Allahabad High Court: The petitioner before the Court appealed against the order of Debt Recovery Appellate Tribunal. The petitioner was serving in Punjab National Bank, Branch Mahmoorganj, Varanasi. During his service period, he availed a housing loan of Rs. 10 lacs in the year 2007 for construction of house and deposited title deed of his property in District Varanasi as security and had committed defaults in payment of instalments. Consequently, the account was declared as ‘Non-Performing Asset’.
The respondent bank issued a notice under Section 13(2) of the SARFAESI Act. The notice inviting tender for sale of security was published in the newspaper subsequent to this and the security was sold. The counsel for petitioner submitted that an application was filed under Section 17(1) of the SARFAESI Act before the DRT for quashing the sale certificate dated January 6, 2012 alleging that the petitioner was not served with the notice for auctioning the property nor was he given a possession notice. Along with that, the property in question (that was being auctioned) was grossly undervalued and that the petitioner had no knowledge of the recovery proceedings.
The counsel pleaded on petitioner’s behalf that the Appellate Tribunal had failed to appreciate that the petitioner was the employee of the respondent bank and his dues were sufficient to meet out the loan taken by the petitioner, even then due to personal prejudice the officers had initiated the proceeding under Section 13 of SARFAESI Act and the Tribunal had not recorded any finding on that point.
Shri M.M. Sahai, counsel for the petitioner, placed emphasis on clear 30 days’ notice, which is required to be given to the borrower by placing reliance on the judgment of Supreme Court in Mathew Varghese v. M. Amritha Kumar, (2014) 5 SCC 610 in which it was held that until a clear 30 days’ notice is given to the borrower, no sale or transfer can be resorted to by a secured creditor.
The submission of petitioners were accepted by the Bench of Tripathi, J. who observed that the requirement to cause publication in ‘vernacular language’ in the newspaper is fundamental and the statutory requirement which cannot be compromised. The Court quashed all the proceedings subsequent to notice under Section 13(4) of the Act, 2002 for being violative of statutory provisions. It ordered the respondent bank to refund the amount deposited by the buyer of the security of petitioner with interest @ 10% per annum to her within four weeks from today. [Ashok Kumar v. Authorized Officer, Punjab National Bank, 2017 SCC OnLine All 333, decided on 10.2.2017]