Dismissed

Blue Autoworld Pvt. Ltd. v. Punjab National Bank

DRT9 Sept 2026SA/222/2024

Case brief

AI extract

What is this about?

Debts Recovery Tribunal Siliguri dismissed an application under Section 17(1) of SARFAESI Act challenging a bank's Section 13(2) notice, possession, and sale. The court held the debt was advent and notices were valid, dismissing pleas regarding missing agreement copy, settlement refusal, NPA classification, and limitation.

What did the court decide?

The stay application and main application challenging Section 13(2) notice, possession, and sale were dismissed with no order as to costs.

Blue Autoworld Pvt. Ltd. versus Punjab National Bank — Writ and Judicial Review | DRT (2026)

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ORDER SHEET DEBTS RECOVERY TRIBUNAL, SILIGURI

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SA/222/2024

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Blue Autoworld Pvt. Ltd. & Anr

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Applicants

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	Punjab National Bank	Respondents
Date of Order	Order with Signature	Office action with date and dated signature of parties when necessary.

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Item No.31 Order No.

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09.09.2026

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Present :-

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Counsel for the Applicants : None. Counsel for the Respondent bank : Mr. P. Joarder, physical mode. Counsel for the intervener : Mr. T. Ganeriwala, virtual mode.

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Judgment is passed in SA/222/2024 and a copy of the Judgment is kept on record.

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Let the judgment be uploaded on website of the Tribunal and the Registry is directed to serve/send copy of this judgment to the parties free of cost.

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Record be consigned to the record room along with the judgment.

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Digitally signed by RAKESH RAKESH PATI TIWARI PATI TIWARI Date: 2026.09.10 17:25:15 +05'30' (RAKESH PATI TIWARI) Presiding Officer DRT-Siliguri

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IN THE DEBTS RECOVERY TRIBUNAL, SILIGURI

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S.A. No.222/2024

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BLUE AUTOWORLD PVT. LTD., registered office at Regent House, 1^st Floor, Hemant Basu Sarani, 12 No. Govt. Place (East), Kolkata -700069 and Present address at C/o. Siddhrtha Gangopadhyay, Abhirampur Market Building 1^st Floor, District Malda, Pin -732103.

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SUBHASISH RAIL, director of Blue Autoworld Pvt. Ltd., son of Sudhanshu Sekhar Rail, residing at Rupali Plastic, Bagnan, Chandrapur East, District 711303. -Howrah, PIN -711303.

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PANCHANAN MISHRA, director of Blue Autoworld Pvt. Ltd., son of Prafulla Kumar Mishra, residing at Manoharpur, P.O. -Mahadebpur, District Malda, -PIN-732121.

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…………………….Applicants

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THE AUTHORISED OFFICER, PUNJAB NATIONAL BANK, at United Tower, 4^th Floor, 11, Hemanta Basu Sarani, Kolkata 7000001.

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ANJANAKRIPA NIRMAN PVT. LTD. a company within the meaning of the Companies Act, 2013, having its registered office at 41 Ramtanu Lahiri Sarani, Kolkata-700053.

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……..…………Respondents Counsel for the applicant : Mr. Sunil Bothra. Counsel for the respondent : Mr. P. Joarder. Counsel for the auction purchaser : Mr. T. Ganeriwala.

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PRESIDING OFFICER: RAKESH PATI TIWARI Date of Judgment - 09.09.2026

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J U D G M E N T

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This is an application under section 17(1) of The Securitization And Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as SARFAESI Act), filed by the applicants for setting aside the E-auction sale notice dated 19.11.2024 for the e-auction sale scheduled on 26.12.2024 and other reliefs.

