DRAT dismisses Appeal by Loan Guarantor against Kotak Mahindra Bank, Citing Proper Service of SARFAESI Notices
The Tribunal noted that the appellant's grounds were taken as an "afterthought" since they were not raised at the first available opportunity.
The Debt Recovery Appellate Tribunal (DRAT) in Chennai has dismissed an appeal filed by a loan guarantor, challenging an order of the Debt Recovery Tribunal (DRT) that favoured Kotak Mahindra Bank. The DRAT confirmed that the bank had correctly followed the securitization procedures under the SARFAESI Act, 2002.
E. Kumar, the appellant, had raised several contentions, including that the bank failed to properly inform him about the assignment of the loan and that notices were not served correctly or published in widely circulated newspapers. However, the DRAT found that the appellant had been duly informed about the loan assignment through multiple communications and had even admitted to receiving the demand notice in his own securitization application.
Counsel for the respondent/Bank submitted that the SARFAESI measures had been taken by following the procedures as contemplated under the SARFAESI Act. In fact, appellant had admitted in the securitization application about the receipt of demand notice dated 30.03.2014 and affixture of possession notice on 27.06.2014 followed by taking of symbolic possession of the property.
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The information regarding assignment of loan in favour of the respondent/Bank was given to the appellant. Relevant records in support of service of possession notice, affixture and publication are produced. No reply was sent with regard to classification of account as NPA. The paper publication was effected in English News Paper “ News today” and Tamil news paper “ Malai Sudar” widely circulated news papers in the area. The Presiding Officer had made only an observation that publication should be effected in widely circulated news papers in future. That does not mean that paper publication was not effected in widely circulated news papers. Even otherwise, this observation was made without any data as to whether these news papers are widely circulated or not. The learned Presiding Officer, had not found any defect in the issuance of demand notice and possession notice. Thus, dismissed the SA 295/2014.
The allegation with regard to failure to inform the assignment, by the appellant and borrower and non-consideration of payments are not raised at the first available opportunity by sending a reply to the 13(2) demand notice and that was not done in this case.
The Tribunal noted that the appellant's grounds were taken as an "afterthought" since they were not raised at the first available opportunity. Regarding the newspaper publication, the DRAT clarified that while the DRT had made an observation about using widely circulated papers in the future, it had not made a specific finding that the newspapers in question were not widely circulated.
Without specific circulation data, the DRAT concluded it could not be said that the bank had failed in this regard. Consequently, the DRAT found no merit in the appellant's arguments and confirmed the DRT's order dismissing the securitization application.
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