Mr Abhishek Anand v. Cholamandalam Investment and Finance Company Ltd.

DRT27 Jan 2026SA/39/2025

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal considered an application challenging the secured creditor's SARFAESI enforcement actions, including possession and sale of mortgaged assets, after an auction sale was confirmed and bought by third parties. The court noted conflicting submissions regarding sale completion and redemption rights but did not decide the merits.

What the court decided

AI extract

Mr Abhishek Anand versus Cholamandalam Investment… — Contract and Commercial Disputes | DRT (2026)

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Page 1 of 25 S.A. No. 39/2025

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PRESENTED ON : 24.01.2025 REGISTERED ON : 05.02.2025

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BEFORE THE P.O., DRT, NAGPUR Delivered by Pankaj Kumar,

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S.A. No. 39/2025

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1.	Mr. Abhishek Anand, Aged about – 42 years, Occupation: Business, R/o Plot No. 198, Flat No. 1, Ring Road, Chhatrapati Nagar, Nagpur - 440015	:	Applicants
2.	Mrs. Anita Devi, Aged about – Major, Occupation: Business, R/o Dayachak Sahari, Patana Barth, Patna, Bihar- 803214
3.	The Mobile Gallery, Shop at Plot No. 198, Flat No. 1, Ring Road, Chhatrapati Nagar, Nagpur - 440015
	..Versus..
1.	Cholamandalam Investment And Finance Company Ltd, Through its Authorized Officer, Branch At Sai Complex, Prayag, 3rd floor, Plot No. 12, Shivaji Nagar, North Ambazari Road, Nagpur - 440010.	:	Respondents
2.	Mrs. Bhagashri Vitthalrao Shastri, aged about major, Occ. Not known, R/o Plot No. 9 Nandanvan Road, Mire Layout, Near Deshmukh Hospital, Nagpur.
3.	Mr. Aditya Meghashyam Pandhare, Aged about major. Occ. Not known, R/o Plot No. 9 Nandanvan Road, Mire Layout, Near Deshmukh Hospital, Nagpur.
Lea	rned counsel for Applicants Adv. Rad Adv. Sho	he A yab	grawal Sheikh
Lea	rned counsel for Respondent No.1 Adv. Anil	Ku	mar
Lea 2 &	rned counsel for Respondent Nos. 3 Adv. H.A.	Kh	edikar

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J U D G M E N T

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(Delivered on 27^th Day of January, 2026)

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Page 2 of 25 S.A. No. 39/2025

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1) This is an application filed by the applicants under Section 17 of SARFAESI Act, 2002 praying therein as under :-

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(a) To Hold and declare that the action of the respondent in taking symbolic possession as per notice dt. 04.01.2025 against the applicants under the provisions of Securitization and Reconstruction of Financial Assets and Enforcement of Securities Act, 2002 is illegal and set aside.

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(b) To Grant appropriate Orders restraining all the respondent permanently from taking possession, putting the property to sale or taking any further course against the applicants or any of the alleged mortgaged properties mentioned in the notices under the Securitization and Reconstruction of Financial Assets and Enforcement of Securities Act, 2002. (b-i) This Hon'ble Tribunal may kindly be pleased to set aside the order dated 01.07.2025 (Cri. M.A. No. 1245/2025, /NAGPUR) passed by Hon'ble 29TH Jt. C.J.S.D. & A.C.J.M; Nagpur under section 14 of Securitization Act and all subsequent proceeding initiated pursuant to order dated 01.07.2025.

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(b-ii) To May Please Quash & Set-Aside the Auction Sale Notice Dt. 30.01.2025 and subsequent Auction Dt. 07.03.2025 with its all effects viz. Confirmation, Sale Certificate & Sale Deed, if any;

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(b-iii) To Since none of the mandatory rules are followed and purchaser has not deposited the EMD on time therefore May please stay the effects & operation of the auction sale

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Page 3 of 25 S.A. No. 39/2025

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including handing over possession by respondent no.1 bank to respondent purchasers in the above facts & grounds of the case;.

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(b-iv) To pass an order of stay the action to be taken by the respondent bank during pendency of the SA including any subsequent auction sale notice, subsequent physical possession action/notices and others, in the interest of justice.

