The DRT quashed a bank's demand and possession notices because they contained material errors in the secured amount and failed to serve the guarantor as required by the Security Interest Enforcement Rules.
The demand notice dated 11.04.2023 and symbolic possession notice dated 12.09.2023 along with subsequent actions were set aside and quashed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
1
| SA | o.591 of 2023 Debts Recovery Tribunal-I, Delhi 4th floor, Jeevan Tara Building, Parliament Street, New Delhi Presiding Officer: Shri Govind Ballabh Sharma S.A. No.591 of 2023 Mr. Manoj Kumar Soni, Proprietor M/s. Durga Jewellers. Shop No.1184/25-26, 1st floor, Kucha Mahajani, Chandani Chowk, Delhi-110006. Applicant Versus 1. State Bank of India, SARD-II, Arya Samaj Road, 3rd floor, Karol Bagh, New Delhi. |
|---|---|
| Pre | 2. The Authorized Officer State Bank of India, SARD-II, Arya Samaj Road, 3rd floor, Karol Bagh, New Delhi. Respondents sent: |
| For | the Applicant�: Mr. Amit Dhall, Advocate |
| Fo | r the respondents : Ms. Jaya Tomar, Advocate |
| Date of Pronouncement: 29.07.2025. | |
| FINAL ORDER The present securitization application has been filed on |
|
| beh | alf of the applicant praying therein to restrain the respondent |
| ba | nk through its authorized officers from initiating the |
| sec | ritization measures against the applicant in relation to the 5c/ - |
2
| SA o.591 of 2023 perty mentioned in the notices under Section 13 (2) and 13 (4) pr |
|---|
| of the Securitization Application in relation to properties bearing |
| no 1184/25-26, first floor, Kucha Mahajani, Chandni Chowk, Delhi- 11 006, till the disposal of the securitization application. |
| 2. It has been submitted on behalf of the applicant that the |
| ap i licant is preferring the Securitization Application assailing the |
| pu ported action(s) and measure(s) initiated and threatened to be |
| ini iated by the respondent bank by allegedly invoking the |
| provisions of the Securitization and Reconstruction of Financial |
| As et and Enforcement of Security Interest Act, 2002 (hereinafter re -rred to as the 'Act') including the measures initiated by the |
| respondent no.1 under Section 13 (4) of the Securitization Act, |
| pu suant to the impugn notices dated: 12.09.2023 and ante dated no ice dated 03.10.2023, has also purportedly issued the alleged |
| de and notices issued under Section 13 (2) of the Securitization |
| A dated 11.04.2023. It has further been submitted that the said |
| ac ions and measures resorted to by the respondent bank and the |
| m :asures threatened to be further taken are totally illegal, |
| ar• itrary, malafide and a malicious attempt on the part of the |
| err ng officials of the respondents to the applicant from seeking |
| re• ressal of its legitimate grievances and genuine claims against |
| the respondents. It has also been submitted that the purported |
| ac ions and measures taken by the respondents purportedly taken |
| un er Section 13 (4) of the said Act together with the impugned Po session Notices dated 12.09.2023 and ante date notice dated |
3
0.591 of 2023
10.2023, and the notice by which the possession of the perties have been fixed for 20.10.2023, as well as the ugned notice dated 11.04.2023, under Section 13 (2) of the uritization Act issued by the respondent bank, are de-hors the uritization and Reconstruction of Financial Assets and orcement of Security Interest Act, 2002. It has further been mitted that the respondent bank has thus renewed/ credit ility by way of arrangement letter dated 21.05.2022, wherein nting the Common Covid-19 Emergency Credit Line Facility as I as Guaranteed Emergency Credit Line Facility and issued the ction letter dated 21.05.2022. It has further been submitted t from time to time the applicant had been requesting the pondent bank that as the Account is regular and the interest is eing served irrespective of the fact that the bank has not been rging the contractual rate of interest and the Applicant, on erous occasions requested the respondent bank about the rging of the correct rate of interest and the applicant is the er of the property bearing No.1184/25-26, Ist floor Kucha ajani, Chandni Chowk, Delhi-110006. It has further been mitted that the respondent bank at no point of time ever ated the applicant about any irregularity in the account and s wrongly classified the account as NPA. It has also been mitted that the provisions of the Act i.e. the SARFEASI Act, 2 can only be invoked if the account of the borrower has been lared as Non-Performing Asset by the respondents for which
