Allowed

Pramod Manikrao Joshi v. the Pandharpur Urban Co. Op. Bank Ltd. Pandharpur

DRT4 Oct 2025SA/435/2024

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal allowed an applicant's challenge against a bank's recovery actions, finding that loan accounts were settled with zero balance after discharge of guarantors, rendering Section 14 proceedings illegal.

What did the court decide?

Securitisation Application allowed; impugned order passed by District Magistrate and subsequent possession notices set aside; parties to bear their own costs.

Pramod Manikrao Joshi versus the Pandharpur Urban Co. Op. Bank… — Banking and Recovery | DRT (2025)

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Presented on: 23.12.2024 Registered on: 27.12.2024 Decided on: 04.10.2025 Duration: Y M D 00 09 12

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IN THE DEBTS RECOVERY TRIBUNAL AT AURANGABAD (Before Dr. J.R. Chauhan Presiding Officer) SECURITISATION APPLICATION No.435/2024

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Pramod S/o Manikrao Joshi, Age : 52 Years, Occu : Agri/Business, R/o. Plot No. 9, Survey No. 147, CTS No. 3247, M.C. House No. 7/1150/14, Majge Nagar, Latur - 413512.

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… Applicant

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Versus

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The Pandharpur Urban Co-operative Bank, Branch Latur, Dist. Latur, Kamdar Road, Latur 413512 And

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Head Office, Navi Peth, Pancharpur, Dist. Solapur.

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Authorized Officer, The Pandharpur Urban Co-operative Bank, Branch Latur, Dist. Latur, Kamdar Road, Latur 413512

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And

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Head Office, Navi Peth, Pancharpur, Dist. Solapur.

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Shri Ramakant Pandharinath Barure, Age :- Major, Occupation:R/o Namdeo Niwas, Murti Nagar,

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[SBJ] (SA No.435/2024) Page 1 of 19

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Latur 413512,

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Sachin Prakash Valase, Age : Major, Occupation :- R/o Vitthal Society, Near Krupasadan English School, Latur - 413512. …Defendants

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APPEARANCES

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For the Applicant Mr. A.A. Yadkikar - Advocate For Defendant Nos.1 &2 Mr. G.K. Naikthigale – Advocate For Defendant Nos., 3 and 4 None

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JUDGMENT (Delivered on 04^th October, 2025)

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This Securitization Application No.435/2024 under Section 17 of the Securitisation and Reconstruction of Financial Assets And Enforcement of Security Interest Act, 2002 (hereinafter referred as SARFAESI Act) has filed by the applicant against the respondents.

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The brief facts of the Securitisation Application are that; the respondent bank (Respondent No.1 & 2) granted financial assistance to the applicant in the year 2013 for Rs.35,00,000/- (Rupees Thirty-Five Lacs only) vide Loan Account No.016118/000049 and Loan Account No.016118/000061 and the property as described in Para

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No.1 of the Securitisation Application was mortgaged to the bank. The Respondent No.3 and 4 stood as guarantors however they have not mortgaged any property against the said loan facilities. Due to rise in construction costs, the loan provided by the bank was not sufficient for completion of the construction project and no income could be generated out of the project for which the loan was raised and ultimately, the bank classified the loan account as Non-Performing Assets (NPA).

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Thereafter the respondent bank issued Demand Notice under Section 13(2) of the SARFAESI Act on 10.07.2015 for Rs.82,28,574/- (Rupees Eighty-Two Lacs, Twenty-Eight Thousand, Five Hundred and Seventy-Four only). The respondent bank also issued notice under Section 13(4) of the SARFAESI Act on 15.11.2018 for taking possession of the secured asset on 28.11.2018 but the applicant did not receive any possession notice. The respondent bank has also obtained order dated 30.03.2023 from the District Magistrate, Latur without verifying the material for taking physical possession. The applicant approached the bank, held meeting and ultimately, the bank had communicated the OTS amount worth Rs.1,10,00,000/- (Rupees One

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Crore, Ten Lacs only) to the applicant.