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(c) To Grant appropriate orders quashing the entire action of the respondent, as against the Applicants, it’s guarantors, borrowers, mortgagors under Securitization and Reconstruction of Financial Assets and Enforcement of Securities Act, 2002.

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(d) To Declare that the entire action of the respondent is bad in law and is set aside.

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(e) To Grant appropriate directions to restore status -quo ante and pay damages as per the provisions of law for taking wrongful possession and further damages as may be deemed fit till the possession is restored back to the applicant .

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(f) To saddle the costs of this proceedings on the respondents;

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(g) To further pleased to pass such other order and grant such other relief in the facts and circumstances of the case and in the interest of justice.

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2) Brief facts of the case on which the applicants have challenged the action of respondent bank are as under:-

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Page 4 of 25 S.A. No. 39/2025

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(a) The present applicants are the owners of the property in question in the present proceedings. That the present applicants took business loan mortgaging the property in question. That the present applicants approached the respondent bank and requested the bank for business loan. It is pertinent to mention here that the respondent bank after verifying the property and the documents availed a business loan of Rs. 72,86,422.72/- (Rs. Seventy Two Lakh Eighty Six Thousand, Four Hundred and Twenty Two and seventy two paisa ) on 04.01.2025.

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(b) The respondent bank has alleged that the applicants have mortgaged immovable property mentioned in the demand notice dated 09.10.2024 allegedly issued under section 13(2) of the SARFAESI Act, 2002. That the Hon’ble Tribunal may kindly appreciate that section 2 (2b) of the SARFAESI Act, 2002 defines security agreement as an agreement /instrument/document arrangement under which security interest is created in favour of the secured creditor whereas security interest means right, title and interest of any kind whatsoever upon the property created in favour of the secured creditor. That the applicants states no security interest has been created in favour of the bank even the alleged security assets are not registered with statutory authority as required under the SARFAESI Act, 2002 and the Government directives which in itself is prima-facie proof that the property mentioned in the demand notice is not secured asset within the meaning

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and ambit of the SARFAESI Act, 2002. The copy of the demand notice under section 13(2) of the Securitization & Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 dated 09.10.2024 has been annexed herewith and marked as ANNEXURE-1.

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(c) That the respondent bank has alleged in the demand notice dated 09.10.2024 allegedly issued under section 13(2) of the Act, 2002, that the date of NPA is mentioned as 03.10.2024 which apparently signifies that the Account of the Applicants/Appellants were not classified as NPA in accordance with the guidelines formulated by the Reserve Bank of India on Prudential Norms on Income Recognition Assets, classification and provisioning pertaining to an advance.

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(d) That on bare perusal of the Notice, the Hon’ble Tribunal would take a judicial note of the fact that the said Notice does not contain the relevant particulars as required under law and only the securities are mentioned. It is submitted that it is mandatory that the notice is issued to all the Borrowers, Partners and Guarantors in individual capacity in view of the definition of the Borrower defined under Section 2(d) of the RDDBF Act provides that it includes all. That on bare perusal of the notice, the notice is void for the following reasons: - The notice does not postulate the role of the addressee(s) as enumerated i.e. it does not disclose as to who is the borrower, director, mortgagor, or guarantor and as such it is vague. - That the said notice at the most can be termed to the applicant

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Page 6 of 25 S.A. No. 39/2025

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borrower and one of its partners. The notice is not served on all the borrower(s) guarantors and Mortgagors. The notice does not disclose the nature of documents executed by the applicant and/or guarantors/mortgagors in the notice which is mandatory. The Notice does not postulate the entire details of hypothecation which is mandatory. The areas are not given.

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(e) That the applicant submits that the said notice was sent by the respondent bank by registered A.D. the same is never affixed on the premises. It is submitted that the applicant has never come across the Inventory being taken by the bank or drawing any Panchnama or affixing the notice. It is submitted that the respondent bank without following due procedure as laid down in the Security Interest Enforcement Rules, 2002 that is the only possession notice which is known to the Appellants, and as such is bad in law for non-compliances of the various rules under the Security Enforcement Rules under the Act, as it was incumbent on the part of the Bank to decide the representation which is never decided. That the copy of the possession notice dated 04.01.2025 has been annexed and marked as ANNEXURE 2.

