Dismissed

Anita Mahapatra v. Bank of Baroda

DRT1 Aug 2025SA/438/2024

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal-II, Chandigarh dismissed the Securitization Application filed under Section 17 of the SARFAESI Act. The Tribunal held that the application was beyond limitation as the impugned Tehsildar notice was a ministerial act pursuant to an order passed by the District Magistrate in 2021. The Court also ruled that the relevant RBI Circular regarding regularization of accounts is i

What did the court decide?

Securitization Application dismissed as beyond limitation.

Anita Mahapatra versus Bank of Baroda — Banking and Recovery | DRT (2025)

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SA/438/2024

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DEBTS RECOVERY TRIBUNAL-II, CHANDIGARH

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SA/438/2024

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ANITA MAHAPATRA AND OTHERS Vs BANK OF BARODA

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01.08.2025 ITEM NO.63

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Argued by: Mr. Sanjay Joshi Advocate for the Applicants (SA) Mr. C.S. Pasricha Advocate for the Respondent Bank

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Smt. Anita Mahapatra 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 Authorised Officer, Bank of Baroda (Respondent Bank).

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The background facts are that Bank of Baroda had sanctioned some credit facilities to ‘M/s Apripz Overseas Limited’ (Applicant No.4). The Bank had also sanctioned Home Loan to Smt. Anita Mahapatra and Sh. Jagdish Mahapatra. Sh. Anuj Saluja was the guarantor in housing loan. Applicants had created security interest in respect of Flat No.103 situated at Faridabad in the housing loan. As far as the loan of ‘Apripz’ is concerned, the security interest was created in respect of a residential house owned by some third person. Admittedly, the loan of ‘Apripz’ had turned NPA and to recover the same, Bank had initiated the SARFAESI action and sold the house which was mortgaged in the case of ‘Apripz’. Since the account of ‘Apripz’ had been declared NPA, the Bank also declared the Home Loan account also as NPA, which had been taken by Smt. Anita Mahapatra and Sh. Jagdish Mahapatra. The Bank issued the notices under Sections 13(2) and 13(4) of the Act in respect of the Home Loan and also obtained the order from District Magistrate under Section 14 on 01.02.2021. Applicants had challenged the SARFAESI action by filing CWP No.4458 of 2021 in the Hon’ble High Court. Vide order dated 28.05.2024, the Hon’ble High Court disposed of the CWP with the observations that the Applicants may

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SA/438/2024

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DEBTS RECOVERY TRIBUNAL-II, CHANDIGARH

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well approach the Debt Recovery Tribunal and for that, Applicants were granted 15 days’ time by way of interim protection. On 20.07.2024, Applicants filed the present SA whereby they challenged the notice dated 11.07.2024 issued by the Tehsildar to them in pursuance to the order of District Magistrate dated 28.01.2021.

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Mr. Sanjay Joshi, counsel for the Applicants argues that this SA is within limitation as the limitation has to be calculated from the date, the Applicants had obtained the certified copy of the order passed by the Hon’ble High Court which was obtained by them on 07.06.2024. Mr. Joshi further argues that the Applicants were bona fidely pursuing their remedy before the Hon’ble High Court. Mr. Joshi further argues that the business loan stands adjusted. As per the directives of the RBI contained in the Master Circular dated 01.07.2011, Para No.2.2, i.e. treatment of accounts as NPA, the business account is no more NPA and the Bank be directed to regularize the Home Loan account. He further argues that out of two Home Loan accounts, one Home Loan Account stands adjusted. As far as the other Home Loan Account is concerned, the payment is being made in the same regularly as the loan had been granted for 20 years period. Mr. Joshi further argues that since the Applicants are making the payment regularly, the SARFAESI action be quashed. Mr. Joshi further argues that without prejudice to their rights, Applicants be allowed to pay Rs.5 lac per quarter.

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Per contra , Mr. C.S. Pasricha argues that a sum of Rs.22 lac is still outstanding plus interest. He further argues that there is no merit in the SA. In fact, the SA is time-barred. He argues that the Applicants had earlier challenged the DM order before the Hon’ble High court which disposed of the case on 28.05.2024. He further argues that the Applicants have not moved any application under Section 14 of the Limitation Act. Even otherwise, the Applicants should have approached this Tribunal and not

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SA/438/2024

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DEBTS RECOVERY TRIBUNAL-II, CHANDIGARH

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rushed to the Hon'ble High Court. As far as the Circular of RBI is concerned, Mr. Pasricha argues that the same is not applicable. The Circular is applicable where the loan account turns NPA and the borrower makes the payment of the same and there is only some temporary deficiency. He further argues that in the case in hand, on account of the fact that one of the accounts had turned NPA, the Bank had to take SARFAESI action and sell the property and recover its dues. Mr. Pasricha further argues that in these circumstances, the RBI Circular would have no applicability. He further argues that the time period which the Applicants want to make the payment, is not acceptable to the Bank. He has also drawn my attention to the order dated 28.07.2025 passed by this Tribunal whereby the interim order was extended subject to the payment of Rs.10 lacs which has not been deposited by the Applicants.

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I have considered the rival contentions.

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As far as the applicability of the RBI Circular is concerned, I am of the considered view that para No.2.2 of the Circular dated 01.07.2011 is not applicable to the facts of the case in hand. In the case in hand, the Applicants did not make the payment and did not regularize the business account. In fact, the business account was closed by the Bank as it had taken the SARFAESI action and recovered the money by the sale of the property. Accordingly, para No.2.2 of the RBI Circular is not applicable to the case in hand. Para No.2.2 of the RBI Circular is applicable where there is temporary deficiency and the borrower regularizes the account. Para No.2.2 of the Circular is not applicable where the Bank is able to recover the money by the sale of secured asset under the SARFAESI Act.

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In this case, the Applicants have challenged the notice issued by the Tehsildar dated 11.07.2024 which was issued by the Tehsildar in pursuance to the order of DM dated 28.01.2021. Applicants had earlier approached the

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SA/438/2024

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DEBTS RECOVERY TRIBUNAL-II, CHANDIGARH

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Hon’ble High Court. The Tehsildar notice is a ministerial act only and is not a statutory order passed by any authority competent under the law. The Tehsildar is simply executing the order of DM. Since the Applicants were aware of the fact that DM has already passed the order in the year 2021, I am of the considered view that this SA is beyond limitation and the same is hereby dismissed.

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A copy of this Final Order be furnished to all the parties free of cost.

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Pronounced in the open Tribunal (A.S. Narang) Dated: 01.08.2025 Presiding Officer ANJ DRT-2, Chandigarh (Additional Charge)

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Anita Mahapatra v. Bank of Baroda

Case brief

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Anita Mahapatra v. Bank of Baroda

Case brief

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