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It is further submitted that applicant deposited a total amount of Rs.1,08,00,000/- (Rupees One Crore, Eight Lacs only) within stipulated time and only Rs.2,00,000/(Rupees Two Lacs only) was remained to be paid. Thereafter, the applicant once again approached the bank to seek some breathing time to pay the balance amount of Rs.2,00,000/- (Rupees Two Lacs only). However, the CEO of the bank Mr. Umesh Virdhe as well as Mr. Unhale, Mr. Deshpande and the Recovery Officer Mr. Munna Jadhav insisted the applicant to pay additional Rs.3,00,000/(Rupees Three Lacs only) towards interest and also compelled the applicant to write a letter in this regard. The applicant, considering the huge payment made by him and having no other alternative, was constrained to address a letter dated 10.08.2022 showing willingness to pay Rs.2,00,000/- (Rupees Two Lacs only) towards the balance amount and Rs.3,00,000/- (Rupees Three Lacs only) towards interest. The applicant had also requested the bank to release the guarantors from their liability. The applicant deposited amount of Rs.2,00,000/- (Rupees Two Lacs only) on 11.08.2022 and Rs.3,00,000/- (Rupees Three

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Lacs only) on 19.08.2022 and in this manner, the applicant had deposited the entire One Time Settlement amount alongwith interest. The respondent bank was pleased to release the guarantee of Mr. Ramakant Barure vide its letter dated 19.08.2022. The applicant requested the bank to issue No Dues Certificate and loan account statement but the bank avoided the same. Thereafter applicant visited the official website of CIBIL to know the status of his loan account and it was found that the loan account was closed by the bank on 23.09.2021 and the balance amount was shown as zero. Similarly, the second loan account was also closed by the bank on 29.09.2022 by showing the balance amount as zero. In this manner, the entire dues paid by the applicant against both the loan accounts enabled the bank to close both the loan accounts and report to the CIBIL Authority. The applicant received SMS on his mobile on 30.09.2022 confirming the balance of 2^nd Loan Account as zero. The applicant requested the bank to issue No Dues Certificate vide Letter dated 23.05.2023 and further reminded vide Letter dated 06.06.2023 but the applicant was under utter shock and dismay when the respondent bank vide Letter dated

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12.06.2023 mentioned that an amount of Rs.33,36,332/(Rupees Thirty-Three Lacs Thirty-Six Thousand Three Hundred and Thirty-Two only) is still due and payable by the applicant. The respondent bank got issued possession notice dated 26.12.2023 after obtaining order dated 30.03.2023 from the District Magistrate Latur and thereafter in the month of October, applicant approached the Hon’ble High Court of Bombay Bench at Aurangabad by filing Writ Petition No.1336/2024 assailing the order passed by the learned District Magistrate, Latur but the Hon’ble High Court vide its Order dated 05.02.2024 disposed of the said Writ Petition on the account of alternate remedy available under the SARFAESI Act. As the respondent bank initiated SARFAESI action, the present application has filed by the applicant challenging the action of the bank on the ground that the action of the bank is completely illegal, arbitrary and contrary to the principles of natural justice. The applicant has paid the entire One Time Settlement amount alognwith the interest and the statement of account showing balance nil, the bank has even reported the CIBIL Authority about closure of the loan accounts. The alleged demand notice as well as

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possession notice was not served upon the borrowers as well as guarantors. The order from the District Magistrate under Section 14 of the SARFAESI Act was obtained by way of misrepresentation. The respondent bank upon receipt of agreed One Time Settlement amount and interest thereon, has released the guarantee of Mr. Ramakant Barure. The action of the bank are against the provisions of the SARFAESI Act and the same are illegal and prayed for declaring the demand notice, District Magistrate Order dated 30.03.2023 as illegal and may be quashed and further directed the bank to restrain from taking physical possession in pursuance to the order dated 30.03.2023 passed by the learned District Magistrate Latur in respect of the secured asset and directed the bank to issue No Dues Certificate to the applicant and release the charge created against the secured asset.

