Partly allowed

M/S Shoolini Associate v. the Baghat Urban Co. Operative Bank Ltd.

DRT17 Aug 2026SA/162/2026

Case brief

AI extract

What is this about?

The Applicant challenged an auction under the SARFAESI Act, claiming the notice served was invalid. The Tribunal found the auction notice did not contain required details regarding the amount due, reserve price, and terms. Consequently, the auction and sale certificate were set aside, conditional on the applicant restoring possession to the bank within twenty days.

What did the court decide?

The auction dated 12.12.2025 and sale certificate dated 19.12.2025 were set aside, conditional upon the applicant restoring possession to the Bank within twenty days.

M/S Shoolini Associate versus the Baghat Urban Co. Operative… — Banking and Recovery | DRT (2026)

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SA No. 162 of 2026

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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SA No. 162 of 2026

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M/s Shoolini Associate

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Versus

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A.O. The Baghat Urban Co-Bank Limited and others

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Dated: 17.08.2026

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Item No. 63

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Argued by: Mr.Rajnish Chauhan, Counsel for the Applicant.

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Mr.Yogesh Jain, Counsel for Respondent No.1 and 2/Bank (on vc). Mr.Vibhu Agnihotri and Mr.Ishan Khetarpal, Counsel for Respondent No. 3 and 4/Auction Purchasers.

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M/s Shoolini Associate, through its partner Darshan Kumar (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, The Baghat Urban Co-Bank Limited and others (Respondents).

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Admittedly, in the year 2016, The Baghat Urban Co-Bank Limited had sanctioned CC Limit of Rs. 1.25 crores to the Applicant, a partnership firm comprising Mr.Prashant Chauhan and Mr.Darshan Kumar, as partners. To secure this loan, Darshan Kumar had created security interest in respect of the property fully detailed in the notice under Section 13(2), dated 29.12.2018, measuring 08-10 Bighas. Applicant did not run the account properly and the Bank declared the account NPA. Bank issued the notices under Section 13(2) and 13(4) of the SARFAESI Act. Earlier, Bank had put the property for auction. On 14.09.2021, Applicant filed SA No. 130 of 2021 on the ground that the secured asset is agricultural land; there was no CERSAI registration; the account had been wrongly declared NPA and the possession notice was not served upon the Applicants. Vide order dated 05.11.2024, this Tribunal dismissed the said SA and held that the secured asset is not agricultural land; there was proper CERSAI registration and all the notices had been duly served upon the Applicants.

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SA No. 162 of 2026

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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It appears that the Bank had put up the property for auction on seven occasions. However, there were no bidders. Vide auction notice dated 27.11.2025, Bank fixed up the auction for 12.12.2025. The Bank fixed up the reserve price at Rs. 97.72 lacs. Respondent No. 3 and 4 gave the highest bid of Rs. 1,00,22,000/- and the Bank accepted the auction. The auction purchasers also deposited the whole of the sale consideration and the Bank issued the sale certificate in favour of the auction purchasers on 19.12.2025 and also executed the sale deed in favour of the auction purchasers.

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On 02.02.2026, Applicant filed the present SA challenging the auction conducted on 12.12.2025 and the sale certificate issued in favour of the auction purchasers on 19.12.2025. This deserves to be mentioned that that during the pendency of SA No. 130 of 2021, Bank had also approached the DM under Section 14 of the SARFAESI Act, who vide order dated 31.01.2022 passed the order under Section 14 of the SARFAESI Act. As per the Applicant, the Bank also took the physical possession of the residential house on 15.03.2022. As mentioned earlier, vide order dated 05.11.2024, this Tribunal dismissed SA No. 130 of 2021. It appears from the material on the record that Applicant in SA No. 130 of 2021 had also challenged the order dated 31.01.2022 passed by the DM under Section 14 of the SARFAESI Act. However, the said SA was dismissed.

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Assailing the SARFAESI action and the auction, Mr, Chauhan, counsel for the Applicant has argued that the whole of the SARFAESI action is illegal, null and void . Mr. Chauhan submitted that the account has been wrongly declared NPA and there was no proper service of the notice under Section 13(4) of the SARFAESI Act. The Bank had fixed up the reserve price at Rs. 97.72 lacs. However, the property is worth Rs. 4.00 crores. The Bank did not obtain proper valuation from the approved valuer. Mr.Chauhan submitted that the auction notice was not served upon the Applicant. Accordingly, the auction be set aside.

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SA No. 162 of 2026

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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Per contra , Mr.Jain, counsel for the Respondent Bank has submitted that earlier Applicant had filed SA No. 130 of 2021, which was dismissed by this Tribunal on 05.11.2024. Mr. Jain submitted that it has already been held by this Hon’ble Tribunal that the notices under Section 13(2) and 13(4) of the SARFAESI Act were duly served upon the Applicant; the secured asset is not agricultural land; the Bank had served the auction notice before conducting the auction. Applicant did not make the repayment. Accordingly, Bank sold the property to respondent No. 3 and 4. Respondent No. 3 and 4 also deposited the whole of the sale consideration and the Bank has also issued sale certificate in their favour. Bank has also executed sale-deed in favour of the auction purchasers. Mr.Jain submitted that Applicant trespassed into the secured asset and on account of this, Bank could not deliver the possession to the auction purchasers. The Bank has also filed complaint against the applicant for tresspassing into the property. Accordingly, applicant is not entitled to any relief. Mr.Jain submitted that there is no merit in the present SA and the same be dismissed.

