SARFAESI objections must be considered with reasons before enforcement measures under Section 13(4) begin.

Under the SARFAESI Act, a secured creditor receiving objections to a notice under Section 13(2) must apply its mind to the borrower's reply and, if the objections are rejected, record brief reasons and communicate them before taking measures under Section 13(4). The reasons need not by themselves confer an immediate right to approach the Debt Recovery Tribunal at that stage, but the statutory safeguard of consideration and communication must still be followed. Where the objections were neither considered nor rejected by a speaking order, the borrower's protection under the scheme was not complied with and the rejection had to be reconsidered in accordance with the prescribed procedure.

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Issues: Whether, after service of notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, the secured creditor must consider the borrower's objections, pass a reasoned order if the objections are rejected, and communicate the reasons before proceeding under Section 13(4).

Analysis: The governing principle was taken from the Supreme Court's exposition that, on receipt of objections to a demand notice under Section 13(2), the secured creditor is required to apply its mind to the borrower's reply and indicate the reasons for not accepting the objections, even if briefly. The reasons need not create an immediate right to approach the Debt Recovery Tribunal at that stage, but they must be communicated to the borrower. In the present case, the objections were neither considered nor rejected by a speaking order, and no communication of the decision was made. The protection afforded to the borrower under the statutory scheme was therefore not followed.

Conclusion: The objection had to be reconsidered afresh and, if rejected, the rejection had to be by a reasoned order with the grounds communicated to the petitioner. The petitioner succeeded.

Final Conclusion: The writ petition was allowed and the secured creditor was directed to proceed only in accordance with the statutory procedure clarified by the Supreme Court.

Ratio Decidendi: Under Section 13(2) of the SARFAESI Act, the secured creditor must consider the borrower's objections with due application of mind and communicate brief reasons for rejecting them before taking measures under Section 13(4).

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