TaxTMI 
TaxTMI 
TaxTMI 
2025 (4) TMI 64
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....ly canvassed that Petitioner No.1 is the Proprietorship Firm and running the business of trading of food grains in Market Yard, Latur. On 01.02.2016, Petitioner No.1 approached the Respondent/Bank for sanction of Rs. 250.00/- lakhs as OCC Limit (Open Cash Credit). Accordingly, the Respondent/Bank sanctioned the said loan facility. The Petitioner Nos.2 to 6 stood as guarantors to the said loan transaction. Considering the timely repayment of the loan and need of the Petitioner Firm, the Respondent/Bank time to time enhanced Open Cash Credit Limit. The Petitioner No.1/Proprietorship Firm is the loan borrower. The Petitioner Nos.2 to 6 have mortgaged their non- agricultural and residential properties while securing loan in favour of the Respondent Bank. 4. It is the contention of the Petitioners that, though the loan amount was regularly paid but the Respondent/Bank illegally classified their loan account as Non-Performing Assets (N.P.A.) Thereafter, the Respondent Bank issued a notice under Section 13(2) and Section 13(4) of the SARFAESI Act on 19.04.2021 and 07.06.2021 for taking possession of the secured properties. Therefore, the Petitioner No.1 - M/s Shailesh Traders had filed (....
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....ailed to follow the provisions of Section 3A of the SARFAESI Act. So also, earlier notice issued by the Respondent/Bank under Section 13(2) of the SARFAESI Act was already withdrawn by the Respondent/Bank but no fresh notice u/s. 13(2) of the Act was served upon the Petitioners/Borrower. Therefore, in absence of service of mandatory notice, the application u/s 14 of the Act is maintainable. However, the learned Chief Judicial Magistrate, Latur failed to consider the same and passed the impugned order. Therefore, it is illegal, bad in law. 9. Mr. A. D. Baviskar, the Authorized Officer of the Respondent/Bank filed its affidavit in reply and strongly resisted the petition. 10. The learned counsel for the Respondent canvassed in vehemence that the Petitioners approached the Respondent/Bank for loan facilities and after execution of necessary documents, the Respondent/Bank sanctioned various loan facilities in favour of the Petitioner No.1 - Firm. The Petitioner Nos. 2 to 6 stood as guarantors. The Petitioners mortgaged their landed properties which is secured assets. Since, the Petitioner failed to repay the loan, the loan account was declared as Non-Performing Assets on 31.03.2021. ....
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....ons, the learned counsel for the Respondent/Bank placed reliance on the following case laws: (i) Balkrishna Rama Tarle Dead Thr. LRS & Anr. Vs. Phoenix ARC Private Limited & Ors.,(2023)1 SCC 662; (ii) Trade Well & Anr. Vs. Indian Bank & Anr. 2007(1) Bom.C.R.(Cri.) 783, (iii) R.D. Jain & CO. Vs. Capital First LTD. & Ors. (2023)1 SCC 675. 15. It is not in dispute that, initially, the Petitioner No.1- Firm availed loan facilities/OCC limit to the extent of Rs.250 lakhs and agreed to repay the same at rate of interest 12.25% per annum with monthly interest. The Petitioner Nos. 2 to 6 are guarantors to said loan facility. While availing the loan, the Petitioners executed following security documents in favour of bank which are as under: i) Demand Promissory Note. (RF 211) 11.02.2016; ii) Composite Agreement Dt.11.02.2016; iii) Consent letter Dt. 11.02.2016; iv) Document of Annexure 2 as a supplement to the composite agreement Dt. 11.02.2016; v) Letter of undertaking Annexure I Dt.11.02.2016; vi) General Form of Guarantee Dt. 11.02.2016; vii) Consent letter from Guarantor dt. 11.02.2016; viii) Simple Mortgage Deed Bearing Day Book No.484/2016 Dt.10.02.2016. 16. Ne....
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....ners challenged the said Notice dated 19.04.2021 before the learned Debts Recovery Tribunal, Aurangabad in Securitization Application No.128 of 2021. It is not in dispute that, on 17.10.2022, the learned Debts Recovery Tribunal, Aurangabad, passed the order and disposed of the said application because the Respondent/Bank withdrew the said notice, however, liberty was granted to the Respondent/Bank for availing appropriate legal remedies. 20. Thereafter, on 14.09.2022, the Respondent/Bank issued a notice under Section 13(2) of the SARFAESI Act to the Petitioners which was duly served upon the Petitioner No.1 on 15.09.2022 as per endorsement appearing on postal acknowledgment. It is not the case of the Petitioners that they challenged subsequent notice u/s 13 (2) of the Act before the competent authority or they ever objected said notice. Needless to say that, the Petitioners never replied said notice but concealed the fact of service notice on 15.09.2022. Therefore, on 04.12.2022, the Respondent/Bank took symbolic possession of the secured assets. Thereafter, the Respondent/Bank approached before the District Magistrate under Section 14 of the SARFAESI Act. 21. Indeed, on 27.03.20....
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.... interest over such properties and the claim of the Bank or Financial Institution is within the limitation period; (iii) the borrower has created security interest over various properties giving the details of properties referred to in sub-clause (ii)above; (iv) the borrower has committed default in repayment of the financial assistance granted aggregating the specified amount; (v) consequent upon such default in repayment of the financial assistance the account of the borrower has been classified as a non- performing asset; (vi) affirming that the period of sixty days notice as required by the provisions of sub-section (2) of section 13, demanding payment of the defaulted financial assistance has been served on the borrower; (vii) the objection or representation in reply to the notice received from the borrower has been considered by the secured creditor and reasons for non-acceptance of such objection or representation had been communicated to the borrower; (viii) the borrower has not made any repayment of the financial assistance in spite of the above notice and the Authorised Officer is, therefore, entitled to take possession of the secured assets under the provisio....
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....excluded at the stage of Section 14 by necessary implication." Further it is held that "In our opinion, at the time of passing order under Section 14 of the NPA Act, the CMM/DM will have to consider only two aspects. He must find out whether the secured asset falls within his territorial jurisdiction and whether notice under Section 13(2) of NPA Act is given or not. No adjudication of any kind is contemplated at that stage." 26. In the case of Balkrishna Rama Tarle cited (supra), the Hon'ble Supreme Court held as under: "Thus, the powers exercisable by CMM/DM under Section 14 of the SARFAESI Act are ministerial step and Section 14 does not involve any adjudicatory process qua points raised by the borrowers against the secured creditor taking possession of the secured assets. In that view of the matter once all the requirements under Section 14 of the SARFAESI Act are complied with/satisfied by the secured creditor, it is the duty cast upon the CMM/DM to assist the secured creditor in obtaining the possession as well as the documents related to the secured assets even with the help of any officer subordinate to him and/or with the help of an advocate appointed as Advocate Commiss....