SARFAESI procedural non-compliance led to setting aside possession action, while contempt was closed for lack of tribunal jurisdiction.

A borrower's challenge to SARFAESI action succeeded where objections to the demand and possession process, defects in service/publication/affixture, and alleged non-compliance in the section 14 application remained unrebutted by the secured creditor. The Tribunal set aside the possession notice and the section 14 order, while permitting the bank to take fresh action in accordance with law. A separate contempt petition based on alleged breach of the Tribunal's stay order was not entertained, because the Tribunal held that it lacked contempt jurisdiction for that purpose and closed the request.

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Issues: (i) Whether the applicant was entitled to relief in the securitisation application challenging the demand notice, possession notice and the order passed under section 14 of the SARFAESI Act, 2002. (ii) Whether the contempt petition was maintainable for alleged breach of the Tribunal's stay order.

Issue (i): Whether the applicant was entitled to relief in the securitisation application challenging the demand notice, possession notice and the order passed under section 14 of the SARFAESI Act, 2002.

Analysis: The borrower had been issued a demand notice under section 13(2) and a possession notice under section 13(4), but no material was produced to show any objection or representation under section 13(3A). The pleadings and record showed complaints regarding classification of the account as NPA and defects in the service, publication and affixture of the possession notice, as well as non-compliance in the application moved under section 14. The secured creditor remained absent and did not rebut the allegations. The Tribunal also noted compliance with the conditional stay granted during the proceedings.

Conclusion: The securitisation application was allowed in favour of the applicant. The possession notice and the order passed under section 14 were set aside, and the bank was left at liberty to initiate fresh action in accordance with law.

Issue (ii): Whether the contempt petition was maintainable for alleged breach of the Tribunal's stay order.

Analysis: The Tribunal found that, even if the auction notice was issued during the operation of the stay, it lacked power to initiate contempt proceedings because it is not a court for that purpose. The alleged breach therefore could not be proceeded with as contempt before the Tribunal.

Conclusion: The contempt petition was not entertained and was closed.

Final Conclusion: The borrower obtained substantive relief in the securitisation proceedings, while the separate contempt request failed for want of maintainability before the Tribunal.

Ratio Decidendi: Where non-compliance with the SARFAESI procedure is established and remains unrebutted, the challenged possession and section 14 proceedings can be set aside; however, contempt cannot be initiated by a tribunal lacking contempt jurisdiction.

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