Allowed

Ms Rama Shankar Chaudhary v. Indian Bank

DRT29 Jan 2026SA/307/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal examined a challenge to SARFAESI proceedings regarding non-payment of agricultural dues. The Tribunal found insufficient proof of postal delivery of the demand and possession notices. Consequently, it held that the statutory measures to take possession could not be sustained.

What did the court decide?

Application allowed. Measures under challenge (possession under Section 13(4)) set aside.

Ms Rama Shankar Chaudhary versus Indian Bank — Specific Performance | DRT (2026)

SA 307 of 2024 (J)

DRT, PATN A

DEBTS RECOVERY TRIBUNAL PATNA

¶5

Presiding Officer: Shri Kaushalendra Yadav

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SA- 307 of 2024

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M/S Rama Shankar Chaudhary Through Prop. Sri Rama Shankar Chaudhary At -Zeromile. P.O- Bhikhanpur P.S- Ahiyapur. DistMuzzafarpur.

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Rama shankar Chaudhary, S/O Late Anand Chaudhary Village: Kamwar, P.O; Kamwar PS; Gayghat District-Muzaffarpur, Pin-847107.

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J.') Manoj kumar jaiswal, S/O Late Sukhlal Prashad Chaudhary at & PoJhapaha P.S; Ahiyapur.

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Prem Chandra S/O Sri Jay Mangal Prasad At- Musalmani Chak. P.OMustafa Ganj , P.S-Minapur District; Muzzafaapur, Pin-843 1 28 .

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

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Versus

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The Authorized Officer, Indian Bank, Branch Office – Jawaharlal Road Branch Muzaffarpur ,Pin-842001.

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......................... Respondent

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Presents; For the Applicants : Sh. Binay Kumar Singh. Advocate For the Respondent Bank : Sh. S.K Tiwari , Advocate

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Dated: 29.01.2026

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JUDGMENT

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The present application has been filed along with an IA 664/2024 to quash the entire SARFAESI proceeding along with the sale notice dated 19.10.2024.

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The brief facts of the case are as follows: The Applicant No. 2. being the proprietor of Applicant No. 1, availed a loan in the form of a Cash Credit facility of ?40,00,000 (Rupees Forty Lakhs) from the Respondent Bank. To secure the loan amount the applicant has created equitable mortgages of the property in question. Due to default in repayment, the loan account was classified as a Non-Performing Asset (NPA) on 31.03.2021. Thereafter. the Respondent Bank issued a demand notice dated 16.07.202 1 under Section 13(2) of the SARFAESI Act. Subsequently, a possession notice under Section

SA 307 of 2024 (J)

DRT, PATN A

13(4) of the Act was issued on 23.02.2023. As the dues were not cleared by the applicants, the Respondent Bank issued a sale notice dated 19.10.2024, fixing the date of auction as 25.11.2024. Being aggrieved by the said sale notice, the applicants have filed the present Secudtization

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aJ. The learned counsel for the applicants submitted that the Respondent Bank has wrongfully classified the loan account as a Non-Performing Asset (NPA) on 31.03.2021. It is further submitted that neither the demand notice nor the possession notice. or the letter for redemption, was duly served upon the applicants. It is further submitted that the possession notice was neither published in a newspaper nor affixed to the secured asset. The applicants received the sale notice dated 19.10.2024 directly. It is contended by the applicants that the reserve price of the mortgaged property was fixed significantly below the market value. Further, the property is also not registered under CERSAI.

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The Respondent Bank submitted that due to default in repayment, the loan account was classified as a Non-Performing Asset (NPA) on 31.03.2021. Thereafter, on 03.04.2021, a recall notice was sent to the applicants. Subsequently, the Respondent Bank issued a demand notice dated 16.07.2021 under Section 13(2) of the SARFAESI Act, which was duly served upon the applicants. This was followed by a possession notice dated 23.02.2023, which was duly served upon the applicants, published in two leading newspapers, and affixed to the secured asset. When the dues remained unpaid, the Respondent Bank issued a sale notice dated 19.10.2024, after obtaining a valuation report from a government-approved valuer. The said sale notice was also duly served upon the applicants, published in newspapers, and affixed to the secured asset.

