Partly allowed

Geeta Gupta Wo Lt Rakesh Kumar v. Punjab and Sind Bank

DRT3 Jun 2026SA/246/2025

Case brief

AI extract

What is this about?

This SARFAESI Securitization Application challenged the bank's NPA classification and enforcement action. The Debts Recovery Tribunal rejected the claim that the account was not NPA, upheld the validity of the mortgage for most assets despite CERSAI admission, but excluded the house from recovery proceedings while directing the bank to proceed against other secured assets.

What did the court decide?

The SARFAESI application was partially allowed; the Bank is directed to proceed against all secured assets except the house in question. All pending interim applications were disposed of.

Geeta Gupta Wo Lt Rakesh Kumar versus Punjab and Sind Bank — Banking and Recovery | DRT (2026)

SA No. 246 of 2025

DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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SA No. 246 of 2025

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Geeta Gupta and others

Versus

Punjab and Sind Bank

Dated: 03.06.2026

Item No. 11

Argued by: Mr. Anand Chibbar, Senior Advocate alongwith Mr.Vashisht, Counsel for Applicants.

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Mr.ABS Sidhu, Counsel for Respondent Bank.

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Geeta Gupta 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 Punjab and Sind Bank (Respondent).

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The case of the Applicants, as set up in the Securitization Application is, that since 2013, Rakesh Kumar Gupta (husband of Applicant No.1 and father of Applicant No. 2 and 3) was availing ODP Limit from the Respondent Bank. On 07.11.2024, Rakesh Kumar Gupta died. Since, Applicants failed to make the payment, on 3 1.03.2025, Punjab and Sind Bank declared the account NPA. On 17.05.2025. Bank issued the notice under Section 13(2) of the SARFAESI Act (Annexure A-3). On 14.07.2025, Applicants filed objections to the demand notice (Annexure A-4) under Section 13(3 A) of the SARFAESI Act. However, on 28.07.2025, Bank rejected the objections (Annexure A-5). On 02.08.2025, Bank issued the notice under Section 13(4) of the SARFAESI Act. Applicants challenged the SARFAESI action in the present SA. It is alleged that the Bank had wrongly declared the account NPA as they had not committed any default in the repayment of interest. The Bank did not serve the possession notice upon them. The Bank had issued the notice under Section 13(2). dated 17.05.2025 and possession notice dated 02.08.2025 to late Shri Rakesh Kumar Gupta, who had already died on 07.11.2024. Again, the notice under Section 13(2) did not give the details of the amount due. Applicant No. 4 i, ,n MSME .„it. As p„ RBI ,i„.1„ dated 17.03.2016, B,„k w„ „„de,

SA No. 246 of 2025

+bq

DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH

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obligation to refer the matter to the Designated Committee for corrective action plan. However, the Bank did not refer the matter to the Designated Committee. Further, Bank is bound by the circulars issued by RBI. It is alleged that the Bank had not registered the security interest with the Central Registry. The deficiency on the part o the Applicants was temporary in nature and the Bank was not supposed to classify the account NPA. Again. the Bank had charged penal interest, which it could not do. The last sanction was carried out on 30.03.2024. No fresh documents were executed by Applicants No. 1 and 4. The SARFAESI action has not been taken by the authorized officer. The description of the property in the notices under Section 13(2) and 13(4) is wrong. Again, the secured assets are agricultural land and under the SARFAESI Act the Bank could not take any action. Again, the equitable mortgage was not validly created. Accordingly, it is stated that the SARFAESI action be set aside

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Bank, in reply to the SA, has denied the case of the Applicants. Bank has alleged that the account was rightly declared NPA. There was no fresh sanction after the death of Rakesh Kumar Gupta on 07.11.2024. No fresh documents were executed. Bank had rightly declared the account NPA as Applicants had committed default in the payment of interest. Bank had issued the notice under Section 13(2) to the Applicants, which was responded by them by filing objections. The objections submitted by the Applicants were duly considered and ?ide letter dated 28.07.2025, they were rejected. Thereafter, Bank had issued the notice under Section 13(4) of the SARFAESI Act. The secured assets are not agricultural land. The security interest was duIY registered with the Central Registry. The equitable mortgage was rightly created. Accordingly, it is submitted that there is no merit in the present SA and the same be dismissed.

