Dismissed

Ms Kashish Garments v. Punjab National Bank

DRT13 Oct 2025SA/870/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed a Securitization Application seeking to quash auction sale proceedings under the SARFAESI Act. The Tribunal held that the secured creditor complied with all statutory requirements and that the sale was confirmed, ruling that only fundamental errors can vitiate a concluded auction.

What did the court decide?

Securitization Application dismissed; all other pending Interim Applications disposed of.

Ms Kashish Garments versus Punjab National Bank — Banking and Recovery | DRT (2025)

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S.A. No.870 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.870 of 2023

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Dated: 13.10.2025

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M/s. Kashish Garments

, Applicant

Versus

Punjab National bank

. . . . Respondents

Ld. Counsel for the applicant: Mr. Rajeev Saran, Advocate. Ld. Counsel for the bank : Mr. Nitesh Kumar Tripathi, Advocate. Ld. Counsel for the auction purchaser: Mr. Anchal Shukla, 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 for setting aside the entire securitization proceeding with regard to the loan account of the applicant and to set aside impugned sale notice dated 12.9.2023 and further to set aside order passed under Section 14 of the Act.

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It is stated that applicant came to the knowledge of the proceeding after the sale notice publication and further regarding order under Section 14 of the Act subsequently. It is submitted that without making compliances under Rule 8(6) & 9(1), the respondent-bank proceeded for putting the secured assets on e- auctron.

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It is stated that illegal demand notice 28.5.2021 was served upon the applicant mentioning the date of NPA as 31.3.2021 and calling to pay amount of Rs.46,77,599.42/- along with pendentlite and future interest. It is further submitted that possession

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S.A.No.870 of 2023

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notice dated 31.8.2021 in order to take symbolic possession was made without affixation. It is reiterated that statutory compliances under SARFAESI Act and Rules was not adhered by the respondent-bank while putting the property on e-auction.

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A detail written objection has been filed on behalf of the respondent-bank. It is stated that SA is highly barred by limitation from the possession notice dated 31.8.2021. It is further submitted that sale which was scheduled on 05.10.2023 became infructuous due to none submission of bid by prospective purchaser. It is specifically submitted that respondent-bank had issued and served demand notice dated 28.5.2021 under Section 13(2) of the Act to all the borrowers and in proof thereof, postal receipts have been annexed as Annexure No.R- 1 along with photocopy and shown to the tribunal. Similarly, possession notice dated 31.8.2021 was served upon the applicant and borrowers, it was affixed on the secured assets and published in two leading newspapers and in proof thereof, Annexure No.R-2 have been shown to the Tribunal. Affixation and publication have been annexed and shown to the Tribunal for denying the averments that possession notice under Section 13(4) was not affixed on the conspicuous part of the secured assets.

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5 . The respondent-bank has further filed objection to the amended SA after amendment of sale. It is stated that respondent-bank had put the sale of immovable property of the applicant for 12th time and in pursuance of 12th sale dated 16.02.2024 sale has been made and sale certificate has been issued in favour of the auction purchaser. It is pointed out that sale notice or sale has not even been challenged by the applicant as in lieu of sale notice dated 12.9.2023, no bid was received. It is stated that after compliance of procedure, sale certificate has been issued in favour of the auction purchaser on 14.3.2024 which has been filed as Annexure No. AR-1 with copy of objection filed by the

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S.A.No.870 of 2023

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bank. It is specific submission that 12th sale notice dated 16.02.2024 was served upon the applicant under Rule 8(7) and it was published in two leading newspapers on 17.02.2024 and the photograph of sale notice dated 16.20.2024, postal receipt, tracking report, photograph of affixation and publication in two newspapers have been shown to the Tribunal as Annexure No. AR-2. The valuation report has been filed as Annexure No. AR-3. It is vehemently argued that sale notice in lieu of which sale was conducted has not even been challenged by the applicant.

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Ld. Counsel for the applicant has placed his arguments mainly on following grounds:

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(a) it is stated that clear cut 30 days has not been given which was mandatory as per ratio decided in M. Rajendran & Ors. Vs. M/s. KPK Protein India Pvt. Ltd & Ors. SLP (Civil) No. 1 1068/2023 .

