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Subbu (None)     29 October 2013

Sarfaesi authorized officer delegation regarding

Demand Notice under section 13(2) signed as Authorized Officer along with Name mentioned.

a) Can somebody else signing as Authorized Signatory without mentioning their name reply to Objections raised by the borrower ?

b) Can somebody else signing as Authorized Signatory without mentioning their name withdraw the issued 13(2) notice ?.

c) How to take legally valid consent from Authorized Officer on these letters signed by others ?

Thanks in advance.



 14 Replies

Kolla V. Raman (Founder Chairman of Global Lgal Services)     30 October 2013

You take advantage of it by raising procedure,   statutory violation in the D.R.T.

1 Like

Ajit Singh Cheema (practising Advocate)     30 October 2013

a) Only the duly  Authorised Officer can sign ,  withname or without name.

b)No, one except the Authorised Officer can withdraw the Notice U/S 13 (2) of SARFAESI ACT.

c)You can get valid confirmation ,by writing to the Authorised Officer , along with a copy of the same to the concerned Branch Manager and the Zonal Manager,ask them to confim the consent. If there shall be any flaw that shall come out.

1 Like

Subbu (None)     30 October 2013

Thanks M/s Ajit Singh Cheema and Kolla V Raman. Regards.

K.K.Ganguly (Advocate)     31 October 2013

1. There is no stipulation in SARFAESI Act,2002 for mentioning the name of the Authorised Officer who signs the Demand Notuice u/s13(2) of the Act or who withdraws the same,

 

2. The can be many A.O.s in a Bank & there is no mention in the Act that the same A.O. should sign the Demand Notice & also the letter to withdraw it,

 

3. You can go to the Bank & find out who are the people who signed the notice & its withdrawal,

 

4. However, Chief Manager & above are assigned with the job of being the A.O. in SARFAESI Proceedings.

Ajit Singh Cheema (practising Advocate)     01 November 2013

We must have a very clear concept. The sarfaesi Act notices are to be given on behalf of particular branch .All scale 4 officer and above may be competent to be AUTHORISED OFFICERS..

There cannot be more than one AOs for a particular Branch. However one AO may send notices on behalf of number of Branches for which he has been Authorised by Secured Creditor.

You may simply ask the Branch Office Concerned, about the name of Authorised Officer For the Branch. 

K.K.Ganguly (Advocate)     01 November 2013

1. There may be more than one A.O. in a Bank (not Branch) issuing notices regarding same SARFAESI proceeding,

 

2. There are instances when one A.O. posted at the Branch has issued Demand Notice u/s 13(2) and another A.O. posted at the Zonal Office (controlling office of the said Branch) has  issued letter u/s13(3-A) informing the Borrower that his representation against the said Demand Notice has not been accepted,

 

3. When after few months the said A.O. of  Zonal Office was on leave, another Chief manager or AGM posted at the said Zonal office acted as A.O. & issued Possession Notice u/s13(4) of the Act to the same Borrower.

1 Like

RAJU O.F., (Advocate)     04 November 2013

Really there is confusion among bankers, regarding the issue of Notice under Sections 13(2) and 13(4) of the SARFAESI Act. Many bankers believe and act as if all the officers in Chief Manager and above cadre of banks are Authorised Officers. I have obtained one judgment (reported)  in which it was decided that the Branch Manager cannot become Authorised Officer for the same branch. In the said case the Branch Manager was Chief Manager. Unfortunately the Act is defecient in clarity on many points. The Authorised Officer must at least be authorised for this purpose, by the Board of Directors of the Bank/FI. I have seen one instance that the Demand Notice was signed by the PEON. When it was challenged, the said peon was promoted.

K.K.Ganguly (Advocate)     05 November 2013

1. May I request  Ld. Advocate Mr.Raju to please give reference of the Judgment whicjh states that 'Branch Manager can not become A.O. of the same Branch',

 

2. At DRTs at  Kolkata ( may be at all other places also) all  most all  Branch Managers of Class I Branches are atleast Chief Managers & they also act as A.O.s  while initiating SARFAESI Proceedings against defaulting borrowers.

c.p.s. ramachary (1500)     22 November 2013

I fully agree with Expert  Mr K.K. Ganguly. There is no restriction on territorial jurisdiction of Authorised Officer. This is clear from Sec.13(12) of SARFAESI Act.  Any part of action (i.e. measures) can be performed by any or different designated Authorised Officers. It is not necessary to mention name of the officer whoever performs the action under Sec.13 of the Act. 

Ajit Singh Cheema (practising Advocate)     24 November 2013

I have this opportunity to request Mr. Raju to supply the reference of  judgement ,which states that the branch Manager cannot become AO of the same branch .

I beg to differ with Sh.Ramachary and have firm belief that unless a person is Authorised specifically he cannot act as AO under Sarfaesi Act. A O must be an officer of Scale (1v) or above officer.

Once a person is designated as AO ,he can be replaced by another officer duly Authorised and its not that anyone else can become AO.

Arun Kumar Sngh (Sr. RTI Consultant )     31 August 2015

It is true that law is not clear on the AO but it must be from the Branch and once SARFAESI is started the AO should must be same for sake of conveince to secured creditior as the said AO shall be loaded with enough history of borrower accounts and Business, now question is whether Bnak can change the Branch after initaion of SARFAESI Proceedings.

It appears there remained ambiguity on the subject 

Arun Kumar Sngh (Sr. RTI Consultant )     31 August 2015

It is true that law is not clear on the AO but it must be from the Branch and once SARFAESI is started the AO should must be same for sake of conveince to secured creditior as the said AO shall be loaded with enough history of borrower accounts and Business, now question is whether Bnak can change the Branch after initaion of SARFAESI Proceedings.

It appears there remained ambiguity on the subject 

RAJU O.F., (Advocate)     15 September 2015

Even now the law is not settled with respect to the position of Authorised Officer. The drafting of the SARFAESI Act and also the Rules are not in consonance. As per Sec. 13 (2) , the Secured Creditor can issue the Demand Notice u/S 13(2). He can also withdraw and modify the Notice. Secured creditor means Branch Manager can issue Demand Notice as per the Act. He need not be Authorised Officer. But the reply to the representation/ objections to Demand Notice, must be made by the Authorised Officer, as per Rule 3-A (c). Bankers as well as the judiciary many times did not go deep into such issues. Recently I came accross a case in which the Bank is in Mumbai and the property at Chennai. Bank engaged Recovery Agents, (perhaps goondas, motor mechanics, etc) who even did not know the spelling of the name of the bank; hence they prepared a Seal of the bank with wrong spelling and some body signed and issued Notice to the mortgagor. The Recovery Agent also did not know the difference between squre feet and square metre. So instead of Sq. feet. He mentioned the area as Sq. Metre. During the arguments, Bank's advocate was sweating.

c.p.s. ramachary (1500)     24 November 2015

Rule 2(a) of Security Interest (Enforcement) Rules 2002 defines the word "authorised officer" as follows:

"Authorised Officer" means an officer not less than a chief manager of a public sector bank or equivalent, as specified by the Board of Directors or Board of Trustees of the secured creditor or any other person or authority exercising powers of superintendence, direction and control of the business or affairs of the secured creditor, as the case may be, to exercise the rights of a secured creditor under the Act.

If the officer produces evidence that he is of Chief Manager cadre in a public sector bank or equvalent as specified as stated in the definition he can perform the action on behalf of his secured creditor. Mentioning name or non mentioning of name is immaterial.

Mr. Raju,please give citation of such judgment as mentioned in your note. I dont think that such judgment is available.


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