The Debts Recovery Tribunal dismissed a securitization application filed by a guarantor challenging a bank's SARFAESI action and subsequent auction. The court held the application time-barred regarding earlier notices as the applicant had knowledge but delayed filing. The auction challenge was treated within time but ultimately dismissed for lack of merit.
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.
SA No. 78 of 2023
DEBTS RECOVERY TRIBUNAL-II, CHANDIGARH
SA No. 78 of 2023 Rahul Anil Ahuja
Versus
A.O. Punjab National Bank and another
Dated: 23.12.2025
Item No. (Supplementary-3)
Argued by: Mr.Rohit Sapra, Counsel for the Applicant. Mr.Atul Mahajan, Counsel for Respondent No.1/Punjab National Bank.
Mr.Shventashu Goyal, Counsel for Respondent No. 2/Auction Purchaser.
Rahul Anil Ahuja (Applicant) has 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 Authorized Officer, Punjab National Bank (PNB) and another (Respondents).
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SA No. 78 of 2023
DEBTS RECOVERY TRIBUNAL-II, CHANDIGARH
18.01.2023, DM, Gurugram allowed the application of the Bank for taking the physical possession of the property. In pursuance to the order dated 18.01.2023 passed by DM, Gurgram, on 07.02.2023, Naib Tehsildar, Gurugram, issued a notice to the Applicant stating that the possession would be taken on 22.03.2023. On 14.02.2023, Applicant filed objections before Tehsildar requesting him to cancel the possession proceedings. The Bank did not take the possession of the property on 22.03.2023. On 22.03.2023, Naib Tehsildar, Gurugram delivered a notice at the secured asset stating that the possession would be taken on 19.04.2023.
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SA No. 78 of 2023
DEBTS RECOVERY TRIBUNAL-II, CHANDIGARH
alleged that the notice under Section 13(2) is very vague and defective. Similarly, he was not served with the possession notice. The possession notice was published in ‘Financial Express’ which does not have wide circulation in the locality. The possession notice was not affixed on the property. The DM did not record his satisfaction before passing the order under Section 14 of the SARFAESI Act. The affidavit, accompanying the application under Section 14 was not duly affirmed. There was no proper CERSAI registration. On these facts, Applicant filed the present SA and alleged that the SARFAESI action be set aside.
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SA No. 78 of 2023
DEBTS RECOVERY TRIBUNAL-II, CHANDIGARH
(Applicant) alleged that his father had died at Mumbai on 12.04.2023 and he was caught up in Mumbai for the last rites of his father. On 29.04.2023, Bank disclosed the particulars of the auction purchaser but it did not share a copy of the sale certificate and also did not inform the date of issuance of sale certificate. Applicant in the amended SA alleged that the whole of the SARFAESI action and the auction dated 25.01.2023 be declared illegal, null and void .
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SA No. 78 of 2023
DEBTS RECOVERY TRIBUNAL-II, CHANDIGARH
from 22.03.2023. Applicant has also not filed any application for condonation of delay. Applicant was served with the notices under Section 13(2) and 13(4) of the SARFAESI Act. Applicant in his returns to the Ministry of Corporate Affairs, Government of India, has continuously mentioned his address as C-1, Second Floor, Greater Kailash-I, New Delhi. The notice was also sent at that address. The property was duly registered with Central Registry. He (Auction Purchaser) had participated in the auction dated 25.01.2023 and has made the payment in the following manner:-
| Date | Amount | Payment Reference No. |
|---|---|---|
| 24.01.2023 | 15,83,000/- | Deposited with MSTC E-commerce.com (e- |
| auction platform provider to PNB against | ||
| reserve price) | ||
| 27.02.2023 | 27,70,000/- | ICICR52023012700578402 |
| 29.03.2023 | 20,00,000/- | Transaction Reference No. 23042100162543ICIC |
| 24.04.2023 | 1,08,69,040/- | ICICR52023042300290030 |
| TDS | 1,73,960 | CIN No. 23042100162543ICIC |
| 21.04.2023 | ||
| Tota | l Payment | Rs. 1,73,96,000/- |
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SA No. 78 of 2023
DEBTS RECOVERY TRIBUNAL-II, CHANDIGARH
admitted on the record that there is no stay order in the appeal filed before the Hon’ble DRAT, Delhi.
