DRT  Legal  Solutions

(Debts Recovery Tribunal Legal Solutions) is an India based

Law Firm since 2000 specializing in DRT, Securitisation, Sarfaesi & Defense of Borrowers in Debts Recovery Tribunals

Pioneer in Counter-claims and Damage Suits based on Law of Torts and Law of Damages.

Law of Damages also applied in cases of Defamation & Real Estate (RERA Act 2016)

Phones (India) - Mobile - +91-9691103689, Off. & Res. +91-731-4049358

E-mail :- ramkishandrt@gmail.com  Web Site :- www.drtsolutions.com

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Expert in:- DRT, Counterclaim, securitization, debt recovery tribunal, NCLT  matters




20th July 2024, Saturday

DRT Cases particularly those who have just received notices u/s 13(2) or 13(4) will be greatly benefited if they ring to us at Mob - 9691103689 (from 11AM to 6 PM on weekdays:- You get instantaneous advice on the said mobile no

Best Approach in DRTs for Borrowers & Guarantors :-  (1) If you are our client, our consultation is available to you at any time on 24/7 basis. (2) We encourage you to acquire basic knowledge so that you may interact with us as well as your advocate properly. (3) We insist that you must always be present in the Court along with your advocate. If you have any problem in the court, you get instantaneous advice on our mobile no. 9691103689. We follow best after sales service. Some of our clients who came to us for even more than 15 years back still contact us and get the same service

Safeguards under Sec 13(2) of Sarfaesi Act - Pl contact us on phone as soon as you received notice under Sec 13(2) of Sarfaesi Act, we shall advice you for necessary precautions and safeguards. The provisions under Sec 13(1), 13(2) and 13(3) are very important. You must understand the same thoroughly well before preparing your representation and objections. Just after filing the representation and objections under Sec 13(3-A), the Secured Creditor i.e. the Bank is required to give reply within 15 days with reasons on each representation and objection. It is observed in most of the cases, the said reply is not given properly with reasons on each representation and objection, the Borrower may consult us and may file a writ petition before the High Court. You will be greatly benefited if  you study our relevant page of this web site by clicking here Securitisation Act-Comments .

Safeguards under Sec 14 of Sarfaesi Act - Pl contact us on phone as soon as you received notice under Sec 13(2) of Sarfaesi Act, we shall advice you for necessary precautions and safeguards. As soon as you get notice u/s 13(4), please check up whether the bank has filed any application before the Magistrate or CMM. Be very careful and vigilant in dealing with the proceedings going on in the court of the Magistrate or CMM. Check up various court documents and if necessary, file SA with an injunction application before the DRT. You will be greatly benefited if  you study our relevant page of this web site by clicking here Securitisation Act-Comments  .

Best Defence for Borrowers is Counter-claim in DRT, in OA as well as in SA - Pl contact us on phone as soon as you receive notice under Sec 13(2) of Sarfaesi Act, we shall advise and explain this particular aspect in detail. There is specific legal provision of counter-claim in DRT Act and hence the same can be pleaded in reply to the OA. As regards SA, the counter-claim can be filed in the SA itself. There is specific legal precedent by way of a 2011 ruling of DRAT Delhi for details of which you may please click here at http://www.drtsolutions.com/counterclaim-SA.htm  

Counter-claim can be filed at any stage since it is based on law of torts and continuing cause of action and hence there is no limitation. In one case we filed a suit for counter-claim after 21 years and the said suit was entertained in the court of law. The counter-claim based on the law of torts is a right in rem and not right in personam.

Appeal to DRAT - Problem of 25% Deposit - Only Solution is Appeal as Indigent Person :- As per Sec 18 of the SARFACEI Act, 25% of the amount of debt claimed by the secured creditor or determined by the DRT whichever is less is to be deposited in DRAT before the Appeal is entertained. If the borrower is not having this amount but he intends to appeal, he should file the Appeal as Indigent Person vide details in O-33 of CPC.    

DRT is the first Court of Fact :-  All the material facts are to be pleaded with documentary evidence so that the said facts can be proven. The counter-claim is to be pleaded. In almost all the cases, the counter-claim is more than the claim of the bank and hence there is no debt due. Under such facts and circumstances, no recovery can be made till the debt due is finally decided.  

