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Jammu & Kashmir High Court
Vikas Bharti & Anr vs Punjab National Bank And on 16 December, 2025
HIGH COURT OF JAMMU & KASHMIR AND LADAKH
AT JAMMU
Case No. WP(C) No. 2342/2024
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WP(C) No. 839/2025
Reserved on: 08.12.2025
Pronounced on:- 16.12.2025
Uploaded on:-16.12.2025
Whether the operative part or
full judgment is pronounced
Vikas Bharti & Anr.
.....Petitioner(s)
Through: Ms. Mandeep Reen, Advocate
Vs
Punjab National Bank and
ors.
..... Respondent(s)
Though: Mr. Parveen Kapahi, Advocate
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M/s Krishna Traders .
.....Petitioner(s)
Through: Mr. P.N Raina, Sr. Advocate with
Mr. Sudesh Sharma, Advocate
Vs
Punjab National Bank & ors
..... Respondent(s)
Through: Mr. Parveen Kapahi, Advocate
HON'BLE MRS.JUSTICE SINDHU SHARMA, JUDGE
CORAM:
HON'BLE MR. JUSTICE SHAHZAD AZEEM, JUDGE
(JUDGMENT)
Shahzad Azeem-J
1. At the outset and in order to keep the record straight, be
it noted that WP(C) No. 2342/2024, titled Vikas Bharti and anr.
WP(C) No. 2342/2024
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WP(C) No. 839/2025 Page 1 of 16
Vs. Punjab National Bank and ors. is filed by the successful
bidder who participated in pursuance of e-auction sale notice
dated 30.07.2024, whereas, e-auction was held in respect of
secured assets stood mortgaged against the loan amount availed
by the petitioner which is subject matter of challenge in WP(C)
No. 839/2025 titled M/s Krishna Traders Vs. Punjab National
Bank and ors., therefore, the petitioner is challenging the e-
auction notice issued by the respondent-bank in respect of the
secured assets, whereas, in the petition titled Vikas Bharti and
anr. Vs. Punjab National Bank and ors., the petitioners are
seeking direction to the respondent-Bank for handing over the
physical possession of the auctioned property being successful
bidders.
2. It is in the above backdrop, both the petitions were
clubbed, therefore, fate of the petition titled Vikas Bharti and
anr. Vs. Punjab National Bank and ors. is subservient to the
outcome of WP(C) No. 839/2025, titled M/s Krishna Traders Vs.
Punjab National Bank and ors, hence, we first propose to deal
with the petition titled M/s Krishna Traders Vs. Punjab
National Bank and ors.
WP(C) No. 2342/2024
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WP(C) No. 839/2025 Page 2 of 16
WP(C) No. 839/2025
3. The petitioner has invoked the writ jurisdiction of this
Court seeking quashment of e-auction sale notice dated
30.07.2024 issued by respondents No. 1 to 3 in respect of
residential house along with land measuring 01 kanal, falling
under Survey No. 215 min, Khata No. 64 min and Khewat No. 07
situate at Toph Sherkhania, Tehsil and District Jammu
[residential house bearing No. 37-A, Bharat Nagar, Talab Tillo,
Jammu] and also further seeks quashment of sale intimation
letter dated 28.08.2024. The petitioner also seeks direction to the
respondent-Bank not to proceed in terms of Notices issued under
Section 13 (2) and 13 (4) of Securitization and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002
[SARFAESI Act].
FACTS
4. Succinctly stated, the petitioner has availed a Cash
Credit Limit [the CCL] to the tune of Rs. 75 lacks and housing
loan to the tune of Rs. 10 lacs from the respondent-Bank and as
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primary security, the petitioner has mortgaged his property i.e.
residential house along with land measuring 01 kanal, falling
under Survey No. 215 min, Khata No. 64 min and Khewat No. 07
situate at Toph Sherkhania, Tehsil and District Jammu
[residential house bearing No. 37-A, Bharat Nagar, Talab Tillo,
Jammu].
5. However, the petitioner defaulted in repayment of
installments which resulted in classification of the loan account
as Non Performing Asset [NPA] on 30.09.2010 as per the Reserve
Bank of India Guidelines and borrower was intimated
accordingly.