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3) T hat the applicant has submitted that the respondent bank intended to take action against the applicants/appellants, and as such it was incumbent on their part to draw an inventory and panchnama, however no such measures were taken till date. In addition to action taken by the Company under section of Securitization Act, the Respondent company filed application

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Page 7 of 25 S.A. No. 39/2025

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U/s. 14 of the SARFAESI ACT before Hon'ble 29TH Jt. C.J.S.D. & A.C.J.M; Nagpur and the said application came to be allowed on dt. 01.07.2025 and passed an order to take physical possession of the subjected property through by Ld. Bailiff, Nagpur.

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4) Brief grounds on which the applicants have challenged the action of respondent bank are as under:-

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(a) The learned respondent committed great mistake in the eyes of law in not appreciating mandatory provisions of the Act, 2002 and issued a notice in slip shod manner without complying with the same and more particularly stated in the facts of the appeal, causing serious prejudice to the Applicant. The notice not being in consonance with the provisions of law is liable to be quashed and set aside. The decision impugned is therefore, liable to be set aside.

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(b) The Respondent bank has while taking symbolic possession of the properties in question has not followed mandatory provisions of the Act and more particularly Rule 8(1) & 8(2) and hence also the entire measures are bad in law and deserves to be quashed and set aside.

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(c) The amount mentioned in the notice U/s. 13(2) of the Act, cannot be termed for a legally recoverable debt and hence also the notice is bad in law and deserves to be quashed and set aside. The 13(2) notice was also not issued by the authorized person and hence also the same is bad in law.

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Page 8 of 25 S.A. No. 39/2025

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(d) Without prejudice, the appellant further state that the notice issued by the respondent bank is lacking in material contents, particularly with regard to statement of account as to how the amount mentioned against outstanding as on 09.10.2024 for Rs. 72,86,422.72/- (Seventy-Two Lakh Eighty-Six Thousand Four Hundred and Twenty-Two rupees and Seventy-two paisa) along with interest have been arrived at. Without such correct and specific details, the appellant has created a situation in which the borrower is not in a position to give an effective reply which amounts to the violation of the principles of the natural justice.

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(e) The Ld. CJSD and ACJM Nagpur who not verified 13(2) demand notice, whether service of demand notice, postal receipts, acknowledgement and hand delivery and paper publication of same notice. Which is clearly shows that Ld. CJSD AND ACJM Nagpur not verify that who assigned the said loan to the Respondent company, the same blunder also done by Ld. CJSD AND ACJM Nagpur in said Order dated 01.07.2025, the said mistake is not amended or nor corrected in said application as well as order dated 01.07.2025, therefore said order dated 01.07.2025 (Cri. M.A. No. 1245/2025) is not executable. Respondent company has issued NPA notice on dated 07/10/2024 and categorically mentioned the NPA date 03/10/2024 but Applicants had deposited sum of Rs. 78,881/ - as EMI on dated 05/08/2024, how the respondent company declared the NPA before the time provided by RBI.

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Page 9 of 25 S.A. No. 39/2025

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(f) Further, the Sale Notice dated 30.01.2025 is in total contravention of the sub-rule-7 of Rule-8 of the Security Interest (Enforcement) Rules, 2002. The rule mentioned supra mandates the authorized officer to affix the sale notice upon the conspicuous part of the property under the sale; however, the respondent No.1 failed to carry out such affixture on the conspicuous part of the schedule (a) property referred to above, said sale notice is also not in specimen proforma provided in the Act.

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(g) The impugned sale notice dt. 30.01.2025 and subsequent sale conducted on dt. 07.03.2025 is illegal, void, and liable to be set aside as the mandatory statutory notices under the SARFAESI Act and Security Interest (Enforcement) Rules, 2002 were neither issued nor served upon the Applicant by the Respondent No. 1 Bank in accordance with the SI (E) Rules Specifically Rule 3, Rule 8, and Rule 9.

