Dismissed

M/S Maurice Appliances v. State Bank of India

DRT4 Jun 2026SA/7/2026

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal-I, Chandigarh dismissed a Securitization Application filed by M/s Maurice Appliances challenging SARFAESI actions by State Bank of India. The Tribunal held that the application was time-barred as the applicants approached higher authorities after the limitation period expired and failed to deposit the admitted outstanding amount as per a prior undertaking.

What the court decided

AI extract

M/S Maurice Appliances versus State Bank of India — Banking and Recovery | DRT (2026)

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SA No. 07 of 2026

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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SA No. 07 of 2026

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M/s Maurice Appliances and another

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Versus

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State Bank of India

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Dated: 04.06.2026

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Item No. 03

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Argued by: Mr. I P Singh, Counsel for Applicants.

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Mr.Vivek Verma and Mr.Sanjay Sagar, Counsel for Respondent Bank.

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M/s Maurice Appliances and another (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 SBI (Respondent).

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Admittedly, Applicant No. 2 is the proprietor of Applicant No. 1. Vide letter of arrangement dated 31.05.2017 (Annexure R-1), Applicant No. 1 had availed CC Limit of Rs. 70 lacs and Term Loan of Rs. 95 lacs from the Respondent Bank. To secure the same, Applicant No. 2 had created security interest, in respect of following properties, by executing registered mortgage deed dated 23.05.2017, in favour of the Bank :-

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"Mortgage of immovable property i.e. land measuring 0- 6-0 Bigha and building constructed/to be constructed thereon i.e:-

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(a) land measuring 0-5-0 Bigha being 300/3660 share of land measuring 3-1-0 Bigha comprised in Khasra No.3621 Khata Khatoni No. 846/1070 and

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(b) land measuring 0-1-0 Bigha being ½ share of land measuring 0-2-0 Bigha comprised in Khasra No.3510 Khata & Khatoni No. 839/1063 as per Jamabandi of the year 2014-2015 situated at Phati Kashawari Kothi Kais, Tehsil Bhuntar, District Kullu, Himachal Pradesh along with structure standing or to be raised or to be erected thereon along with all other right of easement attached thereto owned by Applicant No.2"

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SA No. 07 of 2026

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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Vide sanction letter dated 19.12.2018, the CC Limit of Rs. 70 lacs and Term Loan of Rs. 85 lacs were renewed. In 2020, Applicants had approached the Bank and requested for renewal of CC Limit of Rs. 70 lacs; Term Loan of Rs. 95 lacs; WCTL of Rs. 70 lacs and GECL of Rs. 26 lacs (Annexure R-3) and the limits were sanctioned. On 02.08.2021 and 23.08.2021, Applicants approached the Bank for restructuring and sanction of additional facilities. Vide letter of arrangement dated 23.08.2021 (Annexure R-4), the following facilities were sanctioned.

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i. CC limit of Rs.51,00,000.00 reduced from Rs.70,00,000.00 was repayable on demand with interest @10.90% p.a. with monthly rests besides penal interest @2% p.a. over and above the agreed interest in the event of default.

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ii. The Term Loan having projected capitalized o/s of Rs.72,83,202.00 as on 31.03.2023 existing was repayable as per revised terms which was extended by 24 months from original tenure of 91 months to 115 months by providing 24 months moratorium for principal and interest and interest during moratorium to be capitalized and was repayable as per revised terms i.e.

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a. First 12 EMIs of Rs.1,30,000.00 from April 2023 to March 2024,

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b. Next 12 EMIs of Rs. 1,50,000.00 from April 2024 to March 2025,

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c. Next 12 installments of Rs.1,80,000.00 from April 2025 to March 2026,

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d. Next 8 installments of Rs.1,95,000.00 from April 2026 to November 2026 and

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e. Last installment of Rs.2,03,202.00 to fall due in October 2026. The principal was to be repaid in 35 installments of Rs.72,222.00 from June 2022 and last installment of Rs.72,230.00 and interest was to be served as and when debited.

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iii. FITL of Rs.9,00,000.00 was repayable in 48 months including moratorium of 24 months and was repayable in 24 EMIs of Rs.37,500.00 w.e.f. 01.08.2023 with last

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SA No. 07 of 2026

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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installment on 31.07.2025 with interest @10.90% p.a. with monthly rests.

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iv. WCTL of Rs.19,00,000.00 was repayable in 84 months including moratorium of 12 months and was repayable in 71 EMIs of Rs.26,388.00 w.e.f. 01.08.2023 with last instaliment of Rs.26,452.00 on 31.07.2029 with interest @10.90% p.a. with monthly rests.

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v. GECL Add. 10% of Rs.13,00,000.00 was repayable in 5 years including moratorium of 24 months for principal only and interest payable on monthly intervals. The principal was to be repaid in 35 installments of Rs.36,111.00 and last installment of Rs.36,115.00 with interest @7.65% p.a. with monthly rests.

