Dismissed

Smt Sukho v. Capri Global Capital Limited

DRT8 Oct 2025SA/595/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed an application seeking to quash a sale notice and cancel an auction conducted under the SARFAESI Act. The court held that notices were validly served on the deceased borrower's legal heirs and co-borrower, and found no conclusive evidence of fraud or fundamental procedural error warranting setting aside the confirmed sale.

What did the court decide?

Application dismissed as devoid of merit; other pending IAs disposed of.

Smt Sukho versus Capri Global Capital Limited — Cheque Dishonour | DRT (2025)

S.A. No.595 of 2023

IN THE DEBTS RECOVERY TRIBUNAL, LUCKNOW

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Present: Pravas Kumar Singh, Presiding Officer

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Securitization Application No.595 of 2023

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Dated: 08.10.2025

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Smt. Sukho and another

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, Applicant

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Versus

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Capri Global Capital Limited & Ors

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. . . . Respondents

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Ld. Counsel for applicant: Mr. Suneet K. Sharma, Advocate. Ld. Counsel for res-FI : Mr. Anurag Abhishek, Advocate. Ld. Counsel for AP: Mr. Rana Rahul Singh, Advocate

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JUDGMENT

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The present securitization Application has been brought by the applicant under section 17(1) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short SARFAESI Act) to quash/set sale notice dated 08.6.2023 in which, auction was scheduled on 27.6.2023 and further for restraining the respondent-FI from taking possession of the secured asset in lieu of order passed under Section 14 of the Act.

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Brief facts of the case:- The applicant no.1 is mother of applicant no.2. Admittedly, the applicant no.1 and her husband applied for a loan which was sanctioned by the respondent-FI. It is stated that on 07.7.2023, the applicant came to know from the official of the respondent-FI, when they visited the secured assets that they will be taking possession of the secured assets. The applicant approached the office of District Magistrate regarding for order passed under Section 14 of the Act and came to know demand notice dated 14.02.022 and the order passed under Section 14 of the Act dated 30.7.2023. Admittedly, sale notice

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S.A.No.595 of 2023

has been served upon the applicant. It is submitted that loan account was illegally declared as NPA and respondent-FI proceeded against the dead person namely Chatar Singh husband of applicant no.1 and father of applicant no.2.

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A detail written objection has been filed on behalf of the respondent-F. It is submitted that after making compliance of all the statutory provisions, the respondent-FI has proceeded for securitization proceeding. It is stated at the outset that the SA is barred by limitation. It is specifically stated that loan account was declared as NPA on 10.11.2017 and demand notice was served on 14.02.2022. In proof thereof, postal receipt, newspaper publication has been filed as Annexure No.R-1. As no representation was filed, possession notice dated 29.4.2022 was issued and proof of service has filled as Annexure No.R-2. The respondent-FI obtained order under Section 14 of the Act vide Annexure No.R-3 and in lieu of order dated 30.7.2022 passed under Section 14 of the Act, physical possession was taken on 19.01.2023 .

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As far as claim of the applicant regarding proceeding against dead person is concerned, it is submitted that late Chatar Singh along with applicant approached the respondent-FI to avail financial assistance and a Term Loan of Rs.7,36,025/- was sanctioned and the secured assets was mortgaged with the respondent-FI. It is pointed out that after sanction of the loan on 25.4.2017, since after disbursement, the applicant started making default in payment of EMIs in time, therefore, loan account was declared NPA on 10.11.2017 in accordance with RBI guidelines. It is alleged that applicant never intended to pay the loan amount and entire action has been taken in accordance with SARFAESI Act and Rule. By way of supplementary affidavit, Annexure R- 1 has been brought as loan agreement. Copy of sale notice dated

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'IF 20.02.2023, 28.3.2023 and 08.6.2023 along with postal receipt and publication has been filed as Annexure No.R-2, Annexure

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S.A.No.595 of 2023

No.R-3 is copy of photograph of affixation of sale notice on the secured assets on 08.6.2023, Annexure No.R-4 is extension of bid letter dated 27.6.2023, Annexure No.R-5 is copy of statement of loan account, Annexure No.R-6 is proof of service on the applicant. I find from the loan agreement, the applicant no.1 is co-borrower in the loan agreement and she has put her RTI in presence of her husband.

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Ld. Counsel for the applicant has argued mainly on following grounds:

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(i) The respondent-FI has proceeded against dead person namely Chatar Singh who died on 30.8.2017 and the demand notice dated 14.02.2022 and possession notice dated 29.4.2022 were issued against dead person.

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(ii) Similarly, sale notice was issued against dead person.

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(iii) it is submitted that auction purchaser has not complied Rule 9(3) & 9(4) of SI Rules.

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(iv) it is pointed out that letter issued by the respondent-FI on 27.6.2023. The successful bidder has to deposit 10% of the amount on 28.6.2023 and remaining 90% of the amount within 15 days of opening of Bid amount, however, as per the statement fIled by the respondent-FI, the bidder has not deposited 10c70 on 28.6.2023 and further 90% of bid amount was not deposited within 15 days.

