IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.8699 of 2008 KRISHNANAND JHA Versus UNION OF INDIA & ORS ----------- Advocate for the Petitioner : (1) Mr. Binod Kumar Singh (2) Mr. P.P.N. Sahi Advocate of the Respondent : Mrs. Nilu Agrawal **** 05 08.08.2008 The petitioner had taken a housing term loan from the Respondent-Allahabad Bank, Katihar branch. It is alleged that the loan was repayable in a period of 10 years. The loan was Rs. 2, 75,000/- in one account and Rs. 1,00,000/- in the second account. Petitioner states that in 2006-07 he was irregular in his payment because of marriage of daughter, but, thereafter, he started paying regular payment after April 2007. Petitioner received a notice dated 01.08.2007 from the Branch Manager of Allahabad Bank, Katihar under reference no. HLC- 245TLHP-12 dated 01.08.2007 pointing out that the petitioner had made defaults and should pay the amount to the Bank. Petitioner responded by Annexure-2, dated 13.02.2008 by his advocate. It is submitted that without any other notice to the petitioner, much less, notice in terms of Section 13 (2) of the SARFAESI Act petitioner was surprised to learn that his residential house was put up for auction in terms of Section 13 (6) of the Act and the same was advertised in the Hindi newspaper Prabhat Khabar issued from Patna. Counter affidavit has been filed and parties have been heard and with their consent the writ petition is being disposed of at this stage. - 2 - It may be noted that while granting stay of further proceedings this Court had insisted that petitioner deposit and clears 1/4th of the total outstanding dues for which action is being proposed to be taken. It is not in dispute that petitioner so deposited the amount. On behalf of petitioner, the first submission is that no action under Section 13 of the SARFAESI Act can be taken without notice in terms of Section 13 (2), thereof, granting petitioner an opportunity to respond and informing the petitioner of the result of his show cause. It is submitted with reference to Annexure-2, aforesaid that there was notice under Section 13 (2) by competent authority. The letter was a general letter from the Manager of the Office. Learned counsel for the Bank submits that the petitioner suppressed the fact that he had received a notice dated 01.08.2007. Respondents have annexed a notice purporting to be that under Section 13 (2) of the Act dated 01.08.2007, which is Annexure-A to the counter affidavit. In the Counter affidavit in paragraph 6, it is categorically stated that it is this notice that the petitioner responded to by Annexure-2. In my view, this stand of the bank cannot be accepted as correct. Petitioner’s response, Annexure-2, is to the Branch Manager, Katihar in response to his notice having reference no. HLC-245TLHP-12 dated 01.08.2007. The notice which the bank is purporting to rely (Annexure-A) to the counter affidavit is a notice issued from the Regional Office of the bank at Budh Marge, Patna and has no reference no. It is not by the Branch Manager and it has no such reference, therefore, obviously, there has been a serious mistake on the part of the Respondent-Bank. - 3 - The consequence, thereof, is that in terms of Section 13 (3- A) as interpreted by Courts in absence of a prior notice under Section 13 (2) and consideration of the show cause filed and an order communicated to the party, pursuant, thereto, no further action can be taken. In other words, if the scheme as contemplated under the first part of Section 13 is not complied with, strictly, then, no further action whatsoever can be taken. Thus, on the face of it the advertisement as issued for sale in terms of Section 13 (4) cannot be sustained and is liable to quash and is quashed, as such. Two objections of petitioner further to be noted, firstly, that the newspaper advertisement is to be issued with a purpose, the purpose is to get the best price for the property being sold so that the property owner is not put to a loss. It is submitted that Prabhat Khabar is not a newspaper circulated or normally sold in the town of Katihar. Specific averments have been made in this effect in the writ petition. Secondly, it is stated that for total outstanding dues now of about 3 lakhs in all property worth Rs. 20 lakhs is being sought to be distress sold. Petitioner had been in the past irregular in payment but not so for more than last one year. Loan was repayable in 10 years i.e. by 2014, then why such drastic action at this time, this in my view is a serious matter to be considered. In view of the finding given above the impugned notification notifying sale, as contained in Annexure-1, in so far as is concerned to the petitioner is quashed. The writ petition is, thus, allowed. Trivedi/ (Navaniti Prasad Singh,J.)