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SA No. 78 of 2023
DEBTS RECOVERY TRIBUNAL-II, CHANDIGARH
versus Alpine Pharmaceuticals has been set aside by the Hon’ble Supreme Court, yet, the point in issue in this case was not examined by the Hon’ble Supreme Court. Further, Hon’ble the Gujarat High Court in ‘ Rameshbhai Dodiya versus AO Union Bank of India’ has held that in respect of continuous cause of action, the Applicant can challenge the earlier actions. Mr.Sapra submitted that the demand notice was not served upon the Applicant. Bank has not produced on record any tracking report as well as acknowledgment. Mr.Sapra submitted that as per Rule 3 of The Security Interest (Enforcement) Rules, 2002, the onus is on the Bank to establish that it had served the notice under Section 13(2) on the Applicant. There cannot be any presumption of service of the demand notice. Mr. Sapra placed reliance upon the judgment passed by the Hon’ble Delhi High Court in United Commerical versus Bhim Sain Makhija-1993 (3) PLR (Delhi) 8 . Again reliance was placed on the judgment passed by the Hon’ble Bombay High Court in WP No. 888 of 2022, titled Sanjay Parshuram Jadhav versus State of Maharashtra . Mr. Sapra further submitted that the Bank has again given five addresses. However, since, 2013, Applicant was residing at House No. 1111, Ground Floor, DLF City, Phase IV, (Chakkarpur), Gurgaon. However, in the demand notice incomplete address was mentioned and neither the locality Chakkarpur nor the name of City Gurgaon was mentioned. Accordingly, no presumption under Section 27 of General Clause Act can be drawn. It was also submitted that the Auction Purchaser, who is a Chartered Accountant, filed the old record from the year 2015 to 2018 of Registrar of Companies. In fact, Applicant ceased to be the Director thereafter. Accordingly, the record of ROC prior to the notice dated 05.04.2021 is of no consequence. Applicant never resided in the flat situated at Vasant Kunj, New Delhi. He had never provided the address of Vasant Kunj, New Delhi. He was not residing in the mortgaged property. In fact, he was residing at House No. 1111, Ground Floor, DLF City, Phase IV, (Chakkarpur), Gurgaon. Auction Purchaser was not a party to the present SA prior to the auction. Bank in the reply dated 12.04.2023, nowhere alleged that there was fire. However, auction purchaser has introduced this new defense. The demand
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SA No. 78 of 2023
DEBTS RECOVERY TRIBUNAL-II, CHANDIGARH
notice dated 05.04.2021 was issued from Karol Bagh, New Delhi. The possession notice was also not served. Again, the sale notice was not served upon the Applicant. The demand notice is defective. No reason has been given for declaring the account NPA. In the demand notice, the complete detail of the amount payable has not been given. The demand notice was in violation of Section 13(2) of the SARFAESI Act. The possession notice was not published in the leading newspapers having sufficient circulation in the locality. The Financial Express newspaper has circulation of only 21592 copies compared to Hindustan Times, which has 433049 copies. Again sale notice was not published in leading newspapers. Auction Purchaser did not deposit the remaining 75% within time. The extension was not in terms of the auction notice. The auction notice did not state that there could be any extension. Accordingly, granting him extension was unfair. Auction Purchaser is not entitled to any mesne profits. Accordingly, it is submitted that the auction be set aside.
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SA No. 78 of 2023
DEBTS RECOVERY TRIBUNAL-II, CHANDIGARH
Bank had put the property for auction and the Applicant through his counsel had requested the Bank not to go for auction. This shows that Applicant was aware of the SARFAESI action. Winding up his arguments, Mr. Shventanshu Goyal submitted that there is no merit in the present SA and the same be dismissed.