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The respondent Nos.1 and 2 (Bank) filed Reply Affidavit alleging therein that the impugned order under Section 14 of the SARAESI Act has been passed on 30.03.2023 by the District Magistrate, Latur and the Securitisation Application is barred by the limitation. The applicant committed persistent defaults in making repayment of the

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[SBJ] (SA No.435/2024) Page 7 of 19

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loan and the answering respondents had no other option and classified the loan as Non-Performing Asset and thereafter sent demand notice under Section 13(2) of the SARFAESI Act to the applicants for Rs.82,28,574/- (Rupees Eighty-Two Lacs Twenty-Eight Thousand Five Hundred and Seventy-Four only) and demand notice was published in Daily Marathi and English newspaper. There was no question of entertaining the request of the applicant for One Time Settlement and communicating One Time Settlement figure. Even if application made by the borrower for One Time Settlement scheme, only he has satisfied the required criteria. Under the scheme he is not entitled for one time settlement. There is no question of considering his One Time Settlement proposal by the bank as he was persistent defaulter for more than almost 10 years and as such the bank is justifying in proceedings against the applicant under section 14 of the SARFAESI Act. The said CIBIL score / report showing the status of the account as closed is denied. As the huge amount was pending in the account and the amount of write of does not mean that the amount was waived off. There is no question of releasing guarantee of Mr. Ramakant Barure

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[SBJ] (SA No.435/2024) Page 8 of 19

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and there is no question of issuing No Dues Certificate. The impugned order of possession and notice of possession are legal and the same are not liable to be setaside on any of the grounds as alleged by the applicant. The applicant cannot take benefit of his own wrong as he has not paid the entire outstanding amount and he cannot take any benefit of CIBIL Report. The respondent bank has not violated Rule 8(1) and (2), the applicant does not fulfill any of the condition for One Time Settlement and the applicant has given false offer of One Time Settlement and payment. The applicant has willfully suppressed the updated CIBIL report and by pointing out the outdated civil report has misrepresented before this Tribunal to pass interim order. In the updated CIBIL reports reflected that the loan account was not at all closed but it is write off meaning thereby liability of the borrower / guarantor to pay the loan amount still persists as the loan is not waived off. The respondent bank denied other allegations of the Securitisation Application and dismissal of this same with heavy costs was prayed for.

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It may be noted here that the respondent No.1 and 2 have also filed Additional Affidavit at Diary No.6356/2025 and

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[SBJ] (SA No.435/2024) Page 9 of 19

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also taken the same defence as taken in the main reply affidavit. It was further submitted that there was no question of entertaining request for One Time Settlement by the bank on July 11, 2022. The respondent bank submitted a proposal to its Head Office recommending the write off certain loan accounts. This proposal is encompassed 338 borrower accounts collectively amounts of Rs.23,28,34,243.09Ps. (Rupees Twenty-Three Crores, Twenty-Eight Lacs, Thirty-Four Thousand, Two Hundred Forty-Three and Paisa Nine only). The Board of Directors approved its write off vide its Resolution No.118, dated 29^th June, 2022. The applicant’s loan accounts were included in this write off and copy of the same has been placed as Exhibit R-3. It is further alleged that the applicant made a complaint to the Reserve Bank of India which was disposed off as not maintainable. It is further alleged that in the given facts and circumstances of the case, there is no case made out by the applicant to cause interference in the order passed by the District Magistrate, Latur for taking possession of the secured asset under the SARFAESI Act.

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I have heard the learned counsel for the parties and gone

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[SBJ] (SA No.435/2024) Page 10 of 19

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through the entire material on record thoroughly and carefully. My findings are as under:-

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FINDINGS

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In this case, the applicant has claimed that both the loan accounts were settled under One Time Settlement Scheme and the First Loan Account was closed by the bank on 23.09.2021 and the Second Loan Account was closed by the bank on 29.09.2022 and the entry was also recorded in the CIBIL Record confirming that the account was closed. On the otherside, it is claimed by the bank that the account was not closed but arrears of worth recovery Rs.33,36,362/- were write off and not waived off. Further there was no One Time Settlement.

