No Fresh Notice Required To Legal Heirs Under SARFAESI | J&K High Court Says Section 14 Can Be Invoked If Borrower Was Served Under Section 13(2) Before Death
Sanchayita Lahkar
The High Court of Jammu & Kashmir and Ladakh Division Bench of Justice Sanjeev Kumar and Justice Sanjay Parihar, in a judgment dated July 9, 2025, dismissed a writ petition challenging an order passed under Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The Court held that the petition was without merit and declined to interfere with the proceedings initiated by a secured creditor to take possession of secured assets.
The Division Bench stated that there was no requirement under Section 14 to issue a fresh notice to the legal heirs of a deceased borrower, provided that due process under Section 13(2) of the Act had been complied with. The Court found that the borrower had been duly served with the statutory notice before his death and had not discharged the liability. The petitioners, being his legal heirs, had also failed to discharge the debt in the intervening period. The Court permitted the petitioners to apply for relief under any prevailing One Time Settlement (OTS) Scheme of the respondent bank, subject to its terms.
The petition was filed by the legal heirs of Late Abdul Aziz Sofi—namely, Mst. Sundri (wife), Mohd. Yousuf Sofi, Mst. Maryam, Mohd. Latief Sofi, Mst. Yasmeena, Mudassir Ahmad Sofi, and Mst. Afroza—residents of Firdous Abad, Batamaloo, Srinagar. The petition was directed against the Jammu & Kashmir Bank Ltd. and Nazir Ahmad Sofi, also a co-borrower.
The core issue in the writ petition pertained to an order passed by the Chief Judicial Magistrate, Srinagar on February 22, 2024, under Section 14 of the SARFAESI Act, 2002. This order had been issued upon an application filed by the respondent-bank to take physical possession of the secured assets mortgaged by the borrower.
The petitioners challenged the impugned order on the sole ground that the application filed by the bank under Section 14 was not maintainable as it was filed against a deceased person, Late Abdul Aziz Sofi, who had passed away on July 24, 2023. According to the petitioners, since the borrower was no longer alive at the time the application was filed on December 18, 2023, the bank ought to have issued a fresh notice to his legal heirs before invoking Section 14.
The petitioners were represented by learned Counsel Mr. Shakir Haqani along with Mr. Asif Ahmad Wani. They contended that the non-issuance of a fresh notice to the legal heirs rendered the proceedings invalid. It was argued that the notice under Section 13(2) issued on March 7, 2023, was of no consequence since the borrower had died thereafter. The crux of their submission was that the process initiated under Section 14 must necessarily be preceded by an opportunity granted to the legal heirs to discharge the liability.
In opposition, Mr. Adil Asmi, learned Counsel representing the respondent-bank, submitted that the legal framework under the SARFAESI Act does not mandate the issuance of a notice to the borrower or guarantor at the stage of proceedings under Section 14. The bank maintained that the relevant statutory notice under Section 13(2) had already been served on the deceased borrower during his lifetime, and he had ample opportunity to respond but failed to repay the dues.
It was further contended by the bank that proceedings under Section 14 are not directed against the borrower personally but are focused on taking possession of the secured asset. The default having occurred, and the statutory notice not having been complied with, the bank had the option to proceed either under Section 13(4) or under Section 14. The bank opted for the latter course and filed an application before the Chief Judicial Magistrate.
The bank’s application was accompanied by an affidavit of the authorized officer as mandated under the SARFAESI Act, and the Chief Judicial Magistrate, after being satisfied with the contents of the affidavit, passed the impugned order.
The Division Bench carefully examined the provisions of Sections 13 and 14 of the SARFAESI Act, 2002, and recorded its conclusions based on statutory interpretation and judicial reasoning.
The Court observed: "The only notice to which a borrower is entitled to is a notice under Section 13(2) of the Act of 2002, whereby the borrower is called upon by a notice in writing to discharge in full the liability to the secured creditor within a period of sixty (60) days."
In relation to the facts of the case, the Court noted: "In the instant case, admittedly, the deceased borrower-Late Abdul Aziz Sofi or, for that matter, the other co-borrower-Nazir Ahmad Sofi did not discharge their liability towards the Respondent-Bank despite having been served with a notice under Section 13(2) of the Act of 2002."
The Court stated that once the statutory notice under Section 13(2) has been served and the borrower fails to comply, the bank is within its rights to invoke Section 14 without further notice.
"Section 14 is invoked by the secured creditor only where the possession of the secured asset(s) is required to be taken," the Bench recorded, adding that "the application... must be accompanied by an affidavit duly affirmed by the Authorized Officer of the secured creditor declaring, inter alia, that a notice under Section 13(2) of the Act, 2002 demanding payment stood served on the borrower."
Further clarifying the scheme of the law, the Court stated: "Section 14 is to be invoked after the borrower has failed to discharge in full his liability to the secured creditor within a period of sixty (60) days despite having been served with a notice under Section 13(2) of the Act of 2002."
In response to the petitioner’s plea for fresh notice to legal heirs, the Court held: "We are not persuaded to agree with the contention of the learned Counsel for the Petitioners that before invoking Section 14 of the Act of 2002, the secured creditor should have issued fresh notice to the legal heirs of the borrower so as to provide them an opportunity to pay the dues in full."
Moreover, the Bench commented on the conduct of the petitioners: "Otherwise also, such an argument cannot be accepted for the reason that despite lapse of about two years, the Petitioners have not discharged in full the liability towards the Respondent-Bank."
The Court examined the consequences of hypothetically issuing a fresh notice and concluded that it would not have changed the result: "Is it the case of the Petitioners that they had the money and were ready and willing to discharge their liability within sixty (60) days, but because they were not given any notice they were deprived of depositing the amount before the Respondent-Bank?"
Ultimately, the Court found the grounds raised to be untenable in law and fact. "Viewed from any angle, the arguments raised by the learned Counsel for the Petitioners are misconceived," the Bench held.
The Court issued its final decision: "The Writ Petition filed by the Petitioners is held to be without any merit. The same is, accordingly, dismissed, along with the connected CM(s)."
Regarding any subsisting orders, the Court directed: "Interim direction(s), if any subsisting as on date, shall stand vacated."
Nonetheless, the Court granted a limited liberty to the petitioners for alternate relief:
"We, however, observe that in case any One Time Settlement (OTS) Scheme is in vogue, as on date, and the Petitioners approach the Respondent-Bank with a fresh application along with the pre-requisite deposits, then the same shall be considered by the Bank strictly as per the terms of such Scheme."
Advocates Representing the Parties:
For the Petitioners: Mr. Shakir Haqani, Advocate with Mr. Asif Ahmad Wani, Advocate
For the Respondents: Mr. Adil Asmi, Advocate
Case Title: Mst. Sundri & Ors. v. Jammu & Kashmir Bank Ltd. & Anr.
Case Number: WP (C) No. 780/2024; CM No. 2034/2024; CM No. 2394/2024
Bench: Justice Sanjeev Kumar, Justice Sanjay Parihar
