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Supreme Court Of India

Hon'ble Judge(s): Tarun Chatterjee , J

( A ) Securitisation And Reconstruction Of Financial Assets And Enforcement Of Security Interest Act (54 of 2002) S. 13 (3A) (3A) (as inserted w.e.f. 11-11-2004) — Loan recovery by Bank — Notice to defaulting borrower — Reply sent by borrower admitting liability but raising defence that since bank had already filed suit for recovery of amount provisions of S. 13 of Securitisation Act cannot be enforced — Though pendency of suit is not a bar for invoking provisions of Ss. 13(4), 14 — Bank secured creditor is statutorily bound to consider borrower’s representation or objection and also bound to communicate reasons for such non-acceptance — Bank failed to discharge its statutory obligations under S. 13(3A) of Act — Action initiated by Bank under S. 13(4) and S. 14 is illegal. (Paras57)

( B ) Securitisation And Reconstruction Of Financial Assets And Enforcement Of Security Interest Act (54 of 2002) S. 14 — Loan recovery by secured creditor/bank — Order directing police to assist bank to secure possession of the petition schedule property from borrower — Magistrate is not required to issue any notice to the borrower before passing an order under S. 14 — Borrower has sufficient notice regarding the steps being initiated, the amount sought to be recovered and the consequences of not discharging the liability within the period stipulated in the notice which is issued under S. 13(2). (Paras67)