Allowed

Hdfc Bank v. Smt Dipali Baidya

DRAT22 Jun 2023REGULAR APPEAL/54/2021

Case brief

AI extract

What is this about?

The Debt Recovery Appellate Tribunal allowed the Bank's appeal against the DRT setting aside a demand notice. The Tribunal held that Section 13(2) of the SARFAESI Act does not mandate the inclusion of the rate of interest, principal amount, or accrued interest details in the notice.

What did the court decide?

The impugned order dated 11th November, 2021 passed by the learned DRT-III, Kolkata is set aside.

Hdfc Bank versus Smt Dipali Baidya — Banking and Recovery | DRAT (2023)

¶1

Appeal No. 54 of 2021-DRAT-Kolkata

¶2

IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT KOLKATA

¶3

Appeal No. 54 of 2021

¶4

(Arising out of S.A. 26 of 2019 in DRT-III, Kolkata)

¶5

THE HON’BLE MR. JUSTICE ANIL KUMAR SRIVASTAVA CHAIRPERSON

¶6

The Authorised Officer, HDFC Bank Limited, Department for Special Operation Jardine House, 1^st Floor, 4, Clive Row, Kolkata 700 001.

¶7

… Appellant

¶8

-Versus-

¶9

Dipali Baidya, Proprietress of M/s. Joy Distributors, Wife of Late Subir Kumar Baidya, 117, N.S. Road, Mitrganj Bazar, P.I.N. – 743 337, Joynagar, 24 Parganas (South).

¶10

		… Respondent
Counsel for the Appellant	…	Mr. Samik Basu
Counsel for Respondent	…	Mr. Kala Chand Das
JUDGMENT	:	22^ndJune, 2023

¶11

THE APPELLATE TRIBUNAL :

¶12

Instant appeal has arisen against judgment and order dated 11^th November, 2021 passed by Learned DRT-III, Kolkata in SARFAESI Application 26 of 2019 (M/s. Joy Distributors & 4 Others -vs- The Authorised Officer, HDFC Limited) whereby the Learned DRT allowed the SARFAESI Application.

¶13

2. Feeling aggrieved, Respondent Bank has preferred the appeal.

¶14

3. SARFAESI Applicants No. 1 and 2, namely, Joy Distributors and Smt. Dipali Baidya, were the borrowers while Applicants No. 3 to 5, namely, Ms. Papiya Baidya, Mrs. Debi Rani Baidya and Subir Kumar Baidya, were the guarantors for a Cash Credit Facility of Rs.50.00 lac which was granted by the Appellant Bank. Equitable mortgage was created by mortgaging two immoveable properties. SARFAESI Applicant defaulted and loan account was classified as N.P.A. on 29^th December, 2016. Demand Notice was issued on 13^th November, 2017 claiming an amount of Rs.61,21,699.48p; symbolic possession was

¶15

¶16

Appeal No. 54 of 2021-DRAT-Kolkata taken on 24^th December, 2018. Both these notices were challenged before the Learned DRT. Learned DRT arrived at a conclusion that as per notice under Section 13 (2) of the SARFAESI Act, 2002, total amount of liability of Rs.61,29,699.48p was mentioned but neither the rate of interest nor the principal amount and interest accrued therein was mentioned. Accordingly, Learned DRT held that notice as unsustainable and set aside the notice. Consequently all the SARFAESI actions were quashed.

¶17

4. Feeling aggrieved Bank preferred the appeal. 5. I have heard the Learned Counsel for the parties and perused the record.

¶18

6. Main contention of the Learned Counsel for Appellant is that in the notice under Section 13 (2) of the SARFAESI Act, 2002, required details were furnished, there is no requirement of mentioning the rate of interest or the principal amount or the accrued interest therein. Hence, the Learned DRT has failed to exercise its jurisdiction in accordance with law and the impugned order is liable to be set aside.

¶19

7. Per contra, Learned Counsel for Respondent submits that purpose of notice under Section 13 (2) of the SARFAESI Act, 2002, is to bring to the notice of the noticee all the details regarding which SARFAESI action has been initiated by the Bank which includes rate of interest along with principal amount and interest accrued therein, which should have been mentioned in the notice.

¶20

8. In the case of Mardia Chemicals Limited -vs- Union of India (2004) 4 SCC 311 in paragraph 46 it was held:

¶21

“ 46. We are holding that it is necessary to communicate the reasons for not accepting the objections raised by the borrower in reply to notice under Section 13(2) of the Act more particularly for the reason that normally in the event of non-compliance with notice, the party giving notice approaches the Court to seek redressal but in the present case, in view of Section 13(1) of the Act the creditor is empowered to enforce the security himself without intervention of the Court. Therefore, it goes with logic and reason that he may be checked to communicate the reason for not accepting the objections, if

¶22

¶23

Appeal No. 54 of 2021-DRAT-Kolkata raised and before he takes the measures like taking over possession of the secured assets etc.”

¶24

9. As far as Section 13 (2) of the SARFAESI Act, 2002 is concerned it is clear from the language of the Act the purpose of the provision is that borrower is required to discharge in full its liability to its secured creditor. Section 13 (2) Rules reads as under :

¶25

“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 writing to discharge in full the liabilities to the secured creditor within sixty days from the date of notice failing which the secured creditor shall be entitled to exercise all or any of the rights under subsection (4).”

¶26

10. Perusal of the provision will show that intent of the notice is to give notice to the Borrower to discharge his liabilities in full within sixty days failing which the secured creditor would be entitled for exercising its right under Section 13 (4) of the SARFAESI Act, 2002. Legislative intent for incorporating an amendment under Section 13 (3A) of the SARFAESI Act, 2002 by way of amendment was in compliance of the orders of the Hon’ble Supreme Court in Mardia Chemicals (supra) whereby the main purpose of notice under Section 13 (2) of the Act could be achieved if an opportunity is granted to the Borrower to make a representation to the secured creditor so that action by the secured creditor be taken after giving an opportunity of hearing to the Borrower. Hence, there is no need to incorporate the rate of interest or accrued interest or the principal amount in the notice under Section 13 (2) of the SARFAESI Act, 2002. Accordingly, I am of the view that Learned DRT erred in passing the impugned order and set aside the demand notice dated 13^th November, 2017. Accordingly, the appeal deserves to be allowed.

¶27

¶28

Appeal No. 54 of 2021-DRAT-Kolkata

¶29

O R D E R

¶30

The appeal, is allowed. Impugned order dated 11^th November, 2021 passed by Learned DRT-III, Kolkata in SARFAESI Application 26 of 2019 (M/s. Joy Distributors & 4 Others -vs- The Authorised Officer, HDFC Limited) is set aside.

¶31

No order as to costs.

¶32

File be consigned to Record room.

¶33

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

¶34

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

¶35

(Anil Kumar Srivastava,J) Chairperson

¶36

Dated: 22^nd June, 2023 ac

Hdfc Bank v. Smt Dipali Baidya

Case brief

What is this about?

What did the court decide?

Hdfc Bank v. Smt Dipali Baidya

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

All orders in this case

Similar cases

M/S a. K. Enterprise versus State Bank of India

Swadesh Ranjan Das versus Ao Bangiya Gramin Vikas Bank

Sol Backbay Aqua Limited versus Industrial Investment Bank Of India Ltd.

Daitarai Moharana versus Uco Bank

Beauty Ghosh versus Kotak Mahindra Bank Limited

Ms Borna Mondal versus Bank of Maharashtra