Bank of Maharashtra Faces Allegations of Illegal SARFAESI Action
• Farmers Cry Foul Over Forced Auction
• OTS Ignored, Rights Denied?
• Private Sale, Public Outrage
Unmesh Gujarathi
Sprouts News Exclusive
Contact: +91 9322755098
Sprouts News Exclusive
Contact: +91 9322755098
M/s Vibhi Poultry Farm has accused Bank of Maharashtra of illegally invoking SARFAESI Act, misclassifying loans as NPA, and seizing agricultural and residential properties without due process. Despite substantial repayments and repeated settlement attempts, the bank allegedly proceeded with unlawful possession and sale. Legal challenges are underway to reverse these actions.
Bank Accused of Arbitrary SARFAESI Action Against Poultry Firm
In a detailed legal notice dated April 21, 2025, Advocate Aditya Chandak—on behalf of his clients M/s Vibhi Poultry Farm—has accused Bank of Maharashtra of initiating illegal and high-handed action under the SARFAESI Act. The farm, operated by partners Geetanjali Bhimsen Jadhav, Girish Bhimsen Jadhav, and Sonali Sunil Bhandare, had been functioning since 2012 on agricultural land legally acquired from Jalna District Co-op Bank in a securitization auction.
According to the notice, the bank’s alleged misuse of the SARFAESI Act led to symbolic and physical possession of the firm’s properties without proper procedure, legal standing, or valid notice. The poultry business reportedly suffered significant financial losses due to the arbitrary classification of the account as Non-Performing Asset (NPA) despite ongoing repayments and requests for additional working capital.
Contents
- Bank of Maharashtra Faces Allegations of Illegal SARFAESI Action
- Bank Accused of Arbitrary SARFAESI Action Against Poultry Firm
- Disputed Loan Transactions and Security Collaterals
- Illegality in SARFAESI Procedures and Auction Sale
- OTS Proposal Rejected, Possession of Residential Flats Also Contested
- Pattern of Procedural Lapses and Legal Oversight
- Demands for Reversal and Legal Action Imminent
- Regulatory Scrutiny and Public Accountability Urged
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Disputed Loan Transactions and Security Collaterals
The poultry firm had availed a credit facility comprising ₹1 crore in cash credit and ₹2.03 crore in term loans, later followed by a request for ₹75 lakh for shed construction. Though a portion was sanctioned, subsequent demands were denied. The firm submitted multiple high-value properties as mortgage, including agricultural lands and residential flats in Nashik.
Advocate Chandak highlights that a total of ₹1.61 crore had already been repaid by the firm, with additional contributions even after the alleged NPA classification. However, the bank proceeded to declare the account as NPA in May 2014 without issuing a show-cause notice or conducting a hearing, violating Reserve Bank of India norms.
Illegality in SARFAESI Procedures and Auction Sale
Sprouts News Investigation Team (SIT) found that the bank issued a demand notice under Section 13(2) of the SARFAESI Act on November 17, 2015, demanding ₹2.62 crore. The legal response from the firm under Section 13(3A) was reportedly dismissed casually without proper evaluation. Subsequently, the bank issued a symbolic possession notice and later took physical possession of the agricultural land on June 29, 2017, without judicial backing.
Despite ongoing legal proceedings in the Debt Recovery Tribunal (DRT) at Aurangabad and Pune, the bank allegedly sold the property via private sale on May 17, 2023—without informing the original owners. A sale certificate was issued in December 2024, again without any personal notice. Mutation proceedings were initiated by the local Talathi office without adhering to notice requirements.
OTS Proposal Rejected, Possession of Residential Flats Also Contested
Further compounding the issue, Vibhi Poultry Farm partners claim that despite repeated One Time Settlement (OTS) proposals, the bank ignored or rejected their requests. Residential property in Laxmi Poojan Society, Nashik—offered as additional collateral—was also seized under SARFAESI proceedings. Though the partners were later allowed to reside in the flat, legal challenges continued in DRT-3, Mumbai.
Even after filing Securitization Application No. 3/2022, the case was dismissed due to absence of legal representation. The bank proceeded with three failed auction attempts of the flat before again denying the OTS offer of ₹1.60 crore. The bank’s refusal to consider settlement while continuing with auction attempts has raised serious concerns over its intent.
Also Read: SC Slams Army College of Medical Sciences (ACMS) for Unpaid MBBS Interns.
Pattern of Procedural Lapses and Legal Oversight
The legal notice outlines multiple violations including:
•Improper NPA classification without RBI-compliant process
•Invalid SARFAESI action on agricultural land
•Failure to issue mandatory notices and conduct transparent auctions
•Unauthorized physical possession under Section 14
•Covert private sale without informing the borrower
The Sprouts News Investigation Team (SIT) reviewed supporting legal documents indicating that the poultry firm had been cooperative, made substantial repayments, and engaged constructively with the bank. However, systemic failures and apparent procedural manipulation resulted in asset loss, business closure, and reputational damage.
Demands for Reversal and Legal Action Imminent
Through the legal notice, Advocate Chandak has demanded:
•Immediate cancellation of the sale certificate
•Halt on all SARFAESI proceedings related to the Nashik property
•Restoration of possession and fair settlement negotiations
Failing which, the firm has signaled further legal action against Bank of Maharashtra. Given the severity and scope of the alleged violations, this case may soon escalate to a full-fledged financial and regulatory inquiry.
Regulatory Scrutiny and Public Accountability Urged
The Sprouts News Investigation Team (SIT) urges banking regulators, RBI, and financial watchdogs to examine this case closely. The alleged misuse of SARFAESI provisions and denial of settlement despite borrower cooperation highlights the need for greater oversight and accountability in public sector banking practices.
This case could set a precedent in evaluating borrower rights against arbitrary bank actions and reinforce the importance of procedural compliance under financial recovery laws.