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(h) That, it is notable that the Respondent Company was restrained by this Hon'ble Tribunal from taking balance sale consideration above 25% of the sale price as per order dt. 07.03.2025, the particular operative part of the order is as under “if bid is received, bank shall accept 25% amount and sale of the suit property shall be subject to final decision in main S.A. on merits.” That, once the Hon'ble Tribunal has directed the Respondent Company to not to accept amount more than 25%, the Respondent has no right to take the same without prior permission of this Hon'ble Tribunal, on this count

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Page 10 of 25 S.A. No. 39/2025

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only the auction sale dt. 07.03.2025 is illegal and required to be cancelled.

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5) Respondent No. 1 has filed reply at alongwith documents as under :-

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(a) At the outset the present appeal as filed and framed is not maintainable in the eyes of law as there are no anomalies in taking action against the appellant, who is a chronic defaulter as he has failed to maintain the account regularly and pay the installments in time.

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(b) It is submitted by the respondents that the Notice u/s. 13(2) is admitted however the date is incorrect and the actual date is 15.10.2024 and the same is sent to the borrowers on 17.10.2025 which is served on 24.10.2025.

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(c) That the applicant hereto has not challenged the symbolic possession and has intentionally suppressed the same. It is submitted that thus the applicant has lost its right to challenge the same at this stage and the application is barred by law of limitation.

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(d) That In this regard, it is submitted that the property hereto is already sold and as such the right of the appellant to redeem the property under Section 13(8) of the SARFAESI Act is lost and as such the only relief left is to pay the balance consideration to the bank if any.

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(e) That the respondent has received the entire amount from the respondent no. 2 and the right of the auction purchaser is created. That The Sale Certificate is due for registration . The

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Page 11 of 25 S.A. No. 39/2025

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possession of the property is to be taken and in support of his contention, he has relied upon the judgment passed by the Hon'ble Apex Court in the case of:

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CELIR LLP V/S BAFNA MOTORS (MUMBAI) PVT LTD & ORS reported in 2023 LawSuit (SC) 931.

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(f) It has been alleged that the date of the notice has been incorrectly stated in the subsequent action initiated by the bank and also in the proceedings before the C.J.M., Nagpur which has resulted in vitiating the proceedings. It has been submitted that the Counsel as well as the respondent were surprised over the said allegations and as such the same was investigated by the respondent at length and it appears that there is no such notice dated 9.10.2024 as placed on record. It has been submitted that much prior to the filing of the appearance, the respondent; has filed proceedings before the Hon'ble C.J.M. wherein the notice dated 15.10.2024 is filed on record with postal receipts dated 17.10.2024 and also the paper publications dated 17.10.2024. In view of the aforesaid facts, it is surprising that as to how the appellants has played the magic by placing on record the notice dated 9.10.2024 which is neither issued nor served on the applicants. This can be only by way of tampering to mislead the Hon'ble Tribunal and secure a favourable order. The respondent is filing on record the entire proceedings filed before the Hon'ble C.J.M. to demonstrate the true facts which are on oath.

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Page 12 of 25 S.A. No. 39/2025

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(g) That without prejudice to the aforesaid the auction has concluded on 7.3.2025 and a Pursis was filed on 14.7.2025 before the Hon'ble Court averring that they are ready to pay Rs. 20.00 Lakhs today i.e. on 14.7.2025 and the remaining amount will be deposited in 3 months. The said pursis though not admissible shows the conduct of the appellants that they have no intentions to repay the dues, as the same was not complied with. Regardless a compromise proposal was given after 4 months which was rejected by the respondent by filing Pursis at Diary No. 3647/2025 dated 4.8.2025.

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6) Respondent Nos. 2 & 3 has filed reply at alongwith documents as under: -

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(a) The Applicants have suppressed the material fact that the auction conducted by Respondent No. 1 has been concluded, with Respondent Nos. 2 & 3 being declared the successful bidders who have paid the entire sale consideration. The non - issuance of the Sale Certificate is a direct consequence of the interim orders/status quo obtained by the Applicants in this very proceeding, and they cannot be permitted to take advantage of their own wrong.

