Tom Jacob v. Authorized Officer

The challenge by way of this SA is as against Annexure-A1 demand notice dated 14.01.2015 and Annexure-A3 possession notice dated 25.03.2015, seeking to set aside the same.

2.1 Mr. Peer Mohamed Khan, the Ld. counsel for applicant contended that Annexure-A1 demand notice was served on the applicant only on 03.02.2015 by obtaining his signature at the branch of the defendant bank. Ld. counsel pointed out that since Annexure-A3 possession notice bears the date 25.03.2015, it clearly falls short of 60 days from Annexure-A1 demand notice that was admittedly served on the applicant on 03.02.2015. Ld. counsel for the applicant contended that the Annexure-A2 is a postal cover of Annexure-A1 notice which was returned unserved and the defendant bank had delivered the said notice personally on the applicant on 03.02.2015 along with said returned postal cover. According to the applicant, the period of 60 days contemplated under Sec 13(2) of the Act has to be reckoned from the date of receipt of said notice as provided under the format of ‘possession notice’ prescribed under Appendix IV to the Security Interest (Enforcement) Rules and not from any other date prior to that. On the side of the applicant it was strenuously pleaded that the defendant's act of taking symbolic possession of the secured asset on the 50 day is per se illegal vitiating the entire Annexure-A3 proceedings.

2.2 That apart, the Ld. counsel for the applicant urged the Tribunal to hold Annexure A3 possession notice dated 25.03.2015 to be illegal for the reason of the defendant's failure to follow the procedures contemplated for issuing and publishing the same as envisaged under Rule 8(1) and Rule 8(2) of the Security Interest (Enforcement) Rules. Ld. counsel took this Tribunal Annexures A3 possession notice dated 25.03.2015 as also the Annexures B3 and B4 paper publications dated 31.03.2015 whereunder the date of possession notice is shown to be 30.03.2015 to canvass for his propositions that as Anenxures B3 and B4 possession notices do not bear the date i.e. 25.03.2015 as in the case of Annexure A3 possession notice, the said notices have come to be issued in negation of the legal mandate envisaged under Rule 8(2) of the Security Interest (Enforcement) Rules rendering the bank's assuming of possession under such notices per se illegal. On the aforesaid two counts, the applicant urged the Tribunal to hold the bank's act of taking possession to be illegal and to allow the SA with costs.

3.1 Mr. Easwaran, Ld. counsel for the defendant bank submitted that going by Annexure-A2 returned cover itself it is discernable that intimation with regard to Annexure-A1 demand notice was served by the postal authority on 17.01.2015 and it has been returned unserved subsequently only for the reason of the applicant not claiming the same and such a postal endorsement has to be construed/presumed as a valid service of notice under law. Ld. counsel relied on the judgment of the Hon'ble High Court of Kerala rendered in the case titled South Indian Bank Ltd. v. Union Of India reported in 2010 (4) KLT 657 to substantiate his contention that when a notice under Section 13(2) sent by registered post would be returned as “unclaimed” it amounts to a valid and proper notice. The relevant portion of said judgment is as follows:

“6. It is settled law that, when a notice sent by registered post is returned ‘unclaimed’, it could very well be treated as ‘valid and proper’ service……”

3.2 Ld. Counsel for the defendant bank also sought aid of Section 27 of the General Clauses Act 1897 to prove service of notice on their part which reads as follows —. Where any Central Act or regulation made after the commencement of this Act authorizes or requires any document to be served by post, whether the expression ‘serve’ or either of the expression ‘give’ or ‘send’ or any other expression is used, then unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre-paying and posting by registered post, a letter containing the document, and unless the contrary is proved to have been effected at the time at which the letter would be delivered in the ordinary course of post. Ld. counsel for the defendant bank took this Tribunal through the law expounded by the Hon'ble Supreme Court with regard to the presumption available under S. 27 of the General Clauses Act in the case titled Madan and Co. v. Wazir Jaivir Chand, reported in 1989 KHC 105 : (1989) 1 SCC 264 : AIR 1989 SC 630 which reads as follows:—

