Sarfaesi proceedings validity

Vinay Tripathi (Querist) 29 May 2020 This query is : Resolved
Sir, my question is bank has issued 13 (2) notice under sarfaesi act, upon the borrowers addresses , the principal borrower during that period was in jail and no notice has been served by bank in jail.
Weather this notice will be deemed served to the borrower or not??? And if his wife is also a borrower she served with the same notice will notice served to her fulfill the purpose of 13 (2) or not ????

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This discussion examines the validity of SARFAESI proceedings when the principal borrower was in jail and not personally served. While serving notice at the borrower's last known address and to a co-borrower (spouse) might be considered valid by the bank, a Debt Recovery Tribunal (DRT) previously quashed proceedings in a similar case, citing lack of proper service due to the borrower's incarceration. The consensus suggests challenging such DRT orders may be difficult, and consulting a lawyer for specific case details and appeal options is advised.

Raj Kumar Makkad (Expert) 29 May 2020
If the notice has been served at the ordinary residence of the borrower and especially when his wife also stands served in the same matter, there shall be good presumption of the service upon the main borrower may he be in the jail at the relevant time.

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Rajendra K Goyal (Expert) 29 May 2020
In the given situation, it would be presumed that notice has been duly served.

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P. Venu (Expert) 30 May 2020
When the Bank knows that the principal borrower is in the jail, what is the problem or constraint in serving proper notice upon him?

Raj Kumar Makkad (Expert) 30 May 2020
There is nothing in the facts of the query that banker is aware about the confinement of the main borrower in jail hence there is no use to assume and presume and reply on that basis.

Rajendra K Goyal (Expert) 30 May 2020
It is sufficient to serve notice at the registered address with the Bank.

Co-borrower has been duly served with the notice.

Requirements of service are fulfilled.

Vinay Tripathi (Querist) 30 May 2020
Thanks all for your reply, actually in same situation D.R.T has quashed the entire proceedings, saying notice was not served to borrower as he was in jail,
Can i challenge the decision of D.R.T in appelate tribunal or should i file application for seting aside exparte order as order passed without hearing me..????

K.K.Ganguly (Expert) 30 May 2020
1. Bank is not aware of the change of address of the principal borrower i.e. his going to jail and has served the Demand Notice to him at his last informed address.

2. Moreover the same notice has also been served pon the co-borrower who happens to be the wife of the principal borrower,

3. So, the Bank has effected the service of the notice validly.

Rajendra K Goyal (Expert) 30 May 2020
Please mention the title and case no. in which DRT has ruled as stated by you.

Whether DRT has made any order in the present case?

If so, why fact was not mentioned in your query?

Do you hope puzzle / riddles from you can fetch desired guidance?

Orders of DRT in your case need to be referred, discuss with your lawyer.

If appeal need to be filed, file within the limitation period.

Rajendra K Goyal (Expert) 30 May 2020
Sorry, the reply was repeated due to internet / site problem. Regret.

P. Venu (Expert) 30 May 2020
The innovation Mr.Goyal can discover/invent and introduce in order to sustain his zeal in making multiple posting is worthy of emulation!

Raj Kumar Makkad (Expert) 30 May 2020
If DRT has quashed the proceeding assuming that no notice was served upon to the main borrower then such order is not required to be challenged as such orders are discretionary in nature depending upon the satisfaction of the court. Nothing fruitful shall come out if you challenge the said order.

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Raj Kumar Makkad (Expert) 30 May 2020
I do agree with the observation of Mr. P. Venu.

P. Venu (Expert) 31 May 2020

When a person is in prison, he partially or fully cut off from the ordinary course of dissemination of information, even from the family members. As such the ruling of the DRT is well reasoned. It is unlikely that an appeal or any other challenge to the ruling would be meet with success.

As I could make, the provisions of Section 27 General Clauses Act provide an exception in such 'contrary' cases.

27. Meaning of service by post.— Where any Act made after the commencement of this Act authorises or requires any document to be served by post, whether
the expression “serve” or either of the expressions, “give” or “send” or any other
expression is used, then, unless a different intention appears, the service shall be
deemed to be effected by properly addressing, pre-paying and posting by registered
post, a letter containing the document, and unless the contrary is proved, to have
been effected at the time at which the letter would be delivered, in the ordinary course
of post.

Rajendra K Goyal (Expert) 31 May 2020
Whether notice was received undelivered, if yes with what remarks?
If was received with the remarks that the addressee is in jail, Bank should have tried to serve the notice through jailer.
Full quashing order of DRT need to be referred.
Discuss with your lawyer and may proceed to file appeal.
Bank can proceed through civil court for recovery.

Raj Kumar Makkad (Expert) 31 May 2020
DRT might have taken into consideraton the provision contained in section 27 of General clauses Act and given its finding accordingly then it can safely be said that there is no use to file further revision against the said discretionary order.

P. Venu (Expert) 31 May 2020
Mr. Goyal, good and relevant questions. But too late. The information ought to have been sought at the initial stage itself.

Rajendra K Goyal (Expert) 31 May 2020
Agree with the expert Raj Kumar Makkad ji, revision can be filed against the orders of DRT.

Raj Kumar Makkad (Expert) 01 June 2020
Thanks Mr Goyal for agreeing with my reply.

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