# Sunita Nishad & Anr v. Debt Recovery Appellate Tribunal & Ors

- **Citation:** (2025) 4 ILRA 510
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2025-04-01
- **Case number:** J. Writ C No. 35050 of 2019
- **Bench:** Mrs. Sangeeta Chandra
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/sunita-nishad-anr-v-debt-recovery-appellate-tribunal-ors-53154
- **Pages:** 24

## Headnote

Rakesh Pal, PC Chauhan, Prashant K.
Srivastava, Ramesh Chandra, S.C. Tiwari,
Shailendra Singh Rajawat, Vidya Kant
Sharma
4 All. Sunita Nishad & Anr. Vs. Debt Recovery Appellate Tribunal & Ors.
511
Civil Law - Constitution of India,1950 -
Article
226
-
The
Securitisation
and
Reconstruction of Financial Assets and
Enforcement of Security Interest Act,
2002 - Sections 13, 13(2), 13(4), 1 &,
17)1)
-
The
Security
Interest
(Enforcement) Rules, 2002 - Rule -
3(1), 3(4), 8(1), 8(2), 8(6), 8(6)(a),
13, - The U.P. Agricultural Credit Act,
1973 - Sections - 6(1), 11, 12, 12-A,
12-B & 12-C - The General Clauses Act,
1897 - Section - 27 - The Indian
Evidence Act, 1872 - Section - 114 -
The Registration Act, 1908 - Sections
17(1)(b), 17(1)(c) & 17(2)(xii)- Writ
Petition
-
challenge
to
the
order
of
Appellate Tribunal (DRAT), which upheld
the Bank's auction sale and possession of
the
petitioners'
residential
property
-
Brother of the petitioner no. 2 applied for a
term loan of 5 years for Rs. 90 Lakh
through the Bank of Baroda under the UPSt. Govt. sponsored scheme 'Kamdhenu
Dairy Scheme' - wherein both petitioners
being relative of borrower were shown as
guarantors of the loan fraudulently by the
bank by using original papers of the house
in question which was already mortgaged to
the bank in another house loan, as surety -
Default on the loan account - led to
issuance of demand notices - Objections
were raised by the petitioners challenging
the procedural propriety of notices issued
under the SARFAESI Act for possession and
auction sale - writ petition - dismissed, for
statutory remedy - petitioners approached
to DRT - DRT, declaring the Bank's actions
void ab initio - Appeal filed by bank in DRAT
- Appellate tribunal reversed the decision,
holding that both petitioners had been duly
served with statutory notices and had
executed an extended mortgage agreement,
thereby estopping them from denying their
status as guarantors - writ petition -
petitioners refuted the bank's claim, and
alleged that the bank, in collusion with
borrower,
fraudulently
extended
their
housing loan mortgage as a guarantee
without their consent or signatures, and
that the bank manager involved was later
suspended - further, the petitioners sought
to implead borrower as a respondent, but
the bank opposed this as a delay tactic -
The
Court
ultimately
rejected
the
impleadment request, noting that borrower
was not a party in the original DRT or DRAT
proceedings,
and
his
inclusion
was
unnecessary in the current writ petition -
Court finds that, - the petitioners had
misrepresented
facts
and
deliberately
prolonged litigation to retain possession of
the auctioned property, despite its sale to
respondent no. 4 in 2017 - The Court also
noticed that respondent no. 4 had suffered
significant financial and emotional hardship,
including paying rent and EMIs for seven
years without enjoying the property, and
was entitled to compensation - court held
that, the petitioners are abused the judicial
process and wasted the Court's time -
hence, the writ petition is dismissed with
cost of Rs. 25 Lakhs, to be paid within
three months before the High Court's Senior
Registrar, failure to pay would result in
recovery as arrears of land revenue -
further, direction issued that the amount,
once deposited, would be released in favour
of the respondent no. 4 on an appropriate
application - order of the DRAT stands
affirmed, therefore, petitioners were bound
to vacate the property, within one month.
(Para - 37, 42, 43, 45, 53, 54, 55, 57, 58,
59, 60)

Writ Petition Dismissed. (E-11)

List of referred Cases: -

## Text

_Characters 0–39,795 of 81,024. This is a partial read: ask again with offset=39795 for what follows._

510 INDIAN LAW REPORTS ALLAHABAD SERIES
instrument
categorically
provides
that
interest needs to be paid on actual amount,
the stamp duty for that instrument would
not be more than it would have been if
interest was not at all mentioned therein.
The payment of interest on the instrument
does not empower the authorities for
charging higher stamp duty on the
instrument. If the interest is paid on and
above the amount payable by the purchaser,
the same can be considered in accordance
with law but higher rate of stamp duty
cannot be charged as contemplated under
Section 23 of the Indian Stamp Act.

19. Further Hon'ble the Apex
Court in the case of Bihar State Housing
Board (supra) had an occasion to
consider the issue which is similar to the
issue
in
hand
and
after
detailed
discussion, Hon'ble the Apex Court has
held that the stamp duty cannot be
charged on the amount of interest paid
under the Indian Stamp Act.

 20. Once Section 23 of the
Indian Stamp Act prohibits for charging
higher stamp duty on such instrument
where interest is expressly made payable as
well as the law is very clear on this subject
as held by Hon'ble the Apex Court in the
case of Bihar State Housing Board
(supra) , the proceedings initiated against
the petitioner by making impugned
reference for charging deficit of stamp
duty on the basis of interest paid by the
petitioner, is not justified.

