1. This order of mine will dispose of Securitization Application No. 34 of 2015 filed by applicants against respondent banks qua the securitization process initiated by the banks to recover their dues under the Securitization & Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
2. Briefly stated the case as gathered from the records is that the applicant No. 1 being principal borrower and applicant Nos. 2 to 6 as guarantors took financial facilities aggregating to the tune of Rs. 1,00,94,50.000/- from the consortium of respondent banks out of which Rs. 51,41,00,000/- was granted by Bank of India, Rs. 35,16,50,000/- was granted by Karur Vysya Bank and Rs. 14.37,00,000/- was granted by Oriental Bank of Commerce and respondent Bank of India was the lead bank of the consortium and the said credit facilities were secured by hypothecation of movable and mortgage of immovable assets/properties. Upon commission of default, the account of applicant No. 1 declared as NPA on 31.3.2014, 31.3.2015 and 04.07,2014 by respondent Nos. 1, 2 & 3 respectively. Thereafter the respondent No. 1 bank issued demand notice dated 17.10.2014 u/s. 13(2) of SARFAESI Act, 2002 demanding Rs. 33,89,16,222.75 for Bank of India and Rs. 20,05.10.532.04 for Karur Vysya Bank Ltd. and in response to the above demand notice, the applicant No. 1 submitted its representation on 03.12.2014, It is further submitted that respondent No. 3 filed an O.A. No. 52 of 2015 u/s. 19 of Recovery of Debts & Bankruptcy Act, 1993 for recovery' of its dues before this Tribunal and same is still pending for adjudication. It is further submitted that respondent No. 3 also filed a winding up petition being COMP/96/2015 against the applicant No. 5 before the Hon'ble High Court of Gujarat which is also pending as on date. Thereafter the respondent No. 1 took symbolic possession of the property in question on 13.3.2015 and thereafter respondent No. 2 had also issued demand notice dated 10.04.2015 u/s. 13(2) of SARFAESI Act, 2002 demanding Rs. 7,59,22,364.09 and thereafter the respondents filed application u/s. 14 of SARFAESI Act. 2002 on 07.05.2015 before the Ld. District Magistrate and Ld. District Magistrate vide order dated 03.6.2019 appointed Mamlatdar and Executive Magistrate to take possession of the properties and to handover the same to the respondent banks.
3. The respondent banks filed their respective replies and negated the averments made in the Securitization Application.
4. The Counsels for the parties submitted their written submissions and same are as under:
"Written submission on behalf of the Applicants
The appellants most respectfully submit the following arguments in support of their contentions, submissions and facts already placed and submitted on record:
DEFECTIVE 13(2) NOTICES:-
 That there is no detailed bifurcation with regard to principal and interest amount in the notices issued u/s. 13(2) of the Act. (The appellants rely upon Judgment and Order dated 14.11.2019 passed by Hon'ble Gujarat High Court in SCA/19918/2019.
 That as far as Notice dated 17.10.2014 at Page No. 51 to 53 of S.A.] issued u/s. 13(2) to Guarantors is concerned, the respondent-BOI demanded to repay the alleged outstanding amount within 7 days only and hence, the said Notice is defective and it is not in consonance with mandate of Section-13(2).
 That the rate of interest at which the alleged outstanding amount is calculated period wise and demanded is not mentioned in notice issued u/s. 13(2) of the Act and amount mentioned in the 13(2) notice is also erroneous.
 That respondent-banks have violated guidelines of Reserve Bank of India by capitalizing penal interest, which is not permissible as per settled law.
