Technical defect in SARFAESI notice does not invalidate recovery proceedings absent real prejudice to the borrower.

A mere clerical or technical defect in a SARFAESI demand notice does not invalidate recovery proceedings where the borrower had clear knowledge of the loan transaction, the notice related to the same facility, and no real prejudice was shown. The mistaken affixation of the seal of another group company was treated as a human error, not a substantive defect, because the agreement, correspondence, and subsequent enforcement measures all pointed to the same liability. The notice under Section 13(2) and the consequential measures under Sections 13(4) and 14 were therefore not vitiated.

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Issues: Whether a demand notice issued under the SARFAESI Act is vitiated merely because the seal of the wrong group company was affixed, where the borrower had clear knowledge of the transaction and no substantial prejudice was shown.

Analysis: The appellant had sanctioned the loan, the facility agreement and related correspondence were issued on a commonly used letterhead, and the respondents did not dispute the loan, the agreement, or the liability. The notice under Section 13(2) of the SARFAESI Act clearly related to the same facility and was followed by measures under Sections 13(4) and 14. The Court held that the mistaken use of the seal of another group company was a human error and only a technical lapse. Since the respondents were not misled and no substantial prejudice was demonstrated, the procedural objection could not invalidate the recovery action.

Conclusion: The notice and consequential SARFAESI proceedings were not bad in law on the basis of the technical defect, and the challenge to them failed.

Ratio Decidendi: A mere technical or clerical defect in a SARFAESI notice does not vitiate the proceedings unless it causes real prejudice or confusion to the borrower.

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