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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

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