5d -
4
o.591 of 2023
respondents have to follow the guidelines framed by the erve Bank of India. It has further been submitted that the pondent bank issued the demand notice under Section 13 (2) the Securitization Act, dated 11.04.2023, wherein demanding amount of Rs.2,36,25,031.83 and claiming that the said amount utstanding and on receipt of the demand notice the applicant immediately approached the respondent bank that the ount is not NPA on 30.03.2023, as per the RBI guidelines. It also been submitted that the applicant by way of resentation dated 06.06.2023, requested the respondent bank consider that the account is not NPA and relied upon the gement 'Mardia Chemicals Ltd. (supra) amendment was rted in Section 13 of the Securitization Act w.e.f. 11.11.2014 which is inserted as Section 13 (3A) of the Securitization Act. as also been submitted that the respondent bank in sheer gross ation of Section 13 (3) (a) of the Securitization Act and without wing the time schedule as per the mandate as provided under tion 13 (3) (a) of the Securitization Act and thus, by way of er dated 19.06.2023, rejected the representation of the licant. It has also been submitted that the respondent bank, reafter issued the notice dated 12.09.2023, under Section 13 of the Securitization Act read with rule 8(1) of the Security rest (Enforcement) Rules, 2002. It has further been submitted t in terms of the provisions of the Securitization Act, there has n the duty cast upon the respondent No.2 to consider the
5
o.591 of 2023
resentation of the applicants as per the provisions of the uritization Act and nowhere in the entire Act, it provides the egation of the powers and as per the law laid down by the n ble Madhya Pradesh High Court, in the matter of " Central k of India Vs Jain Mineral Water". It has further been submitted t the respondent bank thereafter initiated the steps under tion 14 of the Securitization Act by filing an application before learned Chief Metropolitan Magistrate, who in turn has passed order dated 06.01.2023, by appointing the Receiver and reafter the Ld. Receiver issued the notice for obtaining the sical possession of the properties which are the subject matter the present Securitization Application. It has further been mitted that the respondent bank has been retaining the Fixed osit and thus had given the due credit in the account of the licant as on 23.08.2023, amounting to Rs.19,91,551/- and as 02.09.2023, the account of the applicant bearing 61147796497, shows outstanding of Rs.1,91,62,335/83 which less than the sanctioned limit of Rs.2 Crores which was ctioned by the respondent bank to the applicant and thus the ount was illegally declared as NPA on 30.03.2023 and the notice ed by the respondent bank under Section 13(2) & 13 (4) of the uritization Act are wholly arbitrary, illegal and unconstitutional he respondent bank has no right to take the possession of the
sci
6
SA o.591 of 2023
(4 of the Securitization Act had been in contravention to the law laid down by the Hon'ble Madhya Pradesh High Court in the matter f entral Bank of India...Vs....Jain Mineral Water wherein as per
the law laid down by the Hon'ble High Court, there is no provision o the delegation of powers for adjudicating the representation
un er Section 13 (3) (a) of the Securitization Act which provides th t the Authorized officer is required to consider and adjudicate representation within 15 days and whereas the said
re resentation has not been adjudicated by the authorized officer which is contrary to law laid down and the mandatory provisions the Securitization Act and further the period of 15 days, as isaged under the Act and the law laid down by the Hon'ble High rt of Judicature at Madras, in the matter of " Bharat Post
duate College...Vs....India Bulls Housing Finance Ltd.,
h refore, the entire Securitisation Act action/measures initiated y the respondent No.1 are contrary to law and are thus liable to e stayed /set aside. It has further been submitted that the
es•ondent bank has failed to serve the demand notice and y bolic possession notice under section 13 (2) and 13 (4) of the FAESI Act, 2002 as per the Security Interest (Enforcement)
ules, 2002. Accordingly, it has been prayed to restrain the
es•ondent bank through its authorized officers from initiating the e•uritization measures against the applicant in relation to the Sc`
7
| SA o.591 of 2023 |
|---|
| perty mentioned in the notices under Section 13(2) and 13(4) pr 0 |
| of the Securitization Application in relation to properties bearing |