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Now, it has to be appreciated by the entire available record whether both the loan accounts of the applicant were settled under One Time settlement or remaining balance amount was write off or waived of? In case, if it is established that remaining balance amount was write off, then the bank has right to proceed further against the borrower to realize its dues in view of Judgment Salim Akbarali Nanji Vs. Union of India and Others., (2006) 5

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Supreme Court Cases 302 .

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The applicant has produced on record the statement of account of First Loan Account bearing Code No.49 from Page No.80 to 89 of the SA. The status of the account has been shows as closed and it was closed on 31.03.2021 and zero balance was outstanding. The applicant has also produced on record the statement of loan account.

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It has been noted that in Column of Remarks, “Arrear Recovery discount OTS as on 31.03.2021” at Page No.89 of the SA and last payment was deposited Rs.29,16,327/- by the applicant and account was closed with zero balance.

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The applicant has also produced statement of account of other loan account bearing Code No.61 from Page No.90 to 99 of the SA which was closed on 19.08.2022 as per statement of account and status of account has been shown as closed with zero balance. It may be noted here that in column of remarks “Arrear Recovery Write off as on 19.08.2022” has been recorded pertaining to amount of Rs.33,36,362/-. In the CIBIL report submitted by the applicant from Page No.59 to 62 of the SA, current balance as well as amount overdue has been shown as closed with

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[SBJ] (SA No.435/2024) Page 12 of 19

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zero balance. Therefore, the CIBIL report is in corroboration with the statement of accounts produced by the applicant.

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It may be noted here that the respondent bank discharged the guarantee of the guarantor by issuing letter on 19.08.2022 and copy of the same in Marathi has been placed at Page No.64 of the Securitisation Application and English translation at Page No.65 of the SA and the letter addressed to the applicant borrower that Shri Ramakant Pandharinath Barure has been discharged for liability as guarantor who stood as guarantor to the borrower of our Latur Branch of Shri Pramod Manikrao Joshi. This letter regarding discharging the liability of the guarantor further strengthens the case of the applicant that the loan accounts of the applicant / borrower were settled and if the balance amount has been write off as claimed by the respondent bank, then there was no occasion for the respondent bank to discharge the guarantor from his liability pertaining to the loan of the present applicant.

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It is worthwhile to mention here that even there was no occasion for the respondent bank to write off the amount of Rs.33,36,362/- (Rupees Thirty-Three Lacs, Thirty-Six

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Thousand, Three Hundred and Sixty-Two only) reason being that there was regular payment being made by the borrower. As per statement of account of Loan Account Code No.61 at Page No.93 of Securitisation Application, Rs.8,41,000/- (Rupees Eight Lacs, Forty-One Thousand only) was deposited on 31.03.2021, Rs.10,00,000/- (Rupees Ten Lacs only) was deposited on 15.05.2021, Rs.5,00,000/(Rupees Five Lacs only) was deposited on 20.05.2021, Rs.6,00,000/- (Rupees Six Lacs only) was deposited on 28.05.2021, Rs.4,00,000/- (Rupees Four Lacs only) was deposited on 02.06.2021, Rs.5,00,000/- (Rupees Five Lacs only) was deposited on 07.06.2021, Rs.90,000/- (Rupees Ninety Thousand only) was deposited on 10.06.2021, Rs.5,00,000/- (Rupees Five Lacs only) was deposited on 30.03.2022, Rs.3,48,470/- (Rupees Three Lacs Forty-Eight Thousand Four Hundred Seventy only) was deposited on 13.04.2022, Rs.1,50,000/- (Rupees One Lac Fifty Thousand only) was deposited on 16.04.2022, Rs.5,00,000/- (Rupees Five Lacs only) was deposited on 26.05.2022, Rs.2,00,000/(Rupees Two Lacs only) was deposited on 11.08.2022 and lastly Rs.3,00,000/- (Rupees Three Lacs only) was deposited on 19.08.2022. When the applicant / borrower

