w w w . L a w y e r S e r v i c e s . i n



Ishwar Oil Industries and Others. V/S The Authorized Officer, Dena Bank and Others.


Company & Directors' Information:- OIL INDIA LIMITED [Active] CIN = L11101AS1959GOI001148

Company & Directors' Information:- T T G INDUSTRIES LIMITED [Active] CIN = U27209TN1987PLC014169

Company & Directors' Information:- V I P INDUSTRIES LIMITED [Active] CIN = L25200MH1968PLC013914

Company & Directors' Information:- A L M INDUSTRIES LIMITED [Active] CIN = U14100DL1996PLC129067

Company & Directors' Information:- S R INDUSTRIES LTD [Active] CIN = L29246PB1989PLC009531

Company & Directors' Information:- K L R INDUSTRIES LIMITED [Active] CIN = U28939TG2002PLC038416

Company & Directors' Information:- T S I INDUSTRIES PRIVATE LIMITED [Under Process of Striking Off] CIN = U18101HR1997PTC034478

Company & Directors' Information:- B L A INDUSTRIES PRIVATE LIMITED. [Active] CIN = U10200MH1964PTC162314

Company & Directors' Information:- R B T INDUSTRIES LIMITED [Active] CIN = U24118UP1990PLC011820

Company & Directors' Information:- H G I INDUSTRIES LIMITED [Active] CIN = L40200WB1944PLC011754

Company & Directors' Information:- D D INDUSTRIES LIMITED [Active] CIN = U74899DL1974PLC007169

Company & Directors' Information:- H. J. INDUSTRIES (INDIA) PRIVATE LIMITED [Active] CIN = U17120GJ2010PTC060769

Company & Directors' Information:- G R S INDUSTRIES LIMITED [Active] CIN = U00000PB2005PLC029159

Company & Directors' Information:- T S L INDUSTRIES LIMITED [Active] CIN = L65999WB1994PLC065255

Company & Directors' Information:- S R P OIL PVT LTD [Active] CIN = U23209DL1996PTC303594

Company & Directors' Information:- V S P INDUSTRIES PRIVATE LIMITED [Active] CIN = U17111TZ2005PTC011820

Company & Directors' Information:- M N INDUSTRIES PRIVATE LIMITED [Active] CIN = U24100TG2012PTC079737

Company & Directors' Information:- G I INDUSTRIES PRIVATE LIMITED [Active] CIN = U15312PB2010PTC033806

Company & Directors' Information:- E A P INDUSTRIES LTD [Active] CIN = U25206WB1956PLC023072

Company & Directors' Information:- S R V E INDUSTRIES LIMITED [Active] CIN = U03210TZ2006PLC012577

Company & Directors' Information:- B. R. OIL INDUSTRIES PRIVATE LIMITED [Active] CIN = U15141MP2009PTC022534

Company & Directors' Information:- P AND P INDUSTRIES LIMITED [Strike Off] CIN = U21010MH1992PLC068885

Company & Directors' Information:- N G INDUSTRIES LTD [Active] CIN = L74140WB1994PLC065937

Company & Directors' Information:- T R A T INDUSTRIES LIMITED [Active] CIN = U25199KL1996PLC010148

Company & Directors' Information:- B R INDUSTRIES LIMITED [Active] CIN = U74899DL1995PLC067120

Company & Directors' Information:- S N L INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U17115RJ1994PTC008053

Company & Directors' Information:- J V INDUSTRIES PRIVATE LIMITED [Active] CIN = U74899DL1994PTC057081

Company & Directors' Information:- D V S INDUSTRIES PRIVATE LIMITED [Active] CIN = U74899DL1992PTC049221

Company & Directors' Information:- G V G INDUSTRIES PRIVATE LIMITED [Active] CIN = U17111TZ1980PTC006887

Company & Directors' Information:- C D INDUSTRIES LIMITED [Active] CIN = U27100MH1996PLC101277

Company & Directors' Information:- G S M INDUSTRIES PRIVATE LIMITED [Active] CIN = U02001DL2002PTC117443

Company & Directors' Information:- L C INDUSTRIES PRIVATE LIMITED [Active] CIN = U15122UP2013PTC055697

Company & Directors' Information:- R M G INDUSTRIES PRIVATE LIMITED [Active] CIN = U18100TG1993PTC016220

Company & Directors' Information:- I W D W INDUSTRIES LTD. [Strike Off] CIN = U30099WB1990PLC050177

Company & Directors' Information:- M K J INDUSTRIES PRIVATE LIMITED [Active] CIN = U19111UP1989PTC010468

Company & Directors' Information:- P B INDUSTRIES PRIVATE LIMITED [Active] CIN = U29120MP1994PTC008840

Company & Directors' Information:- A AND S INDUSTRIES PRIVATE LIMITED [Active] CIN = U17117DL1995PTC064137

Company & Directors' Information:- M C INDUSTRIES LTD [Active] CIN = U27106WB1993PLC058995

Company & Directors' Information:- D R INDUSTRIES PRIVATE LIMITED [Active] CIN = U24100WB2011PTC160058

Company & Directors' Information:- R. L. F. INDUSTRIES LIMITED [Active] CIN = U51909DL1983PLC015262

Company & Directors' Information:- M G I INDUSTRIES PVT LTD [Active] CIN = U27310GJ2006PTC048707

Company & Directors' Information:- A D INDUSTRIES PRIVATE LIMITED [Active] CIN = U18101WB2008PTC131561

Company & Directors' Information:- G R INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U34300PB1996PTC018671

Company & Directors' Information:- M. K. INDUSTRIES PRIVATE LIMITED [Active] CIN = U15549WB2008PTC130116

Company & Directors' Information:- R S V INDUSTRIES PRIVATE LIMITED [Active] CIN = U52399MH2008PTC180489

Company & Directors' Information:- K. A. INDUSTRIES PRIVATE LIMITED [Active] CIN = U14220JH2008PTC013409

Company & Directors' Information:- D K INDUSTRIES LIMITED [Active] CIN = U45202CH1994PLC014627

Company & Directors' Information:- S-ISHWAR INDUSTRIES PRIVATE LIMITED [Active] CIN = U24222MH2006PTC163848

Company & Directors' Information:- R K S INDUSTRIES PRIVATE LIMITED [Active] CIN = U20211WB1997PTC086009

Company & Directors' Information:- D G INDUSTRIES PVT LTD [Active] CIN = U36942WB1946PTC013526

Company & Directors' Information:- I S INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U29100GJ2009PTC057308

Company & Directors' Information:- R V S INDUSTRIES PRIVATE LIMITED [Active] CIN = U17111TZ1995PTC006398

Company & Directors' Information:- A J INDUSTRIES PRIVATE LIMITED [Active] CIN = U17120MH2004PTC145040

