Allowed

Pintu Kumar and Others v. Uco Bank

DRT28 Jan 2026SA/199/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal quashed the SARFAESI action and auction sale by UCO Bank against applicants due to provable infirmities, specifically the bank's failure to produce postal tracking reports for notice service and improper publicity of the sale notice. The application was allowed without any issue regarding limitation of time.

What did the court decide?

SARFAESI action and auction sale quashed; Bank ordered to refund auction amount with 10% simple interest subject to handing over possession to auction purchaser within one month; applicant to be retur

Pintu Kumar and Others versus Uco Bank — Cheque Dishonour | DRT (2026)

SA 199 of 2024 [JI

DRT, PATN A

DEBTS RECOVERY TRIBUNAL PATNA

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Presiding Officer: Shri Kaushalendra Yadav

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SA- 199 of 2024

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Pintu Kumar, S/o Baleshwar Mahto, R/o – Village – Cheriya Bariyarpur, Ward No. 6, P.S. – Cheriya bariyarpur, District – Begusarai. (Borrower).

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Smt. Guriya Devi, Wife of Pintu Kumar, R/o - Village - Cheriya Bariyarpur, Ward No. 6. P.S. – Cheriya bariyarpur, District – Begusarai. (Guarantor).

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.........Applicants

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Versus

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1 UCO Bank. Through Zonal Manager, Zonal Office Sona Jageshwar Complex, Traffic C;howk, Begusarai, District – Begusarai.

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2 The Authorised Officer, UCO Bank Zonal Office Sona Jageshwar Complex, Traffic Chowk, Begusarai, District – Begusarai.

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3 The Branch Manager, UCO Bank, Cheria Bariyarpur. P.0. Shripur, District – Begusarai. Pin Code – 851132.

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4 Raj Kishore Poddar, S/o Baijnath Poddar, Resident of P.S. Cheriya Bariyarpur, P.0. Siripur, District – Begusarai, Pin code 851132 – Auction Purchaser.

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-respondents

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Present :

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For the Applicants Sh. C.S.P. Sinha, Advocate For the Respondent Bank : Sh. Manoj Kumar, Advocate For the Respondent No.4 : Sh. Pawan Kr. Sinha, Advocate

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Dated: 28.01.2026

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JUDGMENT

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Present application has been filed with a prayer to quash entire SARFAESI action taken against the properties of applicant alongwith auction sale of the property.

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During pendency of the SA, the applicant filed Limitation Petition by

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way of IA 404/2024 for condonation of delay. Further, IA 425/2024 was filed by the applicant with the prayer to restore the physical possession of the property.

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The brief fact of the case is that the applicants availed Credit facility to the tune of Rs.6 lacs from the respondent bank. To secure the loan facility, the applicant rnortgaged his property in favour of the respondent bank. Due to default in repayment of dues of the bank, the account was classified as NPA on 31.03,2021. Subsequently, the respondent bank initiated SARFAESI action against the borrower by issuing Demand Notice dated 03.11.2021 u/s 13(2) of the act calling upon the borrower to make the payment of Rs.6,68,038.94. Thereafter, the respondent took possession of the property by issuing Possession Notice dated 08.02.2022 u/s 13(4) of the SARFAESI Act. Thereafter, property was put on auction sale by issuing auction sale notice dated 14.02.2024 fixing the date of auction sale on 15.03.2024. Accordingly property was auctioned on 15.03.2024 and Sale Certificate was issued on 28.03.2024 in favour of the successful bidder. Thereafter, the respondent bank moved before the District Magistrate for assistance towards physical possession of the property. Accordingly, the respondent bank issued a letter dated 05.07.2024 with the request to vacate the property to the applicant Aggrieved from the letter dated 05.07.2024, the present SA has been filed by the applicants.

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On the point of limitation it is submitted by the Id. Counsel of applicant that upon wrong advice of advocate, the applicants approached the Hon’ble High Court of Patna vide CWJC No.7520 of 2024 against the sale of the property. The delay is not deliberate and intentional on the part of the applicant. However, the respondent bank has issued a notice dated 05.07.2024 to the applicant to vacate the mortgaged property, accordingly the present SA has been filed within the limitation period.

