading newspapers Indian express and Loksatta, both dated 21.07.2022. The respondents have taken symbolic possession of the secured asset in presence of the applicant No.2. The possession notice was duly affixed on the conspicuous part of the secured asset. The panchanama was duly drawn in presence of 2 panchas, however, the applicant no.2 refused to sign the same. The applicants have approached the Tribunal just to create hurdle in the recovery action initiated by the respondent bank.

¶53

16 The respondent bank further submitted that for realization of the secured debt, due from the borrowers i.e. the applicants, it is required to put the secured asset i.e. the said properties to sale and consequently vacant possession thereof is required to be taken. As such, the respondent bank filed request petition U/sec. 14 of the Securitisation

¶54

[SBJ] (SA No.419/2024) Page 11 of 29

¶55

Act bearing SA No.94 of 2023. Accordingly, the Learned District Magistrate, Aurangabad allowed the application U/sec. 14 of the SARFAESI Act, 2002 vide order dated 20.06.2023. On the basis of the said order the Tahsildar, Aurangabad took the physical possession of the secured assets and handed over the possession to the respondent bank on 05.09.2024. The respondent bank has issued notice to the applicants thereby calling upon them to remove the movable assets from the secured asset which is put to auction and a notice was also published in the newspaper Indian Express and Loksatta both dated 21.10.2024.

¶56

17 It is further submitted by the respondent bank that the respondent issued notice for sale of mortgaged property to the applicants. The applicants did not make any efforts to make payment of the due and payable amount to the respondent bank nor made any representation or proposal for settlement. The auction notice was also published in two leading newspapers Indian Express and Loksatta, both dated 27.10.2024. The notice also affixed on the property.

¶57

18 It is submitted by the respondent bank that the auction was scheduled on 18.12.2024 which was successful for an

¶58

[SBJ] (SA No.419/2024) Page 12 of 29

¶59

amount of Rs.22,11,111/- (Rupees Twenty-Two Lacs Eleven Thousand One Hundred Eleven only) and the respondent No.3 was declared as successful bidder. Again on 19.12.2024 the respondent bank issued notice to the applicants calling upon them to remove the movable assets from the secured asset which is put to auction and a notice was also published in newspaper i.e. Indian Express and Loksatta, both dated 29.12.2024. .

¶60

19 It is submitted by the respondent bank that as the respondent No.3 (Auction Purchaser) has deposited the entire amount, the sale certificate is issued in his favour on 11.02.2025 and possession is also handed over. The sale certificate is also duly registered vide Day Book No.1451/2025 dated 20.02.2025. The present application has been filed without any bonafide to stall the possession in order to defeat the recovery action. Since issuance of the demand notices, the applicants were granted several opportunities to pay the dues of the respondent bank but they failed to do so. Even after the sale notice, the applicants failed to exercise their right of redemption and as such now are not entitled for any relief. Hence, the present application deserves to be dismissed with heavy

¶61

[SBJ] (SA No.419/2024) Page 13 of 29

¶62

cost. The applicants were also granted several opportunities but failed to pay the dues and now after confirmation of the sale showed their willingness to settle the same. Hence, the present application alongwith all Interim Applications, if any are liable to be dismissed with heavy cost.

¶63

20 The respondent bank further submitted that the applicants are misleading this Tribunal by filing vague applications showing willingness to settle the account or to deposit the entire amount then why they have not deposited the amount when they got served with the notices. The applicants are raising the objections by way of filing this SA, just to prolong the matter and to create hurdle in the recovery proceedings initiated by the respondent. This SA has been filed by the applicants to delay and defeat the recovery proceedings initiated by the respondent bank. The allegations made in the application are totally afterthought and contrary to the records maintained by the respondent. The respondent has duly followed the procedure laid down under the Securitisation Act and Rules thereunder.

¶64

[SBJ] (SA No.419/2024) Page 14 of 29

¶65

21 The respondent bank further submitted that the grounds taken by the applicants are misconceived and not maintainable in law and also inconsistent and false and misleading. On perusal of the accounts extract filed on record by the respondent bank, it is crystal clear that the applicant has not paid the accrued interest and the account was overdrawn and is rightly classified and categorized as NPA as per the RBI Guidelines. It was prayed for dismissal of the Securitisation Application of the applicants with heavy costs.

