Dismissed

Ms Radha Rani Mustard Oil Mill and Others v. Dakshin Bihar Gramin Bank

DRT30 Jan 2026SA/181/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed the applicant's Security Assertion application seeking to quash possession and sale notices under the SARFAESI Act. The court held the applicant failed to prove the land was agricultural and the suit is not maintainable due to the non-joinder of the guarantor.

What did the court decide?

Application dismissed with costs due to non-joinder of guarantor and failure to prove agricultural nature of land.

Ms Radha Rani Mustard Oil Mill and Others versus Dakshin… — Company and Corporate | DRT (2026)

SA 181 of 2022 (J)

DRT.PATN A

DEBTS RECOVERY TRIBUNAL PATNA

¶5

Presiding Officer: Shri Kaushalendra Yadav

¶6

SA- 181 of 2022

¶7

M/S Radha Rani Mustard Oil Mill Through Its Proprietor Abhishek Rajvansh S/O Mr Shailendra Kumar Singh, Plot No. D-1(P) Large Industrial Estate, P.O Barari District – Bhagalpur (Bihar) 812003.

¶8

..................Applicant

¶9

Versus

¶10

The Authorized Officer, Dakshin Bihar Gramin Bank ,Regional Office 3'd Floor Devdoot Complex Ghanta Ghar Bhagalpur ( Bihar) 812001.

¶11

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

¶12

Presents; For the Applicants : Sh.Binod Bihari Sinha , Advocate For the Respondent Bank : Sh. M K Mishra , Advocate

¶13

Dated: 30.01.2026

¶14

JUDGMENT

¶15

The present application has been filed seeking to quash the Demand Notices dated 09.11.2021 and 05.02.2022, as well as the Possession Notice dated 03.06.2022.

¶16

During the pendency of the present application, an Interlocutory Application being I. A. No. 311/2022 has also been filed seeking stay of the sale proceedings scheduled to be held on 13.09.2022

¶17

The brief facts of the case are as follows: The applicant availed a Term Loan of Rs. 30,00,000/- (Rupees Thirty Lakhs only) and a Cash Credit facility of Rs. 14,00,000/- (Rupees Fourteen Lakhs only) from the respondent Bank. To secure the said loan amount, the applicant mortgaged his properties in favour of the Bank. Due to default in repayment of the loan, the respondent Bank classified the account as Non-Performing Asset (NPA) on 30.09.2021 and thereafter issued a Demand Notice dated 05.02.2022 under Section 13(2) of the SARFAESI Act. Subsequently. a Possession Notice under Section 13(4) of the Act was issued on 03.06.2022. Being aggrieved by the said Possession Notice, the applicant

£&$

SA 181 of 2022 (J)

DRT.PATN A

has preferred the present Secudtization Application.

¶23

4 The learned counsel for the applicant submitted that the applicant had availed two types of loans from the respondent bank, namely a term loan and a cash credit facility of Rs. 14 lakhs. It is further submitted that on 23.09.2019, the applicant applied for renewal of the cash credit facility after obtaining clearance from the Department of Industries. State Investment Promotion Board; however, the respondent bank neither renewed the facility nor provided any reply on the ground that the subsidy amount had not been realized. Due to the onset of the COVID-19 pandemic, the applicant’s business was adversely affected. leading to irregularities in repayment. The respondent bank thereafter issued a demand notice dated 19.11.2021 under Section 13(2) of the SARFAESI Act, but the date of NPA was not mentioned in the said notice. Subsequently, another demand notice dated 05.02.2022 was issued. against which the applicant submitted a representation under Section 13(3 A) of the Act; however, without giving any reply to the said representation, the bank issued a possession notice dated 03.06.2022 under Section 13(4) of the Act. It is further submitted that whether the said possession notice was published in the newspaper or not is not known to the applicant. The learned counsel also contended that the land in question is agricultural land, yet the respondent bank proceeded to issue a sale notice dated 05.08.2022 fixing the auction on 13.09.2022.

¶24

5 The respondent bank submitted that due to default in repayment of the loan amount, the account of the applicant was classified as a Non-Performing Asset (NPA) on 30.09.2021. Subsequently, a recall notice was issued to the applicant on 22.10.2021. Thereafter, the respondent bank issued a demand notice under Section 13(2) of the SARFAESI Act on 19.11.202 1. wherein the date of NPA was intelligibly mentioned. Another demand notice was also issued on 05.02.2022, which was duly served upon the applicant. Since no representation or objection was received from the applicant in response to the demand notices under sec 13(3 A), the bank proceeded to issue a possession notice dated 03.06.2022, which was duly delivered to the applicant. The said possession notice was also published in two leading newspapers and affixed on the secured asset. It is further submitted that as per the latest Land Possession Certificate issued by the Circle Officer, Sultanganj, Bhagalpur, the land is not agricultural. It is also submitted that a sale notice dated 05.08.2022 was issued by the bank, which was duly

SA 181 of 2022 (J)

DRT,PATNA

served upon the applicant published in two newspapers and affixed to the secured asset.