 That as per the Reserve Bank of India Guidelines, no interest ought to have been charged and debited after the account has been classified as an NPA, however, the respondent-banks have charged and have debited interest in the loan account, which is against the banking guide lines and respondent-banks have wrongly charged penal interest to the loan account
WRONGFUL NPA BECAUSE OF NON-CO-OPERATION OF RESPONDENT-BANKS BY NOT ACTING AS A CONSORTIUM IN ITS TRUE SPIRIT
 That respondent-banks have not issued any prior notice before classifying the loan account as NPA. (Appellant rely upon judgment passed by Hon'ble High Court of Jharkhand in case of Stan Commodities Pvt. Ltd. V/s. Punjab and Sind Bank)
 That the appellant-Company approached respondent-banks in the month of June, 2013 with a request for restructuring. That after much longtime, ultimately, the lead bank - BOI completed the restructuring and the sanction of restructuring was conveyed vide letter dated 26.10.2013. The appellant-Company had also simultaneously approached other banks i.e. KVB and OBC for restructuring. However, KVB did not sanction the restructuring package and OBC conveyed their sanction only in month of March, 2014. And in meantime, the account of the appellant-Company came to be classified as Non-Performing Asset (NPA) on 31.03.2014 with respondent-BOI
 That moreover, during the time when the aforesaid proposal submitted by the appellant - Company was under active consideration, the respondent-BOI forwarded the said proposal to respondent-KVB. That when the respondent-BOI was positively considering the request of the appellant-Company, the respondent-KVB sent an email on 07.01.2015 [at Page No. 60 of S.A] and raised strong objection for proposal of the appellant Company for Holding On Operations. It is submitted that pursuant to the said objection raised by respondent-KVB, the respondent-BOI also did not co-operate with the appellant-Company for Holding on Operations. That such an action on the part of respondent-banks is arbitrary illegal and unjustified and the respondent-banks did not act as consortium in its true letter and spirit causing severe prejudice to the appellants.
VIOLATION OF SECTION 313(3A) OF ACT
 That it is the case of the respondent-BOI that respondent-BOI had issued a notice u/s. 13(2) of the Act on 17.10.2014 demanding alleged amount of Rs. 33,89,16,222.75 for BOI and Rs. 20,05,10,532.04 for KVB. That after issuance of 13(2) notice dated 17.10.2014 by respondent-BOI, the appellant-Company submitted a representation/objection on 03.12.2014 [at Page No. 54 of S.A.] to respondent-BOI. In the said representation, it was inter alia submitted that the account of the appellant Company is 'Standard' at Oriental Bank of Commerce as the appellant-Company is allowed "Holding On Operations'. And hence, it was requested to respondent-BOI to allow Holding On and to permit operation of account and to allow opening of Letter of Credits on vendors for purchase of raw materials against 90th of value of payment as mentioned in the said letter. And it was further requested to keep SARFAESI notice dated 17.102014 suspended. That the respondent BOI grossly erred in not considering the said representation nor even replied to the said representation and has committed violation of section-13(3) of the Act. It is pertinent to note that on perusal of the notice dated 17.10.2014 issued u/s. 13(2) [at Page No. 46 of S.A.], the same was addressed from Assistant General Manager - BOI and therefore, the appellant-Company submitted its representation dated 03.12.2014 [at Page No. 54 of S.A.] to Assistant General Manager BOI. Hence, the respondent-BOI is not right in contending that the appellant-Company has not addressed the letter to Authorized Officer. The respondent-BOI is not right in submitting that only the appellant No. 3, 4 and 6 have submitted their replies/objections to 13(3} notice.
 That on 05.12.2014 [Page No. 56 of S.A.] the appellant sent an email to respondent-BOI and requested to timely sanction and support the proposal made by the appellant. Company on 03.12.2014.
 That the appellant-Company again submitted its detailed reply/objections/representation to respondent-BOI against the aforesaid 13(2) notice on 15.12.2014 [at Page No. 64 of S.A.] and requested to reconsider the restructuring proposal granted to appellant and further requested to keep action of notice under SARFAESI Act in abeyance.
 That the respondent-BOI did not consider/reply to the objections/representation of the appellant-Company and thereby violated mandatory provisions of section-13(3A) of SARFAES1 Ad and proceeded further by taking Symbolic Possession of the property in question.
EFFECTIVE SYMBOLIC POSSESSION 13(4)
 That respondents have grossly erred in taking Symbolic Possession of the property in question and the Notices are defective.
 That the respondents have not served/delivered a copy of Possession Notice to the appellants as required under the Act/Rules and hence, there is violation of mandatory Rule-8(1).
