VIJAY KUMAR BHARTI vs BANK OF INDIA on 31 July 2020

**J U D G M E N T**

**(Date of Decision: 31.07.2020)**

1. 1. The case was reserved vide order dated 14.07.2020 after hearing the arguments of Ld. Counsel for the Applicants and Ld. Counsel for the Respondent Bank in S.A. No.192 of 2020 as well as in connected M.A. No.39 of 2020. Hence, by this order common both S.A. No.192 of 2020 as well as connected M.A. No.39 of 2020 will be disposed of.

2. 2. The Applicants have filed this Securitization Application on 10.06.2020 under section 17(1) of Securitization and Reconstruction of Financial Assets & Enforcement of Security

DEBTS RECOVERY TRIBUNAL, ALLAHABAD

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Interest Act, 2002 (hereinafter referred as S.A.R.F.A.E.S.I. Act, 2002) challenging the entire action of Respondent Bank initiated against the Secured Asset in question which include Demand Notice dated 13.10.2016, Possession Notice dated 24.01.2017, Ex-parte order dated 26.02.2019 passed by Ld. A.D.M. (F&R) Varanasi under section 14 of the SARFAESI Act, 2002, E-auction Sale Notice dated 24.05.2020 as well as auction dated 10.06.2020 and subsequent proceedings therefore for recovery of **Rs.28,86,000/-** along with interest together with expenses/charges etc.

1. 3. The Applicants have challenged the entire action of Respondent Bank inter-alia on the ground that the Respondent Bank sanctioned Credit facilities of Rs.30,00,000/- to the Applicants against the mortgage of immovable property in question and the Applicants stood as guarantor/mortgager by depositing the original title deed of the immovable property in question being *"Landed Property situated at Arazi no. 226 Khata No. 17 situated at Mauza- Bhadurpur Pargana- Katehar, Tehsil- Varanasi, District- Varanasi having area 0.152 Hectare standing in the name of Applicant No.1"*. However, the Applicant No.1 failed to maintain the loan account. Hence, loan account was classified as NPA on 30.09.2016 without following the guidelines of RBI as well as without giving any opportunity to the Applicant No.1 for regularization and Respondent Bank issued a Demand Notice dated 13.10.2016, under section 13(2) of the S.A.R.F.A.E.S.I. Act, 2002 wherein demanded Rs.28,86,333.34ps.

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1. 4. Respondent Bank proceeded against the Secured Asset under the S.A.R.F.A.E.S.I. Act, 2002 without serving Demand Notice dated 13.10.2016 u/s 13(2) of the S.A.R.F.A.E.S.I. Act, 2002 upon the Applicant No.1. Respondent Bank also failed to serve alleged impugned Possession Notice Dt. 24.01.2017 u/s 13(4) of the S.A.R.F.A.E.S.I. Act, 2002 upon the Applicants and only affixed on the mortgage property in terms of Rule 8(1) of Security Interest (Enforcement) Rules, 2002. However, Respondent Bank published the Possession Notice dated 24.01.2017 in daily Hindi newspaper on 26.01.2017 in order to comply the provisions of Rule 8(2) of the Security Interest (Enforcement) Rules, 2002.

2. 5. That feeling aggrieved from the aforesaid arbitrary action of the Respondent Bank, the Applicant No.1 & 2 challenged the Demand Notice dated 13.10.2016; Possession Notice dated 24.01.2017; Publication of Possession Notice dated 26.01.2017; Ex-parte order dated 26.02.2019 passed by Ld. ADM (F&R), Varanasi under section 14 of the S.A.R.F.A.E.S.I. Act, 2002 & publication of e-auction notice dated 27.06.2019 by filing a Securitization Application No. 428 of 2019.

3. 6. On 05.07.2019 this Tribunal passed a direction that Applicants will deposit Rs.15.00 Lakh on or before 12.07.2019 along-with proposal for repayment of remaining amount in the bank. Thereafter, the Applicants deposited Rs.15.00 Lakh on 12.07.2019 with a proposal in cash which was credited in the loan account on 16.08.2019 just after 1 month 5 days in arbitrary manner. However, Respondent Bank decided the proposal in arbitrary manner and demanded

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outstanding dues of other accounts which is not part & parcel of proceedings and order of this Tribunal dated 05.07.2019.