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Case of the applicants in short is that the is that the applicant is that applicant No.1 is a company incorporated and registered under the Companies Act and applicants Nos.2 and 3 are its directors. It is stated that the applicants had availed various credit facilities from the respondent bank and that the said loan accounts were being operated regularly and satisfactorily at the initial stage. According to the applicants, owing to financial difficulties suffered on account of the pandemic situation and consequential loss in business, the

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RAKESH Digitally signed by RAKESH PATI PATI TIWARI Date: 2026.09.10 TIWARI 17:26:15 +05'30'

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operation of the loan account became irregular and the account was subsequently classified as a Non-Performing Asset (NPA). It is the specific case of the applicants that the respondent bank thereafter issued a demand notice dated 29.11.2023 under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, followed by a notice dated 29.02.2024 purportedly under Section 13(4) of the said Act, whereby the respondent claimed a sum of Rs.6,42,16,913.93/- together with further interest in respect of the aforesaid loan accounts and allegedly took symbolic possession of the secured property. The property in question is stated to comprise land measuring about 18315 decimal situated at Mouza- Barda, standing in the name of M/s. Blue World Pvt. Ltd., formerly known as M/s. New Malda Diesels Pvt. Ltd. The applicants dispute the legality and correctness of the demand raised by the respondent and contend that the alleged dues have not been properly ascertained or explained and that the demand notice does not contain adequate material particulars regarding the basis of the outstanding amount, the rate of interest charged, the various charges allegedly debited and the manner in which the amount claimed has been arrived at. It is further pleaded that the respondent has levied excessive interest and charges contrary to the contractual terms and the applicable guidelines of the Reserve Bank of India and that, consequently, the alleged debt itself is disputed by the applicants. The applicants further contend that the statutory requirements under Section 13 of the SARFAESI Act are mandatory and that the respondent, being a secured creditor exercising drastic statutory powers, was required to strictly comply with the procedure prescribed under the Act and the Rules framed thereunder. According to the applicants, there was non-compliance with the mandatory requirements of Section 13(3A) of the Act inasmuch as their requests and efforts for settlement of the outstanding dues were not duly considered by the respondent. It is pleaded that the applicants made several attempts to regularise/settle the loan account and paid a sum of Rs.4,84,000/- on 06.12.2023 with the expectation that the respondent would consider their request for settlement under a One Time Settlement (OTS) scheme. The applicants further state that they subsequently deposited Rs.1,00,000/- on 03.09.2024 and another sum of Rs.1,00,000/- on 05.09.2024, aggregating to Rs.2,00,000/-, towards the loan account, but according to them, despite such payments and repeated requests, the respondent did not take any effective steps towards settlement of the account. It is further

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Digitally signed by RAKESH RAKESH PATI TIWARI PATI TIWARI Date: 2026.09.10 17:26:34 +05'30'

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stated that on 23.10.2024 the applicants again approached the respondent by email seeking settlement of the NPA account under the OTS mechanism, but the said request was allegedly neither replied to nor considered by the respondent. According to the applicants, notwithstanding their efforts to clear the dues and settle the account, the respondent proceeded with enforcement measures and issued a sale notice dated 19.11.2024 fixing the date of auction as 26.12.2024. The applicants further challenge the possession proceedings on the ground that the respondent failed to comply with the provisions of Rule 8(1) of the Security Interest (Enforcement) Rules, 2002 relating to serving of the possession notice and that the respondent allegedly proceeded against a property in respect of which, according to the applicants, no valid security agreement had been created in favour of the respondent bank. It is also their case that all the objections raised against the Section 13(2) demand notice are equally applicable to the subsequent possession notice and measures taken under Section 13(4). The applicants contend that the demand notice dated 29.11.2023, the alleged symbolic possession taken pursuant to the notice dated 29.02.2024, the possession proceedings and the subsequent sale notice dated 19.11.2024 are illegal, arbitrary, without jurisdiction, void ab initio and liable to be quashed and set aside.

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The respondent bank has filed its written objection stating there in inter alia that the S.A. filed by the Applicants under Section 17(1) of the SARFAESI Act, 2002 is not maintainable, is barred by limitation and is otherwise hit by waiver, acquiescence and estoppel, having been filed only to delay and frustrate recovery of the Bank’s dues. The Bank submits that a credit facility of Rs.6,53,40,000/- was sanctioned in favour of Blue Auto World Pvt. Ltd. on 31.12.2022, but the Applicants failed to maintain financial discipline and did not regularise the account despite repeated demands, resulting in classification of the account as NPA on 18.11.2023. Thereafter, notice under Section 13(2) was issued on 29.11.2023, followed by measures under Section 13(4), including taking symbolic possession of the secured asset, service and publication of the possession notice, and subsequent steps for sale of the mortgaged property. The Bank contends that the Applicants did not raise any objection/representation against the Section 13(2) notice and subsequently sought settlement without any upfront payment, which was not accepted. According to the Bank, all statutory requirements under the SARFAESI Act and the Security Interest (Enforcement)