Company & Directors' Information:- S. A. A INDUSTRIES PRIVATE LIMITED [Active] CIN = U01549TZ1997PTC007927

Company & Directors' Information:- C R I INDUSTRIES PRIVATE LIMITED [Amalgamated] CIN = U29120TZ2002PTC010129

Company & Directors' Information:- ISHWAR INDUSTRIES LTD [Active] CIN = U94999DL1943PLC000717

Company & Directors' Information:- S D B INDUSTRIES LIMITED [Active] CIN = U27107MP1996PLC010394

Company & Directors' Information:- A C INDUSTRIES PVT LTD [Active] CIN = U29299WB2006PTC109474

Company & Directors' Information:- K M INDUSTRIES PRIVATE LIMITED [Converted to LLP and Dissolved] CIN = U74899DL1991PTC043295

Company & Directors' Information:- J. L. INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U29141MP2008PTC020731

Company & Directors' Information:- H. D. INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U27310MH2011PTC216080

Company & Directors' Information:- R. D. G. INDUSTRIES PRIVATE LIMITED [Active] CIN = U26960DL2008PTC182480

Company & Directors' Information:- H & H INDUSTRIES PRIVATE LIMITED [Active] CIN = U34100DL2010PTC204604

Company & Directors' Information:- M J INDUSTRIES PRIVATE LIMITED [Active] CIN = U15203KA2011PTC060675

Company & Directors' Information:- B R V INDUSTRIES PRIVATE LIMITED [Active] CIN = U32301UP1995PTC018704

Company & Directors' Information:- I P M INDUSTRIES LIMITED [Active] CIN = U25200DL1995PLC068554

Company & Directors' Information:- R D I INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U74900DL1995PTC065508

Company & Directors' Information:- J G INDUSTRIES LTD [Active] CIN = L15141WB1983PLC035931

Company & Directors' Information:- S B OIL INDUSTRIES PVT LTD [Active] CIN = U51225WB1981PTC033684

Company & Directors' Information:- R K OIL INDUSTRIES PRIVATE LIMITED [Active] CIN = U51109UP1991PTC013762

Company & Directors' Information:- K G INDUSTRIES PVT LTD [Active] CIN = U29130WB1951PTC019868

Company & Directors' Information:- N S INDUSTRIES PRIVATE LIMITED [Under Process of Striking Off] CIN = U74120UP2012PTC053986

Company & Directors' Information:- D U INDUSTRIES PRIVATE LIMITED [Active] CIN = U29230GJ2016PTC091588

Company & Directors' Information:- B V R INDUSTRIES PRIVATE LIMITED [Active] CIN = U28999CT2020PTC010570

Company & Directors' Information:- M M A OIL INDUSTRIES PRIVATE LIMITED [Active] CIN = U36100KA2013PTC069069

Company & Directors' Information:- M K S OIL PRIVATE LIMITED [Active] CIN = U23201DL2013PTC250459

Company & Directors' Information:- A T C INDUSTRIES LTD [Strike Off] CIN = U27109AS1984PLC002201

Company & Directors' Information:- K R OIL INDUSTRIES PRIVATE LIMITED [Active] CIN = U15140UP1988PTC009717

Company & Directors' Information:- N V INDUSTRIES PVT LTD [Active] CIN = U51909WB1953PTC020952

Company & Directors' Information:- A TO Z INDUSTRIES PVT LTD [Strike Off] CIN = U31908AS1987PTC002804

Company & Directors' Information:- OIL CORPORATION OF INDIA PRIVATE LIMITED [Active] CIN = U15133UP1952PTC002471

Company & Directors' Information:- O.I.L PRIVATE LIMITED [Active] CIN = U15400DL2013PTC255692

Company & Directors' Information:- K S INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U31909MH1960PTC011707

Company & Directors' Information:- R K I INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U29190DL2012PTC233413

Company & Directors' Information:- R K INDUSTRIES PVT LTD [Strike Off] CIN = U25202AS1988PTC003132

Company & Directors' Information:- S G R INDUSTRIES PVT LTD [Strike Off] CIN = U25199WB1948PTC016397

Company & Directors' Information:- P P OIL PRIVATE LIMITED [Active] CIN = U15141MH1999PTC117925

Company & Directors' Information:- Y K INDUSTRIES PRIVATE LIMITED [Active] CIN = U19115UP2012PTC051151

Company & Directors' Information:- V I INDUSTRIES LTD [Strike Off] CIN = U36934WB1951PLC019890

Company & Directors' Information:- J M INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U05002UP1952PTC002456

Company & Directors' Information:- L F INDUSTRIES PRIVATE LIMITED [Active] CIN = U17291UP2015PTC068602

Company & Directors' Information:- V M V INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U26990GJ2013PTC076945

Company & Directors' Information:- S P INDUSTRIES PVT LTD [Strike Off] CIN = U20232AS1980PTC001853

Company & Directors' Information:- V N R INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U21090AP2012PTC081525

Company & Directors' Information:- K INDUSTRIES PVT LTD [Strike Off] CIN = U99999KA1946PTC000938

Company & Directors' Information:- B S B INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U45200TG2013PTC088059

Company & Directors' Information:- R A R INDUSTRIES PRIVATE LIMITED [Active] CIN = U74900TG2016PTC103684

Company & Directors' Information:- K S A B INDUSTRIES PRIVATE LIMITED [Active] CIN = U51909WB2012PTC181903

Company & Directors' Information:- S V S INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U36100JK2013PTC003808

Company & Directors' Information:- R D M INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U31100DL2013PTC252294

Company & Directors' Information:- INDUSTRIES INDIA PRIVATE LIMITED [Strike Off] CIN = U00349KA1947PTC000501

Company & Directors' Information:- A V K INDUSTRIES INDIA PRIVATE LIMITED [Strike Off] CIN = U52100KA2012PTC066761

Company & Directors' Information:- J INDUSTRIES PVT LTD [Strike Off] CIN = U18101OR1960PTC000388

Company & Directors' Information:- B F OIL PRIVATE LIMITED [Strike Off] CIN = U15141DL1993PTC052160

Company & Directors' Information:- OIL INDUSTRIES LIMITED [Dissolved] CIN = U99999KA1947PLC000951

Company & Directors' Information:- INDUSTRIES (INDIA) PRIVATE LIMITED [Under Process of Striking Off] CIN = U51109BR1946PTC000228

Company & Directors' Information:- B M K INDUSTRIES PVT LTD [Active] CIN = U99999MH1948PTC006393

Company & Directors' Information:- S K INDUSTRIES PVT LTD [Under Process of Striking Off] CIN = U99999MH1948PTC006932

