DRAT Allows Appeal for Failure to Consider Non-Service of SARFAESI Notice

By CA Sandeep Kanoi Corporate Law Judiciary February 12, 2026 1 comment

TaxGuru Citation: 2026 taxguru.in 2121
Case Name: Syed Nazmul Hasan Vs Authorized Officer (DRAT Allahabad)
Appeal Number: Only available for paid members
Date of Judgement/Order: Only available for paid members
Courts: Debt Recovery Appellate Tribunal (DRAT)

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Syed Nazmul Hasan Vs Authorized Officer (DRAT Allahabad)

The appeal was filed under Section 18 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) against the judgment dated 26.06.2014 whereby Securitization Application (S.A.) No. 220/2011 was dismissed by the Tribunal below.

The appellant had availed a housing loan of Rs. 6 lakhs from the respondent bank by mortgaging his house through deposit of original title deeds. On default in maintaining financial discipline, the loan account was classified as a Non-Performing Asset (NPA). After issuance of demand and possession notices, the bank issued an auction sale notice scheduling auction of the property on 18.03.2011. The notice was published in newspapers on 13.02.2011. The appellant, by letter dated 15.03.2011, expressed readiness to pay the full dues. However, the property was auctioned on 18.03.2011 to respondent no. 2, who deposited the sale consideration. A sale certificate was issued and sale deed executed on 22.03.2012.

The appellant initially filed a writ petition before the High Court, which was dismissed on the ground of alternative remedy, with liberty to approach the Tribunal. Thereafter, he filed S.A. before the Tribunal contending that no notice under Section 13(2) of the SARFAESI Act was served and that he came to know of the auction only upon publication in the Hindustan newspaper. He also alleged that the property was sold at a very low price. The Tribunal dismissed the S.A., leading to the present appeal.