DCB Bank Limited Vs Mohd. Ali (DART Allahabad)
The appeal before the Debts Recovery Appellate Tribunal, Allahabad was filed under Section 18 of the SARFAESI Act, 2002, challenging the judgment dated 9 June 2023 by which the Debts Recovery Tribunal had allowed S.A. No. 108 of 2022 filed by the respondent-borrowers and set aside the bank’s recovery measures.
The factual background shows that the borrowers were granted a loan of ₹93,48,319 by the appellant bank pursuant to a loan agreement dated 29 January 2017. To secure the loan, an equitable mortgage was created over a residential property by deposit of the original title deed. Due to default in repayment, the loan account was classified as a non-performing asset on 2 December 2019. A demand notice dated 10 December 2019 under Section 13(2) of the SARFAESI Act was issued for ₹89,68,739.45. As the borrowers did not comply, a possession notice dated 10 September 2020 under Section 13(4) was issued and published in two newspapers on 15 September 2020. Thereafter, the bank obtained an order dated 7 December 2020 under Section 14 of the Act from the competent authority.
The borrowers challenged the demand and possession notices before the DRT by filing S.A. No. 108 of 2022, alleging non-compliance with Rules 8(1), 8(2), and Rule 9 of the Security Interest (Enforcement) Rules, 2002. During pendency of the S.A., the bank published a sale notice on 9 December 2022 fixing the auction on 26 December 2022. The property was sold and a sale certificate was issued on 23 January 2023. The borrowers amended the pending S.A. to challenge the auction proceedings as well. By the impugned order, the DRT set aside the possession notice, the order under Section 14 and its execution, the auction conducted on 26 December 2022, and the sale certificate dated 23 January 2023.
