Banks must provide reasoned responses to borrowers' objections under SARFAESI Act, ensuring compliance with statutory requirements and fairness.

JUDGMENT

The petitioners are aggrieved with the manner in which the proceedings under the Securitisation and Reconstructions of Financial Assets and Enforcement of Security Interest Act, 2002 {hereinafter referred to as the 'SARFAESI Act'}, have been carried out by the respondent bank. The petitioners were issued with a notice under Section 13 (2) as is seen from Ext.P15, which was responded to by the petitioners with detailed objections at Ext.P16. The petitioners' contention is that the petitioners have not received any reply to the said objection.

2. The learned Standing Counsel for the respondent bank submits that a reply to the petitioners' objection has been issued to them as per Annexure R1(a). It is also submitted that under the Explanation to Section 17(1), the petitioner does not get a right to approach the Debts Recovery Tribunal(DRT), on the mere ground that an objection made to the notice under Section 13 (2) of the SARFAESI Act was rejected by the respondent bank. It is also contended that the very same contentions were raised before the Banking Ombudsman, which was declined as per Ext.P21.

3. At this stage, this Court is not concerned with an appeal against the measures under sub-section (4) of Section 13 and the ground raised is of the objections being not at all considered in the reply. The respondent bank submits that the consideration was made as per Annexure R1(a) and the same issued to the petitioners by ordinary post. There is nothing to show that the same was despatched and more importantly; received by the petitioners. The petitioners had been continuously disputing the quantum of outstanding and had also approached other forums. The Bank hence ought to have ensured that the reply sent was received by the petitioners or at least despatched in a manner which could be established, on a dispute raised.

4. It is also seen from Annexure R1(a) that none of the objections specifically raised in Ext.P16 was considered by the respondent bank. Sub-section (3A) of Section 17 also provides, for communication of the reasons for rejecting the representation or objection to the borrower, within 15 days of receipt of such representation/objection. Hence, there should be a reasoning in the order of rejection, dealing with the specific objections raised by the borrower, which is totally absent in Annexure R1(a).

5. As to the contention raised of, the justifiability of the reasons for rejection not entitling the borrower to file an appeal, as discernible from the Explanation to Section 17 (1); suffice it to notice2012 (4) KHC 42 Malabar Sand & Stones (Pvt.) Ltd. Vs Catholic Syrian Bank Limited. A similar argument was repelled, finding that the consideration of a representation/objection was not an empty formality. In that context, the extra- ordinary remedy under Article 226 is not fettered by the afore stated Explanation. The Ombudsman also did not deal with the complaint but merely expressed the lack of jurisdiction.

6. In such circumstances, this Court would direct the respondent bank to consider the objections at Ext.P16 afresh and issue the response to the petitioners' objections, under registered post-acknowledgment due, within a period of 15 days from the date of receipt of a certified copy of this judgment. The petitioners have also made a prayer, with respect to some documents, which shall also be supplied, if available, along with the response to the petitioners' objection.

The writ petition is disposed of as above.