SARFAESI Proceedings Not Invalidated On Mere Failure Of Bank In Giving Reply To Objections If Borrower's Proposals Were Otherwise Considered : Supreme Court
The Supreme Court held that failure to furnish reply by the creditor as per the mandate of Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 would not entitle the debtor of discretionary relief, if the Court is satisfied that the creditor has considered the debtor's representation and granted it sufficient opportunity to repay the debt. Subsequently, as the Borrower failed to meet its promise, the Bank issued notice under Section 13 of the Act and the underlying Rules to take symbolic possession of the concerned property. Findings of the High Court Placing reliance on ITC Limited v. Blue Coast Hotels Limited and Others 15 SCC 99, the High Court held that compliance with Section13 was mandatory and failure on the part of the Bank to respond to the representation of the borrower would vitiate the recovery proceedings. Relying on the decision of the Authorised Officer, Indian Overseas Bank and Another v. Ashok Saw Mill 8 SCC 366, it was held that when the Borrower challenges the measure in Section 13, it is open for them to also challenge the steps taken by the Bank under Section 13 of the Act from the date of action till the sale confirmation under Section 17 as a part of the same cause of action.
Civil Suit Not Maintainable After SARFAESI Proceedings Are Initiated: SC [Read Order]
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