Dismissed

Smt Chhaya Kale v. The Akola Urban Co-Operative Bank Ltd.

DRT18 Jul 2026SA/158/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed an application challenging a bank's recovery measures under the SARFAESI Act, including NPA classification, demand notices, possession taking, and private treaty sales of secured assets, finding the applicant failed to demonstrate material illegality or violation of statutory provisions.

What did the court decide?

The Securitisation Application No.158 of 2024 stands dismissed; no order as to costs.

Smt Chhaya Kale versus The Akola Urban Co-Operative Bank Ltd. — Company and Corporate | DRT (2026)

¶1

SECURITISATION APPLICATION NO.158 OF 2024

¶2

DEBTS RECOVERY TRIBUNAL No.3, MUMBAI

¶3

PRESIDING OFFICER: HARISH KUMAR KAUSHIK

¶4

SECURITISATION APPLICATION NO.158 OF 2024

¶5

Date of Institution: 25.04.2024 Date of Decision: 18.07.2026

¶6

Smt. Chhaya Kale W/D. of Late Shri Kale, Prop. M/s. Project Developers of Navi Mumbai, Indian inhabitant residing at B/1345, Sahyadri Plot No.13, Sector 10, Kamothe, Navi Mumbai 410 209.

¶7

… Applicant

¶8

Versus

¶9

The Akola Urban Cooperative Bank Ltd. a bank registered and acting under the Banking Regulation Act having their Branch Office at 58, Kalbadevi Road, Patwa Chawl Tak Wadi, Vithalwadi, Kalbadevi, Mumbai – 400002 also at “Jankalyan” Plot No. 58/59, Toshniwal Layout, Murtizapur Road, Behind Govt. Milk Scheme, Akola – 444001.

¶10

The Authorized Officer, The Akola Urban Cooperative Bank Ltd. 58, Kalbadevi Road, Patwa Chawl Tak Wadi, Vithalwadi, Kalbadevi, Mumbai – 400002.

¶11

Page 1 of 22

¶12

SECURITISATION APPLICATION NO.158 OF 2024

¶13

Central Bank of India, a body corporate, constituted under the Banking Companies (Acquisitions & Transfer of Undertaking) Act, 1970, having Central Office at Chander Mukhi, Nariman Point, Mumbai 400 021 and a Branch Office amongst others at Shop No.24, Plot Nos.33 and 34, Grandeur Building Sector 20, Kamothe, Navi Mumbai 410209.

¶14

Shri. Manoj D. Ubhare (Flat No. D- 301) R/O VTC Kalvan, Po, Wighawali, Sub District Mangoan, District Raigad. 402112.

¶15

Shri. R.S. Babar & Sau. M.R. Babar (Flat No. D-303) Naygoan, Police Head coquter, Building No.5, Room No.49, Naigaoan East Dadar, Mumbai 4000014.

¶16

Shri. Mohammad Kalu Ali & Smt. Raseda bibi (Flat No. D-305) Flat No.102, Sunbeam CHS, PLc 15 & 16, New Panvel 410206.

¶17

Shri. R. B. Sankhe & Sau. Riya R. Sankhe (Flat No.D-704) A - 303, Hilltop Apprtment, Near TMC Water tank, Savarkar Nagar, Thane 400606.

¶18

M/s. Pharma India through its partners Ganesh S. Gupta, Ganpat Gupta, Brijesh Singh and Prashant

¶19

Page 2 of 22

¶20

SECURITISATION APPLICATION NO.158 OF 2024

¶21

S. Gupta (Shop No.C-02) Having address: Plot No.17, Building No.22, Opp. Shiv Society, Khopri, Thane 400603.

¶22

M/s. Pharma India through its Partners Manoj D. Ubhare, Brijesh Amar Bharu Singh, Ganpat R. Gupta, and Mahesh D. Ubhare (Shop No. C-03) Having address: Shop Nos.9 & 10, Morshwar Dham CHS, Ground floor, Kamothe 410209.

¶23

10 M/s. Pharma India NX Through Vinod Jain, Keshav Gupta and Dinesh Singh (Shop No. C-04 to C- 06) 140, Damji Shamji Ind Premises Society, L B S Road, Vikhroli, Mumbai, Mumbai Suburban, Maharashtra, 400083.