1. 7. However, on 13.02.2020 counsel for the Applicants was busy in Hon'ble Allahabad High Court and this Tribunal dismissed the S.A. No. 428 of 2019 in default for non-appearance as well as for non-compliance of order dated 05.07.2019 on 13.02.2020 only on the false statement given by the counsel for the Respondent Bank, while order dated 05.07.2019 passed by Ld. this Tribunal has already been comply by the Applicants in spirit of order. But restoration application for restoring the case could not be filed due to Lockdown. The knowledge of the order dated 13.02.2020 passed in S.A. no. 428 of 2019 did not come to the Applicants due to not providing the copy of the order by the official of the Ld. DRT either through counsel or through registered post and order dated 13.02.2020 came to knowledge of applicants when they contacted to the official of the bank only after publishing the e-auction notice dated 24.06.2020. After coming the knowledge of order applicant filed a restoration application M.A. No. 39 of 2020 along-with application for condonation for delay before this Ld. Tribunal, which is still pending for adjudication.

2. 8. It is also pleaded that without issuing/servicing the 15 days Sale Notice as well as without taking valuation report from valuer in order to comply the provision of Rule 8 (6) & 8(5) of the of the Security Interest (Enforcement) Rules, 2002, the of authorized officer of the bank published the E-auction Notice Dated 24.05.2020 in Daily Hindi News Paper "DAINIK JAGRAN"

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under proviso to Rule 8(6) of the of the Security Interest (Enforcement) Rules, 2002 by fixing the date of auction 10.06.2020. Respondent Bank also failed to affix every Sale Notice upon the conspicuous part of property in compliance to Rule 8(7) of the Security Interest (Enforcement) Rules, 2002. Further, 15 days Sale Notice dated 24.05.2020 (due to second sale) was not ever served to the Applicants under proviso to Rule 9(1) of the Security Interest (Enforcement) Rules, 2002. On perusal of returning envelope attached by the Respondent Bank along-with tracking report with its reply it noted that notice was sent on the address Village Bahadurpur instead of Mohalla Bahadurpur. Hence, Sale Notice could not be served to the Applicants upon address given in the earlier S.A.428/2019.

1. 9. It is further pleaded that reserve price of the property in question was fixed Rs.89.26 Lakh which is even below the distress sale value Rs.89.82 Lakh as per Valuation Report dated 20.03.2020 and sold the property in Rs.89.76 Lakh which is also below the distress value while realizable value of the property is Rs. 102.00 Lakh, fair market value of the property is Rs. 113.00 Lakh and book value of the property is Rs. 155.40 Lakh. Hence, reserve price of the property was fixed by the Authorized Officer of the bank under conspiracy with auction purchaser. It is further submitted that valuation report was prepared by the valuer on the table without visiting the property in question and failed to annexed photographs of the property with applicant in their valuation report as such respondent bank failed to comply the provisions of Rules related to valuation as well as fixing the reserve price.

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1. 10. It is further pleaded that Possession Notice dated 24.01.2017; publication of Possession Notice dated 26.01.2017; Ex-parte order dated 26.02.2019 passed by Ld. ADM (F & R) Varanasi under section 14 of the S.A.R.F.A.E.S.I. Act, 2002 & publication of e-auction notice dated 27.06.2019 could not be served to the Applicant no. 1 because applicant no. 1/ mortgager was in jail since 04.11.2016 and released from jail only on 15.07.2019. This fact was informed to Respondent Bank vide letter dated 19.06.2019 and letter dated 14.10.2019 that the Applicant No.1 is in jail since 03.11.2016 as well as current address for the services of notices and letters.

2. 11. Hence, Respondent Bank proceeded under the S.A.R.F.A.E.S.I. Act, 2002 against the Applicants without compliance of provision of section 13(2), 13(3), 13(3-A) & 13(4) of the S.A.R.F.A.E.S.I. Act, 2002 as well as without compliance the mandatory Rule 3(1), 3(4), 8(5), 8(6), 8(7), 9(1), 9(2), 9(3) & 9(4) of the Security Interest (Enforcement) Rules, 2002. The property of the Applicant No.1 was auctioned under conspiracy of the auction purchaser in Rs.89.76 Lakh in lockdown period without having any jurisdiction in throw away price. However, in earlier auction the reserve price of the property was fixed 99.18 Lakh.

