IMPORTANT POINT
The SARFAESI Act mandates exhausting statutory remedies before seeking extraordinary relief under Article 226; procedural compliance is essential, and the auction process cannot be set aside absent significant errors.

JUDGMENT :

1. The present writ petition has been filed for quashing the order dated 04.02.2025 passed by the learned Presiding Offi- cer, Debt Recovery Tribunal, Patna in S.A. No. 287 of 2024 whereby the SARFAESI application preferred by the petitioner has been dismissed. The petitioner has further prayed for quashing the entire proceedings initiated by the respondent -Bank under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as “SARFAESI Act” ) and for issuance of a direction upon the respondent / Bank to cancel the auction sale of the subject property and to accept repayment of debts from the petitioner after settlement.

2. The fact of the case in brief is that the petitioner is the owner and is in peaceful possession of Shop Nos. UG-04, UG- 05, UG-06 and UG-06-A situated at the first floor of a multisto- ried building known as “Jaikriti Pearl Court”, located at Mauza- Dujra, East Boring Canal Road, P.S. - Buddha Colony, District – Patna having a super built-up area of approximately 1330 sq. ft. with a carpet area of about 900 sq. ft. which was duly purchased by the petitioner through a registered sale deed dated 30.01.2016. The respondent no. 5, namely M/s Mangal Murti Construction through its partners Amit Kumar Singh (Respon- dent No. 6) and Kavita Singh (Respondent No. 7) approached the petitioner to associate with their business venture and made her a guarantor for the credit facilities availed by them from the respondent - Bank. In return, the said respondents assured and promised the petitioner of a regular annual payment of Rs. 35,00,000/- which amount was duly paid to her till the year 2019. On the basis of such assurance the petitioner was made guarantor for multiple loan facilities sanctioned by the respon- dent -Bank. Her signatures were obtained on various bank docu- ments without furnishing any loan agreement, sanction letter or statement of accounts. The petitioner therefore remained com- pletely unaware of the multiplicity of loan accounts in respect of which she had been shown as guarantor.

3. The repayment of the loan was secured by mortgage of flats belonging to Respondent No. 6 and the subject property of the petitioner. Since the year 2019 the respondent nos. 5 to 7 stopped paying the assured annual return of Rs. 35 lacs to the petitioner and deliberately concealed the deteriorating financial condition of their firm. Subsequently, the respondent -Bank is- sued three separate notices dated 02.05.2023 to respondent no. 5 in respect of three different loan accounts which were served upon the petitioner as guarantor claiming overdue amount of total Rs. 5,79,713/-. However, the respondent nos. 6 and 7 assured the petitioner that the said notices could be ignored and were merely routine communications from the Bank.

4. All of a sudden, the Authorized Officer of the respon- dent -Bank issued a demand notice dated 29.06.2024 under Section 13(2) of the SARFAESI Act, 2002, which was served upon respondent nos. 5 to 7 including the petitioner alleging that the two loan accounts had been declared Non-Performing Assets (NPA) on 27.06.2024 and demanded a total outstanding amount of Rs. 2,62,06,848.83 as on 29.06.2024 together with interest.

5. On 28.08.2024, the respondent -Bank issued a posses- sion notice under Section 13 (4) of the SARFAESI Act, 2002 read with Rules 8 and 9 of the Security Interest (Enforcement) Rules, 2002 and took physical possession of the secured assets including the subjec