Allowed

Varinderpal Singh and Another v. the Tarn Taran Central Cooperative Bank Ltd. and Another

DRT13 Mar 2026SA/342/2025

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal quashed SARFAESI proceedings started by a cooperative bank. The court held that the Section 13(2) demand notice could not be presumed to be served due to lack of track consignment records, and the Section 13(4) possession notice failed service requirements. Additionally, the court quashed the proceedings as the secured asset was not registered with CERSAI, violating Sec

What did the court decide?

SA allowed; SARFAESI proceedings initiated by respondents quashed; respondents permitted to initiate fresh proceedings according to law.

Varinderpal Singh and Another versus the Tarn Taran Central… — Banking and Recovery | DRT (2026)

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DEBTS RECOVERY TRIBUNAL-III, CHANDIGARH

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PRESIDED OVER: SH. MRIDULESH KUMAR SINGH

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SECURITIZATION APPLICATION NO.342/2025

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Date of Institution: 16.10.2025 Date of Decision: 13.03.2026

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Sh. Varinderpal Singh S/o Sh. Gurcharan Singh, R/o Margindpura, VPO Kacha Pakka, Tehsil Patti, District Tarn Taran

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Sh. Satinderpal Singh S/o Sh. Gurcharan Singh, R/o Margindpura, VPO Kacha Pakka, Tehsil Patti, District Tarn Taran

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--Applicants

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Versus

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Authorised Officer, The Tarn Taran, Central Cooperative Bank Ltd., Sarhali Road, District Tarn Taran

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The Tarn Taran, Central Cooperative Bank Ltd., Dialpura, Tehsil Patti, District Tarn Taran, through its Branch Manager

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--Respondents

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Argued by: Sh. A.B.S. Sidhu, Advocate for Applicants (through VC) None for Respondents

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FINAL ORDER

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(1) This Securitization Application was filed under Section 17 (1) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘the Act’ for brevity) to set aside demand notice under Section 13(2) of the Act dated 02.07.2024 (Annexure A-4), possession notice dated 06.11.2024 (Annexure A-5), order dated 30.01.2025 passed by District Magistrate (Annexure A-2) and letter dated 17.09.2025 issued by Tehsildar-cum-Duty Magistrate, Patti (Annexure A-3) being illegal, perverse and in violation of the provisions of the Act.

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(2) It was stated in the application that applicants had availed Housing Loan in the year 2008 for an amount of Rs. 10 Lacs from respondents; that the said loan facility was secured against mortgage of immovable property i.e., land measuring 64 Kanals 0

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2 SA/342/2025 VARINDERPAL SINGH AND ANOTHER VS. CENTRAL COOPERATIVE BANK LTD., AND ANOTHER

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Marla situated at Village Margindpura, VPO Kacha Packa, Tehsil Patti, District Tarn Taran; that applicants had duly repaid the loan in time, however due to financial constraints later on, could not be regular in repaying the dues of the respondents; that applicants were surprised to know about the letter dated 17.09.2025 on 23.09.2025 issued by the office of Tehsildar-cum-Duty Magistrate, Patti but the same was never served upon the applicants; that applicants came to know about the said letter on their routine visit to the Bank on 03.10.2025 when the same was provided to the applicants by the Bank Officials along with the copy of the order dated 30.01.2025 passed by the District Magistrate, Tarn Taran; that as per said notice, the same has been issued in pursuance to the order dated 30.01.2025 passed by District Magistrate; that respondents had initiated the SARFAESI proceedings entirely at the back of applicants; that at no stage, applicants were ever served with any notice particularly under Section 13(2) & 13(4) of the Act; that no notice/intimation was ever issued to applicants with regard to the proceedings initiated by respondents before the District Magistrate under Section 14 of the Act; that notice under Section 13(2) of the Act dated 02.07.2024 issued for recovery of Rs.21,76,086/- due as on 19.06.2024 is completely in violation of the provisions of the Act; that in the said notice no date of NPA was mentioned; that the said notice was never served upon applicants therefore, applicants were unable to raise their objections under Section 13(3-A) of the Act; that in fact, notice under Section 13(4) of the Act was also not served upon applicants neither through registered post nor it was affixed on the conspicuous place of the property nor it was published in the newspapers as per Security Interest (Enforcement) Rules, 2002 (hereinafter referred to as ‘Rules’ for brevity); that mortgaged property owned by the applicants has been wrongly described in the notices under Section 13(2) & 13(4) of the Act as compared to the mortgage deed; that notices under Section 13(2) & 13(4) also reflect that the same have not been issued by an Authorised Officer as defined

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SA/342/2025 VARINDERPAL SINGH AND ANOTHER VS. CENTRAL COOPERATIVE BANK LTD., AND ANOTHER

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under the provisions of the Act; that the said notices are required to be issued by the Bank Official not below the rank of Chief Manager, therefore the said notices were not issued in accordance with law; that respondents had obtained order dated 30.01.2025 from the office of District Magistrate, Tarn Taran by filing an application and affidavit on false and frivolous facts; that the said application and affidavit were not filed as per Section 14 of the Act; that respondents had not registered the secured asset with Central Registry as per Section 26-D of the Act, which is mandatory provision of law; that the action initiated by the respondents under the Act is illegal, arbitrary and in violation of the provisions of the Act. Therefore, it was prayed that the present SA may kindly be allowed.