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(b) Respondent Nos. 2 & 3 respectfully submit that they are third-party auction purchasers. The myriad grievances raised by the Applicants regarding the demand notice under Section 13(2), possession notice under Section 13(4), classification of NPA, validity of the mortgage, and the authority of the Authorised Officer, are disputes that lie exclusively between the

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Page 13 of 25 S.A. No. 39/2025

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Borrower (Applicants) and the Secured Creditor (Respondent No. 1).

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(c) The Hon'ble Supreme Court in "S. Karthik vs. The Authorised Officer, Indian Overseas Bank & Ors. (2023) 5 SCC 467 "categorically held that "The Tribunal, while exercising its jurisdiction under Section 17 of the SARFAESI Act, ought to be extremely cautious in setting aside a sale once it is confirmed and the auction purchaser has deposited the entire amount. The scope of inquiry at the instance of the borrower, after the sale is concluded, is limited to whether the sale was conducted in a transparent and fair manner and whether the auction purchaser was a party to any fraud. The borrower cannot be permitted to challenge the sale on grounds of non-compliance with the procedural pre-conditions under Sections 13(2) and 13(4) of the Act, which he ought to have challenged at the relevant time."

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(d) The Hon'ble Supreme Court in "Prestige Lights Ltd. vs. State Bank of India (2007) 8 SCC 449" emphasized that a writ petition (or, by analogy, a Section 17 application) is not maintainable to avoid contractual obligations arising from a concluded auction process. Most recently, the Hon'ble Supreme Court in "Bajranglal Khandelwal vs. State of Chhattisgarh & Ors. (Civil Appeal No. 7688 of 2022, decided on 16.08.2024)" reiterated that the rights of a third-party purchaser in an auction sale conducted by a public authority protected, and the sale cannot be set aside on hyper-technical grounds, especially when the purchaser has acted in good faith.

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Page 14 of 25 S.A. No. 39/2025

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(e) Respondent Nos. 2 & 3 has submitted that the auction sale has been concluded, and Respondent Nos. 2 & 3 have paid the entire sale consideration to Respondent No. 1 Bank. The details of the substantial financial commitment are as under:

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Earnest Money Deposit (EMD): Rs. 7,75,800/paid on 04.03.2025.

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Payment to make up 25% of bid amount: Rs. 16,13,700/ -paid thereafter.

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Payment of the Remaining Sale Consideration: The remaining amount of Rs. 70,72,920/- has been paid in full. It is submitted that for this, Respondent Nos. 2 & 3 have availed a substantial loan, thereby creating a fresh and significant financial liability.

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8) Applicant has filed written notes of argument alongwith the documents as under: -

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(a) The entire SARFAESI action initiated by Respondent No.1 is vitiated at the threshold due to illegal classification of the Applicants’ loan account as Non-Performing Asset (NPA).

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(b) As per various demand notices issued by Respondent No.1, the alleged date of NPA is shown as 03.10.2024.

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(c) However, the Statement of Account clearly establishes that the Last EMI of Rs. 78,881/- was accepted on 05.08.2024.

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(d) As per RBI Prudential Norms, an account can be classified as NPA only if the account remains overdue for more than 90 days, or three consecutive EMIs are unpaid.

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Page 15 of 25 S.A. No. 39/2025

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(e) In the present case there was no continuous default, there were no three consecutive EMI bounces, and the account was operational till August 2024.

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(f) Hence, classification of the account as NPA in October 2024 is arbitrary, illegal, and void ab initio, rendering all subsequent SARFAESI actions non-est. The Hon’ble Supreme Court in Mardia Chemicals Ltd. v. Union of India, (2004) 4 SCC 311, has held that The DRT has jurisdiction to examine whether the classification of the account as NPA and measures taken under SARFAESI Act are lawful.

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(g) The Learned ACJM, Nagpur, while passing the order under Section 14 of SARFAESI Act, recorded the date of NPA as 07.10.2024, which is different from the date mentioned in demand notices (03.10.2024).

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(h) The Learned ACJM has also recorded incorrect and false description of secured assets in the order dated 01.07.2025. It is settled law that orders obtained by misrepresentation or suppression are nullitie.

