Authority: Calcutta High Court, Court No. 6
Order Date: 21 September 2026
Case Overview
- Petitioners: M/s. Maa Kali Traders & Ors., represented by advocates Mr. Suddhasatva Banerjee and Ms. Susmita Nath.
- Opposite Party: Punjab National Bank, represented by Ms. Parna Roy Choudhury and Ms. Payel Ghosh.
- The application is filed under Article 227 of the Constitution of India, seeking revision of the order dated 24 August 2026 passed by the Presiding Officer of the Debts Recovery Tribunal II, Kolkata, in IA No. 9921 of 2026 and IA No. 9941 of 2026, arising out of SARFAESI Act application SA No. 1023 of 2026.
- Petitioners challenged the bank’s action under Section 13(4) of the SARFAESI Act, 2002, and filed an application under Section 17 of the same Act (SA No. 1023 of 2026).
- The bank issued a notice of sale on 17 July 2026. Petitioners filed IA No. 9921 of 2026 on 20 August 2026, contesting the sale notice. On 24 August 2026, they filed IA No. 9941 of 2026, asserting that the auction was fixed for that date.
- The Tribunal, on 24 August 2026, posted the matter for hearing on 25 August 2026, but due to lack of time adjourned it to 27 August 2026. The Tribunal later postponed further hearing, intending to await the auction result.
- Petitioners argued that without an interim protection, IA No. 9921 of 2026 would become infructuous as the auction had already been conducted.
- The bank contended that the auction was ongoing, bids were to be received until 7 p.m. on 24 August 2026, and the highest bidder had been identified; an interim order would prejudice the bank’s rights. The bank also noted that the auction purchaser had already been impleaded before the Tribunal and that the next Tribunal date was 22 September 2026.
Final Outcome
- The Court finds that the Tribunal erred in postponing the hearing of the challenge to the auction notice pending the auction result; the legality of the notice must be decided independently of the auction outcome.
- Accordingly, the Court issues an interim order directing the Debts Recovery Tribunal to hear IA No. 9921 of 2026 on the next scheduled date, 22 September 2026, prior to hearing the application for impleadment of the auction purchaser.
- The bank is restrained from taking any further steps pursuant to the auction sale conducted on 24 August 2026 until IA No. 9921 of 2026 is heard and disposed of by the Tribunal.
- The civil revision application is thereby disposed of.
Topics: Banking Regulation, SARFAESI Act, Auction Stay