6. On finding no response from the borrower, the bank was
compelled to issue demand notice under Section 13 (2) of the
SARFAESI Act followed by notice under Section 13 (4),
respectively.
7. Meanwhile, the respondent-Bank said to have approved
One Time Settlement (OTS) of the loan amount and intimation in
this regard was given to the borrower vide letter dated
14.11.2017 with explicit stipulation, thus:-
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"Please note that if full payment is not received
as per under mentioned terms and conditions,
bank shall proceed to recover the entire dues
after adjusting the payment, if any, received"
8. One of the terms and conditions of the OTS was that the
borrower was enjoined upon to make the payment within a period
of three months towards full and final settlement. However, the
petitioner failed to pay the amount as per OTS Scheme,
resultantly, the bank went onto proceed in terms of Section 13 (8)
of the SARFAESI Act, followed by publication of e-auction sale
notice in two newspapers, and same finally culminated by way of
sale intimation letter dated, 28.08.2024, whereby, respondents
No. 4 & 5 were declared as successful bidders and were asked to
deposit the bid amount as per the terms and conditions
contained therein. However, the respondents No. 4 & 5 though
have completed the terms and conditions contained in sale
intimation letter dated 28.08.2024, but because of the litigation,
same could not be finalized.
9. In the above backdrop, the respondents No. 4 & 5 have
also invoked the jurisdiction of this Court by way of WP(C) No.
2342/2024, titled, Vikas Bharti and anr. Vs. Punjab National
Bank and ors.
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SUBMISSIONS
10. The bone of contention of the petitioner is that notices
under Section 13 (2) and 13 (4) of the SARFAESI Act came to be
issued before the OTS Scheme, therefore, the action of the
respondent-Bank in initiating the action under Section 13 (8) of
the SARFAESI Act is illegal, because, according to the petitioner,
the respondent-Bank once, offered to settle the account under the
OTS, any action taken prior to that loses its significance and as
such, the bank was mandated to proceed from the very inception.
11. The other ground urged by the petitioner is that as per
the OTS Scheme, he could not make the payment of total
outstanding loan amount, nevertheless, he had paid Rs. 30 lacs,
therefore, bank was required to adjust the same and also
thereafter, he was willing to settle the amount but without any
rhyme and reason, the bank has rejected his offer, as such,
according to the petitioner, the action of the bank in auctioning
the secured assets is also bad in law.
12. Further submission of the petitioner is that the notices
under Section 13 (2) and 13 (4) of the SARFAESI Act have been
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issued prior to One Time Settlement, as such, amount mentioned
therein do not fall within the definition of secured debt, therefore,
e-auction sale notice and sale intimation letter are liable to be
quashed.
13. Per contra, learned counsel appearing for the
respondent-Bank has taken us to the objections filed on behalf of
the bank and would submit that the petitioner after availing the
loan facility failed to repay the same as per the terms and
conditions and when the bank initiated the proceedings under
SARFAESI Act, the petitioner has filed number of suits and writ
petitions by concealing the material facts, therefore, he played
fraud on the Courts and also illegally withheld the loan amount,
which obviously, is the public money.
14. The main plank of argument of learned counsel for the
respondent-Bank is that the petitioner admittedly failed to repay
the loan amount, compelling the respondent-Bank to take
recourse to recover the outstanding loan amount under the
provisions of SARFAESI Act, which finally culminated in issuance
of e-auction notice which has been finalized, but because of the
litigation, it could not be completed, therefore, once, e-auction
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notice is issued and the petitioner failed to repay the amount, in
that event, his right to redeem the secured assets also
extinguishes, as such, prays for dismissal of the petition.
15. It is equally noteworthy that the respondents have given
the details of the notices under Section 13 (2) and 13 (4) of the
SARFAESI Act, and subsequent actions which were not only
published in the newspapers, but also communicated, through
registered post [postal receipts], therefore, we do not deem it
necessary to burden this judgment with these details as same are
not disputed by the petitioner, particularly in view of the earlier
writ petition filed by the petitioner being WP(C) No. 421/2022
titled M/s Krishna Traders Vs. Punjab National Bank and ors.
wherein, the petitioner has thrown challenge to the notice issued
by the respondent-Bank under Section 13 (4) of the SARFAESI
Act, which came to be dismissed at motion hearing stage itself.
