Dismissed

Ms Niraja Dental Clinic v. Bank of Maharashtra

DRT20 Aug 2026SA/405/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed an application challenging an e-auction sale under the SARFAESI Act. The Tribunal held that the bank validly served notices, the property was allotted by a society (making a CIDCO NOC unnecessary), and the applicant failed to object to the demand notice in time.

What did the court decide?

Securitization Application dismissed with no order as to costs.

Ms Niraja Dental Clinic versus Bank of Maharashtra — Contract and Commercial Disputes | DRT (2026)

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Presented on : 06.12.2024 Registered on : 09.12.2024 Decided on : 20.08.2026 Duration : Y M D 01-08-14

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IN THE DEBTS RECOVERY TRIBUNAL AT AURANGABAD

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SECURITISATION APPLICATION NO. 405 OF 2024

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M/s. Niraja Dental Clinic Through its

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Proprietor, Deepak Niranjan Suri

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Age: 59 years, Occu: Doctor,

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R/o H No.5-17-33, Samta Nagar,

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Near Kranti Chowk Police Station,

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Aurangabad-431001. .... Applicant

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Versus

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Bank of Maharashtra,

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Through its Authorized Officer,

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Asset Recovery Branch,

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2^nd Floor, Mahabank Bhavan, C-3

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N-1, CIDCO Town Centre,

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Chhatrapati Sambhajinagar-431001

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(Aurangabad).

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The Head Office,

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Bank of Maharashtra, Lokmangal, 1501,

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Shivajinagar, Pune-411005.

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Mrs. Sujata Deepak Suri,

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Age : years, Occupation:Housewife, R/o, C/o Chintaman Sukhdev Pawar,

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Durgawadi, Ladgaon Road, Vaijapur,

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Tq. Vaijapur, Dist. Chhatrapati Sambhajinagar-423701

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(Aurangabad).

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Mr. Suresh Ramrao Pawar

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Age : Major, Occupation: Business,

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R/o RH No.C-3, Garkheda,

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Kasliwal Suvarnayog, Aakar Gallery, Jyotirmay complex, Jalna Road, Aurangabad-431001.

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Mrs. Vaishali Gokul Thakur

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Age : Major, Occupation: Not Known,

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R/o RH No.12, Sy. No.156, Near Vishal Towers, Surewadi

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New Mondha, Harsool, Aurangabad-431 001 …. Respondents APPEARANCE :

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Applicant : Mr. Amarnath Sakhare Advocate Respondent No.1 & 2 : Mr. Mishra Atul A. Advocate Respondent No.3 to 5 : None

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CORAM: DR. J.R. CHAUHAN, PRESIDING OFFICER

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JUDGMENT

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(Pronounced on : 20.08.2026) AN APPLICATION UNDER SECTION 17 OF THE SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST

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ACT.

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The applicant has filed this Securitization Application under section 17 of the Securitization and Reconstruction of Financial Assets and

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Enforcement of Security Interest Act, 2002 (hereinafter referred as SARFAESI Act) against the respondents.

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The brief facts as stated in the Amended Securitization Application are that the applicant availed the loan facility of Rs.18,00,000/under the loan account No.60162717492. The respondent No.3 and 4 are stood as guarantors in the aforesaid loan and executed guarantee deed in favor of the Bank. The Applicant has repaid the aggregate amount of Rs.13,37,640/- as per latest loan statement issued by the respondent Bank wherein the outstanding balance is reflects as Rs.4,62,360/-. The applicant has been making sincere efforts to repay the loan amount regularly, but due to the nature of his profession as a Dentist, which does not provide the steady or consistent income, the loan account was classified as NonPerforming Asset (NPA) in the year 2015. Thereafter, the respondent Bank issued Demand Notice dated 20.05.2015 u/s 13

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(2) of the SARFAESI Act, demanding sum of Rs.15,47,060/-.