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RAKESH Digitally signed by RAKESH PATI PATI TIWARI Date: 2026.09.10 TIWARI 17:27:06 +05'30'

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Rules, 2002 were duly complied with, including valuation, issuance and publication of the e-auction notice, and service of notice under Rule 8(6). The secured asset was ultimately sold in e-auction on 26.12.2024 for Rs.5,98,22,000/-, and the sale was confirmed in favour of M/s Anjanakripa Nirman Private Ltd. on 27.12.2024. The Bank denies the allegations of illegality, casualness or procedural irregularity and maintains that the Applicants deliberately failed to repay the dues despite having sufficient opportunity, while making belated and unsupported allegations to obstruct recovery. It is therefore the Bank’s case that the SARFAESI measures were lawfully undertaken for recovery of the secured debt, that the Applicants have no enforceable cause of action or entitlement to equitable or other relief, and that the S.A. deserves to be dismissed.

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The Applicants have also filed their rejoinder stating therein that they had been making bona fide efforts to regularise the loan account and avoid its classification as NPA, but the Respondent Bank, despite such efforts, proceeded to classify the account as NPA and initiate SARFAESI proceedings without properly considering their intention to clear the outstanding dues. The Applicants allege that the measures under Section 13(4) were undertaken without proper notice and knowledge to them and that the possession notice was not duly served. They further contend that, despite the pendency of the proceedings before the Tribunal and deposits of Rs. 4,84,000/- on 06.12.2023 and Rs. 1,00,000/- each on 03.09.2024 and 05.09.2024, the Bank proceeded with the auction and accepted the bid of Rs.5,98,22,000/-, which, according to them, was substantially below the value reflected in the Bank’s approved valuer’s report. The Applicants allege that the Bank failed to produce the valuation report before the Tribunal and acted arbitrarily, whimsically and in excess of jurisdiction in conducting the auction sale. They maintain that they had consistently expressed their willingness to settle the admitted outstanding dues by instalments so as to protect the business of the Applicant Company, but their efforts were allegedly frustrated by the adamant attitude of the Bank.

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The auction purchaser has also filed her written objection stating therein that the SA application is misconceived, not maintainable and liable to be dismissed. Case of the Defendant No. 2 is that she is a bona fide and successful auction purchaser of the property comprising L.R. Dag Nos. 776 and 777, Khatian No. 3597, Mouza Barda, J.L. No. 152, under Raiganj Municipal Corporation, Uttar Dinajpur, West Bengal, having participated in

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Digitally signed by RAKESH RAKESH PATI TIWARI PATI TIWARI Date: 2026.09.10 17:27:18 +05'30'

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the e-auction conducted pursuant to the Sale Notice dated 19 November 2024 published by Defendant No. 1 Bank and having purchased the property for Rs.5,98,22,000/-, after depositing the entire sale consideration in accordance with law. Consequently, the Bank issued the Sale Certificate dated 7 April 2025 confirming the sale in favour of Defendant No. 2. The applicants, having failed to challenge the notices under Sections 13(2) and 13(4) of the SARFAESI Act within the prescribed period of 45 days, cannot belatedly assail the said measures under the guise of challenging the subsequent Sale Notice. No settlement was ever concluded between the applicants and the Bank, and the alleged deposits made by the applicants did not create any right to compel the Bank to accept a settlement. The applicants also failed to raise any contemporaneous objection to the demand notice, possession notice or the amount claimed by the Bank, nor have they furnished any alternate calculation to substantiate their allegations of excessive or inflated dues. In any event, the grievances raised by the applicants relate primarily to the alleged acts or omissions of the Bank and not to Defendant No. 2, which is a bona fide purchaser for value without notice and has acquired right, title and interest in the property through a lawful and duly conducted auction process. Having acquired the property pursuant to the due process of law and upon issuance of the Sale Certificate, the rights and title of Defendant No. 2 cannot be adversely affected on the basis of the applicants’ belated and untenable challenge, and the application, therefore, deserves to be dismissed with costs.

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Learned counsels of the applicant, auction purchaser and respondent bank have already been heard on SA as well as IA No. 672/2026.

