SPEED POST/COURIER Dated: 17.2.17 REPLY / OBJECTIONS TO DEMAND NOTICE UNDER SECTION 13 (2) OF THE SECURITIZATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND
ENFORCEMENT
OF
SECURITY
INTEREST ACT, 2002 ON BEHALF OF ALL THE NOTICEES. To, The Authorised Officer Capital First, 401-407, Technopolis Knowledge Park, Chakal Road, Andheri(E) Mumbai-93 Dear Sir, Your notice dated 22.12.2016 under section 13 (2) of the Securitization Act which has been received by our clients (i) Anil Chadha (ii) Satvik Chadha (iii) Mr. Ankit Chadha (iv) M/s Chadha Engineering Pvt. Ltd. has been placed under our hands and under instructions of our aforementioned clients we wish to represent against the captioned notice and raise the following objections:
PRELIMINARY OBJECTIONS:
a) At the outset, It is submitted that Notice under reply has not been duly served timely to our clients and the same has been hold it back deliberately by your`s officials for their vested interest. b) That the issuance of notice under reply is not tenable and bad in laws as it is settled position of laws that NBFC i.e. NonBanking Financial Companies
is not entitled to invoke the
provisions of SARFAESI Act and it`s allied rule. Since, admittedly, you are designated as NBFC and hence cannot invoke the provisions of SARFAESI laws. In view of this settled legal position, the notice dated 22.12.2016 is non est and null and void ab initio.
c) That it is also pertinent to mention here that, in facts, you and your authorized representatives approached us for obtaining the loan at very competitive rates @ 6%, but despite repeated requests and in pursuance of your hidden agenda you did not issue any sanction letter for grant of the loan in question.
d) That it is also not out of context to mention here that your authorized representatives has
obtained certain blank
agreements signed by us on the pretext that the same will be mere formality for the sanctioned of loan.
e) That you have already invoked the arbitration clause of alleged agreements, and therefore the notice under section 13(2) of SARFAESI Act is not tenable and null and void ab initio. f) That the notice under reply is bad and non-maintainable as it is well settled law that the lenders owe a duty to act fairly and reasonably while dealing with the borrower and they are not free to act in arbitrary and capricious manner. In Mardia Chemicals vs. Union of India [2004 (4) SCC 311] the Apex Court has stated that while exercising powers under Section 13 the responsibility and onus to act fairly and reasonably is very high as Section 13 of the SARFAESI Act gives power and discretion to the secured creditor to take coercive recovery action as contemplated under Section 13(4) of the SARFAESI Act without the intervention and / or supervision of any judicial or quasi judicial authority. g) That the notice under reply is bad and non-maintainable as the same has not been signed by any officer equivalent to the rank of Chief Manager and above which is mandatory for such a notice. h) That it is stated that the notice under reply has been issued in a casual and mechanical manner disregarding the mandatory pre-requisite as provided under the SARFAESI Act thereby making the same bad in law.
