Allowed

Upendra Nath Mishra v. Bank of Baroda

DRT30 Jan 2026SA/338/2023

Case brief

AI extract

What is this about?

The Applicant, a successful bidder in a bank auction under SARFAESI, failed to deposit 75% of the sale price. The bank forfeited the deposit. The Tribunal granted the refund, holding that the bank concealed pending DRAT litigation in the sale notice. This concealment created a latent defect allowing the purchaser to opt out before the extended payment period expired.

What did the court decide?

Refund of amount deposited by the applicant along with simple interest at 10% per annum.

Upendra Nath Mishra versus Bank of Baroda — Banking and Recovery | DRT (2026)

SA 338 of 2023 (J)

DRT,PATN A

DEBTS RECOVERY TRIBUNAL PATNA

¶5

Presiding Officer: Shri Kaushalendra Yadav

¶6

SA- 338 of 2023

¶7

Upendra Nath Mishra (Male),S/O Late Brajdeo Mishra, Resident of Village Pabhera, Police Station – Dhanrua. District-Patna ( Auction Purchaser)

¶8

..................Applicant

¶9

Versus

¶10

The Authorized Officer, ROSARB Patna, The Bank Of Baroda, lstFloor, Saryug Complex. Nehru Nagar,Patlipiutra District-Patna.

¶11

2 The Chief Manager, ROSARB Patna, The Bank of Baroda .1“ Floor Saryug Complex, Nehru Nagar, Patliputra, District -Patn&

¶12

The Regional Manager, Gaya Region, 2nd Floor, RPF in Front Of 159 Battalion RPF Jail Road, Gaya 800020.

¶13

The Branch Manager, Bank of Baroda, Buxer Branch. Police Station -Buxar Town, District- Buxer

¶14

Usha Devi (Female) W/O Late Ram Chandra Singh, Resident Of Mohalla Sugar Mill,Gajadharganj , Police Station -Buxar, District Buxar.

¶15

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

¶16

Presents;

¶17

For the Applicants : Sh. Pravashankar Mishra, Advocate For the Respondent Bank : Sh. Santosh Kumar Singh, Advocate For The Respondent No.5 ; None

¶18

Dated: 30.01.2026

¶19

JUDGMENT

¶20

The present application has been filed seeking to quash the letter dated 21.11.2022, bearing letter no. BOB/SARPTN/2022-23/08, issued under the signature of the Chief Manager/Authorized Officer, ROSARB. and further directed the respondent bank to refund the amount deposited by the applicant.

¶21

During the pendency of this case, the applicant has filed two Interlocutory Applications, being IA Nos. 654/2023 and 659/2023, to condone the delay.

¶22

3 The brief facts of the case are as follows: The applicant is neither a borrower, mortgagor, nor guarantor in the present case. It is stated that one Amit Kumar and respondent no. 5 had availed a loan facility from the respondent bank, and to secure the said loan amount, mortgaged their property with the bank. Due to default in repayment, the bank-initiated proceedings under the SARFAESI Act

a) 1\

SA 338 of 2023 (J)

DRTLPATNA

and ultimately issued an auction notice fixing the date of auction as 18.10.2022. The applicant participated in the above-said auction and declared successful bidder with the bid of ?14,63,000/-. Accordingly, the respondent bank issued a sale intimation letter dated 18.10.2022, and subsequently, the applicant deposited 25% of the bid amount on 19.10. 2022. Further. the applicant requested for extension of time for depositing the remaining 75% of the bid amount, which was granted by the bank till 10.11.2022 but the applicant did not deposit the remaining 75% during the extended period. Hence, the respondent bank forfeited the amount deposited by the applicant. Aggrieved from the forfeiture, the applicant has filed the present Securitization Application (SA).

¶28

On the point of limitation, the learned counsel for the applicant submitted that on receipt of letter dated 21.11.2022 from the respondent bank; the applicant came to know regarding the forfeiture of the amount. Due to lack of knowledge, the applicant filed a case before the District Consumer Forum seeking refund of the deposited amount which case was rejected as non-maintainable by order dated 08.07.2023. Due to a bonafide mistake, there has been a delay in filing the present application before this Tribunal. The delay of 344 days in filing this Securitization Application may be condoned.

