According to the HC, the practice of exhibiting the picture of a person and shaming him in public for the sin of not paying back a loan cannot be encouraged in civilised societies
The Kerala High Court has said that only officers specified by the bank's board are entitled to send repayment notices to defaulters and not the lawyer appointed by the lender.
"Only an officer of the bank, as specified by the Board of Directors, can issue a notice of demand under Section 13(2) of the the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI) Act as contemplated under Rule 2(b) of the Security Interest Rules, 2002," Justice AV Ramakrishna Pillai of the Kerala HC said in a recent ruling.
The case relates to a petition filed by one Rajendran and his wife Bobby Sebastian, challenging the notice issued by a lawyer representing ICICI Bank's Thiruvananthapuram branch. They took a home loan of Rs1 crore from the lender and claimed to have paid nearly Rs76 lakh. However, the lender was demanding huge amounts as dues, they alleged. When they disputed the amount due, the lawyer representing the bank sent a notice. This notice was challenged by the couple stating that the lawyer was not competent to issue a notice as he was not an authorised officer of the bank.
In its submission, ICICI Bank said, the notice issued by the lawyer representing them was a notice of demand and constitutes an action. The Bank also citied judgements announced by Calcutta High Court and Rajasthan High Court in similar matters, upholding the view that a notice of demand under Section 13(2) of the Act, issued by a solicitor on the instruction of the secured creditor is valid. However, Justice Pillai of Kerala HC disagreed with the decision of both the Courts and ruled that the notice issued by lawyer to defaulters is not valid.
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