DRAT is the Court of Appeal :-  Appellate DRT ie DRAT is the Court of Appeal. If the final order issued by the DRT is defective, it can be questioned in DRAT. As per the Securitisation Act, the Appeal in DRAT requires minimum deposit of 25% of the debt due or as determined by the DRT whichever is less. If the borrower does not have this amount, as stated above, he should appeal as an Indigent Person. The borrowers must understand this particular aspect. If you have any doubt, please discuss with us on phone M-9691103689.

High Court is the Court of Law and the Supreme Court is Court of Justice :-  These aspects must be understood thoroughly. The borrowers must understand this particular aspect. If you have any doubt, please discuss with us on phone M-9691103689.  

Exhaustive details on SARFAESI Act :-  The  borrowers who desire to have further exhaustive details on the SARFAESI Act may visit the specific page by clicking Securitisation Act-Comments 

Borrower should be serious about the happenings in the above Courts :-  (1) The borrower should discuss the matter with his advocate at least a week in advance. (2) The borrower must always be present in the court along with his advocate. (3) If there is any shortcomings by the advocate, the borrower must point out the same before the judge. (4) The borrower must ensure that written arguments are always submitted. (5) The borrower must go through the DRT Act, SARFAESI Act and CPC so that there are no violations of law. (6) The borrower must go through digests on these Acts so that he is aware of and can submit important and relevant judgments to his advocate. (7) The borrowers must understand these important aspects. If you have any doubt, please discuss with us on phone M-9691103689.

Attitude of Banks, DRTs and Courts:-  There is predominant role of  bureaucracy. The bank officials instead of taking action at their ends, they push the matters to DRTs and Courts which are heavily overloaded. The judges either adjourn the matter or take obviously short decisions. The advocates simply help such system which results in long drawn pendency. There are now more than 5 crores cases pending in courts. If the borrowers pursue their cases vehemently, the bank advocates adopt such attitude so that the case is unduly delayed. They even push up the cases from DRT Act and SARFAESI act to Arbitration Act. The banks adopt measures such as declaring the borrowers as wilful defaulters without following the prescribed RBI Guidelines. All these require the borrowers to understand that the fight is long drawn and expensive. If you have any doubt, please discuss with us on phone M-9691103689.

Pleadings in DRTs should include all the facts with documents about the Business, Industry, Borrower and the applicable laws including RBI Guidelines :-  DRT is a trial court. Since normal practice of banks and their advocates is to deny all the facts pleaded by the borrower, the borrower has a right to prove all such facts by the application of law of evidence. Hence borrower should be careful to plead only those facts which can be proved without any hitch. As stated above and at various places in this web site, counter-claim by the borrower is the only complete defence. The pleadings relating to counter-claim are to be based on project report, balance sheets, actual achievements as well as the injuries and damages suffered elaborating direct pecuniary loss, loss in business opportunities, loss in image, reputation and damages suffered due to stress and mental tension, aggravated damages and exemplary damages. The borrower may study other pages of this web site particularly  Notes-Law of Torts and Notes-Damages The borrowers must understand these important aspects. If you have any doubt, please discuss with us on phone M-9691103689.

Discovery of Facts:- As stated above, the pleadings must contain all the material facts. The source of facts is the documents. Sometimes the supporting documents are not available with the borrower but are available with the banks. Normally the banks do not supply the said documents. The borrowers may use the tool of RTI Act to obtain such documents. Even during litigation, the borrower may invoke the provisions under Order 11 of CPC to discover the facts as well as the documents. If you have any doubt, please discuss with us on phone M-9691103689.

Principles of Natural Justice:- All the Tribunals, Courts and Advocates in dealing with the recovery cases of the borrowers have to follow the principles of natural justice. The borrowers must understand the said principles. The CPC is well known codification of the same. The said principles not only cover the CPC but go much beyond. Supreme Court of India Judgment - The DRTs even can go beyond CPC' in the matter of 'ICICI Ltd vs Grapco Industries Ltd' decided on 14.05.99. Full text of the judgment with our comments is available vide link http://www.drtsolutions.com/ICICI-Grapco.htm Important portions of the judgment have been marked in Red..

Main Problem in Industrial Finance:- It is on account of difference in the approach of the term lender and working capitol provider. The term lender looks to the security by way of fixed assets. On the other hand the working capitol provider looks to the viability of the project and profit generated. The intervening facts and circumstances are ignored. Many good projects are suffering due to this approach. The borrower should keep this aspect in mind when approaching to the financial institutions and the banks.

