LEGAL NOTICE

DATE: 9/04/2022
To,
Authorised Officer
IDBI Bank Ltd.,
RAC, Plot No.44, Gr. Fl.,
Sitai Sadan, Suryoday CHSL,
Ambernath Station Road,
Ambernath (E), Thane-421501

SUBJECT: Reply to the Demand Notice, issued u/s 13(2) dated

06th August 2021 and Possession Notice issued u/s
13(4) dated 16th February, 2022.

Sir/Ma’am,

On behalf of and on instructions from our client MR. ARINDAM

BANERJEE and MRS. AKANKSHA BANERJEE, residing at A/104,
1st Floor, Shiv shivam Towers Adarsh Nagar, P Tondon Marg Andheri
West, Mumbai – 400102. We have serious objections regarding the
correctness and authenticity of the amount demanded by you in your
Demand Notice under section 13(2) and Possession Notice under
section13(4) of the SARFAESI Act, 2002 as captioned above. We
hereby give reply to your notice issued dated6 th August, 2021 and
16th February, 2022 is as follows;

1. Our clients state that, they had approached IDBI Bank Limited for
the purpose of availing home loan and had accordingly submitted the
Loan Application to IDBI Bank Limited in the year 2017.

2. Our clients state that, you had approved HOME LOAN of Rs.
2,68,00,000/- (Rupees Two Crore Sixty Eight Lakhs only) We have a

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 strong objection against the amount demanded by you. The original
sanctioned amount was much lower and a significant portion of the
amount has been repaid against the Security of property situated at
Flat No. 102, 1st Floor, Bldg. No. 6-A, Versova, Shubham Karoti
CHSL, Versova Andheri West, Mumbai-400067 and mortgage against
A/104, 1st Floor, Shiv shivam Towers Adarsh Nagar, P Tondon Marg
Andheri West, Mumbai – 400102.

3. Our Clients state that, they have borrowed Home Loan from you in
the year 2017 and they have been regularly paying the EMI of the
loan. Our client is a genuine and honest customer of your Bank, he
does not wish to default on the loan borrowed, but economic
slowdown caused because of Covid-19 pandemic and as a
consequential effect of the same and had also suffered losses in the
business, the loan repayment became irregular.

VIOLATION NO.I
THE CLASSIFICATION OF THE ACCOUNT OF OUR CLINETS AS
NPA WAS FRAUDULENT IN BREACH OF CONTRACT OF LOAN
BETWEEN OUR CLIENT AND IDBI BANK LIMITED.

4. Our Clients state that, their loan account number

0221675100007078 and 0457675100031259 was classified as NPA
on 09/12/2020 without disclosing him the process of accounting
calculations, rate of interest applied for such calculation and the
shortfall by which his account was classified NPA. The IDBI BANK
LTD. did not inform at what rate of interest it has calculated the
outstanding amount to be paid by our client. This action of the IDBI
BANK LTD. was illegal and in violation of RBI Act, banking standards
and banking regulation act and Indian Contract Act. As per section
21 of Banking Regulation Act every Bank, Financial Institution,
Multi-State Co-operative Banks and Co-operative Banks must abide
by the Circulars/Master Circulars, Notifications and Master
Directions given by the RBI.

