No substantial prejudice being caused apart from the technical objection being raised for demand notice under Section 13(2) SARFAESI, interference by the High Court in its limited scope of judicial review was not called for: SC

The SC on October 27, 2020 {M/S. L&T HOUSING FINANCE LIMITED vs. M/S. TRISHUL DEVELOPERS AND ANR.} held that the objection raised by the respondents was trivial and technical in nature and the appellant (secured creditor) has complied with the procedure prescribed under the SARFAESI Act. It was held that at the same time,   the   objection   raised   by   the   respondents   in   the   first instance, at the stage of filing of a Securitisation Application before DRT under the SARFAESI Act is a feeble attempt which has persuaded the Tribunal and the High Court to negate the proceedings initiated by the appellant under the SARFAESI Act, is unsustainable more so, when the respondents are unable to justify the error in the procedure being followed by the appellant (secured creditor) to be complied with in initiating proceedings under the SARFAESI Act.

It was observed by the Bench, comprising of Justice L. NAGESWARA RAO, Justice HEMANT GUPTA and Justice AJAY RASTOGI, that the notice   under   Section   13(2)   of   the   Act   was   served   by   the authorised signatory of “L&T Finance Ltd.” and that was not the secured creditor is wholly without substance for the reason that “L&T Finance Ltd.” and “L&T Housing Finance Ltd.” are the companies who in their   correspondence   with   all   its   customers   use   a   common letterhead having their self ­same authorised signatory, as being manifest from the record and it is the seal being put at one stage by the authorised signatory due to some human error of “L&T Finance Ltd.” in place of “L&T Housing Finance Ltd.”. It was held that  when it is not the case of the respondents that there was any iota of   confusion   in   their   knowledge   regarding   the   action   being initiated   in   the   instant   case   other   than   the   secured   creditor under the SARFAESI Act for non-­fulfillment of the terms and conditions of the Facility Agreement dated 11th August, 2015 or any substantial prejudice being caused apart from the technical objection being raised while the demand notice under Section 13(2) was served under the SARFAESI Act or in the proceedings in furtherance thereof no interference by the High Court in its limited scope of judicial review was called for. It was held that consequently that the judgment of the High Court is unsustainable and deserves to be set aside.

In   the   result,   the   appeal   succeeds   and   was   accordingly, allowed by the SC. The impugned judgment dated 27th June, 2019 passed by the High Court of Karnataka was quashed and set aside.