¶66

22 The applicants have acknowledged the amount due from time to time therefore, the grounds taken to that effect are devoid of merits. The respondent bank has rightly charged the interest to the loan account in pursuance to the agreed contract and as per the security documents. The contents and allegations made in the application are vague. The amount stated in the notice is correct and legitimate. Therefore, considering the aforesaid facts and circumstances, the present SA filed by the applicant deserves to be dismissed and heavy costs be awarded to the respondent.

¶67

[SBJ] (SA No.419/2024) Page 15 of 29

¶68

23 The Respondent No.3, auction purchaser appeared in this matter and filed his reply vide Diary No.3089/2025 to the SA. The respondent No.3 opposed the relief claimed by the applicants in this SA. It is submitted by the respondent No.3, Auction Purchaser that he has participated in the E-auction proceedings by depositing 10% amount of the fixed price. He is placed the highest bid and declared as successful bidder. Thereafter, the respondent No.3, Auction Purchaser deposited more 15% and as such the respondent No.1 issued Sale Confirmation Advice dated 20.12.2024 to him. After Sale Confirmation Advice, the respondent No.3, Auction Purchaser deposited remaining entire amount of auction and the respondent No.1 issued the Sale Certificate to him on 11.02.2025.

¶69

24 It is further submitted by the respondent No.3, (Auction Purchaser) that after issuing the Certificate of sale dated 11.02.2025, the Registered Sale Deed was executed in his favour on 18.02.2025 and the possession of the property have been handed over to him. The respondent No.3, (Auction Purchaser) further submitted that the sale of the property is already confirmed and registered sale deed is also executed in favour of the respondent No.3, (Auction

¶70

[SBJ] (SA No.419/2024) Page 16 of 29

¶71

Purchaser) and the possession is also delivered by following due procedure of law.

¶72

25 It is further submitted by the respondent No.3, that only to harass the respondent, the applicant has filed the present SA. The respondent No.3 has purchased the property by participating in auction process by following due procedure of law. Therefore, the respondent No.3, Auction Purchaser prayed for dismissal of the Interlocutory Application as well as Securitisation Application with heavy costs.

¶73

26 The applicant filed Rejoinder vide Diary No.2746/2025. The applicant submitted that the respondent No.1 and 2 has filed an affidavit in reply making false statements against the record and facts of the case. In reply to Para No.5 the respondent Nos.1 and 2 submitted that the applicant has executed a mortgage in respect of the property situated at Shop No.4 Ground Floor, Hariom Complex Mauje Harsul, Survey No.192/1, District Aurangabad measures an area of 23.33 Sqyds and is owned by Ajay Bandurao Maid. As per applicants, the mortgaged area of the property is admeasuring 19.48 Sq. Mtr., and the respondent bank does not produce the cersai registration

¶74

[SBJ] (SA No.419/2024) Page 17 of 29

¶75

certificate.

¶76

27 The applicant further submitted in the rejoinder that the respondent No.1 and 2 in their reply to para No.6 have made a false statement that the respondent bank produced the strict proof of loan account declaring the NPA on 02.07.2022. In reply Para No.7 the respondent No.1 and 2 made false statement in respect of the demand notice u/s 13(2) served to the applicants but the respondent bank only annexed postal receipts Page No.22 in his reply and not an acknowledgement receipts. The respondent bank took symbolic possession on 02.01.2022 in respect of the property situated at Shop No.4 Ground Floor, Hariom Complex Mauje Harsul, Survey No.192/1, District Aurangabad measuring an area 19.48 Sq. Mtr., is owned by Ajay Bandurao Maid.

¶77

28 The applicants further submitted that respondent No.1 and 2 made false statement in Para No.10 of his reply that Ld. District Magistrate passed order u/s. 14 dated 20.06.2023 for taking over physical possession in respect of the property situated at Shop No.4 Ground Floor Hariom Complex Mauje Harsul, Survey No.192/1, Dist. Aurangabad measures an area of 23.33 Sqyds and is owned

¶78

[SBJ] (SA No.419/2024) Page 18 of 29

¶79

by Ajay Bandurao Maid. As a District Magistrate did not see the deed of mortgaged property measuring 19.48 Sq. Mtr.

