2005 (4) TMI 304

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....istrict Kangra. The petitioners defaulted in the payment of the dues towards the respondent-bank and for this reason their accounts were classified as "non-performing asset" in accordance with the guidelines of the Reserve Bank of India. A recall notice (annexure R1) was issued to the petitioners for the entire outstanding dues together with interest and other charges. By a letter dated 7-11-2003 (annexure R2), guarantee furnished by the petitioners was invoked and the petitioners were asked to pay the due amount with further interest at the agreed rate within 30 days of the receipt of the notice, failing which, the petitioners were put to notice, bank would take such legal steps as may be necessary at the risk and responsibility of the pet....

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....3 of the Act and adequacy and efficacious mechanism to consider and decide objections/disputes raised by a borrower against measures provided under section 13 of the Act, particularly in view of the bar in approaching the civil court under section 34 of the Act. 6. So far as the provisions of section 13(2) of the Act is concerned, it was held to be in vires. Their Lordships observed that : "... till the stage of making of the demand and notice under section 13(2) of the Act, no hearing can be claimed for by the borrower. But looking to the stringent nature of measures to be taken without intervention of court with a bar to approach the court or any other forum at that stage, it becomes only reasonable that the secured creditor must be....

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....cility in respect of which the interest and/or instalment of principal has remained "past due" for a specified period of time. The specified period was reduced in a phased manner as under : . . .'." (p. 395) 8. Their Lordships, however, took a view that before taking action a notice of 60 days is required to be given and it is only thereafter that measures under section 13(4) of the Act can be taken. Their Lordships observed : "Under sub-section (2) of section 13 it is incumbent upon the secured creditor to serve 60 days' notice before proceeding to take any of the measures as provided under sub-section (4) of section 13 of the Act. After service of notice, if the borrower raises any objection or places facts for consideration of the ....