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(i) Issuance of successive demand notices itself proves non - application of mind and non-compliance with Section 13(2). In reply dated 4.07.2025, Respondent No.1 Relied upon and admitted the demand notice dated 09.10.2024, Though the same stood withdrawn due to issuance of subsequent notice dated 15.10.2024. In the same reply, Respondent No.1 also refers to a demand notice dated 03.10.2024, creating irreconcilable contradictions.

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(j) On one hand, Respondent No.1 submits that Property is sold, Sale certificate issued, this fact is recorded in the Tribunal’s order dated 13.08.2025. On the other hand, in reply dated 14.07.2025, Respondent No.1 states Property is still “under sale”, and Rs. 80 lakhs and above are yet to be recovered. Such mutually destructive pleadings destroy the credibility of Respondent No.1.

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(k) The Applicants challenged the auction notice dated 30.01.2025 by filing I.A. No. 143/2025. This Hon’ble Tribunal, by order dated 07.03.2025, categorically restrained Respondent No.1 as under: “If bid is received, the bank shall accept only 25% of the amount and the sale shall be subject to final decision of the S.A.” Despite being present and fully aware of the order, Respondent No.1 accepted remaining 75% of bid amount without seeking permission. Any action taken in violation of a judicial order is illegal, void, and non -est. Reliance is placed on Manohar Lal Chopra v. Rai Bahadur Rao Raja Seth Hiralal, AIR 1962 SC 527.

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(l) Respondent No.1 has consistently stated auction value as Rs. 95,58,000/- However, in reply dated 29.06.2025 to legal notice, Respondent No.1 falsely stated that the property was sold for Rs. 78,58,000/-. Respondent Nos. 2 & 3 have falsely claimed that the loan account is closed Their pursis dated 21.10.2025 states deposit of Rs. 15 lakhs and Rs. 55 lakhs on 21.03.2025. Contrarily, Authorized Officer falsely stated deposits on 25.03.2025 and 29.03.2025.

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Page 17 of 25 S.A. No. 39/2025

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(m) It is a settled position of law that unless and until a sale certificate is issued, a successful bidder in an auction does not acquire the legal status of an “auction purchaser”. Mere participation in auction or deposit of bid amount does not create any right, title, or interest in the secured asset. In the present case, since the auction sale dated 07.03.2025 was expressly made subject to final outcome of the present S.A., and the sale certificate could not have been legally issued during pendency of proceedings, the Respondent Nos. 2 & 3 remain only bidders and not auction purchasers in the eyes of law. The Hon’ble Supreme Court in Mathew Varghese v. M. Amritha Kumar, (2014) 5 SCC 610, has categorically held that: “No right, title or interest is created in favour of the auction purchaser unless the sale is confirmed in accordance with law and a sale certificate is issued.”

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(n) The Hon’ble Supreme Court in Valji Khimji & Co. v. Official Liquidator of Hindustan Nitro Product (Gujarat) Ltd., (2008) 9 SCC 299, has further held that: A highest bidder has no vested right until the sale is confirmed and sale certificate is issued.

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(o) The Respondent Bank, in blatant disregard of the judicial order, accepted the remaining 75% of the bid amount without permission of this Hon’ble Tribunal. It is a settled principle of law that: i. Any act done in violation of a court or tribunal’s order is void, non-est, and unenforceable. ii. No party can derive benefit from its own wrongdoing. c. The acceptance of the balance amount is therefore: i. Without jurisdiction; ii. In

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Page 18 of 25 S.A. No. 39/2025

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contempt of the Tribunal’s order; and iii. Incapable of conferring legality on the alleged sale. In support of his contention, the applicants have also relied upon the judgments passed by the Hon’ble Supreme Court in CELIR LLP vs. BAFNA MOTORS (P) Ltd & (2014) 5 SCC 651.

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9) Respondent No.1 has filed written notes of argument along with the documents at as under : -

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a. That the respondent has received the entire amount from the respondent no. 2 and the right of the auction purchaser is created. The Sale Certificate is due for execution.

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b. All the previous notices are withdrawn which is clearly enumerated in the notice dt. 15.10.2024 which is duly served and is also published in the newspapers on 31.10.2024 which is intentionally suppressed.