 That there is violation of Rule-8(2) because the respondents have not published the Possession Notice in two leading newspapers as required within prescribed period as stipulated under the Act and Rules.
DEFECTIVE SECTION-14 PROCEEDINGS WITHOUT AUTHORITY Or LAW
 That the application filed by the respondent-BOI u/s. 14 was not as per prescribed format as per amended section-14 of the Act as the exact outstanding amount as on date of filing the said application is not mentioned in the application, which is mandatory.
 That the application filed by respondent-BOI u/s. 14 did not accompany 9 Pointer Affidavit duly affirmed by the authorized officer of the secured creditor, declaring the required and mandatory contents as required u/s. 14 of the Act.
 That in section-14 application, the respondent-BOI has not mentioned about the objections/representation made by appellant-Company to 13(2) notice and hence, the application is defective. (Appellants rely upon Order dated 25.11.2013 passed by Hon'ble Gujarat High Court in SCA/10038/2013 in case of Manjudevi Somani V/s. Union of India]
 That earlier aide order dated 02.03.2016, the learned DM had allowed section-14 application by directly directing the police to help the BOI to take possession of property in question. That as the said order was not in consonance with provisions of section-14 of the Act the respondent-BOI filed an application seeking Review of the said order dated 02.03.2016. That the respondent-BOI itself filed Special Criminal Application No. 1219/2017 before the Hon'ble Gujarat High Court challenging the order dated 02.03.2016. That vide order dated 20.02.2017 the Hon'ble High Court was pleased to quash the order dated 02.03.2016 and also observed that Review Application is not maintainable. And further directed the learned DM to pass a fresh order in tune with decision of Hon'ble Supreme Court in case of Standard Chartered Bank V/s. V. Noble Kumar reported in : 2013 (9) SCC 620 by appointing a sub-ordinate officer for taking possession of property.
 That thereafter, vide order dated 28.03.2017 passed by learned Additional District Magistrate, Ahmedabad, he appointed learned Mamlatdar and Executive Magistrate to take possession of properties and to handover the same to respondent-BOI.
 That the order dated 28.03.2017 passed by learned Additional District Magistrate is without any authority of law and under the provisions of SARFAESI Act, learned Additional DM did not have any jurisdiction/authority to pass order u/s. 14 of the Act. That in earlier round of litigation, the learned DM, while passing earlier order dated 02.03.2016 had granted opportunity of hearing to the appellants and the appellants had submitted their detailed reply before the authority. However, while passing the present impugned order dated 28.03.2017 no opportunity of hearing was given to appellants and an ex-parte order is passed by learned Additional DM. Ahmedabad.
 That the appellants challenged the said order dated 28.03.2017 by preferring an Amendment Application before this Hon'ble Tribunal and the same was allowed vide order dated 14.06.2017 by this Hon'ble Tribunal. That thereafter, vide order dated 31.08.2017 this Hon'ble Tribunal was pleased to hold that order dated 28.03.2017 passed by learned Additional District Magistrate is contrary to Judgment passed by Hon'ble Gujarat High Court in case of Pushpa Devi B. Jain V/s. Indian Overseas Bank and others, SCA/19102/30IS and therefore, the implementation of order dated 28,03.2017 was stayed till further orders. That while passing aforesaid order dated 31.08.2017, this Hon'ble Tribunal observed that the respondent-bank is at liberty to file an appropriate application, if it deems fit to obtain Fresh Order u/s. 14 of the SARFAESJ Act, 2002.
 That thereafter, vide Simple Application dated 03.012019 the respondent BOI requested the teamed DM to modify the DM Order dated 28.03.2017 so that they can move ahead for taking physical possession of property On perusal of the Subject Title mentioned in the said application, it seems that the bank is seeking Modification of DM Order dated 02.03.2016 (which is already quashed by Hon'ble Gujarat High Court vide order dated 20.02.2017 passed in Special Criminal Application No. 1219/2017]. However, in last portion of the said application, the respondent-BOI has requested the learned DM to modify the DM Order dated 28.03.2017.