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 VIOLATION-II

VIOLATION OF RBI CIRCULAR RBI/2020-21/16

DOR.No.BP.BC/3/21.04.048/2020-21 DATED 06 AUGUST 2020
th

5. Our clients state that, when the account of our client was classified
as NPA on 09/12/2020, the abovementioned RBI circular was in
force, and as per the circular and on our client, vide its request letter
dated 15/12/2020 had requested the Bank for restructuring of loan
account No. 0221675100007078and 0457675100031259 with pre-
approved moratorium period of 24 months, however, Bank had
approved moratorium request of our client and had granted
moratorium period commencing from 10/01/2021 to 10/12/2022 on
the outstanding loan amount. In addition to it, Bank had also re-
structured loan account no. 0221675100007078 of our client vide its
confirmation letter dated 30.12.2020 bearing Reference No. IDBI
Bank/2020-2021.
6. As per the letter of confirmation of Restructuring the first EMI of
restructured loan (loan account no.00221675100007078and
0457675100031259) is to be paid on 10th January 2023 i.e. after the
moratorium period, without considering this IDBI Bank Ltd.
maliciously issued the Demand Notice for total outstanding amount
of Rs. 2,78,06,144/- (Rupees Two Crore Seventy Eight Lakhs Six
Thousand One Hundred Forty Four Only) on 6 th August, 2021 with
mala-fide intention to extort money from our clients by threatening
them to take forceful illegal possession of mortgaged property.
7. After the restructuring of the Loan Accounts the classification of the
account is upgraded to the Standard account. Once the Loan
Account has been classified as a Standard account, issuing a
demand notice under section 13(2) & 13(4) of the SARFAESI Act is
illegal, bad in law and make the SARFAESI Act infructuous.

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8. In spite of having restructured our client’s Home loan Accounts you
had violated basic principle of the contract Act and issued notice
under section 13(2) and 13(4) in violation of SARFAESI Act and also
in violation of circular as captioned above and therefore notice issued
by you and classification our client loan account as NPA is bad in
law, void, illegal and need to be struck down.

PROVISION OF LAW
SECTION 21(1) OF BANKING REGULATIONS ACT, 1949:
Power of Reserve Bank to control advances by banking
companies-

(1) Where the Reserve Bank is satisfied that it is necessary or

expedient in the public interest 1[or in the interests of
depositors] 2[or banking policy] so to do, it may determine the
policy in relation to advances to be followed by banking
companies generally or by any banking company in particular,
and when the policy has been so determined, all banking
companies or the banking company concerned, as the case may
be, shall be bound to follow the policy as so determined.

9. Every Authorised officer of the bank is a Public servant within the

provision of Section 46A of Banking Regulation Act and being a
public servant he must follow the due procedure of law, failing which
a public servant would commit an offence by disobeying the direction
under the provisions of the Banking Regulation Act, 1949 which is
punishable offence u/s 166 &167 of Indian Penal Code.

VIOLATION NO.III
ISSUE OF NOTICE UNDER SECTION 13 (2) OF THE SARFAESI ACT
IS COMPLETELY ILLEGAL AND IN VIOLATION OF SECTION 13(3)
OF SARFAESI ACT

10. Our clients state that, it is a settled principle of law that

whenever the bank issues notice of demand of outstanding dues by
the borrower it shall issue demand notice under section 13 (2) of the

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 SARFAESI act, the bank shall give complete details of the loan which
will include the type of loan, amount of loan, tenure of the loan, the
rate of interest, the type of interest, namely simple rate of interest or
compounding rate of interest, whether the rate of interest shall be
calculated on the basis of monthly rest, quarterly rest, half yearly rest
and yearly rest, the penal interest that would be charged on the late
payment received from the borrower etc. The IDBI BANK LTD. has
completely failed in providing above-mentioned monetary details in
their demand notice sent to our client.

Section 13 (3) provides: The notice referred to in sub-section (2) shall

give details of the amount payable by the borrower and the secured
assets intended to be enforced by the secured creditor in the event of
non-payment of secured debts by the borrower.

11. The principle of law regarding the issue of demand notice u/s
13(2) and the mandate on the bank as per Section 13(3) to give full
details of the loan under the SARFAESI Act 2002 to the borrower, has
been settled by the Hon’ble Gujarat High Court in the case of Ajay
Hargovind Das versus authorized officer Rajkot Sahakari bank.