Survival during Litigation and longevity:-  During bank litigation, one of the most important aspect is survival. The borrower has numerous problems and challenges such as home and office expenditures, court fees, advocates fees etc. It must be understood that the bank has no such problems and it will fight from DRT to Supreme Court. Before entering into the litigation, the borrower must assess and estimate such expenditures and decide the sources from which such expenditures will emanate and then only the litigation should be undertaken or negotiations for settlement be carried out. It is a fight between the weakest and the mightiest. Since the battle is long drawn, the borrower must pay attention to health of his own and that of his family. Longevity and financial strength will alone ensure success in the litigation. That is why our website has lot of material on these aspects. I myself is very cautious. My date of birth is 01.01.1943 and my wife is 5 years younger. We both keep our self hale and hearty though I am above 81 years. If you have any enquiry, please discuss with us on phone M-9691103689.

Importance & Necessity of Self Study of Legal and Health Aspects:-  The DRTs and other courts are heavily overloaded. The judges are overburdened. Hence it is not possible for them to deliver relevant, comprehensive and quality judgments particularly due to complex facts of business, industry and law involved in DRT Litigation. The borrowers are therefore advised to study the relevant legal books pertaining to DRT Act, SARFAESI Act, CPC, IBC CODE, 1916 (Insolvency and Bankruptcy Code, 2016), Principles of Natural Justice, RBI Guidelines and digests relating to all these legal aspects. Important digests are - (1) by Dr. R.G. Chaturvedi on Law and Practice of Securitisation and (2) by Srivastava on Securitisation Debt Recovery Laws. They should study all these and discuss with their advocates. They must always be present in the DRT and other courts. With passage of time, they will understand the relevant legal aspects. They should help their advocates in drafting the legal documents to be submitted in DRT and other courts of law. As stated above, longevity, financial strength and adequate free time are also very important. This is how they can achieve success. Its a long drawn battle involving full time and expenses. The judgments thus obtained will help not only the borrowers but to the whole society. 

Future of DRTs:-  The sphere of DRTs as Tribunals is questionable as they are already overloaded. In England, it took more than 150 years for the tribunals to be bound up. The administrative tribunal in our country was also closed. The problem is that the functioning of tribunals is based on principles of natural justice the scope of which is quite vast to encompass justice, equity and good conscience. Procedurally it goes even beyond CPC. To expedite the bank recoveries, the Tiwari Committee of RBI came up with the proposal of DRTs in 1970. The BIFR Act came in 1985 and it was rescinded later on in 2016. The DRT Act was enacted in 1993. When difficulties were experienced in DRTs, the Securitisation Act was enacted in 2002. The NCLT Act was enacted in 2013. All these have complicated the judicial process and have created huge burden on High Courts and Supreme Court which are already overloaded. Many DRTs do not have Presiding Officers. All the DRTs are also heavily overloaded.   Under such facts and circumstances, the DRTs do not have promising future.

Use of Modern Technology in DRTs:-  The DRTs have started using modern judicial and court room technology. All the cases and documents can be filed online. The status of pending cases are also available online. The DRT advocates are well aware about the use of relevant technology.

Damages and Compensation to Allottees in Real Estate - RERA Act 2016:-  The field of Real Estate has been ruled by the Promoters by operating a Salers' Market in league with the bureaucracy of the local authorities. The RERA Act 2016 has changed the complete scene. Recently we got an opportunity to study the various legal and procedural aspects. Accordingly we have prepared  loss and damage claim (more than Rs 34 crores) on behalf of an allottee for a 3 bedroom flat in Indore. This claim will be filed under Sec 12 of the RERA Act 2016. Interested persons may discuss various aspects on phone. Impact of SARFAESI and RERA Acts - RERA is a subsequent Act and the interests of Allottees are to be given priority. In certain instances, the financial institutions may assume role of Promoters after considerations of all factors. RERA is a powerful enactment. It is a consolidation and continuation of all the real estate laws. Whenever you intend to buy a flat, please study complete details from the RERA website, examine other projects of the promoter, meet the residents, study the law involved, study the documents etc before making any payment. The promoters make tall claims, their impressive brochures and newspaper advertisements are very attractive, don't get misled otherwise you will be in trouble and coming out will be very difficult. Before making any payment, you should consult proper and expert person in a bank. You should keep all the documents and brochures in record which will be useful if there is any litigation.