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Despite the financial challenges, he has made significant payments towards the loan account since the issuance of Demand Notice. The respondent bank issued pre-possession notice dated 07.09.2019 followed by possession notice dated 24.09.2019 under the provisions of SARFAESI Act, 2002 for the recovery of dues in relation to the loan account of the applicant under the SARFAESI Act and initiation of the possession proceedings u/s 13 (4) is expected to follow within a reasonable timeframe after issuance of Demand Notice u/s 13 (2) of the SARFAESI Act. The prolonged delay in initiating possession proceeding could be viewed as a failure on the part of the respondent bank to act diligently and expeditiously as mandated under the Act and the Tribunal has to examine the legality and validity of the possession notice in the light of the substantial delay. It is mandatory for the secured creditor to obtain order from the District Magistrate or designated authority before taking physical possession of the secured assets

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under the provision of the SARFAESI Act, 2002. The Respondent Bank has failed to comply with this mandatory requirement u/s 14

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of the SARFAESI Act.

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It is further submitted that in the meantime, the respondent bank initiated recovery proceedings by filing Original Application No.17/2016 before Hon’ble DRT. The said Original Application was adjudicated and decided on 05.04.2024. The applicant contested the Original Application through his Advocate and actively participated in the proceedings but the final order passed in default due to absence of the Advocate of the applicant at the relevant stage of the proceedings. The applicant has made multiple representations to the respondent bank seeking settlement of the loan account on various occasions particularly on 24.09.2019, 12.03.2021, 31.03.2021, 30.07.2021, 10.11.2021, 18.03.2023 and 06.09.2023. The some of the representations were made after the issuance of illegal possession notice dated 24.09.2019. The applicant also made substantial representations after the final

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judgment dated 05.04.2024 and he has continued his willingness to settle the loan account but the respondent bank failed to respond his representations.

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It is averred that the applicant received e-auction notice dated 31.07.2024 issued by respondent bank wherein auction of the secured assets was scheduled for 06.09.2024. On 06.09.2024 no bid was received by the respondent bank and as a result, e-auction notice dated 31.07.2024 become infructuous. The applicant further submitted that the detailed representation to the Bank on 05.09.2024 expressing his willingness to settle the outstanding loan

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account amicably was submitted. The applicant has made substantial repayment during the period between issuance of demand notice dated 20.05.2015 and order dated 05.04.2024 passed in the Original Application No.17/2016. On 28.11.2024 the applicant visited the branch office of the respondent bank to enquire about the status of settlement of loan account and branch officer informed that the bank has received bid for the mortgaged property

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and there is no longer any need for the settlement discussion. Thereafter, the applicant approached to Asset Recovery Branch where it was advised by the employee to check the details on e- bakray.in website and thereafter he discovered an e-auction notice dated 06.11.2024 whereby auction was scheduled on 26.11.2024. The e-auction notice dated 06.11.2024 was neither served upon him nor brought to his knowledge in accordance with the mandatory provisions of SARFAESI Act and Security Interest (Enforcement) Rules, 2002 (SARFAESI Rules) and e-auction notice dated 06.11.2024 and sale held on 26.11.2024 are illegal and is in violation of the SARFAESI law.

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The applicant further submitted that, respondent no.3 who is his estranged wife is no longer residing with him, on getting information about the proposed e-auction scheduled for 26.11.2024, he made oral communication to enquire whether she had received any formal communication or notice from the respondent bank regarding the said e-auction, in response respondent no.3

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categorically stated that she had not received any such communication and notice from the respondent bank. Respondent no.3 who holds significant interest both guarantor and co-owner constitutes violation of the mandatory procedural requirements under the SARFAESI Act. The respondent no.4 is guarantor in the loan facility extended by the respondent bank.