¶80

29 The applicants further submitted that respondent No.1 and 2 made false statement in Para No.11 of his reply that the bank has issued notice for removal of the assets from secured assets but the applicant has not received said notice. As is mentioned in reply Para No.12, the auction notice dated 23.10.2024 is not received by the applicants. The respondent did not annex acknowledgement receipts to serve auction notice to the applicants.

¶81

30 The applicants further submitted that respondent No.1 and 2 made false statement in Para No.13 of his reply that the bank has again issued notice on 19.12.2024 for removal of the movable assets from the secured assets, which was put to auction and was published in newspaper Indian Express and Lokstta both dated 29.12.2024, but the applicants have not received said notices.

¶82

31 The applicants also submitted that the respondent No.3 has made false statement in para No.15 that he has deposited the entire amount and accordingly sale certificate was

¶83

[SBJ] (SA No.419/2024) Page 19 of 29

¶84

issued in his favour on 11.02.2025 and possession is also handed over. As per the applicant information, the auction purchaser not deposited amount within stipulated period.

¶85

32 In rejoinder, the applicants submitted that the respondent No.1 and 2 in their reply, stated that the sale certificate issued in favour of the respondent No.3, Auction Purchaser Mr. Sanjay Sahebrao Shelke, but in the auction amount deposited by Gurukrupa Plotting Center and Developers and the respondent bank not issued sale certificate in favour of the Gurukrupa Plotting Center and Developers. The respondent bank annexed said cheque as well as demand draft is his reply Page No.56 to 57. In para No.16 of reply of the respondent No.1 and 2, the respondent bank made false statement. Before e-auction, there was no notice sent by the respondent bank to redeem the property. The respondent no.3 has made a false statement in Para No.18 to 25 but the applicants approached on 19.12.2024 with a demand draft of Rs.24,06,000/- before the respondent bank to settle the loan account but as on date respondent bank did not decide OTS application. The applicants had purchased said property by registered sale deed dated 25.10.2018 for Rs.23,00,000/- (Rupees Twenty-Three Lacs

¶86

[SBJ] (SA No.419/2024) Page 20 of 29

¶87

only) whereas the respondent bank auctioned the said property for Rs.22,11,111/- in collusion with respondent No.3, (Auction Purchaser). The reply filed by the respondent No.1 and 2 is based on incorrect facts and misleading to this Court.

¶88

33 I have heard Learned counsel for the parties and gone through the material on record thoroughly and carefully. My findings on all raised issues are as under:-

¶89

34 The learned counsel for the applicants firstly argued that Demand Notice dated 06.07.2022 is defective as area of mortgaged property is recorded as 23.33 Sqyrds whereas it has been recorded in Sale Deed and other documents as 19.48 Sq. Mtrs. As per perusal of Demand Notice Exhibit-A-1 produced by the applicants, it was issued on 06.07.2022 showing the property measurement as 23.33 Sqyrds. The applicants have produced District Magistrate Aurangabad Order dated 20.06.2023 as Exhibit-B. Wherein the description of mortgaged property has been recorded as “all piece and parcel of Shop No.04, Ground Floor, Hariom Corner, Mauje Harsool, Survey No.191/2 District Aurangabad admeasuring 23.33 Sqyrds owned by Ajay Bandurao Maid”. The applicants have also produced

¶90

[SBJ] (SA No.419/2024) Page 21 of 29

¶91

Auction Notice Exhibit-D, wherein description of property has been shown as property situated at Shop No.04, Ground Floor, Hariom Corner, Mauje Harsool, Survey No.191/2, District Aurangabad admeasuring 19.48 Sq. Mtrs. The applicants have also produced copy of Sale Deed dated 25.05.2018 (Annexure A-2) alongwith rejoinder by which the applicants have purchased this property showing area 19.48 Sq. Mtrs. It may be noted herein that, if the suit property 19.48 Sq. Mtr., is converted into yards it comes out as 23.33 Sqyrds. Further, the description of property must be identifiable for the purpose of taking possession as well as for sale and therefore merely in some documents if area has been given in yards, that does not cause any prejudice to the applicants if the process of possession and sale has been conducted by the bank as per the provisions of the SARFAESI Act and Rules made thereunder. Therefore, the arguments raised by the learned counsel for the applicants on the above referred point has no weight.