| no 1184/25-26, first floor, Kucha Mahajani, Chandni Chowk, Delhi- |
| 11 006, till the disposal of the securitization application and to |
| m intain the status of the properties mentioned in the demand no ices. |
SA o.591 of 2023 21 12.2011 in favour of respondent Bank. It has further been su emitted that the respondent bank as a mortgagee has rightly ini iated the SARFEASI actions against the secured asset to recover its dues as despite service of the demand notice dated 11.04.2023 un•er section 13(2) of SARFEASI Act, 2002 the applicant has failed to pay the amount due to the respondent bank within 60 days as m. ndated by the Act, 2002. It has further been submitted that the respondent bank has declared the loan accounts of the applicant as NPA on 30.03.2023 as per guidelines of RBI and thereafter send the demand notice dated 11.04.2023 under Section 13 (2) of SA' FAESI Act and demanded a sum of Rs.2,36,25,031.83 as on 30 03.2023 plus accrued interest and legal charges and the respondent bank has duly complied with the provision of the SA FAESI act as well as law laid down by Hon'ble Supreme Court of ndia in case of Mardia Chemicals Ltd. Vs, Union of India [2004 (4) SCC 311] and the demand notice is valid, legal and as per gui•elines of RBI. It has also been submitted that the applicant ha approached this Tribunal with ulterior motive to delay the re••very proceedings, possession and sale of the secured asset ini iated by the respondent bank under the SARFAESI Act, 2002. It has further been submitted that the applicant has not 0 roached this Tribunal with clean hands and have not stated ap tru and correct facts before this Tribunal. It has also been su mitted that applicant Durga Jewelers is a Proprietorship co cern and Shri Manoj Kumar Soni is its proprietor and carrying
sd-
9
| SA o.591 of 2023 |
|---|
on business of Gold Jewelry and at request of the applicant, re pondent Bank (erstwhile State Bank of Bikaner & Jaipur) sa ctioned and granted a Cash Credit limit of Rs.110 Lac to Durga Je elers, subject to completion of certain formalities and the p•licant had opened a loan account bearing no.61147796497 in the name of Durga Jewelers with the respondent Bank. It has fu her been submitted that in consideration of respondent Bank sa ction and grant of Cash Credit limit (Hypo) under SME Connect Scl eme of Rs.110 Lac to the applicant, the applicant has executed, signed and delivered to respondent Bank the certain loan do uments such as Letter of Arrangement (SME-1) dated 21 12.2011, copy of which with Letter of Confirmation dated 2112.2011, Agreement of Loan-cum-Hypothecation (SME-2) da ed 21.12.2011, Supplemental Agreement of Loan cum Hy•othecation (SME-4) dated 21.12.2011, Shri Manoj Kumar Soni ha created equitable mortgage of his built-up property i.e. Co mercial Shop No.25-26, Municipal No.1184, First Floor, Kutcha Mahajani, Chandni Chowk, Delhi - 110006 in favour of respondent Ba k by deposit of title documents as collateral security towards h said limit and respondent Bank has absolute charge over the sai• mortgaged property and applicant has signed Letter of Co firmation dated 21.12.2011 in favour of respondent Bank. It ha further been submitted that thereafter at request of the p licant, respondent Bank renewed, sanctioned and enhanced h cash credit (hypo) limit of applicant to Rs.160 Lacs on sd-
10
SA o.591 of 2023 15 02.2013, in consideration of the same the applicant has signed a etter of Arrangement (SME-1) dated 15.02.2013 in favour of re pondent Bank. It has also been submitted that applicant Shri M noj. Kumar Soni proprietor of M/s Durga Jewellers has extended mirtgage charge on his property i.e. Commercial Shop No.25-26, M nicipal No.1184, 1" Floor, Kutcha Mahajani, Chandni Chowk, Delhi 110006 in favour of the respondent Bank towards the en anced limit and respondent Bank has absolute charge over the sat• property and the applicant has signed Letter of Confirmation da ed 18.02.2013 in favour of respondent Bank. It has also been su emitted that at request of the applicant, respondent Bank has ad anced an Ad hoc limit of Rs.40 Lacs on 30.07.2015 to the ap licant and in consideration of the same, the applicant has sig ed and delivered a Letter of Arrangement (SME-1) dated 30 07.2015 to respondent Bank. It has also been submitted that apII licant has extended mortgage charge over his said property in fa our of respondent Bank towards the said limit and applicant has sig ed Letter of Confirmation dated 30.07.2015 in favour of re pondent Bank. It has also been submitted that at request of the applicant, respondent Bank sanctioned/renewed the credit facility of s.160 Lacs to applicant on 29.09.2018 and in consideration of sa e, applicant has signed and delivered the Letter of A ngement dated 29.09.2018 to respondent Bank. It has also bey n submitted that the applicant has extended mortgage charge over his said property in favour of respondent Bank towards the Sc