16. The respondent-Bank has laid much emphasis on the
point that the petitioner has filed one after the other civil suits
and also availed remedy before this Court by way of writ petitions
and now, by concealment of facts again approached the High
Court which amounts to abuse of process of law, therefore, the
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petitioner is required to be burdened with heavy costs also. In
this regard, following information is also delineated regarding
filing of suits and petitions:-
Case Court DOI DOD
Writ Petition High Court 05.03.2022 07.03.2022
Writ Petition High Court 15.07.2010 16.07.2015
Civil Suit Sub Judge, 06.01.2017 10.10.2017
Jammu
Civil Suit Sub Judge, 02.06.2018 22.02.2019
Jammu
Civil Suit District Judge, 21.01.2021 21.01.2021
Jammu
ANALYSIS
17. Insofar as the availing of housing loan to the tune of Rs.
10 lacs and CCL to the tune of Rs. 75 lacs by the petitioner is
concerned, same is not in dispute. This is also admitted fact that
loan account of the petitioner was classified as NPA and
thereafter, action under Section 13 (2) and 13 (4), of the
SARFAESI Act was taken as the petitioner failed to repay the loan
amount. However, despite the petitioner failed to repay the
amount even after issuance of notice under Section 13 (4) of the
SARFAESI Act, and possession of the secured asset said to have
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been taken over by the respondent-Bank, the bank could not
immediately, proceed in terms of Section 13 (8) of the SARFAESI
Act as during the interregnum period, the bank has accepted the
proposal for OTS and thus, communicated to the petitioner for
one time settlement of loan amount within a period of three
months with a specific stipulation that if full payment is not
received as per the terms and conditions within a period of three
months, the bank shall proceed to recover the entire dues.
18. The petitioner has specifically admitted in the petition
that for some reasons, he could not make the payment of the loan
amount as per the terms and conditions of the OTS, meaning
thereby, once the petitioner has flouted the terms and conditions
of OTS Scheme, in that event, he cannot be allowed to raise the
plea that the bank for all the time to come, is duty bound to
accept the amount even beyond the stipulated period of OTS.
19. It is also not in dispute that the petitioner has
challenged the action of the bank taken in terms of Section 13 (4)
of the SARFAESI Act by way of WP(C) No. 421/2022, but same
was dismissed, therefore, the petitioner now, cannot again
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question the action of the bank initiated in terms of Section 13 (2)
and 13(4) of the SARFAESI Act.
20. Admittedly, the petitioner did not repay the loan amount
in terms of notices issued by the bank and also in pursuance of
One Time Settlement Scheme within the stipulated period,
therefore, the bank has rightly proceeded in terms of Section 13
(8) of the SARFAESI Act, whereby, e-auction sale notice dated
30.07.2024 came to be issued, in that, till the issuance of e-
auction notice dated 30.07.2024, admittedly, the petitioner failed
to tender the secured creditor the outstanding loan amount.
21. Confronted with the above factual narration, only point
for consideration that arises is as to whether after publication of
auction notice by the respondent-Bank strictly as per Rule 8 (6) of
Security Interest (Enforcement) Rules, 2002 [Rules of 2002), the
petitioner's right to redeem the secured assets survives.
22. The point involved in the petition is no more res integra
and is settled by Hon'ble Supreme Court in M. Rajendran and
ors. Vs. M/s KPK Oils and Proteins India Pvt. Ltd. And ors.;
2025 SCC Online SC 2036, a locus classicus on the subject
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wherein, Hon'ble Supreme Court in an unequivocal words, while
interpreting the object underlying Section 13 (8) of the SARFAESI
Act held as follows:-
"To put it simply, as per sub-section (8) of Section 13
of the SARFAESI Act, a borrower can tender the
amount of due to the secured creditor along with all
costs, charges and expenses, at any time, before the
date of publication of notice for public auction or
inviting quotations or tender from public or private
treaty, as the case may be.
