Dismissed

Meenu Gupta v. State Bank of India

DRT24 Mar 2026SA/85/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed an application seeking to set aside a sale notice under the SARFAESI Act. The Tribunal held that the proceedings were devoid of illegality or irregularity, the charge was registered with CERSAI, and the Applicant, as a guarantor, was not entitled to demand recovery from the principal borrower first.

What did the court decide?

Application dismissed; any other pending applications disposed of accordingly.

Meenu Gupta versus State Bank of India — 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.85/2024

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Date of Institution: 11.03.2024 Date of Decision: 24.03.2026

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Smt. Meenu Gupta W/o Sh. Pardeep Kumar, R/o House No.919, Janakpuri, Ward No.57, Street No.6, Millerganj, Ludhiana, Punjab-143001

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--Applicant

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Versus

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Authorised Officer, State Bank of India, Gill Road, Ludhiana, District Ludhiana

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--Respondent Argued by: Sh. Parunjeet Singh, Advocate Applicant Sh. Yogesh Kumar, Advocate for Respondent

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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 11.06.2018 (Annexure A-1), possession notice under Section 13(4) of the Act dated 02.11.2018 (Annexure A-2) and e-action sale notice dated 17.02.2024 (Annexure A-4) or quashing any other proceedings arising under the Act related to the property in dispute.

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(2) It was stated in the application that one Firm namely M/s Shukrana Fabrics availed a credit facility of Rs.1.5 Crores approximately and its two partners namely Sh. Gagandeep Juneja and Sh. Raman Sharma created equitable mortgage of 03 properties out of which one belongs to the applicant and other two belongs to Sh. Ashok Kumar & Sh. Tajinder Singh, who stood as guarantors to the credit facility with a view of helping Sh. Gagandeep Juneja; that the partner of M/s Shukrana Fabrics approached the applicant requesting to mortgage for a residential property, which is a double storey Residential House of merely 100 Sq. Yards situated at Sector 32-A Urban Estate, Chandigarh

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SA/85/2024 MEENU GUPTA VS. STATE BANK OF INDIA

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Road, Ludhiana registered in the name of the applicant; that applicant was assured that keeping in view the terms and conditions of the bank the residential property shall be mortgaged for short period of time and shall be released as soon as Sh. Gagandeep Juneja will mortgage his own house that he is planning to buy; that applicant had agreed to mortgage her property as she was assured that after sometime her property shall be released; that in order to secure the above said credit facility, following properties were mortgaged i.e.,:

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Equitable Mortgage of property 100 Sq. Yards situated at village Kakkowal, Hadbast No.80 locality known as Bajrang Vihar Ludhiana vide wasika No.19067 dated 20.12.2011 standing in the name of Sh. Tajinder Singh

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Equitable Mortgage of plot no.3454 measuring 100 sq. Yards situated at Sector 32-A, Urban Estate, Samrala Road, Ludhiana vide wasika no.8180 dated 17.08.2010 standing in the name of Ms. Meenu Gupta (applicant)

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Equitable Mortgage of House bearing MC No.BXX-1930/1315/5 measuring 150 sq. Yards situated at village Hassan Rora, Mahajan Nagar, St. No.4, Ludhiana vide Wasika no.7729 dated 03.10.2001 and transfer of ownership deed dated 15.02.2016 standing in the name of Sh. Ashok Kumar.

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(3) It was further stated that Sh. Gagandeep Juneja had purchased a property worth Rs.2.5 crores, which is House No.66-B Rishi Nagar, Near Kali Mandir, Haebowal Road, Ludhiana & also changed the line of business to manufacturing of paint; that due to continuous losses as per the information given to the applicant, they could not repay the loan installments; that therefore, respondent had issued notice under Section 13(2) of the Act claiming an amount of Rs.1,56,10,054/- as total outstanding against the credit facilities sanctioned by the bank; that in the said notice Residential Property of the applicant was also mentioned alongwith the property of Sh. Tajinder Singh and Sh. Ashok Kumar; that the account of M/s Shukrana Fabrics was classified as NPA on 10.05.2018 and thereafter, the bank had issued notice under

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SA/85/2024 MEENU GUPTA VS. STATE BANK OF INDIA