21.
In
view
of
aforesaid
discussion as well as law laid down by
Hon'ble the Apex Court, the impugned
reference dated 18.10.2012 in Stamp Suit
No. 119 /2012-13 cannot be justified in
the eyes of law and same is hereby
quashed.
22. As the impugned reference
itself
is
quashed,
all
consequential
proceedings as well as the impugned
orders dated 30.5.2018, 21.7.2018 and
recovery citation dated 28.8.2018 are also
hereby quashed.

23. Accordingly, both the writ
petitions are allowed.

24. The authority concerned is
directed to refund any amount deposited
by the petitioner along with interest @
4% per annum from the date of its deposit
till the date of refund, within a period of
two months from the date of production
of a certified copy of this order.

----------
(2025) 4 ILRA 510
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 01.04.2025

BEFORE

THE HON'BLE MRS. SANGEETA CHANDRA,
J.

Writ C No. 35050 of 2019

Sunita
Nishad
&
Anr.
...Petitioner
Versus

Debt Recovery Appellate Tribunal & Ors.
 ..Respondents

Counsel for the Petitioner:
Sushil Kumar, Abhiuday Pratap Singh,
Amrendra Nath Tripathi, Meenakshi Singh
Parihar, Rakesh Chandra Tewari

Counsel for the Respondents:
Rakesh Pal, PC Chauhan, Prashant K.
Srivastava, Ramesh Chandra, S.C. Tiwari,
Shailendra Singh Rajawat, Vidya Kant
Sharma
4 All. Sunita Nishad & Anr. Vs. Debt Recovery Appellate Tribunal & Ors.
511
Civil Law - Constitution of India,1950 -
Article
226
-
The
Securitisation
and
Reconstruction of Financial Assets and
Enforcement of Security Interest Act,
2002 - Sections 13, 13(2), 13(4), 1 &,
17)1)
-
The
Security
Interest
(Enforcement) Rules, 2002 - Rule -
3(1), 3(4), 8(1), 8(2), 8(6), 8(6)(a),
13, - The U.P. Agricultural Credit Act,
1973 - Sections - 6(1), 11, 12, 12-A,
12-B & 12-C - The General Clauses Act,
1897 - Section - 27 - The Indian
Evidence Act, 1872 - Section - 114 -
The Registration Act, 1908 - Sections
17(1)(b), 17(1)(c) & 17(2)(xii)- Writ
Petition
-
challenge
to
the
order
of
Appellate Tribunal (DRAT), which upheld
the Bank's auction sale and possession of
the
petitioners'
residential
property
-
Brother of the petitioner no. 2 applied for a
term loan of 5 years for Rs. 90 Lakh
through the Bank of Baroda under the UPSt. Govt. sponsored scheme 'Kamdhenu
Dairy Scheme' - wherein both petitioners
being relative of borrower were shown as
guarantors of the loan fraudulently by the
bank by using original papers of the house
in question which was already mortgaged to
the bank in another house loan, as surety -
Default on the loan account - led to
issuance of demand notices - Objections
were raised by the petitioners challenging
the procedural propriety of notices issued
under the SARFAESI Act for possession and
auction sale - writ petition - dismissed, for
statutory remedy - petitioners approached
to DRT - DRT, declaring the Bank's actions
void ab initio - Appeal filed by bank in DRAT
- Appellate tribunal reversed the decision,
holding that both petitioners had been duly
served with statutory notices and had
executed an extended mortgage agreement,
thereby estopping them from denying their
status as guarantors - writ petition -
petitioners refuted the bank's claim, and
alleged that the bank, in collusion with
borrower,
fraudulently
extended
their
housing loan mortgage as a guarantee
without their consent or signatures, and
that the bank manager involved was later
suspended - further, the petitioners sought
to implead borrower as a respondent, but
the bank opposed this as a delay tactic -
The
Court
ultimately
rejected
the
impleadment request, noting that borrower
was not a party in the original DRT or DRAT
proceedings,
and
his
inclusion
was
unnecessary in the current writ petition -
Court finds that, - the petitioners had
misrepresented
facts
and
deliberately
prolonged litigation to retain possession of
the auctioned property, despite its sale to
respondent no. 4 in 2017 - The Court also
noticed that respondent no. 4 had suffered
significant financial and emotional hardship,
including paying rent and EMIs for seven
years without enjoying the property, and
was entitled to compensation - court held
that, the petitioners are abused the judicial
process and wasted the Court's time -
hence, the writ petition is dismissed with
cost of Rs. 25 Lakhs, to be paid within
three months before the High Court's Senior
Registrar, failure to pay would result in
recovery as arrears of land revenue -
further, direction issued that the amount,
once deposited, would be released in favour
of the respondent no. 4 on an appropriate
application - order of the DRAT stands
affirmed, therefore, petitioners were bound
to vacate the property, within one month.
(Para - 37, 42, 43, 45, 53, 54, 55, 57, 58,
59, 60)

Writ Petition Dismissed. (E-11)