3. 12. After issuance of notice in the S.A. Respondent Bank appeared and initially filed short reply in the shape of preliminary objection to which the Application filed Rejoinder. Thereafter, Respondent Bank filed detailed Reply to the S.A. along-with

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relevant documents to which the Applicants also filed Rejoinder. Respondent Bank also filed supplementary objection to rejoinder of the Applicants to which the Applicants also filed Reply/objection.

1. 13. Respondent Bank denied all the allegations and submitted that the Applicants have misguided to the Tribunal on the legality and validity of Demand Notice Dt. 13.10.2016 issued U/s 13(2) of the S.A.R.F.A.E.S.I. Act, 2002, Symbolic Possession Notice 24.01.2017 issued U/s 13(4) of the S.A.R.F.A.E.S.I. Act, 2002, order dated 26.02.2019 passed by the Ld. A.D.M. (F&R), Varanasi U/s 14(1) of the S.A.R.F.A.E.S.I. Act, 2002 as the same were already challenged in S.A. No.428 of 2019 which were highly time barred except previous Sale Notice dated 27.06.2019. The Applicants failed to file any delay condonation Application in support of earlier S.A. No.428 of 2019. Further, no bid was turned up in pursuance of earlier Sale Notice dated 27.06.2019 which was stand lapsed. Moreover, physical possession of secured asset was already taken over by Respondent Bank on 14.06.2019 on the strength of order of Ld. A.D.M. (F&R), Varanasi dated 26.02.2019 passed U/s 14(1) of the S.A.R.F.A.E.S.I. Act, 2002.

2. 14. However, the earlier S.A. No. 428/2019 was already dismissed in default by this Tribunal on 13.02.2020 for want of prosecution as well as for non-compliance of order dated 05.07.2019 as the Applicants failed to submit the concrete proposal for payment of remaining entire dues within 30 days. The Applicants have filed the present S.A. No.192 of 2020 before this Tribunal and entire same grounds have been

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taken by the Applicants in the aforesaid S.A. except challenge to the legality and validity of fresh Sale Notice dated 22.05.2020. Hence, the adjudication on the legality and validity of Demand Notice Dt. 13.10.2016, Symbolic Possession Notice 24.01.2017 issued U/s 13(2) & 13(4) of the S.A.R.F.A.E.S.I. Act, 2002 swell as order dated 26.02.2019 passed by the Ld. A.D.M. (F&R), Varanasi U/s 14(1) of the S.A.R.F.A.E.S.I. Act, 2002 of the same is also barred by principle of res-judicata. Further, the S.A.No.428 of 2019 was rendered infructuous for want of bid in pursuance to previous notice dated 27.06.2019. Therefore, M.A. No.39 of 2020 filed by the Applicants on 12.06.2020 for restoration of the aforesaid S.A.No.428 of 2019 is also rendered infructuous.

1. 15. Respondent Bank also submitted that Respondent Bank conducted several auction sales of the secured asset in question in the past on date 22.02.2019, 15.07.2019, 03.09.2019 at a reserve price of Rs.99.18 Lakhs but failed to attract any bidder. Thereafter, the secured creditor decided to the reduce the reserve price to Rs.89.26 lakhs and in Sale Notice dated 07.03.2020 secured asset was put to auction at reserve price of Rs.89.26 Lakhs for sale on 15.04.2020 which also failed due to want of Bidders. Hence, the plea of the Applicants qua selling the secured asset in question at a below the Distress Sale Value as per Valuation Report dated 20.03.2020 at throw away price is completely baseless, misconceived and made to misguide the Tribunal. Moreover, every notice of sale conducted after the letter of the Applicant No.1 dated 14.10.2019 has been sent to the address furnished in the said letter. Further, the Auction Sale dated 15.04.2020

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was fixed after giving a 30 days' Sale Notice dt. 07.03.2020 to Applicants at their addresses and it was also published in newspapers Amar Ujala and Indian Express on 07.03.2020. The Copies of aforesaid Sale Notice Publications are attached with Bank Reply as **Annexure-B**.

