Indian Bank v. ABS Marine Products Pvt Ltd

Facts

• Indian Bank classified a loan as NPA and issued a notice under S.13(2)
• The notice did not clearly specify the exact amount due or identify the secured assets
• After 60 days, the bank took possession under S.13(4)
• The borrower challenged the action on the ground that the notice was defective

Issue

1. Whether the S.13(2) notice must specify the exact amount due and details of the secured asset, and what is the consequence of a defective notice.

Held

• The S.13(2) notice must clearly specify: (a) the amount of debt (with breakup of principal, interest, and charges), (b) the secured asset against which enforcement is sought, and (c) an express demand for payment within 60 days. A vague or incomplete notice does not comply with S.13(2) and renders all subsequent action (including S.13(4) possession) without authority of law.

Ratio Decidendi

Procedural compliance with S.13(2) is mandatory. The notice must be clear, specific, and complete. Defective notice vitiates all subsequent enforcement measures. The borrower is entitled to know precisely what is demanded and against which asset.