SARFAESI Act | Fresh Notice To Legal Heirs Of Borrower Not Necessary To Take Possession Under S.14: J&K High Court

The Jammu & Kashmir High Court has held that a secured creditor is not required to issue a fresh notice to the legal heirs of a deceased borrower before invoking Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002.A Division Bench of Justice Sanjeev Kumar and Justice Sanjay Parihar dismissed a writ petition challenging the proceedings initiated by the bank under Section 14, observing that once notice under Section 13(2) has been served upon the borrower and the liability is not discharged within 60 days, the secured creditor is well within its rights to proceed under Section 14 to take possession of the secured assets.The court said that "We are not persuaded to agree with the contention of the learned Counsel for the Petitioners that before invoking Section 14 of the Act of 2002, the secured creditor should have issued fresh notice to the legal heirs of the borrower."The court added that such a requirement is not envisaged under the scheme of the SARFAESI Act.The case involved borrowers who had availed a loan from the Respondent-Bank but failed to repay. A notice under Section 13(2) of the SARFAESI Act was duly served on them. Upon their failure to clear dues within the statutory period, the bank approached the Chief Judicial Magistrate under Section 14 for taking possession of the mortgaged property.Challenging this action, the legal heirs of the deceased borrower argued that they had not been served with any fresh notice and were thus deprived of an opportunity to repay the outstanding loan.The Court, however, found no merit in the plea. It observed that the Petitioners had not paid the dues even two years after the borrower's death and had not shown any intention or readiness to pay.The said "Assuming for the sake of arguments that the Petitioners were required to be given a fresh notice under Section 13(2)... is it the case of the Petitioners that they had the money and were ready and willing to discharge their liability within sixty (60) days?", noting the absence of any such claim.The Court held that the statutory procedure under Sections 13 and 14 had been followed, and that no fresh notice to the legal heirs was warranted under the law.It observed that if any One Time Settlement (OTS) scheme is in vogue, and if the Petitioners approach the Respondent-Bank with a fresh application and requisite deposit, the bank shall consider the request in accordance with the scheme.APPEARANCE: Shakir Haqani, Advocate with Mr Asif Ahmad Wani, Advocate. for PetitionersMr Adil Asmi, Advocate FOR Respondent no. 1Case-Title: Mst. Sundri and Ors Vs J&K Bank &AnrCitation: 2025 LiveLaw (JKL) 284Click Here To Read/Download Order

SARFAESI Act | Fresh Notice To Legal Heirs Of Borrower Not Necessary To Take Possession Under S.14: J&K High Court

Aleem Syeed

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