11
| SA o.591 of 2023 sa d limit. It has further been submitted that thereafter at request |
|---|
| of the applicant, respondent Bank has sanctioned/renewed the |
| cr dit (Hypo of stocks & Book Debts) facility of Rs.200 Lacs to |
| ap•licant on 20.03.2020 and applicant has signed and delivered |
| the Letter of Arrangement dated 20.03.2020 to respondent Bank. |
| It has further been submitted that at request of the applicant, |
| re pondent Bank has sanctioned/renewed and enhanced the credit |
| facility of the applicant on 26.05.2020 i.e., (i) Cash Credit Limit of |
| Rs 200 Lacs and (ii) Common Covid-19 Emergency Credit Line |
| (C ECL of Rs.20 Lacs, totaling Rs.220 Lacs and in consideration of |
| the same the applicant has signed and delivered to respondent |
| Ba k the loan documents such as Letter of Arrangement (SME-1) |
| da ed 26.05.2020, Guarantee Agreement (SME-3) dated |
| 26 05.2020, Supplemental Agreement of Loan-Cum-hypothecation (S E-4) dated 26.05.2020. It has also been submitted that the |
| ap i licant has extended mortgage charge over his said property in |
| fa our of respondent Bank towards the said limits also and the |
| ap licant has signed Letter of Confirmation dated 26.05.2020 in |
| fa our of respondent Bank and thereafter at request of the |
| ap licant, the respondent Bank has sanctioned/ renewed and |
| en anced the credit facilities on 01.06.2020 to applicant i.e. (i) |
| Ca'.h Credit Limit of Rs.200 Lacs, (ii) Common Covid-19 Emergency Cr dit Line (CCECL) of Rs.20 Lac and (iii) Guaranteed Emergency |
| Cr dit Line (GECL) of Rs.27 Lac, totaling Rs.247 Lacs, in |
| co sideration of the same the applicant has signed and delivered |
12
| SA o.591 of 2023 to respondent bank the loan documents i.e. Letter of Arrangement |
|---|
| (S E-1) dated 01.06.2020, and Guarantee Agreement (SME-3) |
| da ed 01.06.2020. It has also been submitted that applicant has ex ended mortgage charge over his said property i.e. Commercial |
| Sh•p No.25-26, Municipal No.1184, 1 Floor, Kutcha Mahajani, |
| Ch ndni Chowk, Delhi 110006, in favour of respondent Bank |
| to ards the said limits also and the applicant has signed Letter of |
| Co firmation dated 01.06.2020 in favour of respondent Bank. It |
| ha further been submitted that thereafter at request of the |
| ap licant, the respondent Bank has sanctioned and enhanced the |
| cr dit facilities to the applicant on 21.06.2021 i.e. (1) Cash Credit |
| Li it of Rs.200 Lacs, (ii) Common Covid-19 Emergency Credit Line |
| (C ECL) of Rs. 16 Lac, (iii) Guaranteed Emergency Credit Line |
| (G CL) of Rs.27 Lac and (iv) SME Gold Loan of Rs.14 Lacs, totaling |
| Rs 257 Laes and in consideration of the same the applicant has |
| sig ed and delivered to respondent Bank the loan documents: |
| Lei er of Arrangement (SME-1) dated 21.06.2021, Loan |
| Ag eement dated 21.06.2021. Deed of Guarantee dated |
| 21 06.2021. It has further been submitted that the applicant has |
| ex nded mortgage charge over his said property in favour of |
| respondent Bank towards the said limits also and respondent Bank |
| ha• absolute charge over the said property. It has also been |
| su mitted that after that at request of the applicant, the |
| respondent Bank has sanctioned and renewed the credit facilities |
| to pplicant on 09.12.2021 i.e. (i) Cash Credit Limit of Rs.200 Lacs, 5- |
13
SA 0.591 of 2023
(ii Common Covid-19 Emergency Credit Line (CCECL) of Rs.6 Lac, (iii Guaranteed Emergency Credit Line (GECL)-1 of Rs.23 Lac, (iv) G aranteed Emergency Credit Line (GECL)-1 Extension of Rs.14 La and Metal Gold Loan Sub Limit within overall CC Limit (Rs.100 La s), totaling Rs.2.43 crores and applicant has signed and de ivered to respondent Bank the loan documents: Guarantee Agreement (SME-3) dated 09.12.2021, Supplemental Agreement of Loan-Cum-Hypothecation (SME-4) dated 09.12.2021 and Letter of Arrangement (SME-1) dated 13.12.2021. It has further been su s miffed that applicant has extended mortgage charge over his property i.e. Commercial Shop No.25-26, Municipal No.1184, 1 Fl or, Kutcha Mahajani, Chandni Chowk, Delhi-110006 in favour of re pondent Bank towards the said limits also and the applicant has signed the Letter of Confirmation. It has