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It is further submitted by the Ld. Counsel of applicant that had

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provided the Generator facility to the concerned branch as well as to the ATM of the Bank. Against which the respondent bank had made payment till January, 2020 but the payment was lesser than the agreed amount. The applicant had sent a letter dated 27.11.2020 to the bank for payment of dues amount of Rs.3,07,146/– but the respondent bank neither repaid the amount nor replied to the Letter of applicant. Therefore, the loan account became irregular and turned to NPA. Despite this, the applicant had made payment of Rs.1.27 lacs on 26.09.2022 with the request to settle the account but no action was taken by the bank rather initiated SARFAESI action against the applicant. Neither the Demand Notice issued u/s 13(2) nor the Possession Notice issued u/s 13(4) of the SARFAESI act has been served upon the applicant. The Possession notice was neither affixed on secured assets nor published in two leading newspapers. The respondent bank, without following the mandatory provision and obtaining the valuation of the property, issued sale notice dated 14,02.2024 but the sale notice was not served to the applicant. The property was auctioned on 15.03.2024 which was intimated by the bank to the applicant vide letter dated 28.03.2024 that the property has been auctioned for Rs.8.33 lacs on 15.03.2024. Further, the respondent bank sent a letter dated 05.07.2024 to the applicant directing to vacate the premises within 07 days but in the said letter date of sale has been mentioned as 21.05.2024 while the property was auctioned on 15.03.2024.

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On the contrary, Id. Counsel of the respondent bank submits that the borrower after availing the loan facilities failed and neglected to repay the amount due under facility, hence, the accounts was classified as NPA on 31.03.2021. In order to recover outstanding dues, the respondent bank initiated SARFAESt Action against the borrower and issued demand notice dated 03.11.2021 u/s 13(2) of SARFAESI Act. Even after service of demand notice, the applicant failed to repay the dues of the bank, hence the bank took possession

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of the secured asset by issuing possession notice dated 08.02.2022 u/s 13(4) of the act. The Possession Notice was affixed on secured assets and also sent to the applicant through registered post on 08.02.2022. The Possession Notice was also published in “Hindustan and “Hindustan Times" on 13.02.2022. Thereafter, the valuation of property has been obtained by the respondent bank from its registered valuer and the property has been put on auction sale by issuing auction sale notices dated 14.02.2024, fixing the date of auction sale on 15.03.2024. The sale notice was affixed on the secured asset and also sent to the applicant through registered post on 16.02.2024. The sale notice was also published in “Hindustan" on 20.2.2024 and "Business Standard" on 27.02.2024. The property was auctioned on 15.03.2024 to the successful bidder. Rajkishor Poddar, S/o Baijnath Poddar for Rs.8.33 lacs. On deposit of auction amount, the Sale Certificate dated 28.03.2024 has been issued in favour of auction purchaser and the borrower and guarantor were duly informed in this regard through a letter dated 28.03.2024. Further, the respondent bank moved before the District Magistrate for physical possession of the property. Accordingly, the District Magistrate passed an order vide memo no. 1874 dated 26.06.2024. Accordingly. the respondent bank vide letter dated 05.07.2024, requested the applicant to vacate the premises to hand over the possession of the property to the auction purchaser. Further, the possession of the property was taken on 19.07.2024 and the same was handed over to the auction purchaser.

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It is further submitted that the generator service rent (a) Rs.12000/– per month, as mutually agreed, was paid by the respondent bank until January, 2020. Subsequently, the service was orally discontinued. Thus the claim of the applicant is baseless. The amount deposited by the applicant has already been adjusted in the loan account.

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It is submitted by the Id. Counsel of the auction purchaser that after

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getting the knowledge from paper publication dated 20.02.2024, the auction purchaser participated in the e-auction sale of the property in question on 15.03.2024. Accordingly, the auction purchaser was declared as successful bidder with the bid of Rs.8.33 lacs. Accordingly. the auction purchaser deposited Rs.1,26,000/– on 16.03.2024 excluding the EMD of Rs.82,300/deposited on 13.03.2024. Further. Rs.5.00.000/– was deposited on 25.03.2024 and the rest Rs.1,28,700/– was deposited on 28.03.2024. After deposit of the entire auction amount, the respondent bank issued Sale Certificate dated 28.03,2024 in favour of the auction purchaser and the physical possession of the property has also been handed over to the auction purchaser on 19.07.2024 and he is in peaceful possession.