Company & Directors' Information:- S K INDUSTRIES PVT LTD [Active] CIN = U15142PN1948PTC006932

    S.A. 382 of 2018

    Decided On, 01 February 2020

    At, Debts Recovery Tribunal Ahmedabad

    By, THE HONORABLE JUSTICE: VINAY GOEL
    By, (PRESIDING OFFICER)

    For Petitioner: Ritesh Patadia And For Respondents: K.M. Parikh and J.N. Raval



Judgment Text


1. This order of mine will dispose of Securitization Application No. 382 of 2018. Applicant No. 1 is a partnership firm of Shri Rameshbhai Jadhavbhai Gamdha (now deceased), Shri Ketanbhai Nanjibhai Gamdha and Shri Vitthalbhai Jadhavbhai Gamdha and obtained loans/credit facilities from Dena Bank (now Bank of Baroda). Shri Rameshbhai Jadhavbhai Gamdha (deceased), Shri Vitthalbhai Jadhavbhai Gamdha, Shri Vasta Kessha Sorathia, Shri Mukesh Bhut and Ms. Vijayaben Bhut stood guarantors in their individual capacity to secure the loan and Shri Rameshbhai Jadhavbhai Gamdha (deceased), Shri Ketanbhai Nanjibhai Gamdha, Shri Vitthalbhai Jadhavbhai Gamdha, Shri Vasta Kessha Sorathia, Shri Mukesh Bhut and Ms. Vijayaben Bhut mortgaged their properties to secure the loan apart from property of applicant no. 1. The borrower availed Cash Credit Facility of Rs. 9.00 crores and Term Loan of Rs. 52.12 lacs, total credit facilities of Rs. 952.12 lacs and upon default the bank issued demand notice.

2. It appears that after availment of credit facilities the borrower could not adhere to the financial discipline of the bank and ultimately the bank declared account as NPA on 31.12.2017 and thereafter issued demand notice under section 13(2) on 03.04.2018 for demand of Rs. 10,32,12,160.00 followed by symbolic possession on 29.06.2018 and bank has filed application under section 14 of SARFAESI Act, 2002 before Ld. District Magistrate to obtain order dated 27.03.2019. The applicant no. 1 filed objections dated 27.07.2018 against demand notice. The applicants questioned validity of entire process on various grounds.

3. The respondent bank filed reply negating the averments made in the Securitization Application. At the time of the final arguments Ld. Counsel for the parties argued at length and in support of their oral arguments submitted their written submission:

Written submissions of applicants:

I the advocate for the applicant most respectfully submit the said Written submission as under:

NPA:

• That as per the notice of 13(2) the bank has declared the account as NPA on 31-12-2017 which is not in accordance with the guidelines of RBI and No prior notice was given in said regards.

13(2) notice dated 03.04.2018:

• Exorbitant Outstanding claimed being 10,32,12,160.00/- in the 03.04.2018. Further the claim of the bank does not match with the statement of accounts.

• That the respondent bank has failed to serve the said demand notice to all the applicants herein. That applicant No. 5 to 7 are not served with the said notice.

• That as per the SARFEASI ACT, term borrower includes guarantors and mortgagers also and upon death of a person his legal heirs stepped in the shoes of mortgager/borrowers and under the provisions of Securitization act, the said all the legal heirs are entitled to individual notice.

• That it is the case of the respondent bank herein that the respondent bank has served to applicant no. 4 as the legal heir and so the service is said to be valid and in accordance with law. However all legal heirs of Late. Rameshbhai Jadhavbhai Gamdha remained unnerved. That bank has not even disclosed as to what care they had taken to collect the information for issuance of notice to all the legal heirs. That no notice was issued to applicant no 4 even to disclose the details of other legal heirs by the respondent bank.

• It is submitted that prior to the filling of present SA dated 22-11-2018 the respondent bank had filed OA/1221/2018 in which applicant no. 5 to 7 are joined as necessary party dated 8-10-2018 and so it is never the case of the respondent bank herein that the respondent bank were never aware in regards to the legal heirs. That such conduct of the respondent bank herein is material irregularity in Securitization process. Further even the respondent bank has failed to place any record of service to the applicant no. 4 as well as alleged.

• That it is an admitted fact that bank was always aware of all the legal heirs of Late Ramesh Gamdha but only to short cut the procedure, the authorized officer opted not to issue such notice to all the legal heirs.

• That even on perusal of the record in the reply by the respondent bank the respondent bank has failed to place any documents in regards to the service of said notice to applicants herein.

• That further in other group matter of said borrowers wherein SA/10/2019 was filed by all the legal heirs of late Rameshbhai Gamdha, the said respondent bank has withdrawn all its measures of SARFAESI act as the 13(2) notice dated 05/03/2018 was issued to only one legal heir of late Shri Rameshbhai Gamdha. The copy of said order is enclosed herewith as Annexure "A".

• So in the absence of service of 13(2) to all the borrowers the entire action of respondent bank is required to be quash and set aside.

• That the Hon'ble Tribunal in similar matter has already taken view in SA no 417/2018 wherein even thought the dead person had disclosed only two legal heirs it was specified that bank ought to have taken care and issued notice to all the legal heirs other than the one even disclosed by the dead person prior to death on oath. Further similar order as passed in SA 412/2018. The copy of said orders are enclosed herewith as Annexure 'B"(colly).

• Further the respondent bank has come forward with wrong facts in the written submission stating that bank came to knowledge of other legal heirs only after filing of said SA, however the fact reveals that bank had already filed OA against all the legal heirs even prior to filing of SA. So the facts stated are incorrect and bank was duly in knowledge of all the legal heirs.

Symbolic Possession taken on 29/06/2018.

• That from the reply duly filed by the respondent bank the applicants herein came to know in regard to the symbolic possession taken by the respondent bank on 29/06/2018. However the respondent bank has not placed any records in regards to the service of alleged possession notice and so the same being illegal in the eyes of law requires to be quashed, Further from the panchnama so prepared by the respondent bank are in cyclostyle manner and no reliance can be made upon the said documents to be true. That from the documents placed by the respondent bank it is pertinent to note that the respondent bank has not given notice in accordance with appendix-Iv and not complied rule 8 (1) and 8(2).

SALE NOTICE DATED. 18/10/2018.

• That the respondent bank herein has not complied with the mandatory provision of the SARFAESI ACT being Rule 8(5), 8(6), 8(7), 9 (1) & 9(3).

