Mere Typographical error in demand notice would not invalidate recovery proceedings Initiated by Union Bank of India: DRT [Read Order]

The securitization application has been filed by the applicants under Section 17(1) of the Securitisation and Reconstruction of financial Assets and Enforcement of Security Interest Act, 2002( SARFAESI Act ). The applicant sought quashing possession notice dated 08.06.2023 under section 13(4) of the SARFAESI Act, demand notice issued under section 13(2) of the SARFAESI Act, and to quash the entire recovery proceedings initiated by the respondent bank.

The applicant No. 1 is a proprietorship firm, and Applicant No. 2 is the proprietor of the firm, and Applicant No. 3 is the guarantor; she is the wife of Applicant No. 2. Applicant No. 2 has created a security interest on the secured assets, i.e. House NO. C-42, Sector -G, Aliganj, Lucknow-226024. The property was inherited by him through a family settlement. Admittedly, the Cash Credit facility was taken by the applicant, which was enhanced up to Rs. 80.00 Lacs.

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It is submitted that during the COVID period, the applicant could not maintain the financial discipline with the respondent bank, Union Bank of India. In the meantime, the respondent bank had initiated recovery proceedings, and an order was obtained by the ADM and from there they came to the knowledge of the case.

It is stated that from the proceedings under section 140 of the Act, the applicant could know about the demand notice and possession notice. The respondent bank sent notices in the name of Anjana Kala, while the name of the applicant no. 3 is Mrs. Anuji Kala. It is further submitted that without complying with statutory compliance, the respondent bank has measures of recovery.

The respondent stated that all the necessary compliances have been made and all the necessary notices were served upon the applicant. It is submitted that applicant no. 3 is the wife of the applicant no. 2, and the name as stated by the applicant is merely a typing mistake. As the wife of applicant no. 2, applicant no 3 is well aware of the development of the case, as she was residing in the secured assets along with her husband.

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It is specifically submitted that the demand notice dated 05.01.2023 with the demand of Rs. 96,21,767/- as on3.12.20222 was sent through speed post, and in proof thereof. It is further stated that when a response was not made by the applicant, the respondent bank had taken symbolic possession and issued a possession notice dated 08.06.2024 under section 13(4) of the SARFAESI Act.

It was duly affixed to the secured assets and served upon the applicants. The notices were published in two leading newspapers, and in proof thereof, has been filed. Further case is that the respondent bank put the property up for auction sale on 27. 0.2023, and on 14.02.2024 and in the second sale, the secured asset was sold to the auction purchaser.

It is stated that respondent bank had served the second sale notice dated 18.0 .2024 upon the applicants and duly affixed it and published it in two leading newspapers, as well as compliances under rule 8(6) and 8(7) of the Security Interest (Enforcement) Rule, 2002 have been made. It is further stated that a proper valuation report was taken by the respondent bank, Annexure RA-4 has been filed in proof hereof.

The applicants are ready to pay the entire dues of the bank. The Bank did not initiate the proceedings through the Authorised Officer against the applicant. The demand notice dated 05.01.20 3 was sent to Anjana Kala, not to Anuji Kala. The respondent bank has annexed wrong sale notice and further details of payment made by the auction purchaser has not been submitted.

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The bench found through the annexures that it has been duly served upon the applicants no. 2 & 3. Applicant No. 3 is wife of applicant no. 2. Any relief to the applicant hinges around cancellation of sale certificate issued in favour of the auction purchaser and the cancellation of sale registered before Registrar Lucknow.

Pravas Kumar Singh, Presiding Officer observed that mere irregularity or deviation from rule which does not have any fundamental procedural error does not take away the foundation of Authority for such proceeding. As earlier stated , the notice under 13(2) and 13(4) were duly served upon and the necessary compliances have been found to be made under rule 8.

Further held that the applicant could not make any case for cancellation of sale, any material prejudice has not been caused to the applicant, any fundamental procedural error/irregularity has not occurred in the recovery proceedings.

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