“All that a landlord can do to comply with this provision is to post a prepaid registered letter (acknowledgment due or otherwise) containing the tenant's correct address. Once he does this and the letter is delivered to the Post Office, he has no control over it. It is then presumed to have been delivered to the addressee under S. 27 of General Clauses Act. ……. An addressee can easily avoid receiving the letter addressed to him without specifically refusing to receive it. He can so manipulate matters that it gets returned to the sender with vague endorsements such as ‘not found’, ‘not in station’, ‘addressee has left’, and so on. …………… if a registered letter addressed to a person at his residential address does not get served in the normal course and is returned, it can only be attributed to the addressee's own conduct. If he is staying in the premises, there is no reason why it should not be served on him. If he is compelled to be away for some time all that he has to do is to leave necessary instructions with the postal authorities either to detain the letters addressed to him for some time until he returns or to forward them to the address where he has gone or to deliver them to some other person authorised by him. In this situation, we have to choose the more reasonable, effective, equitable and practical interpretation and that would be to read the word ‘served’ as ‘send by post’ correctly and properly addressed to the tenant.”

3.3 Ld. counsel for the defendant bank submitted that as there is a valid service of Annexure A1 demand notice on the applicant reckoning 60 days period from 17.01.2015 i.e., the date on which the intimation with regard to said notice was served by postal authorities, the possession taken on 25.03.2015 is definitely a possession taken beyond the 60 days period mandated under Sec 13(2) of the Act, which calls for no interference by this Tribunal.

3.4 On the part of the defendant bank it was submitted further that going by Annexures B3 and B4 possession notices it could be discerned as to there being due and proper compliance of all the procedures envisaged under Rule 8(1) and Rule 8(2) of the Security Interest (Enforcement) Rules. Ld. counsel emphatically contended that there is no illegality or legal infirmity attendant to any of the measures proceeded with by the bank and the SA is only to be dismissed with cost.

3.5 Ld. counsel for the applicant submitted that the judgments relied by the defendant bank is clearly distinguishable and may not be applicable to the facts and circumstances of this case. Ld. counsel would submit that going by the dictum laid down in the South Indian Bank case referred to above it is fathomable that the said judgment would be a binding precedent only as far as the ‘personal service’ of a demand notice is concerned and the defendant bank cannot be heard to say that it had settled the law on the point that the postal endorsement ‘unclaimed’ could be treated as a valid service of Sec 13(2) notice, more-so when the proviso to Rule 3 of Security Interest (Enforcement) Rules had clearly set out the procedures to be followed by the secured creditor bank when it has reason to believe that the applicant is avoiding service of notice on him. Ld. counsel for the applicant also submitted that the Apex Court judgment referred to above by the defendant bank would be of no avail to them, since that is a decision rendered on a ‘tenancy case’ and under the tenancy enactment issuance of notice is not made mandatory. Ld. counsel submitted that since SARFAESI Act is a special enactment with Rule 3 specifically setting out such procedures to be adopted where the bank has reason to believe that the service of notice is being avoided, the contentions of the bank that the said judgments are binding precedent on the legal point that the postal endorsement ‘unclaimed’ has to be construed or presumed as a valid service is of no consequence. Ld. counsel for the applicant also contended that the provisions of the General Clauses Act would not take away the legal requirement for mandatorily serving the borrower with a clear 60 days notice contemplated under Sec 13(2) of the SARFAESI Act which being a special enactment should definitely prevail over all other laws.

4.1 The bone of contention raised by the applicant in the present SA is two fold. The applicant has sought for holding the defendant's assuming of possession of secured asset to be illegal, firstly for the reason of it assuming symbolic possession of the SA subject secured asset vide Annexure A3 possession notice within the 60 days statutory period prescribed under Sec 13(2) of the Act and secondly for the reason of it taking illegal possession of the said property vide the self same notice in negation of Rule 8(2) legal mandate requiring publishing of possession notice in consonance with Annexure A3 possession notice.

4.2 For the purpose of arriving at a just and proper decision in the present SA the Tribunal deems it expedient to have a close look at the relevant provisions of the SARFAESI Act and Rules that are extracted out below:

SARFAESI Act

S. 13(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 installment 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 subsection.

S 13 (3A) If, on receipt of the notice under sub-section (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 fifteen days 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.

S. 13(4) In case the borrower fails to discharge his liability in full within the period specified in sub-section (2), the secured creditor may take recourse to one or more of the following measures to recover his secured debt, namely:—

(a) take possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset;

S. 35. The provisions of this Act to override other laws

The provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law.

