Dismissed

Harshit Oberoi v. State Bank of India

DRT15 Dec 2025SA/605/2023

Case brief

AI extract

What is this about?

The Arbitrator dismissed a Securitization Application filed to quash demand, possession, and sale notices under SARFAESI Act. The court held that no material prejudice was caused by the alleged irregularities to the applicants, and the application was devoid of merit.

What did the court decide?

The Securitization Application was dismissed, and pending Interim Applications were disposed of.

Harshit Oberoi versus State Bank of India — Cheque Dishonour | DRT (2025)

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DEBTS RECOVERY TRIBUNAL LUCKNOW

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Date oforder or lroceedin!	Order withsignatureofcourt	Officeaction takenwithdate
S.A.No.605/2023 09.12.2025	Judgment is signed and pronounced on separate sheets. Separatelyattachedin07sheets. Order be uploaded on the Tribunal’swebsite.
	r -\qb+/<br>(Pravas Kumar Singh) Presiding Officer

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1 S.A. No.605 of 2023

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IN THE DEBTS RECOVERY TRIBUNAL, LUCKNOW

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Present: Pravas Kumar Singh, Presiding Officer

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Securitization Application No.605 of 2023

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Dated: 09.12.2025

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Harshit Oberoi & Ors.

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. . . . . . . . . Applicants

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Versus

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State Bank of India & Ors.

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. . . . Respondents

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Ld. Counsel for applicant: Mr. Rajeev Saran, Advocate. Ld. Counsel for respondent-bank : Mr. Shivanshu Bajpai, Advocate. Ld. Counsel for auction purchaser: Mr. Gautam Kumar, Advocate.

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JUDGMENT

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The present Securitization Application has been filed 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 demand notice dated 08.3.2022, possession notice dated 26.5.2022, sale notice dated 07.6.2023, sale dated 27.6.2023 and further to quash order dated 28.9.2022 passed under Section 14 of the Act.

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2 Brief facts of the case: The applicant no.1 is partners of the borrower firm M/s. Anha Exports (applicant no.3) along with applicant no.2/wife of applicant no.1. The defendant nos.2 & 3 have also filed SA No.542/2022 titled as Anuradh Sahgal and Others vs. State Bank of India and Others. In the said SA, the applicant no.1 is respondent no.3. The result or status of that case is not before me. It is stated that defendant nos.2 & 3 are out going partners and defendant no.2 has joined as partner subsequently. It is further stated that change in partnership was communicated to the bank by e-mail dated 20.5.2021. The present recovery proceeding was initiated by the respondent-

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S.A.No.605 of 2023

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bank under SARFAESI Act in respect of property as detailed in the SA, which is residential property in the name of respondent no.2. The flat in the name of applicant no.1 and respondent no.3, two vehicles along with fixed assets of the firm. The applicant no.1 is co-owner of the property situated at Agra and by virtue of agreement, he has right and interest over the property ofNoida.

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Further case being that sale notice dated 07.6.2023 in respect of property situated at Agra was scheduled to be held on 27.6.2023 and it is not in consonance with Rule 8(6). It is further stated that applicant came to know that property situated at Agra has been sold by the respondent-bank to respondent no.4. It is further submitted that stated that proper CERSAI registration has not been made and order under Section 14 of the Act is ex-parte.

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The respondent nos.2 & 3 did not appear in the case, however, Ld. Counsel for the respondent no.4/auction purchaser has appeared and filed written notes.

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Written objection has been filed by the respondent-bank stating therein that all the statutory compliances have been made. It is submitted that applicant no.2/Smriti Pandey, wife of applicant no.I was not necessary party, as she is neither signatory to the loan documents or other documents and further, she has joined partnership agreement after loan facilities were provided to the others. It is further stated that loan account was classified as NPA on 16.10.2021 in accordance with guidelines of RBI on account of failure to maintain financial discipline and irregularity in repayment. The notice dated 08.3.2022 under Section 13(2) was issued and served upon the borrowers and guarantors. In proof thereof, Annexure No. R-1 has been annexed and shown to the Tribunal. I find that notice dated 08.3.2022 has been send to all the borrowers/guarantors through speed post and postal receipt has been annexed with the counter affidavit. It is further stated that no representation was made by

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the applicants or by respondent nos.2 & 3. The respondent-bank issued possession notice dated 26.5.2022 after expiry of 60 days and affixation of the same was made. The notice was duly published in two newspapers on 01.6.2022. True copy of possession notices and its service upon the borrowers and guarantors have been shown to the Tribunal and annexed with the counter affidavit. I find that vide Annexure No. R-3, it has been affixed at the secured assets and it has been duly published rn two newspapers.

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It is further stated that respondent-bank had preferred a petition under Section 14 of the Act before ADM, Agra and in lieu of the order, a notice was issued by ACM for taking possession of the mortgage property. In proof thereof, Annexure No. R-4 has been brought by the respondent-bank and shown to the Tribunal. The grievance of the applicant that it was ex-parte order is non-est, since, it is ministerial proceeding and not even quasi-judicial process was required to be adopted by Ld. ADM.

