✦ High Court of India · 24 Sep 2025

Bank Ltd. Lucknow Thru. Authorised Officer Alp Narayan Tiwari v. State Of U.P. Thru. Prin. Secy. Home Lko. And

Case Details High Court of India · 24 Sep 2025
Court
High Court of India
Decided
24 Sep 2025
Bench
SANGEETA CHANDRABRIJ RAJ SINGH
Length
1,620 words

nos.1, 3, 4 and 5, Shri Varun Pandey, appears on behalf of the Opposite party no.2 and Shri Saksham Agarwal, Advocate, who has filed his Power on behalf of the Opposite party no.11, the Auction purchaser.

2. This petition has been filed by the petitioner for the following prayers:- "I. Issue a writ, order or direction in the nature of Certiorari quashing the order dated 22.05.2025 passed by the Respondent no.5 contained as Annexure No.1 to this petition. II. Issue a writ, order or direction in the nature of Mandamus commanding Opposite party Nos.3, 5 and 10 to take over the physical possession of the property situated at House No.E-4/346, Sector-O, Mansarowar, Kanpur Road Yojana, Lucknow, and handed over the same to the petitioner/ Bank forthwith. III. Issue in favour of the petitioners any other writ, order or direction which this Hon'ble Court may deem just and proper in the circumstances of the case as also in the interest of justice." 2 WRIC No. 9305 of 2025

3. It is the case of the petitioner that Opposite party no.6-Shree Balaji Enterprises Proprietor, Ankit Gupta, who was the borrower has approached the petitioner-Bank at Jankipuram Branch in Lucknow seeking a Cash Credit Limit against his property situated at E-4/346, Sector-O, Mansarowar, Kanpur Road Yojana, Lucknow, as well as Residential House No.545 Ka/K-763/ P.L.-2 (New Number 545 KA/D- 1079) constructed over Plot No.2, which was a portion of Khasra No.763, Area 1200 Sq.ft. situated at Village Para (Shivpuram), Ward- Alamnagar, Tehsil & District Lucknow. The Bank sanctioned a loan of Rs.18 lacs @ 13.50% per annum for a period of 12 months on

08.06.2016. At the time of sanctioning the loan Shri Balaji Enterprises Property, Ankit Gupta, the borrower had also produced Opposite party nos.8 to 11 as his Guarantors to the said loan. The Respondent no.6- Ankit Gupta defaulted in repayment of loan. The notices were issued under Section 13 of the SARFAESI Act to Ankit Gupta and to the four guarantors i.e. to Smt. Sunita Gupta, the mother of Ankit Gupta, Dinesh Kumar Sharma son of Vivekanand Sharma, Anil Agarwal son of Mr. M.L. Agarwal and Pankaj Gupta son of Sada Shiv Gupta. After notice was issued under Section 13(2) of the SARFAESI Act on 14.06.2023 making a demand of Rs.28,54,278/- as outstanding balance including interest. Another notice was affixed on

02.07.2018, out of abundant caution also on residence of the borrower situated at E-4/346, Sector-O, Mansarowar, Kanpur Road Yojana, Lucknow. Neither the loan amount was satisfied nor the borrower made any representation under Section 13(3A) of the Act, 2002 and the petitioner-Bank had no occasion to deal with the matter on the basis of any such representation either by the borrower or by the guarantors, therefore, the Bank proceeded to take symbolic possession under Section 13(4) of the Act by issuing notice to the borrower and to the guarantors on 18.09.2023 and 26.10.2023 under Rule 8(1) of the Security Interest (Enforcement Rules, 2002). The possession notices were also affixed on the secured property. Inspite of such notices, the borrower made absolutely no attempt to settle the loan account, it left the Bank with no option but to proceed with the Sale of the of the Secured Property and the Bank auctioned off the property to the Opposite party no.11-Pranchi Pandey, the highest 3 WRIC No. 9305 of 2025 bidder. An application was filed on 17.02.2024 under Section 14(1) and Section 14(2) of the Act before the District Magistrate seeking Police assistance for taking physical possession of the secured assets i.e. at House No.E-4/346, Sector-O, Mansarowar, Kanpur Road Yojana, Lucknow. Upon filing of this application, the District Magistrate issued notice on 28.01.2019 to the borrower. The borrower Ankit Gupta, appeared and took the plea that the Guarantor Anil Agarwal, Respondent no.9, had died, therefore, proceedings could not be initiated against a dead person. Accepting his argument and rejecting the argument made by the Bank that the borrower was still alive and only one of the guarantor had died and the Bank has not been intimated by the borrower or any of the guarantors regarding death of Anil Agarwal, the ADM/Additional Collector, Administration, Lucknow; the Opposite party no.5 had passed the impugned order.

