SARFAESI sale notice must be individually served on borrower with 30 days notice and full property description including buildings; defective notice and excessive sale of divisible assets vitiate proceedings, even absent specific pleadings.

ORDER

1. The appellant filed SA 109/2013 to set aside the sale dated 07.03.2013 made by the first Respondent in favour of the Respondents 3 to 6 pursuant to the illegal auction conducted on 07.02.2013 in violation of Security Interest (Enforcement) Rules, 2002 (SIE Rules) on the file of DRT, Madurai.

1.1 After contest, SA 109/2013 was dismissed by Learned Presiding Officer, DRT, Madurai, on 07.07.2015. Dissatisfied and aggrieved against the said order, Appellant filed this Appeal.

2. Brief facts of the case are that the Appellant’s husband availed Housing Loan from Respondent No.2 to the tune of Rs.5 Lakhs on 26.09.2006 and Term Loan to the tune of Rs.7 Lakhs on 11.10.2006 for construction of a House and a Marriage Hall. Appellant’s husband was regular in payment of loan till he died on 11.01.2010 under unforeseen circumstances. Appellant found it difficult in paying the loan due and approached the Bank for settlement. The Bank charged exorbitant interest and other charges. When it was questioned, Respondent Bank issued Demand Notice under Section 13(2) of SARFAESI Act, 2002, on 07.06.2012. She sent a Representation dated 09.07.2012 offering to settle the loan account subject to waiver of interest. The Bank sent a reply dated 16.07.2012 stating that her offer of Rs.12 Lakhs was insufficient and asked her to pay the entire amount claimed in the Demand Notice. Possession Notice dated 22.09.2012 was issued for taking symbolic possession. Appellant filed Writ Petition in WP (MD) No. 14528/2012 before Hon’ble High Court of Madras at Madurai Bench, challenging the Possession Notice. Hon’ble High Court passed an order directing the Appellant to pay Rs.8 Lakhs within the period of six weeks and also to submit her proposal for settlement. Appellant took a Demand Draft for Rs.8 Lakhs on 06.02.2013 and approached the first Respondent for submitting the Demand Draft. However, she was asked to submit the Demand Draft along with the copy of order of Hon’ble High Court. Appellant received order of Hon’ble High Court only on 20.02.2013. Her Counsel sent a letter to the Bank on 08.03.2013 requesting the first Respondent to receive Demand Draft. The Bank sent a reply dated 12.03.2013 stating that the sale was held on 07.02.2013 in favour of Respondents 3 to 6. It is further submitted that first Respondent had not complied with the mandatory provisions of SIE Rules, 2002, such as, issuance of 30 days’ notice prior to sale, publication of sale notice both in English and vernacular newspapers, affixture of sale notice etc. There is violation in the tender notice issued that it was not personally addressed to the borrower and served.

2.1 Reiterating the aforesaid grounds, Learned Counsel for Appellant submitted that the Demand Notice was not sent to the other LRs of deceased borrower Mr. Shanmugam. To the Representations of the Appellant dated 09.07.2012, 27.07.2012 and 22.08.2012, no proper reply was sent under Section 13 (3A) of the SARFAESI Act, 2002. Despite the information given by Appellant as regards the order passed by the Hon’ble High Court of Madras at Madurai Bench in WP (MD) No. 14528/2012 along with Demand Draft, the Bank refused to receive the Demand Draft requiring copy of order, and then, proceeded to sell the property for a low price. Thereafter, the Appellant filed Writ Petition in WP No.4410/2013 against the order passed in Writ Petition in WP (MD) No. 14528/2012 and then the SA was filed. Appellant deposited Rs.13 Lakhs in the Securitisation Application. Sale proc