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First of all order would be passed on S.A. of the applicants which has been filed challenging the 13(2) & 13(4) notices.

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Applicants have admitted the advancement of the loan facilities from the respondent bank and their case is that loan account was running smoothly but during the pandemic situation due to losses account become irregular and NPA.

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First plea of the applicants is that copy of loan agreement was not handed over to the borrowers. Question arises that if the copy of loan agreement was not served to the borrower, proper letter in this regard should have been written or the borrower may have approached to the ombudsman of the Bank who is appointed by the Reserve Bank of India

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RAKESH Digitally signed by RAKESH PATI PATI TIWARI Date: 2026.09.10 TIWARI 17:27:30 +05'30'

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to resolve the complaints of the customer. Moreover the advancement of banking facilities by the respondent bank to the borrower has already been admitted.

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Next plea of the applicants is that several times they approached to the bank for settlement of the loan account but the authorities did not consider it.

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On the point of settlement established principle is that the borrower cannot claim OTS as a matter of right and the grant of benefit of OTS scheme is subject to the illegibility criteria and the guidelines issues from time to time {The Bijnor Urban Cooperative Bank Limited Bijnor & Others vs Meenal Agarwal and others (2021) SCC online SC 1255}.

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Third plea of the applicants is that 13(2) SARFAESI Act notice is not in accordance with the provisions of the Act.

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Sub-section (2) of Section 13 of the SARFAESI Act prescribes that where any borrower, who is under a liability to a secure creditor under a security agreement, makes any default in repayment of secured debt or any installment thereof and his account is classified nonperforming asset, the secured creditor may issue notice in writing to the borrower to discharge in full his liability to the secured creditor within 60 days of the notice. Sub-section (3) of Section 13 of the SARFAESI Act prescribes the ingredients of Section 13(2) notice which runs as under:

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“(3) The notice referred to in sub-section (2) shall give details of the amount payable by the borrower and the secured assets intended to be enforced by the secured creditor in the event of non-payment of secured debts by the borrower.”

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From perusal of 13(2) notice dated 29.11.2023 of the instant matter (Annexure-A of the SA, running page no. 35 to 37) it transpires that outstanding balance as on 29.11.2023, of all the four loan accounts is Rs. 6,42,16,913.93/- and this amount was to be paid within 60 days of the notice with further interest at the contractual rate until payment is made. In the notice of 13(2) it is also mentioned that date of classifying the loan account NPA is 18.11.2023 and the interest has been calculated upto 31.10.2023.

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Thus in the instant matter although details of the amount payable including the interest, charges, costs and expenses is not mentioned in the 13(2) notice but it is not the case of the applicants that they were ready to deposit the amount within 60 days of the notice if the

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RAKESH Digitally signed by RAKESH PATI PATI TIWARI Date: 2026.09.10 TIWARI 17:27:43 +05'30'

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details of the amount would have been ,mentioned in the notice and as such no prejudice has been caused to the applicants.

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Fourth plea of the applicant is that the claim of the respondents as per the 13(4) notice dated 29.02.2024 is hopelessly time barred.

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Although this plea has been taken by the applicants in para-V of the S.A. under the ground of relief but within any specific pleading that how the claim of the respondent bank is barred by law of limitation in view of section 36 of the limitation act 1963 has not mentioned.

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Sub-rule (2) of Order 6 of the Code of Civil Procedure, which is the parent code of civil matters, specifically provides that every pleading shall contain a statement in a concise form of the material facts on which the party pleading relies for his claim or defence.

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On the point of limitation there is no any specific pleading of the applicant and thus accordingly it is decided against the applicants.

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Fifth plea of the applicants in the S.A. is that classifying the loan account NPA is not as per the guidelines of the Reserve Bank of India. Subsection (o) of section 2 of the SARFAESI Act defines the NPA as hereunder :-

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(o) “non-performing asset” means an asset or account of a borrower, which has been classified by a bank or financial institution as sub-standard, 2 [doubtful or loss asset,—

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(a) in case such bank or financial institution is administered or regulated by any authority or body established, constituted or appointed by any law for the time being in force, in accordance with the directions or guidelines relating to assets classifications issued by such authority or body;

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(b) in any other case, in accordance with the directions or guidelines relating to assets classifications issued by the Reserve Bank];

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In view of the prudential norms of the Reserve Bank of India “Non Performing Asset” is such an asset which becomes non performing when it ceases to generate income for the bank and non performing asset is a loan or an advance where interest and/or instalment of principal remain overdue for a period of more than 90 days. The borrower has defaulted in repayment of the loan amount and thus loan account of the borrower became irregular and finally as per the guidelines of Reserve Bank of India the respondent bank classified the loan account as Non Performing Asset (N.P.A.).