Firstly, it is pertinent to note that the order dated 28.03.2017 was not passed by learned DM and the same was passed by learned Additional DM and therefore, there does not arise any question for modification by learned DM as it was not his own order. Even otherwise, it is a settled law that in absence of any statutory provision providing for Review, entertaining an application for Review under the garb of clarification/modification/correction is not permissible. [Appellants rely upon Judgment of Hon'ble Supreme Court in case of Kalabharti Advertising V/s. Hemant Vimalnath Narichanla reported in : 2010 (9) SCC 437/. And in the entire SARFAESI Act, no such powers are available to learned DM/CMM. And therefore, the application dated 0301.2019 of respondent-BOI was itself not maintainable and no orders could have been passed on the same. Secondly, the application dated 03.01,2019 in the form of a letter of respondent-bank before learned DM was itself not maintainable and the same is also not in prescribed format. Thirdly, the earlier dated 28.03.2017 of learned Additional District Magistrate cannot be corrected/modified by learned DM in such a manner as is done in the present case.
 That the learned DM issued notice to the applicants on the basis of Letter dated 03.01.2019 and the present applicants appeared before the learned DM and filed their detailed reply before the learned DM.
 That though the appellants appeared before the learned DM and had filed detailed reply, none of contentions of appellants are considered and the learned DM passed an order dated 03.06.2019 allowing application of respondent-BOI and appointed Mamlatdar & Executive Magistrate for handing over physical possession of properties to the bank.
 That the respondent-BOI has misread the order dated 31.08.2017 passed by this Hon'ble DRT, whereby, a liberty was granted to bank to obtain Fresh Order u/s. 14 of the Act and not modification. In the present case, the respondent-bank has not filed any fresh application u/s. 14 of the Act.
 That the impugned order dated 03.06.2019 passed by the learned District Magistrate is in violation of principles of natural justice as the same is passed without granting sufficient opportunity to the appellants to represent their case.
 That the order passed by teamed DM is defective as the learned DM has only authorized the Mamlatdar & Executive Magistrate to handover possession of property to respondent-bank and has not authorized him to take possession of property.
(JJ) That the learned District Magistrate has grossly erred by passing the impugned order without recording his satisfaction as required under amended section-14 of the Act. (Appellants rely upon Order passed by Hon'ble Gujarat High Court in SCA/11516/2018 and LPA/1204/2018]
(KK) That no valid security interest is created in favour of the respondent-bank, and hence, the respondent bank cannot take any action against the properties in question under the provisions of Securitization Act.
(LL) That the action of the respondent-bank is without jurisdiction. That the respondent bank is not entitled to take action u/s. 13(4) of the Act because the respondent-bank is not holding valid consent of other alleged creditors as required u/s. 13(9) of the SARFAESI Act.
 That the appellant-Company supplies pipes to one Doshion Put. Ltd. and Doshion inturn is to supply pipes and materials to Government projects like Sardar Sarovar Nigam, etc. If the respondent-banks are allowed to take further action under the SARFAESI Act, then it would cause severe harm and injury to the Government Undertakings/works, which will expose the appellant-Company to third party liabilities. And hence also, the respondent-banks may not be permitted to take further action against the appellant-Company under the provisions of SARFAESI Act.
 That the entire plot/area where the factory is situated is admeasuring 30 Acres plot. That out of said 30 Acres plot, 13 Acre plot belongs to another Company namely Fivebro International Pvt. Ltd. which has availed some facilities from another bank. That the entrance gates for both the aforesaid Companies is common and hence, if the respondent-banks are not restrained from taking further action under the provisions of SARFAESI Act and if the respondent-banks will take possession of the property of appellant-Company, then the entrance of another Company i.e. of Fivebro International Pvt. Ltd. will also be blocked and the another Company would be severely affected and it would be exposed to third party liabilities.
 Therefore, in view of the aforesaid submissions, it is submitted that the entire action of the respondent-banks is illegal and arbitrary and to in violation of mandatory provisions of the Act and Rules and hence the entire action of respondent-banks including notices issued u/s. 13(2), 13(4) and orders of learned DM passed u/s. 14 of the Act deserve to be quashed and set aside and the aforesaid S.A. of the appellants deserves to be allowed."
