Dismissed

Ms Gayatri Traders v. Punjab National Bank

DRT30 Jun 2026SA/186/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed an application by a borrower seeking to quash a bank's SARFAESI action, including a possession notice and sale notice. The court rejected claims regarding NPA classification during lockdown and the reserve price, noting the non-joinder of the guarantor rendered the application non-maintainable.

What did the court decide?

The SARFAESI application was dismissed with costs; no relief granted to quash the bank's actions.

Ms Gayatri Traders versus Punjab National Bank — Banking and Recovery | DRT (2026)

SA 186 of 2023 IJI

DRT, PATN A

DEBTS RECOVERY TRIBUNAL PATNA

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Presiding Officer : Shri Kaushalendra Yadav

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SA- 186 of 2023

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M/s Gayatri Traders (Prop. Sri Shailesh Kumar), Son of Sri Umesh Singh, R/o Village - Dinabigha, P.O. – Datiyana & P.S. – Bikram, Patna – 801104.

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... ... ...Applicant/Borrower

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Versus

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Punjab National Bank, Circle Sastra Head Patna, through Authorised Officer.

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Punjab National Bank Branch, through Branch Manager

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--respondents

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Present: For the Applicant : Sh. Nand Kishore Singh, Advocate For the respondent Bank : Sh. Sachindra Kr. Tiwari, Advocate

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Dated: 30.06.2026

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JUDGMENT

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Present application u/s 17 of SARFAESI Act has been filed with a prayer to quash entire SARFAESI action taken against the properties of applicant alongwith the possession notice.

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The brief facts of the case are that the applicant availed financial assistance by way of Cash Credit to the tune of Rs.15.00 lakh and Term Loan facility to the tune of Rs.2.98 lakh from the respondent bank. On default in repayment of the dues of the bank, the accounts of the applicant were declared as NPA on 02.01.2022. Subsequently, the bank initiated SARFAESI Action against the borrower and issued demand notice u/s 13(2) dated 29.12.2022 calling upon the applicant to make the payment of Rs.19,90,482.78. Further, the respondent Bank took symbolic possession of the secured asset by issuing Possession Notice dated 05.04.2023 u/s 13(4) of the SARFAESI Act. Aggrieved from Possession Notice, the applicant filed this SA.

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During the pendency of the SA, Ld. Counsel of the applicant filed IA 200/2025 with the prayer to quash the Sale Notice dated 18.02.2025.

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It is submitted by the Ld. Counsel of applicant that due to p/andemic of the

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SA 186 of 2023 IJI

DRT, PATN A

covid-191 the applicant’s business suffers from heavy loss and during lockdown period the accounts were declared as NPA i.e. on 02.01.2022. The applicant requested to settle the account under OTS but the respondent bank issued Demand Notice dated 29.12.2022 and further Possession Notice dated 06.04.2023. The applicant is ready to deposit overdue amounts to regularize the account, hence the possession notice may be quashed. During pendency of SA, the respondent bank issued an auction sale notice dated 18.02.2025 for the auction sale of the property with the reserve price of Rs.73.69 lacs while the value of the property is then Rs.2 Crore .

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On the contrary, Id. Counsel of the respondent bank submits that due to default in repayment of dues of the Bank, the accounts of the borrower were classified as NPA on 02.01.2022. Subsequently, the respondent bank initiated SARFAESI Action against borrower and guarantor by issuing Demand Notice dated 29.12.2022 under section 13(2) of the Act and the same was sent to the applicant through post on 31.12.2022. Despite service of demand notice, the borrower neither repaid the dues of the bank nor raised any objection against Demand Notice. Hence, the respondent bank proceeded 'further and took symbolic possession of the propeFty by issuing Possession Notice dated 05.04.2023 by affixing the same on the secured asset. Further, the possession notice was served to the applicant on 11.04.2023. The possession notice was also published in “Hindustan” and “Hindustan Times” on 11.04.2023.

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I have heard Ld. Counsel for the parties and gone through the record.

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On perusal of records it appears that in the entire SARAESI Application the applicant has not pointed out any illegality or irregularity in the SARFAESI Action initiated by the respondent bank against applicant. The only issue raised by the applicant was that the account was classified as NPA during the lockdown period of C:ovid-19. Further, the applicant raised issue by way of IA 200/2025 that the property having value of more than Rs.2 Crore has been put on auction sale with the reserve price of Rs.73.69 lacs only vide sale notice dated 18.02.2025.

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8 The allegation that the account was classified as a Non-Performing Asset (NPA) "during the lockdown period" on 02.01.2022 is legally untenable and factually incorrect as the centralized nationwide lockdown lasted from 25 March 2020 to 31 May 2020. The RBI £CWID-19 Regulatory

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SA 186 of 2023 IJI

DRT, PATN A

Package permitted an asset classification standstill and debt moratorium only from 1 March 2020 to 31 August 2020. There was no operating national lockdown or active RBI moratorium shielding accounts from normal asset classification on 02.01.2022. In the case of Small Scale Industrial Manufacturers Association v. Union of India, the Supreme Court had granted a temporary interim injunction on 3 September 2020, stating accounts not declared NPA as of 31 August 2020 could not be declared NPA until further orders. The Supreme Court formally vacated this interim stay vide order 23 March 2021.

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So far allegation regarding fixation of low reserve price of secured asset for auction sale is concerned, neither the applicant nor the respondent Bank informed this Tribunal regarding the status of auction sale. It appears that no auction sale took place in pursuance of sale notice dated 18.02.2025. Hence, this allegation becomes infructuous.

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At the same time, it is important to consider the effect of non-joinder of the guarantor, namely Shri Umesh Singh, in the present application. The non-joinder of the necessary party results in multiplicity of proceedings, and the application filed by the borrower is not maintainable without impleading the guarantor, as the controversy involved cannot be effectively adjudicated in his absence, being a party to the contract. Therefore, no relief can be granted to the applicant.

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11.In view of the above discussion, the present application deserves to be dismissed.

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ORDER

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The application SA 186 of 2023, is dismissed with costs.

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[KaushalendraYadav]

Presiding Officer

Debts Recovery Tribunal, Patna

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Judgment signed, sealed, dated and pronounced in the open court on this 30th Day of June, 2026.

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[KaushalendraYadav] Presiding Officer Debts Recovery Tribunal, Patna

Ms Gayatri Traders v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

Ms Gayatri Traders v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

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