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c. There is no illegal sale. This is duly explained by filing submissions vide diary No.6923/25 dt. 26.12.2025 and there is no rebuttal to the same as required. Thus the explanation given is just and proper and as such this ground does not exists .

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d. The amount paid by the auction purchaser as well as forcibly deposited by the Appellants are with the Respondent and upon decision of the S.A. appropriation shall be made if not done earlier.

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e. The right to redemption ended on 30.1.2025 when the notice of sale was issued and the amount was not deposited even upto 7.3.2025 i.e. the date of sale.

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f. The date of N.P.A. is not recorded in the order dt. 7.10.2024 in the orders of the Hon’ble C.J.M., but a declaration is filed on record dt. 7.10.2024 wherein the averment is made that the account is N.P.A. Reference is made to document No. 3 which is a letter addressed to the Appellants on 7.10.2024 intimating them that the account is N.P.A. on 3.10.2024. It is submitted that the said letter is reproduced. The Hon’ble C.J.M. does not adjudicate the disputes and as such any typographic error in the order does not vitiate the same. The Hon’ble C.J.M. only takes into consideration the provisions of Section 13(2) of the Act and it’s service, however the respondent has filed all docs before the Hon’ble C.J.M.

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10) Respondent No.2 & 3 has filed written notes of argument along with the documents at as under: -

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a) That the applicant has failed to challenge the auction notice within limitation, failed to obtain any stay on the e -auction,

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b) That the applicant has failed to redeem prior to publication of auction notice,

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c) yet seeks to revive time-barred challenges by procedural subterfuge.

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d) Upon publication of the auction notice dated 30.01.2025, the borrower's right of redemption under Section 13(8) of the Act stood extinguished.

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e) The auction dated 07.03.2025 was conducted lawfully resulted in Respondent Nos. 2 & 3 being declared highest bidders, culminated in full payment of sale consideration in March 2025 itself.

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f) The Hon'ble Supreme Court in Celir LLP v. Bafna Motors (2024) 2 SCC 1 has categorically held that:

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Once sale is confirmed and consideration is paid, the auction purchaser acquires a vested and indefeasible right, and the secured creditor cannot withhold issuance of sale certificate or entertain redemption attempts.

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g) The borrower has deliberately misread the order dated 07.03.2025.

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The said order rejected the borrower's stay application an d request to stay Auction, facilitated continuation of the auction, merely made the sale subject to final adjudication of the S.A.

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h) There was no restraint, express or implied on issuance of sale certificate on crystallisation of auction purchaser's rights.

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Acting on written demand of the secured creditor, Respondent Nos. 2 & 3 deposited the entire balance amount strictly in compliance with Rule 9 of the Security Interest (Enforcement) Rules, 2002.

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i) The Hon'ble Supreme Court in S. Karthik v. Authorised Officer, IOB (2023) 5 SCC 467 has clearly held that once the auction is concluded and consideration is paid, the borrower's challenge is limited only to fraud in the conduct of the auction. In the

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present case, no allegation-much less proof of fraud or collusion is made against Respondent Nos. 2 & 3.

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j) The Respondent No.2 & 3 auction purchasers therefore submit that they too have obtained financial assistance to fund the purchase and because of this SA they are put to financial hardship and required to pay EMI, Interest as well as rent and therefore entire purpose is defeated because of untenable action of applicant and therefore they submit that present SA be dismissed with cost. In support of their contention, they have relied upon judgment passed by the Hon’ble Supreme Court, reported in 2025 INSC 1137.

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11. On perusal of case record, I find that the Ld. Counsel for

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applicants has submitted before this Tribunal that the security interest over the secured asset has not been created. This fact has been denied by the Ld. Counsel for respondent no. 1 stating therein that the mortgaged property was registered with CERSAI on 22.04.2022. As such, it cannot be said that the security interest over the secured asset was not created as per provision U/s. 26-D of the SARFAESI Act.

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12. The Ld. Counsel for the applicants has asserted that a business loan of Rs. 72,86,422.72/- (Rs. Seventy Two Lakh Eighty Six Thousand, Four Hundred and Twenty Two and seventy two paisa ) was availed on 04.01.2025. The same doesn’t find support from the documents on record as asserted by the respondent no. 1, who has submitted that the

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loan of Rs. 75,54,000/- was sanctioned to the applicants on 30.03.2022.

