Dismissed

Ms a B Jalna v. Sunderlal Sawaji Urban Co-Op Bank Ltd.

DRT8 May 2026SA/531/2025

Case brief

AI extract

What is this about?

In this Securitisation Application, the applicants challenged the bank's decision to cancel a tender wherein they were the highest bidder. The Tribunal examined whether the bank acted within its rights to reject a single bid deemed inadequate. The application was dismissed, affirming that the bank cancelled the sale to recover a better market value.

What did the court decide?

The Securitisation Application dismissed. Respondent bank directed to refund the Earnest Money Deposit immediately.

Ms a B Jalna versus Sunderlal Sawaji Urban Co-Op Bank Ltd. — Company and Corporate | DRT (2026)

¶1

Presented on : 04.08.2025 Registered on : 11.08.2025 Decided on : 08.05.2026 Duration : Y M D 00-09-05

¶2

IN THE DEBTS RECOVERY TRIBUNAL AT AURANGABAD

¶3

SECURITISATION APPLICATION NO.531 OF 2025

¶4

M/s A.B. JALNA

¶5

Through its Partner Someshwar Dineshji Aasawa, Age : 40 years, Profession : CA,, R/o C-M-2-153, N-2, CIDCO, Thakare Nagar,

¶6

Chhatrapati Sambhajinagar – 431 003

¶7

Anuradha Someshwar Aasawa, Age : 40 years, Profession : CA, R/o C-M-2-153, N-2, CIDCO, Thakare Nagar, Chhatrapati Sambhajinagar – 431 003 .. Applicants

¶8

Versus

¶9

Sunderlal Sawji Urban Co op. Bank Ltd., Jintur, through its Authorized Officer, Head Office, APMC Market Yard,

¶10

Jintur – 431 509, Dist. Parbhani

¶11

[N. Jahagirdar] [S.A.No.531/2025] Page 1 of 19

¶12

M/s Sanjay Cotton Seeds Industries, Through its Partner Girish Manoharrao Singare, R/o Situated at Plot No.A/9/5, New MIDC, Aurangabad Road, MIDC, Jalna

¶13

Manohar Jagganath Singare, Age : Major, Occupation Business, R/o Situated at CTS No.9674/Part, House No.3-18-255/Part, Railway Station Road, Jalna

¶14

Sanjay Manoharrao Singare, Age : Major, Occupation Business, R/o Situated at CTS No.9674/Part, House No.3-18-255/Part,

¶15

Railway station Road, Jalna …. Respondents

¶16

APPEARANCE :

¶17

Applicants : Mr. Vivek B. Kulkarni, Advocate

¶18

Respondent No.1 : Mr. G.L. Deshpande, Advocate Respondent Nos.2 & 3 : Mr. Satyajit R. Vakil, Advocate Respondent No. 4 : None present

¶19

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

¶20

JUDGMENT

¶21

(Pronounced on : 08.05.2026)

¶22

This Securitisation Application (S.A.) under Section 17 (1) of

¶23

the Securitisation and Reconstruction of Financial Assets and

¶24

[N. Jahagirdar] [S.A.No.531/2025] Page 2 of 19

¶25

Enforcement of Security Interest Act, 2002 (hereinafter referred to as “SARFAESI Act”) has been filed by the applicants against the

¶26

respondents for the following reliefs:

¶27

(i) The Tribunal may be pleased to set aside the letters dated 11.07.2025, 14.07.2025 and 24.07.2025, issued by the respondent No.1 Bank for cancellation of sale/tender;

¶28

(ii) The Tribunal may be pleased to set aside the letters dated 11.07.2025, 14.07.2025 and 24.07.2025, issued by the respondent bank for cancellation of sale and refund of the amount and declare that sale is as per provisions of law and action initiated by respondent bank for cancellation of sale as being bad in law and non est;

¶29

(iii) The Tribunal may be pleased to direct the respondent No.1 bank to accept the remaining 75% amount as per sale notice and declare the applicant as successful bidder and direct the respondent No.1 bank to issue sale certificate in the name of applicants.

