Allahabad High Court
SHREE GANESH AGRO INDUSTRIESversusSTATE OF U.P. AND 2 OTHERS
- Decided
Holding
The Court stayed the bank’s recovery proceedings subject to the petitioner’s compliance with the stipulated installment schedule, and ordered that any default would lift the stay and permit the bank to resume recovery.
Summary
Shree Ganesh Agro Industries, the petitioner, challenged a notice issued by IDBI Bank under Section 13(2) of the SARFAESI Act and the subsequent order rejecting its representation under Section 13(3‑A). The bank had also issued a notice under Section 13(4) and claimed the loan had become a non‑performing asset of Rs 17,35,531.30. The petitioner offered to settle the debt through a structured installment plan, beginning with a deposit of Rs 5 lakhs within 15 days. The Court directed the petitioner to make the initial deposit and stayed the recovery proceedings for two months, conditioning further stays on timely payment of subsequent installments as per the schedule. It held that any default would terminate the protection and allow the bank to resume recovery, and consequently disposed of the writ petition.
Issues considered
- What is the effect of a notice issued under Section 13(2) of the SARFAESI Act on the borrower’s right to representation under Section 13(3‑A)?
- Whether the High Court can stay recovery proceedings under the SARFAESI Act upon the borrower’s offer to pay the debt in installments.
- What are the consequences of defaulting from the court‑sanctioned installment schedule?
Legislation cited
- Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 — s. 13(2), 13(3-A), 13(4)
Subjects
- SARFAESI Act
- Section 13
- Recovery proceedings
- Stay of execution
- Loan default
- Installment payment
- Writ petition
- High Court
Judgment
HIGH COURT OF JUDICATURE AT ALLAHABAD
WRIT - C No. - 36928 of 2026
Shree Ganesh Agro Industries
.....Petitioner(s)
Versus
State Of U.P. And 2 Others
.....Respondent(s)
Counsel for Petitioner(s) : Awesh Kumar Bhardwaj, Surendra
Kumar Chaubey
Counsel for Respondent(s) : C.S.C., Krishna Kant Tiwari
Court No. - 2
HON'BLE J.J. MUNIR, J.
HON'BLE INDRAJEET SHUKLA, J.
1. Heard learned counsel for the petitioner and Mr. Krishna Kant Tiwari,
learned counsel appearing on behalf of the I.D.B.I. Bank Ltd.
2. The petitioner challenges the notice dated 09.07.2026 issued under
Section 13(2) of the SARFAESI Act and the order dated 12.08.2026
rejecting the petitioner's representation under Section 13(3-A) of the
SARFAESI Act.
3. The learned counsel for the Bank points out that a notice under Section
13(4) has also been issued.
4. Without adverting to the merits of the case, the learned counsel for the
petitioner has come up with an offer to pay the entire outstanding of the loan
in easy installments.
5. Learned counsel for the Bank informs us that the total outstanding in the
petitioner's loan account which has become a non performing asset as on
07.09.2026 is Rs. 17,35,531.30/-.
6. Learned counsel for the petitioner undertakes on behalf of his client to
deposit a sum of Rs. 5 lakhs with the Respondent Bank within 15 days of
date i.e. to say on or before 08.10.2026.
7. In view of the agreement between parties, we direct the petitioner to
deposit Rs. 5 lakhs with the Respondent Bank within 15 days i.e. on or
before 08.10.2026.
WRIC No. 36928 of 2026
2
8. In the event, the aforesaid sum of money is deposited, recovery
proceedings will initially remain stayed for a period of two months.
9. The respondent Bank shall furnish the petitioner with the entire
outstandings of his loan after adjusting the deposit on 23.11.2026.
10. On 22.11.2026, the petitioner will deposit 1/4th of the total outstanding
then indicated by the Bank. The recovery proceedings will then remain
stayed for the next quarter and the second installment would be payable on
23.02.2027. The third installment would be payable on 24.05.2027 and the
last/fourth installment on 23.08.2027.
11. In the event deposit according to the aforesaid schedule is made,
recovery proceedings shall stand discharged upon deposit of the last
installment which shall carry with it any remainder on account of interest
and other charges.
12. In the event of default at any stage of adherence to the schedule, the
protection against recovery shall stand discharged and the recovery shall
resume.
13. The writ petition stands disposed of.
14. Let this order be communicated to the District Magistrate, Ballia and the
Branch Manager, I.D.B.I. Bank, Ballia through the learned Chief Judicial
Magistrate, Ballia by the Registrar (Compliance).
September 23, 2026
Shweta
(Indrajeet Shukla,J.) (J.J. Munir,J.)
Digitally signed by :-
SWETA YADAV
High Court of Judicature at Allahabad
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