Skip to main content

Lawyer's notice on loan repayment invalid: Kerala HC

Though they disputed the amount which was due to the bank, the bank's lawyer sent them a notice under Section 13(2) of the SARFAESI Act, the petition said. As per this section, a notice has to be sent to the debtor asking them to repay the outstanding loan within 60 days. If the debtor fails to pay up, the bank can take possession of the mortgaged property.

The petitioners' counsel Praveen K Joy argued at the high court that a lawyer is not competent to issue such a notice as he is not an authorized officer of the bank, as specified in Security Interest Rules of 2002. As per the rules, an authorized officer is an officer who is not less than a chief manager of a public sector bank.

Opposing this, the bank's counsel Lal K Joseph contended that the notice sent to the petitioners is legally competent.

Setting aside the notice sent by the lawyer, the court held, "On a plain reading of Rule 2(a) and 2(b), it can be seen that only an officer of the bank, as specified by the board of directors, can issue a notice of demand under Section 13(2) of the Act as contemplated under Rule 2(b) of the Security Interest Rules, 2002."

Though they disputed the amount which was due to the bank, the bank's lawyer sent them a notice under Section 13(2) of the SARFAESI Act, the petition said. As per this section, a notice has to be sent to the debtor asking them to repay the outstanding loan within 60 days. If the debtor fails to pay up, the bank can take possession of the mortgaged property.

The petitioners' counsel Praveen K Joy argued at the high court that a lawyer is not competent to issue such a notice as he is not an authorized officer of the bank, as specified in Security Interest Rules of 2002. As per the rules, an authorized officer is an officer who is not less than a chief manager of a public sector bank.

Opposing this, the bank's counsel Lal K Joseph contended that the notice sent to the petitioners is legally competent.

Setting aside the notice sent by the lawyer, the court held, "On a plain reading of Rule 2(a) and 2(b), it can be seen that only an officer of the bank, as specified by the board of directors, can issue a notice of demand under Section 13(2) of the Act as contemplated under Rule 2(b) of the Security Interest Rules, 2002."

 Article referred: http://timesofindia.indiatimes.com/City/Kochi/Lawyers-notice-on-loan-repayment-invalid-HC/articleshow/36264333.cms

Comments

Post a Comment

Most viewed this month

The recovery of vehicles by the financier not an offence - SC

Special Leave Petition (Crl.) No. 8907  of 2009 Anup Sarmah (Petitioner) Vs Bhola Nath Sharma & Ors.(Respondents) The petitioner submitted that  respondents-financer had forcibly taken away the vehicle financed by them and  illegally deprived the petitioner from its lawful possession  and  thus,  committed  a crime. The complaint filed by the petitioner had been  entertained  by  the Judicial Magistrate (Ist Class), Gauhati (Assam) in Complaint Case  No.  608 of 2009, even directing the interim custody of the vehicle (Maruti  Zen)  be given to the petitioner vide order dated  17.3.2009.  The respondent on approaching the Guwahati High  Court against this order, the hon'ble court squashed the criminal  proceedings  pending   before  the  learned Magistrate. After hearing both sides, the Hon'ble Supreme Court decided on 30th...
7 comments
Read more

When debt is bona fide disputed and the defence is a substantial one, the court will not wind up the company

In SHITAL FIBERS LTD.  vs  INDIAN ACRYLICS LIMITED, as per the respondent, appellant had made a payment of Rs.61,83,218/­. However, there was an outstanding balance of Rs.8,92,723/­ as on 28.7.2008. Since despite repeated requests, balance amount was not paid, the respondent issued a statutory notice to the appellant. The same was duly responded to. As the payment was not made despite notice being duly served on the appellant, the respondent filed the aforesaid Company Petition seeking winding up of the present appellant for its inability to pay admitted debts. The learned Company Judge vide order dated 28.9.2015 admitted the Company Petition. However, while doing so, the learned Company Judge observed, that since the appellant was an on­going concern, an opportunity should be granted to it to settle the accounts with the respondent by 31.12.2015. Only in case of failure of the settlement, the citation was directed to be published. On appeal, the Division Bench of the High Cou...
Post a Comment
Read more

Abusing in-laws a ground for divorce: SC

Abusing in-laws and not allowing them to reside in the matrimonial home by a woman amounts to cruelty to her spouse, ground enough for grant of divorce, the Supreme Court has ruled while allowing an NRI's plea for legal separation from his wife. A bench of Justices Vikaramajit Sen and A M Sapre said such incidents could not be termed as "wear and tear" of family life as held by Madras High Court which had said that a couple must be prepared to face such situations in matrimonial relationship. The NRI had filed a divorce petition alleging that his wife was abusive to his family members and did not allow his parents and siblings to stay in his house when they visited the US. Referring to an incident, the husband told the court that his wife had once locked him and his sister out of the house and abused them saying they belonged to a 'prostitute family'. She refused to allow her sister-in-law to enter the house and even lodged a police complaint against her hu...
4 comments
Read more