Allowed

K G N Comtrade Pvt. Ltd. v. Indian Bank

DRT8 Sept 2026SA/275/2024

Case brief

AI extract

What is this about?

Debts Recovery Tribunal allowed an application to quash SARFAESI actions. The Court held that the bank violated procedural requirements by failing to reply to the applicant's objection within the statutory time limit and by executing a second possession notice without adhering to the 60-day rule from the prior notice.

What did the court decide?

The SARFAESI actions including the demand and possession notices were set aside.

K G N Comtrade Pvt. Ltd. versus Indian Bank — Banking and Recovery | DRT (2026)

SA 275 of 2024 IJI

DRT, PATN A

DEBTS RECOVERY TRIBUNAL PATNA

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Presiding Officer : Shri Kaushalendra Yadav

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SA- 275 of 2024

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K.G.N. Comtrade Pvt. Ltd. through its Director Md. Basir Alam, Rajepur, Dhaka, East Champaran - 845418 (Borrower and Mortgagor) .

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Md. Basir ALam, son of Md. Sanaullah. Ward No.01, Rajepur, Dhaka, East (_,hamparan – 845418 (Mortgagor and Guarantor).

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Mrs. Majda Khatoon, Director of M/s K.G.N. Comtrade Pvt. Ltd. Village - Rajepur, Dhaka, East Champaran. Bihar - 845418. (Guarantor) .

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.........Applicants

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Versus

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The Authorized Officer, Indian Bank, Stressed Assets Management Vertical East Patel Nagar Road No.5, House No. 41, Shastrinagar, Patna – 800023.

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The Branch Manager, Indian Bank, Motihari Branch, Main Road, Motihari.

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--respondents

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Present :

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For the Applicants : Sh. Satish Nr. Sinha, Advocate

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For the Respondent Bank : Sh. Sachindra Kr. Tiwari, Advocate

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Dated: 08.09.2026

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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 possession notIce.

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The brief fact of the case is that the applicants availed various Credit facilities all total to the tune of Rs.1410 Lacs from the respondent bank. To secure the loan facility, the applicant no. 1 & 2 mortgaged their property in favour of the respondent bank. Due to default in repayment of outstanding dues of the bank, the accounts were classified as NPA on

q(„,”

SA 275 of 2024 IJI

DRT. PATN A

31.03.2021. In order to recover the outstanding dues, the respondent bank initiated SARFAESI action against the borrowers & guarantors by issuing Demand Notice dated 07.06.2024 u/s 13(2) of the act calling upon the borrowers to make the payment of Rs.20,61,75,539.00. Thereafter, the respondent took possession of the property on 18.09.2024 by issuing Possession Notice dated 18.09.2024 u/s 13(4) of the SARFAESI Act. Aggrieved from the possession notice, the present SA has been filed by the applicants.

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It is submitted by the Ld. Counsel of applicant that on 30.09.2020 the loan amount was renewed/enhanced to the tune of Rs.12.95.97 lacs including the C;ovid-19 loan of Rs.200 lacs. The Covid -19 loan of Rs.200 lacs was granted with the moratorium period of 12 months. Meaning thereby, the respondent bank has no legal right to take action for its recovery till June, 2021. But the respondent Bank declared the account as NPA on 31.03.2021 despite the deposit of a huge amount of Rs.44.92 lacs on 31.03.2021. The respondent bank initiated SARFAESI Action by issuing Demand Notice dated 13.04.2021 & Possession Notice dated 22.06.2021 Later on, the respondent bank issued a fresh Demand Notice dated 07.06.2024 mentioning the earlier Demand Notice dated 22.06.2021 or any other dates stands withdrawn while the Demand Notice was issued on 13.04.2021. No Demand Notice dated 22.06.2021 either issued by the bank or served to the applicants. However, against the Demand Notice dated 07.06.2024, the applicants raised its objection vide representation dated 05.08.2024 u/s 13(3-A) and sent to the respondent bank. The respondent bank did not respond to the representation of the applicant within time as it was received to the applicant on 03.09.2024 which was posted on 30.08.2024. Moreover, all the objections raised in the representation were not replied to by the Bank. Further, the respondent bank took Possession Notice dated 08.08.2024 but the same was issued on 12.09.2024 and served to the applicant on 18.09.2024. It appears that possession was taken without issue of possession notice. Another possession notice dated 18.09.2024 was published in “Prabhat Khabar" on

SA 275 of 2024 IJI

DRT, PATN A

20.09.2024 mentioning that the possession of property was taken on 18.09.2024 without restoring the possession taken on 08.08.2024 through possession notice dated 12.09.2024. The possession notice dated 18.09.2024 has neither been served upon the applicants nor published in two leading newspapers.