SECURITY INTEREST (ENFORCEMENT) Rules

3. Demand Notice.—(1) The service of demand notice as referred to in Sub-section (2) of Section 13 of the Ordinance shall be made by delivering or transmitting at the place where the borrower or his agent, empowered to accept the notice or documents on behalf of the borrower, actually and voluntarily resides or carries on business or personally works for gain, by registered post with acknowledgement due, addressed to the borrower or his agent empowered to accept the service or by speed post or by courier or by any other means of transmission of documents like fax message or electronic mail service:

Provided that where authorised officer has reason to believe that the borrower or his against is avoiding the service of the notice or that for any other reason, the service cannot be made as aforesaid, the service shall be effected by affixing a copy of the demand notice on the outer door or some other conspicuous part of the house or building in which the borrower or his agent ordinarily resides or carries on business or personally works for gain and also by publishing the contents of the demand notice in two leading newspapers, one in vernacular language, having sufficient circulation in that locality.

(2) Where the borrower is a body corporate, the demand notice shall be served on the registered office or any of the branches of such body corporate as specified under sub-rule (1).

(3) Any other notice in writing to be served on the borrower or his agent by authorised officer, shall be served in the same manner as provided in this rule.

(4) Where there are more than one borrower, the demand notice shall be served on each borrower.

“8. Sale of immovable secured assets

(1) Where the secured asset is an immovable property, the authorised officer shall take or cause to be taken possession, by delivering a possession notice prepared as nearly as possible in Appendix-IV to these rules, to the borrower and by affixing the possession notice on the outer door or at such conspicuous place of the property.

(2) The possession notice as referred to in sub-rule (1) shall also be published, as soon as possible but in any case not later than seven days from the date of taking possession, in two leading newspapers, one in vernacular language having sufficient circulation in that locality, by the authorised officer.”

4.3 On a conjoint reading of S. 13(2) and S. 13(4) of the SARFAESI Act it is clear that the secured creditor bank may require the borrower by a notice in writing to discharge in full his liabilities to the bank within 60 days from the date of the notice failing which it shall be entitled to exercise all or any of the rights under sub-section (4) which shall include the recourse available to the secured creditor to recover his secured debt by taking the possession of the secured asset of the borrower including the right to transfer it by way of sale or otherwise. Sub-section (3A) to the Section 13 was inserted by an amendment brought out by the Parliament giving it retrospective effect from 11.11.2004 whereunder the lawmakers had consciously employed the expression ‘on receipt of notice under sub-section (2)'and the said sub-section (3A) underwent further amendment with the substitution of the expression ‘within fifteen days’ for the expression ‘within one week’ with effect from 15.01.2013. The SARFAESI Act now stands amended extensively in view of the coming into force of the Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Act, 2016 with effect from 01.09.2016. While taking a close look at the march of SARFAESI law since 2002 as also its subsequent amendments, the Tribunal cannot lose sight of the fact that S. 13(2) of the Act remains intact as it originally stood on the date of passing of the SARFAESI Ordinance 2002 without there being any need or legal compulsion for amending the expression ‘within sixty days from the date of notice’ contained in sub-section (2). This only flashes light on the conscious drafting of the said provision by the lawmakers requiring the borrower to discharge in full his liabilities to the secured creditor within 60 days from the date of such notice.

4.4 The Ld. Counsel for applicant of course took this Tribunal through APPENDIX IV format prescribed for ‘possession notice’ in terms of Rule 8(1) of the Security Interest (Enforcement) Rules wherein the demand notice is stated to have been issued calling upon the borrower to repay the amount mentioned therein within 60 days from the date of receipt of the said notice. Even going by Rule 8(1) itself, the authorised officer is required to deliver a possession notice prepared as nearly as possible in APPENDIX IV format and therefore, the said format is only illustrative and directory which in any respects cannot override the provisions of the SARFAESI Act itself, moreso when S. 13(2) is clear and certain as to the 60 days period provided to the borrower for making payment from the date of notice. It is well settled in law that the provision of the Act shall always prevail over the Rules framed under the Act as affirmed by the Hon'ble High Court of Madras in K. Arangasami v. S. Dhanam (CDJ 2002 MHC 081). The Hon'ble Apex Court in Dudhganga Vikas Seva Santha Naryadit v. The District Collector, Kolhapur, (2006) 5 SCC 250 : CDJ 2006 SC 425 has held that where there is any inconsistency or repugnancy, the Act must prevail over the Rules.