¶24

11 M/s. Pharma India, a partnership firm through its Partners Ganpat Gupta and Sundaram Pharma Private Limited, (Multipurpose Hall C-13&14) having address: Office No.101, 1^st Floor, B Wing, Srushti Kiran Surya Kiran CHS. Ltd., Chembur Building No.102, Tilak Nagar (West), Mumbai - 400 089.

¶25

…Respondents

¶26

Page 3 of 22

¶27

SECURITISATION APPLICATION NO.158 OF 2024

¶28

APPEARANCES

¶29

For the Applicant	: Mr Rishabh Shah a/w Monika M. Kale - Advocate	Ms
For Respondent Nos.1 and 2	: Mr Prashant Gawali a/w Gaurav Devdhekar – Advoca	Mr te
For Respondent No.3	Mr Sunil Kadam – Advocate
For Respondent Nos.8 to 11	Mr Sunil Humbre i/b Jaywant G. – Advocate	Mr
For Respondent No.4 to 7	Already set ex-parte vide or dated 12.06.2026.	der

¶30

Final Order

¶31

(1) The present Securitisation Application No.158 of 2024 is filed under Section 17 of the SARFARSI Act, 2002 challenging the measures taken by the Respondent No.1 under the provisions of the SARFAESI Act, 2002.

¶32

Factual matrix of the case:

¶33

(2) The Applicant has preferred the present Securitization Application under Section 17 of the SARFAESI Act challenging the measures adopted by Respondent Nos.1 under Sections 13(2), 13(4) and 14 of the Act, together with the subsequent sale of the secured assets.

¶34

(3) The Applicant claims to be the widow and legal heir of Late Shri Mohan S. Kale, the original borrower, and also claims to be a guarantor and mortgagor in certain loan accounts. It is her case that the credit facilities were extended to proprietary concerns of the deceased

¶35

Page 4 of 22

¶36

SECURITISATION APPLICATION NO.158 OF 2024

¶37

borrower and that substantial repayments had already been made during his lifetime.

¶38

(4) That the Applicant stated that the concern M/s. Project Developers, M/s. Sahaydri Health Club and M/s. Sahyadri Hostel were the proprietorship of Late Shri Mohan S Kale who passed away on 12.12.2014. Late Shri Kale was engaged in the business of real estate construction and development on land area situate at Plot No.13, Sector 10, Kamothe, Tal. Panvel, Dist. Raigad, Navi Mumbai – 410209 admeasuring 3800 sq. mtrs. (herein after referred to as “the said land”) . In the course of his business, Late Shri Kale constructed the following properties on the said land - A Residential Cum Commercial Complex known as ‘SAHYADRI’ comprising of 3 residential buildings of 7 storeys each viz., Block A, Block B & Block D and 1 commercial building viz., Block C having basement, ground plus 1 storey. The residential Blocks A, B and D, as built, comprise of 32, 33 and 35 residential flats, respectively and the commercial Block C comprises of a basement, 12 shops and 2 halls (hereinafter referred to as “the secured assets”) . Late Shri Kale availed loans for the purpose of purchase of land and funding of construction of the said secured assets. Late Shri Kale had first availed loans from 2003 onwards. His track record of repayment was regular and consistent until his untimely and sudden demise. (5) The Applicant contends that the loan accounts were illegally classified as Non-Performing Assets without correctly accounting for the repayments made after the

¶39

Page 5 of 22

¶40

SECURITISATION APPLICATION NO.158 OF 2024

¶41

demise of the borrower, including deposits aggregating to approximately ₹1.03 crore, and without considering the Fixed Deposits and other securities allegedly available with the Bank. According to the Applicant, the demand notices issued under Section 13(2) do not correctly disclose the outstanding liability or the basis of its computation and are, therefore, contrary to the provisions of the SARFAESI Act, 2002. It is further contended that the objections submitted under Section 13(3A) were rejected mechanically without proper application of mind.