further been submitted th t the applicant had agreed that interest on the cash credit facility shall be payable by the applicant @2.65% margin above EB R which was at that time @6.65% p.a. at the time of renewal of CC limits and effective rate was @ 9.30% (CC Limit) p.a. cal ulated on daily products with monthly rests. CCECL: Interest @ of 0.75% above the MCLR/EBLR which was @6.65% p.a. cal ulated on daily products at monthly rest and card rate @7.40% p... 1-year MCLR to be reset after one year WCTL (GECL-1): In serest @ of 0.75% above EBLR which was @7.40% p.a. and m xirnum of @9.25% p.a. during the entire tenor. EBLR will be re 't at quarterly intervals. WCTL GECL (Extension-1): Interest @
14
| SA o.591 of 2023 of 0.75% above EBLR which was @7.40% p.a. and maximum of |
|---|
| @I 25% p.a. during the entire tenor. EBLR will be rest at monthly |
| in rvals. It has also been submitted that the applicant had agreed |
| th t he shall pay CCECL in 18 monthly instalments of Rs.1,11,111/- ea h, with the first instalment commencing on 30.11.2020 and the |
| la t instalment falling due on 30.05.2022 and interest to be |
| se iced as and when applied including during moratorium and he |
| ag eed that the tenor of GECL be 48 months and shall be repayable |
| in 36 monthly instalments of Rs.75,000/- each, with the first |
| in talment commencing on 01.06.2021 and the last instalment |
| fal ing due 01.06.2024 interest to be serviced as and when applied |
| in•luding during moratorium and thereafter at request of the |
| ap•licant, the respondent Bank has sanctioned and renewed the |
| cr dit facilities to applicant on 21.05.2022 i.e. (i) Cash Credit Limit |
| of Rs.200 Lacs, (ii) Common Covid-19 Emergency Credit Line |
| (C ECL) of Rs.2 Lac, (iii) Guaranteed Emergency Credit Line |
| (G CL) of Rs.14 Lac, (iv) GECL 1 (Extension) of Rs.14 Lac, |
| an i (v)Metal Gold Loan Sub Limit within overall CC Limit (Rs.100 |
| La s), totaling Rs.2.30 crores and applicant has signed and |
| de ivered to respondent Bank the Letter of Arrangement (SME-1) |
| da ed 21.05.2022. It has further been submitted that applicant has |
| ex ended mortgage charge over his property i.e. Commercial Shop |
| No.25-26, Municipal No.1184, 1 Floor, Kutcha Mahajani, Chandni |
| Ch wk, Delhi 110006, in favour of respondent Bank towards the |
| sal• limits and respondent Bank has absolute charge over the said fc-/— |
15
| SA o.591 of 2023 perty and the applicant has signed the Letter of Confirmation pr 0 |
|---|
| da ed 21.05.2022 in favour of respondent Bank. |
| It has also been submitted on behalf of the respondent bank 5. |
| t the loan accounts of the applicant have become irregular due non-servicing interest in the Limit account, not routing the sale nsactions through loan account and non-deposit of installments hin time in term loan accounts and respondent Bank various th, to tr wi |
| ers and personally requested the applicant to pay dues of le |
| pondent Bank and service interest but the applicant has failed re |
| •o so and the applicant has failed to maintain financial discipline agreed by the applicant while availing the credit facilities. It has to as |
| her been submitted that the loan accounts of the applicant fu |
| e been classified as Non-Performing Asset (NPA) on ha |
| 03.2023. It has also been submitted that the respondent Bank served demand notice dated 11.04.2023 under Section 13 (2) 30 ha |
| SARFAESI Act, 2002 upon the applicant and requested the of |
| •licant to pay the amount of Rs.2,36,25,031/- to respondent ap |
| k which the applicant has failed to pay despite service of said Ba |
| ice. It has further been submitted that the applicant has sent a no |
| ue representation/objection under section 13 (3A) dated va |
| 06 06.2023 (already on record as Annexure A-6 at page no.100 to |
| 111 of SA) to the said demand notice which was duly |
| lied/rejected by respondent Bank vide its reply dated re II |
19.06.2023 (already on record as Annexure A-7 at page no.112 to |
| 12' of SA). It has further been submitted that respondent Bank |
16
| SA o.591 of 2023 ha sent a legal demand notice dated 01.09.2023 to the applicant calling upon him to pay the outstanding amount due payable by |
|---|
| the applicant to respondent Bank as regards the aforesaid loans |
| gr nted by the respondent Bank to him and availed by the ap • licant but despite receipt of the aforesaid legal demand notice, |
| the applicant failed to liquidate the outstanding amount. It has also |