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13. The Ld. Counsel for the applicants has submitted that the loan account was illegally classified as NPA on 03.10.2024 as the applicants has lastly deposited the EMI on 16.08.2024 in the loan account. This fact has been denied by the Ld. Counsel for respondent no. 1 and has submitted that the applicants were chronic defaulters since 06.07.2024 as per statement of loan account on record. As such, the same has rightly been declared NPA on 03.10.2024 as per RBI guidelines.

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14. The Ld. Counsel for the applicants has submitted that the earlier demand notice U/s. 13(2) of the Act was issued on 09.10.2024 and a fresh demand notice U/s. 13(2) of the Act on 15.10.2024 was not justified as the same was never recalled. The same has been opposed by the Ld. Counsel for the respondent no. 1, who has submitted that specific averment has been made with regard to recalling of earlier demand notice dated 09.10.2024 in the subsequent demand notice dated 15.10.2024 and the provisions under Rules 8 (1), (2) & (7) of the Security Interest (Enforcement) Rules, 2002 was complied prior to issuance of possession notice on 02.08.2025.

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15. The Ld. Counsel for the applicants has assailed the order passed by Ld. 29^{t h} Jt. CJSD & ACJM, Nagpur dated 01.07.2025 passed in connection with Cri. M.A. No.

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1245/2025 on the ground that correct date of NPA has not been mentioned in the impugned order. The same has been opposed by Ld. Counsel for respondent no. 1, who has submitted that due to typographical error, in place of 03.10.2024 the same has been mentioned as 07.10.2024 as the date of NPA as the letter in this regard was addressed to the applicants on 07.10.2024. There is nothing on the record to suggest that due to non-mentioning of the proper NPA date in the impugned order, a prejudice has been caused to the applicants as the applicants were well aware with regard to actual date of NPA. The Ld. Counsel for the respondent has drawn attention towards the order passed by this Tribunal dated 13.08.2025, whereby the protection against the possession notice dated 02.08.2025 sought by the applicants was rejected by this Tribunal and the same has also been disposed of by the Hon’ble DRAT, Mumbai in Misc. Appeal No. 151/2025 dated 22.09.2025, whereby possession of the secured asset was stayed for a period of one month from today.

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16. The Ld. Counsel for the applicants has drawn attention of this Tribunal towards the order passed on 07.03.2025, whereby the respondent no. 1 was directed to accept 25% of the amount and the sale of suit property has been directed to be final decision in S.A. on merit, where the e-auction dated 07.03.2025 was under challenge. The same has been opposed by the Ld. Counsel for the respondents, who has

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submitted that as there was no barrier in the impugned order dated 07.03.2025 with regard to acceptance of rest of the auction amount by respondent no. 1. The same has been accepted under bonafide intention for giving effect of the said order as there was no ambiguity in this regard for concluding the sale. 17. The Ld. Counsel for the applicants has submitted that on the verbal direction of the respondent no. 1, the applicants had deposited Rs. 34,50,000/- on 10.11.2025 and 40 Lakhs on 15.12.2025 in the loan account and are ready to redeem the mortgaged property. The same has been opposed by the Ld. Counsel for the respondent no. 1, who has submitted that the applicants have voluntarily deposited the said amount with the respondent no. 1 and the same has not been appropriated in the loan account. It has further submitted that there is nothing on the record to suggest that applicants h ave approached the respondent bank for settlement of loan account prior to issuance of e-auction notice dated 30.01.2025, which was held successful on 07.03.2025 and the auction amount has been deposited within stipulated period by 29.03.2025 and sale certificate is to be issued after disposal of this application.

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18. The Ld. Counsel for respondents has submitted that in view of specific provision U/s. 13(8) of the SARFAESI Act and consistent judgments passed by the Hon’ble Courts in this regard, lastly on 22.09.2025, reported in 2025 INSC 1137, the

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borrower i.e. applicants cannot redeem the property in the

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prevailing circumstance.

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19. I have heard Ld. Counsel for both sides at length.

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20. Accordingly, I pass the following order :-

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ORDER