¶42

(6) The Applicant has further challenged the proceedings initiated under Section 14 by contending that although separate demand notices were issued in respect of different credit facilities, the Respondent Bank filed one composite application before the District Magistrate. It is alleged that while seeking assistance under Section 14, the Bank failed to disclose material facts relating to the secured assets, including the units already sold pursuant to the No Objection Certificate issued by the Bank itself, and thereafter obtained a revised order by substantially altering the description of the secured assets under the guise of rectification. According to the Applicant, the said proceedings are contrary to the statutory scheme governing Section 14 of the Act.

¶43

(7) The main challenge, however, is directed against the sale of the secured assets. It is the Applicant's case that after taking possession, the Bank retained the secured assets for several years, repeatedly reduced

¶44

Page 6 of 22

¶45

SECURITISATION APPLICATION NO.158 OF 2024

¶46

the reserve price and ultimately disposed of valuable residential and commercial properties by private treaty at grossly inadequate consideration without following the mandatory safeguards prescribed under the Security Interest (Enforcement) Rules, 2002. The Applicant has questioned the valuation adopted by the Bank, relied upon independent valuation reports indicating substantially higher market values and contended that the Bank failed to disclose its valuation reports despite repeated requests. It is further contended that the procedure governing sale by private treaty was not followed and that the impugned sale has resulted in substantial prejudice to the Applicant.

¶47

(8) The Applicant has accordingly prayed for setting aside the measures adopted under the SARFAESI Act, 2002, the proceedings under Section 14, the private treaty sales, the sale certificates and all consequential actions.

¶48

(9) The Respondent Nos.1 has opposed the Securitization Application by filing a detailed affidavit in reply as well as written submissions. At the outset, the Respondent Bank has questioned the maintainability of the present proceedings on the ground that the Applicant had earlier filed proceedings before the Debts Recovery Tribunal, Nagpur, challenging the SARFAESI measures and has suppressed the said fact. It is further contended that the present challenge is barred by limitation since the principal measures under the SARFAESI Act had been initiated much prior to the institution of the present Securitization Application

¶49

Page 7 of 22

¶50

SECURITISATION APPLICATION NO.158 OF 2024

¶51

and that the subsequent amendments cannot revive claims which had already become time barred. The Bank has also questioned the maintainability of a composite Securitization Application in respect of several independent credit facilities.

¶52

(10) The Respondent Nos.1 contends that the respective loan accounts were validly declared as Non-Performing Assets in accordance with the guidelines of the Reserve Bank of India and that separate demand notices under Section 13(2) were issued specifying the outstanding dues and the secured assets. It is submitted that the objections submitted by the Applicant were duly considered under Section 13(3A), possession was lawfully taken in accordance with the provisions of the Act and the proceedings under Section 14 were initiated after complying with all statutory requirements. The Bank has denied suppressing any material facts before the District Magistrate and has contended that the subsequent order merely corrected inadvertent errors without altering the substance of the proceedings.

¶53

(11) That with regard to the sale of the secured assets, the Respondent Bank submits that repeated attempts to realise the secured assets through public auction remained unsuccessful despite several opportunities. It is contended that fresh valuations were obtained from approved valuers from time to time, reserve prices were revised on the basis of such valuations and, after repeated failures of auction, the Bank proceeded to sell the secured assets by private treaty strictly in

¶54

Page 8 of 22

¶55

SECURITISATION APPLICATION NO.158 OF 2024

¶56

accordance with the Security Interest (Enforcement) Rules, 2002. According to the Bank, notices were issued to the Applicant inviting better offers, sufficient opportunity was afforded to bring prospective purchasers and the Applicant failed to produce any purchaser capable of offering better consideration. The Bank has denied the allegations of undervaluation, procedural irregularity and illegality in the sale process and has prayed for dismissal of the Securitization Application.

