Non-service of notice to one legal heir under SARFAESI Act does not invalidate the proceedings when other heirs do not inform the bank of alternate addresses.

ORDER

1. This appeal is filed under Section 18 of the SARFAESI Act against the order against the order passed in SA No.620/2023 by Learned Presiding Officer, DRT, Madurai on 15.5.2024.

2. Learned Counsel for the appellant submitted that the aforesaid SA was filed by respondents 1 to 3 challenging the Possession Notice dated 16.9.2023 and the Sale Notice dated 29.3.2023. Learned Presiding Officer after perusing the records and hearing the submissions of Learned Counsel appearing for parties, allowed the SA. Therefore, this appeal is filed.

3. It is his further submission that SA was allowed on following grounds:

a) There is only a short interval between the possession notice and the sale notice.

b) Notice sent to Mrs. Jeevitha returned with remarks “ left India” but the appellant bank had not taken any steps to complete the service in respect of one of the legal heirs of deceased Mr. Guruva Reddy.

c) Authorised Officer has not taken Panchanama in respect of movable properties.

d) No valuation report was obtained by the Authorised Officer.

e) Date of Demand Notice, Possession Notice and the Sale Notice is not legible in the affixture.

4. Learned counsel for appellant bank further submitted that Learned Presiding Officer failed to observe that all the legal heirs of deceased Guruva Reddy except Mrs. Jeevitha, challenged the measures initiated under the SARFAESI Act by the appellant bank. No intimation was given to the bank by the other legal heirs that Mrs. Jeevitha was not residing in the address given by the bank but residing in a Foreign country. It is further submitted that Mrs. Jeevitha has not chosen to challenge the SA measures. When the measures were challenged by other Legal heirs, it is as good as challenge by the Legal heirs, who has not challenged the measures. The demand notice, after returned unserved, was duly affixed, published in tune with Rule 3(1) of Security Interest (Enforcement) Rules and that was overlooked by the Learned Presiding Officer. Demand Notice, Possession Notice and Sale Notice had all been sent to the address given to the bank. Bank is not expected to contact and enquire and investigate with regard to residential details of Mrs. Jeevitha especially when her brothers failed to inform about her whereabouts.

5. It is further submitted that the first respondent firm is represented by its Managing partner, the second respondent and other partners. They are carrying on day to day operations of the business of first respondent firm.

Thus, notice was served on necessary parties.

6. Every measure taken under the SARFAESI Act, gives rise to a fresh cause of action. In SARFAESI application, possession notice and sale notice had been challenged. Challenge to possession notice was made beyond the period of 45 days, therefore, that was barred by limitation. However, Learned Presiding Officer, chose to set aside all the measures including the measure of taking possession.

7. No steps have been taken by the Authorised Officer to bring the movable assets for E-Auction sale. Learned Presiding Officer failed to observe that Item No.3 of the property described in the Possession Notice dated 16.9.2003 had not been brought for sale in the E-Auction Sale Notice dated 29.9.2023. This pleading has not been raised in the grounds of the SARFAESI Application. Possession Notice was issued as per Appendix IV under rule 8(1) of Security Interest (Enforcement) Rules. Learned Presiding Officer failed to take note of the fact that physical possession of movable item No.3 was not taken. Valuation report was taken within a period of one year prior to the date of sale.

8. Learned Counsel for appellant bank submitted that without co