| be -n submitted that Ld. CMM vide order dated 21.09.2023 has ap•ointed Receiver to take physical possession of the secured as et. It has further been submitted that on 03.10.2023 Receiver |
| ha issued notice for taking physical possession of the secured as et on 20.10.2023 but since he has met with accident he could no take the physical possession of secured asset on 20.10.2023 |
| It as further been submitted that on 11.10.2023, the respondent |
| ba k has filed the Original Application (OA No.823/2023) under |
| Se tion 19 of the Recovery of Debts and Bankruptcy Act, 1993 for |
| recovery of Rs.2,37,41,683/-together with pendentelite, future |
| int rest, costs and expenses etc. against the applicant before DRT- |
| I, 'elhi. It has further been that the SA filed by applicant is not |
| m intainable and is liable to be dismissed as no amount has been |
| pa d by the applicant to the respondent bank after 11.01.2023 |
| w en he has paid meager sum of Rs.3304/- only which shows |
| m lafide intentions of applicant to delay the payment of the |
| ou standing dues of the respondent bank and the present |
| ap • lication has just been filed to delay the SARFAESI action |
| ini dated by the respondent bank and to delay the sale of secured sd- |
17
SA o.591 of 2023 as et. It has further been submitted that the SA filed by applicant is of maintainable and is liable to be dismissed because as per R:I guidelines "if the interest or principal remain overdue for a pe iod 90 days or three months and above and/or if the ou standing balance in CC/OD account remains continuously in ex ess of the sanctioned limit/drawing power for 90 days, the loan ac ount is classified as Non-Performing Asset" and the respondent ba k has referred the statement of account (CC account) which re ains continuously in excess of sanction limit/drawing power for 90 days It has also been submitted that the present SA filed by ap•licant is not maintainable and is liable to be dismissed as ap•licant has admitted the receipt of the demand notice dated 11 04.2023 sent under Section 13(2) of SARFAESI Act 2002 in the SA but despite receipt of the same he has failed to liquidate the du -s of the respondent bank. It is further stated that applicant has ad itted the receipt of the possession notice dated 12.09.2023 se t under Rule 8(1) of Security Interest (Enforcement) Rules, 20 1 2 and Section 13(4) of SARFAESI Act, 2002 in the SA but de pite receipt of the same he has failed to liquidate the dues of the respondent bank. It has further been submitted that the pr: sent SA filed by applicant is not maintainable and is liable to be dismissed as the same is filed by applicant with ulterior motive of no to pay the dues of the respondent bank and to delay the sale pr ceedings. It has further been submitted that the present SA fil d by applicant is not maintainable and is liable to be dismissed
18
SA o.591 of 2023
as same is abuse process of law. Accordingly, it has been prayed fo dismissal of this SA.
19
SA No.591 of 2023
20
| SA ass |
o.591 of 2023 et Ex. RW-1/13, True copy of notice dated 03.10.2023 issued |
|---|---|
| by | Receiver to applicant Ex. RW-1/14, True copy of copy of |
| po | session notice dated 12.09.2023 issued by respondent to |
| ap | i licant with newspaper and photos Ex.RW-1/15 and True copy |
| azette of India dated 02.05.1987 as well as Gazette dated on | |
| 29 | 10.2005 Ex. RW-1/16. |
| 8. | Heard the rival contentions of both the parties and perused |
| the | records thoroughly. |
| 9. | In the present matter, admittedly the borrower has availed |
| th l | oan facilities from respondent bank against the mortgage of |
| th | property in question. It has been argued on behalf of the |
| a p | licant that entire actions of the respondent bank are bad in law. |
| It a | s further been argued that the respondent bank has failed to |
| se an |
e the demand notice dated 11.04.2023 under section 13 (2) symbolic possession notice dated 12.09.2023 under section 13 |
| (4 | upon all the borrowers/ guarantors/mortgagors as per the |
| Se | urity Interest (Enforcement) Rules, 2002. It has further been |
| a r | ued that the demand notice dated 11.04.2023 is bad in law |
| be | ause in the said demand notice (at Schedule B) the amount |
| se | ured is mentioned as Rs.25,65,00,000/-, whereas the applicant |
| h | never availed the said loan of Rs.25.65 crores from the |
| re | pondent bank and further there is mis-description of the |
| m | rtgage property mentioned in the said demand notice as the |
| pr Ku |
perty is mentioned as "Shop no.25-26, Municipal no.1184, ha Mahajani, Chandni Chowk, Delhi-110006", whereas actually |
21
