Plea u/s 14 of SARFAESI Maintainable as Procedural Defect of Missing Affidavit Was Cured Through Additional Filings | HC

Case Details: Shailesh Traders v. Union Bank of India - [2024] 169 taxmann.com 642 (HC-Bombay)

Judiciary and Counsel Details

• Y. G. Khobragade, J.
• N.P. Patil, Jamalpurkar for the Petitioner.
• Atul A. Mishra for the Respondent.

Facts of the Case

In the instant case, On the petitioners/borrowers failure to repay the loan, the bank initiated recovery proceedings against the petitioners and issued a notice under section 13(2) of the SARFAESI Act, 2002. Subsequently, the bank filed an application under section 14 of the Act to take physical possession of the secured property.

It was a case of the petitioners that section 13(2) notice had already been withdrawn by the Bank, and no fresh notice was served upon the petitioners. Further, the said section 14 application was not supported by the affidavit/solemn affirmation. Thus, the petitioners had filed an application and prayed for the issuance of directions against the Bank to supply copies of the Section 14 application, its affidavit and a copy of a notice under Section 13(2) of the Act.

The Trial Court passed an impugned order and rejected the same. It was noted that no doubt, as per the provisions of Section 14, the details of transaction and secured assets were required to be submitted on an affidavit.

In the instant case, the Authorized Officer of the Bank submitted all transactions history between the petitioners and the Bank, which was based on documentary evidence. The Bank had also given a detailed description of the secured assets. The petitioners had not disputed about the description of secured assets.

Therefore, merely solemn affirmation/affidavit was not furnished with the application under section 14, it could be called as a procedural defect, which could be cured by filing an additional affidavit.

Further, the Bank had already issued a fresh section 13(2) notice to the petitioners, which was served on them on 15.09.2022. However, the petitioners neither raised an objection to the said notice nor challenged it before the Competent Authority nor replied to the notice.

High Court Held

The High Court held that the bank had complied with the provisions of section 14, and therefore, there was no substance to disturb the findings of the Trial Court. Thus, the instant writ petition was to be dismissed.

List of Cases Referred to

• Balkrishna Rama Tarle fead Thr. LRS & Anr. v. Phoenix ARC Private Limited & Ors. (2023) 1 SCC 662 (para 13 and 14)
• R.D. Jain & Co. v. Capital First Ltd. & Ors. (2023) 1 SCC 675 (para 13 and 14).