"Written submission on behalf of the Respondent No. 1 - Bank
The respondent - bank begs to submit its written submissions are as under:
1. At the outset, it is submitted that the respondent No. 1 bank has issued notice u/s. 13(2) of the Act on its behalf as a lead bank of consortium as well as on behalf of respondent No. 3 bank - Karur Vysya Bank dated 17.10.2014 demanding the amount of Rs. 33,89,16,222,75Ps. along with interest costs etc. towards the dues to the respondent No. 1 bank and Rs. 20,05,10,532.04Ps. along with interest costs etc. towards the dues to the respondent No. 3 bank. The respondent No. 2 bank has separately issued notice u/s. 13(2) of the Act dated 10.04.2015 demanding the amount of Rs. 7,59,22,364.09Ps. along with interest costs etc. towards the dues to the respondent No. 2 bank.
2. It is submitted that out of six applicants, only applicant No. 3, 4 and 6 have submitted their objections to Authorized Officer dated 31.10.2014. 30.10.2014 and 30.10.2014 respectively not produced by the appellant with their application, however, produced by respondent No. 1 bank along with its reply. Perusal of the same, clearly establish that there is no objection to the liability and/or any other process/procedure including the contents of 13(2) notice Only point raised by them is that first recover from Principal Borrower and also slating that Principal Borrower gave proposal for restructure. The same have been duly considered and replied by the Authorized Officer on behalf of respondent Nos. 1 and 3 by reply dated 11.11.2014 to the said three applicants. Copies of their objections are produced with the reply of respondent No. 1 at pages 258 to 260 and the replies at pages 255 to 257. So far as applicant No. 1 borrower is concerned, the borrower apart from several letters for proposal, gave reply to the 13(2) notice dated 15,12.2014 not to the Authorized Officer but addressing to the Chairperson and Managing of the respondent No. 1 bank, produced with application at Annexure C at page 64 admitted liability stated problems faced by them and accepting that the account has been Non-performing and requested to keep the notice in abeyance and give chance of reviving and restructuring. No other applicants have submitted their objections to the Authorized Officer.
3. So far as the contentions raised on behalf of the applicant No. 1 that there is failure in not fulfilling the requirement of the reply is not correct. In the reply of the respondent No. 1 specifically this aspect has been stated on affidavit in para 13 on page 9 and the same has not been controverted by rejoinder. At the time of arguments, they have relied upon one letter dated 03.12.2014 produced by them with their application at pages 55 and 56. On perusal of the same, it is clear that the same is not addressed to the Authorized Officer as a reply to 13(2) nonce, but addressed to the Assistant Genera/Manager. It is a request for permitting operation and till then, praying that the notice be suspended as long as they performed what is submitted therein. The said letter is a reproduction of the Email indicating the dated of 03.12.2014 sent on 04.12.2014 sent by them to the respondent No. 1 bank The said Email is produced by respondent No. 1 at pages 253 and 254. The same has been replied by the Assistant General Manager vide Email sent on 04. 12.2014 itself. The Assistant General Manager in reply to their request asked for relevant details as indicated therein.
4. Thereafter, the respondent bank granted sufficient time of above two months for them to comply with the requirement in order to consider the request and the said correspondence/Email have been produced along with the reply by the respondent No. 1 bank at Pages 221 to 224. However, they have failed to fulfill the requirement. The bank has addressed Email on 11.12.2014 asking for pollution Control Board consent at page 239 of the paper book and also sent Email on 06.12.2014 asking for relevant documents page 239 and 240. Again addressed an Email on 11,02.2015 at page 223 stating that no concrete accepted proposal coming forward and requested to pay at least Rs. 1 Crore upfront failing which the bank will continue with the recovery action. The applicant No. 1 addressed a letter produced at page 222 with the reply of the bank, to the Division Manager dated 03.03.2015 referring purported Moll to be signed with third party and when the Moll is signed, they will meet the Divisional Manager and requested that till they meet with Moll not to take any action. The Divisional Manager replied by Email on 03.03.2015 produced at page 221 to the reply of the bank, stating that uncertainty is not acceptable and asked them to meet immediately with a plan to pay the dues by 10.03.2015 and if no acceptable plan, the recovery action will continue.
