Allowed

Shri Damjeet Singh v. Indian Overseas Bank

DRT4 Aug 2026SA/197/2026

Case brief

AI extract

What is this about?

This is a Securitization Application challenging the bank's SARFAESI action for alleged procedural defects. The court allowed the application, setting aside the recovery proceedings due to lack of proper notice service and incomplete CERSAI registration, while permitting fresh action.

What did the court decide?

The Securitization Application was allowed. The SARFAESI action initiated by the Bank is set aside. The Bank is prohibited from taking possession.

Shri Damjeet Singh versus Indian Overseas Bank — Contract and Commercial Disputes | DRT (2026)

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SA No.197/2026

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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SA/197/2026

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SHRI DAMJEET SINGH AND OTHERS VERSUS INDIAN OVERSEAS BANK AND ANOTHER

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04.08.2026 Item No.2

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Present: Mr. Vivek Verma, Counsel for the Applicants. Mr. R.S. Bhatia, Counsel for respondent No.1/Bank. None for respondent No.2.

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Damjeet Singh and others (Applicants) have 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, Indian Overseas Bank and another (Respondents).

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Admittedly, Indian Overseas Bank had sanctioned credit facilities to the tune of Rs.40.00 lacs to respondent No.2. Applicant No.2 and 3 are stated to be the erstwhile partners of respondent No.2. Applicant No.1 is stated to be the guarantor. The residential house was given as security, which is owned by the Applicants. On 14.01.2025, Bank declared the account NPA. On 17.01.2025, Bank issued the notice under Section 13(2). On 03.05.2025, Bank issued the notice under Section 13(4). Thereafter, the Bank put the property for auction on many occasions. However, there was no bidder. The last auction notice was issued on 11.06.2026.

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Respondent No.1/Bank has filed reply to the S.A.

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Mr. Verma, counsel for the Applicants, argues that the Applicants were never served with the notice under Section 13(2). Again, the Bank also did not serve the notice under Section 13(4)

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SA No.197/2026

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upon them. He argues that, in fact, in the year 2022, there was a fresh partnership deed. In place of Applicant No.2 and 3, some other partners joined the firm. Bank had also got the documents executed by them. Accordingly, Applicant No.2 and 3 are not the partners. He further argues that the Bank had also published the demand notice. However, there was no affixation of the demand notice on the secured asset. There is no CERSAI registration. He further argues that though the Bank had put up the property for auction many times, it never served a 30-day notice or a 15-day notice upon the Applicants. On these facts, the SARFAESI action is liable to be set aside.

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Per contra , Mr. Bhatia, counsel for the Bank, argues that the demand notice was duly served upon the Applicants. He states that there are postal receipts on the record to show that the notices were duly sent to the Applicants. However, he admits that there is no proof of affixation of the demand notice on the secured asset. As far as the CERSAI registration is concerned, Mr. Bhatia, argues that there is proper CERSAI registration. Mr. Bhatia, submits that, in case the Bank auctions the property, the Bank would give 30 days' notice to the Applicants.

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I have considered the rival contentions.

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I have perused the CERSAI Report, which states that the security interest has been submitted by the maker but has yet to be approved by the checker. Though, Mr. Bhatia, sought time to produce the latest report, yet he has not produced the latest report. From the report in question, it cannot be said that the security interest was duly registered. That apart, there is no proof of service of the notice under

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SA No.197/2026

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Section 13(2). Mr. Bhatia, admits that there is no proof that the notice under Section 13(4) was sent. For all the aforementioned reasons, I allow the SA. The SARFAESI action initiated by the Bank is hereby set aside. The Bank would not take the possession tomorrow. However, it is made clear that this order will not debar the Bank from initiating fresh SARFAESI action as per law. All the pending IAs, if any, are also stand disposed of accordingly.

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Registrar is directed to send a copy of this order to all the parties, as per rule. File be consigned to record room after due compliance.

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

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Pronounced in open court Dated: 04.08.2026

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PANKAJ

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Shri Damjeet Singh v. Indian Overseas Bank

Case brief

What is this about?

What did the court decide?

Shri Damjeet Singh v. Indian Overseas Bank

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

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