4. It has been submitted by the learned counsel for the petitioner that the Additional District Magistrate was under no legal obligation to issue notice to the borrower as it has been settled by the Hon'ble Supreme Court and by this Court that the application under Section 14(1) and Section 14(2) of the SARFAESI Act only requires delivery of actual physical possession of the secured asset which in fact is only a Ministerial Act. There is no lis to be decided between the parties. Nevertheless, the Opposite party no.5 issued notice to the borrower and the borrower came forward with the plea that one of the guarantors had died even before the Bank issued notice under Section 13(2) and Section 13(4) of the SARFAESI Act.

5. It has been submitted that the Bank is now faced with a piquant situation that it has proceeded to sell of the property through E- Auction to the Opposite party no.11 and the Auction purchaser having received a valid Sale Certificate from the Bank, is after the Bank to give actual physical possession of the property in question.

6. The counsel for the State-respondents has pointed from the order impugned that the Opposite party no.5 while considering the arguments raised by the Bank has expressed a considered opinion which according to the counsel for the Respondents is correct that 4 WRIC No. 9305 of 2025 the responsibility of the borrower and the guarantor is co-extensive and if the loan account is not settled from the sale proceeds of the secured assets of the borrower, the property of the guarantor in all likelihood would be sold off. Such guarantor being equally liable to settle the loan account was not heard at all as he had died much before notice under Section 13(2) and Section 13(4) was issued. It has also been pointed out by the counsel appearing for the State- respondents that only the application under Section 14 has been rejected without addressing the right of the Bank to take the secured asset in its possession. It has been submitted that there is no observation on the merits of the Bank's case which still to be decided by the Competent Forum i.e. the Debt Recovery Tribunal with regard to entitlement to recover such loan amount either from the borrower or the guarantors. It has also been submitted that it will always open for the Bank to issue fresh notice under Section 13(2) and Section 13(4) of the Act to the legal representatives of the guarantor Anil Agarwal who has died in the meantime, and to proceed afresh.

7. At this stage, Shri Saksham Agarwal has stated that his client is the Auction Purchaser, and she has paid the entire amount and a valid Sale Certificate has been issued to her and her rights will be affected.

8. We are of the considered opinion that the order dated 22.05.2025 cannot be faulted with as the liability of the borrower and the guarantors is co-extensive in nature. Once, one of the guarantors has died, his property in all likelihood would also suffer the same consequences as that of the borrower without any notice being issued to him. In case Sale proceeds of the secured assets are not sufficient to settle the loan amount then property of the guarantors is likely to be auctioned. The order impugned cannot be faulted, there is no legal infirmity in the order. In sofaras the difficulty faced by the Bank or by the Opposite party no.11 is concerned, it shall always be open for the Bank to return the amount of the Auction purchaser including her earnest money she deposited earlier alongwith interest at Bank rate, leaving it open for the Auction purchaser to again participate in the Auction proceedings if the loan account is not 5 WRIC No. 9305 of 2025 settled either by the borrower or by the guarantors.

9. This writ petition is disposed of with a direction to the Bank to return the money of the Opposite party no.11 within a period of three weeks from today alongwith interest at Bank rate and to proceed afresh after giving notice to the borrower and to the guarantors and legal representatives if any of the dead guarantor.

10. Before issuing such notice under Section 13(2) the Bank shall first issue a letter to find out from the borrower whether any of the other guarantors are still alive or not and also find out legal representatives of the guarantor who has died, and such notice shall be issued within three weeks from today.

