Sarfaesi notice u/s 3(1)
s.loganathan
(Querist) 11 February 2010
This query is : Resolved
I have been served unceremoniously with a Sarfaesi 13(2)notice through a paper publication under the pretext of 'avoiding of service'.The bank has issued this as "Substituted Service of Notice u/s 3(1) of Security Interest (Enforcement) Rules 2002". On inquiry at the Postal Dept., it was known to have been returned as 'Not Found' and not as 'Refused' since I was not in station. Furthermore, I am actively engaged with the bank through dialog & correspondence. No other means of service was even contemplated by the bank viz-a-viz ordinary post, courier, telegram, telephone, sms or email.Can anyone tell me exactly what sec 3(1) mentioned above says? Can 'Not Found' be construed as avoiding service? Opinion & advice please.
Raj Kumar Makkad
(Expert) 11 February 2010
3 (1) of Security Interest (Enforcement) Rules 2002 gives power to bank to issue notice to the respondent through substituted service means even through paper publication in case ordinary service is not working due to any reason. So no illegality has been done in your case and notice has now duly been made to you. Move further in the matter instead of searching any lacunae in the way of service.
Parveen Kr. Aggarwal
(Expert) 11 February 2010
Rule 3 of the SECURITY INTEREST ENFORCEMENT RULES, 2002 makes provision for demand notice under the SARFAESI Act.
"3. Demand notice
(1) The service of demand notice as referred to in sub-section (2) of
section 13 of the Ordinance shall be made by delivering or transmiting at the place
where the borrower or his agent, empowered to accept the notice or documents on
behalf of the borrower, actually and voluntarily resides or carries on business or personally works for gain, by registered post with acknowledgement due,
addressed to the borrower or his agent empowered to accept the service or by
Speed Post or by courier or by any other means of transmission of documents like
fax message or electronic mail service:
PROVIDED that where authorised officer has reason to believe that the borrower or his agent is avoiding the service of the notice or that for any other reason, the service cannot be made as aforesaid, the service shall be effected by affixing a copy of the demand notice on the outer door or some other conspicuous part of the house or building in which the borrower or his agent ordinarily resides or carries on business or personally works for gain and also by publishing the contents of the demand notice in two leading newspapers, one in vernacular language, having sufficient circulation in that locality.
(2) Where the borrower is a body corporate, the demand notice shall be
served on the registered office or any of the branches of such body corporate as
specified under sub-rule (1).
(3) Any other notice in writing to be served on the borrower or his agent by
authorised officer, shall be served in the same manner as provided in this rule.
(4) Where there are more than one borrower, the demand notice shall be
served on each borrower."
So, the discretion has been granted to the bank regarding the manner of service of notice. As stated by you, the notice was served through registered post but you were out of station and as such was returned with endorsement of the postman 'not found'. It was your duty to make arrangement for receipt of the notice in your absence as has been observed by the Apex Court in a number of judgments and in case you have failed, you cannot blame the bank for your default. It is the option available with the bank to service the notice in any of the mode provided under the Rules.
s.loganathan
(Querist) 11 February 2010
Thank you guys! The issue only further emphasizes the ills of putting in the hands of irresponsible officers draconian powers that are not exercised with prudence.
Adinath@Avinash Patil
(Expert) 12 February 2010
RAJ AND PARVEEN EXPLAINED IN DETAIL I AGREE WITH ABOVE EXPERTS.