SA o.591 of 2023 the property being Shop no.25-26, First Floor, Municipal no.1184, Ku ha Mahajani, Chandni Chowk, Delhi-110006 is mortgaged with the respondent bank. It has further been argued that the said de and notice is also bad in law because in the said demand no ice the property in the name of Shri Deepak Kumar at (1) re•idential building bearing survey no.194, Block G, Prashant Vi ar, New Delhi-110085 is mentioned at Schedule B of the said de and notice, but the said property was never mortgaged with the respondent bank. It has further been argued that the aforesaid sy bolic possession notice was never served upon Mr. Manoj Soni, w o is mortgagor/guarantor, and the same was served only upon the borrower M/s Durga Jewellers only through affixation and pu•lication, but the same was never served through by post as per Ru e 8 (1) of the Security Interest (Enforcement) Rules, 2002. It ha further been argued that since the entire actions of the re•pondent bank are bad in law, accordingly, it has been prayed fo allowing the present securitization application and setting aside the aforesaid demand notice dated 11.04.2023 under section 13 (2 and symbolic possession notice dated 12.09.2023 under se tion 13 (4) of the SARFAESI Act, 2002. On the other hand, it ha. been argued on behalf of the respondent bank that the re• pondent bank has taken all the measures under the SARFAESI A 2002 as per law and there is typographical error in the aforesaid demand notice and the symbolic possession notice was se ed through affixation and publication in two newspaper and Sci
22
| SA o.591 of 2023 on y on the technical ground the aforesaid demand notice cannot be set aside and accordingly, it has been prayed for dismissal of the present securitization application. |
|---|
| 10 Apparently, the respondent bank has issued the two |
| arate demand notices dated 11.04.2023 under section 13 (2) se |
| was issued by the respondent bank to both the |
| bo rower/mortgagor/ guarantor i.e. M/s Durga wellers (Delhi), |
| prietor Manoj Kumar Soni at the address of 1184/25-26, first pr |
| floor, Kucha Mahajani, Chandni Chowk (Exh.RW-1/10-annexed at |
| pa'!e no.140) and Mr. Manoj Kumar Soni s/o Damodar Soni, |
| 1/' 126, Gali no.4, Balbir Nagar, Shandara, Delhi-110032 (Exh.RW- |
| 1/ 0-annexed at page no.144) and as per the postal tracking re ort (annexed at page no.145-A and 145-C) the said demand |
| no ice was served upon both the both the borrower/mortgagor/ |
| gu rantor. Thereafter, the said demand notice dated 11.04.2023 |
| wa duly replied by the said borrower vide |
| re• resentation/objection dated 06.06.2023 under section 13 (3) |
| an" the said representation/objection dated 06.06.2023 was |
| dis•osed of by the respondent bank within 15 days vide its letter |
| da ed 19.06.2023. However, on perusal of the aforesaid demand |
| novice it appears that admittedly, there is error in the aforesaid |
| de and notice because the amount secured of Rs.25.65 crores |
| ha wrongly been mentioned in the schedule B of the said demand |
| novice, whereas the actual demand of Rs.2,36,25,031.83 was |
| ma• e by the respondent bank in para no.7 of the aforesaid 54- |
23
| SA o.591 of 2023 de and notice and such error is bad in law. Further, in the |
|---|
| afu resaid demand notice dated 11.04.2023 the property in the |
| na e of Shri Deepak Kumar at (1) residential building bearing |
| su ey no.194, Block G,PrashantVihar, New Delhi-110085 is |
| m ntioned at ScheduleB of thesaid demand notice, but admittedly |
| the said property was never mortgaged with the respondent bank, |
| w ich is also bad in law. Further, in the said demand notice the |
| property is mentioned as "Shop no.25-26, Municipal no.1184, |
| Ku ha Mahajani, Chandni Chowk, Delhi-110006", whereas actually |
| the property being Shop no.25-26,**First Floor,**Municipal no.1184, Ku ha Mahajani, Chandni Chowk, Delhi-110006 is mortgaged with |
| the respondent bank, which is also bad in law. However, these |
| er ors in the aforesaid demand notice were well within the |
| kn .wledge of the respondent bank because the borrower has |
| alr ady informed these facts to the respondent bank vide |
| reoresentation/objection dated 19.06.2023 under section 13 (3) of |
| the SARFAESI Act, 2002, but the respondent bank has not |
| de iberately rectified these errors by issuing fresh demand notice aning thereby the said demand notice dated 11.04.2023 under |
| see tion 13(2) of the SARFAESI Act, 2002 is bad in law and the |
| sa e is liable to be set aside. |
| 11 Further, on perusal on perusal of the records, it appears that |