11. Since the Opposite party nos.6 to 10 have not been heard by us while disposing of this matter, a copy of the order passed today shall be also served upon the Opposite party nos.6 to 10 by the Bank while issuing such notice. (Brij Raj Singh,J.) (Mrs. Sangeeta Chandra,J.) September 24, 2025 N.PAL NARESH PAL High Court of Judicature at Allahabad, Lucknow Bench

nos.1, 3, 4 and 5, Shri Varun Pandey, appears on behalf of the Opposite party no.2 and Shri Saksham Agarwal, Advocate, who has filed his Power on behalf of the Opposite party no.11, the Auction purchaser.

2. This petition has been filed by the petitioner for the following prayers:- "I. Issue a writ, order or direction in the nature of Certiorari quashing the order dated 22.05.2025 passed by the Respondent no.5 contained as Annexure No.1 to this petition. II. Issue a writ, order or direction in the nature of Mandamus commanding Opposite party Nos.3, 5 and 10 to take over the physical possession of the property situated at House No.E-4/346, Sector-O, Mansarowar, Kanpur Road Yojana, Lucknow, and handed over the same to the petitioner/ Bank forthwith. III. Issue in favour of the petitioners any other writ, order or direction which this Hon'ble Court may deem just and proper in the circumstances of the case as also in the interest of justice." 2 WRIC No. 9305 of 2025

3. It is the case of the petitioner that Opposite party no.6-Shree Balaji Enterprises Proprietor, Ankit Gupta, who was the borrower has approached the petitioner-Bank at Jankipuram Branch in Lucknow seeking a Cash Credit Limit against his property situated at E-4/346, Sector-O, Mansarowar, Kanpur Road Yojana, Lucknow, as well as Residential House No.545 Ka/K-763/ P.L.-2 (New Number 545 KA/D- 1079) constructed over Plot No.2, which was a portion of Khasra No.763, Area 1200 Sq.ft. situated at Village Para (Shivpuram), Ward- Alamnagar, Tehsil & District Lucknow. The Bank sanctioned a loan of Rs.18 lacs @ 13.50% per annum for a period of 12 months on

08.06.2016. At the time of sanctioning the loan Shri Balaji Enterprises Property, Ankit Gupta, the borrower had also produced Opposite party nos.8 to 11 as his Guarantors to the said loan. The Respondent no.6- Ankit Gupta defaulted in repayment of loan. The notices were issued under Section 13 of the SARFAESI Act to Ankit Gupta and to the four guarantors i.e. to Smt. Sunita Gupta, the mother of Ankit Gupta, Dinesh Kumar Sharma son of Vivekanand Sharma, Anil Agarwal son of Mr. M.L. Agarwal and Pankaj Gupta son of Sada Shiv Gupta. After notice was issued under Section 13(2) of the SARFAESI Act on 14.06.2023 making a demand of Rs.28,54,278/- as outstanding balance including interest. Another notice was affixed on

02.07.2018, out of abundant caution also on residence of the borrower situated at E-4/346, Sector-O, Mansarowar, Kanpur Road Yojana, Lucknow. Neither the loan amount was satisfied nor the borrower made any representation under Section 13(3A) of the Act, 2002 and the petitioner-Bank had no occasion to deal with the matter on the basis of any such representation either by the borrower or by the guarantors, therefore, the Bank proceeded to take symbolic possession under Section 13(4) of the Act by issuing notice to the borrower and to the guarantors on 18.09.2023 and 26.10.2023 under Rule 8(1) of the Security Interest (Enforcement Rules, 2002). The possession notices were also affixed on the secured property. Inspite of such notices, the borrower made absolutely no attempt to settle the loan account, it left the Bank with no option but to proceed with the Sale of the of the Secured Property and the Bank auctioned off the property to the Opposite party no.11-Pranchi Pandey, the highest 3 WRIC No. 9305 of 2025 bidder. An application was filed on 17.02.2024 under Section 14(1) and Section 14(2) of the Act before the District Magistrate seeking Police assistance for taking physical possession of the secured assets i.e. at House No.E-4/346, Sector-O, Mansarowar, Kanpur Road Yojana, Lucknow. Upon filing of this application, the District Magistrate issued notice on 28.01.2019 to the borrower. The borrower Ankit Gupta, appeared and took the plea that the Guarantor Anil Agarwal, Respondent no.9, had died, therefore, proceedings could not be initiated against a dead person. Accepting his argument and rejecting the argument made by the Bank that the borrower was still alive and only one of the guarantor had died and the Bank has not been intimated by the borrower or any of the guarantors regarding death of Anil Agarwal, the ADM/Additional Collector, Administration, Lucknow; the Opposite party no.5 had passed the impugned order.