1. 16. Respondent Bank further submitted that prior to issuance of current Sale Notice, Authorized Officer again obtained fresh Valuation Report of present Secured Asset on 20.03.2020 from empaneled approved Valuer of Respondent Bank. Further, the Authorized Officer fixed the Reserve Price of mortgaged property at Rs.89,26,000/- in terms of Rule 8(5) of the Security Interest (Enforcement) Rules, 2002. Copy of Valuation Report Dt. 20.03.2020 is annexed with Bank's Reply as **Annexure C.A.-02**. Moreover, reasonable opportunity was given to the Applicants by serving 15 days' Sale Notice under Rule 8(6) read with 9(1) of the Security Interest (Enforcement) Rules, 2002 vide Sale Notice Dt. 22.05.2020 through Registered Post on 23.05.2020 on all three last recorded address of the Applicants which includes ADDRESS- "श्री विजय कुमार भारती पुत्र स्व फुलचंद्र भारती, महाकाल मंदिर, मौजा बहादुरपुर, पोस्ट कटहर, चौबेपुर, वाराणसी provided by the Applicant No.1 vide his letter dated 14.10.2019. However, no other address of Applicant No.2 was never communicated to the Respondent Bank. The applicant No.1 is trying to mislead the Tribunal by creating confusion between MOHALLA and VILLAGE. However, there is only one Bahadurpur, Chaubeypur in the Varanasi District and the Applicants must not be allowed to take benefit of usage of words MOHALLA, VILLAGE OR MOUZA etc. as all these words

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connotes more or less same meaning. So, all the services are being made at address available as per records. The copies of Notice of Sale Dt. 22.05.2020 and Postal Receipts of dispatch Dt. 23.05.2020 along-with Tracking Report are annexed with Bank's Reply as **Annexure C.A.-03 & Annexure-A**.

17. Further, on 22.05.2020 Respondent Bank put the mortgage property on auction for 10.06.2020 again against reserve price of Rs.89,26,000/- giving complete description of mortgaged property. The Sale Notice was issued, affixed and published in terms of Rule 8(6), 8(7) & 9(1) of the Security Interest (Enforcement) Rules, 2002 which was published on 24.05.2020 in two leading newspapers (out of which one in vernacular) i.e. "Dainik Jagran" as well as in "Indian Express"; having sufficient circulation in the locality by setting out the terms of sale and also affixed on the mortgage property under sale. Proof of affixation & Publication of two newspapers are annexed with Bank's Reply as **Annexure C.A.-04 & R-05**.

18. Subsequently, in pursuance to Auction Notice mortgage Property was auctioned for Rs.89,76,000/- on 10.06.2020 to highest bidder i.e. *Mrs. Archana Jiaswal & Mr. Sanjay Kumar Gupta, R/o Choubepur, District Varanasi*. They were declared as successful bidder and who also deposited 25 percent of bid value i.e 22,48,000/- (inclusive of EMD) till date 11.06.2020. The secured creditor confirmed sale in their favour on date 11.06.2020 in terms of Rule 9(2) of the Security Interest (Enforcement) Rules, 2002 vide Sale Confirmation Letter which is annexed with Bank Reply as **Annexure C.A. 6**.

DEBTS RECOVERY TRIBUNAL, ALLAHABAD

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19. Respondent Bank also submitted that though the Applicants deposited Rs.15.00 Lakhs with Respondent Bank but they failed to submit concrete proposal (*For Payment of remaining dues within 30 days*) in consonance of order dated 05.07.2019 passed by this Tribunal in S.A. No.428 of 2020. As per the latest statement of account in the loan account of Vijay Kumar Bharti the remaining dues were Rs.26,02,542.20ps. even after adjustment of Rs.15,00,000/- deposited by the Applicants. A copy of statement of account is annexed with Bank reply as **Annexure C.A. 1**. Father, the Applicants have availed multiples loan facilities from the Respondent Bank and even till date no concrete compromise proposal filed by the Applicants before Respondent Bank. Hence, Respondent Bank rightly rejected the proposal dated 15.07.2019 vide Rejection Letter which are annexed with S.A. as **Annexure SA No.01**.

20. Further, there was no legal impediment to sell the secured asset in lock-down period as in **Public Interest Litigation (PIL) No. - 564 of 2020** the **Hon'ble High Court of Allahabad** has not restrained from selling the secured asset in auction during lockdown period in the month of May 2020. Hence, Respondent Bank submitted that it has taken all legitimate steps as prescribed in the S.A.R.F.A.E.S.I. Act, 2002 as well as Rules made thereunder to recover its legitimate dues. In fact, the Applicants have neither approached with clean hands before this Tribunal nor stated true facts and suppressed true material facts from this Tribunal. Thus, the present S.A. is misconceived and is liable to be dismissed with cost. Further, M.A. No.39 of 2020 filed by the Applicants on

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12.06.2020 for restoration of the S.A.No.428 of 2019 is also liable to be dismissed being rendered infructuous.

