Allowed

Janardan Prasad Yadav and another v. State Bank of India

DRT29 Jan 2026SA/204/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal allowed the application to quash SARFAESI proceedings including the sale notice and auction sale. The court held that the delivery of the possession notice was not proved, the inventory was suspicious, and the bank failed to rebut allegations regarding inadequate consideration and lack of notice.

What did the court decide?

The SARFAESI action, including the auction sale and sale certificate, are quashed. The bank is directed to refund the amount deposited by the auction purchaser with 10% simple interest and hand over p

Janardan Prasad Yadav and another versus State Bank of India — Property and Title | DRT (2026)

DRT. PATN A

SA 204 of 2022 (J)

DEBTS RECOVERY TRIBUNAL PATNA

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Presiding Officer: Shri Kaushalendra Yadav

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SA- 204 of 2022

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Janardhan Prasad Yadav, S/o Ramprit Yadav

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Amla Kumari, W/o Janardhan Prasad Yadav Both residents of Village – Mahatha, Bengatola, P.S. Ladania. District Madhubani, State – Bihar – 847232.

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..................Applicants

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Versus

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The Authorized Officer, State Bank of India, Red Cross Building. Main Branch, District – Madhubani, State – Bihar – 846001.

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Chandramani Kumari, W/o Sri Pawan Kumar Prasad, R/o Balua Gandhi Chowk, Madhubani, Ward No. 12, District – Madhubani, Pin – 8472 ll .

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......................... Respondents

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Presents;

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For the Applicants : Sh. Binay Kumar Singh . Advocate For the Respondent Bank : Sh. Binod Bihari Sinha . Advocate For The Respondent No. 2 : None

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Dated: 29.01.2026

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JUDGMENT

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The present application has been filed to quash the entire SARI'-AESI proceedings including the sale notice dated 21.06.2022 and also to pass an order to restore physical possession which was taken on 08.11.2019.

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2 The brief facts of the case are as follows.' The applicant no. 1 availed a housing loan of (15.00,000 korn the respondent bank in 2013, and subsequent !) . in 2015. obtained a top-up loan of {5,00.000. To secure the loan amount. the applicant no. 2 stood as guarantor and mortgaged her property in favour of the bank. Due to default in repayment, the loan account was classified as a Non-Perfonning Asset (NPA) on 31.12.2017. Thereafter. the respondent bank issued a dclnirnd notice ddted 13.06.2018 under Section 13(2) of the SARFAESI Act. follow’ed by a possession notice dated 19.11.2018 under Section 13(4) of the Act. Subsequently, a sale notice dated 21.06.2022 was issued. Aggrieved by the said sale notice. the applicants have tiled the present Securitization Application

SA 204 of 2022 (J)

DRT, PATN A

The learned counsel for the applicants submitted that the applicant purchased a plot of land in 2010 and, for construction, availed a housing loan of ?15,00.000 in 2013 and a top-up loan of ?5,00.000 in 2015. Due to the failure of his bricks business and being defrauded by his business partner, the applicant could not repay the loan, and during this period applicant no. 2 also suffered serious health issues, all of which were duly communicated to the respondent bank, but no cooperation was extended. It is further submitted that neither the demand notice nor the possession notice was ever served upon the applicants, without serving any prior notice, on 08.11.2019 the respondent bank, with the help of the local administration, took physical possession of the property and prepared an inventory behind the back of the applicants; only the minor son of the applicant was present, who was forcefully dragged out, and the house was locked by the authorities. Aggrieved thereby. the applicant filed SA No. 30/2020 before this Hon’ble Tribunal, and vide order dated 15.02.2020 this Tribunal directed the applicant to deposit 25% of the demand notice amount by 18.02.2020 and also directed the respondent to allow the applicant’s children to stay in the house for their examinations. It is further submitted that the applicant could not deposit the said amount due to the outbreak of coronavirus and conveyed the situation to the respondent bank, who assured assistance. During COVID, the applicants went to their village, and meanwhile the respondent bank issued a letter dated 20.10.2021 demanding payment. As the applicants were in their village, they could not contact their advocate, resulting in SA No. 30/2020 being dismissed for default on 20.05.2022. Thereafter, the respondent bank issued the sale notice dated 21.06.2022. It is further submitted that the respondent bank sold the property to the auction purchaser; however. the auction purchaser did not deposit 25% of the sale price as required under Rule 9(3) of the Security Interest (Enforcement) Rules, 2002, and moreover, the reserve price of the property was fixed much lower than the prevailing market value.