¶57

(12) Respondent No.3 i.e. Central Bank of India, has filed an independent affidavit asserting that it possesses an independent and prior security interest over certain secured assets of the Borrowers. Respondent No.3 disputes the entitlement of Respondent No.1 to deal with the secured assets without recognising its charge and contends that valuable properties have been sold at grossly inadequate valuation. It is specifically alleged that the valuation adopted by Respondent No.1 does not reflect the true market value of the properties and that the sale by private treaty has adversely affected the security interest claimed by Respondent No.3. Respondent No.3 has accordingly sought protection of its rights in accordance with law. (13) Respondent Nos.8 to 11, the auction purchasers, have also opposed the Securitization Application by filing an affidavit in reply. It is their case that they are bona fide purchasers for valuable consideration pursuant to measures lawfully undertaken by the secured creditor under the SARFAESI Act, 2002. They contend that the

¶58

Page 9 of 22

¶59

SECURITISATION APPLICATION NO.158 OF 2024

¶60

present Securitization Application is not maintainable as it seeks to challenge distinct transactions relating to separate loan accounts in one proceeding. It is further submitted that the challenge is barred by limitation, that the sale certificates have already been registered and third party rights have concluded in their favour. According to these respondents, no material irregularity or statutory violation has been established warranting interference with the completed sale transactions and, therefore, the Securitization Application deserves to be dismissed.

¶61

(14) Heard Ld. Advocates for the parties, considered their contentions. Perused the record.

¶62

(15) The present Securitization Application has been filed under Section 17 of the SARFAESI Act challenging the measures adopted by Respondent Nos.1 under the provisions of the Act. Though the original challenge was filed on the Tahsildar's notice dated 13.02.2024 received by the Applicant on 11.03.2024, the Applicant, by way of amendments permitted by this Tribunal, has also assailed the earlier and subsequent measures adopted by the secured creditor including the proceedings under Section 14, the sale process, sale confirmation and issuance of sale certificates. The challenge has, therefore, to be examined in the light of the same.

¶63

(16) At the outset, the objection regarding maintainability and limitation deserves to be dealt with. The Applicant has approached this Tribunal within forty-five days of receipt of the Tahsildar's notice dated 13.02.2024,

¶64

Page 10 of 22

¶65

SECURITISATION APPLICATION NO.158 OF 2024

¶66

which constitutes one of the impugned measures. The amendments subsequently allowed by this Tribunal form part of the pleadings on record and the present adjudication shall be confined to the pleadings as they stand after such amendments. The objection that the Applicant ought to have instituted separate Securitization Applications merely because separate demand notices had been issued for different loan accounts also does no merit. The remedy under Section 17 arises against the measures adopted under Section 13(4) and not merely against issuance of the demand notices under Section 13(2). In the present case, the record reveals that the subsequent steps, including the proceedings under Section 14, were pursued as part of one composite enforcement action. Merely because five separate demand notices were issued in respect of different loan accounts would not, by itself, render the present Securitization Application non maintainable.

¶67

(17) The Applicant has first questioned the very initiation of proceedings under the SARFAESI Act by contending that the respective loan accounts were illegally classified as Non-Performing Assets. According to the Applicant, the Respondent Bank failed to take into consideration deposits aggregating to Rs.1,03,10,000/- allegedly made during March 2015 and proceeded to classify the accounts as NPAs before expiry of the period prescribed under the RBI guidelines. On this premise, it is contended that the

¶68

Page 11 of 22

¶69

SECURITISATION APPLICATION NO.158 OF 2024

¶70

statutory condition for issuance of notices under Section 13(2) itself was absent.

¶71

(18) This contention, however, cannot be accepted. A perusal of the demand notices issued by the Respondent Bank reveals that separate notices were issued in respect of each individual credit facility, each recording the date on which the respective account had been classified as Non-Performing Asset. The dates of NPA vary from account to account depending upon the nature of the facility and the status of the particular account. The notices also specify the amount outstanding, particulars of the security created, the secured assets and the persons to whom the notices were addressed. On the face of the record, the notices disclose due compliance with the requirements of Section 13(2) of the Act.

¶72

(19) The Applicant has undoubtedly pleaded that deposits amounting to Rs.1,03,10,000/- were made during March 2015 and that the same were ignored while classifying the accounts as NPAs. However, except making the aforesaid assertion, no material has been placed before this Tribunal demonstrating that after giving due credit to the said deposits the respective accounts ceased to satisfy the conditions prescribed under the applicable RBI guidelines for classification as Non-Performing Assets. The Applicant has neither placed any account wise computation nor established that the alleged deposits regularised the respective facilities before the dates on which they came to be classified as NPAs. In the absence of such material,

¶73

Page 12 of 22

¶74

SECURITISATION APPLICATION NO.158 OF 2024

¶75

this Tribunal is unable to hold that the classification of the accounts as NPAs was contrary to the RBI guidelines merely because deposits were made during the same period. The burden to establish such illegality lay upon the Applicant and the same has not been discharged.