List of referred Cases: -

1. St. of Orissa & ors.Vs Laxmi Narayan Das
(2023) 15 SCC 273,

2. Hari Narayan Vs Badari AIR 1963
Supreme Court 1558,

3. G. Narayana Swamy Reddy Vs Govt. of
Karnataka 1991 (3) SCC 261,

4. Krishna Kumar Gupta Vs Manoj K Sahu
reported in (2022) SCC OnLine All. 528,

5. C.C. Alavi Haji Vs Palapetty Muhammed &
anr reported in (2007) 6 SCC 555,

6. M/s Ajeet Seeds Ltd Vs K. Gopala
Krishnaiah reported in (2014) 12 SCC 685,
512 INDIAN LAW REPORTS ALLAHABAD SERIES
7. B. Arvind Kumar Vs Government of India
& ors.- (2007) 5 SCC 745,

8. Shakeena & ors.Vs Bank of India & ors.-
(2021) 12 SCC 761,

9.
Indian
Overseas
Bank
Vs
RCM
Infrastructure Limited & ors.- (2022) 8 SCC 516,

10. Mardia Chemicals Ltd.d Vs U.O.I.- (2004) 4
SCC 311.

11. S. Karthik & ors.Vs N. Subhash Chand Jain &
ors.- (2022) 10 SCC 641,

12. St. of Orissa Vs Laxmi Narayan Das (2023)
15 SCC 273,

13 K. Jayaram Vs BDA, (2022) 12 SCC 815,

14. Udyami Evam Khadi Gramodyog Welfare
Sanstha v. St. of U.P. - (2008) 1 SCC 560,

15. A. Shanmugam Vs Ariya Kshatriya Rajakula
Vamsathu Madalaya Nandhavana Paripalani
Sangam, (2012) 6 SCC 430: (2012) 3 SCC (Civ)
735: 2012 SCC OnLine SC 384

(Delivered by Hon'ble Mrs. Sangeeta
Chandra, J.)

1. This writ petition has been filed
by the petitioners Sunita Nishad and her
husband Om Prakash, challenging the order
dated 22.10.2019 passed by the Debt
Recovery Appellate Tribunal Allahabad,
(DRAT) in Appeal No.18 of 2018, filed by
the Bank of Baroda through which the
order dated 20.08.2018 passed by the Debt
Recovery Tribunal, Lucknow (hereinafter
referred to as "DRT") has been set aside
and auction sale dated 11.12.2017 and
possession notice dated 05.10.2016 has
been affirmed and physical possession of
House No. 13/88, Sector-13, Indira Nagar
Vistar Yojna, Lucknow, has been directed
to be delivered to Smt. Mamta Yadav, the
respondent no.4 in this petition. The
petitioners had earlier filed Writ Petition
No. 31115 (MB) of 2017 before this Court
challenging the auction notice dated
11.12.2017, which petition was disposed
off by this Court directing the petitioners to
approach the DRT as the proceedings were
under the SARFAESI Act.

2. The brief facts necessary for
deciding the case, as mentioned in the Writ
Petition No. 35050 of 2019 are that the
State Government launched a scheme
called "Kamdhenu Dairy Scheme" with
intention to promote dairy farming in the
State of U.P. to maintain its status as the
highest milk producing state in the country.
One Jai Prakash, the brother of petitioner
no.2 and the brother-in-law of the petitioner
no.1, applied for a term loan of five years
and was sanctioned Rs.90 lakhs by the
Bank of Baroda under the State Sponsored
Scheme. The petitioner no.1 and the
petitioner no.2 being relatives of the
borrower Jai Prakash and already being
customers of Bank of Baroda, Gomti Nagar
Branch, were shown as guarantors of the
loan fraudulently by the bank, which used
the original papers relating to petitioner's
jointly owned property at Indira Nagar,
which was already mortgaged to the bank
in a housing loan, as surety for the
agricultural loan of the borrower. It has
been stated in paragraph 10 to 13 that the
petitioner no.1 was never consulted by the
bank, nor did she sign any papers for
extension of mortgage and she never stood
as guarantor or surety for the loan taken by
Jai Prakash. Petitioner no.1 and petitioner
no.2 had taken a housing loan from HDFC
Bank on 30.07.2011 of Rs.32 lakhs for
buying the house situated at Indira Nagar
and the loan had to be repaid with interest
to HDFC initially, but due to lower rate of
interest being offered by Bank of Baroda,
the petitioners got their loan transferred on
23.01.2015 to the respondent no.3, Bank of
4 All. Sunita Nishad & Anr. Vs. Debt Recovery Appellate Tribunal & Ors.
513
Baroda, which granted them a loan of
Rs.29,50,000 and the papers relating to the
house situated at Indira Nagar were
submitted by the petitioners to the said
bank in January, 2015 itself. In March
2015, when Jai Prakash applied for loan of
Rs.90,00,000
under
Kamdhenu
Dairy
Scheme, the papers relating to Indira Nagar
House property had already been deposited
in the bank as the house was mortgaged for
repayment of housing loan, which had to be
done in 217 monthly installments. The loan
account of the borrower Jai Prakash Yadav
was declared NPA by the bank on
30.06.2016 and a Demand Notice was
issued
under
Section
13(2)
of
the
SARFAESI Act on 21.07.2016.