4.5 The Tribunal which is a creature of statute expected to give full effect to the provisions of the Act going by its plain meaning cannot venture giving any other interpretation to the expression ‘within sixty days from the date of notice’, more so when the said sub-section has been consciously brought into the statute book by the lawmakers in their profound wisdom with the avowed object of achieving expeditious recovery of public dues. The Tribunal is rather afraid to do so since the law is by now settled by catena of legal decisions of the Hon'ble Apex court as also the Hon'ble High Court of Kerala as regards the restraint to be exercised by the courts of law in attempting to arrogate itself to the role of lawmakers. If we need any authority on the legal proposition of ‘casus omissus’ we can find the same in the Constitution Bench judgment rendered by Hon'ble Apex Court in the case titled Padmasundara Rao v. State of Tamil Nadu reported in which reads as follows:

“12. The rival pleas regarding re-writing of statute and casus omissus need careful consideration. It is well settled principle in law that the Court cannot read anything into a statutory provision which is plain and unambiguous. A statute is an edict of the legislature. The language employed in a statute is the determinative factor of legislative intent. The first and primary rule of construction is that the intention of the Legislation must be found in the words used by the Legislature itself. The question is not what may be supposed and has been intended but what has been said. “Statutes should be construed not as theorems of Euclid”. Judge Learned Hand said, “but words must be construed with some imagination of the purposes which lie behind them”. (See Lenigh Valley Coal Co. v. Yensavage 218 FR 547). The view was re-iterated in Union of India v. Filip Tiago De Gama of Vedem Vasco De Gama (1990) 1 SCC 277.

13. In Dr. R. Venkatchalam etc. v. Dv. Transport Commissioner etc. [1977] 2 SCR 392 it was observed that Courts must avoid the danger of apriority determination of the meaning of a provision based on their own pre-conceived notions of ideological structure or scheme into which the provision to be interpreted is somewhat fitted. They are not entitled to usurp legislative function under the disguise of interpretation.

14. While interpreting a provision the Court only interprets the law and cannot legislate it. If a provision of law is misused and subjected to the abuse of process of law, it is for the legislature to amend, modify or repeal it, if deemed necessary. [See Rishabh Agro Industries Ltd. v. P.N.B Capital Services Ltd.. (2000) 5 SCC 515]. The legislative casus omissus cannot be supplied by judicial interpretative process. Language of Section 6(1) is plain and unambiguous. There is no scope for reading something into it, as was done in Narasimhaiah's case (supra). In Nanjudaiah's case (supra), the period was further stretched to have the time period run from date of service of High Court's order. Such a view cannot reconciled with the language of Section 6(1). If the view is accepted it would mean that a case can be covered by not only Clauses (i) and/or (ii) of the proviso to Section 6(1), but also by a non-prescribed period. Same can never be the legislative intent.”

4.6 Concededly Annexure A1 demand notice dated 14.01.2015 has been despatched by the defendant bank on 16.01.2015 as evidenced by Annexure A2 returned postal cover received and relied by the applicant himself in this SA. It is axiomatic that whenever and wherever the expression ‘within ………days from the date’ is employed in a statute, the period prescribed by law has to be reckoned by calculating that period excluding the date of notification or notice as the case may be. In coming to such a conclusion, the Tribunal stands fortified by the Full Bench decision of the Hon'ble High Court of Rajasthan rendered in the case titled Ramanath v. Dwarka Prasad reported in AIR 1959 Rajasthan 201 wherein the expression “within fifteen days from the date of notification” stood elucidated as follows:—

“When an enactment says “within fifteen days from a certain date” it indicates the starting point as well as the concluding point. The starting point will be indicated by the word “from” and the concluding point be determined by calculation of the period of limitation mentioned therein. Therefore R. 19 which uses the expression “within fifteen days from the date of notification under R. 18” means that the election petition has to be filed after the notification under R. 18(c) and within fifteen days of that period. In calculating that period, the date of notification will be excluded.”