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It is further averred that the subject property falls under the ownership and jurisdiction of the City and Industrial Development Corporation (CIDCO). As per prevailing legal requirements for creation of any mortgage, lien, or encumbrance over the property vested in CIDCO mandates prior approval in the form of No Objection Certificate (NOC) from the CIDCO. The respondent bank creating a mortgage over the suit property, failed to secure mandatory NOC from the CIDCO as such the mortgage is legally defective and unenforceable. The applicant made formal representation on 27.12.2024 to the CIDCO whether the said mortgage was created with the prior permission and No Objection

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Certificate from CIDCO and vide letter dated 27.02.2025 informed that no such NOC has been issued by CIDCO in favor of respondent bank for the purpose of creating or registering mortgage or charge over the proposed property. The applicant challenged illegality of the e-auction sale conducted on 26.11.2024 and bank submitted the Sale Certificate dated 05.12.2024 purportedly issued in favor of respondent no.5. The proceedings conducted by the respondent bank regarding possession and sale are illegal and null and void and liable to set aside on the grounds that there is delay in the recovery proceedings and the respondent bank failed to comply with the provisions of SARFAESI Act. Further respondent bank has ignored settlement letters and representations of the applicant. The applicant was not informed about the sale notice. It was necessary for the respondent bank to issued fresh Demand Notice u/s 13 (2) of the SARFAESI Act after adjudication of the Original Application No.17/2016. No possession order was obtain by the respondent bank u/s 14 from District Magistrate or the designated

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Authority and the respondent bank has misused the provisions of the SARFAESI Act and more so, no permission for mortgage the suit property was taken from the CIDCO. The applicant prayed for setting aside impugned sale dated 26.11.2024 and Sale Certificate dated 05.12.2024 and Demand Notice dated 20.05.2015 as illegal and same are liable to set aside and prayed for the allowing the Securitization Application.

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The Respondent No. 1 and 2 (Bank) filed reply and contested the Securitization Application on the grounds that the loan account of the applicant was irregular in payment of EMI and the applicant committed default in repayment of the said loan amount and as such loan account was classified as NPA on 30.03.2015. Thereafter, the notice u/s 13 (2) of the SARFAESI Act was issued on 20.05.2015 for payment of Rs.15,47,060/ + interest, expenses and other charges but the applicant failed to pay the loan amount as demanded in the notice dated 20.05.2015 and he has not raised any objection to the notice. Thereafter, the respondent bank issued

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notice of intimation to take possession of the secured assets and accordingly the symbolic possession was taken on 07.09.2019 and symbolic possession notice was published in two newspapers but the applicant did not raise any objection to the said notice. The respondent bank issued e-auction sale notice on 31.07.2023 where no bid was received in e-auction sale fixed on 06.09.2024 and sale was failed. Thereafter, the respondent bank again issued e-auction sale notice on 06.11.2024 and sale was scheduled on 26.11.2024. The sale notice was served to the applicant and notice was also published in two newspapers i.e. “Indian Express” and “Loksatta” on 06.11.2024 and notice was also pasted on the secured assets on 08.11.2024. The respondent bank received bid in respect of sale on 26.11.2024 and purchaser has paid entire sale amount of Rs.18,20,000/- and accordingly bank has issued Sale Certificate on 05.12.2024. The respondent bank has extended all possible cooperation to the applicant, however the applicant failed to pay the amount despite several assurances. Respondent Bank has followed

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the provisions of the Act and have acted under the rules made therein. The Borrower/Guarantor/Mortgagor have failed to pay dues of the Bank since 2015.

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It is further alleged that the respondent bank is to recover Rs.24,90,693/- and after adjusting sale proceeds of Rs.18,20,000/-, remaining amount is still due as of Rs.6,70,693/-. The applicant has raised objection by way of filing Securitization Application just to prolong the matter and create hurdle in recovery proceedings initiated by the bank. The applicant has no right to challenge auction initiated by the Bank as the Bank has proceed in accordance with the law. The respondent bank denied all other allegations of the applicant and pray for dismissal of the Securitization Application with costs.

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The applicant/borrower filed re-joinder and again reasserted his claim and controverted the allegations of the written statement.