• That the respondent bank on 08/10/2018 filed OA/1221/2018 wherein all the legal heirs of late Rameshbhai Gamdha were party to the proceedings. However subsequent to the said fact the respondent bank issued sale notice dated 18/10/2018 and even after knowledge of all legal heirs never bothered to served the same to all the legal heirs. That in alternate for sake of argument if considered that bank was not in knowledge of all the legal heirs than also from the date of knowledge they ought to have issued notice to all the legal heirs. That as per the Judgement of division bench of Hon'ble High court of Madras it is clear that from the date of knowledge bank ought to proceed against all the legal heirs, the copy of said Judgment is enclosed herewith as Annexure "C". Further the said Judgment is also upheld by the Hon'ble Apex court.

• That the bank was duly aware of all the legal heirs prior to even 13(2) notice or else they ought to have not filed OA against all the legal heirs.

• That respondent bank had put the property to auction at throw away price. That on page no. 30 the applicants herein has placed sanction letter dated: 03/12/2015 in which the valuation of the property sold is Rs. 167.69 Lacs and the same property is kept under auction at: 134.59 lacs. That the respondent bank herein has failed to establish any cause for which the value of the property is detonated. That so it is submitted that authorized officer is in connive with the auction purchaser to sold the property at throw away price.

• That the sale in favor of the respondent no. 2 is required to be quash and set a aside as the respondent bank has not place in document in regards to the compliance of Rule 9 (1) and 9(3).

SECTION 14 APPLICATION

• That the respondent bank has filed application before the Ld. DM without complying to the mandatory Section 14, 14(1), 14(1A) and 14(1B).

• That Ld. DM without recording satisfaction and without perusing the documents passed cyclostyle order dated 27/03/2019 and the same is illegal as per the law settled by High Court of Gujarat.

• That Ld. DM were ought to verify in regards to the service of 13(2) and mortgage deed. However without recording the satisfaction and without verification of records so place the Ld. DM has passed erroneous order which liable to be quash and set aside in the eyes of law.

• That even thought at the time of filing application before the DM, the respondent bank were in knowledge of all the legal heirs they ought to not join all the legal heirs and proceeded only against one legal heir. That SA and OA already filed were with all the details of all legal heirs.

SALE DATED. 12/09/2019.

• That the respondent bank herein has not complied with the mandatory provision of the SARFAESI ACT being Rule 8(5), 8(6), 8(7), 9 (1) & 9(3).

• That herein also the notice was not issued to all the legal heirs of late Ramesh Gamdha even thought in knowledge of said facts.

So considering the said facts and submissions the securitization application filed by the applicant bank needs to be allowed in the interest of Justice.

Written Submissions by Respondent Bank

(1) The Respondent Bank humbly submits that Applicants have filed present S.A. against Respondent Bank challenging the sale notice dated 18/10/2018 issued by A.O. of Respondent Bank for sale of scheduled properties for public auction scheduled to be held on 22/11/2018. It is submitted that it is the admission on the part of applicants themselves that applicants have challenged sale notice dated 18/10/2018 and therefore, to the extent of sale notice under challenge, present S.A. is within limitation. So far as, rest of the measures prior to auction sale notice are concerned, the same are time barred and applicants have failed to file any delay Condonation application for Condonation of delay and therefore, all the measures prior to auction sale notice dated 18/10/2018 are not open for judicial scrutiny by this Hon'ble Tribunal. Hence, all the measures prior to the auction sale notice cannot be agitated and challenged by applicants on any legal and factual grounds. Since, there is no infirmity or irregularity or material irregularity in the auction sale process already commenced by A.O. of Respondent Bank vide auction sale notice dated 18/10/2018, present S.A. does not called for any interference from this Hon'ble Tribunal.

(2) The Respondent Bank humbly submits that Respondent Bank classified the account of Applicant No. 1 Principal Borrower as N.P.A. on 31/12/2017. It is further submitted that fact of death of Mr. Rameshbhai J. Gamdha, who expired on 01/07/2017, as stated by applicants in Para 5.5 of the S.A., was never conveyed by the heirs and L.Rs. of deceased Mr. Rameshbhai J. Gamdha to the A.O. of Respondent Bank, except disclosing said fact for the first time while filing S.A. on 22/11/2018 before this Hon'ble Tribunal. Hence, for non disclosing the date of death of Mr. Rameshbhai J. Gamdha by applicant No. 4 to 7 of this S.A., adverse inference be drawn against them and the defense raised by applicant No. 4 to 7 about the service of demand notice and possession notice to all the heirs and L.Rs. of deceased Mr. Rameshbhai J. Gamdha is not the correct proposition of law as canvassed by the concerned applicants. When applicants as heirs and L.Rs. of deceased Mr. Rameshbhai J. Gamdha have not reported the names and addresses of the heirs and L.Rs. of deceased Mr. Rameshbhai J. Gamdha, in such eventuality, it cannot be expected from the A.O. of Respondent Bank to effect service of demand notice to all the heirs and L.Rs. of deceased Mr. Rameshbhai J. Gamdha as canvassed by the applicants. Since, Respondent Bank was not aware about the names and addresses of all the heirs and L.Rs. of deceased Mr. Rameshbhai J. Gamdha and therefore, whatever information available on the date of issuance of demand notice with Respondent Bank, A.O. of Respondent Bank issued demand notice dated 03/04/2018 to Applicant No. 4 of this S.A. as heirs and L.Rs. of deceased Mr. Rameshbhai J. Gamdha. Since, names and addresses of other heirs and L.Rs. of deceased Mr. Rameshbhai J. Gamdha was not provided and furnished by the applicants to the Respondent Bank prior to 03/04/2018, it was not practically possible and feasible to issue notice to all the heirs and L.Rs. of deceased Mr. Rameshbhai J. Gamdha as canvassed by the applicants in the S.A. However, fact remains that applicant No. 4 of this S.A. is one of the addressee of demand notice dated 03/04/2018. Hence, no adverse inference be drawn against Respondent Bank on the ground of non service of demand notice to all the heirs and L.Rs. of deceased Mr. Rameshbhai J. Gamdha.

(3) The Respondent Bank humbly submits that A.O. of Respondent Bank issued demand notice dated 03/04/2018 to Principal Borrower i.e. applicant No. 1 to 4 of this S.A. and also issued separate notice to applicant No. 8 and 9 of this S.A. Copies of such demand notices sent by Respondent Bank to the applicants have already been produced by bank along with affidavit in reply at Page No. 11 to 20 of the same. Hence, there is a full compliance of provisions of sec. 13(2) and 13(3) of the Act. The same also satisfy the compliance of Rule-3 of SARFAESI Rules-2002.