¶76

(20) The Applicant has next challenged the validity of the demand notices issued under Section 13(2) by contending that they are contrary to Section 13(3) of the Act. Having examined the notices placed on record, this Tribunal finds no ground to invalidate the demand notices.

¶77

(21) The Applicant has further contended that the Respondent Bank failed to meaningfully consider the representation dated 21.01.2016 submitted in response to the demand notices and mechanically rejected the same by communication dated 02.02.2016, thereby violating Section 13(3A) of the SARFAESI Act and the principles laid down by the Hon'ble Supreme Court in the case of Mardia Chemicals Ltd. It is submitted that the representation disclosed the financial hardship caused by the sudden demise of the original borrower, the efforts undertaken by the legal heirs to mobilize funds, the status of the project and the request for temporary moratorium till completion of CIDCO formalities. The grievance of the Applicant is that the Bank merely informed that the request could not be considered as per the Bank's policy without examining the objections raised in the representation.

¶78

Page 13 of 22

¶79

SECURITISATION APPLICATION NO.158 OF 2024

¶80

(22) This contention also does not persuade this Tribunal to interfere with the measures adopted by the secured creditor. Section 13(3A) casts an obligation upon the secured creditor to consider the representation or objection submitted by the borrower and to communicate reasons where such representation is not accepted. The provision is intended to ensure consideration of the borrower's objections before resorting to measures under Section 13(4). However, the scope of such consideration cannot be equated with an adjudicatory determination of the disputes raised by the borrower.

¶81

(23) A perusal of the representation dated 21.01.2016 shows that the emphasis of the Applicant was principally on the financial hardship faced by the family after the demise of Late Shri Mohan Kale, the incomplete status of the Sahyadri Project, the request for grant of time and moratorium and the willingness to liquidate the dues upon completion of the project. The representation did not dispute the creation of the security interest, the execution of the loan documents or the existence of the outstanding liabilities. The Respondent Bank, by its communication dated 02.02.2016, declined the request by stating that the proposal was not acceptable in accordance with the Bank's policy. Though the reply is undoubtedly brief, the material placed on record does not justify a conclusion that the Bank completely ignored the representation or that non acceptance thereof, by itself, renders the subsequent measures illegal. A

¶82

Page 14 of 22

¶83

SECURITISATION APPLICATION NO.158 OF 2024

¶84

borrower undoubtedly possesses a right to have his representation considered; however, he does not possess a corresponding right to insist that such representation must necessarily be accepted. In the facts of the present case, no prejudice of such nature has been demonstrated as would invalidate the subsequent proceedings solely on account of the reply furnished under Section 13(3A).

¶85

(24) The Applicant has next challenged the possession proceedings by alleging that the possession notices were illegally issued, that signatures were obtained under coercion and that symbolic and physical possession were taken contrary to law. Particular emphasis has been laid upon the allegation that on 21.04.2016 the Applicant was compelled to acknowledge possession on behalf of her husband despite having no authority to do so and that subsequent possession in December 2016 was also obtained under coercive circumstances. Serious allegations have also been levelled regarding threats allegedly administered by certain unidentified persons accompanying the officers of the Bank.

¶86

(25) The Tribunal has carefully considered these allegations. It is settled that allegations of coercion, threat or undue influence constitute serious allegations which require satisfactory proof. Except the averments contained in the pleadings, no independent material has been placed before this Tribunal establishing that the possession proceedings were vitiated on account of coercion or that the

¶87

Page 15 of 22

¶88

SECURITISATION APPLICATION NO.158 OF 2024

¶89

contemporaneous documents acknowledging possession were obtained by force. The possession notices themselves disclose that possession was taken pursuant to the measures initiated under the SARFAESI Act, 2002 after issuance of the statutory demand notices. Mere allegation that signatures were obtained under pressure, unsupported by contemporaneous evidence capable of establishing such coercion, cannot by itself invalidate proceedings which otherwise appear to have been undertaken in exercise of statutory powers. This Tribunal is, therefore, unable to accept the challenge to the possession proceedings on this ground. Further, the Applicant is at liberty to assert their rights before the requisite competent forum.

