1. Heard the learned counsel for the parties.
2. On account of default of payment of dues, the respondents have proceeded for the recovery of the dues and served notice under Sub-section (2) of Section 13 of the Securitisation & Reconstruction of Financial Assets and Enforcement of the Security Interest Act, 2002 (for short the Act). The submission is that the respondents are proceeding ahead to recover the dues by service of the impugned notice on unfounded grounds. Provisions contained in sub-section (3A) of Section 13 of the Act provides that in case borrower makes any representation or raises any objection, the secured creditor shall consider such representation or objection and inform the decision taken by it. For convenience, Section 13(1)(2)(3) and (3A) of the Act are reproduced as under:
“13. Enforcement of security interest.—
(1) Notwithstanding anything contained in section 69 or section 69A of the Transfer of Property Act, 1882 (4 of 1882), any security interest created in favour of any secured creditor may be enforced, without the intervention of the court or tribunal, by such creditor in accordance with the provisions of this Act.
(2) Where any borrower, who is under a liability to a secured creditor under a security agreement, makes any default in repayment of secured debt or any instalment thereof, and his account in respect of such debt is classified by the secured creditor as non-performing asset, then, the secured creditor may require the borrower by notice in writing to discharge in full his liabilities to the secured creditor within sixty days from the date of notice failing which the secured creditor shall be entitled to exercise all or any of the rights under sub-section (4).
(3) The notice referred to in sub-section (2) shall give details of the amount payable by the borrower and the secured assets intended to be enforced by the secured creditor in the event of non-payment of secured debts by the borrower.
(3A) If, on receipt of the notice under subsection (2), the borrower makes any representation or raises-any objection, the secured creditor shall consider such representation or objection and if the secured creditor comes to the conclusion that such representation or objection is not acceptable or tenable, he shall communicate within one week of receipt of such representation or objection the reasons for non-acceptance of the representation or objection to the borrower.
Provided that the reasons so communicated or the likely action of the secured creditor at the stage of communication of reasons shall not confer any right upon the borrower to prefer an application to the Debts Recovery Tribunal under section 17 or the Court of District Judge under section 17A.”
3. In view of the statutory provisions, it is always be open to the petitioner to represent his or her cause by filing an objection in response to notice issued under sub-section (2) of Section 13 of the Act. In the present case, it has been submitted on behalf of the petitioner that after receipt of notice, the petitioner has submitted representation a copy of which is Annexure No. 11 to the writ petition to ventilate his grievance. The submission is that the respondents without deciding the representation, are proceeding ahead to recover the dues by taking follow up action.
4. The provisions contained in Section 13(3A) of the Act are mandatory in nature and the Bank as well as the authority has no right to proceed in violation of the provisions contained in sub-section (3A) of Section 13 of the Act. It is open to the authorities to proceed in accordance with the provisions contained in Section 13(4) of the Act only after the representation or objection filed by the borrower or guarantor is decided.
5. Needless to say that while deciding the objection, it shall be incumbent upon the authorities to pass a speaking or reasoned order on the basis of material on record. Even at this stage, in case after receipt of decision taken by the bank authorities, the borrower or guarantor wants to pay dues, then it shall be incumbent upon the Bank authorities to permit the borrower or guarantor to pay the entire dues. However, while deciding the objection filed by the borrower or guarantor, it shall further be incumbent upon the Bank authorities to provide statement of account including original amount as well as the interest with regard to dues in view of the statutory provisions in view of sub-section (3A) of Section 13 of the Act. We are of the view that the respondents have no right to proceed with the recovery proceedings unless they decide the objection or representation of the borrower or guarantor keeping in view the observations made hereinabove and the provisions contained in Section 13(3A) of the Act.
6. In view of the above, the writ petition is finally disposed of directing the respondents Bank to decide the petitioner's representations keeping in view observations made hereinabove and the mandatory provisions contained in Section 13(3A) of the Act by passing a speaking and reasoned order within a period of two months from the date of receipt of a certified copy of this order and communicate the decision.
7. Till the disposal of the representation and the communication of the decision taken by the Bank authorities on the petitioner's representation, further recovery proceedings shall remain suspended.
8. With the above observations, the writ petition is finally disposed of.
9. Order accordingly.