Hon’ble Sudhir Agarwal, J.—Petitioner State Bank of Patiala Branch, Rudrapur, Head Office at The Mall, Patiala, through its Branch Manager has come to this Court under Article 226 of Constitution of India assailing the order dated 3.1.2008 of Debt Recovery Tribunal (hereinafter referred to as ‘DRT’) and the appellate order dated 16.10.2008 passed by Debt Recovery Appellate Tribunal (hereinafter referred to as ‘DRAT’) rejecting the appeal.

2. The facts giving rise to the present dispute in brief are as under.

3. The respondent No. 3 M/s Namrata Enterprises Pvt Ltd. sought for credit facility which was allowed by petitioner Bank to the extent of Rs. 95 Lac in 2001; increased to 121.7 Lac on 29.10.2002. Respondent Nos. 4,5,6 and 7 stood guarantor to the said facility extended to respondent No. 3. Respondent Nos. 6 and 7 in addition to personal guarantee also mortgaged their property situated at Kanpur by depositing original title deed and thereby creating an equitable mortgage of property No. 543/9 Block K, Kidwai Nagar, Kanpur.

4. On 30.6.2005 Non-Performance Assets of respondent No. 3 became to the tune of Rs. 93,13,344/- plus interest etc. which was not regularised by respondent No. 3. The Bank issued notice dated 22.7.2005 under Section 13(2) of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as “the Act 2002”) to borrowers, mortgagors and guarantors requiring them to salvage outstanding dues within sixty days failing which further steps under Section 13(4) of the Act would be taken. The respondents did not react whereafter the Bank took possession of secured assets under Section 13(4) of Act 2002 on 28.11.2005.

5. Respondent Nos. 6 and 7 challenged Bank’s action before DRT in SA No. 1 of 2006, appending a copy of demand notice dated 22.7.2005. DRT passed an ex part interim order. The Bank withdrew demand notice dated 22.7.2005 and also the possession notice on 15.9.2006 as a result whereof SA No. 1 of 2006 filed by respondent Nos. 6 was dismissed on 30.10.2007.

6. The Bank issued fresh demand notice on 15.9.2006. Respondent Nos. 6 and 7 filed writ petition No. 57023 of 2006 challenging the said notice. The writ petition was dismissed on 8.3.2007 observing that notice challenged in the writ petition was issued to M/S Namrata Enterprises Pvt. Ltd. which has not come to the Court to challenge the same and the writ petition at the instance of others, namely, respondent Nos. 6 and 7 was not maintainable. The Court also observed that no cause of action had arisen within territorial jurisdiction.

7. Thereafter Bank served possession notice dated 8.3.2007 upon mortgagors and published the same in newspapers on 10.3.2007. It is said that no objection/representation was filed by mortgagors before the Bank under Section 13(3) of the Act 2002. However, alleged representation/objection given on 8th March 2007 was rejected by the Bank on 22nd March 2007. The borrowers thereafter filed another writ petition No. 282 of 2007 in Uttarakhand High Court in which a conditional interim order was passed on 21.3.2007.

8. When the above writ petition was pending, respondent Nos. 3 to 7 filed S.A. No. 74 of 2007 before DRT seeking following reliefs :

“(i) That, the Hon’ble Tribunal may be pleased to quash the proceedings under Section 13(4) of the SARFAESI Act 2002 initiated by Opp. Party No. 1/State Bank of Patiala as being wrong, illegal, premature and infructuous.

(ii) That, the Hon’ble Tribunal be pleased to direct the respondent Bank not to charge the interest, penal interest, cost and expenses etc for the intervening period i.e. from the date of N.P.A. till the date of payment.

(iii) That, the Hon’ble Tribunal may be pleased to direct the respondent Bank to issue No Dues Certificate and release the mortgaged property in favour of the applicants.

(iv) That, any other relief, which the Hon’ble Tribunal may deem fit and proper in the circumstances of the case.”

9. The said a