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The applicant has produced following documents on record as per list of documents:

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Sr. No.	Particulars	Annexure
1.	The copy of loan statement for Loan account bearing no. 60162717492	A-1
2.	The copy of demand notice u/s 13 (2) of the SARAESI Act 2002 on 20.05.2015.	A-2
3.	The copies of pre-possession notice dated 07.09.2019 and possession notice dated 24.09.2019	A-3
4.	The copy of order passed by Hon’ble Tribunal in OA No.17/2016	A-4
5.	The copies of representations made by applicant to the respondent bank.	A-5
6.	The copy of E-auction notice dated 31.07.2024	A-6
7.	The copy of representation dated 05.09.2024	A-7
8.	The copies e-auction notice dated 06.11.2024 in which the scheduled auction was 26.11.2024 and online status of auction notice.	A-8
9.	The copy of case status report filed by respondent no.3 before Chief Judicial Magistrate, Aurangabad vide PWDAVA Application under Domestic violenceActno.19834of 2023	A-9

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10.	The copy 27.02.2025 i favorof appl	of letter dated ssued by CIDCO in icant.	A-10
11.	The copies dated 05.1 received fro dated 30.01.2	of sale certificate 2.2024 and letter m respondent bank 025	A-11
12.	The copies No.213/2018 No.34/2015	of order in SA and Transfer SA	A-12

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The respondent Bank produced documents Annexure A-1 E- auction sale notice dated 06.11.2024, and publication of the sale notice in two newspapers alongwith photographs pasted dated

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08.11.2024 and Annexure A-2, Sale Certificate dated 05.12.2024.

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The respondent Bank has further submitted following documents on record as per pursis at Exh.11:

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Sr. No.	Documents	Annexure
01.	Copy of registered mortgage deed bearing daybook no.745-2014 alongwith the NOC from society tomortgage	R-3
02.	Copy of notice u/s 13 (2) of SARFAESI Act alongwith the postal receipt	R-4

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Copy of judgment passed in OA R-5 No.17/2016.

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I have heard learned counsel for the parties and gone through the written notes of arguments submitted by applicant and other material available on record thoroughly and carefully. My findings alongwith reasons are as under:

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The applicant has raised loan of Rs.18 lakhs from the respondent bank and respondent no. 3 & 4 are the guarantors of the said loan. The applicant/borrower failed to repay the loan amount and ultimately, the loan account was declared NPA on 30.05.2015. Thereafter, respondent bank issued Demand Notice dated 20.05.2015 u/s 13 (2) of SARFAESI Act, 2002 demanding a sum of Rs.15,47,060/- plus interest, expenses etc. The symbolic possession of the mortgaged property was taken on 07.09.2019. The Respondent Bank issued e-auction notice dated 31.07.2024 and sale was fixed for 06.09.2024, but no bid was received. The respondent bank issued second e-auction sale notice dated 06.11.2024 and sale

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was fixed for 26.11.2024 and copies of these documents have been produced on record even by the applicant as Annexed A-2, A-6, A- 8 on record. When the applicant has produced all the documents, he was duly served and still, he did not make any representation against Demand Notice dated 20.05.2015 u/s 13(3A) of the SARFAESI Act, 2002. Service of demand notice has been proved by postal receipt produced on record by the bank as Exh. R- 4.

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The applicant has challenged the sale proceedings of the respondent bank on the grounds that no sale notice was issued to him and he submitted representation against the sale, which was not considered and further at the time of mortgage of the suit property, no permission or No Objection Certificate was obtained by the respondent bank from CIDCO as originally suit property was owned by the CIDCO and therefore, the auction sale conducted by the Bank on 26.11.2024 is liable to be set aside.

