Registered Post / Speed Post /
Courier
Ref.:
Legal / SD/CB / 1707-3108 / 2023.
Dated : 11th day of March’ 2023
To,
The
Authorized Officer,
Regional
Office -1, Kolkata 16,
Pradip
Kumar Bag
Emp.
No. 72346
Canara
Bank
Shakuntala
Park Branch,
88/N,
Biren Roy Road (West),
Kethopole,
Kolkata
700061,
Contact
No.: 8334999314
Email
: cb1665@canarabank.com
Ref.: Your Letter Ref.: 1565/
DEMANDNOTICE/SUKANTADAS/JAN/2023/1, dated 13.01.2023.
My Client : Mr. Sukanta Das,
Premises No. 177, Raja Ram Mohan Roy Road, Flat 2A, 2nd Floor, Ward
121, P.S. Behala, Kolkata – 700008, and also Son of Nityalal Das, 171/4, Rai
Bahadur Road, Behala, Kolkata - 700034.
Subject : Loan Account No. 1665619001334
( Loan Against residential Property ), dated 10/07/2018.
REPRESENTATION UNDER SECTION 13 ( 3 A ) OF SRFAESI ACT’ 2002
TO CANARA BANK’S NOTICE UNDER SECTION 13 ( 2 ) OF SRFAESI ACT’ 2002.
Dear
Sir,
Under
instructions of my above named client, I hereby states that my client is in
receipt of your letter dated 13th day of January’ 2023, which was
posted on 17-01-2023, and the same has been received on 27-01-2023, and whereas
my clients duly gone through the contents of your said letter, surprisingly
find that the said letter has been issued by the Authorised Officer, and
thereafter, handed over to me with specific instructions to reply your said
letter dated 13th day of January’ 2023, and to put objection in the
following manner :-
1.
That
from the bare reading of your letter dated 13th day of January’ 2023,
it’s appear that your Demand Notice dated 13th day of January’ 2023,
under Section 13 (2) of the Securitisation and Reconstruction of Financial
Assets and Enforcement of Security Interest Act’ 2002, is not in accordance
with the Law, as prevailed for time being in force.
2.
That
the instant representation is being caused against the aforesaid notice dated 13th
day of January’ 2023, purportedly issued under Section 13(2) of the
Securitisation and Reconstruction of Financial Assets and Enforcement of
Security Interest Act’ 2002 ( hereinafter referred to as the “said notice” ).
The issuance of the said notice itself is an act without jurisdiction and
suffers from some incurable defects which has itself vitiated the procedure
laid down under the Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act’ 2002 and rules made there under an as a
nullity.
3.
The
notice under reference fails to disclose the correct date with appropriate
annexure of bank statements, on which the accounts of the Borrower has been
classified as NON PERFORMING ASSETS in terms of the guidelines issued by the
Reserve Bank of India. The notice is also lacks “transparency” as it fails to
divulge the details of the amount payable by the borrower. These disclosures
are mandatory for issuance of notice under Section 13(2) of the Securitisation
and Reconstruction of Financial Assets and Enforcement of Security Interest
Act’ 2002 and pursuant to the law laid down by the Hon’ble Apex Court. The
defects as aforesaid are incurable and therefore the action under the
Securitisation and Reconstruction of Financial Assets and Enforcement of
Security Interest Act’ 2002, by issuance of notice under Section 13(2), has
become nullity and thus is not enforceable.
4.
That
my clients have made regular payment towards the repayment of the credit
facilities Amount granted by you, as shown in the statement of accounts
provided by you. And thereby my client did not breach any covenant of the
alleged agreement of Residential Loan, though you have breach the terms and
conditions of your said alleged Residential Loan agreement by taking several
mode of payments on threat from my client
you did not co-operate my client at any occasions, even you did not
consider my client’s request and not even bothered to take into consideration
of the situations with my client, whereas
any communications between the parties under an agreement or contract, is a
part and parcel of such agreement and contract, the binding of duties and
obligations should lies reciprocally on both the parties of the such agreement
or contract, and which should be genuinely legally valid in accordance with the
Law of Land.