4.7 Going by Annexure A1 demand notice which is admitted to have been sent through Annexure A2 returned postal cover as also Annexure B1 despatch register maintained by the bank containing the registration receipts evidencing despatch of demand notices, it is discernible that the date of demand notice is 16.01.2015 (i.e., date of its issuance/despatch). Excluding the date of issuance (despatch) of notice i.e., 16/01/2015 which is to be construed as the date of notice, 60 days period have to be reckoned from 17.01.2015 i.e., the date on which the intimation regarding the said notice is seen to have been served at the address of the applicant going by the postal endorsement found in the returned postal covers. In coming to such an inescapable conclusion, the Tribunal stand fortified by the judgments of the Hon'ble Apex Court and the Hon'ble High Court of Allahabad extracted out below:

(i) The Hon'ble Supreme Court in the case titled Keshavlal Khemchand & Sons Pvt. Ltd v. Union of India, reported in (2015) 4 SCC 770 : AIR 2015 SC 1168 held as follows:—

“5. After a decade of working of the tribunals constituted under Act 51 of 1993, the Parliament felt that even machinery and procedure established under the Act 51 of 1993 is not able to produce the desired result of efficiently recovering monies from the borrowers. The Parliament, therefore, made the Act. The crux of the Act is that any ‘security interest’4 created in favour of a ‘CREDITOR’5, who by definition under the Act becomes a ‘SECURED CREDITOR’, can be enforced without the intervention either of the court or tribunal6 constituted under Act 51 of 1993 by following the procedure Under Section 13 of the Act. Section 13(2) of the Act provides as follows:

(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).

6. It provides that the SECURED CREDITOR may call upon the borrower7, by issuing a notice in writing to discharge his liabilities in full within a period of sixty days from the date of the notice. If the borrower fails to discharge his liabilities after such a demand, the secured creditor is entitled to take any one of the steps contemplated under Section 13(4).”

(Emphasis is mine)

(ii) The Division Bench of the Hon'ble High Court of Allahabad in its judgment rendered in the case titled Dayanath Pandey v. State of U.P. reported in II (2008) BC 634 held as follows:—

“4. Annexure-2 to the writ petition is notice under Section 13(2) of the Act. This was dated 9.7.2007…………………… The period of sixty days given in the notice under Section 13(2) of the Act was to be counted from the date of notice and not from the date of service. ………………The computation of period of notice had to be made under the provisions of Section 9 of U.P. General Clauses Act, 1904 which runs as under:

Section 9. Commencement and termination of time-In any (Uttar Pradesh) Act it shall be sufficient, for the purpose of excluding the first in a series of days or any other period of time, to use the word “from” and for the purpose of including the last in a series of days or any other period of time, to use the word “to”.

5. Thus, the period of thirty or sixty days was to be counted excluding the date of issuance of notice.”

(Emphasis is mine)

4.8 The applicant had in para 5.4 of his SA concedes to the factum of issuance of such notice by the defendant by registered post as also to the factum of returning of said cover with an endorsement ‘addressee unclaimed’. On a conspectus reading of the endorsements contained in Annexure A2 returned cover the Tribunal finds an endorsement ‘intimation’ stated to have been served on 17.01.2015. The applicant has no case or contention as to non service of such intimation on his address by the postal authorities nor does he have any dispute or claim as regards the correctness of the address mentioned therein. In fact, the applicant has instituted this SA setting out the very same address as contained in Annexure A2 returned postal cover. The Tribunal wherefore comes to a conclusion that there is a deemed, constructive service of said notice on the applicant on 17.01.2015 itself going by S. 27 of the General Clauses Act which provides for presumption of such service of registered articles that are correctly addressed and properly stamped. On such posting of intimation by the postal authorities, it is incumbent on the part of the addressee to claim and receive such registered article/notice. The applicant's conduct and act of evading receipt of such notice is only to be construed as a deemed, valid, proper service of said notice on him in the eye of law. The Tribunal arrives at such a conclusion by placing respectful reliance on the judgment of the Hon'ble Apex Court rendered in the case titled P.T. Thomas v. Thomas Job reported in which reads as follows:—

“14……… Though the notice was correctly addressed and despite the intimation by the post office, the notice was not accepted by the Respondent and was returned unserved. In such circumstances, the presumption of law is that the notice has been served on the Respondent”

(emphasis is mine)

4.9 The Tribunal finds force in the argument putforth by the Ld. counsel for defendant bank as to the need for holding due and valid service of Annexure A1 demand notice on the applicant on 17.01.2015 notwithstanding the subsequent ‘personal service’ of the self same notice on him going by S. 27 of the General Clauses Act and the legal decisions discussed supra and hereinafterwards. Admittedly as the registered post with regard to demand notice has been properly addressed, pre-paid and sent on 16.01.2015 and evidently as there is service of postal intimation on 17.01.2015, this date could be reckoned with as the date when the said letter would and could have been delivered to the addressee (applicant herein) in the ordinary course of post. Giving any other interpretation other than this would pave way for the recalcitrant borrower to evade service of registered article despite receiving postal intimation about it to ensure that the said notices are served falling short of the 60 days notice as mandated under the SARFAESI Act, 2002.