A borrower has no unfettered right to tender such
amount of dues, as stipulated in Section 13(8), after
the date of publication of notice for public auction or
inviting quotations or tender from public or private
treaty, as the case may be, because the restriction on
the secured creditor, from transferring the secured
asset, envisaged under clause(s) (i) and (ii) of the said
provision, would only be attracted, if the dues are
tendered prior to the publication of notice for public
auction or inviting quotations or tender from public or
private treaty, as the case may be. Where the
borrower tenders such dues after the publication of
the notice stipulated in Section 13(8), the secured
creditor is not bound to accept it, and can continue to
proceed with the transfer of the secured asset, by
way of lease, assignment or sale."
23. Hon'ble Supreme Court went onto explain the object
underlying amended Section 13 (8) of the SARFAESI Act, that the
amended provisions extinguishes the right of redemption of the
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borrower in the event he fails to repay his dues and redeem the
secured assets before publication of the Auction Notice.
24. In the above case before the Hon'ble Supreme Court, the
Auction Notice was published by the bank on 22.01.2021 and the
secured assets were successfully auctioned on 26.02.2021. In the
circumstances, the Hon'ble Supreme Court has authoritatively
held that right to redeem the secured asset stood extinguished on
22.01.2021 on the ground that borrowers have failed to pay the
outstanding debt before the publication of Auction Notice dated
22.01.2021.
25. The SARFAESI Act is a special legislation enacted with
the avowed object of providing a speedy and expeditious remedy
to banks and financial institutions for recovery of public money in
respect of non-performing assets without the intervention of civil
Courts.
26. Coming back to the case on hand, the e-auction sale
notice came to be published on 30.07.2024, therefore, in view of
the settled proposition of law, once auction notice is published,
right of redemption of the petitioner has extinguished on
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30.07.2024 and any amount even if deposited, is immaterial.
Admittedly, the petitioner has failed to repay his dues till the
publication of auction notice dated 30.07.2024 and by now, the
respondents No. 4 & 5 were not only declared as successful
bidders but said to have deposited the consideration amount as
per the terms of auction notice with the respondent-Bank.
27. This is equally noteworthy that on going through the
factual narration contained in the objections, it appears that
every now and then after availing loan and subsequent failure to
repay the same, the petitioner appears to have hit every door
across all the rungs up to the High Court repeatedly to obstruct
the bank from taking action to realize the outstanding loan
amount which necessarily paid by the bank out of the public
corpus, therefore, it is high time to put the litigation to quietus.
28. It is highly disturbing that a small but recalcitrant class
of borrowers, instead of honouring their legitimate contractual
obligations, deliberately resort to a multiplicity of frivolous
proceedings before civil courts and High Courts, with the sole
objective of stalling enforcement measures, thereby defeating the
very purpose for which the SARFAESI Act was enacted. Such
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conduct has been repeatedly condemned by the Courts and terms
the same as an abuse of process, warranting note of caution to
such habitual litigants.
29. We are of the considered opinion that right of the
petitioner to redeem the secured assets stand extinguished with
the publication and culmination of auction process, therefore,
peripheral pleas raised by the petitioner also do not stand the
scrutiny of law.
30. Though we are not proceeding harshly against the
petitioner despite his indulgence into multiplicity of litigation,
nonetheless, struck a note of caution that litigation will be put to
quietus.
31. In the above backdrop, WP(C) No. 839/2025 titled M/s
Krishna Traders Vs. Punjab National Bank and ors. found to be
bereft of merit, accordingly, same is dismissed along with
connected CM(s).
32. In view of the observations and finding returned in
WP(C) No. 839/2025, the respondent-Bank is at liberty to
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complete the process of e-auction and to proceed in terms of sale
intimation letter dated 28.08.2024.
33. Disposed of.
(SHAHZAD AZEEM) (SINDHU SHARMA)
JUDGE JUDGE
JAMMU
16.12.2025
Tarun/PS
Whether order is speaking: Yes/No
Whether order is reportable: Yes/No
c/w
Tarun Kumar Gupta
2025.12.16 00:22
integrity of this document