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Section 13(2) of the Act dated 11.06.2018; that thereafter, respondent had issued possession notice dated 02.11.2018, which was never served to the applicant; that after knowing the fact of possession notice, the applicant approached to borrower but no proper reply was ever given by him; that the said possession notice was neither served through registered post nor it was published in the leading newspapers as the same was published in only one Newspaper, which is the essential requirement of Rule 8 of the Security Interest (Enforcement) Rules, 2002 (hereinafter referred to as ‘Rules’ for brevity); that thereafter, applicant approached Hon’ble High Court of Punjab and Haryana at Chandigarh by way of filing CWP No. 5336/2021 and the said Writ Petition was disposed of vide order dated 05.01.2024; that thereafter, respondent had issued e-auction sale notice for sale of immovable property vide newspaper publication dated 17.02.2024, whereby auction of the secured asset was fixed for 12.03.2024; that no 30 days auction notice was provided to applicant for the auction sale; that the said sale notice was neither affixed on the conspicuous place of the property nor it was published in two leading newspapers; that there is no valuation conducted prior to putting the property to sale, which is also one of the essential requirement of law; that respondent has not followed the mandatory provisions of Rule 8 of the Rules while putting the property for sale; that as per the information available with the applicant it is relevant to mention that the property of Sh. Raman Sharma (partner of M/s Shukrana Fabrics, borrower) has already sold by the respondent but the not appropriated the sale proceeds and has not deducted the amount while putting the present property to sale as the amount outstanding remains the same; that principal borrower namely Sh. Gagandeep Juneja had already expired but the bank has the right to appropriate the loan amount from the LRs. of deceased Sh. Gagandeep Juneja; that the property of Sh. Ashok Kumar has not been put to sale and only the property of present applicant has put to sale, this shows discrimination on the part of the respondent while putting the property for sale, which is totally

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SA/85/2024 MEENU GUPTA VS. STATE BANK OF INDIA

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wrong and illegal in the eyes of law; that earlier Sh. Amit Gupta filed the Civil Suit No.255 of 30.08.2018 having CS No.3987/2018 against Ms. Meenu Gupta seeking restraint order from the tenancy premises and the said Suit was decided on 14.12.2018 against which an Appeal was also filed before the District Judge i.e., an Appeal bearing No.CMA-11, which was decided on 01.10.2020 whereby, status quo regarding the property was directed to maintain; that the property in question is not registered under the Central Registry as per Section 26-D of the Act, which is mandatory for the bank to register its charge under the CERSAI; that respondent had initiated SARFAESI proceedings against applicant in violation of the provisions of law. Therefore, it was prayed that the present SA may kindly be allowed.

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(4) Reply filed by respondent.

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(5) It was stated in the reply that applicant has not approached this Tribunal with clean hands; that the facts of the case are not in dispute; that the financial facilities were granted to the borrower M/s Shukrana Fabrics, a partnership Firm, in which the present applicant was one of the guarantors and mortgagors; that the property owned by the applicant is admittedly mortgaged with the bank; that it is also not in dispute that the loan account was classified as NPA on 10.05.2018 and notice under Section 13(2) of the Act was issued and served on 11.06.2018; that the said demand notice was duly served upon all the persons including Firm, its partners as well as guarantors including the present applicant; that copy of the postal receipts showing the service of the demand notice is annexed as Annexure R-1; that no objections were raised by the applicant to the said demand notice; that however, the objections were raised by one Sh. Raman Sharma S/o Sh. Mohan Lal, which were duly decided by the Authorised Officer in accordance with law; that similarly, the objections were raised by the Firm M/s Shukrana Fabrics through its partner Sh. Gagandeep Juneja under Section 13(3-A) of the Act, which were also decided by the Authorised Officer; that thereafter, notice under Section 13(4) of the Act was served in accordance with law i.e., by all three modes as

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5 SA/85/2024 MEENU GUPTA VS. STATE BANK OF INDIA

