Allowed

M S Sara Masala Kutir Udyog and Ors. v. Fedbank Financial Services Limited

DRT21 Oct 2023SA/367/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal, Jaipur heard an application challenging the legality of a demand notice and subsequent possession notice issued by the respondent bank. The tribunal held that the demand notice was invalid as it lacked the signature or seal of the Authorized Officer, rendering all subsequent proceedings legally unsustainable.

What did the court decide?

The Single Application was allowed and all actions initiated by the Respondent, including the demand notice, possession notice, and application under Section 14, were quashed and set aside.

M S Sara Masala Kutir Udyog and Ors. versus Fedbank Financial… — Banking and Recovery | DRT (2023)

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SA No. 367/2023

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DEBTS RECOVERY TRIBUNAL, JAIPUR PRESIDING OFFICER: SH. VIVEK SAXENA

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SA No.- 367/2023

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1. M/S SARA MASALA KUTIR UDYOG , Through its proprietor office at 14, 100 Feet Road, Bhomiya Nagar, Jhotwara, Jaipur, Rajasthan-302012.

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2. MR. Kesar Singh Rathore Mr. Roop Singh , R/o 153, Vijay Singh Pathik Nagar, Gurjar colony, Near 200 Fit Bypass, Kalwar Road, Jhotwara, Jaipur, Rajasthan-302012 Also at: 14, 100 Feet Road, Bhomiya Nagar, Jhotwara, Jaipur, Rajasthan-302012.

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3 . Mrs. Hansa Kanwar w/o Mr. Keshar Singh, R/o 153, Vijay Singh Pathik Nagar, Gurjar colony, Near 200 Fit Bypass, Kalwar Road, Jhotwara, Jaipur, Rajasthan-302012

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... Applicants

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VERSUS

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FEDBANK FINANCIAL SERVICES LIMITED

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Through its Authorized Officer,

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Having Registered Office at Kanakia Wall Street, A- Wing, 5th Floor, Unit Nos 511 & 512, Andheri Kurla Road, Chakla, Andheri (East), Mumbai 400 093

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…Respondent

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Present:

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Sh. Akshat Kulshrestha, Ld. Counsels for the Applicant

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Sh. Avinash Kumbaj, Ld. Counsel for the Respondent FI

(Final Order)

(21.10.2023)

This SA was filed on 29.05.2023 and vide order dated 01.06.2023, the respondent bank was directed to give three weeks advance notice before taking any coercive action but after filing reply to SA.

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Reply to SA was filed on 21.06.2023 and thereafter vide order dated 24.07.2023 last opportunity was granted to SA applicant to file rejoinder, with a condition that if rejoinder not filed, opportunity to file rejoinder shall stands closed and rejoinder was not filed and therefore right to file rejoinder was closed.

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An IA no. 2015/2023 was filed on 26.09.2023 with a prayer to stay the notice dated 04.09.2023 given by Respondent FI and further prayed that order under Section 14 of the Act of 2002 dated 28.03.2023 is required to be quashed and set aside.

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Pleadings were complete, therefore the matter is heard finally.

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Ld. Counsel for the applicant referred letter dated 15.07.2021 (Annexure A/1), the letter issued by the Respondent FI, Sanction Letter dated 15.07.2021 in the said loan agreement and he further referred demand notice (Annexure A/2) dated 26.08.2022 and argued that account was wrongly declared as NPA on 31.07.2021. Ld. Counsel further referred Annexure A/2, demand notice dated 26.08.2022 and submitted that the said demand notice was forwarded by the

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Respondent FI without having seal and signatures of Authorized Officer of the Respondent FI and therefore the demand notice dated 26.08.2022 is required to be quashed and set aside.

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Ld. Counsel for the applicant also raised the issue of legality of possession notice dated 24.12.2022 (Annexure A/3) because the said possession notice was issued by Respondent FI on the basis of demand notice dated 26.08.2022 which is neither signed nor having seal of Authorized Officer of the Bank.

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Ld. Counsel for the applicant also raised the issue of authority of person who signed application under Section 14 of the Act of 2002 filed before Ld. DM, Jaipur because it was filed by Authorized Representative and not by the Authorized Officer of the Respondent FI and therefore he prayed that all the actions initiated by Respondent FI including the order under Section 14 of the Act of 2002 are required to be quashed and set aside.

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Ld. Counsel for the Respondent FI, while objecting the grounds taken by SA applicant submitted that account was rightly declared as NPA in the light of RBI guidelines (Annexure R/6).

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Ld. Counsel for the Respondent FI referred Annexure R/7, copy of demand notice dated 26.08.2022 and submitted that page no. 4 of the said demand notice is duly signed by Authorized Officer of the Bank and he submitted that from where and under what

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circumstance, the demand notice dated 26.08.2022 was issued in favour of SA applicant, having no seal and signatures of the Respondent FI, is the subject matter of inquiry.

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Further Ld. Counsel for the Respondent FI submitted that they have taken care of mandatory guidelines issued by the RBI and prayed that all the actions taken by Respondent FI are legally permissible as per law. he submitted that there was nothing illegal in the application under Section 14 of the Act of 2002.

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Ld. Counsel for the Respondent FI also referred affidavit at page no. 33 of the SA and submitted that the said affidavit was filed by Authorized Officer of the Bank Mr. Shakti Singh Rathore and there was also nothing illegal in it

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Based on these ground, Ld. Counsel for the Respondent FI prayed to dismiss this SA.

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Heard arguments and perused the record.

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Perused Demand Notice dated 26.08.2022, issued by Respondent FI and found that entire Demand Notice do not have either signature or seal of Authorized Officer of the Respondent FI, whereas as per copy of Demand Notice filed along with the reply, only last page i.e. Schedule ‘A’ is having only signature and no seal, is affixed, therefore it is clear that Demand Notice issued by Respondent FI is not at all a validly and legally enforceable documents, on the basis of which the Respondent FI could have initiated further proceedings

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like issuance of Possession Notice as well as filing application under Section 14 of the Act of 2002.

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Therefore, the SA stands disposed of as allowed, with no cost. All the actions initiated by Respondent are quashed and set aside.

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Needless to say, the Respondent FI is required to proceed ahead as per law by taking appropriate actions as per law.

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Copy of the order be given free to the concerned parties.

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File be place before Registrar for compliance, after compliance file be consigned to record as per rules.

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Vivek Saxena Presiding Officer DRT, Jaipur

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M S Sara Masala Kutir Udyog and Ors. v. Fedbank Financial Services Limited

Case brief

What is this about?

What did the court decide?

M S Sara Masala Kutir Udyog and Ors. v. Fedbank Financial Services Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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