At this stage, this Court would like to refer to the order dated
14.11.2019 passed by the Coordinate Bench of this Court in
Special Civil Application No.19918 of 2019. In the said order,
this Court observed in para 7.1 to 7.3 as under:
"7.1 Reading subsection 3 of Section 13 makes it clear that a
notice under Subsection 2 shall give details of the amount
payable by the borrower. If Ms.Lodha's submission were to be
accepted, then the word "shall give details" would be rendered
negatory. Therefore, to suggest that notice should only give
the final figure, in my opinion, is not in accordance with the
provisions of Section 13(2) of the Act. The recovery Tribunal
has considered this issue in para 9 of the judgment, which
reads as under: "9. Respondent Bank issued Demand Notice
dated 29/12/2014 under Section 13(2) of SARFAESI Act
2002 for an amount of Rs.9,11,99,276.92 outstanding in Cash
Credit Limit and amount of Rs.81, 19, 651/ outstanding in
Term Loan Account.”

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 12. Our client states that they being a bona-fide customer of IDBI
BANK LTD. they got a fundamental right to get the true and correct
outstanding loan account statement along with rate of interest
charged as per the RBI Master Circular to calculate the pending EMIs
and Penal interest levied upon the borrower.

13. Hence the Demand Notice issued by your Bank u/s 13(2) and
13(4) of the SARFAESI Act is illegal and bad in law. The amount
demanded in your notice dated 06/08/2021 is illegal with mala-fide
intention of extorting money from our client you have initiated illegal
SARFEASI proceedings against our client. Our client shall exercise all
rights available under the law to protect their property from illegal
proceedings by the IDBI BANK LTD.

VIOLATION NO.IV
VIOLATION OF EXPLANATION (B) OF SUB SECTION 9 OF SECTION
13 OF SARFAESI ACT, 2002

14. Our client states that as per explanation (b) of sub rule 9 of section
13 of the SARFAESI Act, 2002 (b) “amount outstanding” shall
include principal, interest and any other dues payable by the
borrower to the secured creditor in respect of secured asset as per the
books of account of the secured creditor. Our client state that your
Bank has violated this provision of law while calculating the amount
outstanding and declaring the borrower’s account as NPA. Our client
has discovered that the your Bank has done accounting fraud while
declaring the our client’s account as NPA, issued notice by violating
provisions under section 13 (2) and 13(3)
15. The question of law under the above provision has been settled by the
Hon’ble Punjab & Haryana High Court in the case of M/S Amar
Alloys Pvt. Ltd vs. State Bank Of India on 17 May, 2019, it was held
that;

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 “From the aforesaid, it clearly emerges that the decision of the Bank
before classifying an asset as NPA should be based on the record of
recovery. An account which has some temporary deficiencies like
non- availability of adequate disbursing power based on the latest
available stock statement, balance outstanding exceeding the limit
temporarily, non- submission of stock statements and non-renewal of
limits on the due date etc., should not be classified as NPA. Further,
the Reserve Bank of India in its Master Circular dated 01.07.2015 in
Clause 4.2.4 thereof enumerated various guidelines which the Bank
must follow for the removal of the temporary deficiencies. Clause
4.2.5 of the said Master Circular mandates that where the arrears of
interest and principal are cleared by the borrower in the case of loan
accounts classified as NPAs, the accounts should not be any longer
treated as non-performing and may be classified as 'Standard'
account. Thus, in nutshell, it is concluded that where the borrower
expresses willingness for regularizing the loan account by
discharging the arrears of interest and principal, the Bank/financial
institutions are obligated to accept the same as per mandate
expressed in the Master Circular dated 01.07.2015 issued by the 26
of 30 Reserve Bank of India in exercise of powers under the 1949
Act and declare the account to be 'Standard' account.”

VIOLATION.NO. V
ISSUE OF POSSESSION NOTICE UNDER SECTION 13 (4) OF THE
SARFAESI ACT WAS ILLEGAL

16. Our Client states that, after the restructuring of the Loan Accounts
the classification of the account is upgraded to the Standard account.
Once the Loan Account has been classified as a Standard account,
issuing a demand notice under section 13(2) & 13(4) of the SARFAESI
Act is illegal, bad in law and make the SARFAESI Act infructuous.
The loan account of our client was declared NPA illegally, and the
subsequent notice under section 13 subsection 2 of SARFAESI act

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 was also illegal, hence all subsequent notices and order obtained by
your bank under SARFAESI act and SARFAESI Security
(Enforcement) Rule 2002 to take physical possession of the secured
asset is also illegal. The law applicable here is the legal maxim Sub
Lato Fundamento Cadit Opus, that means when the foundation is
removed the building falls.