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provided under the Act; that copy of the postal receipts serving the possession notice by way of registered post is annexed as Annexure R-2, copy of the photographs showing affixation of possession notice at the spot is annexed as Annexure R-3 and copy of the newspaper publication is annexed as Annexure R-4; that thereafter an application under Section 14 of the Act was filed by respondent before the Learned District Magistrate, which was allowed by the District Magistrate, Ludhiana vide order dated 07.01.2019 (Annexure R-5); that the fact that the applicant have the knowledge of the proceedings, which is apparent from the Civil Suit filed by Sh. Amit Gupta seeking tenancy rights against the present applicant; that the said suit was filed only to protect the possession although the Civil Court does not have any jurisdiction to deal with the tenancy rights qua the property which was mortgaged with the bank and the only remedy available to the tenants is to file application under Section 17 of the Act; that the applicant never assailed the proceedings up to the stage of notice under Section 13(4) of the Act and as such, the present application is barred by limitation; that Writ Petition, which was filed by the borrower was only filed in the year 2021; that the limitation for filing an application under Section 17 of the Act is 45 days from the cause of action; that the order under Section 14 of the Act could be challenged by the applicant within 45 days from the date of order but the said order was never challenged and as such the proceedings to that extent attained finality and cannot be reopened; that even otherwise, the applicant does not deserve any relief even in equity keeping in view the fact that the Partnership Firm by the name of M/s. Shukrana Fabrics had three more accounts, which can be termed as group accounts by the name of M/s SSG Fabrics, M/s lnaya Fabrics and M/s Dutta Knit Pvt. Ltd.; that in all the four accounts fraudulent entries were repeated for which an application was filed before the CBI by the respondent (Annexure R-6); that since the applicant is already facing prosecution in the Criminal Case, therefore she do not deserve any relief; that it is also not in dispute that another mortgaged property in the present case i.e., Commercial cum Residential Building

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6 SA/85/2024 MEENU GUPTA VS. STATE BANK OF INDIA

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measuring 100 sq. yards, which was owned by Sh. Tajinder Singh and which was equitably mortgaged with the bank by deposit of the original title deed bearing No.19067 dated 20.12.2011 was subsequently sold by way of open auction in favour of the successful Auction Purchaser namely Ms. Palak Behel; that copy of the Sale Certificate with respect to one of the secured assets, which has already been sold is annexed as Annexure R-7; that the present application is only confine to challenge the sale notice dated 17.02.2024, whereby the auction was scheduled for 12.03.2024; that no sale has taken place in pursuance to the sale notice, which is under challenge in the present SA, therefore the present SA has been rendered infructuous and it was prayed that the present SA may kindly be dismissed being devoid of any merits.

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(6) No replication filed by applicant to the reply filed by respondent.

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(7) I have heard arguments advanced by Sh. Parunjeet Singh, Advocate for Applicant and Sh. Yogesh Kumar, Advocate for Respondent and gone through the record carefully.

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(8) Sh. Parunjeet Singh, Advocate argued that applicant has challenged the auction notice dated 17.02.2024, whereby auction of the secured asset is fixed for 12.03.2024. It was further argued that this SA was filed on 11.03.2024 with the Registry well within the limitation period.

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(9) Per contra , Yogesh Kumar, Advocate argued that this SA was filed beyond the permissible time limit of 45 days. Therefore, the said SA is barred by Limitation and liable to be dismissed.

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(10) Admittedly, this SA was filed challenging the sale notice dated 17.02.2024. Admittedly, this SA was filed on 11.03.2024 within 45 days from the date of sale notice. Therefore, there is no force in the argument of Sh. Yogesh Kumar, Advocate that this SA is barred by Limitation.

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(11) It was not argued by learned counsel for applicant that notice under Section 13(2) of the Act dated 11.06.2018 was not served upon applicant. Therefore, there is no requirement for adjudication

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7 SA/85/2024 MEENU GUPTA VS. STATE BANK OF INDIA

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regarding service of notice under Section 13(2) of the Act.

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(12) Sh. Parunjeet Singh, Advocate further argued that possession notice under Section 13(4) of the Act dated 02.11.2018 was not served upon applicant through registered post. It was further argued that the said notice was not published in the two leading newspapers as per Rules.

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(13) Per contra , Sh. Yogesh Kumar, Advocate argued that possession notice under Section 13(4) of the Act was duly served upon applicant as per Rules i.e., by all three modes. It was further argued that copy or receipts of registered post are annexed as Annexure R-2, copy of affixation of the said notice is annexed as Annexure R-3 and copy of newspapers publication in two leading newspapers is also annexed as Annexure R- 4.