(4) The Respondent Bank humbly submits that after receipt of demand notice dated 03/04/2018, applicant No. 4 to 7 being heirs and L.Rs. of deceased Mr. Rameshbhai J. Gamdha have not lodged or raised any representation or objection with the A.O. of Respondent Bank and thereby, applicant No. 4 to 7 have waived their legal and statutory rights to submit any objection against the demand so raised by A.O. of Respondent Bank u/s. 13(2) of the Act It is submitted that by not submitting any objection of any nature against demand notice dated 03/04/2018, applicant No. 4 to 7 have relinquished and waived their legal right to challenge legality of demand notice dated 03/04/2018. Now, in this S.A., such challenge of demand notice dated 03/04/2018 on the grounds urged in the S.A. is not permissible in the eye of law. By not submitting any objection against demand notice dated 03/04/2018, applicant No. 4 to 7 have accepted the demand raised by the bank claimed in the demand notice dated 03/04/2018.

(5) The Respondent Bank humbly submits that rest of the applicants of this S.A. have not even cared to submit the objection on behalf of applicant No. 4 to 7 with Respondent Bank.

(6) The Respondent Bank humbly submits that after receipt of demand notice dated 03/04/2018 applicant No. 1 submitted their objection u/s. 13(3A) of the Act. The same is produced on Page No. 37 to 42 of the Paper Book of the S.A.

(7) The Respondent Bank humbly submits that applicants have suppressed one of the fact that one of the recipient of demand notice dated 03/04/2018 Mr. Vastabhai K. Sorathia had submitted his reply cum objection through his advocate Shri A.Y. Mehta of Ahmedabad vide letter dated 31/05/2017 and raised various contentions therein. The same came to be disposed of by A.O. of Respondent Bank by way of rejoined and speaking order vide letter dated 26/06/2018.

(8) The Respondent Bank humbly submits that applicant No. 4 to 7 have not submitted any objection u/s. 13(3A) of the Act with the A.O. of Respondent Bank. Hence, it amounts to admission of demand as claimed by the bank.

(9) The Respondent Bank humbly submits that objection dated 27/07/2018 submitted by applicant No. 1 through their advocate with A.O. of Respondent Bank is not legally sustainable objection in the eye of law. The applicant No. 1 had received demand notice dated 03/04/2018 and had not submitted the objection with the A.O. of Respondent Bank within a period of 60 days as contemplated under the law. Not only that the objection dated 27/07/2018 submitted by applicant No. 1 with the A.O. of Respondent Bank is after the date of taking of symbolic possession of secured assets by A.O. of Respondent Bank on 29/06/2018. Thus, objection so lodged by applicant No. 1 after completion of the process of sec. 13(4) of the Act is not legally entertainable and sustainable in the eye of law. When the objection dated 27/07/2018 submitted by applicant No. 1 are not objections as prescribed under statute in the eye of law, it is not incumbent or mandatory on the part of A.O. of Respondent Bank to disposed of such objection, which are admittedly lodged by applicant No. 1 after the event of taking of symbolic possession 29/06/2018. Hence, such objection produced at Page No. 37 to 42 of the Paper Book of the S.A. is having no legal significance.

(10) The Respondent Bank humbly submits that since applicants have failed to discharge in full the entire secured debts with interest, cost, charges and expenses as claimed by the bank claimed in demand notice dated 03/04/2018, A.O. of Respondent Bank have taken further measures against secured assets u/s. 13(4) of the Act and have taken symbolic possession of secured asset on 29/06/2018 and the same was produced by Respondent Bank at Page No. 37 to 54 of the Paper Book of the affidavit in reply filed by Respondent Bank in the S.A.

(11) The Respondent Bank humbly submits that even after taking of symbolic possession on 29/06/2018, the applicant No. 4 to 7 have not raised any objection or not submitted any objection to the A.O. of Respondent Bank. Not only that applicant No. 5 to 7 of this S.A. have not raised any objection against the demand notice dated 03/04/2018 as well as symbolic possession notice dated 29/06/2018 with the A.O. of Respondent Bank and thereby, applicant No. 4 to 7 have completely relinquished and waived their legal rights as heirs and L.Rs. of deceased Mr. Rameshbhai J. Gamdha to challenge legality and validity of demand notice dated 03/04/2018 as well as symbolic possession notice dated 29/06/2018. Now, applicant No. 4 to 7 for the first time in the S.A. filed on 22/11/2018 cannot raise such objection belatedly, when, A.O. of Respondent Bank have already completed further SARFAESI Process up to sec. 13(4) of the Act Hence, on this ground alone, challenge of demand notice and possession notice are not required to be entertained by this Hon'ble Tribunal

(12) The Respondent Bank humbly submits that A.O. of Respondent Bank had published fact of symbolic possession notice dated 29/06/2018 in vernacular language in local daily and also in English daily published on 04/07/2018 and thereby, complied with provisions of Act and Rules. It is to be noted that even after publication of symbolic possession notice on 04/07/2018, applicant No. 4 to 7 have not lodged or raised any objection against the possession notice. Thus, from 03/04/2018 till 22/11/2018, applicant No. 4 to 7 have not submitted any objection about the effective service of demand notice and possession notice to all the heirs and L.Rs. of deceased Mr. Rameshbhai J. Gamdha. Thus, applicant No. 4 to 7 are not entitled to raise such contention being after thought and when A.O. of Respondent Bank had already proceeded further in SARFAESI Process up to the stage of auction of secured asset, applicant No. 4 to 7 have no legal and vested right to challenge demand notice and possession notice on such ground as canvassed in the SA. due to silence kept by applicant No. 4 to 7, A.O. of Respondent Bank had already completed SARFAESI Process and applicant No. 4 to 7 be not allowed to take advantage of their own wrong i.e. suppression of facts with the bank i.e. non disclosure of names and addressed of all the heirs and L.Rs. of deceased Mr. Rameshbhai J. Gamdha to the bank after the death of Mr. Rameshbhai J. Gamdha.

(13) The Respondent Bank humbly submits that when A.O. of Respondent Bank issued auction sale notice dated 18/10/2018 for sale of all the secured assets belonging to the applicants, A.O. of Respondent Bank had received bid from prospective bidder in respect of secured asset belonging to Mr. Mukesh V. Bhut and Mrs. Vijayaben V. Bhut and the said property belonging to them came to be disposed of and sold by A.O. of Respondent Bank in the auction held on 22/11/2018 to the highest successful bidder and thereby, said property belonging to Mr. M.B. Bhuj and Mrs. Vijaya B. Bhut came to be disposed of by A.O. of Respondent Bank. For rest of the properties, A.O. of Respondent Bank had not received any bids from the prospective bidders. However, fact remains that at the time of auction held on 22/11/2018, which resulted into sale of one of the properties, however, at that point of time, applicant No. 4 to 7 have not insisted for hearing of the appeal on the grounds stated therein. Thus, the applicant No. 4 to 7 have kept complete silence on 22/11/2018, i.e. the date on which one of the secure assets came to be disposed of. The auction sale notice which was under challenge in the S.A. by the applicants is common for all the properties including properties of applicant No. 4 to 7. Thus, the right to challenge demand notice possession notice and auction process by applicant No. 4 to 7 gets closed and therefore, now, they cannot challenge demand notice and possession notice on the grounds stated in the S.A. By not raising such objections at the time of confirmation of sale of one of the secured assets by A.O. of Respondent Bank on 22/11/2018, once again, applicant No. 4 to 7, particularly, have waived their legal rights to challenge legality of the SARFAESI Process. The said sale of one of the properties got confirmed and concluded by A.O. of Respondent Bank and therefore, now any steps of SARFAESI Process under taken by A.O. of Respondent Bank prior to 22/11/2018 cannot be questioned by the applicants in any manner. On the doctrine of waiver, delay, latches and acquiescence, the S.A. deserves to be dismissed.