3. It has been stated that the
petitioner
no.1
never
received
such
Demand Notice under Section 13(2) of the
SARFAESI
Act.
On
05.10.2016,
possession notice was issued by the bank
under Section 13(4) of the SARFAESI Act,
2002 and it took symbolic possession of the
property, but no such notice was ever
served upon petitioner no.1, and the
petitioner had no knowledge of taking over
of the property by the bank. On 27.01.2017,
a letter of redemption was sent by the bank
to the petitioners through speed post.
Thereafter summons were issued by the
District Magistrate, Lucknow under Section
14 of the SARFAESI Act, 2002, on
21.03.2017.

4. It has been stated that the
petitioners filed their objections, but they
were not considered and the house property
at Indira Nagar was put up for auction. The
bank failed to comply with Rule 8(6)(a) of
the Security Interest (Enforcement) Rules,
2002 (hereinafter referred to as the Rules of
2002), which specifically provides that
publication of auction sale notice shall
include details of encumbrances on the
property known to the secured creditor. The
bank was well aware that there was a
housing loan of Rs.29 lakhs pending
against the said property, which was the
primary charge and details of such
encumbrance was not published.

5. The petitioners filed Writ
Petition No. 31115 (MB) of 2017 at
Lucknow challenging the Auction Sale
Notice dated 11.12.2017, which was
disposed of by this court, directing the
petitioners to approach the DRT. The
petitioners filed an application under
Section 17 (1) of the Act of 2002 before the
DRT Lucknow and after pleadings were
exchanged, the Securitisation Application
No.19 of 2018 was allowed by the DRT by
its order dated 20.08.2018, a copy of which
has been filed as annexure-12 to the
petition.

6. It has been submitted on behalf
of the petitioners that the Securitisation
Application No. 19 of 2018 was allowed by
the DRT after recording a specific finding
that the Demand Notice issued under
Section 13(2) of the Act of 2002 was not
served upon petitioner no.1. The postal
receipt submitted by the bank was issued in
the name of one 'Savita' and not Sunita.
The DRT observed that the bank should
have gathered more proof of service,
instead of placing reliance upon postal
receipt dated 25.07.2016, which was in the
name of 'Savita' and not Smt. Sunita
Nishad. The DRT while placing reliance
upon the Rule 3(4) of the Rules of 2002,
which required that the Demand Notice
should be served upon each borrower
individually where there were more than
one borrowers; was of the opinion that the
Demand Notice was served only upon the
husband of the petitioner no.1 Om Prakash,
514 INDIAN LAW REPORTS ALLAHABAD SERIES
and not on Sunita Nishad although the
property was jointly owned by husband and
wife. The DRT also observed that mere
producing of postal receipt in support of
having dispatched the notice under Section
13(2) is not sufficient to have established
that the communication was actually
delivered to the addressee. Due to noncompliance of of Rule 3(4) of the Rules of
2002, the entire action initiated by the
respondent bank was void ab initio, and
therefore, the possession notice dated
05.10.2016 and the E-auction sale notice
published by the bank were also vitiated on
the ground that the possession notice was
dispatched to the petitioners through
registered post on 05.10.2016 and symbolic
possession was taken by the bank on
05.10.2016 itself. Such action was against
the law settled by the High Court of
Karnataka in the case of K.R. Krishna
Gowda
and
Another
Vs.
Chief
Manager/Authorised
Officer,
Kotak
Mahindra
Bank
reported
in
Manu/KA/0689/2012, where the Karnataka
High Court observed that in order to enable
the borrower to know the date on which
possession would be taken by the secured
creditor Rules(1) and (2) of Rule 8 would
have to be complied with by issuance of
notices indicating the date on which
possession would be taken. The DRT
observed further that Special Leave Petition
preferred by Kotak Mahindra Bank was
dismissed by the Supreme Court hence the
judgement rendered by Karnataka High
Court stood affirmed about service of
possession notice prior to actual taking of
symbolic possession.

7. It was also observed by the DRT
that auction sale notice published by the
respondent bank did not mention the
encumbrances already existing on the
secured asset proposed to be sold in terms
Rule 8(6) of the Rules of 2002, Sunita
Nishad being a joint owner of the secured
asset along with her husband Om Prakash,
had taken a housing loan on the property
earlier from the bank, which was not
mentioned in the sale notice. Consequently,
since the bank had failed to prove service
of demand notice dated 21.07.2016, on
Sunita
Nishad
hence,
the
entire
consequential
action
taken
by
the
respondent bank under the SARFAESI Act
of 2002 was vitiated and void ab initio.

8. It has further been stated that the
bank being aggrieved filed an appeal before
the DRAT, which was allowed mainly on
three grounds. It was observed that even
though notice was sent indicating a wrong
name of 'Savita' instead of Sunita Nishad it
can be considered to be a typographical
error of the postal department and notice
shall be treated to have been duly sent as it
was not returned undelivered. Such notice
will be deemed to have been served upon
petitioner no.1 as it was addressed, not only
to petitioner no.1, but also to her husband
Om Prakash, who was living at the same
address. The Securitisation Application was
filed by both husband and wife. The
pleading in the Securitisation Application
was only for non-receipt of notice by the
the applicant no.1, Smt. Sunita Nishad. It is
sufficient to infer that the notices were
served to both husband and wife as they
were dispatched to one and the same
address and her husband, Om Prakash did
not allege that such notice was never served
upon him, and even the notice sent to
Sunita Nishad did not return unserved.