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4 The learned counsel for the respondent bank submitted that due to default in repayment of the loan, the bank classified the account as NPA on 31.12.2017. Subsequently, a demand notice dated 13.06.2018 under Section 13(2) of the SARFAESI Act was issued and duly served upon the applicant. followed by a possession notice dated 19.11.2018, which was served, affixed on the secured asset, and published in two newspapers. Thereafter, through a letter dated 26.07.2019, the bank informed the applicant that the District Authority. ride letter No. 1610 dated 06.07.2019, had granted administrative clearance for taking physical possession of the property and advised the applicant to make alternative

it\

SA 204 of 2022 (J)

DRT. PATN A

arrangements; the said letter was duly received by the applicant. It is further submitted that with the assistance of the local administration, physical possession was taken on 08.11.2019, and an inventory was prepared in the presence of the applicant’s son. The applicant earlier approached this Hon’ble Tribunal by filing SA No. 30/2020, which was heard on 15.02.2020, and the Tribunal directed the applicant to deposit 25% of the demand notice amount by 18.02.2020 and also directed the respondent to permit the applicant’s children to stay in the house for their examinations; however, it was clarified that such permission would not affect the sale proceedings unless the account was regularized by the applicant. The applicant failed to comply with the said order and did not deposit the required amount. Thereafter, upon obtaining proper valuation of the secured asset. the respondent bank issued a sale notice dated 21.06.2022 fixing the auction for 01.08.2022. The secured property was sold to respondent no. 2. the auction purchaser, Smt. Chandramani Kumari W/o Shri Pawan Kumar Prasad, and a sale confirmation letter was issued on 03.08.2022, followed by the issuance of a sale certificate on 20.08.2022.

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Despite service of summons upon Respondent Nos. 2, none has appeared through counsel. nor has any vakalatnama been filed on her behalf.

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

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It is alleged by the applicants that neither the demand notice nor the possession notice was ever served upon them. It is further alleged that on 08.11 .2019 the respondent bank took physical possession of the property without any prior information. It is further alleged that the inventory handed over to the applicant’s minor son by the bank is different from the inventory filed by the bank. It is further alleged that the auction purchaser did not deposit 25% of the bid amount as required under Rule 9(3) of the Security Interest (Enforcement) Rules. 2002, and that the reserve price of the property was fixed at a very low amount compared to the prevailing market value.

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As far as the allegation regarding the service of the demand notice is concerned, the bank, in paragraph 7 of its counter affidavit, has not clearly stated how the service was made. However, upon perusal of the record, it is found that the bank has annexed the xerox copy of the demand notice as Annexure-A at page 15-20 of the counter affidavit, which bears the signature of the applicant, showing that it might have been hand-delivered to the applicant.

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9 As far as the allegation regarding the possession notice is concerned. it is found that although in paragraph 8 of the counter affidavit the respondent has mentioned the possession notice, it has only stated about the affixation and publication, and

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SA 204 of 2022 (J)

DRT. PATNA

not about the service of the possession notice upon the applicant. nor has any proof regarding such service been provided. As Annexure-C (pages 22–24), the bank has attached photocopies to show the affixation of the possession notice on the secured asset, although the xerox copies are not very clear. The possession notice was published in two newspapers, namely Hindustan and Prabhul Khabar . on 24.11.2018, as evident from Annexure-D (pages 25–26) of the counter affidavit.

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So far as the allegation regarding the deposit of 25% of the bid amount by the auction purchaser is concerned, the bank has not given any statement in its counter affidavit to rebut this allegation, nor has it provided any proof The auction purchaser has neither appeared nor filed any counter affidavit; therefore, it is not possible to resolve this allegation. Further, the respondent bank has not provided the valuation report to rebut the applicant’s allegation that the reserve price was fixed at a very low amount compared to the market price. The bank has only stated in paragraph 13 of its counter affidavit that it had obtained a valuation report, but no proof has been provided to support this contention despite the specific allegation made by the applicant.

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As far as the allegation regarding the inventory is concerned, it is found that in the supplementary affidavit, the applicant has filed the inventory that was handed over by the bank to the applicant’s minor son. Upon perusal of the record, it is found that the inventory filed by the bank in the counter affidavit at page 29 is different from the inventory filed by the applicant at page 10 of the supplementary affidavit. The description of the articles is different, and even the names of the panch witnesses are different.

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In view of the above discussion the delivery of possession Notice is not proved. The inventory prepared by the respondent is also suspicious. No valuation report has been filed to rebut the allegation of inadequate sale consideration. No submission on behalf of the auction purchaser to show bonafides are the ground vitiate the measures of the respondent Bank including established sale as it suffers the defect of inadequate consideration, fraud and the collusion

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ORDER

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The application SA 204 of 2022 filed by Janardhan Prasad Yadav and ors, is allowed with costs. The SARFAESI Action in question against applicants, including auction sale 23.03.2022 and the sale certificate dated 17.08.2022 are 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

SA 204 of 2022 (J)

DRT. PATN A

auction purchaser is in possession. will hand over the vacant possession of the mortgage(i property within one month from the date when the amount i'or refund is tendered by the respondent Bank. 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 @ 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.

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/ dl\ d’ {X [KaushaFendraYadav]

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Presiding Officer

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Debts Recovery Tribunal, Patna

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Judgment signed, sealed. dated and pronounced in the open coun on this :9TH Day

of January, 2026.

;}* IG„"“,;,'”

[KaushalendraYadav]

Presiding Officer

Debts Recovery Tribunal, Patna

Janardan Prasad Yadav and another v. State Bank of India

Case brief

What is this about?

What did the court decide?

Janardan Prasad Yadav and another v. State Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

Parties & counsel

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