Sarfaesi notice u/s 13(2)- mismatch dates
s.loganathan
(Querist) 11 February 2010
This query is : Resolved
I have been served Sarfaesi 13(2) notice. If the dates on the notice stating the date of NPA is wrong and I have transactions after the date mentioned and also a correspondence from the chief manager to prove that alongwith my statement. Does it make that notice void? Can I move the court on this ground to prevent 13(4) action? Maybe flimsy, but I could gain time for my counter, after all the bank has received 95% of the principal as charges debited from my receipts from the time my account has been in-operative.
Prakash Yedhula
(Expert) 11 February 2010
Your remedy is only to reply to the notice stating the aforesaid facts. The bank has then to consider the same under Rule 3 A. In case the bank rejects your reply and proceeds under Rule 4, then you can file an application under Section 17 before DRT challenging that the measures under Section 13 are bad.
You can take a chance to file a writ petition after the bank passes orders under Rule 3 A and before Rule 4 proceedings are initiated. This is the only way you can try to prevent 13 (4) proceedings.
B K Raghavendra Rao
(Expert) 11 February 2010
No. Your ground does not hold water. It is better you issue a reply seeking more time.
Y V Vishweshwar Rao
(Expert) 12 February 2010
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act ,2002 -Provisions of this Act not to apply in certain cases.
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act ,2002Act No : 54
31. Provisions of this Act not to apply in certain cases.-The provisions of this Act shall not apply to-
(a) a lien on any goods, money or security given by or under the Indian Contract Act, 1872 (9 of 1872) or the Sale of Goods Act, 1930 (3 of 1930) or any other law for the time being in force;
(b) a pledge of movables within the meaning of section 172 of the Indian Contract Act, 1872 (9 of 1872);
(c) creation of any security in any aircraft as defined in clause (1) of section 2 of the Aircraft Act, 1934 (24 of 1934);
(d) creation of security interest in any vessel as defined in clause (55) of section 3 of the Merchant Shipping Act, 1958 (44 of 1958);
(e) any conditional sale, hire-purchase or lease or any other contract in which no security interest has been created;
(f) any rights of unpaid seller under section 47 of the Sale of Goods Act, 1930 (3 of 1930);
(g) any properties not liable to attachment or sale under the first proviso to sub-section (1) of section 60 of the Code of Civil Procedure, 1908 (5 of 1908);
(h) any security interest for securing repayment of any financial asset not exceeding one lakh rupees; (i) any security interest created in agricultural land;
(j) any case in which the amount due is less than twenty per cent of the principal amount and interest thereon.
s.loganathan
(Querist) 12 February 2010
Thank you Prakash, Raghavendar & Visveshwar, but is that notice void abinito on the face of it, since 13(2) itself qualifies only on NPA? If that fundamental qualification is claimed wrongly, would the notice be valid?
s.loganathan
(Querist) 12 February 2010
I hope opinions could be more rational. If notice is valid give reason. If notice is not valid, help with references.
B K Raghavendra Rao
(Expert) 12 February 2010
Notice is not void, it is valid and enforceable. You are due to repay the loan amount and the bank / financial institution has caused a statutory notice under the SARFAESI Act. If your loan has become NPA may be not on the date mentioned, notice under Section 13(2) is enforceable.
s.loganathan
(Querist) 12 February 2010
Raghavendra, thanks, but your opinion has not satisfied my query in absolute. I am told that by virtue of pronouncing wrong dates of NPA(the cause of action for Sarfaesi) the notice has been rendered deficient. Now, if a notice is deficient, is it valid? No, I am not questioning the right of the bank to invoke Sarfaesi viz-a-viz sec. 13(2). Should the bank issue fresh 13(2) notice, since I have refuted the NPA in writting to them on the basis that on that date specified my account was having transactions.
s.loganathan
(Querist) 06 April 2010
Thanks everyone! The Bank has issued fresh 13(2) notice.