5. Thus, the contentions of the applicants are not correct that the bank has not replied to their suggestion or objections submitted to the Authorized Officer. Objections from three applicants received have duly been replied by the Authorized Officer and applicant No. 1's submissions for restructure to the General Manager and Divisional Manager have also been duly replied.
6. There is contention raised with regard to account of the applicant No. 1 becoming NPA. In the present facts and circumstances, it is an admitted fact that the applicants were aware about the account becoming NPA and made representation from time to time for restructuring. Further, in none of the objections/letters by the concerned applicants, any contentions raised with regard to the validity of 13(2) notice and/or with regard to details mentioned therein and/or the time period stated for payment in the said notice. It is further submitted that even in the memo of application before this Hon'ble Tribunal, no contention is raised with regard to the time period of 1312/notice and when the matter was taken up for hearing by this Hon'ble Tribunal on 31.08.2017, no contention with regard to validity of 13(2) notice and/or with regard to details mentioned therein and/or the time period stated for payment in the said notice. No contention about wrong charge of interest, and/or dispute about the liability was raised. Thus, the applicants are now stopped from raising any new contentions or any other contentions not specifically submitted at the time of filing of the application as well as before the hearing took place on 31.08.2017.
7. In the order passed by this Hon'ble Tribunal on I.R. in this S.A. dated 31.08.2017, this Hon'ble Tribunal, after perusing the pleadings as well as the documentary evidence, held that the application filed under Section 14 of the Act, is as per mandatory provisions of the Act giving required details including details of the demand notice. After perusing the order dated 22.02.2017 passed by the Hon'ble High Court of Gujarat in the petition filed by this respondent bank as well as modified order passed under Section 14 of the Act dated 28.03.2017, this Hon'ble Tribunal in the said order held that since the modified order is passed by learned Additional District Magistrate, the respondent bank is at liberty to file an appropriate application to obtain fresh orders under Section 14 of the Act. Accordingly, respondent No. 1 filed an application before the learned District Magistrate and learned District Magistrate thereafter, has been pleased to pass fresh order dated 03.06.2019 in accordance with law and as per the directions, the same has been produced at Annexure K with the application for amendment filed by applicant dated 02.07.2019. Thus, so far as procedure taken under Section 14, the same has also been now to be treated as legal and proper as the same is in consonance with the directions of the Hon'ble High Court as well as this Hon'ble Tribunal.
8. The Mamlatdar is now taking action under the direction of the abovementioned order passed by teamed District Magistrate u/s. 14 of the Act dated 03.06.2019 and issued notice to the borrower/mortgagor Company dated 21.11.2019, whereby if was informed that the physical possession will be taken on 09.12.2019. The said notice has been received on or about 21.11.2019 by the applicant and the same has also been affixed as per Rules.
9. The applicants appeared before learned Magistrate and filed their reply on or about 20.11.2015, respondent filed rejoinder to the same on or about 01.02.2016 and the final order of the learned District Magistrate dated 03.06.2019 specifically states that the tearing took place on various dates from 13.07,2015 till 29.01.2019. Thus, the contention of the applicant that no opportunity is given to them while passing the order is not maintainable in law.
10. So far as contention with regard to Rule 8(1) and 8(2), while taking symbolic possession is concerned, the respondent No. 1 bank produced the notice for taking possession u/s. 13(4) dated 05.02.2015 of page 228, the reply by the applicants to the same accepting the receipt of the same by reply dated 10.02.2015, whereby they requested to give them time till 10.03.2015 and hold the action till 10.03.2015 as they are in advance stage of finalizing with the deal with one investor, the said reply is produced at page 224 with the reply of the respondent No. 1-Further, copy of panchnama dated 13.03.2015 along with postal receipt of acknowledgment of symbolic possession, copy of publication in newspapers dated 15.03.2015 and copy of photographs taken during symbolic possession are produced from pages 209 to 220 with the reply of respondent No. 1. Without prejudice to above and contentions of this respondent that all the required procedure in law has been followed, even these contentions ore not pressed at the time of hearing by the applicants on 31.08.2017 and therefore also, they are stopped from raising the contention at this stage.