17. The said principle of law has been settled by the Hon’ble Supreme
Court/high court of Madhya Pradesh in the case of Vinod Singh
Tomarvs Union of India. It was held as

“25. More so, if the initial action is not in consonance with law,
the subsequent conduct of a party cannot sanctify the same.
"Sublatofundamentocadit opus"- a foundation being removed, the
superstructure falls. A person having done wrong cannot take
advantage of his own wrong and plead bar of any law to
frustrate the lawful trial by a competent Court. In such a case the
legal maxim NullusCommodumCaperePotest De InjuriaSuaPropria
applies. The persons violating the law cannot be permitted to urge
that their offence cannot be subjected to inquiry, trial or
investigation. (Vide: Union of India v. Maj. Gen. MadanLalYadav,
AIR 1996 SC 1340; and Lily Thomas v. Union of India &Ors., AIR
2000 SC 1650) Nor can a person claim any right arising out of his
own wrongdoing (jus ex injuria non oritur) illegal acts don not
create law"

18. Our clients state that, your bank has restructured their loan
Accounts in 30 December 2020 with pre-approved Moratorium period
for two year after the sanctioned of the loan. As per the loan
restructuring and grant of moratorium confirmed by IDBI Bank Letter
dated 30.12.2020 the due date of the first EMI of the sanctioned loan
is 10st January 2023.

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19. When our client’s Loan accounts mentioned above was classified as
Standard and their Loans were restructured by offering moratorium
as given in the foregoing paragraph. Therefore initiating SARFAESI
proceedings against our client to recover the outstanding loan by
sending a Possession Notice is illegal and bad in law. Being a Finance
company you are duty bound as per RBI Act & section 21 and 46A of
Banking Regulation act you must follow due procedure of Law.

20. We call upon you to give us a copy of following documents which are
in your possession and which are necessary for the determination of
true and correct amount of outstanding loan, in the loan account
Nos. 00221675100007078 and 0457675100031259.

1. Copy of Loan Sanction Letter along with terms and conditions

containing of rate interest charged, rest period, penal interest,
expenses to be charged, insurance amount to be debited, other
miscellaneous expenses, repayment schedule and security
terms mentioned in the said sanction letter and acceptance to
it by my clients and their guarantors for Loan Account Nos.
00221675100007078 and 0457675100031259
2. Copy of Loan Restructured Sanction Letter for Loan Account
Nos. 00221675100007078 and 0457675100031259
3. Copy of the circular of Reserve Bank of India, directing Bank,
NBFC and Housing Finance companies to charge rate of
interest, penal interest and expenses to the loan account of the
category of Entrepreneur under which it is advanced to the
loan account of Applicant
4. Copy of the latest statement of loan account with narration of
debit and credit entries since inception till today, reflecting
payment made by our clients.
5. Copy of the supporting vouchers of the entries debited/credited
in the Loan Account inclusive of penal interest, insurance

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 premium and other expenses debited in the loan account of our
clients since inception.
6. Copy of the letter through which it was informed to our clients
and their guarantor that the loan account becomes NPA, the
date of the NPA and the exact ledger balance on the date of
NPA.

If you fail to give us the copy of abovementioned documents would

mean that the method of calculation adopted in the demand notice
under Section 13(2) of SARFAESI Act is factually incorrect and our
client as your borrower has full right to seek the copy of
abovementioned documents. Our clients are ready to pay the
photocopying and other related cost to your bank for the copies of the
demanded documents.

In view of all violations of law and illegal action taken by the bank,
you cannot take any coercive action against our client. If you
continue to take further illegal action then our client shall be
compelled to initiate Legal Proceedings including but not limited to
civil, criminal, banking ombudsman and consumer forums among
others.

SANDEEP SHEREGAR MITA RUDANI

ADVOCATE HIGH COURT ADVOCATE HIGH COURT

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