Allowed

Ms Sai Ram Traders and others v. Hdfc Bank

DRT29 Jan 2026SA/105/2024

Case brief

AI extract

What is this about?

This application to quash SARFAESI proceedings and seek compensation was disposed of. The Tribunal set aside the order of taking possession via delivery of notice due to inability to prove service and CERSAI registration, while noting that loan restructuring requests are outside its adjudicatory purview.

What did the court decide?

The application was allowed with costs and the measure of taking possession by delivery of notice was set aside.

Ms Sai Ram Traders and others versus Hdfc Bank — Banking and Recovery | DRT (2026)

SA 105 of 2024 (J)

DRT. PATN A

DEBTS RECOVERY TRIBUNAL PATNA

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Presiding Officer: Shri Kaushalendra Yadav

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SA- 105 of 2024

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M/s Sai Ram Traders, Registered Office at G. T. Road, Mohania, Bhabua, Near Chandni Chowk, Hanuman IVlandir, Mohania, Bihar – 821109. (Borrower).

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Om Prakash Gupta, Proprietor. M/s Sai Ram Traders, S/o Chandrika Prasad Sah. R/o Village – Didikhili. P.O. Didkhili. District – Kaimur (Bhabua). Bihar – 821109. (Proprietor).

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'1J. Chandrika Prasad Sah, R/o Village – Didikhili, P.O. Dirikhili, District Kaimur (Bhabua), Bihar – 821109. (Guarantor).

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..................Applicants

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Versus

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The Authorized Officer, HDFC Bank, Limited, Department for Special Operation. Rajendar Ram Plaza, 1 st Floor, Exhibition Road, Patna, Bihar- 800001.

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......................... Respondent

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Presents;

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For the Applicants

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For the Respondent Bank

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: Sh. S.N Choubey, Advocate

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: Sh. Bhola Shankar, Advocate

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Dated: 29.01.2026

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JUDGMENT

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The present application has been filed seeking to quash the entire SARI;AESI proceedings. including the demand notice. if any, and the possession notice dated 07.02.2024. and to seek compensation under Section 19 of the Act.

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During the pendency of this case, the applicant has filed an Interlocutory Application. being I. A. No. 357/2024. seeking a stay on the physical proceedings.

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The brief facts of the case are as follows: Applicant No. 1 is a proprietorship firm, Applicant No. 2 is its proprietor, and Applicant No. 3 is the guarantor. The applicants had availed a Cash Credit facility of ?25,00,000 in the year 2015 from the respondent bank, which was later enhanced to ?50,00,000 in 2017. To secure the said loan. the applicants created an equitable mortgage over the property. Due to default in repayment of the loan amount, the respondent bank classified the loan account as a Non-Performing Asset (NPA) on 3 1.12.2018. Subsequently, the bank issued a demand notice dated 26.03.2019 under Section 13(2) af the SARFAESI Act, followed by a possession notice dated 07.02.2024 under Section

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SA 105 of 2024 (J)

DRT. PATN A

13(4) of the said Act. Aggrieved by the issuance of the possession notice. the applicants have filed the present Securitization Application.

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The learned counsel for the applicant submitted that due to the COVID-19 pandemic, there were irregularities in the repayment of the loan amount. The applicant had repeatedly requested the respondent bank to restructure the loan and extend the repayment period, as the business had been shut down during the pandemic. However, the bank did not respond to such requests. It is further submitted that the respondent bank did not issue any demand notice under Section 13(2) of the SARFAESI Act, or if issued, the same was not served upon the applicants. The applicant also stated that they were not informed about the declaration of the loan account as a Non-Performing Asset (NPA). It is further submitted that the bank issued a possession notice dated 07.02.2024 under Section 13(4) of the Act, but the same was not served upon Applicant No. 3. The said possession notice was also not affixed on the secured asset, and the secured asset has not been registered with CERSAI. It is also submitted that the secured property is already under attachment by this Hon’ble Tribunal in R.C. No. 394/2023. The applicant further submitted that despite several requests, the respondent bank has not provided the statement of account to the applicant. It is further submitted that an order dated 15.06.2024 was passed by the District Magistrate under Section 14 of the Act for taking physical possession of the secured asset on 26.06.2024.