¶29

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

¶30

. It is alleged by the applicants that on 23.09.2019, the applicant applied for renewal of the cash credit facility after obtaining clearance from the Department of Industries, State Investment Promotion Board; however. the respondent bank neither renewed the facility nor provided any reply. It is further alleged that the respondent bank thereafter issued a demand notice dated 19.11.2021 under Section 13(2) of the SARFAESI Act, but the date of NPA was not mentioned in the said notice. Subsequently. another demand notice dated 05.02.2022 was issued, which according to the applicant, is not valid in law. It is further contended that against the demand notice, the applicant submitted a representation under Section 13(3 A) of the Act; however. the respondent bank failed to reply thereto. It is further alleged that the applicant is not aware whether the said possession notice was published in the newspaper or not. The learned counsel for the applicant also contended that the land in question is agricultural land.

¶31

As With regard to the allegation that the applicant had submitted an application for renewal, the applicant has annexed a letter dated 23.09.2019 as Annexure 5 at page 7 of the rejoinder to support the claim. However. no postal receipt or tracking report has been submitted to prove service of the letter on the bank. This allegation has been specifically denied by the respondent bank in paragraph 4 of the counter affidavit to the SA.

¶32

The issue regarding the bank issuing two demand notices is concerned. It is observed that the demand notice dated 19.11.2021 did not mention the date of NPA, as evident from the xerox copy of the notice annexed as Annexure A2 at pages 10–13 of the counter affidavit. In the subsequent demand notice dated 05.02.2022, the bank did mention the date of NPA. as evident from Annexure A3 at pages 14–17 of the counter affidavit. The bank contends that the date of NPA was intelligibly mentioned in the demand notice dated 19.11.2021. However, there is no specific provision preventing the bank from issuing a second notice if the first notice is incomplete, contrary to the specific allegation made by the applicant. It is noted, however, that the second demand notice does not indicate that the prior notice was defective or that it is being withdrawn.

¶33

As far as the allegation regarding the representation against the demand

SA 181 of 2022 (J)

DRT,PATNA

notice is concerned. the applicant has filed a representation dated 05.04.2022 against the demand notice dated 05.02.2022, as evident from Annexure-3 at pages 24 to 27. However, to prove the service of the said representation upon the bank, the applicant has annexed a xerox copy of a postal receipt on the right side of page 24 itself The said postal receipt is not legible; therefore, it is not possible to equate it with successful service upon the bank, and no tracking report has been submitted. The same has been denied by the bank in paragraph 8 of the counter affidavit to the S. A.

¶39

The allegation that the bank did not publish the possession notice in the newspaper is refuted by the respondent bank. On page 21 of the counter affidavit, the bank has annexed a xerox copy of the postal receipt, which shows that the possession notice dated 03.06.2022 was sent to the applicants on 04.06.2022. The said possession notice was published in the newspapers Prabhat Khabar and The Times of India on 09.06.2022, as evident from pages 19 and 20 of the counter affidavit. The notice was also annexed to the secured asset, as evident from pages 22–25 .

¶40

So, Regarding the applicant’s allegation that the land in question is agricultural, the applicant has not submitted any proper proof. Only a land possession certificate dated 13.06.2017 has been annexed with IA 311/2022, which itself does not specifically state that the land is agricultural. In contrast, the bank has denied this claim. In the case of K. Sreedhar v. M/s Raus Constructions Pvt. Ltd. & Ors. (2023). the Court provided decisive clarification on the exemption of agricultural land under Section 31(i) of the SARFAESI Act, 2002. The Court held that the exemption is not automatic merely because the land is classified as agricultural in revenue records; instead, the actual use of the property for agricultural activities must be proven. Crucially, the burden of proof to establish such use rests solely on the borrower, not the secured creditor (the bank). Since the responsibility to prove that the land is agricultural rests on the borrower, the applicant has failed to discharge this burden.

¶41

It is to be noted that none of the parties has informed this Hon'ble Tribunal about the sale. However, in several orders of this Tribunal, the parties have stated that they are attempting to settle the matter, which indicates that the sale has not taken place on the said date.

¶42

At the same time, it is important to consider the effect of the non-joinder of the guarantor, namely Nitesh Kumar Rai S/o Vishwanath Rai, in the present application. The non-joinder of the necessary parties’ results in a

yd),\

SA 181 of 2022 (J)

DRT,PATNA

multiplicity of judicial proceedings. The application filed by the borrower is not maintainable without impleading the guarantor, as the controversy involved cannot be effectively adjudicated in their absence. they being parties to the contract. Therefore despite irregularities if any, no relief can be granted to the Applicant.

¶48

ORDER

¶49

The application SA 181 of 2022 filed by M/S Radha Rani Mustard Oil Mill through its proprietor Abhishek Rajvansh, is dismissed with costs.

+r," ,,}\ \ @

[KaushalendraYadav]

Presiding Officer

Debts Recovery Tribunal, Patna