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

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Before entering into controversy let us examine whether the present application was filed within the period of limitation or it is beyond the limitation that requires any kind of condonation of delay.

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For the purpose of filing of the securitization application under section 17 of the SARFAESI Act (hereinafter referred as Act), the application has to be filed within the period of 45 days from the measures taken under section 13(4) of the Act. As such for the purpose of determining the date from which the limitation will start running. depends upon the fact that when the measures u/s 13(4) of the Act were initiated and when such measures were brought into the knowledge of the applicant. It is also important to consider that the measures under the Act when are said to be initiated and when it comes to an end

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The SARFAESI Action can be challenged under Section 17 of the SARFAESI Act. which runs as under:-

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[Application against measures to recover secured

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debts]. – (1) Any person (including borrower). aggrieved by any of the measures referred to in sub-section (4) of

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section 13 taken by the secured creditor or his authorized officer under this Chapter, [may make an application alongwith such fee, as may be prescribed,] to the Debts Recovery Tribunal having jurisdiction in the matter within forty–five days from the date on which such measures had been taken.

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It is clear that any person who is aggrieved by measures referred to in sub-section 4 of the section 13 taken by secured creditor, may file the application under this provision. The sub-section (4) of section 13 runs as under :

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13(4) in case the borrower fail to discharge his liability in full within the period specified in sub-section (2), the secured creditor may take recourse to one or more of the following measures to recover his secured debt, namely:-

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(a) take possession of the secured assets of the borrow including the right to transfer by way of lease, assignment or sale for realizing the secured right o transfer by way of lease, assignment or sale for realizing the secured asset:

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(b) ....

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It is clear that subsection (4) of section 13 authorizes the secured creditor to take recourse to one or more of the measures for recovery of dues. Under these measures, the secured creditor may take possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realization of dues

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Ld counsel for the applicant has further submitted that the right to challenge the SARFAESI action from very inception, still subsists as the SARFAESI Action has not come to an end till the application is filed

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It is pertinent to mention here that u/s.13(7) of SARFAESI Act provides

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SA 199 of 2024 IJI

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that –

(7) Where any action has been taken against a borrower under the provisions of sub-section (4). all costs, charges and expenses which, in the opinion of the secured creditor, have been properly incurred by him or any expenses incidental thereto, shall be recoverable from the borrower and the money which is received by the secured creditor shall, in the absence of any contract to the contrary, be held by him in trust. to be applied. firstly, in payment of such costs. charges and expenses and secondly. in discharge of the dues of the secured creditor and the residue of the money so received shall be paid to the person entitled thereto in accordance with his rights and Interests

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In view of the above provision, the SARFAESI action u/s 13(4) comes to an end only after the stage of u/s.13(7) of SARFAESI Act. The application U/s 17 of SARFAESI Act can be filed till the auction money is appropriated and residue is paid to the rnortgagor after adjustment according to section 13(7). In the present matter neither such averment has been made

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The applicant stated that after getting knowledge, approached the Hon’ble High Court vide CWJC No.7520 of 2024 against the sale of the property which was withdrawn by the applicant on 19.07.2024 with liberty to avail the remedies as available under law.

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It is the allegation of the applicant that no notice has ever been served upon the applicant. The applicant had no knowledge of the measures taken by the respondent. Against the sale notice the applicant had filed a writ petition before Hon'ble High Court, the time spent in the writ petition can be exempted under the provisions of S.14 of the Limitation Act.

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So far as the infirmity in SARFAESI action is concerned, it has been

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alleged that due to non-payment of rent against the generator service provided to the respondent branch and concerned ATM, the account became NPA. Neither the Demand Notice issued u/s 13(2) nor the Possession Notice issued u/s 13(4) of the SARFAESI act has been served upon the applicant. The Possession notice was neither affixed on secured assets nor published in two leading newspapers. The respondent bank, without following the mandatory provision and obtaining the valuation of the property, issued sale notice dated 14.02.2024 but the sale notice was not served to the applicant.

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On perusal of records it appears that the applicants themselves admitted that agreement for service of generator was for 02 years vide agreement dated 16.12.2024 and the said agreement was not extended further after expiry of such period, Only on the oral consent, the service has been provided by the applicant against which payment was made upto January, 2020 but it is admitted fact that there is no any written agreement between parties. The respondent bank has clearly stated that service was discontinued thereafter therefore. payment was not made.

