Sarfaesi 13(2)- a/c active within 180 days next to NPA-?able
s.loganathan
(Querist) 18 May 2010
This query is : Resolved
I had a CC limit of 122 lakhs. My account went bad and I could not service my interest & principal for 107 days. My account is declared as NPA on the 90th day. On the 108th day, I service the interest in full & principal (part). Sarfaesi 13(2) issued and subsequent possession u/s 13(4) taken by affixing notice. Now, the Bank issues a 'Fresh Notice' u/s 13(2). The Bank has not withdrawn the first notice or has not re-conveyed possession of my property. Prior to the 107th day, my account has been active and within the sanction limit with many transactions. I have already made an application before the DRT and have taken back the application for correction and resubmitting. In the meantime, I have come across a judgment. It was on an Appeal filed in 2004. Can anyone tell me if there has been any amendment or further ruling of the Supreme Court that has any implication on that ruling. Pls help.
Asha T. Ruia v. The Greater Bombay Co-operative Bank Ltd., IV (2006) BC
(DRT Mumbai)
“ Coming to the all important issue of NPA, it may be at the outset noted that the notice u/s 13 (2) of the SARFAESI Act states that account was classified as NPA on 30.11.2003. Mr. Colabawala, learned Counsel for the applicant has straightaway submitted that the issue as to whether the account was NPA on the aforesaid date was decided against the Bank by this Tribunal in Appeal No. 25 of 2004 filed by present applicants and two others. My attention is drawn to Para Nos 18 to 21 of the judgement delivered by this Tribunal on 21.9.2004 holding that the account could not be classified as NPA within six months next before the issuance of notice (20.3.2004) under Section 13(2) which was germane to that appeal. The Tribunal had observed that there were credit entries in the account between 28.11.2003 and 29.12.2003 in the aggregate of Rs. 55 lakh. Upon that, the Tribunal quashed above referred notice and consequently restrained the Bank from taking any action under SARFAESI Act on basis of said notice. Mr. Vilas Naik, learned Counsel for the Bank has pointed out that this Tribunal in operative part ‘C’ of the judgment had clarified that the Bank would be at liberty to issue fresh notice under Section 13(2) of SARFAESI Act. In reply, Mr. Colabawala submitted and in my view rightly that the Tribunal had given the liberty for removal of doubt, if any, in the minds of the parties to the effect that the account could never be classified as NPA. I also find substance in his further submissions that by said clarification, this Tribunal did not allow reopening and reagitation of the issue of classification of the account as NPA as on 30.11.2003 on the same set of the facts and issued notice under Section 13 (2) of SARFAESI Act”
“ Even if above aspect is for a while kept aside and the issue as to whether the classification of the account as NPA as on 30.11.2003 is proper or not and whether the notice under Section 13 (2) of SARFAESI Act is legal and valid is re-examined, it would be seen that the Bank is hopelessly placed. It may be reiterated in this connection that there are several payments made within six months of the classification of the account as NPA on 30.11.2003. In other words, it is not that this is a straightforward case of the interest and/or installment of principal remaining overdue for a clear period of more than 180 days. The same was the case in Appeal No. 25 of 2004. In the notice impugned in that matter also the Bank went on to simply state that the account is classified as NPA without bothering to clarify as to how the account could become NPA irrespective of significant payments within six months of issuance of notice. This Tribunal had observed in Para No. 19 of Appeal No. 25 of 2004 that the Bank ought to have elaborately stated the facts as to how the account was treated as NPA irrespective of credit entries within 180 days of the issuance of notice. In Para No. 21 of the judgment, this Tribunal went on to point out the importance of the statutory notice under Section 13 (2) of SARFAESI Act. It was observed that the notice, in case like that, should give particulars of the Bank’s claim in details from which a person should be in a position to readily know the default and should provide opportunity for complying, without reasonable controversy. The observation in said judgment clearly is that one should not be required to do forensic examinations and analysis of the notice of the statutory notice for finding out whether classification of the account as NPA was proper. It seems that the Bank has not taken any leaf from the above observation and has not learnt a lesson therefrom. The Bank did not bother to send the chart (Exh. IV to the reply) with notice under Section 13 (2) of SARFAESI Act to the Borrower details as to how the account was classified as NPA. In these circumstances, I hold that the impugned notice under Section 13 (2) of SARFAESI Act being omnibus, is bad in law”.
Raj Kumar Makkad
(Expert) 18 May 2010
The citation referred by you in definitely applicable in your case and bank has got no power to issue you notice under section 13 (2) and as it has already been issued so it is liable to be quashed as has been done in the cited case.