4.10 The applicant's further contention that SARFAESI Act being a special enactment would have overriding effect over the General Clauses Act is also not acceptable for the reason that no inconsistency is found in S. 13(2) of the SARFAESI Act which would exclude the operation of any of the provisions of the General Clauses Act. The Division Bench of the Hon'ble High Court of Andhra Pradesh in the case titled G. Manohar v. Indian Bank reported in CDJ 2009 AP HC 544 and the Hon'ble High Court of Calcutta in the case titled In the matter of Eastern Spinning Mills & Industries Ltd reported in CDJ 2012 Cal HC 540 while deciding a securitisation case invoked the provisions of the General Clauses Act.

4.11 The Hon'ble High Court of Patna had in its judgment rendered in the case titled Prachi Exim India Ltd v. State Bank of India reported in AIR 2008 Patna 92 cited reference to the General Clauses Act and applied it to decide a case relating to SARFAESI Act. In Para 3 of the said judgment, the Hon'ble High Court held as follows:—

“3. I may also refer Sec. 27 of the General Clauses Act 1897 which raises a presumption along with the relevant provision of the Evidence Act of a letter sent by registered post being validly served. In my view the presumption has not been repudiated. A bald denial is not a valid rebuttal of presumption in Law.”

4.12 This Tribunal also incidentally observes that in as much there is no inconsistency in interpreting the provisions of SARFAESI Act and the General Clauses Act, the former Act would not have any overriding effect over the latter Act. This Tribunal holds that S. 37 of SARFAESI Act would take within its ambit, the provisions of the General Clauses Act as well. S. 37 of SARFAESI Act is extracted out below:

“S. 37. Application of other laws not barred:— The provisions of this Act or the Rules made thereunder shall be in addition to, and not in derogation of, the Companies Act, 1956(1 of 1956), the Securities Contract (Regulation) Act, 1956 (42 of 1956), the Securities and Exchange Board of India Act 1992 (15 of 1992), the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (51 of 1993) or any other law for the time being in force.”

4.13 The submission that came forth from the Ld. Counsel of the applicant as to the South Indian Bank Ltd case of the Hon'ble High Court of Kerala being a decision for tenability of ‘personal service’ of S. 13(2) notice alone and not a binding precedent for holding the postal endorsement ‘unclaimed’ to be a valid service, does not receive the Tribunal's appreciation as the Hon'ble High Court of Kerala by adverting to Rule 3 of the Security Interest (Enforcement) Rules has definitely held as follows:

“6. It is settled law that, when a notice sent by registered post is returned ‘unclaimed’, it could very well be treated as ‘valid and proper’ service. There is no case for the Respondents 2 and 3 that the averments raised by the Bank that the notice was initially sent by ‘registered post’ is not correct; or that the same was not received by the second Respondent/borrower and further that it was never caused to be returned ‘unclaimed’ by the third Respondent/guarantor. Similarly, there is no case for the said Respondents that the notice was ‘not personally served’ by the authorised officer on 10-9-2009 as contended by the Bank. This being the position, absolutely no prejudice has been caused to the parties concerned and the ‘position’ has already been let known to the parties, which is the purpose of serving any notice.

8. ………………Giving ‘purposive interpretation’ to the provisions, so as to give effect to the scheme and object of the statute, the purpose/target to be achieved is that, the party be let known as to the proceedings being pursued by the secured creditor. The Respondents 2 and 3 have no dispute with regard to the service of notice by ‘registered post’ to the 2nd Respondent and the ‘personal service’ effected on the 3rd Respondent; whereby the purpose has been achieved.

9. That apart, going by the course and conduct pursued by the third Respondent, who has caused the notice returned ‘unclaimed’, this by itself is liable to be reckoned as proper and valid service and no further personal service was necessary.

(Emphasis is mine)

It was in addition to this, that the authorised officer, as a more prudent or precautionary measure, chose to effect service of notice ‘personally’ as well.”

