Punjab National Bank Vs Neelam Enterprises (DART Allahabad)
The appeal before the Debts Recovery Appellate Tribunal, Allahabad, was filed by the bank under Section 18 of the SARFAESI Act, 2002, challenging the order dated 25 July 2022 passed by the Debts Recovery Tribunal in S.A. No. 296 of 2021. By the impugned order, the DRT had allowed the borrower’s securitisation application and set aside the bank’s recovery actions.
The borrower firm had been granted a cash credit limit and a term loan of ₹15 lakh. The proprietor and other respondents stood as guarantors and created an equitable mortgage over the secured property. Following default, the loan account was classified as NPA on 2 October 2019, and a demand notice under Section 13(2) was issued on 5 November 2019 for ₹15,10,318.97. As the demand was not complied with, the bank issued a symbolic possession notice dated 12 February 2020 under Section 13(4), which was published in newspapers on 16 February 2020.
A sale notice issued in March 2020 for an auction on 16 April 2020 did not materialise due to lack of bidders. A subsequent sale notice dated 22 July 2020 fixed the auction for 10 August 2020. The sale was confirmed on 14 August 2020 and a sale certificate was issued on 26 August 2020 in favour of the auction purchaser. During pendency of the borrower’s S.A., the bank obtained an order under Section 14 on 3 September 2021 and took physical possession.
