The demand notice issued under Section 13(2) of the SARFAESI Act must comply with the requirements of Rule 3(5) and Section 13(8) of the Act, which includes inviting the attention of the borrower to the statutory right of redemption and providing a 60-day period for payment of the amount due.

ORDER :

C. PRAVEEN KUMAR, J.

1) Challenging the Sale Notice, dated 13.01.2022, issued by the first Respondent herein, as violative of the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, [for short, “SARFAESI Act”] 2002, and the Rules made therein, the present Writ Petition came to be filed.

2) The facts, which lead to filing of the present Writ Petition, are as under:-

a) The first Petitioner is a Private Limited Company, engaged in construction works. In order to execute the work allotted, namely construction of a Boys Hostel for GITAM College, Bangalore, as per the Work Orders issued by the GITAM University, Visakhapatnam. The first Petitioner approached the 2nd Respondent/bank herein for a loan to a tune of Rs.14 Crores. The request of the first Petitioner was accepted and a sum of Rs.9.00 Crores was sanctioned under first spell for execution of Work Order of Rs.105.03 Crore. The 2nd respondent also sanctioned an amount of Rs.5.00 Crores to the first Petitioner for construction of Boys Hostel at GITAM College, Bangalore.

b) It is said that after availing the loan, the first Petitioner herein commenced construction of the work at Bangalore and completed the work to an extent of 70% till 06.10.2019. It is said that though he requested GITAM University, Visakhapatnam, to extend the Work Order, but the same was not done and the GITAM University also did not pay the amount to the first Petitioner for the work done.

c) On 09.03.2020, the Work Order was terminated. On 16.03.2020, the first Petitioner got issued a notice to GITAM University, requesting it to take appropriate action in terms of Clause 23.2.1 of the General Conditions of Contract for appointment of Adjudicator. As there was no response, an Arbitration Application came to be filed before the High Court.

d) While things stood thus, on 26.05.2021, the first Respondent issued a notice under Section 13(2) of the SARFAESI Act alleging that the first Petitioner is liable to pay an amount of Rs.15,75,84,850.99 ps. and called upon the Petitioners to pay the entire amount within 60 days from the date of receipt of the notice. It was further stated that if the Petitioners failed to pay the amount due within the time prescribed, steps under Section 13(2) would be taken. It is said that the first Petitioner replied the said notice on 28.07.2021 pointing out the defects in the amount shown in the notice. The first Petitioner also explained the reasons as to why the amount could not be paid. The 2nd Respondent on receipt of the reply given by the first Petitioner, responded to the averments in writing on 04.08.2021 and thereafter possession notice under Section 13(4) of the SARFAESI Act, came to be issued.

e) It is said that the first Petitioner again issued a Lawyer’s Notice on 01.09.2021, but ultimately, the bank authorities issued the Sale Notice dated 19.01.2022 for sale of immovable properties under Item Nos.1 to 9 referred to therein through e-auction, fixing the date of sale on 19.02.2022. The total reserve price for all the properties was fixed @ Rs.27,01,56,000/-and the earnest money deposit is Rs.2,70,15,600/-. Challenging the said e-auction, the present Writ Petition came to be filed.

3) Sri P.A.K. Kishore, learned counsel for the Petitioners would submit that the present Writ Petition, is filed mainly on the ground that the valuation fixed is far below the market value and secondly, the notice issued under Section 13(2) of the SARFAESI Act, is not in accordance with the letter and spirit of the Act, and as such, the same is illegal.

4) In other words, the reply affidavit and the additional affidavit filed by the first Petitioner would show that the Sale Notice dated 13.01.2022 published in Newspapers on 15.01.2022 and sent by post to the first Petitioner on 19.01.2022 would defeat the statutory right of redemption under the amended Sub-Section 8 of Section 13 of the SARFAESI Act, as respondent/bank did not invite