¶30

[N. Jahagirdar] [S.A.No.531/2025] Page 3 of 19

¶31

(iv) Direct the respondent bank to pay costs, including the compensatory costs to the extent of Rs.1 lakh, to be awarded to the applicants;

¶32

(v) Direct the respondent Bank to pay costs, including the compensatory costs and damages to the extent of Rs.1 lakh to be awarded to applicants for publishing false advertisement in the newspaper and inviting tenders from public at large;

¶33

(vi) Any other just and equitable orders, in favour of the applicants in the interest of justice may kindly be passed to meet ends of justice.”

¶34

The facts of this Securitisation Application, in brief, are that the applicant No.1 i.e. M/s A.B. Jalna is a partnership firm and Mr. Someshwar Dineshji Aasawa and Mrs. Anuradha Someshwar Aasawa are the partners of applicant No.1. Respondent No.1 is a bank engaged in banking business. Respondent No.2 is the borrower and respondent Nos.3 and 4 are the property owners/holders being mortgagors of the CTS No.9674/Part, Sheet

¶35

[N. Jahagirdar] [S.A.No.531/2025] Page 4 of 19

¶36

No.93, M.C. House No.3-18-255/Part, admeasuring 1579.46 sq.mtrs., situated at Railway Station Road, Jalna, Taluka and District Jalna (hereinafter referred to as “suit property”).

¶37

It is further stated that respondent No.1 bank has published Public (Tender) Notice dated 20.06.2025 in respect of the suit property under the SARFAESI Act, wherein reserve price was shown as Rs.6,37,42,500/- (Rupees Six Crore, Thirty Seven Lakhs, Forty two Thousand and five hundred only). In response thereto, the applicants submitted their tender by mentioning Rs.6,38,00,000/- (Rupees Six Crore, Thirty Eight Lakhs only) as bid amount, whereupon respondent bank has issued letter dated 08.07.2025 and informed to the present applicants that their tender in respect of the suit property is of Rs.6,38,00,000/-, which is highest tender amount and the same has been received and forwarded to the head office at Jintur for consideration. The applicants have deposited 10% EMD amount of Rs.63,74,250/- on 08.07.2025 and remaining 15% amount of Rs.95,75,750/- on

¶38

[N. Jahagirdar] [S.A.No.531/2025] Page 5 of 19

¶39

09.07.2025, aggregating to Rs.1,59,50,000/- with respondent No.1 bank being a highest bidder. The applicants have received letter dated 11.07.2025 and surprised to know the contents of the letter, which read as follows:

¶40

“…. You had participated in the auction sale. Your bid through tender was for Rs.6,38,00,000/-. Since the

¶41

reasonable price of the property was not met, your tender has been rejected. ”

¶42

It is further stated that respondent No.1 bank wanted to sell the suit property, hence it has published Public (Tender) Notice dated 20.06.2025 and invited the tenders. The reserve price was Rs.6,37,42,500/-, which itself shows that the property cannot be sold below the reserve price. Taking into consideration aforesaid fact, the applicants have submitted their tender by mentioning the amount of Rs.6,38,00,000/-, which itself is more than the reserve price. It is stated that the respondent No.1 is a Financial Institution and being Authorised Officer and responsible person, respondent

¶43

[N. Jahagirdar] [S.A.No.531/2025] Page 6 of 19

¶44

cannot act unilaterally as per their wish. It is submitted that the applicants had meeting with the bank officials and it transpired that earlier respondent bank has taken steps for sale of the suit property by e-auction under SARFAESI Act but auction could not be materialized for want of bidders.

