Dismissed

Rajesh Kumar v. Indian Bank (Allahabad Bank)

DRT1 Jan 2025SA/57/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal Patna dismissed an application seeking to quash SARFAESI action and auction notices. The tribunal held that the application was not maintainable because necessary co-borrowers and guarantors who received notices were not impleaded, risking multiplicity of proceedings.

What did the court decide?

The application challenging the SARFAESI action and auction notices was dismissed with no orders for costs.

Rajesh Kumar versus Indian Bank (Allahabad Bank) — Contract and Commercial Disputes | DRT (2025)

DRT,PATNA

SA 57 of 20241J1

DEBTSRECOVERYTRIBUNALPATNA

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PresidingOfficer:Shri KaushalendraYadav

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SA- 57of 2024

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Rajesh Kumar (Mortgagor), Son of Late Gajendra Kumar Singh, resident of Village :- Khusha Ichak, Post - Chipura Khurd, P.5. - Gaurichak, District - Patna,Pin Code- 804453, Bihar,

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Mis Maa Laxmi Rice Mill (Borrower), a proprietorship concerned, through its proprietorship Usha Devi, Wlo Late Ganendra Kumar Singh, having its registered office at Khusha Ichak, Post - Chipura Khurd, P.5. - Gaurichak, District - Patna, Pin Code - 804453, Bihar.

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. Applicants

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Versus

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Authorised Officer, Indian Bank (Previously Allahabad Bank), Address: - S.A.M.V.,Patna Allahabad, House No. - 41,Road No.5, East Patel Nagar, Patna - 800023.

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Indian Bank (Previously Allahabad Bank), Through S.A.MV., Address - House No. - 41,Road No.5, East Patel Nagar, Patna - 800023.

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--respondents

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Present:

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: Sh.BholaShankar,Advocate

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Forthe Applicant

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: Dr.BinodKr.Jha,Advocate

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Forthe RespondentBank

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Dated:01.01.2025

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JUDGMENT

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Present application has been filed with a prayer to quash entire SARFAESIaction taken against the properties of applicant alongwith the possession notice as well as sale notice issued by the respondent bank.

DRT,PATNA

SA57 of 2024 IJ]

The brief fact of the case is that the applicants availed various credit facilities from the respondent bank and mortgaged the property towards security of the loan. Due to default in repayment of dues of the bank, the accounts were classified as NPA on 28.04.2022. In order to recover outstanding dues, the respondent bank initiated SARFAESI Action against the borrower & guarantor by issuing Demand Notice dated 06.05.2022u/s 13(2)of the act calling upon the borrower to make the payment of RS.1,75,84,928.05.Thereafter, the respondent took possession of the property by issuing Possession Notice dated 13.10.2022u/s 13(4) of the SARFAESI Act. The respondent bank proceeded further and put the property on auction sale by issuing auction sale notice dated 02.02.2024fixing the date of auction sale on 21.02.2024. Aggrieved from the sale notice present SA has been filed by the applicants.

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It is submitted by the Ld. Counsel of applicant that without prior information, the accounts of the applicants were declared as NPA which is gross violation of the guidelines of RBI dated 17.03.2016.The applicants approached the bank for regularizing of account and on instruction deposited Rs.63,69,000/- in the account to regularize the same but the bank did not regularize the account in Standard category while the accounts were under limit on deposit of above said amount. Suddenly, on 08.02.2024respondent bank served a E- auction sale notice dated 02.02.2024where the date of auction sale of property has been fixed as 21.02.2024. However, due to intervention of this court vide order dated 16.02.2024the sale could not be conducted. Prior to service of sale notice, the respondent bank neither served the demand notice nor the possession notice to the applicants. The possession notice was neither affixed on secured assets nor published in two leading newspapers. The property were never registered under the central registry CERSAI.