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[SBJ] (SA No.435/2024) Page 14 of 19

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was regularly paying the amount from March, 2021 till closure of the accounts by 19.08.2022, then there was no occasion for the respondent bank to close the account and write off the amount worth Rs.33,36,362/- (Rupees ThirtyThree Lacs, Thirty-Six Thousand, Three Hundred and Sixty-Two Only). In one account it has been shown as settled under One Time Settlement whereas in another account in remarks column “the arrear recovery has been written as Write off”. The entry of deposits as referred above, are in corroboration with the pleadings taken by the applicant as account was settled for Rs.1,10,00,000/(Rupees One Crore, Ten Lacs only) and the applicant paid the entire amount regularly within stipulated period except Rs.2,00,000/- (Rupees Two Lacs only) which was paid later on but the bank claimed further Rs.3,00,000/(Rupees Three Lacs only) as interest for delayed period and that was deposited by the applicant on 19.08.2022 and the account of the applicant was closed on the very day after adjusting the interest part of the loan under settlement.

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The respondent bank has produced details of all the write off amount alongwith additional affidavit at Page No.17

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[SBJ] (SA No.435/2024) Page 15 of 19

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thereof wherein against the loan account of the present applicant, principal part of the loan of account Code No.61 has been shown “Nil” amount and interest column has been shows as Rs.33,36,362/- (Rupees Thirty-Three Lacs, Thirty-Six Thousand, Three Hundred and Sixty-Two Only). Therefore, it is concluded that there was no outstanding amount pertaining to principal part and that is the reason that the respondent bank has settled the loan account and waived the remaining part of the interest component.

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The respondent bank filed another details / list of write off accounts on 25.08.2025 vide Diary No.6898/2025 which is quite different from the earlier details filed alongwith the additional affidavit. In this document, in details of Account Code No.61 of the applicant, has shown principal amount of Rs.9,35,743/- (Rupees Nine Lacs Thirty-Five Thousand Seven Hundred Forty-Three only) and arrear balance as Rs.33,71,038/- (Rupees Thirty-Three Lacs Seventy-One Thousand Thirty-Eight only) and total arrear has been shown as Rs.43,06,781/- (Rupees Forty-Three Lacs Six Thousand Eighty-One only). Therefore, this document is quite contrary with the earlier details filed

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[SBJ] (SA No.435/2024) Page 16 of 19

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alongwith the additional affidavit. Therefore, the respondent bank is playing even hide and seek with this Tribunal and producing different details at different occasions as per their convenience. Hence, from the above record, it is established that the loan account of the applicant was settled after adjusting the interest part of the loan.

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If it is so proved on record, the proceedings initiated by the respondent bank under Section 14 of the SARFAESI Act are not sustainable and impugned order passed by the District Magistrate, Latur dated 30.03.2023 and subsequent Possession Notice dated 10.12.2024 issued by the Circle Officer and all other subsequent proceedings are liable to be set aside.

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It was also submitted on behalf of the respondent bank that Securitisation Application is not within limitation. It may be noted here that initially the applicant has challenged District Magistrate, Latur order by filing a Writ Petition before the Hon’ble High Court and the Hon’ble High Court vide order dated 05.02.2024 disposed of Writ Petition No.1336/2024 that statutory efficacious remedy is available to the applicant and the liberty was granted to

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the applicant to approach the Competent Forum and the time spent by the applicant of this Court from 25.10.2023 till passing of this order would be a good ground for condonation of delay. Therefore, the Securitisation Application cannot be said to be barred by limitation.

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In view of above discussion, the measures adopted by the respondent bank under section 13(2) and under Section 13(4) of the SARFAESI Act, impugned order dated 30.03.2023 passed by the District Magistrate, Latur and the Possession Notice dated 10.12.2024 issued by the Circle Officer, Latur and all the subsequent actions are liable to be set aside.

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