¶45

It is further stated that the applicants have participated in bidding process through Public (Tender) Notice and respondent No.1 bank has communicated the applicants that they are the highest bidder. Earlier respondent bank’s e-auctions had failed for want of bidders, which shows that this is not the first attempt of the respondent bank to sell the suit property. Respondent No.1 bank has given the reason for cancellation of tender, which is not justifiable. Further, respondent No.1 bank and borrowers have, in collusion with each other, cancelled the tender. It is stated that if the respondent No.1 bank was not satisfied with the price, then question arises as to why it has published sale notice and invited the tenders from public by mentioning the reserve price. The

¶46

[N. Jahagirdar] [S.A.No.531/2025] Page 7 of 19

¶47

applicants have quoted the bid amount, which is more than the reserve price. It is further stated that the impugned action of respondent bank is not in accordance with the provisions of the SARFAESI Act and principles of natural justice. Being highest tender, the respondent bank has cancelled the tender process by informing that tender price quoted by the applicants is not reasonable though it was more than the reserve price. Being aggrieved by the action of respondent bank, the applicants have preferred the present application on the grounds raised in the memo of S.A., which are almost identical to the averments/submissions made in the memo of application under head “FACTS OF THE CASE”, which are narrated hereinbefore and thus, the applicants have prayed for grant of the reliefs quoted in para No.1 of this judgment.

¶48

On behalf of respondent No.1 bank, say has been filed vide Diary No.6789/2025 and contested this S.A., opposing the

¶49

admission of the Securitisation Application, on the grounds that the

¶50

[N. Jahagirdar] [S.A.No.531/2025] Page 8 of 19

¶51

present Securitisation Application (S.A.) is not maintainable as the provisional acceptance of bid amount does not create any right in the party. Preliminary objection has been taken by respondent No.1 to the effect that this S.A. is misconceived, frivolous, vexatious and is filed with an ulterior motive to compel the bank to dispose of secured assets at a price far below their reasonable market value, which is contrary to the object of the SARFAESI Act. It is stated that the applicants have no vested or enforceable right in the auctioned property, merely on the basis of having been declared `highest bidder’ in the tender process, as no sale has been confirmed in their favour in term of Rule 9(2) of the Security Interest (Enforcement) Rules, 2002 (for short, “Rules of 2002”). The cancellation of the tender was carried out in accordance with law and the terms of the tender document, to protect public interest and maximize recovery of public funds. The question of limitation is irrelevant as there is no concluded sale in favour of the applicants. The right to seek confirmation never accrued, hence no

¶52

[N. Jahagirdar] [S.A.No.531/2025] Page 9 of 19

¶53

enforceable cause of action arises. It is admitted by the respondent bank that the applicants submitted tender for an amount of Rs.6,38,00,000/- and deposited EMD of Rs.63,74,250/- and additional amount of Rs.95,75,750/-. However, it is denied that this created any vested right to have the sale confirmed in their favour. It is stated that the reserve price is only the minimum threshold and it does not bind the bank to confirm sale merely because the bid marginally exceeds the reserve price. The bank is bound to reject offer that do not reflect the fair and reasonable market value in order to safeguard public funds. Further, the allegations of collusion between the bank and the borrower are false, baseless and unsupported by the evidence. The cancellation was done transparently and in good faith, with adequate reasons communicated in the letters dated 11.07.2025, 14.07.2025 and 24.07.2025.

¶54

As regards legal position, it is submitted by respondent No.1 bank that as per Rule 9(2) of the Rules of 2002, the sale shall be

¶55

[N. Jahagirdar] [S.A.No.531/2025] Page 10 of 19

¶56

confirmed only in favour of the highest bidder if the price offered is acceptable to the secured creditor. The Authorised Officer is empowered to reject a bid not meeting reasonable value. In support of this submission, the respondent No.1 has relied on the decision of the Hon’ble Supreme Court in the matter of Valji Khimji & Co. Vs. Official Liquidator; (2008) 9 SCC 299 , wherein it is held that even the highest bidder has no indefeasible right to have the sale confirmed in his favour until such confirmation is made by the competent authority. Further it is stated by the bank that the tender terms themselves make the auction subject to confirmation by the bank and allow the bank to cancel without assigning any reason if it deems fit in the interest of recovery. It is further submitted that the reasons for cancellation, which are legal, valid and in conformity with SARFAESI provision, were duly communicated to the applicants. It is stated that there is no legal compulsion to accept a bid merely above the reserve price. Reserve price is only a floor and not the final acceptable value. The applicants are attempting to

¶57

[N. Jahagirdar] [S.A.No.531/2025] Page 11 of 19

¶58

compel a sale at an undervalue and such action would amount to breach of fiduciary duty owed by the bank towards its depositors and stakeholders.