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SA No. 78 of 2023
DEBTS RECOVERY TRIBUNAL-II, CHANDIGARH
Section 13(2) and 13(4) and the order of DM was time-barred. Auction Purchaser has produced on the record notice dated 04.08.2022 issued by Mr. Adarsh Ganesh, Advocate on behalf of the Applicant to the Bank requesting that the auction fixed up be cancelled. This shows that Applicant was aware that the Bank has taken the SARFAESI action. Further, in the notice dated 04.08.2022, issued by Mr.Adarsh Ganesh, Advocate, on behalf of the Applicant, it was not stated that Applicant had not been served with any notice under Section 13(2) and 13(4) of the SARFAESI Act. I am of the considered view that the challenge by the Applicant to the notices under Section 13(2) and 13(4) was time-barred.
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SA No. 78 of 2023
DEBTS RECOVERY TRIBUNAL-II, CHANDIGARH
The question of the borrower challenging the auction does not arise till the Bank has received the whole of the sale consideration from the Auction Purchaser. If the Auction Purchaser does not deposit the whole of the sale consideration within the prescribed time, there would be no sale and consequently the question of challenging the same also does not arise. I am of the considered view that this SA, as far as auction is concerned, should be treated within time.
18-A. I am of the considered view that there is no force in the contention of Mr.Sapra that Applicant was not served with the auction notice dated 31.12.2022. There is no denying the fact that the Bank has not produced on the record any tracking report of the auction notice dated 31.12.2022. I am of the considered view that this Tribunal should look to the totality of the facts and circumstances before returning any finding as to whether the auction notice was served or not. It
has already been observed by this Tribunal that Applicant has made false statement to the effect that he was not served with the notices under Section 13(2) and 13(4) of the SARFAESI Act. Despite the fact that those notices were served upon the Applicant, he never challenged the same. In fact, he has come out with the plea that those notices were not served upon him. Counsel for the Auction Purchaser has produced on the record a notice by the counsel for the Applicant, Mr.Adarsh Ganesh, dated 04.08.2022 to the Bank to cancel the auction. In that notice Applicant never alleged that he was not served with the notices under
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SA No. 78 of 2023
DEBTS RECOVERY TRIBUNAL-II, CHANDIGARH
Section 13(2) and 13(4) of the SARFAESI Act. Further the auction notice was sent to the Applicant at five addresses. Apart from this, the notice was also sent to M/s Earl Exim Private Limited and other guarantors. I am of the considered view that in facts and circumstances of this case, it cannot be said that Applicant was not served with the auction notice. That apart, Applicant has alleged that the auction notice was not published in leading newspapers having wide circulation in the locality. Admittedly, the auction notice was published in ‘Financial Express’ and ‘Jansatta’. Both these newspapers are well established newspapers and they are being published for the last many years. They may not have the widest circulation but it cannot be said that they do not have wide circulation and they are obscure newspapers having no or negligible circulation.
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SA No. 78 of 2023
DEBTS RECOVERY TRIBUNAL-II, CHANDIGARH
notice was not published in leading newspapers; the sale notice was not effected in English newspaper having wide circulation in the locality. The Auction Purchaser did not deposit the total sale consideration within time and the Bank was not justified in granting extension to the Auction Purchaser in making the payment of sale consideration as in the auction notice it was not mentioned that there could be an extension.
Registrar is directed to send a copy of this order to all the parties, as per rule. Thereafter, file be consigned to record room after due compliance.
(A S Narang) Presiding Officer DRT-II, Chandigarh (Additional Charge) Pronounced in open court Manoj/Dated: 23.12.2025 13
3 issues framed by the court
Whether the Securitization Application filed by the applicant challenging the SARFAESI action and auction is time-barred.
Whether the applicant has proved any ground sufficient to set aside the auction conducted by the bank.
Whether the applicant has been duly served with the requisite notices under the SARFAESI Act to challenge the proceedings.
1 provisions across 1 enactments
Rahul Anil Ahuja
A.O. Punjab National Bank
Dinesh Kumar Gupta
A S Narang
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