¶92

35 The learned counsel for the applicants further argued that the respondent Nos. 1 and 2 (Bank) have not created any charged on CERSAI (Central Registry of Securitisation

¶93

[SBJ] (SA No.419/2024) Page 22 of 29

¶94

Asset Reconstruction and Security Interest of India) which is mandatory requirement for the respondent bank to initiate a securitization action against the applicants. Again this argument of the learned counsel for the applicants is devoid of merits as the respondent Nos.1 and 2 have produced on record CERSAI Certificate regarding registration of charge vide Pursis Diary No.3260/2025. On perusal of this document, the charge pertaining to equitable mortgage of the secured asset has been registered with CERSAI and hence, the Respondent Nos.1 and 2 have not violated this mandatory requirement of registration of charge with CERSAI.

¶95

36 The learned counsel for the applicants further argued that sale notice was not served to the applicants and as per post office report, it was returned back. It was argued that even no redemption notice under Section 13(8) of the SARFAESI Act has been issued to the applicants so that they could avail their right of redemption. It was further argued that even applicant moved application Annexure A-1 on 19.12.2024 for OTS of Rs.22,50,000/- (Rupees Twenty-Two Lacs Fifty Thousand only) alongwith DD for Rs.24,06,000/dated 02.01.2025 and hence, the sale in this case is illegal

¶96

[SBJ] (SA No.419/2024) Page 23 of 29

¶97

and the same is liable to be set-aside.

¶98

37 If the documents on record are appreciated in totality, it is established that the proper opportunity was provided to the applicants to get redeemed the suit property as per the provisions of Section 13(8) of the SARFAESI Act but the applicants failed to redeem the same within the stipulated period. Admittedly, Exhibit A-1 Notice under Section 13(2) of the SARFAESI Act was issued to the applicants on 06.07.2022. No representation on this notice was given by the applicants to the bank. This notice was also got published by the bank in two newspapers dated 21.07.2022 as Annexure-B and symbolical possession was also taken on 02.01.2022. The physical possession was also taken on 05.09.2024 as per District Magistrate Order dated 20.06.2023. The Sale Notice dated 23.10.2024 has been produced on record by the respondent Nos.1 and 2 as Annexure-E. The E-Auction Notice was also published in two daily newspapers namely Indian Express and Loksatta and copy of same has been produced as Annexure-F and E-Auction details are produced on record as Annexure-E dated 18.12.2024. As per Annexure-F, the auction notice was published in two leading newspapers on 27.10.2024 for

¶99

[SBJ] (SA No.419/2024) Page 24 of 29

¶100

the sale fixed on 18.12.2024 and therefore the 30 days‟ notice prior to the sale was issued to the applicants and the secured asset was purchased by the respondent No.3 for Rs.22,11,111/- (Rupees Twenty-Two Lacs Eleven Thousand One Hundred Eleven only).

¶101

38 The respondent bank has also issued notice dated 19.12.2024 as Annexure-H for removal of assets from the secured assets and the same was published in two newspapers i.e. Indian Express and Loksatta on 29.12.2024. The sale certificate has also been issued to respondent No.3 and copy of sale certificate dated 11.02.2025 has been produced by the bank as Annexure-I. The sale certificate has further been duly registered as per Annexure-J vide Day Book No.1451/2025 dated 20.02.2025 and possession of the secured asset has been handed over to the respondent No.3. Therefore, the respondent No.1 and 2 have made compliance of all the mandatory provisions of the Act while proceeding against the applicants in this case.

