SUNDARAM HOME FINANCE LIMITED Vs. TAHSILDAR HOSUR

JUDGEMENT

(1.) THE question raised in this Writ Appeal is whether a notice needs to be issued under Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 (hereinafter referred to as the 'Act') before invoking Section 14 thereof. In the judgment under Appeal, it was held that there is a statutory requirement to issue a notice under Section 13(4) of the Act before invoking Section 14.

(2.) LEARNED Senior Counsel appearing for the appellant submitted that there is nothing in the Act which contemplates the issuance of another notice under Section 13(4) before taking possession of the security interest. The only notice contemplated is under Section 13(2), which gives the borrower 60 days to regularize his account and in default thereof, the financial institution was entitled to take action under Section 3(4) of the Act.

(3.) IN Digivision Electronics v. INdian Bank, 2005 (3) CTC 513, the question was whether the action under the Act can be taken without permission of the Debts Recovery Tribunal, before whom an Application is pending, unless such an action had been initiated by issuing notice under Section 13(2) of the Act. A reading of this judgment also indicates that after the notice under Section 13(2) and the consideration of the objections thereagainst, there is no intermediate notice under Section 13(4) of the Act. Where the challenge was to the notice under Section 13(2) of the Act, the Division Bench rejected it on the ground of availability of alternative remedy of filing a reply and where the challenge was to the notice Section 13(4) of the Act, that was also rejected on the ground of availability of alternative remedy of filing an Application under Section 17.