| the aforesaid symbolic possession notice dated 12.09.2023 |
| (E h.RW-1/15) was issued by the respondent bank in the name of M Durga Jewellers (Delhi) through proprietor Manoj Kumar Soni, |
24
SA o.591 of 2023
ad ress 1184/25-26 first floor, Kucha Mahajani Chandni Chowk, Delhi-110006, but the respondent bank has failed to issue the said sy bolic possession notice dated 12.09.2023 in the name of Mr. M noj Kumar Soni s/o Damodar Soni, 1/5126, Gali no.4, Balbir Naar, Shandara, Delhi-110032, that too, when the respondent ba k has already issued two separate demand notice dated 11 04.2024 to both the borrower/mortgagor/ guarantor at their se II arate addresses i.e. M/s Durga wellers (Delhi), proprietor M noj Kumar Soni at the address of 1184/25-26, first floor, Kucha M hajani, Chandni Chowk (Exh.RW-1/10-annexed at page no.140) an p Mr. Manoj Kumar Soni s/o Damodar Soni, 1/5126, Gali no.4, Ba bir Nagar, Shandara, Delhi-110032 (Exh.RW-1/10-annexed at pa e no.144) meaning thereby the respondent bank has failed to se e the symbolic possession dated 12.09.2023 upon all the bo rower/mortgagor/ guarantor, which is bad in law. Further, on pe usal of the records it appears that the respondent bank has se ed the aforesaid symbolic possession dated 12.09.2023 under se• tion 13 (4) through affixation (annexed at page no.174) and pu•lication in two newspapers — English and Hindi (annexed at pa e no.175 and 175), but the respondent bank has failed to file an documentary evidence to show that the same was also served th •ugh by post/delivery (postal receipt), which is bad in law as pe Rule 8 (1) of the Security Interest (Enforcement) Rules, 2002 an the same is also reproduced herein below. That since the re•pondent bank failed to serve the said symbolic possession sd
25
| SA 0.591 of 2023 no ice 12.09.2023 under section 13 (4) of the SARFAESI Act, 2002 up•n all the borrower/mortgagor/ guarantor through all modes as |
|---|
| pe Security Interest (Enforcement) Rules, 2002, therefore, the |
| sat• symbolic possession dated 12.09.2023 is bad in law and |
| ac• ordingly, the same is liable to be set aside. Rule 8 (1) of the Security Interest (Enforcement) Rules, 2002: |
| Where the secured assetisan immovable property, the authorised officer shall take or cause to be taken possession, by delivering a possession notice prepared as nearly as possible in Appendix IV to these rules, to the borrower and by affixing the possession notice on the outer door or at such conspicuous place of the property. |
| 12 In view of the above facts and circumstances and SARFAESI |
| Acs and Rules, this Tribunal is of the affirmed view that the |
| re pondent bank has not followed the mandatory procedures as |
| lai down under the SARFAESI Act and Rules, while initiating the 11 |
| m asures under the SARFAESI Act and as per Security Interest |
| (E forcement) Rules, 2002, therefore, the SARFAESI Application is |
| lia le to be allowed and the demand notice dated 11.04.2023 0 |
| un er section 13 (2) and symbolic possession notice dated p |
| 12 09.2023 under Section 13 (4) of the SARFAESI Act and all the |
| sequent actions of the respondent bank are liable to be set asi• e. su 0 |
(ORDER)
| The SARFAESI Application filed by the applicant is allowed |
|---|
| the demand notice dated 11.04.2023 under section 13 (2) and an |
| bolic possession notice dated 12.09.2023 under Section 13 (4) sy |
26
| SA o.591 of 2023 of the SARFAESI Act and all the subsequent actions of the respondent bank are hereby set aside and quashed. Accordingly, the present securitization application stands disposed of along with pe ding applications, if any, and the respondent bank is free to |
|---|
| to le afresh action as per law. The present final order be uploaded im ediately on the website of this Tribunal. Final Order signed, sealed, dated and pronounced in the |
| op n court on this 29th July, 2025. |
| Sa/— (GOVIND BALLABH PRESIDING OFFICER, DRT-I, Delhi Di•tated & Corrected by me. |
•
2 issues framed by the court
Whether the demand notice issued under Section 13(2) was valid despite containing clerical errors in the secured amount and property details.
Whether the symbolic possession notice issued under Section 13(4) was legally valid given the failure to serve all borrowers/mortgagors through all mandatory prescribed modes.
3 provisions across 2 enactments
Manoj Kumar Soni, Proprietor M/s. Durga Jewellers
State Bank of India, SARD-II
The Authorized Officer, State Bank of India
Govind Ballabh Sharma
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