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DRT,PATNA

SA 57 of 2024 U)

On the contrary, ld. Counsel of the respondent bank submits that the borrowers availed the loan facilities granted by the respondent bank but failed to maintain the financial norms of the bank and not submitted the stock statement of the firm/Rice Mill. They have contravened the terms and conditions of agreement and are avoiding payment of bank dues in spite of several assurances as well as demand notice issued by the bank. Hence, the accounts were declared as NPA on 28.04.2022 and SARFAESI action has been initiated by issuing demand notice dated 06.05.2022u/s 13(2) of the act calling upon the borrower to make the payment of RS.1,75,84,928.05but the borrower failed to repay the amount. Hence, the respondent bank issued possession notice dated 13.10.2022 against the secured assets. The possession notice was sent to the borrower as well as guarantors through post and also published in Hindustan and Hindustan Times on 19.10.2022.Further, after getting valuation of the property from approved valuer of bank, the properties were put on auction sale by issuing auction sale notice dated 02.02.202 fixing the date of auction sale on 21.02.2024. However, due to intervention of this court vide order dated 16.02.2024 the sale could not be conducted. It is also informed that the applicant did not comply with the order dated 16.02.2024 passed by this Tribunal in the matter.

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I have heard Ld. Counsel for the parties and gone through the record.

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It has been alleged that without prior information, the accounts of the applicants were declared as NPAviolating the guidelines of RBI dated 17.03.2016.The applicant Rs.63,69,000/- in the account but the bank did not regularize the account while the accounts came under limit on deposit of above said amount. Without serving demand notice as well as possession notice to the applicants, the respondent bank directly served a E-auction sale notice dated 02.02.2024 fixing the date of

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5A 57 of 2024 [JI

DRT,PATNA

auction sale on 21.02.2024.However, due to intervention of this court vide order dated 16.02.2024the sale could not be conducted. The possession notice was neither affixed on secured assets nor published in two leading newspapers. The property was never registered under the central registry CER5AI.

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On perusal of records it appears that the demand notice was issued on 06.05.2022against borrower & guarantors to make the payment of RS.l,75,84,928.05but the respondent failed to file any evidence to prove the service of demand notice upon the applicants.

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Further, the respondent bank issued possession notice dated 13.10.2022and the same was sent to the applicants on 15.10.2022& 18.10.2022respectively through post. The copy of postal receipt is annexed as annexure R/02, page 15and 17with counter affidavit. The possession notice was also affixed on secured assets and also got published in Hindustan and Hindustan Times on 19.10.2022.

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So far as sale notice is concerned, since the sale could not be conducted, hence sale notice dated 02.02.2024became infructuous.

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10.As far as the issue raised regarding illegal declaration of account as NPA is concerned, the responden cout not submit an explanation or evidence to show what efforts have been made by the respondent in compliance with the guidelines of Reserve Bank in this regard.

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At the same time it is not out of place to mention here that the demand notice was issued to eight persons including the firm with Nitu Devi, Nikhil Raj, Aarti Kumari, Ranjeet Kumar and 5uresh Singh, which is evident from the copy of demand notice as filed by the respondent. The possession notice also discloses that all the above persons have executed Mortgage deed. But all of them have not been impleaded in this application. As such it is necessary to consider the effect of non- joinder of Nitu Devi, Nikhil Raj, Aarti Kumari, Ranjeet Kumar and Suresh Singh in the present application. Non-joinder of

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ORT, PATNA

SA57 of 2024 !JJ

aforesaid necessary parties may give rise to multiplicity of judicial proceedings and the conflicting orders. At the same time the possibility of payments or willingness of other stakeholders to pay the dues as demanded by the respondent cannot be ruled out. If they have paid or are willing for that. the purpose of the present SARFAESIApplication will get infructuous. The present controversy cannot be effectively decided without impleading all stakeholders. Application of applicant is not maintainable without impleading the co-borrower/guarantor/mortgagor. In the above circumstances despite the aforesaid infirmities, no relief can be granted to the applicant.

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In view of the above discussion, the present application deserves to be dismissed.

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ORDER

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The application SA 57 of 2024 is dismissed. No orders for costs. Consignthe record.

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-;;; f. ~oi'ty-, [Kaushalend'~aYadav] Presiding Officer Debts Recovery Tribunal, Patna

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Judgment signed, sealed, dated and pronounced in the open ourt / on this O1ST Day of January, 2025. ~7'>

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~7'> <sup>0' "'" /.. D' [KaushalendraYadav] Presiding Officer Debts Recovery Tribunal, Patna

Rajesh Kumar v. Indian Bank (Allahabad Bank)

Case brief

What is this about?

What did the court decide?

Rajesh Kumar v. Indian Bank (Allahabad Bank)

Case brief

What is this about?

What did the court decide?

What the court decided

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Case details

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