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

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6 It is alleged by the applicants that the Respondent Bank has wrongfully classified the loan account as a Non-Performing Asset (NPA). Neither the demand notice nor the possession notice was ever served upon them. It is further alleged that the possession notice was neither published in a newspaper nor affixed to the secured asset. The applicants also allege that the sale notice was issued by the Bank without obtaining a valuation report, and that the reserve price of the mortgaged property was fixed significantly below the market value. Further, the property was also not registered under CERS Al.

hI,

SA 307 of 2024 (i)

DRT. PATN A

Upon perusal of the record, it is found that the applicant has not annexed any account statement to show that the account was regular and that the bank has wrongfully classified it as NPA. The bank has also not filed any document in proof to rebut this allegation.

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As regards the allegation concerning the service of the demand notice dated 16.07.2021, it is found that the respondent bank has annexed a xerox cop)- of the postal receipt at page 21 of Annexure A series of the counter affidavit, which shows that the demand notice was sent to the applicant on 16.07.2021. However, no tracking report has been filed.

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Upon perusal of the record, it is found that the respondent bank has not filed any postal receipt or tracking report to show the service of the possession notice upon the applicant, although it has been admitted by the bank in its submission that the possession notice was sent through post. As far as the allegation regarding the publication of the possession notice dated 23.02.2023 is concerned, the respondent bank has annexed a xerox copy of the newspaper as well as the original copy at pages 23 and 24 of the counter affidavit series. According to the same, the possession notice was published in Dainik Bhaskar and Hindustan Times on 28.02.2023. The said notice was also affixed on the property in question, as is evident from page 22/A of the counter affidavit.

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As far as the allegation regarding the valuation of the property is concerned, the respondent bank has annexed a valuation report dated 18.08.2024 as Annexure E series at pages 25–29. According to the said report, the market value of the property is Rs. 28,67,200/-, the distress value is Rs. 24.37,000/-, the realizable sale value is Rs. 25,80,000/-, and the forced sale value is Rs. 24,37,000/-. The sale notice dated 19.10.2024 mentions a reserve price of Rs. 25,80,000/-, which shows that the reserve price was not significantly below the market price of the property. On the other hand, the applicant has also filed a valuation report dated 26.02.2016 at pages 25–27 of the S. A., according to which the net valuation of the property was assessed at Rs. 55,70,000/-.

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It is to be noted that none of the parties has informed this Hon’ble Tribunal as to whether the sale has taken place or not. Therefore, it appears that the sale has not taken place, and accordingly, the allegation regarding the sale has become infructuous.

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So far as the CERSAI registration is concerned, the respondent bank has annexed a xerox copy of the CERSAI registration certificate, from which it

DRT. PATN A

SA 307 of 2024 (J)

appears that the property was duly registered under CERS Al, as evident from Annexure G series at pages 4042.

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In view of the above discussion the delivery of demand notice and the Possession Notice has not been proved, the measures under S.13(4) OF THE SARFAESI Act of taking possession by delivery of notice cannot be upheld. As such SA succeeds.

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ORDER

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The application SA 307 of 2024 filed by M/S Rama Shankar Chaudhary & Ors., is Allowed with costs. Measures under challenge are hereby set aside.

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[KaushalendraYadav]

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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 court on this 29THand pronounced in the open court on this 29THpronounced in the open court on this 29TH29TH

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Judgment signed, sealed, dated and pronounced in the open court on this 29THand pronounced in the open court on this 29THpronounced in the open court on this 29TH29TH Day of January, 2026. 'r.

[KaushalendraYadav]

Presiding Officer

Debts Recovery Tribunal, Patna

Ms Rama Shankar Chaudhary v. Indian Bank

Case brief

What is this about?

What did the court decide?

Ms Rama Shankar Chaudhary v. Indian Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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