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(3) Reply filed by respondents.

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(4) It was stated in the reply that applicants in order to bolster their case have twisted the facts to mislead this Tribunal; that applicants had availed Housing Loan of Rs. 10 Lacs from respondents on 26.08.2006 after due execution of all requisite loan documents and upon accepting the terms and conditions stipulated therein; that due to the default in the loan account by applicants, account was classified as NPA on 01.06.2013; that thereafter, demand notice under Section 13(2) of the Act dated 02.07.2024 was issued by respondents calling upon the applicants to discharge the obligation within the statutory period of 60 days from the date of receipt of the said notice; that despite due service of the said demand notice, applicants were failed to liquidate the outstanding dues and not submitted any representation under Section 13(3-A) of the Act; that thereafter, respondents had issued symbolic possession notice under Section 13(4) of the Act dated 06.11.2024; that the said notice was duly published on 09.11.2024 in two widely circulated newspapers namely ‘The Pioneer’ (English) and ‘Punjabi Jagran’ (Punjabi); that the said notice was also affixed on the secured asset; that thereafter, on 07.01.2026 respondents in accordance with the provisions of Section 14 of the Act filed an application before District Magistrate seeking assistance for taking physical

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4 SA/342/2025 VARINDERPAL SINGH AND ANOTHER VS. CENTRAL COOPERATIVE BANK LTD., AND ANOTHER

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possession of the property owned by the applicants and the Guarantor as the borrower had failed to comply with the statutory demand; that the District Magistrate vide order dated 30.01.2025 was pleased to allow the said application and directed the concerned authority to provide assistance for taking over physical possession of the secured asset in accordance with law; that the Duty Magistrate-cum-Tehsildar vide order dated 17.09.2025 was pleased to grant police protection for the purpose of taking possession on 29.09.2025 at around 11.00 AM in respect of the mortgaged property; that the said letter of possession was duly affixed at the secured asset on 18.09.2025 and on the said day, it was handed over to the applicants; that no violation of the principles of natural justice can be attributed to the respondents; that applicants had approached this Tribunal with suppression of material facts and by making misleading and false averments; that the present SA was filed by applicants with the sole intent to delay recovery proceedings and frustrate the legitimate rights of respondents. Therefore, it was prayed that the present SA may kindly be dismissed. (5) No replication was filed by applicants to the reply filed by respondents.

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(6) I have heard arguments advanced by Sh. A.B.S. Sidhu, Advocate for Applicants, who appeared through Video Conferencing and gone through the record carefully. None was present on behalf of respondents despite repeated calls.

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(7) Sh. A.B.S. Sidhu, Advocate argued that notice under Section 13(2) of the Act dated 02.07.2024 was not served upon applicants as per Rules. Therefore, right to file objections under Section 13(3-A) of the Act was snatched by respondents from applicants.

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(8) It was stated in the reply by respondents that notice under Section 13(2) of the Act dated 02.07.2024 was duly served upon applicants as per Rules. It was further stated that copy of notice dated 02.07.2024 is annexed as Annexure R-4 and receipts of registered posts were annexed as Annexure R-5.

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5 SA/342/2025 VARINDERPAL SINGH AND ANOTHER VS. CENTRAL COOPERATIVE BANK LTD., AND ANOTHER

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(9) It reveals from record that only receipts of registered posts were filed in respect of notice under Section 13(2) of the Act but no track consignment record filed by respondents to show that the notice in question which was allegedly sent by respondents was ever received by the applicants and concerned. Track consignment record is available w.e.f. January, 2013 and as per reply filed by respondents notice in question was sent in year 2024. Gone are the days when sending of registered post itself used to be enough for drawing the presumption of service against the addressee. There is hardly any scope for the same in view of the availability of the track consignment record. Track consignment record should have been produced to bring home the fact that the notice was duly served upon the applicants and concerned and that not being the position, this Tribunal refuses to draw presumption of service. There is no other type of personal service of the said notice upon the applicants and other concerned, which was either pleaded or proved.

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(10) In light of above factual position, it is established that notice under Section 13(2) of the Act was issued but not proved served upon applicants in light of Rules.

