Facts
The petitioners are legal heirs of Smt. Sudha Patil, who availed a home loan from Respondent No. 1 (Bank) in 2011.
Source reference: p. 2Following the borrower’s death in 2011, the account was declared a Non-Performing Asset (NPA) in 2014.
Source reference: 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.
Source reference: 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.
Source reference: p. 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.
Source reference: p. 4-5Issues
1. Whether the suppression of material facts regarding the petitioners’ conduct disentitles them to discretionary relief under Article 226 of the Constitution.
Source reference: p. 11-122. Whether the recovery proceedings were barred by limitation under Section 36 of the SARFAESI Act, read with the Limitation Act, 1963.
Source reference: p. 5, 173. 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.
Source reference: p. 4-5, 17Law 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.
Source reference: p. 13-15It applied Section 36 of the SARFAESI Act, which subjects recovery measures to the limitation periods prescribed in the Limitation Act, 1963.
Source reference: 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).
Source reference: p. 10-11, 19Reasoning
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.
Source reference: p. 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.
Source reference: 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.
Source reference: 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.
Source reference: p. 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.
Source reference: p. 19-20Holding
The Court dismissed the writ petition, holding that the petitioners’ conduct and suppression of facts disentitled them to equitable relief.
The Court found the Bank’s actions to be within the period of limitation and legally valid.
Source reference: p. 17, 20The petitioners were ordered to pay costs of Rs. 10,000/- to the Bank.
Source reference: p. 20The Court granted a limited stay on the physical possession for four weeks to allow the petitioners to approach the Supreme Court.
Source reference: p. 21Original Court PDF
Vaishali Rahul Gondhane And OthersvsCentral Bank Of India, Thr. Chief Manager/Auth. Officer, Nagpur And Others
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