¶90

(26) The Applicant has also argued that the Bank acted illegally in issuing a composite possession notice despite there being separate loan accounts and separate demand notices. This contention equally deserves rejection. The record indicates that while separate demand notices were issued for the respective credit facilities, the secured assets constituted the common security for the facilities and the subsequent enforcement measures formed part of one continuous recovery process undertaken by the secured creditor. The Applicant has failed to demonstrate any statutory provision prohibiting a composite possession notice in such circumstances or to establish any prejudice caused solely because the Bank adopted a consolidated course while enforcing the security

¶91

Page 16 of 22

¶92

SECURITISATION APPLICATION NO.158 OF 2024

¶93

interest. In the absence of any demonstrated prejudice or statutory prohibition, the composite nature of the possession proceedings does not vitiate the action of the secured creditor.

¶94

(27) The main grievance of the Applicant thereafter relates to the manner in which the Respondent Bank dealt with the secured assets after assuming possession. According to the Applicant, the Bank continued to remain in possession of substantial portions of the secured assets for several years without undertaking timely valuation or sale, continued to charge interest despite holding assets far exceeding the outstanding dues, repeatedly reduced the reserve price and ultimately sold valuable assets at grossly inadequate consideration through auctions and private treaty. It is further contended that the secured creditor failed to preserve the secured assets in the manner contemplated under the Security Interest (Enforcement) Rules, 2002 and thereby caused serious prejudice to the Applicant. (28) The Tribunal has carefully examined these submissions in the light of the material placed on record. The record demonstrates that possession of different portions of the secured assets was taken in stages commencing from the year 2016 and thereafter in the year 2019. The auction notices produced on record further indicate that repeated attempts were undertaken by the Respondent Bank to realise the secured assets over a considerable period of time and that several auctions did not culminate in successful

¶95

Page 17 of 22

¶96

SECURITISATION APPLICATION NO.158 OF 2024

¶97

sale. Ultimately, certain assets came to be disposed of by private treaty after earlier attempts at public auction had failed.

¶98

(29) Merely because the Bank remained in possession of the secured assets for a considerable period or because more than one auction came to be conducted would not, by itself, establish any illegality. Recovery proceedings under the SARFAESI Act are often influenced by prevailing market conditions, availability of prospective purchasers and the nature of the secured assets. Delay in successful realisation, though undesirable, cannot automatically lead to an inference that the entire recovery process stood vitiated.

¶99

(30) The Applicant has repeatedly asserted that the value of the secured assets was substantially higher than the outstanding liabilities and that the Respondent Bank ought to have first valued the assets and sold only such portion as was necessary for recovery of the dues. The submission appears attractive at first blush but cannot be accepted in the manner canvassed. The SARFAESI Act does not contemplate that the secured creditor should, at every stage, undertake a mathematical exercise of identifying individual units corresponding exactly to the outstanding dues before initiating recovery. The secured creditor is entitled to enforce the security interest created in its favour in accordance with the Act and the Rules. Nevertheless, while doing so, it remains under an obligation to act fairly, obtain valuation in accordance with the Rules

¶100

Page 18 of 22

¶101

SECURITISATION APPLICATION NO.158 OF 2024

¶102

and ensure that the sale process is transparent and intended to secure the maximum possible price. (31) The Applicant has also criticised the repeated reduction of reserve prices over successive auction notices. However, reduction in reserve price after failure of earlier auctions is not, by itself, contrary to law. The Security Interest (Enforcement) Rules recognise that where earlier attempts at sale fail, fresh valuation and revision of reserve price may become necessary having regard to prevailing market conditions. Unless it is demonstrated that the valuation itself was arbitrary, mala fide or contrary to the statutory requirements, mere reduction in reserve price cannot constitute a ground to invalidate the sale. (32) The allegation that the properties were ultimately sold at throw away prices also cannot be accepted merely because the Applicant asserts that the market value was substantially higher. The burden to establish material undervaluation lies upon the Applicant. Except making general assertions regarding the alleged market value of the properties, no independent valuation report or other cogent material has been placed before this Tribunal demonstrating that the reserve prices adopted by the Respondent Bank were so grossly inadequate as to shock the conscience of the Court or indicate fraud, mala fides or deliberate sacrifice of the secured assets. It is evident from the record that the borrowers were given the opportunity to bring a buyer at a higher reserve price, however, no such buyer was brought by the borrower. A Tribunal

¶103

Page 19 of 22

¶104

SECURITISATION APPLICATION NO.158 OF 2024

¶105

exercising jurisdiction under Section 17 does not sit as an appellate authority over the commercial wisdom of the secured creditor merely because another valuation may also have been possible.

