Dismissed

Mehar Agriculture Works v. State Bank of India

DRT22 Jul 2025SA/429/2024

Case brief

AI extract

What is this about?

In this Securitization Application under the SARFAESI Act, the applicants, who were the security owners, challenged the bank's actions claiming lack of notice service and failure to constitute an MSME Committee. The Court dismissed the application, holding that the applicants admitted notice service in their OTS proposal and never requested MSME Committee placement.

What did the court decide?

The Securitization Application is dismissed along with any pending interim applications; no relief granted to the applicants.

Mehar Agriculture Works versus State Bank of India — Banking and Recovery | DRT (2025)

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SA No. 429 of 2024

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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SA No. 429 of 2024

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M/s Mehar Agriculture Works and others

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Versus

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A.O. State Bank of India

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Dated: 22.07.2025

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Item No. 18

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Argued by: Sh.ABS Sidhu, Counsel for the Applicants.

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Sh.Devender Rattan, Counsel for the Respondent Bank.

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M/s Mehar Agriculture Works and others (Applicants) have filed this Securitization Application under Section 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), against the Authorized Officer, State Bank of India (Respondent).

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As per Applicant, it is an MSME unit. In the year 2012, Respondent Bank had sanctioned a CC Limit of Rs. 30 lacs and in 2014 it was enhanced to Rs. 35 lacs and it was further renewed in the year 2017. To secure the same, Applicants had created security interest in respect of 02 kanals 05 marlas of land. Applicants did not make the repayment of the loan. The account turned NPA. On 27.01.2020, Bank issued the notice under Section 13(2) of the SARFAESI Act. On 04.10.2022, it (SBI) issued the notice under Section 13(4). On 04.01.2024, Bank obtained the order from DM under Section 14 of the SARFAESI Act. Applicants had submitted an OTS proposal on 18.07.2024. On 20.10.2024, Applicants filed the present. It is stated that the possession of the secured asset is fixed up for today.

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Notice of the SA was given to the respondent, which has filed the reply.

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Mr.Sidhu, counsel for the Applicants has argued that Applicant is a MSME unit. As per RBI guidelines, before declaring the account NPA, Bank should have placed the matter before the MSME Committee. However, it was not done. He further argued that Applicants were never served with the notice under Section 13(2) of the SARFAESI Act. Respondent has not produced on record any material that the notice under Section 13(2) was duly served upon the Applicants.

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SA No. 429 of 2024

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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He further argued that earlier Applicants had submitted and OTS proposal of Rs.23 lacs and he is ready to give a fresh proposal today. He further submitted that Applicant is ready to deposit Rs. 10 lacs today to ward off dispossession. Mr.Sidhu has placed reliance upon the judgment passed by the Hon’ble Supreme Court in M/s Pro Knits versus The Board of Directors of Canara Bank, decided on 01.08.2024.

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Per contra , Mr. Rattan, counsel for the Respondent Bank has argued that Applicants in their OTS proposal dated 18.07.2024 have admitted the service of notice under Section 13(2). Further, Applicants never made any request to the Bank for placing the matter before the MSME Committee. Mr.Rattan submitted that a sum of Rs. 95 lacs and odd sum is due from the Applicants. There is no merit in the present SA and the same be dismissed.

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I have considered the rival contentions.

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Applicants never made any request to the Bank for placing the matter before the MSME Committee. The plea of the Applicants that they were never served with the notice under Section 13(2) is wrong as Applicants themselves in their OTS proposal dated 18.07.2024 have admitted the service of notice under Section 13(2) of the SARFAESI Act. Once, Applicants submitted an OTS proposal, it does not lie in their mouth to argue that the notices under Section 13(2) and 13(4) of the SARFAESI Act were not served upon them. That apart, Applicants at this stage cannot be allowed to argue that their case was not placed before the MSME Committee as Applicants never made any such request to the Bank. I am of the considered view that there is no merit in the present SA. The same is hereby dismissed . All the pending IAs, if any, are also disposed of, accordingly.

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Registrar is directed to send a copy of this order to all the parties, as per rule. Thereafter, file be consigned to record room after due compliance.

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(A S Narang) Presiding Officer Pronounced in open court DRT-I, Chandigarh

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Manoj/22.07.2025

Mehar Agriculture Works v. State Bank of India

Case brief

What is this about?

What did the court decide?

Mehar Agriculture Works v. State Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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