Sarfaesi act = notice u/s 13(2) & 13(4)
Goapl Garg
(Querist) 16 June 2015
This query is : Resolved
I have allowed my flat under mortgage towrads credit limit to my brother"s pvt ltd company and it is clearly mentioned in the sanction letter that my liability shall remain restricted to the value of my property under mortgage,i.e. the flat.My brother met an accidental death and his company turned into bad condition and his loan account has become NPA with liability of about 4.00 crore.
The bank has issued notice u/s 13(2) to the company and to myself as guarantor asking for payment of 4.00 crore.I objected thru my letter that I am not liable for the total outstanding but to the extent of value of my flat.Bank did not answer.Recently the Bank has pasted a notice on the wall of my flat u/s 13(4) and delivered notice to one of the resident of the society and made paper publication with the same amount.I again strongly objected in the same manner as earlier and as time for filing SA u/s 17 was nearing without any response from Bank, I had to file SA, had to pay Rs.1.00 as Filing Fees , on the same ground and submitted that the both the notice were bad as they have been issued to me asking the full outstanding instead of the property value as clearly mentioned in the sanction letter.Now the bank has issued one letter to me (after filing SA) that they agree that I am only liable for the value of my flat and hence I should pay Rs.1.20 crore(the Fair Market Value assessed by two valuers without my knowledge at all).I disagree with the valuation.It should be at least 30-40% less by going market rates in the area.
Kindly advise
(01) whether the Bank is right in doing so what it has done?
(02) what will be fate of my SA?
(03) what should I do under these circumstances?
I do have advocate who is looking after my case and I do respect him and his action who opines to wait for the disposal of SA.I approach this forum for opinions as this forum has seasned experts and their advice/opinion will reassure me and I shall have more mental peace and assurance.Please do help., Regards and thanks in advance.
malipeddi jaggarao
(Expert) 17 June 2015
Your appeal is pending before DRT challenging the claim of the Bank. In the meanwhile the Bank clarified that your liability is limited to the value of the flat. There is a dispute about the valuation of the flat.
Bank is not right in giving notice to pay the entire debt ignoring the limited liability which it has agreed after you filed the Appeal.
You are ready to to settle the issue by repaying the debt to the extent of value of the flat mortgaged to the Bank.
Because of this hasty action of the Bank by giving wrong notice, you were forced to knock the doors of DRT. Now you advocate can file additional petition bringing these facts before DRT and to make the Bank liable to refund the fee paid by you and accept the fair market value of the flat as per the impartial valuation by a neutral valuers.
The Bank cannot do anything till the Appeal is disposed off by DRT.
J K Agrawal
(Expert) 17 June 2015
I go with Mr Jaggarao.
Your advocate is on right path and have confidence upon him.
In this SA you will win and the notice of 13(2) will be quashed by the DRT. in such a case, it is possible that the DRT may impose cost upon bank to pay you Court fee and expenditure.
It is advisable to linger on the case as long as possible. for this purpose first ask for the originals of all documents. File application to call for witness in witness box. Raise objections at each step when ever you get an opportunity. Keep your advocate paid properly. If your flat is already under any mortgage or dispute raise it. If you have purchased the flat with contribution of your father and by help of funds of your father means your other brothers sisters have right in your flat. If so, they can apply for there share before the DRT.
Keep adherence. wait for good time. The worst condition is that you shall have to leave your flat. It is not advisable to do this at first step.
Goapl Garg
(Querist) 17 June 2015
My heartfelt thanks to Mr.Malipeddi Jaggarao Sir & Mr. J.K.Agarwal Sir for their mirror opinion.
Sir, when my SA is pending before DRT, can or shall the Bank move for physical possession u/s14.In case if Bank has already moved application before DM/ACJM, then what is the remedy available to me?
Kindly opine....
Dr J C Vashista
(Expert) 18 June 2015
I fully agree with the opinion, advise and strategy of the experts, you should linger on the case as far as possible. The opinion, advise and proceeding of your lawyer is absolutely correct and appreciating, have faith in him/her.
Involvement of some other family members in purchase of the flat, as advised by expert Sh. J K Agarwal, shall be very beneficial and fruitful.
The Bank cannot and/or shall not take physical possession of your flat u/s 14 through DM/ACJM during the pendency of case, as you apprehend, even if bank has moved application. You should file reply to the application through your lawyer stating all the facts of the case.
Narendra Sharma
(Expert) 18 June 2015
QUERY(1)when my SA is pending before DRT, can or shall the Bank move for physical possession u/s 14.
ANSWER(1)YES, there is no embargo, unless you have obtained stay from DRT.
QUERY(2)In case if Bank has already moved application before DM/ACJM, then what is the remedy available to me?
ANSWER(2)You must fight tooth and nail against the Bank's application before DM/ACJM. In case of an unfavourable order, you can file another SA before DRT against the order of DM/ACJM as per recent SC judgment.
If desired, you may call me on following nos.
Narendra Sharma,
Consultant (Arbitration, DRT, Securitisation)
Expert (Director's Personal Guarantee)
Mobile: 9229574214/8982321310/9424858767
Land line: (07272) 421309
Biswanath Roy
(Expert) 21 June 2015
If you have sufficient admissible evidence to prove that after filing SA in DRT the Banker inspite of their knowledge of such fact issued notice under sec.13(4) of the SARFAESI ACT then it is a clear case of infringement of your legal right and encroachment upon Natural Justice which can be remedied by a Writ of Mandamus following Article 226 of the Constitution of India.
From your given facts I apprehend Notice u/s.13(2) also stands invalid.
T. Kalaiselvan, Advocate
(Expert) 27 June 2015
experts have explained the position very clearly, shall not add anything more to it.
