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ARTICLE

[(2004) 4 SCC 311], the Hon'ble Supreme Court had made it
mandatory to reply to the objections, if any, raised by the
borrower on receipt of the notice issued under Section 13(2)
though there was no such provision under the statute.
Thereafter, Section 13(3A) was inserted by the Parliament,
w.e.f. 11.11.2004, requiring the banks to reply to the
representation, if any, received from the borrower raising
objections to the notice, within 7 days of the receipt of the
said reply. Subsequently, the said time period for replying
to the same has been enlarged to a period of 15 days, w.e.f.
15.1.2013. However, no time period has been fixed by the
said provision for replying to the said notice by the borrower.
There are some instances where courts had quashed the
action of the Banks even when the borrower had
represented to the notice after 60 days of receipt of notice.
In the case of Prabir Chakraborty Vs. LIC Housing Finance representation of the borrower as entire action is being set
Ltd., Calcutta High Court had held that such reply/ aside in case of any delay by the Secured Creditor in replying
representation shall be made within 60 days from the date to the representation beyond the said period of 15 days.
of receipt of the notice.
Assistance by the District Magistrate/
However, in the case of Alphine Pharmaceuticals Pvt. Ltd.
and Ors. vs. Andhra Bank [2020(2)ALD391 ], it was held by Chief Metropolitan Magistrate
the High Court of Telangana that there was no merit in the Taking physical possession of the property is the key to
submission that the objection/representation of a debtor to enforcement of securities. However, generally no borrower
the demand notice issued under sub-section (2) of Section comes forward to hand over peaceful and vacant possession
13 of the Act should be given before the expiry of 60 days of the secured assets nor make payment of the amount. To
from the date of receipt of notice under sub-section (2) of avoid law and order situation, the Act provided for availing
Section 13 of the Act and that in the absence of any such of the assistance of the District Magistrate in non-
stipulation in the statute, such a stipulation cannot be metropolitan area and Chief Metropolitan Magistrate
inferred by the Court. Similar view was taken by the Mumbai (CMM) in a Metropolitan area and when an application filed
High Court in its order dated 23.3.2016 M/s. Blue Coast by a secured Creditor, the DM/CMM should pass orders for
Hotels Ltd. v. IFCI Limited. The Mumbai High Court held that assistance within a maximum period of 60 days of filing of
there was no specific provision and/or mandate in Section such application. However, in practice, such orders for
13(3-A) of the Act that the representation of the borrower assistance would take more than 60 days and this is where
to the demand notice under Section 13(2) of the Act should the intention of the legislature for speedy resolution of NPA
be filed within the period of sixty days from the date of the is being defeated. Hence, effective mechanism needs to be
notice. evolved to assist the Authorised Officers to take physical
possession of the secured assets without loss of time.
Since there is no time limit mentioned in the Act, some
unscrupulous borrowers, to buy time, reply after the period Possession of the Property where
of 60 days thereby causing delay in enforcement of securities
by the Bank. Therefore, the said Section 13(3A) should be Tenancy is Created:
amended to provide for representing to the notice by the Unscrupulous borrowers create sham tenancies to somehow
borrower, say, within 15 days of receipt of the demand wriggle out of the enforcement of security interest. It was
notice from the bank. Further, instead of 15 days time for held by the Supreme Court in the cases of Harshad
replying to the representation of the borrower, it may be Govardhan Sondagar Vs. International Asset Reconstruction
provided that a Secured Creditor Bank cannot take further Company [(2014) 6 SCC 1], Vishal N. Kalsaria Vs. Bank of
steps for enforcement of security without replying to the India, [AIR2016SC530] and Bajrang Shyamsunder Agarwal

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