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20.On default in repayment, respondent bank issued demand notice dated 03.11.2021 u/s 13(2) of SARFAESI Act. The said demand notice was sent to the applicant through post on 06.11.2021 which is evident from annexure – A, page 21 of counter affidavit filed by the respondent bank but the respondent bank failed to file its tracking report to prove the service of demand notice which is best evidence as the applicant specifically denied the service of demand notice. Further, the respondent bank issued possession notice dated 08.02.2022 u/s 13(4) of the act. The Possession Notice was affixed on secured asset and also sent to the applicant through registered post on 08.02.2022 as appear from the anne><ure – B series, page 24-26 but the respondent bank failed to file its tracking report to prove the service of possession notice upon applicant. The Possession Notice was published in “Hindustan" and “Hindustan Times" on 13.02.2022

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Further, the valuation of property was obtained by the respondent bank from its registered valuer vide valuation report dated 04.02.2024. The said valuation report has been annexed with counter affidavit annexure – E, page 32–45. Thereafter, property was put on auction sale by issuing auction sale notices dated 14.02.2024, fixing the date of auction sale on 15.03.2024. The sale notice was affixed on secured asset and also sent to the applicant through registered post on 16.02.2024 as evident from the annexure – F series, page – 48-51. But again the respondent bank failed to file its tracking report to prove the service of sale notice upon applicants. However, the sale notice was published in “Hindustan" on 20.2.2024 and “Business Standard" on 27.02.2024. The property was auctioned on 15.03.2024 to the successful bidder, Rajkishor Poddar, for Rs.8.33 lacs. Accordingly, the auction purchaser deposited Rs.1,26,000/– on 16.03.2024 excluding the EMD of Rs.82,300/- deposited on 13.03.2024. Further, Rs.5,00.000/– was deposited on 25.03.2024 and the rest Rs.1,28,700/– was deposited on 28.03.2024. To prove the above said payment, the auction purchaser annexed the copy of the statement of account as annexure – A, page 7-8 of the counter affidavit filed by the auction purchaser. On receipt of the entire auction amount, the respondent bank issued a Sale Certificate dated 28.03.2024 in favour of the auction purchaser and the physical possession of the property was also handed over to the auction purchaser on 19.07.2024 with the assistance of District Administration

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In view of the above discussion, when the respondent has Failed to prove the service of demand notice, possession Notice and the Sale Notice on the applicant by filing Postal tracking report, which would have been best evidence, the measures taken by the respondent suffers infirmity. Again the Publication of sale notice in Business Standard, the newspaper which may be popular in the business community but can be a popular and widely circulated newspaper among common people of the locality where the mortgage property

/d6} \

DRLPATNA

SA 199 of 2024 IJI

situated. As such the publication does not serve the requirement of the provision under the Act. Accordingly, non service of any notice to the applicant and non compliance of the wide publicity for the sale notice renders the measures having defects of fraud collusion and inadequate sale consideration. Accordingly the sale is vitiated and the present SA succeeds.

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ORDER

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The application SA 376 of 2023, is allowed with costs. The SARFAESI Action in question against applicants, including auction sale dated 15.03.2024 is hereby quashed. The respondent Bank shall refund the amount deposited by the auction purchaser with 10% simple interest. subject to the condition that if the auction purchaser is.in possession, will hand over the vacant possession of the mortgaged property within one month from the date when the amount for refund is tendered by the respondent Bank. Thereafter the respondent Bank will hand over the possession of the property to the applicant. No interest will be payable to the auction purchaser, if the possession is not handed over to the bank within one month from the date of tender of the refund. The respondent Bank will be liable to pay compensation (a) Rs.1000 per day from today if the amount is not offered for refund to the auction purchaser within 30 days from the date of this order. ,,J/, r

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[KaushalendraYadav]

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Presiding Officer Debts Recovery Tribunal, Patna

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Judgment signed, sealed, dated and pronounced in the open court on this 28th Day of January, 2026. /FTo/IAB'” J+~\ J~ [KaushalendraYadav]

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Presiding Officer Debts Recovery Tribunal, Patna

Pintu Kumar and Others v. Uco Bank

Case brief

What is this about?

What did the court decide?

Pintu Kumar and Others v. Uco Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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