11. The applicants were granted sufficient time. Even thereafter, the applicants got sufficient time of about more than four years now and neither they paid any amount towards the admitted liability nor brought any such alleged Moll and therefore, the applicants are not entitled to the reliefs prayed for and in view of the above and in the facts and circumstances of the case and in the interest of recovering large amount of public funds of more than Rs. 53 Crores plus further interest, costs and charges outstanding due to respondent Nos. 1 and 3 banks as on 13.10.2014, it is respectfully submitted that the application deserves to be dismissed.
12. The Respondent also rely upon the judgment of Apex Court in the matters of ITC Ltd. Vs. Bluecost Hotels Ltd. regarding waiver of mandatory requirements due to conduct of the parties."
5. I have heard the Ld. Counsel for the parties and also gone through the records.
6. In this case the applicants have questioned validity of demand notice on the ground that there was no NPA and on the other hand the applicants time and again approached the bank for restructuring of loan. The applicants cannot be allowed to take divergent stand once the applicants have submitted the bank for restructuring of loan that tantamounts admission in disguise about NPA state of account. So, on that account I find no merits. However, the action of the bank is bad in the eyes of law due to following reasons:-
The applicants have raised various issues during the course of arguments. So far as different dates of NPA mentioned differently on different occasion is concerned, I find no merits in the contentions, so raised on behalf of the applicants, whereas Ld. Counsel for the Respondents fairly explained under what circumstances, the banks mentioned different dates of NPA on different occasions, In fact, the account was declared NPA and there was request for restructuring of loan account. It was consortium loan given by three banks but operations were conducted by the borrower individually with each bank. So there can be separate dates of NPA of each bank.
Further, I have considered such contentions otherwise and I am of the opinion that applicants failed to dispute availment of loan, creation of security interest, default and their liability. Further the NPA status of account is now not under dispute; merely bank has mentioned different dates of NpA at different steps cannot be treated as any material irregularity which may call for quashing of securitization process. Date of NPA or wrong date of NPA would not have any bearing on the merits of the proceedings, once account was NPA and hank has initiated SARFAESI process against the defaulter/borrower. I find no merits in the contentions raised on behalf of the applicants.
The consortium members jointly or individually initiate process under SARFAESI Act. 2002 and even some of the consortium members can initiate process jointly if respondent No. 1 & 3 have issued joint demand notice u/s. 13(2) of SARFAES1 Act, 2002. I find no irregularity in the same.
Once there was default to my opinion there was no need to issue any prior notice to declare account as NPA particularly when borrower approached for restructuring.
The borrower cannot compel and force the creditor to accept its proposal for restructuring and as such 1 find no merits in the contention raised on behalf of borrower.
Further, once bank replied through email, there was no need to separately reply hard copy of said email having similar objections. So, that cannot be construed as non compliance of Section 13(3A) of SARFAESl Act, 2002.
Further, there is an issue regarding 07 days notice to the guarantors as raised by the applicants. I have considered the rival contentions of both the parties. 1 am of the opinion that as per Securitization & Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and Rules framed thereunder, all and every borrowers/mortgagors/guarantors have their individual identity and recognition and are entitled to be served individually. Regarding service of notice Rule 3 of the Security Interest (Enforcement) Rules 2002 provides as under:-
"The service of demand notice as referred to in sub-section (2) of Section 13 of the (Act) shall be made by delivering or transmitting or documents on 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 authorized 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.
And Sub-rule (3) of Rule 3 of Security Interest (Enforcement) Rules, 2002 is read as under:-
"Any other notice in writing to be served on the borrower or his agent by authorized officer, shall be served in the same manner as provided in this rule."
Further section 2(0 of the Securitization & Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 defines term borrower as under:-
"Borrower means any person who has been granted financial assistance by any bank or financial institution or who has given any guarantee or created any mortgage or pledge as security for the financial assistance granted by any bank of financial institution and includes a person who becomes borrower of a securitization company or reconstruction company consequent upon acquisition by it of any rights or interest of any bank or financial institution in relation to such financial assistance."