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Applicant No. 2 extended the earlier mortgage vide registered mortgage deed dated 28.10.2021. Vide letter of arrangement dated 20.01.2024, the facilities of Rs. 2.13 crores were renewed by the Bank. On 31.03.2024, Bank declared the account NPA. On 16.12.2024, Bank issued the notice under Section 13(2) of the SARFAESI Act. On 22.04.2025, Bank issued the possession notice (Annexure R-11) and also published the same in the newspapers. On 19.07.2025, District Magistrate, Kullu passed the order under Section 14 of the SARFAESI Act (Annexure R-12). SBI has also filed OA No. 127 of 2025, before this Tribunal for the recovery of Rs. 1,74,22,579.07p, due as on 02.12.2024. Applicants had also filed CWP No. 20268 of 2025 before the Hon’ble Himachal Pradesh High Court, which vide order dated 01.01.2026 dismissed the same. On 03.01.2026, Applicants filed the present SA.

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With this background, I come to the impugned Securitization Application.

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Applicants in the present SA have challenged the SARFAESI action; physical possession notice dated 08.12.2025 (Annexure A-1); notice dated 04.12.2025 issued by Tehsildar (Annexure A-2); for quashing the order dated

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SA No. 07 of 2026

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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19.07.2025 passed by DM, Kulla under Section 14 of the SARFAESI Act (Annexure A-3) as well as the notice under Section 13(2) etc.

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Applicants in the SA have alleged that it is an MSME Enterprise. The loan facilities were secured by the guarantee of CGTMSE. Accordingly, as per RBI guidelines, the Bank could not accept any property by way of security to secure the loan. It is alleged that due to various factors, they were facing financial crunch. However, they did not stop the production. They had approached the Kullu Branch of SBI for restructuring and had made a request to refer the matter to the Designated Committee constituted under MSME Scheme. However, the Respondent Bank kept on delaying the matter on one pretext or the other. Respondent Bank forced the Applicants to sign some documents which were found to be renewal documents on 20.01.2024. The last date for Term Loan installment was fixed till the month of October, 2026. It is alleged that the Bank had issued the notice under Section 13(2) on 18.04.2024, stating that the account had been declared NPA on 01.04.2024. Applicants state that their account was quite regular and the limits were renewed on 20.01.2024. They were regularly making the payments of installments in the Term Loan Account. The unit was also having production with sufficient stock. They had raised this issue with the Bank authorities, who had accepted the same and withdrawn the notice. However, on 01.05.2024, Bank issued yet another notice stating that the account had been turned NPA on 30.07.2023. Whereas, the date of NPA in the earlier notice was mentioned as 01.04.2024, in the notice dated 01.05.2024, the date of NPA was mentioned as 30.07.2023. They had again raised this issue with the Bank. On 04.07.2024, Bank issued the symbolic possession notice. On 13.09.2024, Bank had moved an application before DM, who vide order dated 19.07.2025 passed the order under Section 14 of the SARFAESI Act. Vide letter dated 28.10.2024, Bank intimated the Applicants that their account have been migrated to Stressed Assets Recovery Branch at Shimla. On getting this letter, they represented the

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SA No. 07 of 2026

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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Bank that the account has been wrongly declared NPA. Applicants state that they were running an MSME unit and the case of the Applicants should have been sent to the Designated Committee for restructuring. However, Applicants did not receive any communication from the Bank for revival or restructure. On 16.12.2024, they got another notice under Section 13(2) stating that the account has been declared NPA on 31.03.2024 and a sum of Rs. 1,74,22,579.07p was due. Earlier notices under Section 13(2) were withdrawn by the Bank. On 22.04.2025, Bank issued the possession notice. On 27.10.2025, they got a notice from the Bank stating that the possession would be taken on 12.11.2025 as the date has been fixed by the Tehsildar. On 10.11.2025, they moved a detailed representation before DM and made a request to recall the order dated 19.07.2025. On 13.11.2025, they also made representation to Tehsildar not to take the possession. On 08.12.2025, they got another letter from the Bank stating that the possession would be taken on 07.01.2026. They had filed writ petition before the Hon’ble Himachal Pradesh High Court, which dismissed the same with the observation that they (Applicants) have the alternate remedy before DRT.

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On these facts, Applicants filed the present SA stating that their account was wrongly declared NPA. Their account was renewed on 20.01.2024. Accordingly, the Bank could not declare the account NPA on 31.07.2023 and 31.03.2024. The loans were granted under the CGTMSE scheme. The secured asset is joint property. Accordingly, Bank cannot take the possession. Respondent has charged higher rate of interest. Bank has failed to comply with the RBI guidelines. Their unit is running. The deficiency in the account was temporary etc. Accordingly, Applicants prayed that the SARFAESI action be set aside.