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Mr.Agnihotri, counsel for the auction purchasers also supported the contentions of Mr.Jain and submitted that the auction purchasers are bona fide purchasers. They have paid the whole of the sale consideration to the Bank. Bank has also issued the sale certificate in their favour. However, they have not been put in the possession of the property. Accordingly, the SA be dismissed.

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I have considered the rival contentions.

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Mr.Chauhan, counsel for the Applicant has submitted that the Bank had served the notice dated 27.11.2025 (page 61 of the reply filed by the Bank) upon the Applicant. Mr. Chauhan submitted that a look at the notice would show that it does not state the amount due from the applicant; the reserve price and the terms and conditions of the auction. Accordingly, the said notice

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SA No. 162 of 2026

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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cannot be said to be a valid notice in the eye of the law and on this very ground this auction is liable to be set aside.

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I have perused the notice served upon the Applicant. The notice reads as under:-

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The Baghat Urban Co-Bank Limited

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BUCB/HO/3841-384/2025-26 Dated: 27^th November, 2025

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M/s Shoolini Associates Partners Mr. Prashant Chauhan & Mr. Darshan Kumar R/o Village Gun Ki Ser, PO Salogra, Tehsil & District Solan HP.

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Sub: - Auction of the secured assets i.e. Land & building comprising Khata/Khatauni No. 22/25 Khasra No. 126/23, 128/24, 31 & 181/80 Situated at Mauza Gun Ki Ser, Tehsil & District Solan HP. Land Area 04-16 Bigha. Total built up area 225.54 SQM & Land comprising Khata/Khatauni No. 26/27 Khasra No. 364/355/346/176/98/74 Situated at Mauza Gun Ki Ser, Tehsil & District Solan HP Area 01-14 Bigha under SARFAESI Act 2002Information-thereof.

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Sir,

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It is to inform you that the Bank has published the secured assets mortgaged in your loan/limit case i.e. Auction of the secured assets i.e. Land & building comprising Khata/Khatauni No. 22/25 Khasra No. 126/23, 128/24, 31 & 181/80 Situated at Mauza Gun Ki Ser, Tehsil & District Solan HP. Land Area 0416 Bigha. Total built up area 225.54 SQM & Land comprising Khata/Khatauni No. 26/27 Khasra No. 364/355/346/176/98/74 Situated at Mauza Gun Ki Ser, Tehsil & District Solan HP Area 01-14 Bigha for sale through public tender under SARFAESI Act 2002. The Auction of your property will be held on dated 12th December, 2025. So, you are advised to deposit the outstanding loan amount in your account before 12th December, 2025. This is for your information please. Thanking You,

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Authorized Officer

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CC: 1. Mr. Khem Lal S/o Mr. Kaman Singh R/o Shyam Niwas, Subathu Road, Saproon, Tehsil & District Solan HP (Guarantor) for information. 2. Mr. Vishal Kashyap S/o Mr. Virender Kashyap R/o Gupta Lodge, Old Bus Stand Tehsil & District Solan HP (Guarantor) for information. 3. Office file.

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Authorized Officer

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Mr.Jain, counsel for the respondent Bank admits that this was the only notice, which was served upon the Applicant. I am of the considered view that the service of this notice cannot be said to be compliance of the provisions of the SARFAESI Act. As a Rule, the Bank should issue one notice to the

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SA No. 162 of 2026

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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borrower and should also affix the same on the secured asset and publish the same in the newspapers. The said notice does not answer the proper description of notice. I am of the considered view that this auction is liable to be set aside on the ground that proper auction notice was not served upon the Applicant. Accordingly, this auction is liable to be set aside. It is admitted on the record that the Bank had taken the possession of the secured asset. However, Applicant had trespassed into the same.

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In view of the above, the auction dated 12.12.2025 and the sale certificate dated 19.12.2025 are hereby set aside, subject to the condition that the applicant would restore the possession of the secured asset to the Bank within twenty days from today. In case, applicant does not restore the possession to the Bank within twenty days from today, the auction in favour of the auction purchasers, would be considered to be a valid auction and in that eventuality the SA would be deemed to have been dismissed.

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However, in case applicant surrenders the possession to the Bank within twenty days from today, the auction in favour of the auction purchasers, would be held to be illegal and the Bank would get the sale certificate and the sale deed cancelled and also refund the whole of the sale consideration deposited by the auction purchasers with interest @ 6% per annum from the date of deposit, till the date of payment. Bank would also be liable to pay stamp and registration charges to the auction purchasers.

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In view of the above observations, the present SA stands disposed of . All the pending IAs, if any, are also disposed of, accordingly.

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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.

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Pronounced in open court Dated: 17.08.2026 Manoj

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(A S Narang) Presiding Officer DRT-I, Chandigarh

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M/S Shoolini Associate v. the Baghat Urban Co. Operative Bank Ltd.

Case brief

What is this about?

What did the court decide?

M/S Shoolini Associate v. the Baghat Urban Co. Operative Bank Ltd.

Case brief

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What did the court decide?

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