9. It has also been observed by the
DRAT that non-service of prior notice of
taking symbolic possession under Section
13(4) is also of no consequence once
summons were issued under the provisions
4 All. Sunita Nishad & Anr. Vs. Debt Recovery Appellate Tribunal & Ors.
515
of Section 14 of the Act by the District
Magistrate. The DRAT also observed that
in view of the judgment rendered by the
Supreme Court in Standard Chartered
Bank Vs. V. Noble Kumar, 2013 (9) SCC
620; there was no necessity to serve any
notice
before
taking
over
symbolic
possession of the property. The DRAT
placed reliance upon a judgement rendered
by this court at Allahabad in Writ-C No.
9731 of 2019, 'M/s Mahesh Industries
Private Limited and Others Vs. Karur
Vyasa Bank Limited', on 08.08.2019,
where relying upon Noble Kumar (supra),
this Court had observed that there is no
requirement for issuance of any notice to
the borrower for the proposed date of
taking possession. The secured creditor is
under no obligation to intimate to the
borrower/guarantor before taking symbolic
possession of the property.

10. The DRAT has allowed the
appeal of the bank also on the ground that
the applicants had created an extended
mortgage of property for securing the loan
granted to their relative Jai Prakash, who
was the Borrower. The extended mortgage
letter dated 07.05.2015 was signed by both
Sunita Nishad and her husband Om
Prakash, and therefore, Sunita Nishad could
not be permitted to say that she had not
given any guarantee for securing the loan
taken by Jai Prakash. As per Rule 8(6), the
secured creditor is required to mention
encumbrances in the sale notice, but in this
case
the
properties
were
primarily
mortgaged against the housing loan granted
to Sunita Nishad and her husband by Bank
of Baroda itself and since no mention
regarding such housing loan was made in
the demand notice, it was apparent that
such housing loan was regular. Also, even
if the encumbrance was in existence, the
property was mortgaged with the self same
bank and encumbrance was not of any third
party (institution), hence if at all it caused
any prejudice to the rights of any party it
was that of the bank alone. Non-mentioning
of such encumbrance on the properties in
the sale notice was of no consequence and
it could not be said that the bank had
committed such a grave irregularity as to
vitiate the sale proceedings altogether.

11. Initially, when this petition was
filed and taken up as fresh, the counsel for
the
petitioner
had
argued
that
the
requirement of Rule 13 of the Rules of
2002 had not been met and the Appellate
Tribunal had given a wrong finding
regarding sufficiency of service of notice
under Section 13. The Court issue notice to
the respondent and directed that till the next
date of listing, the parties shall maintain
status quo. Such time interim order
continued to be extended and counter
affidavit was filed by the respondent bank
on 26.03.2021, along with an application
for vacation of interim order.

12. In the counter affidavit, the
bank denied the claim of the petitioners in
the writ petition and stated that the
petitioners have
resorted
to
material
concealment
and
misrepresentation
in
stating on oath that they have not taken any
guarantee in the term loan facility extended
to Jai Prakash of Rs.90 lakhs under the
Kamdhenu Scheme. It was stated that
earlier Writ-C No.16546 of 2021 was filed
by the borrower Jai Prakash before this
court, praying for early disposal of his
application
for
recall
dismissing
Securitisation Application No. 15 of 2017
for want of prosecution. The High Court
disposed off Writ-C No. 16546 of 2021 on
07.04.2022 with direction to the DRT to
decide the recall as well as delay
condonation
application
filed
by
Jai
516 INDIAN LAW REPORTS ALLAHABAD SERIES
Prakash expeditiously, but before such
order was passed, the DRT had already
disposed off both the applications by its
order dated 04.04.2022 and Securitisation
Application No. 15 of 2017 filed by Jai
Prakash stood revived.

13. It was also stated in the counter
affidavit of the bank that the Demand
Notice dated 21.07.2016, issued under Rule
13 (2) of the Act of 2002 was sent to the
borrower and also to the guarantor through
registered speed post on 25.07.2017, which
notice has not returned undelivered, and
therefore, service was deemed upon them.
The bank took symbolic possession of the
secured asset on 05.10.2016 and summons
were issued by the District Magistrate
under Section 14 of the Act which were
affixed on a conspicuous place on the
house
property/secured
asset
as
the
borrower/guarantor had refused to accept
personal service of the same.

14. It has also been stated that the
petitioners have admitted in paragraphs 3
and 15 of writ petition that they had stood
as guarantors for the loan facility extended
to Jai Prakash. Kamdhenu Dairy Loan is a
commercial loan, which is granted to the
borrower against some security. The
borrower Jai Prakash and the guarantors
have executed the necessary documents in
this regard by securing the said term loan
by extending guarantee of house property
no. 13/88, Indira Nagar Vistar Yojna and a
plot situated at Sharda Nagar Raebareli
Road Scheme, therefore, the bank could
initiate
recovery
proceedings
under
SARFAESI Act which relates to recovery
of NPAs from secured assets held by the
creditor. Moreover, the Uttar Pradesh
Agricultural Credit Act, 1973 prohibits sale
of agricultural property, whereas the house
property situated at Indira Nagar Vistar
Yojna and the plot situated at Sharda Nagar
Raebareli Road Housing Scheme were not
agricultural properties.

