The 60-day period for borrowers to discharge liabilities under the SARFAESI Act begins from the date of service of notice, not the date of the notice itself.

Date of Decision: 01.07.2024 JUSTICE R. D. KHARE, CHAIRPERSON 1. The present appeal has been filed U/s 18 of The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short “SARFAESI Act”) against the judgment dated 05/01/2021 passed by DRT, Patna, whereby the S.A No. 87/2018 filed by the respondents-borrowers was dismissed.

2. The brief facts of the present case are that the respondent No.1 is proprietor of M/s Maa Janki Traders, who was granted financial assistance by the appellant- Bank, to which respondent Nos. 2 and 3 stood as a joint guarantor and executed a Letter of Guarantee dated 30.08.2014 in favour of the appellant-Bank. Since the borrowers did not maintain the financial discipline, therefore, the account was classified as NPA on 31.03.2017 and Demand Notice under Section 13(2) of the SARFEASI Act was issued on 20.06.2017 for a sum of Rs. 25,94,147.90. Since the borrowers did not pay any heed to the said demand, therefore, the possession notice dated 23.11.2017 was issued under Section 13(4) of the said Act and the same was published in the newspapers on 25.11.2017.Thereafter, the appellant- Bank issued auction sale notice dated 20.02.2018 to the borrowers scheduling the auction to be held on 28.03.2018. The said auction sale notice was challenged by the borrowers before the Hon’ble High Court by filing CWJC No. 4559 of 2018. Since the said auction could not take place for want of bidders, therefore, the said petition was disposed off by the Hon’ble High Court vide order dated 27.03.2018 with liberty to the petitioner (S.A. applicant) to move before the Tribunal below.

3. Thereafter, the appellant-Bank again issued sale notice, which was published in the newspapers on 21.04.2018 scheduling the auction of the property in question on 30.05.2018. The borrowers filed the S.A. before the Tribunal below on 21.05.2018 challenging the entire proceedings of the appellant-Bank including the demand notice dated 22.06.2017, possession noticed dated 23.11.2017 and the auction sale notice dated 21.04.2018.

4. It appears that in the meantime, the borrowers had filed an application dated 24.02.2018 under Section 13(3) of the SARFAESI Act before the appellant-Bank.

5. The Tribunal below vide order impugned allowed the S.A. of the borrowers and set aside the entire proceedings of the appellant-Bank. Being aggrieved by the said order, the present appeal has been filed by the appellant-Bank.

6. Learned counsel for the appellant further submitted that the finding of the DRT, Patna in the order impugned that the mandatory 60 days’ notice will be counted from the date of notice is not correct in view of the provisions of law as well as the judgment of the Hon’ble Patna High Court in CWJC No. 15468 of 2012 – M/s Tirupati Storage and Allied Pvt. Ltd. Vs. The United Commercial Bank decided on 19.10.2012. The learned counsel has referred to para 15 of the said judgment, wherein it has been held that 60 days would be counted from the date of service of notice, therefore, the finding of the Tribunal below is bad in law. It was, therefore, prayed that the order impugned may be set aside and the appeal may be allowed.

7. Learned counsel for the respondent-Borrower submitted that the recovery certificate has not yet been withdrawn by the appellant-Bank. As such two parallel proceedings are going on by the Bank which is not sustainable in the eye of law. The learned counsel further submitted that the appellant-Bank has not followed the mandatory provisions of the SARFAESI Act and Rules made there under with regard to the service of notices. As such the Tribunal below has rightly allowed the S.A. Hence the order impugned does not call for any interference by this Tribunal. It was, therefore, prayed that the appeal may be dismissed.

8. Learned counsel for the appellant submitted that the said proceedings are separate, which is pending before the Tribunal below and the issue involved in the pr