Loan declared NPA
Loan was declared NPA and bank served us 13(2) notice. We gave full detailed 48 pages objections/representations. At the same time my mother was critically ill so I asked Branch officials, as I was not in a position to move out of hospital, to visit me in hospital and collect the detailed 48 pages objections/representations. He gave me proper receiving and I handed over to him the copies for CMD as well as for AO. They gave me 13(4) notice and case is in DRT. Banks legal counsel admitted that objections/representations were given and he also admitted that reply was not given but he argued that as it was given to Bank manager no reply has to been given by AO. We said that in SARFAESI act 2002, it is clearly evident that objections/representations by the borrowers can be given to either Secured Creditor or AO whereas reply shall only be given by AO. As the loan agreement was signed between the bank manager who is the representative of the secured creditor handing of the copies to him is not wrong and case stands vitiated under section 13(3A). Please place your views over this situation.
u can approach DRAT or high court against the banks action also for the direction to the bank to consider your reply before prceeding any further
Since the representative of secured creditor has given receiving of the objection raised it is deemed to be received by the security creditor. Once the secured creditor receives the representation or objections raised Section 13 (3 A) of SARFAESI Act, 2002 comes into play.
Section 13 (3A) of SARFAESI Act, 2002 states that 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 one week of receipt of such representation or objection the reasons for non-acceptance of the representation or objection to the borrower.
As far as reply by AO is concerned it is clearly mentioned in Rule 3 (A) of THE SECURITY INTEREST (ENFORCEMENT) RULES, 2002 that
(a) After issue of demand notice under sub-section (2) of section 13, if the borrower makes any representation or raises any objection to the notice, the Authorized Officer shall consider such representation or objection and examine whether the same is acceptable or tenable.
(b) If on examining the representation made or objection raised by the borrower, the secured creditor is satisfied that there is a need to make any changes or modifications in the demand notice, he shall modify the notice accordingly and serve a revised notice or pass such other suitable orders as deemed necessary, within seven days from the date of receipt of the representation or objection.
(c) If on examining the representation made or objection raised, the Authorized Officer 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.
Therefore it is very clear from the above mentioned provisions that authorized officer is bound to examine any representation or objection raised and to communicate the acceptance and non-acceptance within seven days from receipt of representation or objections.
Hence, the action of security creditor can be challenged in the court of law.
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