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Scania Commercial Vehicles India Pvt. Ltd. Vs. Agy George – Kerala High Court Read Post »
The Hon’ble High Court held that in the absence of serving the order of COE on the petitioners, there could never have been a declaration of the petitioners as wilful defaulters since the Master Circular as directed by the Supreme Court in in State Bank of India v. M/s. Jah Developers Pvt. Ltd. and Ors. (2019) ibclaw.in 136 SC contemplates declaration as wilful defaulter only after serving the copy of the order of COE and the consequent decision of the Review Committee. The procedure adopted by the 4th respondent while declaring the petitioners as wilful defaulters has thus failed to grant an opportunity to represent on law and on facts against the decision of the COE. Without giving or serving to the petitioners the order of the COE, petitioners cannot be expected to represent against the said decision. Communicating the content or conclusion of the COE to the borrower through an officer of the Bank is not a sufficient compliance of the requirement of “giving the order-to the borrower”.
The Hon’ble High Court held that a reading of the proviso to Rule 9(1) of the Security Interest (Enforcement) Rules 2002 makes it explicit that the authorised officer must serve, affix and publish the notice of sale of not less than 15 days to the borrower, for any subsequent sale. The word ‘serve’ relates to personal service of notice, affixture relates to the notice being affixed on the property and the publication relates to the publication of notice in the newspaper dailies. The conjunction ‘and’ employed in the proviso also indicate the mandatory nature of all three methods of notice. Further, in spite of the amendment to section 13(8) of the Act, the proviso to Rule 9(1) mandates the three methods of serve, affix and publish the notice to be carried out, with 15 days clear notice. In the instant case, there is a failure on the part of the respondent to serve notice of not less than 15 days upon the petitioner.
Hon’ble High Court holds that if after issuance of section 13(2) notice, the bank itself initiates proceedings under the RDB Act for recovery of any debt and invites an adjudication on the quantum of debt due to it, they cannot thereafter turn around and proceed to demand or enforce security interest for any amount, more than what is quantified by the Tribunal. Fairness of the lender demands that the bank ought not to be permitted to recover anything more than what has already been quantified by the Tribunal. Therefore, on an appreciation of the various statutory provisions, this Court is of the view that once the DRT quantifies the debt due from the borrower, on the basis of an application under section 19 of the RDB Act, the bank is not entitled to seek enforcement of the security interest for any amount more than what is quantified
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Travancore Devaswom Board Vs. The Deputy Examiner, Local Fund Audit,- Kerala High Court Read Post »