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SA No. 07 of 2026

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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Bank, in reply, has denied the case of the Applicants. Bank has alleged that the present SA is time-barred. The Bank has also alleged that the account was rightly declared NPA. Accordingly, it is stated that the SA be dismissed.

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Applicants have also filed the rejoinder.

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I have heard Mr. IP Singh, counsel for the Applicants and Mr.Vivek Verma, counsel for the Respondent Bank.

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Mr.IP Singh, counsel for the Applicants drawing my attention to the documents submitted that the account was renewed on 20.01.2024. Accordingly, the Bank could not declare the account NPA on 31.03.2024. Further, Applicants are running an MSME unit. As per RBI guidelines, Bank could not declare the account NPA without referring the matter to the Designated Committee. Though, they had made request to refer the matter to the Designated Committee, yet, the Bank did not refer the case of the Applicants to the Designated Committee. Further, the proceedings of the Designated Committee were just eyewash. The proceedings of Designated Committee were conducted behind the back of the Applicants. The proceedings of the Designated Committee were not conveyed to the Applicants. Applicants had earlier approached the Hon’ble Himachal Pradesh High Court, which declined to interfere in the matter. Applicants have the right to approach Debts Recovery Tribunal, which they have done. Accordingly, it is stated that the SA be allowed.

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Per contra , Mr.Verma, counsel for the Respondent Bank has submitted that the SA is time-barred. Applicants were duly served with the notices under Section 13(2); 13(4) and the order of DM passed under Section 14 of the SARFAESI Act. Despite having the knowledge of the SARFAESI action, Applicants did not approach this Tribunal and they rushed to the Hon’ble High Court, which declined to interfere in the matter. Accordingly, the SA filed on 03.01.2026 is time-barred. Mr. Verma further submitted that on 06.01.2026,

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SA No. 07 of 2026

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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Applicants had undertaken to deposit Rs. 1.05 crores within three months from 01.02.2026. However, Applicants just deposited Rs. 25 lacs only and they failed to deposit the remaining sum. Accordingly, Applicants failed to honour their commitment. Mr.Verma further submitted that on the request of the Applicants, the matter was referred to the Designated Committee, which conducted the proceedings and came to the conclusion that the account cannot be revived/restructured and the Bank rejected the restructuring proposal. Mr.Verma submitted that there is no merit in the present SA and the same be dismissed.

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I have considered the rival contentions.

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It is admitted on the record that SBI had sanctioned some credit facilities to the Applicants. It is also admitted on the record that Applicants had earlier approached the Hon’ble Himachal Pradesh High Court. Applicants have also admitted the service of notices under Section 13(2), 13(4) and order dated 19.07.2025 passed by the DM under Section 14 of the SARFAESI Act. It has already been mentioned that earlier, Applicants had filed CWP No. 20268 of 2025 before the Hon’ble Himachal Pradesh High Court, wherein they had challenged the SARFAESI action. Vide order dated 01.01.2026, Hon’ble the High Court dismissed the writ petition. Bank has also produced on the record a copy of the writ petition filed by the Applicants before the Hon’ble High Court. A look at the copy of the writ petition would show that on 10.11.2025, Applicants had approached the DM. Again, on 13.11.2025, Applicants had approached the Tehsildar. This clearly shows that the Applicants were aware of the order dated 19.07.2025 passed by the DM under Section 14 of the SARFAESI Act. Despite having knowledge of the same, Applicants did not approach this Tribunal but rushed to the Hon’ble High Court. Applicants cannot stretch the limitation on the basis of repeated notices issued by the Tehsildar. Applicants admit that they had approached the

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SA No. 07 of 2026

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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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DM/Tehsildar by filing representation dated 10.11.2025 and 13.11.2025. Accordingly, the present SA filed on 03.01.2026 is beyond limitation.

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Applicants have also raised the issue that the case of the Applicants should have been referred to the Designated Committee. Though, Applicants had made many requests for the same, yet, the Bank did not refer the matter to the Designated Committee. Applicants could well file the SA within time and raise this issue. The Hon’ble Supreme Court in Pro Knits case has held that the borrowers should approach the Court within time in case they allege that the Bank has not considered their case for restructuring.

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Before I conclude, this deserves to be mentioned that on 06.01.2026, Applicants had made a statement that they would deposit Rs. 1.05 crores within three months from 01.02.2026. However, Applicants deposited just Rs. 25 lacs only. I am of the considered view that Applicants had no intention to make the payment. They simply wanted to enjoy a stay order on the basis of a false commitment. I am of the considered view that the Applicants do not deserve any sympathy. I am of the considered view that the present SA is beyond limitation. Accordingly, the same is hereby dismissed .

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