4.14 Yet another contention raised by the applicant as regards the illegality committed by the defendant in publishing Annexure B3 an B4 possession notices dated 30.03.2015 in negation and violation of the legal mandate envisaged under Rule 8(2) of the Security Interest (Enforcement) Rules received the Tribunal's further consideration. Ld. Counsel for the applicant emphatically contended that what is mandated to be published under Rule 8(2) is the possession notice verbatim as referred to in Rule 8(1). In the present case while Annexure A3 possession notice served on the applicant in terms of Rule 8(1) is dated 25.03.2015 divulging therein the date of taking possession of secured asset as 25.03.2015, Annexures B3 and B4 possession notices dated 30.03.2015 have come to be published on 31.03.2015 which according to the applicant is a patent illegality and a glaring departure from the mandatory requirement of the Rule. This argument of the applicant did not impress the Tribunal since Annexure B3 and B4 are paper publications of the possession notices dated 30.03.2015 intended to serve as public notice to general pubic, which as well divulges the defendant's assuming of possession of secured asset from the applicant on 25.03.2015. Rule 8(2) requires the authorised officer to publish the possession notice as referred to in Rule 8(1) within 7 days from the date of taking possession and therefore the mentioning of date of publishing the said possession notice in Annexures B3 and B4 cannot be held to be an illegality or legal infirmity vitiating the said statutory notices. The applicant cannot say or show what prejudice he stood to suffer due to the reason of Annexures B3 and B4 possession notices been dated 30.03.2015. Annexures B3 and B4 possession notices dated 30.03.2015 published on 31.03.2015 in two leading newspapers within the stipulated period of 7 days definitely meets out the legal requirement of the Rule. The Tribunal wherefore has to necessarily discard the applicant's said contention as well.

4.15 In the backdrop of the aforesaid factual and legal submissions made by both sides, this Tribunal on being convinced that there is no illegality in assuming possession of secured asset in as much there is a due service of demand notice on the applicant as per the provisions of SARFAESI Act and Section 27 of the General Clauses Act and on being fortified in its view by the decisions of the Hon'ble Supreme Court cited reference to supra, the decision of Hon'ble High Court of Patna rendered in the case titled Prachi Exim India Limited v. State Bank of India reported in AIR 2008 Pat 92 and the decision of Hon'ble High Court of Kerala rendered in the case titled The South Indian Bank Ltd. v. Union Of India reported in AIR 2011 Ker 35 wherein the Lordship has held that giving ‘purposive interpretation’ to the provisions of SARFAESI Act the intent to be achieved is that the party be let known as to the proceedings being pursued by the secured creditor bank, uphold the SARFAESIA measures so far proceeded with by the bank in pursuance of Annexure A1 and Annexure A3 statutory notices.

4.16 In the result, the SA is dismissed as ‘unsustainable’. Consequently, IA 1164/2015 is also dismissed. There is no order as to costs.

5. Communicate copy of this final order to both parties as provided in Regulation 32 of the Debts Recovery Tribunal Ernakulam Regulations, 2015.

(Dictated to my PA directly on the computer, corrected and pronounced by me in the open Tribunal on this the 19th day of November, 2016)

[N. SOMASUNDAAR] PRESIDING OFFICER

Exhibits on the part of the applicant

Ext. No. Date Particulars of documents Annexure-A1 14.01.2015 True copy of the demand notice issued by the defendant. Annexure-A2 30.01.2015 True copy of the postal cover received by the applicant after returning the same. Annexure-A3 25.03.2015 True copy of the possession notice issued by the defendant. Annexure-A4 30.01.2015 Returned postal covers (2 nos).

Exhibits on the part of the defendant

Ext. No. Date Particulars of documents Annexure-B1 16.01.2015 True copy of the despatch register maintained by the bank including the receipt evidencing dispatch of the demand notice. Annexure-B2 ……… Copy of the acknowledgment card signed by the applicant. Annexure-B3 31.03.2015 Copy of the paper publication of the possession notice in New Indian Express daily Annexure-B4 31.03.2015 Copy of the paper publication of the possession notice in Mangalam daily. Annexure-B5 …… Copy of the demand notice pertaining to the loan account No. 6022092461 signed by the applicant. Annexure-B6 ……. Copy of the demand notice pertaining to the loan account No. 6022092461 signed by the applicant's wife. Annexure-B7 ……. Copy of the demand notice containing the acknowledgement of the notice in respect of the vehicle loan.

PRESIDING OFFICER