15. It has also been stated that after
summons were issued under Section 14 of
the Act of 2002 by the District Magistrate,
Lucknow. The petitioners did not file
objections when orders were passed under
section 14 of the Act by the designated
officer, the Bank had published auction
notice on 18.11.2017, in two leading
newspapers, namely, Times of India and
Amar Ujala as is required under the Act
and the Rules. The DRT had allowed the
Securitisation Application of the petitioners
on technical grounds stating the Demand
Notice remained unserved due to wrong
mention of the name of the petitioner no.1,
the name of the petitioner no.1 was Sunita,
but it was typed as 'Savita'. It has been
stated that the postal receipt issued in the
name of 'Savita' had been issued for the
notice which showed the correct name and
address of the guarantors. Both petitioner
no.1 and petitioner no.2 were joint owners
of the property. The Demand Notice sent
through registered post has never been
received back undelivered, and therefore,
service is deemed upon the petitioners.
With regards to taking over of symbolic
possession, the bank has relied upon
Standard Chartered Bank Vs. Noble Kumar
(supra), where the Supreme Court has
observed that application under Section 14
of the Act can be moved straight away after
Demand Notice under Section 13(2) of the
Act is issued.

16. The bank has also stated in its
counter affidavit that there is no provision
which requires the bank to cancel the sale
proceedings in case only one bid is
received. Since the reserved price set by the
bank had been met by the bidder, the house
4 All. Sunita Nishad & Anr. Vs. Debt Recovery Appellate Tribunal & Ors.
517
property could be sold to such bidder. It
was an open bidding process and the
petitioners were free to place a better offer
in the auction.

17. In the rejoinder affidavit filed
by the petitioners to the counter affidavit of
the bank, it has been stated that Writ-C No.
16546 of 2021 was filed by the borrower
Jai Prakash without knowledge of the
petitioners. When the petitioners derived
knowledge of the contents of the petition,
they objected to the same. Since Jai
Prakash, the borrower was petitioner
no.1's brother-in-law, he admitted his
mistake, but requested the petitioner no.1
not to deny the contents of the Writ
Petition No. 16546 of 2021. To protect
him, she had stated in her Writ Petition
No. 31115 (MB) of 2017 that she was the
guarantor in the loan extended to Jai
Prakash. In fact, Writ Petition No. 31115
(MB) of 2017 was disposed of by this
court by making no observations on
merit, but with a direction to the
petitioners to approach the DRT under
the SARFAESI Act. In such writ petition
the petitioners had made no admission of
being guarantors for the term loan facility
extended to Jai Prakash. The petitioners
had taken a housing loan of Rs. 29 lakhs
from the Bank of Baroda to buy a house
property situated in Sector-13, Indira
Nagar and mortgaged the said house to
secure the loan. They had not signed any
document extending the guarantee in
favour of Jai Prakash for securing his
term loan taken under Kamdhenu Dairy
Scheme. However, the bank in collusion
with the borrower Jai Prakash had
extended the guarantee which was never
executed by the petitioners. As a result of
such fraudulent behaviour, the bank
manager, who had processed the loan
given to Jai Prakash had been suspended
and later demoted.

18. It was also stated in such
rejoinder affidavit that the alleged letter
issued on 27.11.2017 admitting the
mortgage of house property situated at
Indira Nagar for securing the loan given
to the principal borrower was not signed
by the petitioners and Jai Prakash may
have forged the same. The house property
at Indira Nagar was never mortgaged, and
therefore, there could not have been an
extension of the mortgage deed.

19. It was reiterated that the bank
had failed to comply with Rule 8(1) and
8(2) by not issuing notices, specifying the
possession date. The alleged notice of
symbolic possession dated 05.10.2016
was
published
only
on
07.10.2016
proceedings initiated thereafter ex parte.

20.
After
affidavits
were
exchanged and the petition was ripe for
hearing an Impleadment Application no.9
of 2022 was filed by the petitioners on
25.04.2022 for impleading the principal
borrower Jai Prakash as respondent no.5 in
the
writ
alleging
that
Securitisation
Application No.150 of 2017 was pending
before the DRT and its outcome would
impact the petitioners, and therefore, it was
necessary to include Jai Prakash as
respondent no.5 in the petition.

21. Objections were filed by the
bank
on
18.07.2022,
against
such
application for impleadment by the bank
saying that such impleadment application
was collusive in nature and filed only to
delay the decision in the writ petition where
pleadings had been exchanged and the
matter was ripe for final hearing. It was
stated that initially one Securitisation
518 INDIAN LAW REPORTS ALLAHABAD SERIES
Application No. 150 of 2017 was filed by
Jai Prakash, the petitioners were not
impleaded therein as respondents. When
Securitisation Application No.19 of 2018
was filed by petitioners Sunita Nishad and
Om Prakash, they did not implead Jai
Prakash as a respondent, although the same
advocate was engaged by them and they
had made pleadings on behalf of each
other.
Also,
when
Securitisation
Application No.19 of 2018, was allowed by
the DRT, the bank filed appeal before the
DRAT
Allahabad.
Jai
Prakash,
the
borrower was not a party to such
proceedings and no objections regarding
the non-joinder of the borrower was ever
raised by the petitioners.