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Ld. Counsel for the respondent-FI has started his arguments with the point of limitation, however, it is admitted after some length of argument that the SA may not be barred by limitation, as limitation runs from the last measure taken by the respondent-FI. Admittedly, sale notice dated 08.6.2023 has been issued in which auction was scheduled on 27.6.2023 and the SA has been filed on 13.7.2023 i.e. within statutory period, hence, question of limitation ends here.

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The respondent-FI had drawn my attention towards the complian„, „nd„ S„ti,. 13(2) & 13(4) „„,d „p,„ th, applicant. It is stated that under Section 13(2) dated 14.02.2022 at the front page as mentioned that notice is being sent to Mr.

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S.A.No.595 of 2023

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Chatar Singh through legal heir and applicant no.I/Sukho coborrower. It is submitted that by utter caution, the respondent-FI published notice under Section 13(2) in two leading newspaper and it was duly affixed at the secured assets, in proof there of Annexure No.R- 1 has been submitted. Similarly, Annexure R-2 is notice address to the legal heir along with co-borrower and in proof.thereof, postal receipt, affixation and publication has been filed.

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One another leg of argument being that co-borrower/mother of the applicant no.I was residing in the same premises and it was deemed to be served upon the applicant no.1 as well and there is no other legal heir other than him and furthermore the applicant co-borrower never approached the FI for information regarding legal heir. In view of submission and annexure filed, I find that plea of the applicant that securitization proceeding was being run against dead person is not to be accepted, accordingly, I find and hold that proper service of notices under Section 13(2) & 13(4) were made by the respondent-FI upon the legal heir as well as to the co-borrower. As far as sale notice is concerned, the respondent-FI has brought by way of supplementary affidavit Annexure No.R-2 for service of sale notice along with postal receipt, publication. Annexure R-3 is photograph of affixation; thus, none service of notices under Section 13(2), 13(4) and sale notice is non-est.

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The second leg of arguments of Ld. Counsel for the applicant being that loan account was declared as NPA and benefit of Covid was not provided to the applicant. It is replied by the respondent-FI that the loan account was declared NPA on 10.11.2017 and at that time, circular referred by the applicant was not in existence and does not enure the applicant. It is pointed out that applicant defaulted in paying of several EMIs just after taking loan and the applicant was not serious about payment of the loan.

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S.A.No.595 of 2023

Another leg of argument of the Ld. Counsel for the applicant being that none adherence of Rule 9(3) & 9(4) has been raised at the time of argument. I find from the annexure that in the sale notice, the date of auction is 27.6.2023, EMD of 10% was to be deposited by 28.6.2023 for amount of Rs.1.60 lac and as per the statement of account 10% amount has been deposited n 28.6.2023 and rest amount has been deposited on 25.7.2023. Main contention of the applicant being that it has not been deposited within 15 days. I find that rule provide for extension and since it has not been challenged in the SA, it is not to be replied by the respondent-FI that in which condition extension was granted.

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Admittedly, sale has taken place and auction purchaser has appeared and any relief to the applicant hinges around cancellation of sale certificate.

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12.1 have considered the leading judgment known as judgment passed by the Hon’ble Apex Court known as CELIR LLP Vs. Mr. Sumati Prasad Bafna & ors.

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“The Hon’ble Apex Court has framed a question and laid down ratio, as to the circumstances, when a sale of property by auction or other means under SARFAESI Act may be set aside after its confirmation. Their Lordships have examined a series of judgments pronounced by the Hon’ble Apex Court. It has been said that purpose of an open auction is to get the most enumerative price and it is a duty of the Court to keep openness of the auction so that intending bidder would be free to participate and offer higher value. It is said that once the sale has been confirmed, it cannot be set aside unless fundamental procedural error occurred or sale certificate has been obtained by misrepresentation or fraud. After discussions of several other judgments their Lordship has propounded the ratio in para 218 of the judgment.”

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" Any sale by auction or other public procurement methods once already confIrmed or concluded ought not to be set-aside or interfered with lightly except on grounds that go to the core of such sale process, such as either being coUusive, fraudulent or vitiated by inadequate pricing or underbidding. Mere irregularity or deviation from a rule which does not have any

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S.A.No.595 of 2023

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fundamental procedural error does not take away the foundation of authority for such proceeding. In such cases, courts in particular should be mindful to refrain entertaining any ground for challenging an auction which either could have been taken earlier before the sale was conducted and confIrmed or where no substantial injury has been caused on account of such irregularity.

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I find that any of the grounds, as stated has not been neither pleaded nor proved.

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13.In view of above discussion, I do not find any merit in the SA, accordingly, the present SA is dismissed being devoid of merit. All the other pending IAs are also disposed of.

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Let the file be consigned to record room.

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("“’:“b-v (Pravas Kumar Singh) Presiding Officer Debts Recovery Tribunal Lucknow

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Judgment signed, sealed, dated and pronounced in the open court on this 08th Day of October, 2025 .

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n ~-'A

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(Pravas KumaI bIhaR) Presiding Officer Debts Recovery Tribunal Lucknow

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(Veeresh)

Smt Sukho v. Capri Global Capital Limited

Case brief

What is this about?

What did the court decide?

Smt Sukho v. Capri Global Capital Limited

Case brief

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