01Facts
The petitioners are legal heirs of Smt. Sudha Patil, who availed a home loan from Respondent No. 1 (Bank) in 2011.
p. 2Following the borrower’s death in 2011, the account was declared a Non-Performing Asset (NPA) in 2014.
p. 2The Bank initiated recovery under the SARFAESI Act, issuing a Section 13(2) notice in 2023 and obtaining Section 14 orders for possession in 2024.
p. 3The Bank took physical possession in May 2025; however, Petitioner No. 3 allegedly broke the locks and re-entered the property, leading to police complaints and subsequent court orders for restitution and breaking open locks.
pp. 3-4The petitioners challenged these actions, claiming the proceedings were barred by limitation and vitiated by the failure to serve a demand notice on Petitioner No. 1.
pp. 4-502Issues
i.1. Whether the suppression of material facts regarding the petitioners’ conduct disentitles them to discretionary relief under Article 226 of the Constitution.
pp. 11-12ii.2. Whether the recovery proceedings were barred by limitation under Section 36 of the SARFAESI Act, read with the Limitation Act, 1963.
p. 5, 17iii.3. Whether the failure to serve a Section 13(2) notice on one of the three legal heirs (Petitioner No. 1) invalidates the entire recovery process.
pp. 4-5, 1703Law Applied
The Court applied the principle of "Clean Hands," as elucidated in Bhaskar Laxman Jadhav v. Karmaveer Kaka saheb Wagh Education Society, holding that a litigant must disclose all material facts on affidavit and not leave it to the Court to "fish out" facts from annexures.
pp. 13-15It applied Section 36 of the SARFAESI Act, which subjects recovery measures to the limitation periods prescribed in the Limitation Act, 1963.
p. 6, 17The Court interpreted Rule 3 of the Security Interest (Enforcement) Rules, 2002, in the context of legal representatives, and relied on the principle that writ jurisdiction is not a substitute for an "alternate efficacious remedy" available under the SARFAESI Act before the Debts Recovery Tribunal (DRT).
pp. 10-11, 19Provisions in the judgment · 4 · Linked ones open on LawLens
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 Section 2Section 13Section 14Section 36
04Reasoning
The Court found the petitioners guilty of gross suppression of material facts, specifically their illegal re-entry into the property and obstructions caused during the execution of possession orders.
pp. 15-16It rejected the argument that filing documents in a "bunch" constitutes disclosure, ruling that material events must be candidly stated in the memorandum of petition.
p. 16On the merit of limitation, the Court observed that the account turned NPA in August 2014 and the notice was issued in December 2023, well within the 12-year period for mortgage-based recovery.
p. 17Regarding the notice to Petitioner No. 1, the Court held that service upon her real brothers (Petitioner Nos. 2 and 3) constituted sufficient knowledge, especially since they had previously made partial repayments and failed to inform the Bank of other heirs.
pp. 17-18The Court determined that the petition was an attempt to bypass the statutory remedy of the DRT without justifying any violation of fundamental rights.
pp. 19-2005Holding
The Court dismissed the writ petition, holding that the petitioners’ conduct and suppression of facts disentitled them to equitable relief.
p. 20The Court found the Bank’s actions to be within the period of limitation and legally valid.
p. 17, 20The petitioners were ordered to pay costs of Rs. 10,000/- to the Bank.
p. 20The Court granted a limited stay on the physical possession for four weeks to allow the petitioners to approach the Supreme Court.
p. 21Original Court PDF
Vaishali Rahul Gondhane And OthersvsCentral Bank Of India, Thr. Chief Manager/Auth. Officer, Nagpur And Others
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