In the present case, a Petition was filed before the Hon’ble Gujarat High Court challenging the actions/measures taken by the Bank under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act”).
The Petitioner contended that the Notice under section 13(2) of the SARFAESI Act issued by the Respondent Bank did not mention the break up of the principal amount and the interest amount and hence, the Notice was defective and in contravention of the provisions of the SARFAESI Act.
In view of the above facts and circumstances, the Hon’ble High Court relied upon the judgment of Punjab National Bank Vs. Mithilanchal Industries Pvt. Ltd., wherein it was held:
“29. The words used in Section 13(3) of the SARFAESI Act are “details of the amount payable by the borrower as also the details of the secured assets intended to be enforced by the Secured Creditor.” So, the notice under Section 13(2) of the SARFAESI Act has to necessarily contain the details on the above two counts.”
In view the aforesaid, it was held that in accordance with section 13(3) of the SARFAESI Act, providing of the principal amount and interest amount was necessary for the purpose of making demand in the Notice issued under section 13(2) of the SARFAESI Act. In was held that Section 13 (3A) of the SARFAESI Act gave right to the borrower to make a representation or raise an objection against the notice under section 13(2). Therefore, it was observed that unless the borrower knew the details of the amounts being demanded under a notice under section 13(2), the borrower would not be in a position to make any representation or raise any objection.
Thus, the petition was allowed by the Hon’ble Court, and the Bank was restrained from taking any possession of the secured assets of the Petitioners pursuant to the notice issued under section 13(2) of the SARFAESI Act and the actions under sections 13(4) and 14 of the SARFAESI Act till the final disposal of the Securitization Application pending before the Debt Recovery Tribunal.