Allowed

Smt Neelam Chaudhary v. Punjab National Bank

DRT6 Nov 2025SA/842/2023

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal upheld the Securitization Application filed by borrowers challenging the enforcement action by Punjab National Bank. The court found that the bank violated the mandatory 15-day notice period for auction under SARFAESI Rules. Consequently, the sale was set aside, and the bank was directed to refund auction proceeds with interest.

What did the court decide?

Sale dated 29.01.2024 set aside; Sale Certificate revoked; Bank directed to return auction proceeds with 9% p.a. interest within 15 days.

Smt Neelam Chaudhary versus Punjab National Bank — Execution and Attachment | DRT (2025)

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DEBTS RECOVERY TRIBUNAL LUCKNOW

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a Office action
proceeding taken with
date
S.A. No.842/2023
06.1 1.2025 The Judgment is signed and
pronounced on separate sheets. Separately
attached in 06 sheets.
Order be uploaded on the Tribunal’s
website.
(Dictated)
(Pravas Kumar o„rgh)
Presiding Officer
(Mugish)

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S.A. No.842 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. 842 of 2023

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Dated: 06.11.2025

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1 2.	Smt.NeelamChaudhary,wifeof SriShiv Poojan Veerma, resident of Mohalla Ghasiyaripura, City&District–Bahraich. Shiv 'Poojan Verma, son of VishramLal Verma, resident of Mohalla Ghasiyaripura, City&District–Bahraich. .. . Versus	. ....Applicant
1.	Punjab National Bank, Circle Sastra: Circle Office, BSNL ExchangeBuilding Sitapur – 261001, through itsAuthorized Officer
2. 3.	Punjab National Bank, Branch Office Digiha, District – Bahraich –271801, through its Branch Manager. ShriBalramGupta S/o Shri RamShankar Gupta, R/o Kasaudhan Niwas Naya Anand Bag,Barahata,Ayodhya(U.P.) 224123. . .	.. ..Respondents
Ld : , Ld Ld :	. Counsel for Applicant: Mr. Bhaskar Tripathi, Ad .Counsel for Respondent bank: Mr. N. K.Tripath, . Counsel for the auction purchaser: None	: , vocate. i, 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).

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S.A. No.842 of 2023

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This Application under Section 17(1) of the SARFAESI Act, 2002 has been initially brought by the applicant mainly for setting aside the sale notice dated 13.09.2023 and the subsequent sale proceeding and further to quash the possession notice dated 19.08.2023, demand notice dated 07.06.2023 along with other reliefs. By way of amendment subsequent sale notice and sale has been challenged. Facts of the case are mostly admitted or proved.

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Admittedly, a Term Loan facility for a sum of Rs.5.00 lacs was disbursed in favour of the applicant and the applicant could not maintain financial discipline. A demand notice dated 07.06.2023 under Section 13 (2) of the SARFAESI Act, 2002 was issued demanding a sum of Rs.9,18,431.00 along with interest. The Applicant No.1 is the wife of Applicant No.2 and they reside under one roof.

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It is stated that the demand notice and possession notice were not served upon all the borrowers and it was not in accordance with the SARFAESI Rules. Further case being that, in the meantime sale notice dated 13.09.2023 was issued but sale could not take place. Subsequently, the respondent bank issued sale notice dated 08.01.2024, which was not served as per the SARFAESI Rules, the property was put on sale without making statutory compliances.

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A detailed written objection has been filed. It is submitted that the respondent bank has made all the statutory compliances as per SARFAESI Act and Rules and the property has been rightly put on e-auction, the sale certificate has been issued in favour of the auction purchaser. It is stated that the applicant is a willful defaulter and he had never intended to pay any amount in lieu of the debt.

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1 have considered the rival submissIons.

S.A. No.842 of 2023

Re 13 (2):

Ld. Counsel for the respondent bank has drawn my attention towards the written submission filed by the respondent bank. It is submitted that the demand notice dated 07.06.2023 was sent through speed post and as per postal receipts along with the tracking report. Notices have been shown to be served upon both the applicants.

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1 find that notices under section 13 (2) have been served upon both the applicants.

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Re 13 (4):- 1 find that possession notice dated 19.08.2023 has been sent through speed post and as per the tracking report items have been delivered to both the applicants on 28.08.2023. Proof of publication of the notice has been filed both the newspapers and affixation have been made at the secured assets, annexures have been shown to the Tribunal

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10.1 find that and confirm that notices under Section 13 (4) have been served upon both the applicants.