¶29

The learned counsel for the applicant further submitted that the applicant participated in the auction held on 18.10.2022 and had deposited a sum of ?1,14,000/- in the e-auction wallet as earnest money. The applicant emerged as the highest bidder with a bid amount of ?14,63,000/-, and accordingly. a sale intimation letter was issued by the respondent bank on 18.10.2022 at 6:25 p.m. Thereafter, the applicant deposited 25% of the bid amount on 19.10.2022. Further, the applicant requested an extension of time to deposit the remaining 75% of the bid amount, which was granted by the bank up to 10.11.2022. It is further submitted that subsequently, in the meantime, it has come to the knowledge of applicant that the respondent no. 5 had approached the Hon’ble DRAT, Allahabad by filing Appeal Diary No. 543 of 2022 seeking to stop the SARFAESI proceedings, and that a Civil Writ Application bearing CWJC No. 2713 of 2022 had also been filed in this regard, which was disposed of on 20.04.2022. Upon these developments, the applicant approached the respondent bank vide letter dated 07.11.2022 requesting a refund of the amount deposited by him being declared the successful auction purchaser. In response, the respondent bank, vide letter dated 21.11.2022, informed that the deposited amount had been forfeited due to default in depositing the balance 75% of the bid amount. It is further submitted that respondent bank was not bonafide towards auction purchaser as on one hand the bank was requesting from the auction purchaser for payment of

/ab

DRT.PATN A

SA 338 of 2023 (J)

remaining amount while in another hand proceeding to settle the loan account with the borrower which is evident from the letter issued by the bank to Amit Kumar, son of respondent no. 5, dated 17.12.2022, whereby the bank compromised the matter in favour of the borrower. The applicant sent a legal notice through counsel on 1 1.01.2023, but the bank did not respond.

¶35

The learned counsel for the respondent bank submitted that the respondent bank initiated proceedings under the SARFAESI Act against the borrower and. in pursuance thereof, issued a sale notice fixing the e-auction date as 18.10.2022. In the said auction, the applicant emerged as the highest bidder. Accordingly, the applicant deposited 25% of the bid amount on 19.10.2022 excluding EMD deposited earlier. Thereafter, the applicant, vide letter dated 28.10.2022. requested for extension of time towards deposit of remaining 75% of the bid amount, which was duly granted by the bank till 10.11.2022 but the applicant failed to deposit the remaining amount within the extended period and, instead, vide letter dated 07.11.2022, requested the bank to refund the amount already deposited. There was no request for any further extension of time. Hence, the amount deposited by the highest bidder was forfeited by the bank and the same has been communicated to the applicant, vide letter dated 22.11.2022. Further, the borrower approached the bank for settlement of the account. Accordingly, the loan account has been settled between parties amicably. Subsequently, on deposit of settlement amount, the respondent bank issued a “No Dues Certificate” on 14.03.2023

¶36

Despite service of summons upon respondent no. 5, no vakalatnama has been filed on her behalf, nor has she appeared through any counsel.

¶37

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

¶38

It is alleged by the applicant that due to pendency of Appeal before Hon’ble DRAT and Civil Writ against the property in question, the applicant did not deposit the remaining 75% of auction amount. It is also alleged that the bank was demanding payment from him, on the other hand, it was simultaneously settling the matter with the borrower. When the applicant requested the bank to refund the amount deposited by him, the bank refused, stating that the said amount had been forfeited.

¶39

Before considering the allegations made by the applicant, it is to be noted that it is an admitted position on behalf of the applicant that the applicant failed to deposit the remaining 75% of the auction sale amount within the stipulated or extended period. Hence, he cannot be treated as the actual auction purchaser of the mortgaged property. Since the applicant has not completed the sale in terms of the SARFAESI Rules, he does not acquire any right or title over the said property. Therefore, he has no locus standi to maintain the present Securitization

/aF

SA 338 of 2023 (J)

DRT.PATNA

Application, which is liable to be dismissed on this ground alone.