4. It has been submitted by the learned counsel for the petitioner that the Additional District Magistrate was under no legal obligation to issue notice to the borrower as it has been settled by the Hon'ble Supreme Court and by this Court that the application under Section 14(1) and Section 14(2) of the SARFAESI Act only requires delivery of actual physical possession of the secured asset which in fact is only a Ministerial Act. There is no lis to be decided between the parties. Nevertheless, the Opposite party no.5 issued notice to the borrower and the borrower came forward with the plea that one of the guarantors had died even before the Bank issued notice under Section 13(2) and Section 13(4) of the SARFAESI Act.

5. It has been submitted that the Bank is now faced with a piquant situation that it has proceeded to sell of the property through E- Auction to the Opposite party no.11 and the Auction purchaser having received a valid Sale Certificate from the Bank, is after the Bank to give actual physical possession of the property in question.

6. The counsel for the State-respondents has pointed from the order impugned that the Opposite party no.5 while considering the arguments raised by the Bank has expressed a considered opinion which according to the counsel for the Respondents is correct that 4 WRIC No. 9305 of 2025 the responsibility of the borrower and the guarantor is co-extensive and if the loan account is not settled from the sale proceeds of the secured assets of the borrower, the property of the guarantor in all likelihood would be sold off. Such guarantor being equally liable to settle the loan account was not heard at all as he had died much before notice under Section 13(2) and Section 13(4) was issued. It has also been pointed out by the counsel appearing for the State- respondents that only the application under Section 14 has been rejected without addressing the right of the Bank to take the secured asset in its possession. It has been submitted that there is no observation on the merits of the Bank's case which still to be decided by the Competent Forum i.e. the Debt Recovery Tribunal with regard to entitlement to recover such loan amount either from the borrower or the guarantors. It has also been submitted that it will always open for the Bank to issue fresh notice under Section 13(2) and Section 13(4) of the Act to the legal representatives of the guarantor Anil Agarwal who has died in the meantime, and to proceed afresh.

7. At this stage, Shri Saksham Agarwal has stated that his client is the Auction Purchaser, and she has paid the entire amount and a valid Sale Certificate has been issued to her and her rights will be affected.

8. We are of the considered opinion that the order dated 22.05.2025 cannot be faulted with as the liability of the borrower and the guarantors is co-extensive in nature. Once, one of the guarantors has died, his property in all likelihood would also suffer the same consequences as that of the borrower without any notice being issued to him. In case Sale proceeds of the secured assets are not sufficient to settle the loan amount then property of the guarantors is likely to be auctioned. The order impugned cannot be faulted, there is no legal infirmity in the order. In sofaras the difficulty faced by the Bank or by the Opposite party no.11 is concerned, it shall always be open for the Bank to return the amount of the Auction purchaser including her earnest money she deposited earlier alongwith interest at Bank rate, leaving it open for the Auction purchaser to again participate in the Auction proceedings if the loan account is not 5 WRIC No. 9305 of 2025 settled either by the borrower or by the guarantors.

9. This writ petition is disposed of with a direction to the Bank to return the money of the Opposite party no.11 within a period of three weeks from today alongwith interest at Bank rate and to proceed afresh after giving notice to the borrower and to the guarantors and legal representatives if any of the dead guarantor.

10. Before issuing such notice under Section 13(2) the Bank shall first issue a letter to find out from the borrower whether any of the other guarantors are still alive or not and also find out legal representatives of the guarantor who has died, and such notice shall be issued within three weeks from today.

11. Since the Opposite party nos.6 to 10 have not been heard by us while disposing of this matter, a copy of the order passed today shall be also served upon the Opposite party nos.6 to 10 by the Bank while issuing such notice. (Brij Raj Singh,J.) (Mrs. Sangeeta Chandra,J.) September 24, 2025 N.PAL NARESH PAL High Court of Judicature at Allahabad, Lucknow Bench

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