21. I have heard Ld. Counsel for Applicants as well as Respondent Bank and perused the material available on record.

22. On scrutiny of record it shows that admittedly after availing Credit / Loan facilities of **Rs.30,00,000/-** against equitable mortgage of immovable property in question; the Applicants did not adhere to the financial discipline of Respondent Bank as per terms and conditions of the loan/security documents executed in favour of Respondent Bank. Consequently, the said account of the Applicants was rightly classified as NPA on 30.09.2016 in terms of RBI Guidelines. **Hon'ble Supreme Court of India** in Writ Petition (Civil) No. 901 of 2014 **Keshavlal Khemchand & Sons Pvt. Ltd. Vs. Union of India & Ors.** on 28.01.2015 held that- *"..... The crux of the impugned Act is the prescription that a Secured Creditor could take steps contemplated under Section 13(4) on the "default" of the borrower. The expression "default" is clearly defined under the Act. Even if the Act were not to be on the statute book, under the existing law a Creditor could initiate legal action for the recovery of the amounts due from the borrower, the moment there is a breach of the terms of the contract under which the loan or advance is granted. The stipulation under the Act of classifying the account of the borrower as NPA as a condition precedent for enforcing the security interest is an additional obligation imposed by the Act on the Creditor. In our opinion, the borrower cannot be heard to complain that defining of the conditions subject to which the Creditor could classify the account as NPA, is part of the essential legislative function....."*

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23. Therefore, Respondent Bank on 13.10.2016 issued Demand Notice U/s 13(2) of the S.A.R.F.A.E.S.I. Act, 2002. Since, the Applicants failed to repay the dues within statutory period of 60 days from the date of receipt of the Demand Notice served u/s 13(2) of the S.A.R.F.A.E.S.I. Act, 2002, Respondent Bank rightly took symbolic possession of the Secured Asset on 24.01.2017 U/s 13(4) of the S.A.R.F.A.E.S.I. Act, 2002. Further, Respondent Bank on 26.02.2019 obtained order for taking possession of the Secured Asset from Ld. Addl. District Magistrate, Varanasi U/s 14(1) of the S.A.R.F.A.E.S.I. Act, 2002. Thereafter, Respondent Bank took physical possession of secured asset on 14.06.2019 on the strength of order of Ld. A.D.M. (F&R), Varanasi dated 26.02.2019 passed U/s 14(1) of the S.A.R.F.A.E.S.I. Act, 2002.

24. The plea of the Applicant No.1 that no such aforementioned notice was served upon the Applicant no.1 as he was in jail since 04.11.2016 and released from jail on 15.07.2019. Further plea that this fact was informed to Respondent Bank vide letter dated 19.06.2019 and letter dated 14.10.2019 that the Applicant No.1 is in jail since 03.11.2016 as well as current address for the services of notices and letters. However, these pleas of the Applicant No.1 are not sustainable as the Applicant No.1 did not inform the Respondent Bank about jail or change of address well in time during the course of aforementioned action of Respondent Bank.

25. Moreover, challenge qua legality and validity in S.A. No.428 of 2019 qua the aforementioned action of Respondent Bank vis a vis Demand notice Dt. 13.10.2016, symbolic Possession Notice dated 24.01.2017 as well as of order of Id. A.D.M. (R& R),

DEBTS RECOVERY TRIBUNAL, ALLAHABAD

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Varanasi dated 26.02.2019 passed U/s 14(1) of the S.A.R.F.A.E.S.I. Act, 2002 was time barred except previous Sale Notice dated 27.06.2019. Further, physical possession of secured asset was already taken over by Respondent Bank on 14.06.2019 on the strength of order of Ld. A.D.M. (F&R), Varanasi dated 26.02.2019 passed U/s 14(1) of the S.A.R.F.A.E.S.I. Act, 2002. Hence, order of Ld. A.D.M. (F&R), Varanasi dated 26.02.2019 passed U/s 14(1) of the S.A.R.F.A.E.S.I. Act, 2002 was no more left open for challenge being already executed by Respondent Bank. Further, the S.A. No.428 of 2019 was rendered infructuous qua challenge to the legality and validity of previous Sale Notice dated 27.06.2019 as no bidder turned up in pursuance of earlier Sale Notice dated 27.06.2019 which was accordingly stand lapsed.