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(14) Copy of receipts of registered post of the said possession notice is annexed as Annexure R-2, which shows that the said notice was issued and sent on the same addresses as was mentioned in the notice under Section 13(2) of the Act. It was not denied that notice under Section 13(2) of the Act was not served upon applicant then it may be safely presumed that the notice under Section 13(4) of the Act was also received by applicant. It further reveals from record that the said notice was also affixed on the conspicuous part of the secured asset (Annexure R-3) and the same was also duly published in the two leading newspapers on 03.11.2018 (Annexure R-4). This shows that the possession notice was served on the persons concerned as per Rules.

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(15) Sh. Parunjeet Singh, Advocate further argued that sale notice dated 17.02.2024 was not served upon applicant providing 30 days time as per Rules.

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(16) Per contra , Sh. Yogesh Kumar, Advocate argued that sale notice dated 17.02.2024 challenged by the applicant in the present SA has been rendered infructuous for the reason that sale scheduled for 12.03.2024 in terms of the said notice was unsuccessful.

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8 SA/85/2024 MEENU GUPTA VS. STATE BANK OF INDIA

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(17) In light of above, there is no need to prove the service of above said sale notice challenged by the applicant in the present SA. Neither it required for any adjudication.

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(18) Sh. Parunjeet Singh, Advocate further argued that respondent had never created its charge against the property in question with CERSAI as per Section 26-D of the Act.

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(19) Per contra , Sh. Yogesh Kumar, Advocate argued that respondent had duly created its charge against the property in question with CERSAI and copies of CERSAI Certificate is annexed as Annexure R11 to the reply.

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(20) In the considered opinion of this Tribunal, as per CERSAI Certificate, the secured asset is duly registered with Central Registry as per Section 26-D of the Act.

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(21) Sh. Parunjeet Singh, Advocate further argued that applicant is guarantor and mortgagor and not actual borrower, therefore respondent cannot recover the loan from applicant without attempting to recover loan from actual borrower and respondent was supposed to proceed against the principal borrower first.

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(22) Per contra , Sh. Yogesh Kumar, Advocate argued that the liability of guarantor is co-extensive with that of the principal borrower and respondent may proceed to recover the amount against anyone on its choice.

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(23) Since the liability of borrower and guarantor is co-extensive therefore, applicant is not free to take a plea that respondent should proceed against the principal borrower first to recover the loan. In fact, respondent can very well proceed for recovery of loan against the borrower or guarantor or simultaneously as per its choice.

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(24) Sh. Parunjeet Singh, Advocate further argued that there is a restraint order regarding dispossession was passed by the Civil Court in Civil Suit No.255 of 30.08.2018 having CS No.3987/2018 preferred by Sh. Amit Gupta against the applicant. Therefore, respondent may be restrained to proceed under the Act.

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9 SA/85/2024 MEENU GUPTA VS. STATE BANK OF INDIA

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(25) Per contra , Sh. Yogesh Kumar, Advocate submitted that Civil Court has no jurisdiction to pass restrained order on the property mortgaged with the bank.

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(26) In the considered opinion of this Tribunal, if a property is mortgaged with Bank/FI and SARFAESI proceedings have been initiated against the mortgaged property then in light of Section 34 of the Act, Civil Court has no jurisdiction to entertain any Suit or proceedings in respect of any matter, which a Debts Recovery Tribunal is empowered by the Act. Except it, admittedly, respondent is not party in the Civil Suit, therefore the said restrained order is not binding upon the respondent.

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(27) No other point was argued/pressed. (28) After the consideration of all facts, circumstances, hearing of arguments as well as after perusal of record, no illegality or irregularity was found in the proceedings initiated by respondent under the Act and no case is made out by applicant in her favour. There is no merits in the SA.

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(29) Therefore, SA is dismissed. Any other IAs pending stands disposed of accordingly. Record be consigned to record room after due compliance. Date: 24.03.2026 Pronounced by me in the open Tribunal.

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

Meenu Gupta v. State Bank of India

Case brief

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Meenu Gupta v. State Bank of India

Case brief

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