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I find that in the cited case The Hon’ble Court has flagged the issue regarding inconsistency between the Act and the Rules regarding notice period and even if a law is propounded by the Hon’ble Court, it will not to take effect retrospectively as The Hon’ble Apex Court has not directed for retrospective effect of the order.

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(b) Limitation point has also been argued, but, in view of trite law that limitation runs from the last measure taken by the respondent-bank i.e. sale in this case, hence, I find and hold that SA is not barred by limitation.

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(c) Ld. Counsel for the applicant has argued that respondentbank cannot wash away its hand for issuance of subsequent demand notice dated 06.9.2023 by simply saying that in its objection that bank had wrongly issued demand notice dated 06.9.2023 and it does not want to press the said demand notice. It is submitted that on behalf of the said demand

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S.A.No.870 of 2023

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notice, the applicant is pursuing the OA 89/2024, a copy of the same has been filed.

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I find that first demand notice is admitted to be received by the applicant and if some subsequent demand notice has been issued by the respondent-bank inadvertently, any material prejudice touching core of securitization proceeding has not caused to the applicant. 1 further find that actually it is a registered legal notice as stated in para 5.31 of The OA.

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(d) it is submitted that order under Section 14 of the Act has been obtained on the basis of demand notice dated 28.5.2021 and possession notice dated 31.8.2021, though, the subsequent demand notice dated 06.9.2023 has been issued. I find that this issue has already discussed by me while deciding the earlier plea raised by the applicant.

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(e) Another leg of argument has been that possession notice dated 31.8.2021 is not addressed to applicant no.2, applicant no.3 & applicant no.4, though, they are joint owners of the property. I find that possession notice has been issued and the owner of the secured assets Javed Khan and Parvez Khan i.e. applicant nos.2 & 4 and the applicant no.3 is wife of applicant no.4. She is simply mortgagor being wife of the applicant no.4. As per the postal receipt, it has been sent to all the borrowers and mortgagors, accordingly, the plea taken by Ld. Counsel for the applicant is non-est.

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In view of above discussion, I find that all the statutory compliances under SARFAESI Act and Rules have been complied by the respondent-bank. Admittedly, in this case, sale certificate has been issued and any relief to the applicant hinges around cancellation of sale certificate. At the cost of repetition, it is stated that applicant has not challenged the sale notice in lieu of which, sale had taken place.

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S.A.No.870 of 2023

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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 fi:aud. 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 con$rmed 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 cottusi\Pe, fraudulent or vitiated by inadequate pricing or underbidding. Mere irregularity or deviation from a rule which does not have any 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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Needless to say9 any such ground has not been raised by the applicant.

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As far as order under Section 14 of the Act is concerned, any particular fact has not bed pleaded regarding anY deficiencY in the order.

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TIle Hon’ble Apex Court in the leading case known as Balkris tma Rama Tarte Through LRg vs. Phoenix ARC Private Limited another SLP Petition No.16013 of 2022 has observed:

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“Immediately9 after receipt Of application iS received, the CMM/DM is expected to pass an order after verification of compliance of all formalities by the secured creditor and after being satisfied in that regard, to take possession of the secured

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assets. It is specifically observed that any claiming adjudicating that power exercised under Section 14 of the Act are ministerial step and does not involve on adjudicatory process qua points raised by the borrower against the secured creditor taking possession of secured assets.”

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In that view of the matter once all the requirements under Section 14 of the SARFAESI Act are complied with, it is the duty cast upon the DM to assist the secured creditor in obtaining the possession as well as the documents related to the secured assets even with the help of any officer subordinate to him. It is submitted that at any stage, the District Magistrate is not required to adjudicate the dispute between the borrower and the secured creditor and/or between any other third party.

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11.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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P:“?L;' )~~P,.+

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(Pravas Kthnar Singh) Presiding Officer Debts Recovery Tribunal Lucknow

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Judgment signed, sealed, dated and pronounced in the open court on this 13th Day of October, 2025.

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iLbl - \N

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(Pravas Kumar\ ,ngh) Presiding Officer Debts Recovery Tribunal Lucknow