Valid notices under the SARFAESI Act served during a borrower's lifetime do not require renewal for legal heirs post-death.

JUDGMENT

(Dated this the 18^th day of November 2025)

The petitioner is a legal heir of the late Mr. Babu (the fifth respondent), who served as a guarantor for a loan obtained by the second respondent firm from the first respondent bank. Following a default in repayment, the bank initiated recovery proceedings under the SARFAESI Act against respondent Nos.2 to 6. The property currently secured under these proceedings was inherited by the petitioner following the demise of Mr. Babu on August 6, 2025.

2. The petitioner submits that the first respondent bank continued proceedings under Section 14 of the SARFAESI Act (M.C. No. 689/2025) despite having knowledge of the fifth respondent’s demise. Pursuant to these proceedings, the Advocate Commissioner appointed by the CJM, Kollam, issued a possession notice (Ext.P1) dated 30.08.2025, scheduling the takeover of the property on 13.09.2025. Although, the Advocate Commissioner was formally requested via Ext.P2 on 10.09.2025 to report the death of the fifth respondent to the Court, no action was taken. Subsequently, the 3^rd respondent moved the CJM, Kollam, through CMP No. 7692/2025 (Ext.P3), seeking to stay the proceedings and restrain the Commissioner from taking physical possession. However, the CJM adjourned the petition without formal consideration, providing only an oral direction to defer possession until 16.09.2025, while advising the parties to obtain orders from the Hon’ble Apex Court. In the absence of any other efficacious remedy, the petitioner has approached this Court.

3. Heard the learned counsels appearing for the petitioner as well as the standing counsel for the 1^st respondent.

4. The learned counsel for the petitioner contends that even after knowing the death of the 5^th respondent, coercive recovery proceedings were advanced against the petitioner without issuing fresh notice under section 13(2) of the Act for discharging the liability of the deceased, which violates the principles of natural justice, denying him the opportunity of being heard. The counsel also argued that the order of the CJM, Kollam, was passed against the law contemplated and the respondent Bank is expected to initiate proceedings under Section 14 against this petitioner afresh. Hence, attempts made to dispossess the petitioner without initiating fresh Section 14 proceedings against him, that too on the strength of an order passed against a dead person, is void and impermissible in law.

5. On the other hand, the standing counsel for the first respondent maintains that the SARFAESI Act does not mandate the issuance of fresh notices to the legal heirs of a deceased borrower or guarantor. The respondent contends that there is no statutory requirement to initiate second round of notices to successors-in- interest provided that the due process under the Act was properly followed during the borrower’s lifetime. Consequently, the bank asserts that the proceedings remain valid and prays for the dismissal of the writ petition.

6. Upon perusal of the facts, it is evident that the Advocate Commissioner was appointed by the CJM Court, Kollam, via an order dated 25.04.2025 in M.C. No. 689/2025. This order directed the Commissioner to take physical possession of the secured assets, including the immovable property owned by the fifth respondent. Significantly, as the fifth respondent passed away on 06.08.2025— well after the Commissioner’s appointment—the statutory notices under Sections 13(2) and 13(4) of the Act, as well as the Section 14 order, were all issued and served during the lifetime of the