¶59

It is further submitted by the respondent bank that the subject matter of present Securitisation Application i.e. the property involved/mortgaged by respondent nos.2 to 4 with the answering respondent bank, is already pending before this Tribunal in S.A. No.394/2024. It is stated that when on the date of auction i.e. 08.07.2025, only one bid was received i.e. by the applicants herein, as per law three bids were not received. The board/committee of the answering bank refused the bid on the count that the same is not as per law and is below the market value as this answering respondent owes the duty towards the public money. It is stated that if the answering respondent would have accepted the bid, the borrower would have approached this Tribunal stating that the property is sold at very meager price. The respondent bank has given the reasons for rejection of bid of the applicants to the effect

¶60

[N. Jahagirdar] [S.A.No.531/2025] Page 12 of 19

¶61

that there was absence of adequate participation and competition in the auction, the bid price was found by the secured creditor itself to be below reasonable market value and the earnest money deposit (EMD) was ordered to be refunded. While relying on the judgment of the Hon’ble Bombay High Court in Mathew Varghese Vs. M. Amritha Kumar; 2014 (5) SCC 610 , wherein, while interpreting SARFAESI sale provisions, it has been emphasized that public auction must be transparent, competitive and aimed at fetching maximum price. Hence, according to the answering respondent, the secured creditor, in the present case, is within its rights to reject a single bid situation. Thus, denying all other allegations made in the memo of S.A., the respondent No.1 bank has prayed that this Securitisation Application may be dismissed with heavy costs by upholding the bank’s decision to cancel the tender.

¶62

The applicants have produced on record following documents as per lists of documents (Exhibit-4).

¶63

[N. Jahagirdar] [S.A.No.531/2025] Page 13 of 19

¶64

Sr. No.	Description of document	Annexure
1	Copy of Public (Tender) Notice	A-1 (colly)
2	Letter dated 08.07.2025 issued by the respondent bank addressing to the present applicants	A-2
3	Letter dated 11.07.2025, 14.07.2025 and letter dated 24.07.2025 issued by the respondent bank addressing to the present applicants.	A-3 (colly)

¶65

The respondent No.1 bank has produced following documents

¶66

on record as per list of documents filed along with memo of its say.

¶67

Sr. No.	Description of document	Exhibit
1	True copy of the noting dated 09.07.2025 by the answering respondent to the Chief Executive Officer	RA-1
2	True copy of the communication dated 11.07.2025 by the answering respondent along with the reminder dated 14.07.2025 and 24.07.2025 and screen shot of emails sent by the recovery department of the bank to the applicant	RA-2 (colly)

¶68

[N. Jahagirdar] [S.A.No.531/2025] Page 14 of 19

¶69

I have heard the learned counsel for the applicants, learned counsel for respondent No.1 bank, learned counsel for respondent Nos.2 and 3 and gone through the material on record. My findings along with reasons are as under.

¶70

The respondent No.1 bank issued public tender notice (Exhibit-A1) for sale of immovable asset mortgaged with the bank, having reserve price of Rs.6,37,42,500/-. The applicants submitted tender of Rs.6,38,00,000/- and deposited EMD of Rs.63,74,250/-. As there was only one tender for sale of the immovable asset, it was opened on 08.07.2025 and the respondent No.1 bank, vide letter dated 08.07.2025 (Exibit-A2), conveyed to the applicants that the bank has received the highest bid of the applicants for Rs.6,38,00,000/- through tender and this tender would be put up before the Hon’ble Head Office of the bank at Jintur for consideration and he would be intimated regarding approval of the tender.