(14) The Respondent Bank humbly submits that all the contentions and averments as canvassed by A.O. of Respondent Bank in their affidavit in reply dated 05/03/2019 be treated as part and parcel of present written submission.

(15) The Respondent Bank humbly submits that A.O. of Respondent Bank at all the stages of SARFAESI Process, have complied with statutory requirements of SARFAESI Act and Rules and no irregularity came to be committed by A.O. of Respondent Bank at any point of time. Therefore also, S.A. deserves to be dismissed.

(16) The Respondent Bank humbly submits that they have placed on record copy of Valuation Report and A.O. of Respondent Bank have shown that they have complied with all the provisions of law. Not only that, A.O. of Respondent Bank had also placed on record copies of M.O.E. and extension of M.O.E. being registered as required under law. Not only that A.O. of Respondent Bank had also placed on record copy of sale certificate dated 07/12/2018 issued by A.O. of Respondent Bank showing confirmation of sale of Plot No. 23 belonging to Mr. M.V. Bhut and Mrs. Vijaya V. Bhut. Thus auction of 22/11/2018 held by A.O. of Respondent Bank get confirmed and concluded by this Hon'ble Tribunal and therefore, now, at this stage, more particularly at the stage of second auction it is not open for the applicants to challenge the earlier concluded SARFAESI Process and therefore, the present S.A. challenging the subsequent auction held on 12/09/2019 cannot be questioned by the applicants. In any case, amendment application challenging second auction already held on 12/09/2019, though allowed by this Hon'ble Tribunal cannot give rise to fresh cause of action to applicant No. 4 to 7 in any manner. It is clarified that in the second auction held on 12/09/2019, A.O. of Respondent Bank received bids from prospective bidders in respect of secured assets belonging to Applicant No. 3 and 4 to 7. For rest of the properties, no bids are received by the bank. Now, applicant No. 8 and 9 no longer remain as aggrieved person as defined u/s. 17(1) of the Act, because their property have already been disposed by the bank by way of issuance of sale certificate dated 07/12/2018.

(17) The Respondent Bank humbly submits that it is interesting to note that applicant No. 4 to 7 were fully aware that A.O. of Respondent Bank had already commenced SARFAESI Process against principal borrower, partners, guarantors and mortgagors in accordance with law from 03/04/2018. It is also admitted fact that applicant No. 4 to 7 have not challenged symbolic possession notice dated 29/06/2018 within the period of 45 days from the date of said measure as provided u/s. 17(1) of the Act. On the ground of delay and latches, present S.A. challenging second auction held on 12/09/2019 deserves to be dismissed by this Hon'ble Tribunal.

(18) The Respondent Bank humbly submits that A.O. of Respondent Bank published symbolic possession notice on 04/07/2018. It is submitted that A.O. of Respondent Bank also affixed possession notice on the said property belonging to applicant No. 4 to 7 and thereby, complied with provisions of law. Even after affixation of possession notice on secured asset, applicant No. 4 to 7 kept complete silence and had not challenged said measure within a period of limitation.

(19) The Respondent Bank humbly submits that by not lodging objection against demand notice dated 03/04/2018 and by not challenging symbolic possession notice dated 29/06/2018 and its publication in two dailies dated 04/07/2018, applicants have waived their legal rights and such waiver and relinquishment of the applicants tantamount to admission of correctness of steps taken under SARFAESI Act.

(20) The Respondent Bank humbly submits that once applicant No. 4 to 7 allowed the A.O. of Respondent Bank to sale secured assets under SARFAESI Act, practically, it amounts to admission of the applicants regarding legality, correctness and genuineness of demand notice dated 03/04/2018 and further steps taken by A.O. of Respondent Bank under SARFAESI Act in respect of property in question. Once applicants have admitted the correctness of SARFAESI steps, now, applicants cannot be allowed to agitate anything about the validity of demand notice dated 03/04/2018 and further steps taken by A.O. of Respondent Bank in respect of properties in question. Since applicants have failed to challenge demand notice and possession notice within 45 days, the S.A. deserves to be dismissed.

(21) The Respondent Bank humbly submits that this Hon'ble Tribunal in their order dated 14/08/2019 rendered in the S.A. No. 73/2016, clearly held in Para 16 and 17, which reads as follows:

" 16: Bare reading of section 17 of the Securitization Act reflects that aggrieved with the measures taken by the secured creditor a person can approach to this Tribunal within 45 days. As detailed in section 13(4) of the Act, a bank can proceed to enforce security interest to recover its dues in different steps only after successful completion of previous steps in accordance with law. Thus practically legislature admits the right of aggrieved person to invoke section 17 on each and every step so taken. If a person is not aggrieved with initial step he may approach this Tribunal to challenge any subsequent step/s, if he becomes aggrieved with such subsequent steps. Thus if a person opts not to question the legality or validity of a particular step at relevant time within prescribed period of limitation that will tantamount to waiver on the part of the said person and subsequently if said person prefer any securitization application for subsequent step, he would be prohibited by estoppels or principles of waiver to challenge previous steps against which said person could have file securitization application at relevant time. In this context we can safely rely upon judgment of Hon'ble Supreme Court in the case of P.K. Mamachandran Vs. State of Kerala passed in Civil Appeal No. 6514 of 1997 dated 19/09/1997:-

"2. It would be noticed from a perusal of the impugned order (supra) that the court has not recorded any satisfaction that the explanation for the delay was either reasonable or satisfactory, which is essential pre-requisite to condonation of delay.

5. Law of limitation may harshly affect a particular party but it has to be applied with all its rigour when the statute so prescribed and the Courts have no power to extend the period of limitation on equitable grounds. The discretion exercised by the High Court was, thus, neither proper nor Judicious. The order condoning the delay cannot be sustained. This appeal, therefore, succeeds and the impugned order is set aside. Consequently, the application for Condonation of delay filed in the High Court would stand rejected and the Miscellaneous First Appeal shall stand dismissed as barred by time. No costs."