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RAKESH Digitally signed by PATI RAKESH PATI TIWARI Date: 2026.09.10 TIWARI 17:27:55 +05'30'

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In the instant matter loan account of the borrower has been classified NPA on dated 18.11.2023 and under para no. 6(2) of the SA applicants themselves have admitted that during the pandemic situation and due to loss the loan account has become irregular and NPA. Thus the plea of the applicants is not tenable and accordingly decided against the applicant of the SA.

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Last plea of the applicant is that delivery of notice has not been complied with as per Rule 8(1) of the Security Interest (Enforcement) Rules 2002, (hereinafter referred to as Rules 2002).

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On this point written objection of the bank is that Rule 8(1) of the Rules 2002 was duly complied and the applicant No. 3 had received the notice by hand on dated 22.04.2024 (para no. 16 of the W.O. of the respondent bank).

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From perusal of the record it transpires that at page no. 18 of the W.O. respondent bank has annexed the copy of possession notice served through hand delivery to the applicant no.3 Mr. Panchanan Mishra on dated 22.04.2024. This receipt of notice has not been acknowledged by the applicants and thus it seems that the applicants have not come with clean hands and accordingly, this issue is decided against the applicants.

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Although limitation of 45 days has been counted from the sale notice dated 19.11.2024 and under the heading of interim relief also prayer has been made by the applicants to restrain the respondents for giving any effect or acting in furtherance of sale notice dated 19.11.2024 along with other reliefs but any measures taken by the respondent bank with respect to the sale notice dated 19.11.2024 has not been specifically challenged in the entire S.A. and except of para no. 6.5 & 6.6 of the S.A. ; there is no pleading of the applicants with respect to sale notice. Para Nos. 6.5 and 6.6 of the S.A. are extracted herein-below:

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“6.5 That the applicant was sent an email on 23.10 2024, requesting a one-

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time settlement. The email was never replied to by the respondent.

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The copy of the said mail dated 23..11.2024 is annexed hereto and marked with letter "C".

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6.6 That the respondent has been issued a sale notice on 19.11.2024 and

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auction date on 26.12.2024.

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The copy of the said sale notice dated 19.11.2024 is annexed hereto and marked with letter "D".”

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RAKESH Digitally signed by RAKESH PATI PATI TIWARI Date: 2026.09.10 TIWARI 17:28:12 +05'30'

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In these two above paragraphs also not a single measure of sale has been challenged.

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One I.A. bearing no. 672/2024 has also been filed by the applicants wherein only in para 8 of the I.A. there is some whispering of sale notice dated 19.11.2024 and the said paragraph of the I.A. is extracted here-in-below:

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“8. That the cause of action arose when the applicants received Notice for Sale of the Mortgaged Property dated 19.11.2024 and came to know that the Defendant abovenamed took symbolic possession of the immovable property on 29.02.2024.”

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In the I.A. No. 672/2024 also any measures of the sale has not been challenged rather only the 13(2) & 13(4) notices have been challenged.

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In view of the discussions made here-in-above in foregoing paragraphs S.A. as well as I.A. No. 672/2024 filed by the applicants have got no merit in the eye of law and/or fact and accordingly, both are dismissed .

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No order as to cost.

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Registry is directed to send/serve copy of this order upon both the parties free of cost.

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Order be uploaded in the website of the Tribunal.

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Let the record be consigned to the Record Room.

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The judgment is signed and pronounced in the open Tribunal on 9^th day of September, 2026.

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Digitally signed by RAKESH RAKESH PATI TIWARI PATI TIWARI Date: 2026.09.10 17:28:30 +05'30' (RAKESH PATI TIWARI) Presiding Officer DRT, Siliguri.

Blue Autoworld Pvt. Ltd. v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

Blue Autoworld Pvt. Ltd. v. Punjab National Bank

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

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