5.
That
you please note that the several communications has been made by my client,
whereby my client showing its willingness to repay the loan amount as was
determined on the date of sanction of said Loan against residential property,
describing financial conditions and other inability for the time being though
you did not consider my client’s aspect nor provide any suitable opportunity.
6.
That
you have stated in your said purported demand notice date 26/12/2019, that my
client’s account has been classified as a Non Performing Asset (NPA) in
accordance with the directives and guidelines of RBI, though you did not given
on which date, month and year my client’s account has been specified as
NPA, nor you did ever communicate in
such aspects to my clients, moreover, you did not classified the categories of
NPA and its’ durations and causes as per the directives and guidelines issued
in that behalf by the RBI in the year 2003. Henceforth, the Classification of
NPA of my client’s account has not been done in accordance with the prevailing
law, since there was no scope to describe my client’s account as a NPA at any
occasions, whatsoever. Thus the Classification as NPA of my client’s account is
not maintainable in the eye of law.
7.
That
you did not given any notice of Recall of any amount, whatsoever, nor you did
communicate in that regard to my clients and whereas you purposively recalling the
Loan Amount which has been granted to my clients, rather you recall the
adjustable remaining loan amount on and after consideration and adjustment of
the payments made by my clients till date. You have shown a statement of Dues
as on 13/01/2023, for the amount of Rs. 30,74,925.13/- in respect of Loan
Account No. 1665619001334 ( Loan Against residential Property ), dated
10/07/2018, without discussing the rate of interest calculation and the basis
of other charges, and the calculation of amortization principal amounts
arrival, Henceforth the schedule of description of the Dues as described by you
in your said notice dated 13th day of January’ 2023, is wholly wrong
and without any legal basis, and whereas you have issued this notice
suppressing the material facts that under which manner you have arrived on such
dues amount. Furthermore you did not disclose the rate of interest charged appropriately
thereon and neither you have provide any basis to that.
8.
That
my client never created any security interest by way of mortgage of immovable
property with you, neither had knowingly declared or put signature on any
declaration or documents which created legally enforceable instrument, to
create security interest in their immovable property, as described by you in your
said notice dated 13th day of January’ 2023.
9.
That
it is further stated that the title of the mortgagor to the property, as such,
bears certain deficiencies and such deficiencies were patently existing even at
the time of issuing your notice dated 13th day of January’ 2023.
However, my client refrain from commenting on the gross infirmity in the
mortgage itself, because in the context of repayment of liability, such
questions are not relevant at this stage.
10.
That
it is further stated that the amount due and payable in the books of the bank
is not correctly mentioned in the notice under reference. The contractual rate
of interest has not been disclosed the calculation of outstanding amount has
not been described, by you in the notice under reference.
11.
That
the details set out in the schedule of the notice are vague, indefinite and
totally lacking necessary details with regard to measurement, demarcation,
value, and description and as such the notice is bad in eye of law. Your kind
reference is drawn to schedule of account, which contains incorrect balance
under the head “ SCHEDULE-C” and various credits made by my clients as per his
record is not shown to have been made in the account. As regards to the
respective paragraph, Schedule of the immovable property, it is stated that the
legal deficiencies in respect of the property in question are numerous and the
mortgage of the said property is not duly created.
12.
That
without prejudice to the legality of the facts in question, I for and on behalf
of my above named clients request you to reschedule the repayment structure of
the credit facilities / Loan against residential property, granted by you to my
clients on the legally calculated after all the adjustment of the previous
repayment by my clients into the said credit facility / Loan account.
Furthermore, you are requested to provide the followings for the better
accountability of my clients :-
a)
The detail description of the
calculation of the DUES as on 13th day of January’ 2023 - amount, as
stated in the notice under reference.
b)
The rate of interest charged by
you on the credit facilities / Loan against residential property, provided to
my client.
c)
The statements of Account of
the Credit facilities / Loan against residential property.
d)
The Agreement Copy of the
Credit facilities / Loan against residential property.
e)
The schedule and structure of
the re-payment of E.M.I. of the Credit facilities / Loan against residential
property.
f)
The statements of processing
fees, margin money, rate of interest, service tax, administrative charge,
delayed payment charge, incidental charges, Cheque bouncing charges, late
payment charges, Day books.
g)
The statements of cash and all
other copies of books used in the ordinary business of the finance company, or
bank.
h)
The letter of the reschedule of
the credit facilities / Loan against residential property to my client.