17 : Although there is continuity of process, but each step has its own independent existence, importance and significance and bank/secured creditor is not bound to take all steps. The secured creditor may abandon process in between in its own discretion. An aggrieved person, if opts to challenge all particular step, he can get complete relief up to that stage and once said person failed to challenge an initial step and opts to file Securitization Application to challenge subsequent step, it is obligatory on the part of the person to explain, why he could/did not challenge earlier step and seek Condonation of delay to challenge initial step also. In the absence of any such explanation, the said person has no right to challenge earlier step, as a matter of right and Tribunal would be within its jurisdiction to ignore the objections qua earlier steps, rather challenge to earlier steps at belated stage, would also prejudice the rights of secured creditor. So the applicants would have challenged the steps of the bank at relevant time. As per the latest judgment of Hon'ble Supreme Court of India in the matter of M/s. Hindon Forge Pvt. Ltd., & Anr. & Ors. v/s. The State of Uttar Pradesh through Dist. Magistrate Ghaziabad & Anr, the Apex Court has recognized the right of the borrower to approach the Tribunal under Section 17 of the SARFAESI Act, 2002, even without losing possession and borrower had every right to avail efficacious remedy under the said Act at relevant time."

Applying this analogy, present S.A. deserves to be dismissed.

(22) The Respondent Bank humbly submits that A.O. of Respondent Bank had complied with provisions of Rule-8(1), 8(2), 8(5), 8(6) and 8(7) of the SARFAESI Rules-2002. No irregularity causing prejudice to the rights of applicants have been committed by A.O. of Respondent Bank and therefore, the auction held on 12/09/2019 in respect of the properties for which A.O. of Respondent Bank had received the bids may kindly be allowed to be confirmed by this Hon'ble Tribunal and the sale in favour of successful highest bidder may kindly be upheld by this Hon'ble Tribunal and consequently, S.A. deserves to be dismissed.

The Respondent Bank humbly submits that the earlier order passed by this Hon'ble Tribunal is after the commencement of SARFAESI Process by A.O. of Respondent Bank against the applicants and therefore, the process already commenced prior to the order dated 10/01/2019 passed by this Hon'ble Tribunal shall not prevent A.O. of Respondent Bank to take further measures under the Act Hence, earlier order dated 10/01/2019 shall not be treated as embargo for A. O. of Respondent Bank to take further measures under the Act. Hence, no adverse inference be drawn against A.O. of Respondent Bank based on the order dated 10/01/2019 passed by this Hon'ble Tribunal and therefore said order shall not come to the rescue of the applicants in any manner.

4. I have heard the Ld. Counsel for the parties and also gone through the records.

5. It is the case of the applicants that Shri Rameshbhai Jadhavbhai Gamdha died leaving behind his four class I legal heirs i.e. applicant nos. 4 to 7 i.e. wife, one daughter and two minor legal heirs.

6. The borrowers in their objections admitted the default but have come with plea that same was for limited period. But once they admitted default, onus shifted on them how their account came out of out of order and NPA status, so I find no merits to entertain plea of applicants that account was not NPA. Now before touching other aspects, I would like to take up issue of death of one of partner and mortgagor Shri Rameshbhai Gamdha and issuance of demand notice to one legal heir only without any notice to other legal heirs as it would go into the roots of entire process. If ultimately this Tribunal would found that demand notice so issued is valid certainly this Tribunal will adjudicate other issues also. Let us start with the issue of validity of demand notice on the facts stated above.

7. At this juncture, I would like to reproduce relevant provisions of Securitization Act, 2002 i.e. Section 13(2) and Rule 3 of Security Interest (Enforcement) Rules, 2002:-

"Section 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 his 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 sub-section (4)."

Rule - 3 of Security Interest (Enforcement) Rules, 2002; Demand notice.-

(1) The service of demand notice as referred to in sub-section (2) of section 13 of the l[Act shall be made by delivering or transmitting at the place where the borrower or his agent, empowered to accept the notice or documents of behalf of the borrower, actually and voluntarily resides or carries on business or personally works for gain, by registered post with acknowledgement due, addressed to the borrower or his agent empowered to accept the service or by Speed Post or by courier or by any other means of transmission of documents like fax message or electronic mail service: Provided that where authorised officer has reason to believe that the borrower or his agent is avoiding the service of the notice or that for any other reason, the service cannot be made as aforesaid, the service shall be effected by affixing a copy of the demand notice on the outer door or some other conspicuous part of the house or building in which the borrower or his agent ordinarily resides or carries on business or personally works for gain and also by publishing the contents of the demand notice in two leading newspapers, one in vernacular language, having sufficient circulation in that locality.

(2) Where the borrower is a body corporate, the demand notice shall be served on the registered office or any of the branches of such body corporate as specified under sub-rule (1).

(3) Any other notice in writing to be served on the borrower or his agent by authorised officer, shall be served in the same manner as provided in this rule.

(4) Where there are more than one borrower, the demand notice shall be served on each borrower.

8. In this case deceased mortgagor died leaving behind his two minor children in toto four legal heirs and upon his death his legal heirs stepped into the shoes of mortgagor. As per provision of Securitization Act, 2002 every borrower/mortgagor is required to be served individually. So, minors and other legal heirs were entitled to demand notice/statutory notices required to be served under Securitization Act, 2002 in their own right as co-sharers of the property.

9. The bank has failed to serve any demand notice to the said minors and applicant no. 5. The bank has issued demand notice to only one legal heir i.e. applicant no. 4. Now question arises whether notice sent to guardian in her individual capacity and demand raised from the said guardian in her individual capacity would be justified under Securitization Act, 2002 and would meet with the statutory requirements of notice required to be served under Securitization Act, 2002 and whether statutory rights of minors and other legal heir to have notice under SARFAESI Act, 2002 can be abandoned and whether process of the bank is in accordance with law and latches on the part of bank or guardian can be allowed to perpetuate to the detriment of interest of minors. Whether other partners, guarantors and mortgagors by their act and conduct waive the rights of minors and other legal heir to have notice and whether bank can claim estoppel against minors and other legal heir.

10. The facts and circumstances under SARFAESI Act, 2002 are on different footings. The bank would quote provisions of Income Tax Act that in said Act minors are bind by the demand made to guardian. The demand raised by Income Tax Officer is in a adjudicatory process, whereas under Securitization Act, 2002 Legislature has empowered secured creditors to sell property of defaulters upon commission of default through non adjudicatory process without intervention of the Court. So, the analogy of provisions of Income Tax would not be applicable to the facts and circumstances of the present case. The minors and other legal heir were entitled to the notice in their own right. Further, the negligence on the part of guardian or bank would not be able to deprive minors or other legal heir from their statutory right to have notice under SARFAESI Act, 2002. No Act of any other mortgagor, partner, guarantor or co-legal heir would affect rights of minors and other legal heir to have notice and exercise rights u/s. 13(8) of SARFAESI Act, 2002. However, the rights of minors in the property are subservient to the mortgagee rights of the bank. So, bank can proceed against the property in accordance with law and there would not be any need to seek any permission of Guardian Court under Guardians & Wards Act. But despite that minors are required to be served independently in their own right in accordance with law.