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On the contrary. Id. Counsel of the respondent bank submits that it is admitted fact that the accounts were renewed on 30.09.2020. So far as C;ovid-19 Loan (GECL) is concerned, the facility of Rs.200 lacs was sanctioned separately under the applicable RBI guidelines, and the moratorium benefit was confined solely to that facility. The declaration of account as NPA on 31.03.2021 was strictly in accordance with the RBI’s prudential norms and had no relation to, or impact from, the GECL facility. To recover the outstanding dues, the respondent bank issued demand notice dated 13.4.2021 u/s 13(2) of the Act and Possession Notice dated 22.06.2021 but later on same was withdrawn vide letter dated 20.03.2024. Further, a fresh Demand Notice dated 07.06.2024 was issued and served upon applicants. Against demand notice. the applicants submitted its representation dated 05.8.2024 u/s 13(3-A) of the Act which was duly replied by the respondent bank via its letter dated 27.8.2024 and the same sent to the applicants through registered post on 30.08.2024. Thereafter. respondent bank proceeded further and issued possession notice dated 12.09.2024 but to certain technical irregularities, same was withdrawn and fresh Possession Notice dated 18.09.2024 was issued by the respondent bank for taking symbolic possession of the secured assets on 18.09.2024 u/s 13(4) of the Act. The possession notice was affixed on the secured asset and sent to the applicant on 20.09.2024 through post. The Possession Notice was published in “The Hindu” and “Prabhat Khabar” on 20.9.2024.

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

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It has been alleged that the loan was renewed/enhanced to the tune of Rs.12.95.97 lacs with the GECL loan of Rs.200 lacs. The GECL loan was granted with a moratorium period of 12 months but before expiry of the

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DRT. PATN A

SA 275 of 2024 IJI

moratorium the account was declared as NPA on 31.03.2021. The Demand Notice dated 07.06.20241 was issued by the Bank with the statement that the earlier Demand Notice dated 22.06.2021 or any other dates stands withdrawn while never any demand notice was issued on 22.06.2021. Against the Demand Notice dated 07.06.2024, the applicants raised its objection vide representation dated 05.08.2024 but the same was not replied within time by the Bank and also all the objections were not replied by the Bank. The possession notice dated 18.09.2024 was published in "Prabhat Khabar" on 20.09.2024 mentioning that the possession of property was taken on 18.09.2024 without restoring the possession taken on 08.08.2024 through possession notice dated 12.09.2024. The possession notice dated 18.09.2024 has neither been served upon the applicants nor published in two leading newspapers.

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On perusal of records it appears from the sanction letter dated 30.09.2020 annexed with S. application as annexure -2, page 25-40 that the accounts were renewed on 30.09.2020 wherein Moratorium period for 12 months against the GECLS Covid-19 Emergency Loan was granted but it also appears that other loan account was not regular. Hence, the accounts were declared as NPA on 31.03.2021. Further, the respondent bank issued Demand Notice dated 07.06.2024 and sent to the applicants as also admitted by the applicants.

¶41

Against the demand notice, the applicants represented the same which was admitted by the bank in its counter affidavit and the and the same was responded by the respondent bank vide letter dated 27.08.2024 i.e. after stipulated period. Furthermore, the applicants in its application stated that the reply against the representation was posted on 30.08.2024 and the same was received on 03.09.2024 which has not been denied by the respondent bank in its counter affidavit nor any evidence has been to rebut such statement.

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Further, the respondent bank took symbolic possession of the property by issuing Possession Notice dated 18.09.2024. The possession notice was affixed on the secured asset and also sent to the applicants on

PoM

SA 275 of 2024 IJI

DRT, PATNA

20.09.2024. The possession notice was also published in "The Hindu" and "prabhat Khabar" on 20.09.2024.

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So far, the allegation of applicants that the possession of the property was taken on 18.09.2024 without restoring the possession taken on vide possession notice 12.09.2024 is concerned, it has been submitted on behalf of of the Bank that it was only a symbolic possession , there was no need to restore that prior to second possession notice. To arrive at a conclusion in this regard. it is impressed upon that the notice u/s 13-4 of SARFAESI Act is the notice of an act of taking possession not before the possession. If the possession was already taken. though symbolic. there was no need to mention the fresh date of subsequent possession. If so intended, it could be mentioned that previous notional possession stands withdrawn or will continue. In such circumstances the possession taken on 08,08.2024 is before the expiry of 60 days as mentioned in Demand Notice dated 07.06.2024. Fresh date in Second possession notice appears an attempt to cover up the irregularity.

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In view of the above discussion. non disposal of representation within time date of possession falls prior to expiry of 60 days after the subsequent demand notice, the present application succeeds.

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ORDER

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The application SA 275 of 2024, is allowed the measures under challenge are hereby set aside' No orders for costs' &.

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&. \r\A bx- '“' [KaushalendraYadav] Presiding Officer Debts Recovery Tribunal, Patna

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Judgment signed, sealed, dated and pronounced in the open court on this 08TH Day of September, 2026. yZI'dI'd

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yZI'dI'd {~_*/' ** [KaushalendraYadav] Presiding Officer Debts Recovery Tribunal, Patna

K G N Comtrade Pvt. Ltd. v. Indian Bank

Case brief

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K G N Comtrade Pvt. Ltd. v. Indian Bank

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