Dismissed

Hdfc Bank Ltd. and Anr. v. M S Heritage Retail India Pvt. Ltd.

DRAT20 Jan 2023REGULAR APPEAL/115/2019

Case brief

AI extract

What is this about?

The DRAT dismissed the appeal filed by HDFC Bank against the DRT order setting aside the Demand Notice and Possession Notice. The court held that the notices failed to comply with Section 13(3) of the SARFAESI Act as they did not contain the mandatory details of accrued interest and penalty breakdown.

What did the court decide?

The appeal was dismissed, but the appellant bank was given liberty to proceed afresh in accordance with law.

Hdfc Bank Ltd. and Anr. versus M S Heritage Retail India Pvt… — Banking and Recovery | DRAT (2023)

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Appeal No. 115 of 2019-DRAT-Kolkata

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IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT KOLKATA

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Appeal No. 115 of 2019 (Arising out of S.A. 56 of 2017 in DRT-III, Kolkata)

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THE HON’BLE MR. JUSTICE ANIL KUMAR SRIVASTAVA

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CHAIRPERSON

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The Authorised Officer, HDFC Bank Limited, Kolkata Branch Office, 1^st Floor, Gillanders House, Netaji Subhas Road, Kolkata – 700 001;

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The Branch Manager, HDFC Bank Limited, carrying on business, inter alia, from its office at Kolkata Branch Office, 1^st Floor, Gillanders House, Netaji Subhas Road, Kolkata – 700 001.

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… Appellants

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M/s. Heritage Retail India Private Limited, represented by its Director Sri Malay Kumar Mondal, having its registered office at 130/65, Prince Golam Hossain Shah Road, Kolkata – 700 032. … Respondent

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Counsel for the Appellant … Mr. Rajeev Maity

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Counsel for Respondent Bank … None

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JUDGMENT : 20^th January, 2023

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THE APPELLATE TRIBUNAL :

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Instant appeal has arisen against judgment and order dated 2^nd December, 2019 passed by Learned DRT-III, Kolkata in SARFAESI Application 56 of 2017 (M/s. Heritage Retail India Private Limited -vs- The Authorised Officer, HDFC Bank Limited) whereby the Learned DRT allowed the SARFAESI Application and set aside the Demand Notice as well as the Possession Notice with liberty to the Respondent Bank to proceed afresh in accordance with law. 2. As per the pleadings of the parties, Respondent, M/s. Heritage Retail India Private Limited, is a Private Limited Company and Sri Malay Kumar Mondal and Smt. Arpita Mondal are its Directors which was engaged in the business of manufacturing and trading soft toys. On being approached, Cash Credit to the tune of Rs.85.00 lac was sanctioned by the Appellant Bank to the Respondent on 26^th July, 2011

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Appeal No. 115 of 2019-DRAT-Kolkata which was secured by equitable mortgage of two residential flats and corporate guarantee of the Respondent. There was default in payment and re-payment of loan. The loan was classified as N.P.A. Appellant proceeded under SARFAESI Act 2002 and issued Demand Notice dated 28^th April, 2015 claiming Rs.1,11,26,339.84 re-payable within sixty days. Possession Notice under Section 13(4) was issued on 23^rd December, 2016.

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3. Feeling aggrieved, Respondent filed SARFAESI Application. It is contended that the notices are bad in law as provisions of Section 13 sub section (3) were not complied with.

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4. Feeling aggrieved, Appellant preferred the present appeal. 5. I have heard the Learned Counsel for the Appellant. Respondents are served but none is present. 6. Learned Counsel for the Appellant vehemently argued that the Learned DRT has erred in setting aside the Demand Notice as well as the Possession Notice. Notices were issued strictly in accordance with law. It is further submitted that all the required details were mentioned in the notice and the provisions of Section 13 (3) of the SARFAESI Act were duly complied with. Section 13 (2) of the SARFAESI Act 2002 provides for issuance of a notice in case the debt is classified as ‘Non Performing Asset’. Further the borrower may be required to discharge his liabilities in full within sixty days from the date of notice.

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Section 13 (3) of the SARFAESI Act reads as under:

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“The notice referred to in sub-section (2) shall give details of the amount payable by the borrower and the secured assets intended to be enforced by the secured creditor in the event of non-payment of secured debts by the borrower.”

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7. Section 13 (3) of the Act specifically shows that it is required that the details of the amount payable by the borrower should be given in the notice and further the secured assets intended to be enforced by secured creditor in the event of non-payment of secured

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Appeal No. 115 of 2019-DRAT-Kolkata debts by the borrower. The word used is “shall” which means that it is a mandatory provision. As far as the word “details” is concerned, it means that it should comprise the component of principal amount, interest accrued thereon and any other charges, penal or incidental. 8. Perusal of the notice reveals that no details, as required under Section 13 (3), are mentioned in the notice rather only total amount sanctioned as well as due is mentioned in paragraphs 2 and 4 of the notice; the amount of interest accrued is not mentioned and whether any penalty is charge or not is also not mentioned. Break-up of principal amount as well as interest accrued thereon should have been mentioned in the notice. Hence I am of the view that the notice, issued by the Appellant Bank under Section 13 (2) of the Act is not in consonance with Section 13 (3) of the Act. Accordingly, it is bad in law. Learned DRT has rightly arrived at the conclusion and passed the impugned order. The appeal lacks merits and is liable to be dismissed.

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O R D E R

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The appeal, is dismissed. However, the Appellant would be at liberty to proceed afresh in accordance with law.

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No order as to costs.

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File be consigned to Record room.

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Copy of the order be supplied to Appellant and the Respondents and a copy be also forwarded to the concerned DRT.

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Order dictated, signed, dated and pronounced in open Court.

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(Anil Kumar Srivastava,J) Chairperson

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Dated: 20^th January, 2023 ac

Hdfc Bank Ltd. and Anr. v. M S Heritage Retail India Pvt. Ltd.

Case brief

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Hdfc Bank Ltd. and Anr. v. M S Heritage Retail India Pvt. Ltd.

Case brief

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