M/s Global Technical Education Foundation Central Bank of India ; Authorized Officer CBI

1. This order of mine will dispose of Securitization Application No. 39 of 2017 filed by applicant under section 17( 1) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The applicant has approached this Tribunal on publication of sale notice under the provisions of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and the bank had not received any bid for the scheduled auction.

2. At the time of arguments the counsel for the parties submitted as under:- S .A. 39/ 17 04.2.2017 Counsel for the applicant while arguing on stay application submitted as under:-

(i) That bank has taken possession of movable and immovable vide notice dt. 14.12.2016 annexed as Annexure-1 at page 21 of its reply, but bank has failed to comply with Rule 4 of Security Interest (Enforcement) Rules, 2002, as far as movables are concerned.

(ii) Further there is non compliance of Rule 4(2)(a) and {b).

(iii) Further possession notice Annexure A-1 is again bad in the eyes of law for non compliance of inclusion of provisions of regarding 13(8) as per amended rules vide notification dt. 3.11.2016.

(iv) That the demand notice was issued in the name of Smt. Sheela Sirohi WI o Late V.S. Sirohi naming her as borrower whereas borrower is a society namely Global Technical Education foundation as such very basis of securitization process is defective.

(v) That further process is bad for non compliance of section 13(3A) and there is no time limitation for such representation.

(vi) That further e-portal of the bank reflects that bids will be accepted only after 5.00 p.m. on 4.2.2017 which is against clause 8 of the sale notice published in the newspaper. In support of his contention he relied upon two print out of e-portal.

(vii) That letter dt. 31.12.2016 cannot be treated as notice u/ r 8(6) for the want of necessary ingredients requires to be incorporated as per said rules.

(viii) That the letter dt. 31.12.2016 alleged issued u/ r 8(6) is in violation of Rule 8(5).

(ix) That in letter dt. 31.12.2016 bank has referred some sale through inviting tender whereas as per sale notice published in the newspaper bank ref erred sale through e-auction.

(x) That ban has failed to sent any enclosure allegedly mentioned in the letter dt. 31.12.2016 and further bank failed to mention at what time bank sold the property. The applicant has placed on record one sealed envelop received by the applicant sent by the bank posted on 3.1.2017 and that has been opened by the counsel for the bank tn presence of Law Officer after being satisfied that same ts not tampered with and in the said envelop after opening one page signed by authorized officer has found i.e. letter dt. 31.12.2016 and there is no enclosure and other document tn the said envelop. Counsel for the bank in rebuttal submitted as under:- (a) That applicant has failed to seek any relief against the impugned sale in the stay application as such stay application is lial?le to be dismissed. (b) That the bank has not taken any physical possession of movable and bank has taken symbolic possession of the building and super structure of mortgage property. (c) That when bank has not taken any physical possession of movable as such there ~ np need to prepare punchnama and there is no violation of Rule 4. (d) That non mention of amended provisions in the possession notice Annexure-4 in terms of amended rules dt. 3.11.2016 is merely an irregularity. (e) That no objection/representation has been given by the borrower against demand notice issued u/ s 13(2) and as such there is no irregularity regarding l 3(3A). (f) That the letter annexed at page 36 cannot be treated as objection sent u/ s l 3{3a) as there is no reference of demand notice and further same has been filed after expiry of 60 days and it was merely a request to defer measure for possession and bank has duly accepted said request and bank has taken possession after expiry of period stipulated in the said representation and on non compliance of deposit proposed in the said letter. As such there was no need to dispose of said letter nor that was required as applicant has failed to raise any such objection to the demand notice. (g) That the bank had obtained the valuation of the property prior to putting the property for auction and there is no irregularity as far as Rule 5 is concerned. (h) That Sheela Sirohi has not filed any S.A. whose property is put to auction and as such applicant has no right to challenge the process of the bank and no sale can be stayed in securitization application filed by the applicant proposed for sale of property of Sheela Sirohi and this Tribunal has no jurisdiction to decide the application in respect of property owned by Smt. Sheela Sirohi.