¶45

As per Rule 9(3) of Security Interest (Enforcement) Rules, 2002, successfbl bidder is required to deposit 25% of the sale price immediately which was deposited by the auction purchaser within time and for the rest amount. the Bank has allowed the petitioner to deposit the balance amount of by 10.11.2022. However, the petitioner has failed to pay the balance 75% of sale consideration. The Bank forfeited the earnest money deposit and cancelled the auction.

¶46

Rule 9(5) of the Security Interest (Enforcement) Rules, 2002 mandates that in default of payment within the period mentioned in sub-rule (4), the deposit shall be forfeited [to the secured creditor and the property shall be resold and the defaulting purchaser shall forfeit all claim to the property or to any part of the sum for which it may be subsequently sold.

¶47

It has been submitted that due to pendency of Appeal Diary No. 543 of 2022 before Hon’ble DRAT and a Civil Writ Application bearing CWJC No. 2713 of 2022 of before Hon’bIc High Court, the present applicant did not deposit the rest 75% of auction amount and requested to refund the amount vide letter dated 07. 1 1.2022.

¶48

On perusal of records it appears that the above said CWJC No. 2713 of 2022 was disposed of on 20.04.2022 while the property was auctioned on 18.10.2022. So far as Appeal filed before DRAT is concerned, as per status of case record filed by the applicant, it appears that the case was pending for removal of defects i.e. the case was not admitted for regular hearing. Further, the respondent in Para7(iii) stated that the applicant had submitted an application dated 28.10.2022 wherein the applicant has shown his inability to deposit the rest amount within an extended period except deposit of an amount of Rs.50,000/-.

¶49

The main contention of the applicant is that the letter dated 07.11.2022 was given by the applicant to refund the deposited amount on the ground that property under auction sale was disputed and the applicant was not interested to purchase the disputed property. In such circumstances that whether there was any latent defect in the subject matter of the sale? it is important to see whether any litigation was pending at the time of auction sale dated 18.10.2022 in pursuant of notice dated 01.04.2021 .

¶50

It is not disputed that the Appeal Diary No.543/22 had been preferred by Sri Amit Kumar before DRAT on 16.08.2022. This fact has not been denied by the respondent in the counter Affidavit. As such it was incumbent upon the respondent to inform the general public in the sale notice itself, regarding

N<br>

SA 338 of 2023 (J)

DRT.PATN A

pendency of litigation. But from the perusal of Annexure A1 to the SA it appears the fact regarding pendency of litigation or the filing of Appeal before the DRAT was not disclosed in the auction sale notice. Whereby the applicant was misled by the concealment of material defect in ownership. The contention that the auction was notified on as it is and where it is basis, can not justify the concealment of latent defects in subject matter of sale.

¶56

In view of the above discussion present Application Succeeds. The respondent Bank is liable to pay the amount deposited by the applicant as against the sale conducted without disclosing the latent defects pertaining to the pending litigation. Applicant has right to opt out of the sale when such defects have been found specially before the extended time of payment expires.

¶57

ORDER

¶58

The application SA 338 of 2023 filed by Upendra Nath Mishra is allowed with costs. The respondent Bank is directed to refund the amount paid by the // ../ applicant alongwith Simple interest@ 10% per annum.

: /h2f)\S dP f-

[KaushalendraYadav]

Presiding Officer

Debts Recovery Tribunal. Patna

¶63

Judgment signed, sealed, dated and pronounced in the open court on this 30TH Day of January, 2026.

[KaushalendraYadav]

Presiding Officer

Debts Recovery Tribunal, Patna

Upendra Nath Mishra v. Bank of Baroda

Case brief

What is this about?

What did the court decide?

Upendra Nath Mishra v. Bank of Baroda

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

S Rajeswari versus Union Bank of India

Bank of Baroda versus Kishan Mitrapal Chawla Dairy

Bank of India versus Ms Narmada Pipes

Ms Khajuria Constructions and Another versus State Bank of India

Raj Kumar Baniya versus State Bank of India

Smt Firoja Begum versus Indian Bank