¶106

(33) The Applicant has further alleged that after taking possession the Respondent Bank failed to properly preserve the secured assets and neglected their maintenance. It has also been contended that the Bank remained in possession while simultaneously continuing to levy contractual interest. Though these grievances have been raised, the material placed before this Tribunal does not establish that any demonstrable loss has been caused to the Applicant on account of negligent preservation of the secured assets so as to invalidate the recovery proceedings. Equally, the question whether contractual interest continued to accrue after possession depends upon the contractual terms governing the facilities and the actual realisation of the secured assets. Merely because possession had been taken does not, by itself, extinguish the liability to pay interest until the debt stands satisfied. The contention, therefore, cannot be accepted.

¶107

(34) The Applicant has also questioned the sale by private treaty. A sale by private treaty is undoubtedly permissible under the Security Interest (Enforcement) Rules, subject to compliance with the prescribed safeguards. In the present case, the challenge proceeds largely on the premise that the earlier auctions had failed, the reserve prices had been

¶108

Page 20 of 22

¶109

SECURITISATION APPLICATION NO.158 OF 2024

¶110

successively reduced and the assets were ultimately disposed of at inadequate values. As already observed, neither the failure of earlier auctions nor the revision of reserve price, by themselves, establish illegality. The Applicant has not been able to demonstrate any specific violation of the mandatory procedure governing the sale by private treaty which would justify setting aside the completed transactions. (35) Having independently examined the pleadings, documentary evidence and the rival submissions, this Tribunal is satisfied that the Applicant has failed to establish that the measures adopted by Respondent Nos.1 under the SARFAESI Act suffer from any illegality warranting interference under Section 17 of the Act. Though numerous objections have been urged at different stages of the enforcement proceedings, none has been substantiated by cogent material demonstrating violation of any mandatory statutory provision or resulting prejudice of such nature as would invalidate the measures undertaken by the secured creditor. The challenge to the classification of the loan accounts as Non-Performing Assets, the demand notices issued under Section 13(2), the consideration of objections under Section 13(3A), the possession proceedings, the proceedings under Section 14 and the subsequent sale measures, therefore, fails. The jurisdiction of this Tribunal under Section 17 is confined to examining whether the measures adopted by the secured creditor are in accordance with the provisions of the SARFAESI

¶111

Page 21 of 22

¶112

SECURITISATION APPLICATION NO.158 OF 2024

¶113

Act,2002 and the Security Interest (Enforcement) Rules, 2002.

¶114

(36) In view of the above, the Applicant has failed to make out any case for interference under Section 17 of the SARFAESI Act and thus, the present Securitisation Application deserves to be dismissed. Accordingly, the following order:

¶115

ORDER

¶116

I. The Securitization Application No.158 of 2024 stands dismissed.

¶117

II. IAs, if any, stand disposed of.

¶118

III. No order as to costs.

¶119

Sd/-

¶120

(Harish Kumar Kaushik) Presiding Officer, DRT-2, Mumbai

¶121

Page 22 of 22

Smt Chhaya Kale v. The Akola Urban Co-Operative Bank Ltd.

Case brief

What is this about?

What did the court decide?

Smt Chhaya Kale v. The Akola Urban Co-Operative Bank Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Harshada Biharilal Shah versus Rbl Bank Limited

Midas Petrochem Pvt. Ltd. versus Axis Bank

Mrs Anjali Harsad Modi versus State Bank of India

Bhavik Shashikant Thakkar versus Canara Bank

Karnataka Bank Limited versus Lakshmanan Ramaswamy

Karnataka Bank Limited versus Aafreen