¶102

39 From the date of publication of Auction Notice dated 27.10.2024, the applicants have lost right of redemption and prior to it, they could have redeemed the secured asset as

¶103

[SBJ] (SA No.419/2024) Page 25 of 29

¶104

per Section 13(8) of the SARFAESI Act. No doubt, the applicants have produced on record application dated 19.12.2024 as Annexure A-1 whereby a copy of Demand Draft dated 02.01.2025 for Rs.24,06,000/- (Rupees TwentyFour Lacs Six Thousand only) has been produced but the applicants have already lost the right of redemption after publication of the Auction Notice on 27.10.2024 in two leading newspapers as referred above. Therefore, the respondent bank has conducted the possession as well as sale proceedings in accordance with the provisions of the Act and Rules made thereunder.

¶105

40 The learned counsel for the applicants argued another point that the bank has E-auctioned the secured asset for Rs.22,11,111/- (Rupees Twenty-Two Lacs Eleven Thousand One Hundred Eleven only) which is on lower side as this secured asset was purchased by the applicants for Rs.23,00,000/- (Rupees Twenty-Three Lacs only) vide Sale Deed Annexure A-2 dated 25.05.2018. It was also argued that auction purchaser has not deposited the auction money within stipulated period and on this ground also, the sale of the secured asset to respondent no.3 is liable to be set-aside.

¶106

[SBJ] (SA No.419/2024) Page 26 of 29

¶107

41 As per Annexure A-2 copy of Sale Deed dated 25.05.2018, the purchase value of the shop has been reflected as Rs.23,00,000/(Rupees Twenty-Three Lacs only). Admittedly, the respondent bank has sold away the same in e-auction for Rs.22,11,111/- (Rupees Twenty-Two Lacs Eleven Thousand One Hundred Eleven only). The applicants have not produced any valuation report of any authorized valuer in order to ascertain that the value of the property was more than Rs.23,00,000/- (Rupees TwentyThree Lacs only). When the mortgaged property is sold away by the financial creditor, nobody come forward to purchase the same being disputed and in such circumstances, some time the secured asset is to be sold at a some lower value. Sometime, even value of property goes down due to so many reasons. As the onus was on the applicants to prove that the value of the secured asset was more than Rs.23,00,000/- (Rupees Twenty-Three Lacs only) at the time of sale but they failed to discharge this onus. It is stated on behalf of the respondent bank that the auction purchaser has deposited the entire sale consideration and thereafter sale certificate has been issued as discussed above. The applicants have claimed that the auction

¶108

[SBJ] (SA No.419/2024) Page 27 of 29

¶109

purchaser has not deposited the auction money within stipulated period but the applicants have nowhere disclosed how much delay has been caused in making payment by the auction purchaser. More-so, the respondent bank is empowered even to grant extension of time for payment of auction money upto 90 days. In this case, the respondent bank has claimed that the auction purchaser has deposited the auction money within stipulated period.

¶110

42 No other point was argued before me.

¶111

43 In the result, the reliefs sought by the applicants in this SA are not sustainable in the eyes of law and this SA No.419/2024 is liable to be dismissed.

¶112

44 Hence, I pass the following order.

¶113

ORDER

¶114

(A) Securitisation Application No.419/2024 is hereby dismissed with no order as to costs.

¶115

(B) All the pending Interlocutory Applications stands disposed of accordingly in terms of this Judgment.

¶116

[SBJ] (SA No.419/2024) Page 28 of 29

¶117

¶118

compliance.

¶119

Pronounced in open Court. Date : 25.04.2025.

¶120

Sd/(Dr. J.R. Chauhan) Presiding Officer Debts Recovery Tribunal, Aurangabad

¶121

[SBJ] (SA No.419/2024) Page 29 of 29

Ms Narhari Jewellers v. Au Small Finance Bank Limited

Case brief

What is this about?

What did the court decide?

Ms Narhari Jewellers v. Au Small Finance Bank Limited

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Mahesh Kishan Joshi versus Bank of Baroda

Union Bank of India versus Mr. Kishor Shriram Patil

State Bank of India versus Ashok Bhimraj Darkunde

Late Mr Bapu Arjun Patil Decased versus Canara Bank

Shriram Narayan Venkatram versus Indusind Bank Limited

State Bank of India versus Sagar Uttam Bhingardive