¶71

[N. Jahagirdar] [S.A.No.531/2025] Page 15 of 19

¶72

Accordingly, the tender was put up before higher authorities for approval vide noting dated 09.07.2025 (Exh-RA-1), but the same was rejected on the ground that the bid amount was not considered adequate and in the said auction process, one more bidder had offered a bid amount of Rs.6,68,00,000/-. However, since this bid amount was offered after the auction proceedings dated 20.05.2025 and the highest bid amount in the auction process was considered inadequate, the said bid cannot be accepted. On receiving this order of the higher authority, the Authorised Officer of respondent bank conveyed to the applicants vide letter dated 11.07.2025 (Exh-RA-2 colly), stating therein that since the fair market value was not reached, their bid has been rejected. It was also informed that EMD amount of Rs.1,59,50,000/- would be returned to them through RTGS and the applicants were requested to provide bank details of their account on the e-mail ID cited in this letter. The respondent No.1 bank again sent a reminder dated 14.07.2025 (Exh.RA-2 colly) to this effect and lastly on 24.07.2025

¶73

[N. Jahagirdar] [S.A.No.531/2025] Page 16 of 19

¶74

(Exh.RA-2 colly), but the applicants did not furnish details of their account and filed present Securitisation Application for various reliefs as referred in opening para of this judgment.

¶75

The applicants submitted their tender for the purchase of secured asset mortgaged with the respondent No.1 bank as per public tender notice (Exhibit-A1). The terms and conditions of the auction sale have been mentioned in this sale notice and the condition No.13 thereof reflects that if the maximum bidding amount is not satisfactory and not with expectation of Authorised Officer, he has right to cancel/postpone the said auction sale. If the rejection of the auction sale is appreciated in the light of the noting of the respondent bank (Exhibit-RA-1) dated 09.07.2025, the respondent No.1 bank has rightly cancelled the auction sale as the bid was for inadequate consideration as it would have fetched more money, had it been a competitive bid as it is a case of single bid. Further, the respondent bank has proceeded as per terms and conditions of the sale notice and after following proper procedure, it

¶76

[N. Jahagirdar] [S.A.No.531/2025] Page 17 of 19

¶77

cancelled the present sale. The Authorised Officer moved for approval of the higher authority/Chief Executive Officer vide letter/noting dated 09.07.2025 (Exh.RA-1) and before that he sent a letter to the present applicants on 08.07.2025 (Exhibit-A2), informing them that the matter shall be moved for approval of the higher authority and in case of approval or rejection, the same would be conveyed to them in due course of time. Therefore, the respondent bank has not concealed anything in this regard, but cancelled the bid in order to fetch more money.

¶78

Even otherwise, the highest bidder has no indefeasible right to

¶79

have the sale confirmed in his favour until such confirmation is made by the competent authority, as held by the Hon’ble Supreme Court of India in the matter of Valji Khimji & Co. Vs. Official Liquidator; (2008)9 SCC 299 .

¶80

For the foregoing reasons and my findings as above, the Securitisation Application is liable to be dismissed.

¶81

In the result, I pass the following order:

¶82

[N. Jahagirdar] [S.A.No.531/2025] Page 18 of 19

¶83

ORDER

¶84

(A) The Securitisation Application No.531 of 2025 is hereby dismissed with no order as to costs.

¶85

(B) The respondent No.1 bank is directed to refund the EMD amount of Rs.1,59,50,000/- to the applicants immediately.

¶86

¶87

(D) Copy of this judgment and order be uploaded on the website.

¶88

(E) File be consigned to the Record Room.

¶89

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

¶90

Aurangabad

¶91

Date : 08.05.2026

¶92

[N. Jahagirdar] [S.A.No.531/2025] Page 19 of 19

Ms a B Jalna v. Sunderlal Sawaji Urban Co-Op Bank Ltd.

Case brief

What is this about?

What did the court decide?

Ms a B Jalna v. Sunderlal Sawaji Urban Co-Op Bank Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Parties & counsel

Coram

Case details

Similar cases

Union Bank of India versus Mr. Rameshwar Baburao Gaikwad

Canara Bank versus Sudhir Bhaurao Ghuge

Union Bank of India versus Onkar Ramdas Rathod (Deceased)

Canara Bank versus M/s. Cik Parametrics Pvt. Ltd.

Maharastra Gramin Bank versus Shri. Jalindar Damodhar Bhingardeo

Punjab National Bank versus M/S Shrinath Mauli Krupa Stone Crusher