26. Further, the earlier S.A. No. 428/2019 was rightly dismissed in default by this Tribunal on 13.02.2020 for want of prosecution as well as for non-compliance of order dated 05.07.2019 as though the Applicants deposited Rs.15.00 Lakhs with Respondent Bank but they failed to submit concrete proposal For payment of remaining entire dues within 30 days in pursuant of order dated 05.07.2019 passed by this Tribunal in S.A. No.428 of 2020. In fact, the Applicants submitted the OTS proposal on different lines. Hence, Respondent Bank rightly rejected the proposal dated 15.07.2019 vide Rejection Letter which are annexed with S.A. as **Annexure SA No.01**. Further, as per the latest statement of account in the loan account of Vijay Kumar Bharti the remaining dues were Rs.26,02,542.20ps. (**Annexure C.A. 1**) even after adjustment of Rs.15,00,000/- deposited by the

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Applicants. Therefore, M.A. No.39 of 2020 filed by the Applicants on 12.06.2020 for restoration of the aforesaid S.A.No.428 of 2019 is also rendered infructuous.

27. On perusal of record also shows that in the past Respondent Bank attempted to sell the secured asset at a reserve price of Rs.99.18 Lakhs and conducted several auction sales of the secured asset in question in the past on date 22.02.2019, 15.07.2019, 03.09.2019 but failed to attract any bidder for that reserve price. Thereafter, the secured creditor rightly reduced the reserve price to Rs.89.26 lakhs and in Sale Notice dated 07.03.2020 secured asset was put to auction at reserve price of Rs.89.26 Lakhs for sale on 15.04.2020 which also failed due to want of Bidders. Hence, the plea of the Applicants qua selling the secured asset in question at a below the Distress Sale Value as per Valuation Report dated 20.03.2020 at throw away price is completely baseless and misconceived. Further, the Auction Sale dated 15.04.2020 was fixed after giving a 30 days' Sale Notice dt. 07.03.2020 to Applicants at their addresses and it was also published in newspapers Amar Ujala and Indian Express on 07.03.2020. A Copies of aforesaid Sale Notice Publications are attached with Bank Reply as **Annexure-B.**

28. Prior to issuance of current Sale Notice, Authorized Officer obtained fresh Valuation Report of present Secured Asset on 20.03.2020 from empaneled approved Valuer of Respondent Bank. Further, the Authorized Officer fixed the Reserve Price of mortgaged property again at Rs.89,26,000/- in terms of Rule 8(5) of the Security Interest (Enforcement) Rules, 2002. Copy

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of Valuation Report Dt. 20.03.2020 is annexed with Bank's Reply as **Annexure C.A.-02**.

29. Moreover, reasonable opportunity was given to the Applicants by serving 15 days' Sale Notice under Rule 8(6) read with 9(1) of the Security Interest (Enforcement) Rules, 2002 vide Sale Notice Dt. 22.05.2020 through Registered Post on 23.05.2020 on all three last recorded address of the Applicants which includes ADDRESS- "श्री विजय कुमार भारती पुत्र स्व फुलचंद्र भारती, महाकाल मंदिर, मौजा बहादुरपुर, पोस्ट कटहर, चौबेपुर, वाराणसी provided by the Applicant No.1 vide his letter dated 14.10.2019. However, no other address of Applicant No.2 was never communicated to the Respondent Bank. The usage of words MOHALLA, VILLAGE OR MOUZA etc. as all these words connotes more or less same meaning which makes not much difference. The copies of Sale Notice Dt. 22.05.2020 and Postal Receipts of dispatch Dt. 23.05.2020 on all recorded address along-with Tracking Report are annexed with Bank's Reply as **Annexure C.A.-03 & Annexure-A**.