Sub-rule (iv) of Rule 3 of the Security Interest (Enforcement) Rules, 2002 is read as under:-
"Where there are more than one borrower, the demand notice shall be served on each borrower."
Joint reading of section 2(f) of the Securitization Act read with Rule 3(i). Rule 3(ii), Rule 3(iv) of the Security Interest (Enforcement) Rules reflects that each and every individual is required to be served individually and it is immaterial that the said persons are related to each other as father or son, brother, sister or spouses or created security interest in the property or not, once a person is claimed as guarantor on execution of guarantee agreement or creation of security interest, he is entitled to have 60 days' notice. The bank has committed grave error while serving 60 days demand notice only to the b
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orrower. The term borrower includes guarantors also and all the persons are required to be served with 60 days Demand Notice as enshrined in Section 13(2) of the SARFAESI Act. The objection raised by some of the guarantors against demand notice and not taking such ground i.e. 07 days notice ground would not absolve bank from its duty and obligation to comply provisions of SARFAESI Act. 2002 in its meticulous form. 7. As discussed supra, under the provision of the Securitisation Act i.e. Section 2(1) read with Rule 3(1), 3(2) & 3(4) of Security Interest (Enforcement) Rules. 2002, irrespective of creation of security interest by an individual, the bank is/was required to serve the Demand Notice upon all the guarantors/borrowers and in this case, it is an admitted case, that the bank has not served any 60 days Demand Notice to all the persons entitled to. Admittedly, the bank has given 7 days' notice to the Guarantors, whereas it is a mandatory requirement under the Securitization Act, 2002 to give 60 days notice under Section 13(2) of SARFAESI Act, 2002 to the borrowers/guarantors and the guarantor/s comes within the ambit of the term borrower, as such, the banks were required to give clear 60 days notice to the guarantors. It hardly matters that security interest is/was created by the borrowers and is/was not created by guarantors and even in case of personal guarantee only; the guarantor is entitled to 60 days' notice. The process of the banks is defective and further the guarantors i.e. applicant Nos. 2 to 6 filed this Securitisation Application and have challenged the process of banks So the Demand Notice issued by respondent No. 1 & 3, as issued, is defective and non-est in the eyes of law and is liable to be quashed. Once the Demand Notice of respondent No. 1 & 3 is defective, entire subsequent process is defective and 1 find no merits and necessity to go into the validity of subsequent process and entire subsequent process is accordingly quashed. 8. The Securitization Application is allowed. The Securitisation Act was passed in the year 2002 and now we are in the year 2020. Admittedly there are certain issues which still require some more clear interpretation by Hon'ble Higher Courts, but so far as issuance of Demand Notice to the borrowers/guarantors with 60 days' time is concerned that is clear under the Act itself and it is strange that banks are still continuing with wrong process, which is ultimately causing delay in recovery of public money and also causing wastage of precious time and energy. It is astonishing that banks to justify their erroneous action, quoted one judgment of Hon'ble Supreme Court regarding waiver and/fail to understand how facts, circumstances and law point involved in said case are applicable to facts of this case. The Authorised Officer was required to give 60 days notice and that notice is sine qua non for further proceedings. The Authorised Officer cannot mould provisions of SARFAESl Act to his fancies and convenience once Act mandates 60 days notice, there was no occasion to issue 7 days notice to guarantors. The process is not even defective but is suffering from patent illegality. We can safely quote Section 13(2) of SARFAESI Act 2002 and rules framed thereunder regarding notice. 9. As demand notice of respondents No. 1 & 3 is defective and is not sustainable in the eyes of law, so entire subsequent process on the basis of defective demand notice is defective and stands quashed. The applicants have failed to point out any irregularity in demand notice issued by respondent No. 2. So this order would not affect rights of respondent No. 2 and its process initiated under SARFAESI Act. Securitization Application is partly allowed accordingly. Let copies of this order be supplied to the parties as per rules. Pronounced and Dictated on 03.01.2020. Corrected and signed by me 04.01.2020.