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The respondent Bank has produced on record copy of sale notice dated 06.11.2024 as Annexure-A-I and it was published in

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newspapers one in “Marathi” and another in “English” as attached with the notice and further sale notice was pasted on the conspicuous part of the secured assets and same has been placed on record alongwith newspapers as Annexure A-1. It may be noted that the first auction notice was issued on 31.07.2024 and sale was fixed for 06.09.2024 but no bid was received and second notice dated 06.11.2024 was issued and 15 days’ notice was required in case of subsequent sale which was fixed for 26.11.2024 and notice was published in two newspapers. The respondent no.5 namely Mrs. Vaishali Gokul Thakur has participated in the auction and she was declared as highest bidder as she paid total sale consideration of Rs.18,25,000/- against the reserve price of Rs.18,00,000/-. The sale certificate dated 05.12.2024 as Annexure A-2 has been issued in favor of auction purchaser. The applicant has also produced copy of sale certificate as Annexure A-11 which was received by him from the bank on 30.01.2025. Hence, the sale notice was served upon the applicant/borrower and bank has proceeded against the

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applicant for sale of the secured assets as per provisions of the SARFAESI Act and Rules made thereunder.

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It may be noted here that the applicant has raised objection that the suit property was allotted by CIDCO who is original owner of the suit property and no “No Objection Certificate” was obtained by the bank from the CIDCO and CIDCO has issued letter Annexure A-10 dated 27.02.2025 that the respondent bank has not obtained any permission or “No Objection Certificate” regarding mortgage of the suit property. The respondent bank has produced on record copies of mortgage deed Annexure R-3 vide pursis at Exh.11 alongwith “No Objection Certificate” from the Society to mortgage the suit property. The respondent bank has produced certificate of plot allotment issued to the applicant by Jai ShriKrishna Co-Operative Housing Society Limited that he has allotted Plot No.14, out of society land, Plot No.2, Sector-8 behind Kirti Housing Society CIDCO New Aurangabad. The plot allotment certificate is issued on 27.05.1997. The Certificate

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indicates that the CIDCO has allotted the land/plot to the Jai ShriKrishna Co-Operative Housing Society Limited and thereafter, this society divided the same in plots and has allotted plot No.14 to the present applicant as a member of the society. This Society has issued “No Objection Certificate” in favor of the applicant (Exh-R3). It is mentioned in certificate that the society has allotted the applicant Plot No.14 as a member of the society and there is no dues pending towards him and he is allowed to mortgage his plot to the bank. Therefore, in this case, it is a society who was allotted the suit plot by the CIDCO and thereafter, the society after dividing into plots, further allotted different plots to the members of the society out of the total area allotted by the CIDCO. Therefore, in this case it is a society which allotted the plot to the applicant and the society is competent to issue “No Objection Certificate” and no separate NOC is required from the CIDCO. In case this society needs financial facility from the bank, it may be necessary for the society to obtain “No Objection Certificate” from the CIDCO for

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mortgaging the plot allotted to society by the CIDCO. Therefore, the judgment annexed A-12 referred by the applicant is not applicable, in the given facts and circumstances of this case as the plot mortgaged to the bank was not allotted by the CIDCO to the applicant but it was allotted by the society as referred above. Therefore, the valid mortgage deed was executed by the applicant in favor of the respondent bank and SARFAESI proceedings conducted by the respondent bank against the secured assets are not liable to be set aside on any of the grounds as raised in the Securitization Application.

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In the result, I pass the following order.

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Order

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A. The Securitization Application No.405/2024 is hereby dismissed

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with no order as to costs.

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B. The Interim Applications pending if any, stands disposed in terms of the present judgment.

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C. This Judgment be uploaded on the website of the Tribunal.

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D. File to be consigned to record.

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Announced in open court. Date: 20.08.2026.

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(Dr. J.R. Chauhan), PRESIDING OFFICER, DEBTS RECOVERY TRIBUNAL, AURANGABAD

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Ms Niraja Dental Clinic v. Bank of Maharashtra

Case brief

What is this about?

What did the court decide?

Ms Niraja Dental Clinic v. Bank of Maharashtra

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

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