13.
It
is pertinent to say that the period commencing since the month of March’ 2020,
is of a period commencing of pandemic situation which prevented the borrowers
in repayment as well as carrying the business activities meaning thereby
earning of the borrowers stopped unconditionally. Nationwide Lockdown compelled
to protect the life of the Citizen. Such lockdown very slowly released though 2nd
phase of COVID-19 again came into sphere of such pandemic situation and still
going on. The Borrowers are affected to the Pandemic Situation and therefore
even having willingness to repay, failed only doe non-earning capacity due to
such pandemic situation. Legislature’s objective to protect the rights of the
Secured Creditor as well as rights of the Borrowers, meaning thereby
co-operation to each other in growing business perspective. The Secured Creditor
should not indulge in a coercive measure against the borrowers. The Secured
Creditor should co-operate and help our the borrowers in such a hurdle of
pandemic by providing some more time to borrowers in repayment of the financial
facilities, so far.
14.
My
Client effected with the Pandemic situation and still suffering thereby by loss
of earning measures, so far. My Client did never intend not to pay to the
Secured Creditor. My Client need reschedule of EMI in repayment of financial
facilities / Loan against residential property. The reschedule of EMI will
suffice the purposes of both the Secured Creditor and the borrower. My Client
communicated such intention to you on several occasion but yield no result yet.
15.
Please
also treat these objections with reference to your notice under section 13 ( 2
) as the objections made by my clients during the repeated visits to the
branch, which have not been considered and replied to till date.
16.
Without
prejudice to the above contentions it is stated that the notice is illegal,
totally misconceived, baseless, and issued even in contravention of the object,
purpose, and provisions of the SRFAESI Act’ 2002, under the provisions of which
it is purported to have been issued, inter alia, on the following grounds :-
a) That your action is not only
unwarranted but also tainted with motives extraneous to the statutory
provisions of SRFAESI Act. Without prejudice to my client’s right to initiate
appropriate legal proceedings under, inter alia section 19 of the SRFAESI Act,
my client call upon you to desist from such illegal action against the immovable
property.
b) That the said notice is issued
in contravention of Section 13 (3) of the SRFAESI Act’ 2002, As per Section 13
(3), the notice referred in section 13 (2) is required to set out details of
the amount payable by the borrower and the secured assets intended to be
enforced by the secured creditor in the even on non-payment of the secured
debts payable giving details as to sanction, disbursement, repayment, and
outstanding have been mentioned.
The aforesaid details are all the more necessary
because as per section 31 (j), the provisions of the SRFAESI Act’ 2002, shall
not apply in case the amount dues is less than twenty percent of the principal
amount. Therefore, the said notice is not in compliance with the provisions of
the SRFAESI Act’ 2002, itself.
c) Even otherwise, a bare perusal
of the provisions of the SRFAESI Act’ 2002, make it absolutely clear that the
SRFAESI Act’ 2002, is promulgated primarily for the securitization and
reconstruction of financial assets. So, far as the issue of enforcement of
security interest in concerned, it is only secondary to it. Therefore, before
embarking on any action as per section 13 ( 4 ) of the SRFAESI Act ‘ 2002, for
which the notice has purportedly been issued, you are duty bound to ascertain
whether dues can be realized by other suitable measures already provided in the
SRFAESI Act’ 2002, reconstruction can be done even by reschedulement of payment
of debt or by settlement of dues payable by the borrower, the said notice is
untenable in the eye of law, since it has been issued without exhausting other
remedies provided in the SRFAESI Act’ 2002.
d) It is stated that the object
and purpose of the SRFAESI Act’ 2002, is to entitle the secured creditor to
enforce the security without the intervention of the court in appropriate
cases, which, in essence, refer to cases relating to willful defaulters. It is
stated that the borrowers are unable to service its debts for reasons beyond
control for a limited time period. Under such circumstances, it is prudent for
the secured creditors to support the borrowers in its revival efforts so that
interests of all concerned including those of bank can be protected and promoted.