30. Further, on 22.05.2020 Respondent Bank put the mortgage property on auction for 10.06.2020 again against reserve price of Rs.89,26,000/- giving complete description of mortgaged property. The Sale Notice was issued, affixed and published in terms of Rule 8(6), 8(7) & 9(1) of the Security Interest (Enforcement) Rules, 2002 which was published on 24.05.2020 in two leading newspapers (out of which one in vernacular) i.e. "Dainik Jagran" as well as in "Indian Express"; having sufficient circulation in the locality by setting out the terms of sale and also affixed on the mortgage property under sale. Proof of

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affixation & Publication of two newspapers are annexed with Bank's Reply as **Annexure C.A.-04 & R-05.**

**Hon'ble Supreme Court of India** in Civil Appeal No. 3411 of 2017 titled as ***Canara Bank Vs. M. Amarender Reddy & Anr.*** on 02.03.2017 has clearly that- *".....there is nothing in the Rules, either express or implied, to take the view that a public notice under sub-rule 6 of Rule 8 must be issued only after the expiry of 30 days from issuance of individual notice by the authorized officer to the borrower about the intention to sell the immovable secured asset. In other words, it is permissible to simultaneously issue notice to the borrower about the intention to sell the Secured Asset/s and also to issue a public notice for sale of such secured asset by inviting tenders from the public or by holding public auction. The only restriction is to give thirty days' time gap between such notice and the date of sale of the immovable secured asset.*

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*".....the only restriction placed on the secured creditor is to serve a notice of 30 days on the borrower intimating him about its intention to sell the immovable secured asset and the mode and date fixed for sale; and also to issue a public notice in two leading newspapers, if the sale of such secured asset is effected either by inviting tenders or by holding public auction, notifying the date of sale after 30 clear days from such notice. There is no need to wait for the expiry of 30 days from issuance of notice of intention to sell the secured asset given to the borrower, for publication of a public notice for sale of such asset. Nor is there any requirement to give a separate individual notice prior to deciding on the mode of sale of the secured asset. ...."*

31. In pursuance to Auction Notice, mortgage Property was auctioned for Rs.89,76,000/- on 10.06.2020 to highest bidder i.e. *Mrs. Archana Jiaswal & Mr. Sanjay Kumar Gupta, R/o Choubepur, District Varanasi.* They were declared as successful

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bidder and who also deposited 25 percent of bid value i.e 22,48,000/- (inclusive of EMD) till date 11.06.2020. The secured creditor confirmed sale in their favour on date 11.06.2020 vide Sale Confirmation Letter which is annexed with Bank Reply as **Annexure C.A. 6**. Thus, Respondent Bank/successful bidder has also complied the provisions of Rule 9(1), 9(2) & 9(3) of Security Interest (Enforcement) Rules, 2002.

32. The plea of the Applicants that mortgage property was put to auction and sold in lockdown period without any jurisdiction is also not sustainable as much as there was no specific bar or legal impediment to sell the secured asset in lock-down period. As in ***Public Interest Litigation (PIL) No. - 564 of 2020*** the **Hon'ble High Court of Allahabad** has not restrained from selling the secured asset in auction during lockdown period in the month of May 2020. Hence, Respondent Bank successfully proved on record that the Applicants have neither approached with clean hands before this Tribunal nor stated true facts and suppressed true material facts from this Tribunal. Respondent Bank has successfully proved on record that Respondent Bank has rightly classified the loan account as NPA on 30.09.2016 in terms of RBI Guidelines. Notices issued U/s 13(2) & 13(4) of the S.A.R.F.A.E.S.I. Act, 2002 as well as Sale Notice were duly served upon the Applicants, as per Rule 3, 8(5), 8(6), 8(7) & 9(1), 9(2) & 9(3) of the Security Interest (Enforcement) Rules, 2002 which are in accordance with Law and Rules made thereunder.

33. For the reasons recorded above, I do not find any infirmity in the action of Respondent Bank initiated under the

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S.A.R.F.A.E.S.I. Act, 2002 against the Secured Asset in the present loan account. There is no merit in the instant S.A. and same is dismissed. Pending I.A.s if any, also stand dismissed. Interim relief/stay already granted, stands vacated. Further, M.A. No.39 of 2020 filed by the Applicants on 12.06.2020 for restoration of the aforesaid S.A. No.428 of 2019 is also dismissed being rendered infructuous. However, in the facts and circumstances of this case, there shall be no order as to costs.

34. Respondent Bank is free to proceed further against the Secured Asset under the S.A.R.F.A.E.S.I. Act, 2002 in accordance with law and rules made thereunder to recover the outstanding dues.

35. Registry is directed to provide the scanned copy of the Judgment to all concerned parties through e-mail and also upload on the official website of DRT.

Let scanned copy of this judgment be also paced in M.A. No.39 of 2020. After due compliance, file be consigned to Record.

**Dated: 31.07.2020**

(SHAMMI KHAN) Presiding Officer DRT, Dehradun A/c DRT, Allahabad