11. Now question at this stage as argued on behalf of the bank is that S.A. is barred by limitation.

12. Admittedly, in this case applicants have failed to approach this Tribunal within 45 days from the steps/measures taken by the bank under Securitization Act, 2002 and prima facie Securitization Application is barred by limitation but certainly the irregularity committed by the bank is so flagrant, conspicuous and glaring and would go into the roots of the merits of securitization process itself. So, limitation aspect of this case would not be hurdle to adjudicate requisite issue on merits. Against the patent defect the bank cannot claim limitation. Further, limitation would come into operation only if bank has issued notice to all the legal heirs. The bank cannot claim limitation without issuing notice to them. The bank has not issued any demand notice to the minors and this Tribunal has to take care of interest of the minors to advance justice, once it has come to the notice of this Tribunal. The present case cannot be equated to situations of NPA status of account or other irregularities which can be waived or relinquished by the act and conduct of the parties. It is the basic material and patent irregularity in the process. Notice to guardian in his individual capacity cannot be treated as notice to minor under SARFAESI Act, 2002. The bank has committed grave error while issuing notice to mother only without issuing notice to minors and other legal heir and demand as raised from other in the demand notice does not consummate with the requirement of SARFAESI Act, 2002. Subsequent process also would affect rights of minors and other legal heir because no such notice was ever served upon them and for the purpose of legal & valid transfer of property under SARFAESI Act, 2002, notice to all the borrowers/guarantors as prescribed under SARFAESI Act, 2002 at different stages is mandatory. So, even otherwise the process from that angle is also defective.

13. In this case deceased mortgagor died leaving behind his three children (two minors) and one wife and upon his death, his all legal heirs stepped into the shoes of mortgagor. As per provisions of Securitization Act, 2002 every borrower/mortgagor is required to be served individually. So, minors and other legal heir were also entitled to demand notice/statutory notices required to be served under Securitization Act, 2002 in their own right as co-sharers of the property. The notice alone to wife of deceased mortgagor is bad in the eyes of law.

14. Before proceeding further I would like to reproduce orders passed by this Tribunal in Securitization Application No. 10 of 2019 wherein same bank withdrew its demand notice after it came to know about death of Shri Rameshbhai Jadhavbhai Gamdha:

8.1.2019

S.A. No. 10/19

Present:

Mr. Ritesh Patadia, Ld. Counsel for the Applicant

Mr. K.N. Shah, Ld. Counsel for the Respondent Bank

Mr. K.N. Shah has filed vakalatnama on behalf of respondent bank.

Ld. Counsel for respondent bank submitted that owing to certain technical defect in the demand notice as on that day bank was not aware about the

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details of class I legal heirs of diseased Mr. Rameshbhai Gamdha. Bank issued demand notice to only one class I legal heir i.e. wife of Mr. Rameshbhai. He further submitted that to avoid delay in recovery of public money and for expeditious recovery, bank intends to withdraw its demand notice but without prejudice to the rights of the bank proceed afresh to recover its dues. As Bank withdrawn its demand notice so this Securitization Application has become infructuous, The applicant would be able to take all such grounds as taken in this Securitization Application if any cause of action accrues to the applicant in future. At this stage Ld. Counsel for the applicant submitted that except declared there is no other class I legal heir of Mr. Rameshbhai Gamdha. He further submitted that said person dead intestate. At this stage applicant has filed one application and submitted that due to inadvertence his clerk's has placed a D.D of Rs. 1.00 lakh, whereas court fee required to be deposited for the Securitization Application as Rs. 32,000/-. He tendered Rs. 32,000/- dated 08.01.2019. I have heard the Ld. Counsel for the applicant and the D.D. tendered today is taken on record. Registry is directed to make necessary corrections of its record and further Registry is directed to return the D.D. of Rs. 1.00 lakh deposited at the time of filing Securitization Application against receipt to Ld. Counsel for the applicant. This order would be subject to satisfaction of Registry about quantum of Court Fee required to be paid on Securitization Application. Securitization Application is accordingly disposed of. 15. Once same bank has withdrawn its Securitization process in loan account of sister concern on account of death of a person and non-issuance of demand notice under section 13(2) of SARFAESI Act, 2002 to all the legal heirs, it is astonishing and strange as to why bank has continued with the Securitization process in this loan account. During the course of oral hearing it was that submitted before this Tribunal that in the said loan account wherein bank withdrew its demand notice, the Bank has again initiated process in Securitization Act and succeeded to recover considerable amount by sale of the secured assets. Securitization Act is a special Act wherein if secured creditor relinquished its process on technical grounds without prejudice to its rights to proceed fresh or otherwise initiate fresh process that would not come into the way of secured creditor for subsequent process and withdrawal would not be hit by principles of waiver, estoppel or res judicata by abandoning the defective process and to continue the same defective process ignoring standard legal procedure & protocol. In fact is the cause of delay and this case is a live example of such conduct of the bank. The bank has tried to contest the matter with more vigour and force to justify its patently defective process without questioning itself as to why it has withdrawn its process in other loan account on account of death of same person. Such conduct of bank not even delayed the recovery of public money in this loan account but also affected adjudication of many other cases. The valuable time of system can be/could be utilized in more positive manner for effective adjudication of other cases. 16. As demand notice itself was defective, so entire subsequent steps would not sustain on such defective process. The sale, if any, made by the bank on this defective process is liable to be quashed and is accordingly quashed and bank is directed to refund the amount to auction purchaser forthwith with interest applicable to FDR. It is further made clear that bank would not be able to claim amount so paid on account of interest from the borrowers. 17. As demand notice itself, is defective, so there would not be any need to go into the merits of other steps. 18. Keeping in view facts and circumstances of the case, I would like to impose cost of Rs. 2.00 lacs upon bank to be deposited with National Defence Fund Account No. 11084239799 State Bank of India at New Delhi Main Branch (00691). 19. Further, bank is directed to restore back possession of all the properties within 15 days and would be able to proceed afresh in accordance with law and will be liable to deposit cost before taking symbolic or physical possession. The bank will not be entitled to debit expenses incurred on defective process or defending the same in the account of borrower. Accordingly, S.A. is allowed. Let copies of this order be supplied to the parties as per rules. Dictated and Pronounced on 01.02.2020
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