i) That the notice under reply is bad and non-maintainable as the details of the alleged liabilities as contemplated under Section 13 of the Securitization Act have not been provided to our client. The statement of account in respect of each of the alleged NPA accounts has not been provided which is also mandatory before proceeding under Section 13(4) of the Securitization Act. It is submitted that the notice under reply has not been accompanied by the detailed statement of accounts thereby preventing our client from ascertaining the correctness of the alleged liability/alleged outstanding amounts stated in the notice which is one of the important conditions for a legal notice under Section 13(2) of the Securitization Act. j) That the notice under reply is bad and is liable to be withdrawn as the value of the alleged securities is more than the alleged outstanding amounts which outstanding amount is also disputed by our client. It is settled legal position in view of the judgment of the Apex Court in M/s Transcore Vs Union of India and another reported as 2006 (12) SCALE 585 wherein it has been held that the secured creditor may take an action under Section 13(2) / 13(4) of the Securitization Act where the debtor has failed to maintain the value of the security which is not there in the present case. k) That the notice under reply is bad and is liable to be withdrawn as the bank has charged interest at the rates and rests which was never agreed upon by our client and the same is also not
in consonance with the practice prevalent in the banking industry. l) That the notice under reply is bad and is liable to be withdrawn as the statement of accounts are wrong and non justifiable as the same have not been maintained in the ordinary course of banking business; and each and every entry is disputed, individually and specifically. All alleged transactions including the balances pleaded in the notice or otherwise, are vehemently denied individually and specifically. The ledgers have not been maintained correctly by the bank. It is made out from the notice under reply that the bank has charged interest at exorbitant, excessive and usurious rates. The bank is not entitled to either charge or claim interest at the rates and rests as claimed in the present notice. According to the guidelines and directions of Reserve Bank of India, interest at such exorbitant rates and rests as charged and claimed by the bank as stated in the notice under reply is not permissible. The bank cannot charge interest at such excessive rates and rests and also without express consent of our client. m) That the notice under reply is bad, unwarranted, uncalled for as there has not been any cause of action for the issuance of the said notice under section 13 (2) of the Securitization Act. n) That our client deny all allegations of default or alleged liability as stated in the notice under reply and/or the right of you to
enforce security interest under Section 13 of the Securitization Act.
PARAWISE REPLY That unnumbered para of the notice under reply in so far as the submissions with regard to sanction and disbursement of loan to our client is concerned the same are specifically denied to the extent of inconsistency with the records. 1. That Para (1) of the notice under reply is wrong and hence denied.
It is specifically denied that our clients have been
irregular towards repaying the outstanding dues along with contractual dues and inspite of repeated requests and demands our clients have failed to repay the outstanding loan dues along with contractual dues and charges due to which loan account of our clients has been classified as NPA in accordance with the directives and guidelines set by the RBI as alleged. 2. That Para (2) of the notice under reply is wrong and hence denied. It is specifically denied that in view of the default made by our client the loan granted to our clients is recalled as alleged. it is also specifically denied that our clients are liable to pay any amount leave aside the alleged outstanding amount of Rs.21,976,509.55/- as on 19.11.16 as alleged. It is submitted that our clients approached on several occasions to your office
and meet your official concerned to sort out the matters. However, it was always assured by your official to my client that matter would be sorted out at the earliest after considering all the concessions as per prevailing policies. 3. That Para (3) of the notice under reply is wrong and hence denied. It is specifically denied that our clients have neglected and failed to pay the dues outstanding to Capital First Ltd. with respect to the said loan duly secured by the securities as alleged. It is also specifically denied that our clients are liable to pay the alleged outstanding amount of Rs.21,976,509.55/- as on 19.11.16 within 60 days from the date of the said notice together with future interest at the alleged contractual rate with additional interest on the alleged amount and all related dues, charges, cost and expenses incurred w.e.f. 21.11.6 onwards till realization as alleged.
It is also specifically denied that any
action U/s 13(4) including power to take possession of the secured asset pursuant to the notice under reply is maintainable against our client as alleged. 4. That Para (4) of the notice under reply is wrong and hence denied.
It is specifically denied that our client could be
restricted from transferring the secured asset or creating any interest or rights by way of tenancy or license or any other rights whatsoever in or over the secured asset without obtaining
written consent of the secured creditor as alleged. It is also specifically denied that our client is punishable under section 29 of the Act in the condition of non-compliance of the above provision under section 13(13) of the said Act as alleged. 5. That Para (5) of the notice under reply is wholly misconceived and hence the same is denied. It is specifically denied that our clients are obliged to comply with the demand notice to avoid further action under the SARFAESI Act as alleged.
In view of the above we hereby call upon you to withdraw the notice under reply the same being false, frivolous, illegal, coercive, nonmaintainable and violative of RBI guidelines We further maintain that this reply should also be treated as representation/objection u/s 13(3A) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. Copy retained for necessary action.