22. This court passed a detailed
order
on
14.03.2023,
rejecting
the
impleadment application by noticing the
objections as stated by the bank and finding
that the securitisation application of Jai
Prakash the borrower is pending before the
DRT, where the guarantors have not been
impleaded as parties. The securitisation
application of the guarantors Sunita Nishad
and Om Prakash having been allowed, the
bank had filed appeal before the DRAT
Allahabad, and during the pendency of the
appeal, the petitioners did not raise any
issue regarding non-impleadment of the
principal borrower. Since Writ-C No.
35050
of
2019
had arisen out
of
proceedings
in
the
Securitisation
Application No. 19 of 2018 and challenged
the order passed in appeal by the DRAT,
Allahabad where Jai Prakash was not a
party, there was no necessity of impleading
the Jai Prakash in the instant petition.

23. An application for amendment
in the petition was moved on 20.09.2023 by
the petitioners stating that Writ Petition No.
31115 (MB) of 2017 had been disposed off
on 20.12.2017 and there were certain
incorrect pleadings made therein and the
petitioners
had
filed
an
amendment
application which was pending in the
finally disposed off petition.

24. This Court partly allowed such
Amendment Application on 01.03.2024,
the relevant extract of which is being
quoted here in below:-

 1. ***
 2. Learned counsel for the
applicant has prayed, on the basis of the
affidavit
filed
in
support
of
such
amendment application for permission to
add paragraph 1A after paragraph 1 in
Writ-C No.35050 of 2019, that initially a
Writ Petition No.31115 (M/B) of 2017 was
filed by the petitioners, which was disposed
of by this court by an order dated
20.12.2017. In the said Writ Petition
No.31115 (M/B) of 2017, certain incorrect
statements were made in paragraphs-3 and
15, to substantiate the claim of the
petitioners that loan ought to be recovered
from the principal borrowers first and only
if it is not feasible to recover from the
principal
borrowers,
proceedings
of
recovery could be initiated against the
guarantors that is the petitioners. Such
pleadings was made in Writ Petition
No.31115 (M/B) of 2017 by the petitioners
only to convince this Court that the
petitioners being guarantors cannot be
fixed with liability of repayment of loan of
the principal borrower before the bank
proceeds against principal borrower. But
from such pleadings, an inference has been
drawn that the petitioners admitted the
Bank's claim that they are guarantors of
the loan taken by the principal borrower.
In fact, the petitioners had wanted to assert
that the bank was arbitrarily proceeding
against the petitioners as guarantors.
4 All. Sunita Nishad & Anr. Vs. Debt Recovery Appellate Tribunal & Ors.
519
 The petitioners pleading in the
said Writ Petition No.31115 (M/B) of 2017
was made only because they could not
understand the nuances of the english
language used by the learned counsel
appearing for them in Writ Petition
No.31115 (M/B) of 2017 and even the
document that has been relied upon by the
petitioners showed that the petitioner no.1
Sunita Nishad never signed the terms and
conditions of the loan document and the
extension of equitable mortgage, nor did
she extended her own house as security
against the loan of Jai Prakash, who is the
principal borrower. The petitioners were
under
tremendous
pressure
as
their
residential house, which was fraudulently
shown by the Bank officials to have been
extended as security for repayment of loan
in time by the principal borrower, was
under auction sale and they were being
threatened to be dispossessed. Therefore,
inadvertently mistake was committed in the
said pleading in Writ Petition No.31115
(M/B) of 2017.

 3. Learned counsel for the
applicant has also stated before this Court
that Writ Petition No.31115 (M/B) of 2017
having already disposed off by this Court
by
its
order
dated
20.12.2017,
an
application for amendment in the pleadings
in the said Writ Petition No.31115 (M/B) of
2017 has also been filed, which is pending
disposal before the Division Bench.

 4. Additionally, learned counsel
for the applicant has prayed for liberty to
add paragraph-70 A in Writ-C No.35050 of
2019, raising the plea with regard to the
bank proceeding under the Securitization
and Reconstruction of Financial Assets and
Enforcement of Security Interest Act
(SARFAESI Act) illegally, as a loan that
had been given to the Principal borrower
was under "Kamdhenu Dairy Interest
Subsidy Scheme" floated under the U.P.
Agriculture Credit Act, 1973. In the said
loan, subsidy was given by the State
Government. As such recovery, if any,
could be done only under the provisions
Section 11, 12, 12A, 12B and 12C of the
U.P. Agriculture Credit Act, 1973. The
Bank could not be allowed to pursue the
remedy under the SARFAESI Act before the
Debt Recovery Tribunal.

 5. Further, the learned counsel
for the applicant prays for permission to be
granted to the applicants to add paragraph
70-B to the pleadings in Writ-C No.35050
of 2019, wherein it has been stated that
loan in question being under the Kamdhenu
Dairy Interest Subsidy Scheme, under the
U.P. Agricuture Credit Act, 1973, is an
agricultural loan extended for agricultural
purposes and, therefore, no proceedings
under the SARFAESI Act could be initiated
to effectuate recovery of agricultural loan.

 6.,7.,8.***

 9. A strong objection has been
taken to the pleadings proposed to be
added as paragraph-1A saying that the
petitioners knowingly signed all documents
and they cannot resile from signatures
made by them on such documents as
guarantors and the annexure that have
been filed along with Writ Petition
No.31115 (M/B) of 2017 by the petitioners
themselves belie their claim that they were
not guarantors to the loan taken by the
principal borrower and they did not offer
their residential house as surety for the
loan taken by the principal borrower.

