IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH DATE OF DECISION: 11.03.2026 M/S BHAI INDUSTRIES PVT LTD … Petitioner Versus AUTHORIZED OFFICER, PUNJAB ... Respondents NATIONAL BANK AND ANOTHER CORAM: HON’BLE MR. JUSTICE SUVIR SEHGAL HON’BLE MR. JUSTICE DEEPAK MANCHANDA Present: Mr. Sunil Chadha, Senior Advocate with Mr. Tara Dutt, Advocate and Mr. Akhilesh Vyas, Advocate for the petitioner.

Mr. C.S. Pasricha, Advocate and Mr. Himanshu Sharma, Advocate for the respondent-Caveators.

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SUVIR SEHGAL, J.

1. This petition has been filed inter alia for issuance of a writ in the nature of certiorari for quashing order dated 24.02.2026 (Annexure P-12) passed by DRT-III, Chandigarh as well as for a writ of mandamus directing DRT-III to reconsider and decide interim relief regarding sale notice dated 17.01.2026 (Annexure P-11). A direction has also been sought to the respondent-bank not to issue sale certificate or hand over possession to the auction purchaser pursuant to the impugned e-auction.

2. Brief facts may be noticed. Petitioner is an MSME unit and is engaged in the business of production of ‘Flour and Maida’. It availed Cash Credit limit of Rs.98,00,000/-, Working Capital Term Loan of Rs.5,02,00,000/- as well as FITL of Rs.1,22,94,000/- by mortgaging factory premises, including building as well as land in district Moga. There was a default in repayment and petitioner’s accounts were declared as NPA on 10.06.2020. A demand notice dated 16.07.2020 (Annexure P-2) was issued under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short – SARFAESI). Petitioner filed a petition before the Debt Recovery Tribunal(DRT). By order dated 22.05.2024 (Annexure P-3), NPA declaration was held to be illegal and the SARFAESI proceedings initiated by the respondent-bank were quashed. Petitioner’s accounts were again classified as NPA w.e.f. 30.03.2019. Another demand notice dated 17.09.2024 (Annexure P-4) was issued by the bank. Petitioner submitted objections under Section 13(3-A) of the SARFAESI Act which was rejected by the bank vide its reply dated 24.11.2025 (Annexure P-7). Petitioner approached this Court and by order dated 22.02.2021 (Annexure P-8), writ petition was dismissed as withdrawn with liberty to avail alternate remedy. Petitioner thereafter filed an SA before the DRT as well as approached this Court by filing a writ petition which was disposed of 05.10.2023 (Annexure P-10) with liberty to the petitioner to approach DRT. The SA filed by the petitioner was dismissed by the DRT as barred by time vide order dated 08.02.2024 (Annexure P-9). On 17.01.2026 (Annexure P-11), bank issued the impugned sale notice and petitioner again approached the DRT by filing SA No.77 of 2026. By impugned order dated 24.02.2026, DRT has declined to stay the sale notice.

3. Mr. Sunil Chadha, learned Senior counsel for the petitioner, who is assisted by Mr. Akhilesh Vyas, Advocate has argued that the bank has filed an appeal before the Debt Recovery Appellate Tribunal/DRAT assailing order Annexure P-3 which is pending and during its pendency, bank could not have initiated the SARFAESI proceedings. It is his argument that the bank cannot be permitted to invoke the provisions of the SARFAESI Act till the time appeal is decided by the Appellate Tribunal. Learned Senior counsel has argued that the earlier classification of petitioner as NPA w.e.f. 10.06.2020 was quashed by the DRT vide order Annexure P-3 as the petitioner’s accounts had been declared as a Non Performing Asset during the moratorium declared by the Reserve Bank of India. It is his argument that petitioner could not have been declared as NPA from a back date, and that too without referring the matter to the designated committee, as petitioner is an MSME unit. Still further, an argument has been raised that by notice dated 26.12.2025(Annexure P-13), petitioner was called upon to redeem the secured asset within a peri