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Further case being that prior to the present auction dated 27.6.2023, the respondent-bank had taken attempts to put the property on e-auction on five earlier occasions, however) as no bid could be received, earlier sale notice has been abated. Earlier sale notice is annexed as Amexure No. R-5. It is Rrrther stated that after failure of the earlier sale notices9 the respondent_bank issued sale notice dated 07.6.2023 which was served upon all the borrowers and guarantors and true copy of sale notice dated 07.6.2023 is filed with the counter affidavit as Annex.ure No. R_ 6, which has been perused by me. It is submitted that sale notice was affixed at the secured assets and published in two newspapers, copy of which has been filed as Annexure No. R-7 It is stated that after due service of the notices9 secured asset was put on auction on 27.6.2023 and the respondent no.4 was declared as highest bidder for amount of Rs.869569000/_ against the reserve price of Rs.74.56 lac after deposit of entire amount9

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sale certificate was issued on 12.7.2023. TIue copy of sale certificate is annexed as Annexure No.R-8.

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It is pointed out at the very outset that by earlier order, this Tribunal has given clear finding that SA is well within territorial jurisdiction of this Tribunal and it is not barred by law of limitation. The order has attained finality and does not require to be discussed here.

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It is specifically submitted that applicant availed total nine credit facilities from the respondent-bank and the demand notice dated 08.3.2022 clearly mentioned the total outstanding over each of the nine loan accounts amounting to Rs.5,32,69,941/-. It is further stated that same amount is mentioned in possession notice and sale notice dated 07.6.2023 and mention of seven loan accounts in the sale notice does not cause any prejudice to the applicant. It is submitted that respondent-bank has carefully complied the statutory requirement under Rule 8(5)9 8(6) & 8(7).

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10.Ld. Counsel for the auction purchaser submits that auction purchaser has invested huge amount and still shadow is cast upon the right and title and interest due to pendency of this SA.

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The grievance of the applicant mainly hinges around following grounds.

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(i) Date of NPA in demand notice is 09.5.2021. 1 fInd that any material prejudice has not been caused by it to the applicant .

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(ii) Tracking report for demand notice has not been filed. / Dnd that any material prejudice has not been caused by it to the applicant.

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(111) Postal receipt of possession notice is not filed.

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'I Pnd that it has been duly DIed and has been annexed with the counter aadavit and it has been authenticated from the postal department . ’ ’

S.A.No.605 of 2023

12.It is submitted that sale notice is not according to Appendix-IVAp however) I find that all the ingredients have contained in the notice. I further fmd that respondent-bank has attached CERSAI report with the counter affidavit.

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13.Ld. Counsel for the applicant has also filed second set of written submission mainly stating therein that the Hon’ble Apex Court in the matter of M. Rajendra & Ors Vs. M/s. KPK Oils and Proteins India Pvt. Ltd & Ors has held that Rule 8(6) and 9(1) are redundant and there is only one notice of sale is provided under Rule 8(6) as per the Appendix IV-A which is of 30 days. I find that in the said judgment of the Hon’ble Apex Court has flagged the issue regarding inconsistency in the Act and Rules regarding notice of 30 days and in notice under Rule 9(1) of 15 daYS in subsequent sale and any amendment to the same has not been incorporated.

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14'1 have also considered the argument advanced by Ld. Counsel for the applicant regarding plea of retirement ofpanner. Section 32 of Indian Partnership Act permits a partner to retire

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15'S''ti'n 32(2: ' read as “R'ti"hg P„,t„,„ m,y b, discharged from 'IT liability to ' anJ Mhd party for acts of the fIrm done Lefore

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S.A.No.605 of 2023

not on record, the deed was acted upon is not on the record as stipulations were pre-condition of the agreement. Thus, plea of partnership deep and retirement of a partner seems to be only a pretext.

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16.1 have considered that in this case, sale certificate has been issued and any relief to the applicant lies in cancellation of sale certificate, for which ground is required to be pleaded and proved.

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The Hon’ble Apex Court has decided a ratio in Bafna Contempt Case.

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“The Hon’bIc 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’bIc 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 nee 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 mlsrepresentation or fraud. After discussions of several other Judgments their Lordship has propounded the ratio in para 218 of the judgment.”

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bt L\

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'AnY sale by auction or other public procurement methods once alreadY con$rmed or concluded ought not to be set_aside or Interfered with tightIY except on grounds that go to the core of such sale process3 such as either being coltusRe1 fraudulent Jr vitiated bY inadequate pricing or tmderbidding.. Mere Irregularity or deviation from a rule which does not-'have any fundamental procedural error does not take away --tie foundation of authority for such proceeding. In such cases, 30urts m PTr,ticular should be mindful to refrain entertaining anY ground for challenging an auction which either could hai been taken earlier before the sale was conducted and con$7.med or ThFre nq substantial injurY has been caused on account of such irregularity.”

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18'1 find that any such ground causing material prejudice to the applicant has neither been pleaded nor proved and fun,her if

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some irregularity has been committed by the respondent-bank, any material prejudice has not been caused to the applicant touching the core of the securitization proceeding.

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