(i) That bank has published the sale notice in the newspaper and the word tender mentioned in letter dt. 31.12.2016 in fact means submission of EMD and not ordinary meaning of tender. (j) That the objection regarding irregularity in the e-portal cannot be looked into because applicant has failed to plead the same in its S.A. (k) That bank has published sale notice in accordance with Securitization Act and is going to auction the property as per said tenns. In rebuttal counsel for the applicant submitted that there is no time prescri.bed for filing objection to the demand notice u/ s 13(2) and a person has right to file objection before possession notice and before taking symbolic possession bank is required to decide the same. He further submitted that even the bank had taken symbolic possession bank was required to prepare inventory of the movables because the bank had mentioned the details of movables in the possession notice and further in the Transcore case Hon'ble Supreme Court has categorically held that there is no difference between symbolic possession and physical possession. S .A . 39/ 17 13.4.2017 Ld. Counsel Sri Sandeep Arora is present on behalf of the applicant. Ld. Counsel Sri A.K. Pal is present on behalf of respondent bank. Counsel for the parties submitted that thPy intends to rely upon the arguments dt. 4.2.2017 and on the basis of arguments so advanced the case may be decided.

3. It is the case where applicant has come to this Tribunal after issuance of sale notice and bank has not received any bid for scheduled auction as such the process of the bank from Rule 8(5) of Security Interest (Enforcement) Rules, 2002 on wards is not required to be adjudicated on merits.

4. The applicant has come to this Tribunal within 50 days from the date of issuance of possession notice, so delay, if any, in filing securi tization application is condoned. The Lei. Counsel for the applicant submitted that possession notice is defective. Counsel for the bank submitted that even if bank has given notice on old proforma that would not cause any prejudice to the applicant and as such the possession notice is not defective.

5. I have heard the counsel for the applicant and I have also gone through the records. The possession notice as issued appears to be defective and not in consonance with the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and amended rules uptil date. The bank was required to given opportunity to the borrower/ mortgagor to pay the dues of the bank in terms of section 13(8) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 as provided under amended Rules came into force on 4.11.2016. The bank has issued possession notice subsequent to that amendment so bank was under obligation to issue notice with amended provisions. The question of prejudice or non-prejudices to applicant is not significant important is the mode and procedure prescribed under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. Bank is under objection to follow the procedure as enshrined in the act meticulously. The irregularity as committed is a material irregularity, so I find prima facie case in favour of applicant. The possession notice is liable to be quashed.

6. In this case although not specifically pleaded, but at the time of arguments counsel for the applicant submitted that bank has not given any demand notice to borrower society. The demand notice annexed as Annexure A-6 with the securitization application reflects that bank addressed demand notice in following manner to the company:- "Smt. Sheela Strohl W/o Late V.S. Strohl, (Chairperson of Global Technical Education Foundattonr

7. The notice as sent is not in accordance with provisions of law. As far as society is concerned, a society can sue or to be sued in its own name and every notice must be addressed to a society through its Secretary or President or any other specifically nominated person, but it is a fact that although applicant has challenged validity of demand notice, but has not taken specific ground regarding non issuance of demand notice to society and simultaneously as per material available on record no notice has been issued to the society nor any such document has been produced by applicant or the bank to substantiate that demand notice was addressed and issued to the society. Although it can be taken as waiver of objection, but fact remains that it is a serious technical irregularity on the part of the bank in a loan case where huge amount of public money is involved and that irregularity will come into the way of respondent bank at every stage and that would hinder and delay the process of recovery and it might be possible that bank has not produced demand notice issued to the society because there was no such grouse in securitization application.

8. Keeping in view of such facts and circumstances, I feel judicious to say Lhat bank in its own decision weigh the gravity of such lapse and m~y continue on same demand notice or in its own discretion may issue fresh demand notice to recover its public money in accordance with law, but certainly applicant would have every right to challenge the process of the bank with all available objections, if in future any cause of action accrues to the applicant.

9. In the backdrop of above, Lhe securitization application filed by the applicant/borrower is disposed of \vith the observations made in the final order. Let copies of this order be supplied to the parties as per Rules. The S.A. is disposed of accordingly. Order is completed and pronounced in the open court. Dared : 29.4.2017 Dictated and corrected by me. --sd- (Vinay Goel} Presiding Officer -sd-- (Vinay Goel) Presiding Officer