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(11) Sh. A.B.S. Sidhu, Advocate further argued that notice under Section 13(4) of the Act dated 06.11.2024 was not served upon applicants as per Rules. It was further argued that the said notice was neither served through personal service nor it was affixed on the conspicuous place of the secured asset nor it was published in the newspapers.

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(12) It was stated in the reply that possession notice under Section 13(4) of the Act dated 06.11.2024 was duly served upon applicants. It was further stated that copy of the said notice is annexed as Annexure R-6 and the said notice was duly affixed on the conspicuous place of the secured asset, which is annexed as Annexure R-7. It was further stated that the said notice was also published in the two newspapers i.e., namely ‘The Pioneer’ (English) and ‘Punjabi Jagran’ (Punjabi), which are annexed as Annexure R-8.

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(13) Possession notice was required to be served through personal service, through pasting and through publication in two leading newspapers.

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(14) Copy of possession notice under Section 13(4) of the Act dated 06.11.2024 is annexed as Annexure R-6 to the reply. Photographs of pasting (Annexure R-7) shows that a photocopy of notice had been affixed on the wall.

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(15) It reveals from record that neither copy of receipts of registered posts nor track consignment record were filed in respect of notice under Section 13(4) of the Act to show that the notice in question which was allegedly sent by respondents was ever received by the applicants and concerned.

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(16) In light of above factual position, it is established that notice under Section 13(4) of the Act was issued but not proved served upon applicants through personal service in light of Rules.

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(17) Sh. A.B.S. Sidhu, Advocate further argued that mortgaged property owned by the applicants has been wrongly described in the notices under Section 13(2) & 13(4) of the Act as compared to the mortgage deed.

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(18) The above said argument of learned counsel for applicants was duly considered by this Tribunal vide order dated 17.10.2025. It was noted in the said order that wrong mentioning of Khasra number or discrepancy in the details of property in the above said notices is merely a lapse and not illegality or irregularity.

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(19) Hon’ble Supreme Court in M/s L & T Housing Finance Limited vs. M/s Trishul Developers in Civil Appeal No.3143/2020 decided on 27.10.2020 has observed that trivial procedural lapse is not a ground of nullify SARFAESI proceedings initiated by secured creditors, if no substantial prejudice was caused to borrower. It is further observed by Hon’ble Supreme Court that proceedings initiated under the SARFEASI Act by the secured creditor cannot be nullified merely on the ground to technical defect and procedural lapse unless substantial prejudice was caused to the defaulters. No such

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prejudice was indicated during the course of arguments. (20) Sh. A.B.S. Sidhu, Advocate further argued that secured creditor has not registered the mortgaged property with the Central Registry in compliance of mandatory provision under Section 26-D of the Act. (21) In whole of the reply filed by respondents it was not mentioned that as to whether the secured asset was registered with the Central Registry or not. No document regarding the registration of secured asset with the Central Registry was filed along with the reply.

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(22) As per Section 26-D of the Act , it is mandatory that no secured creditor shall be entitled to exercise the rights of enforcement of securities under Chapter-III unless the security interest created in its favour by the borrower has been registered with the Central Registry.

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(23) In absence of CERSAI Certificate or any equivalent with complete details of CERSAI, it appears that secured asset was not registered under Section 26-D of the Act by respondents, which is pre-requisite for initiating of SARFAESI proceedings. Therefore, on this ground also SARFAESI proceedings are liable to be quashed.

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(24) No other point was argued/pressed. (25) This Tribunal has considered all facts, evidence available on record as well as arguments advanced by the learned counsel for applicants.

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(26) From the above facts, it shows that when the foundation of the SARFAESI proceedings i.e., notice under Section 13(2) of the Act was not proved as served upon applicants then building constructed on the said base (notice) cannot be said as legal. Service of notice under Section 13(4) of the Act was also not proved served as per Rules. Non-registration of CERSAI is a crucial illegality in the SARFAESI proceedings. It is not proved that the secured asset was registered with the Central Registry.

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(27) After considering the above facts and circumstances as well as evidence on record, present SA is liable to be allowed.

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(28) SA is allowed. SARFAESI proceedings initiated by the respondents is quashed. It is made clear that respondents may again initiate fresh SARFAESI proceedings according to law. Record be consigned to record room after due compliance. Date: 13.03.2026 Pronounced by me in the open Tribunal.

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(MRIDULESH KUMAR SINGH) Presiding Officer, DRT-III, Chandigarh

Varinderpal Singh and Another v. the Tarn Taran Central Cooperative Bank Ltd. and Another

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Varinderpal Singh and Another v. the Tarn Taran Central Cooperative Bank Ltd. and Another

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