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1 have heard Mr. Anand Chibbar, Senior Advocate, counse1 for the

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Applicants and Mr. ABS Sidhu, counsel for Respondent Bank.

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SA No. 246 of 2025

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DEBTS RECOVERY TRIBUNAL-1, CHANDIGARH

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abb

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Mr.Chibbar. counsel for the Applicants has argued that the account was wrongly declared NPA as Applicants were regular in making the payment of installments. The balance in the account was below the sanctioned limit. The notice under Section 13(2) did not specify the details of the amount due. The Bank had issued the notices to Rakesh Kumar Gupta, who had already died on 07.11.2024. There was no CERS AI registration regarding the house. Bank did not serve the possession notice under Section 13(4). Further, the SARFAESI action has not been taken by the authorized officer. Counsel submitted that Applicant is a MSME unit and the Bank should have referred the matter to the Designated Committee. Again, the property is agricultural land regarding which the Bank cannot take the SARFAESI action. Accordingly, it is submitted that the SARFAESI actiori be set aside.

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Per contra, Mr. Sidhu, counsel for the Respondent Bank has argued that the Bank had rightly declared the account NPA. Applicants had not made any payment in the loan account. Moreover, after the death of Rakesh Kumar Gupta. the loan account was not renewed. The SARFAESI action was taken by the authorized officer. There was proper registration of security interest in the CERS Al portal. The equitable mortgage was rightly created. Accordingly, it is submitted that there is no merit in the present SA and the same be dismissed.

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1 have considered the rival contentions.

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It is admitted on the record that since 2013, late Rakesh Kumar Gupta was availing ODP Limit from the Respondent Bank, who died on 07.11.2024. On 31.03.2025, Bank declared the account NPA. On 17.05.2025, it issued the notice under Section 13(2), which was followed by possession notice dated 02.08.2025. 1 am of the considered view that there is no force in the contention of Mr. Chit)bar that the account was wrongly declared NPA. The balance in the OD Limit may be below the san’ctioned limit. However, we have to see as to whether Applicant has been making the payment of interest. Counsel for the Applicants has failed to show that Applicant was servicing the interest 3

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SA No. 246 of 2025

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DEBTS RECOVERY TRIBUNAL-I, CnANDiGARH

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properly. Accordingly, it cannot be said that the account was wrongly declared NPA

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Applicants admit that they were served with the notice under Section 13(2). They had filed objections under Section 13(3A). Applicants state that they were not served with the possession notice. However, the Bank has produced on the record photographs of the service of possession notice. Applicants have failed to show that the secured assets are agricultural land. The onus to establish that the secUred assets are agricultural land is on the Applicants.

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As far as CERS AI registration is concerned, it is admitted by counsel for the Respondent Bank that there was no CERS AI in respect of house in question. I am of the considered view that the Applicant has failed to show that the equitable mortgage was not created properly. There is also no force in the contention of Mr. Chit)bar that the notice was issued to the dead person. Geeta Gupta and Surya Gupta are the legal heirs of Rakesh Kumar Gupta and W they represent the estate of + deceased. Further, Applicants have failed to show that there unit was MSME and that they had made request to the Bank to refer the matter to the Designated Committee.

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The upshot of the entire discussion is that except the house, the action of the Bank in taking the SARFAESI action is proper. Accordingly, the present SA stands disposed of with the observations that the Bank may proceed against all the secured assets, except the house in question.

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All the pending IAs, if any, ate disposed of, accordingly.

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Registrar is directed to send a copy of this order to al\the parties, as per

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rule. Thereafter, nIe be consigned to record room after dug c&npliance.

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Pronounced in open court Dated: 03.06.2026 Manoj

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Geeta Gupta Wo Lt Rakesh Kumar v. Punjab and Sind Bank

Case brief

What is this about?

What did the court decide?

Geeta Gupta Wo Lt Rakesh Kumar v. Punjab and Sind Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

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