 10. It has been argued by Sri
Prashant
Kumar
Srivastava,
learned
counsel for the respondent, that the
520 INDIAN LAW REPORTS ALLAHABAD SERIES
petitioners
deliberately
moved
an
amendment application with a prayer to
add
the
pleadings
as
proposed
in
paragraph-1A only to detract from the
inference made from the pleadings in the
writ petition subsequently filed i.e. Writ-C
No.35050 (M/S) of 2019, where they had
stated that they had not signed as
guarantors and have not offered the house
as surety for the loan taken by the principal
borrower. Through the application for
amendment, the petitioners are trying to
raise new grounds and are trying to change
nature and character of the petition.

 11. It has also been argued that
application for amendment filed by the
applicants is collusive for the reason that at
the
initial
stage
when
securitization
application No.150 of 2017 was filed by the
principal borrower Jai Prakash, and
securitization application no.19 of 2018
was filed by Mrs. Sunita Nishad and her
husband, they had engaged the same
Advocate and they had made pleadings on
behalf
of
each
other
in
the
said
Securitization Applications.

 12., 13., ***

 14. This Court has gone through
the counter affidavit that has been filed to
the original writ petition Writ-C No.35050
of 2019 and also the writ petition no.31115
of 2017, a copy of which has been annexed
to the counter affidavit filed in the instant
petition. From the same, it is evident that
documents have been filed by the Bank to
show that the petitioners had signed the
documents
as
guarantors
for
the
principal
borrower,
annexed
as
annexure-5 to the counter affidavit.
Therefore, the amendment as proposed by
addition of paragraph 1A cannot be
allowed. It would only permit the
petitioners to resile from their pleadings
and set up a new case altogether before
this Court.

 15. In so far as the proposed
amendments and addition of paragraphs-
70A and 70B are concerned, such
addition to the pleadings raise legal
grounds, which can be taken at any stage.

 16.
Such
pleadings
are
proposed to be made the basis of the
legal grounds which could be raised at
any stage even at the stage of final
hearing as they do not require additional
evidence to be led. Such proposed
amendments by addition of pragraph-70A
and 70B, the grounds (hh) and (ii) as well
as the relief clause (v) are permissible in
law to be added and are therefore
allowed.

 17.
Consequently,
the
amendment application C.M. Application
No. I.A.12/ 2023 is partly allowed."

25. In effect, this Court had
allowed amendments relating to UP
Agricultural
Credit
Act,
1973,
by
addition of paragraphs 70A and 70B and
grounds relating to the same. It however,
did not allow paragraph 1A to be added
where the petitioners had stated that,
although in Writ Petition No. 31115
(MB) of 2017, they had stated that
recovery should first be sought to be
made from the principal borrower before
proceeding against the guarantor and had
inadvertently suggested their acceptance
as guarantors to the loan taken by Jai
Prakash, the petitioners only meant that
even if they are treated as guarantors, the
recovery should first follow the proper
legal procedure. It was also stated that they
had unknowingly signed the pleadings
4 All. Sunita Nishad & Anr. Vs. Debt Recovery Appellate Tribunal & Ors.
521
under pressure as their residential house
was under auction.

26.
After
amendment
of
the
petition by addition of paragraph 70A and
70B, the respondent bank filed another
application for dismissal of the petition on
03.04.2024, along with a supplementary
counter affidavit, saying that the petitioners
have acknowledged their role as guarantors
for the term loan of Rs.90 lakhs extended to
Jai
Prakash
under
Kamdhenu
Dairy
Scheme additionally through letter dated
27.11.2017, they admitted to providing the
guarantee and requested the bank to auction
the borrowers property first. They had
further sought a deferment of auction of
their house property situated in Sharda
Nagar Yojna and Indira Nagar Vistar. Also,
after rejection of interim relief application
in
Securitisation
Application,
the
petitioners had filed Writ Petition No.
31115 (MB) of 2017 and had made various
averments on behalf of the borrower and
they had also engaged the same counsel
and through this petition as well as repeated
applications moved by the petitioners, they
have indirectly benefited the borrower.

27. Moreover, the petitioners have
filed false affidavits before this Court and
the Supreme Court in the case of State of
Orissa and Others Vs. Laxmi Narayan
Das (2023) 15 SCC 273, has observed that
if a petitioner does not disclose all material
facts fairly and truly before the Court but
stated them in a distorted manner and tried
to mislead the Court, the Court has inherent
power to protect itself and to prevent an
abuse of its process and dismiss the
petition. The respondent bank has also
placed reliance upon Hari Narayan Vs
Badari AIR 1963 Supreme Court 1558, G.
Narayana Swamy Reddy Vs. Govt. of
Karnataka 1991 (3) SCC 261 and several
other cases where the High Court denied
relief to the litigant on the ground that he
had not approached the court with clean
hands and writ jurisdiction was equitable
jurisdiction, which could not be allowed to
be abused. With regard to contents of
paragraphs 70A and 70B, it has been
submitted that securitisation proceedings
can be initiated by a secured creditor for
realisation of debt through transfer of
security interest created on the secured
asset by way of sale/lease, etc. under the
Act of 2002. There is no provision in the
Act of 2002, which bars the bank from
initiating securitisation proceedings under
the Kamdhenu Scheme.

28.