Debts Recovery Tribunal, Chandigarh, disposed of a Securitization Application under Section 17 of SARFAESI Act filed by M/s Hotel Lake Palace against The Kangra Central Cooperative Bank Limited. The court noted a pending issue regarding the alleged non-issuance and non-service of a Section 13(4) notice.
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DEBTS RECOVERY TRIBUNAL-1, CHANDIGARH
skIs\6l2623 MS HOTEL LAKE PALACE & ANOTHER Vs THE KANGRA CENTRAL COOPERATIVE BANK LIMITED
19.09.2024 Item No.2 Present:
Sh. KPS Dhillon, Counsel for the Applicant.
Sh.Yogesh Jain, Counsel for respondent bank.
M/s Hotel Lake Palace and another (Applicants) have filed this Securitization Application under Section 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), against The Kangra Central Cooperative Bank Limited and another (Respondents).
Vide sanction letter dated 08.07.2016, respondent bank had sanctioned a Term Loan of Rs.12 crores to the applicant. The loan was repayable in 90 monthly installments. The moratorium period was for 30 months. The first installment was paid on 21.07.2016 of Rs. 80 lacs. The applicant did not make the repayment as per the repayment schedule and on 31.03.2021, the bank declared the account of the applicant NPA and issued the notice under Section 13(2) on 18.10.2022, which was followed by the notice- under Section 13(4) on 10.04.2023.
Applicants state that in this case Applicant No.2 is the principal borrower and his father (Puran (;hand) (now deceased) and his wife Satya Devi are the guarantors. Apart from other issues, the case of applicant No.2 is that his father had died on 31.01.2023. The notice under Section 13(4) was issued on 10.04.2023. In fact, the bank did not issue any notice under Section 13(4). The bank has not produced on the record any postal receipt or any other proof of service of notice under Section 13(4) to the applicant or to the guarantors. Moreover, his father had already died on 31.01.2023. In these circumstances, the question of any service to the deceased did not arise. Further, the LRs were also not served with the notice under Section 13(4).
In view of the above facts/ the present SA is aIRowed - However/ it is made clear that this order will not debar the bank from proceeding under the SARFAESI Act, in case it is so advised. File bAconsigned to record room after due compliance.
Pronounced in open court. MANa]
3 issues framed by the court
Whether the present Securitization Application is allowable given the alleged discrepancy in issuance of the notice under Section 13(4) of SARFAESI Act and lack of service proof.
Whether proceedings can be stayed pending compliance regarding service of notice to guarantors and legal heirs of deceased borrower.
Whether the Respondent Bank is currently debarred from proceeding under the SARFAESI Act in light of the current provisional direction.
1 provisions across 1 enactments
M/s Hotel Lake Palace & Another
The Kangra Central Cooperative Bank Limited
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
