The main legal point established in the judgment is that the authority must comply with the statutory provisions, particularly Section 13 (3-A) of the Act and Rule 3-A of the Rules, before issuing a notice under Section 13 (4).

Judgement

Dr. B. S. CHAUHAN, C. J. :-

This writ petition has been filed raising large number of issues including factual controversy pointing out that the documents with the bank are not genuine and signature of the petitioner purported to have been made on the same are forged. However, at the time of submission Mr. P. Acharya, learned counsel for the petitioner restricted the case that the notice under Section 13 (4) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter called the "Act") has been issued without meeting the requirement of Section 13 (3-A) of the Act read with Rule 3-A of the Security Interest (Enforcement) Rules, 2002 (hereinafter called the "Rules").

2. The facts necessary for determining the controversy invoked herein are that the notice under Section 13 (2) of the Act was served upon the petitioner on 13-2-2008 (Annex. 1). The petitioner submitted his objection through his counsel Shri N. Pati on 7-3-2008 taking several objections including factual controversies. In spite of raising the objection, the impugned notice dated 28-5-2008 under Section 13 (4) of the Act has been issued without deciding the said objections. Hence this writ petition.

3. Mr. P. Acharya, learned counsel for the petitioner has submitted that in view of the provisions contained in Section 13 (3-A) of the Act and Rule 3-A of the Rules it was mandatory on the part of the opposite party No. 1 - authority to first deal with the objection filed by the petitioner by a reasoned order and only then to issue notice under Section 13 (4) of the Act. Therefore, the impugned notice dated 28-5-2008 is liable to be quashed.

4. On the contrary, Mr. Tuna Sahu, learned counsel for opposite party No. 1 bank has submitted that the financial institution has received the objection of the petitioner. But, the bank did not think it proper to consider the same on the ground that the objection was filed by the petitioner's counsel and not by the petitioner himself. Thus, the impugned notice under Section 13 (4) has rightly been issued ignoring the said objection. The petition is liable to be dismissed.

5. We have considered the rival submissions made by the learned counsel for the parties and perused the record.

6. Admittedly, initially the Act did not contain any provision to consider the objections filed by the borrower or guarantor in reply to the notice under Section 13 (2). However, by amendment the provisions of sub-section (3-A) of Section 13 were inserted with effected from 11-11-2004 and the said provisions read as under :

"(3-A) If, on receipt of the notice under sub-section (2), the borrower makes any representation or raises any objection, secured creditor shall consider such representation or objection and if the secured creditor comes to the conclusion that such representation or objection is not acceptable or tenable, he shall communicate within one week of receipt of such representation or objection the reasons for non-acceptance of the representation or objection to the borrower.

Provided that the reasons so communicated or the likely action of the secured creditor at the stage of communication of reasons shall not confer any right upon the borrower to prefer an application to the Debts Recovery Tribunal under Section 17 or the Court of District Judge under Section 17-A."

Corresponding change was also brought into the Rules by inserting Rule 3-A to the Rules of 2002, which reads as under :

"3-A. Reply to representation of the borrower. -

(a) After issue of demand notice under sub-section (2) of Section 13, if the borrower makes any representation or raises any objection to the notice, the Authorized Officer shall consider such representation or objection and examine whether the same is acceptable or tenable.

(b) If, on examining the representation made or objection raised by the borrower, the secured creditor is satisfied that there is a need to make any changes or modifications in the dema