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11.Re. Sale notice: - I find that sale notice dated 08.01.2024 has been issued for both the applicants (dispatched on 1 2.01 .2024) and as per the endorsement made on the envelop both the applicants had refused to receive the same on 16.01.2024 and the employee of the postal department has submitted the report as “refusal” postal receipts dated 12.01.2024 has been filed along with returned envelop. Notice dated 08.01.2024 has been published on newspaper on 14.01.2024 in both the two leading newspapers, it has been affixed at the secured assets, (the date is not clear). Thus, the notice would be deemed to be served on 16.01.2024 only.

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12.It is further pointed out that the applicant served a legal notice dated 16.01.2024, which was received by the respondent bank on 19.01.2024 saying therein that notice dated 08.01.2024 has been affixed at the secured assets without informing the applicant.

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S.A. No.842 of 2023

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13.The main contention of the Ld. Counsel for the applicant being that e-auction sale notice dated was issued on 08.01.2024, it was dispatched on 12.01.2024, and delivered on 16.01.2024 and the sale took place on 29.01.2024. Similarly, sale notice was issued on 08.01.2024, but the same could not be pasted on before 16.01.2024. Similarly, sale notice was issued on 08.01.2024, but the same was published on 14.01.2024 and the sale could take place on 29.01.2024. The publication was made in Lucknow edition, while the property is situated in Bahraich District. Needless to say, that Lucknow edition is meant for circulation in the city itself

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14.It is stated that the respondent bank has violated the Rule 8 (6) of the Security Interest (Enforcement) Rules, 2002.

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The main contention of the Ld. Counsel for the applicant being that sale has been made within 15 days of the notice in violation Rule 8 of the SAF:FAESI Rules. Rule 8 of the SARFAESI Security Interest (Enforcement) stipulates that the Authorized Officer was required to serve to the borrowers a notice on 30 days for sale of the immovable secured assets under sub-rule (5) of Rule 9 a proviso Rule 9 (1 ) reads as:

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No sale of immovable property under these rules, in first instance shall take place before the expiry of thirty days from the date on which the public notice of sale is published in newspapers as referred to in the proviso to sub-rule (6) of rule 8 or notice of sale has been served to the borrower.

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r( P

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Provided further that if sale of immovable property by any one of the methods specified by sub-rule (5) of rule 8 fails and sale is required to be conducted again, the authorized officer shall serve, affix and publish notice of sale of not less than fifteen days to the borrower, for any subsequent sale.

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Admittedly, it was subsequent sale. I find that, it has been proved that a notice dated 08.01.2024 was

IIly

S.A. No.842 of 2023

dispatched on 12.01.2024, any reason for delayed dispatch has not been brought on record, not served by any mode before 16.01.2024 and the property was put on e-auction dated 29.01.2024. Meaning thereby a clear 15 days’ notice was not given. The stringent provision has been given by the legislature to ensure that the borrower gets sufficient time to redeem or participate in the e- auction. The conduct of the respondent bank in dispatching the notice dated 8.01.2024 on 12.01.2024, publication made in city edition of Lucknow though the borrowers being of Bahraich, affixation made without GPS camera and putting the property for e-auction on 14th day gives an inkling of unfair conduct by the respondent bank. It seems that respondent bank was bent upon to get the borrower parried before the auction takes place.

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17.In view of the above discussion, I find that the sale dated 29.01.2024 has been proceeded by the respondent bank in defiance of Rule 9 (1) of the SARFAESI Rules in hot haste and it is not tenable in the Eyes of Law.

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0.R.D.E.R.

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Accordingly, SA is allowed and contest. I. The sale dated 29.01.2024 is set aside.

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II. The Sale Certificate and Confirmation Letter issued in favour of the auction purchaser is set aside.

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III. The respondent bank is directed to return back the amount received from the auction purchaser within 15 days of this order with interest @9% per annum with monthly rest.

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IV. The respondent bank is at liberty to proceed a fresh from the stage after 13 (4).

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V. The applicant will be at liberty to move before the respondent bank for redemption of the secured assets/mortgaged.

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VI. The respondent bank is directed not to impose any charge from the borrower with regard to prosecution of this SA.

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Let the file be consigned to record room.

S.A. No.842 of 2023

(Dictated)

(Pravas Kuma}Singh) Presiding Officer Debts Recovery Tribunal Lucknow

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Judgment signed, sealed, dated and pronounced in the open court on this 6th Day of November, 2025.

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”n\INn

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(Pravas Kumar Singh) Presiding Officer Debts Recovery Tribunal Lucknow

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(Mugish)

Smt Neelam Chaudhary v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

Smt Neelam Chaudhary v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

Parties & counsel

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