The borrowers are not liable, under law and in equity, to be stripped of their
assets while they struggle to survive against harsh economic realities hold a
fair promise for repayment of the dues of the bank.
e) That the said notice is
premature as its purports to enforce “Security interest” against the property,
which in fact has not been created so far, nor it can be created unless and
until the Central Registry is being set up as per the provisions of Chapter IV
of the SRFAESI Act’ 2002,. Because Section 2(zc) defines “ Secured assets” to
means the property on which security interest is created. While section 20 says
that the Central Government shall set up a Central Registry for the purpose of
creation of security interest under the said SRFAESI Act’ 2002.
f) That the classification of
credit facilities of my client’s account as nonperforming assets / doubtful /
loss assets / is bad in law, because :
1 : classification has done
arbitrarily and without prior notice to my clients.
2 : classification is contrary to
the guide lines / directions issued by the authority established by law to
administer your bank / by the Reserve Bank of India.
Such classification being condition precedent to
the issue of notice under section 13 (2) of the SRFAESI Act’ 2002,
noncompliance with such guidelines / directions vitiates the notice as a whole.
g) That the present notice is not
maintainable as the same is not issued in compliance with section 36 of the
SRFAESI Act’ 2002. Section 36 of the SRFAESI Act’ 2002, states that law of
limitation will apply in respect of the claim made by the bank, and the amount
claimed as on date of your notice is barred by the law of limitation.
h) That as per section 13 of the
SRFAESI Act’ 2002, the bank is bound to disclose in the notice itself the
measures to be taken by the bank towards maintenance and upkeep of the assets
purported to be taken possession of. Admittedly, no such details have been
provided by you.
i) That Section 19 in The Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest Act,
2002 - Right of borrower
to receive compensation and costs in certain cases.—If the Debts Recovery
Tribunal or the Court of District Judge, on an application made under section
17 or section 17A or the Appellate Tribunal or the High Court on an appeal
preferred under section 18 or section 18A, holds that the possession of secured
assets by the secured creditor is not in accordance with the provisions of this
Act and rules made thereunder and directs the secured creditors to return such
secured assets to the concerned borrowers, such borrower shall be entitled to
the payment of such compensation and costs as may be determined by such
Tribunal or Court of District Judge or Appellate Tribunal or the High Court
referred to in section 18B.
IN VIEW OF WHAT
HAS BEEN STATED ABOVE, THE NOTICE DESERVES TO BE WITHDRAWN.
It is requested that the proposal contained in the
opening paragraph number 12, of this letter being a) The detail description of the calculation of the DUES as on 13th
day of January’ 2023 - amount, as stated in the notice under reference. b) The
rate of interest charged by you on the credit facilities / Loan against
residential property, provided to my client. c) The statements of Account of
the Credit facilities / Loan against residential property. d) The Agreement
Copy of the Credit facilities / Loan against residential property. e) The
schedule and structure of the re-payment of E.M.I. of the Credit facilities /
Loan against residential property. f) The
statements of processing fees, margin money, rate of interest, service tax,
administrative charge, delayed payment charge, incidental charges, Cheque
bouncing charges, late payment charges, Day books. g) The statements of cash and all other copies of books used in
the ordinary business of the finance company, or bank. And h) The letter of the reschedule of the
credit facilities / Loan against residential property to my client, may be
given due consideration and acceptance thereof may be conveyed to my client, so
that my client may work towards the repayment according to the reconstruction
of the credit facilities on its reschedule structure of the dues, as
ascertained in a legal manner, prevailing the RBI Guidelines.
Thanking you,
Professionally yours’
Rabindra Nath Das.
Advocate.
High Court Calcutta.
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