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The learned counsel for the respondent bank submitted that due to default in repayment of the loan amount. the bank classified the loan account as a NonPerforming Asset (NPA) on 31.12.2018. Subsequently, the bank issued a demand notice dated 26.03.2019 under Section 13(2) of the SARFAESI Act, which was duly served upon the applicants. The said demand notice was also published by the respondent bank in two newspapers on 19.09.2019. As the applicants did not file any objection or representation under Section 13(3 A) of the Act, the bank thereafter issued a possession notice dated 07.02.2024 under Section 13(4) of the Act, which was duly delivered to the applicants, affixed on the secured asset, and published in two newspapers in compliance with the provisions of the Act. It is further submitted that the secured asset has been registered on the CERS AI portal. The learned counsel also submitted that the secured asset was not attached under R.C. No. 394/2023 till the filing of the counter affidavit on 18.10.2024

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I have heard the learned counsels of both the parties and gone through the records.

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7 It is alleged by the applicant that the demand notice was not issued by the bank,

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SA 105 of 2024 (J)

DRT. PATN A

or if issued, the same was not served upon them. It is further alleged that the possession notice dated 07.02.2024 was neither served upon Applicant No. 3 nor affixed on the secured asset. It is also alleged that the applicant's request for restructuring the loan and extension of the repayment period was not considered by the bank. The applicant further alleged that the secured property was not registered with CERS Al, and despite repeated requests, the statement of account was not provided by the bank.

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As far as the allegation regarding the demand notice is concerned, upon perusal of the record, it is found that the demand notice was issued on 26.03.2019 and the same was sent by post to the applicant on 27.03.2019, as evident from the xerox copy of the postal receipt annexed as Annexure R/1 at page 15 of the counter affidavit. However, no tracking report has been filed. The respondent bank has also published the demand notice in two newspapers–one in The Indian Express and another in Sanmar g–on 19.09.2019, after a gap of six months, as evident from Annexure R/2 (xerox copies of the newspaper publications at pages 16–17 of the counter affidavit).

¶39

As far as the allegation regarding the possession notice is concerned, it is found that although the bank has stated, in paragraph 14 of the counter affidavit, that the possession notice was physically served upon the applicants and also sent through post, the bank has not submitted any proof in support of this claim. Neither the copy of possession Notice having signature after receiving the copy thereof has been aIr nor any postal receipt or tracking report has been filed. The possession notice appears to have been affixed on the secured asset. as evident from Armexure R/3 at pages 18–30 of the counter affidavit. The said possession notice was also published in two newspapers–one in The Times of India and another in Haj–on 10.02.2022, as evident from pages 31–32 of the counter affidavit.

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With regard to the allegation that the property has not been registered under CERSAI, it is noted that although the bank has stated at paragraph 8 of the counter affidavit that the property is registered with CERSAI, no document or proof has been filed to substantiate this statement, despite the specific allegation raised by the applicant.

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As far as the allegation that the respondent bank did not respond to the applicant’s requests for restructuring of the loan, extension of the repayment period, and supply of the statement of account is concerned, it is observed that such matters fall within the internal discretion and administrative domain of the bank and do not come within the adjudicatory purview of this Tribunal.

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SA 105 of 2024 (J)

DRT, PATN A

Furthermore, the applicant has not placed on record any documentary evidence to substantiate the allegation or to demonstrate that any such requests were. in fact,

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made to the respondent bank.

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It.is to be noted that neither the applicant nor the respondent bank has informed this Tribunal whether the physical possession of the secured asset has been taken under Section 14 of the SARFAESI Act or not.

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In view of the above discussion the CERSAI registration and the delivery of possession notice could not be proved, the measures of taking possession by delivery of notice is liable to be set aside.

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ORDER

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The application SA 105 of 2024 filed by M/s Sai Ram Traders and Ors, is Allowed with costs. The measure of taking possession by delivery of notice is hereby set aside

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[KaushalendraYadav]

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Presiding Officer

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Debts Recovery Tribunal. Patna

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Judgment signed, sealed. dated and pronounced in the open court on this 291 H Day of January. 2026.

'dll ) yb

[KaushalendraYadav]

Presiding Officer

Debts Recovery Tribunal,

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Patna

Ms Sai Ram Traders and others v. Hdfc Bank

Case brief

What is this about?

What did the court decide?

Ms Sai Ram Traders and others v. Hdfc Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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