Notice under Section 13(2) of the SARFAESI Act is valid with sufficient information; exact NPA classification date is not mandatory for compliance.

J U D G M E N T

Petitioners challenge Ext.P9, an order passed by the Debts Recovery Tribunal in SA No.58/2016. Ext.P9 seems to be an interim order by which the Tribunal had directed the applicants therein to pay `75 lakhs on or before 29/2/2016.

2. The main contention urged by the petitioners before the Tribunal was that Section 13(2) notice was not in accordance with the statutory format. Further, there is procedural infirmity as far as sale notices issued by the authorized officer are concerned. According to the petitioners, there was no publication as envisaged under Rules 8(2) and 8(6) of the Security Interest (Enforcement)

Rules.

3. When the above matter came up for admission on

26/2/2016, this Court stayed further proceedings permitting the petitioners to remit `15 lakhs on or before 1/3/2016. It is stated that the said amount had been deposited.

4. The question to be considered is whether there is any illegality in the order passed by the Tribunal directing the petitioners to pay such an amount. Securitisation Application was filed at a stage when proceedings were taken by the respondent Bank to effect sale of the property and one of the contentions urged was that the notice under Section 13(2) was invalid. The Tribunal by the impugned order observed that the details of interest rate, security agreement executed, security asset etc., have clearly been shown in the notice. Tribunal did not find any infirmity in the said notice. Further, in regard to the contentions regarding non compliance of Rules 8(2) and 8(6), it was observed that no contention was raised in the Securitisation Application and therefore there was no necessity to consider the same.

5. Having regard to the publication of notices for sale of property, it is now submitted by the learned counsel appearing on either side that the sale did not take place. Under such circumstances, I do not think it necessary to go into the allegation of non compliance of Rules 8(2) and 8(6). In any case, the Bank will have to take further steps by way of publication and therefore, there is no necessity to go into the validity of the notices issued for sale of the property.

6. Coming to the first contention that the notice under Section 13(2) of the SARFAESI Act is illegal, I do not think that such a contention is available to the petitioners. In para 3 of the notice, it is recorded as under;

“3. Despite our repeated requests/demands calling upon all of you to pay the amount together with interest, you have failed to pay and committed default in repaying the amount due. The loan account has been classified as Non-Performing Asset on in accordance with directions/guidelines relating to asset classifications issued by Reserve Bank of India.”

7. The only contention urged by the petitioners is that the date on which the account has been classified as Non Performing Asset is not mentioned. When the notice itself is issued on 17/6/2015, it is apparent that the account had become NPA much before the said date. That apart, the notice indicates the amount sanctioned in different accounts for different periods, details of the loan account and nature of loan and facilities are also specifically mentioned. The details of the documents executed are also very much available. Further, in para 4, it is stated that the amount was outstanding as on 30/4/2015. Therefore, Tribunal was justified in assuming that the accounts have become NPA as on 30/4/2015. That apart, perusal of Section 13(2) of the Act shows that there is no necessity to inform the petitioners about the date on which the account had become NPA. Section 13(2) of the SARFAESI Act reads as under:-

“13(2) Where any borrower, who is under a liability to a secured creditor under a security agreement, makes any default in repayment of secured debt or any instalment thereof, and his account in respect of such debt is classified by the secured creditor as non-performing asset, then, the secured creditor may require the borrower by notice in writin