DRT Judgments Favourable to Borrowers and Guarantors – Now Full text of such Judgments is being provided on this Web Site with Important Portions marked in Red For reference of such judgments please click DRT Judgments Favourable / Useful to Borrowers

Useful Analysis of NPA Recovery by Banks and Counter-claim is the Best Defense of Borrowers:-  The following article will be highly useful to the Borrowers and Guarantors particularly those facing litigations in DRTs:- 

NPA Recovery by Banks - Counterclaim is the Best Defense of Borrowers

-         Ram Kishan*


The Supreme Court of India had delivered a landmark verdict on the Securitisation Act. The said verdict had been the turning point in the legal history of DRT Act and Securitization Act. Full text of the said ruling can be seen on this web site by clicking http://www.drtsolutions.com/sc_judgment_on_drt,_securitisation,_transcore.htm  In this article, important legal and practical aspects of the said ruling have been analyzed with particular reference to the status and legal defense of the borrowers and their counter-claims in DRTs. 

Important Judgment of Supreme Court on Securitisation Act:-

 The Supreme Court of India has ruled vide Transcore vs Government of India and Indian Overseas Bank, decided on 29th November 2006 that during pendency of recovery proceedings under DRT Act, 1993, the applicant banks and financial institutions can also invoke Securitisation Act, 2002 (also known as NPA Act) Prior to this judgment, the lenders were debarred from  simultaneous proceedings under both the Acts and therefore were required to withdraw their recovery applications from DRTs before invoking the Securitisation Act. On account of removal of such restriction, the secured creditors has wielded all the powers hitherto desired and sought after by them. In this article certain important legal and practical aspects pertaining to litigations under Securitisation Act and DRT Act. and impact on the resultant adjudicatory legal process have been analyzed so as to be of practical utility for the lenders as well as the borrowers.  

Categories of Defaulters:-

The recovery cases can be divided in two broad categories viz. willful defaulters and secondly genuine borrowers turned defaulters for no faults of theirs. The provisions of law contained in DRT Act and NPA Act applied through special courts of DRTs provide adequate legal framework to accomplish recoveries from the defaulters. It is needless to mention that no businessman would like to make his unit sick and close down his business voluntarily. Many a times, the circumstances are beyond his control due to which his business or industry become sick such as natural calamities, deficiency of funds, inadequate working capital, inordinate delays in formulation of rehabilitation plans by the banks and FIs etc.  During such time, if the bankers do not provide timely and adequate financial assistance, the borrower undergoes acute financial miseries, loss and damages and then dragged to face undesirable litigation for recovery of alleged dues.  

Legal process in DRTs:-

The secured creditor approaches DRT with prescribed format of application stating that financial assistance was sanctioned, documents were executed, there were defaults, the account became NPA and hence recovery suit has to be filed within limitation period of three years. The recovery amount is arrived at by adding the compound interest on monthly rests and the DRT is requested to issue the recovery certificate for the amount prayed along with compound interest till the date of payment. The borrower in his written statement of defence, describes the circumstances on account of which the unit became sick and prays for rehabilitation so that the unit runs and the installments of loans and interest are paid out of the earnings. In most of the cases, such defence is ignored and the recovery certificate is issued for the amount prayed for by the applicant lender. All his assets may be sold and there may be balance amount for which he and his heirs may continue to be debted and pursued for recovery. He may be even arrested and jailed. This is the price genuine borrower may have to pay for his entrepreneurship in India. This model is pathetically illustrated by the farmers committing suicides due to bank loans They have no resources or knowledge to fight the thrusted recovery litigations or raise their counter-claims. In some cases where the secured assets are those which can be quickly sold such as residential properties, the secured creditor invokes the Securitisation Act to take possession of the said properties and sell the same without any adjudication in any court of law including DRT. These are the most simple instances of recovery litigations. Complications and complexities are further introduced by the factors like consortium lending, term loans from FIs, public issues, foreign exchange dealings, preparation of rehabilitation plans by operating agencies, intermediate legal proceedings in Appellate DRTs, Sec 138 of NI Act, Winding up, Labour courts, CBI Enquiries, Taxation matters, Insurance matters, High Courts, Supreme Court back and forth proceedings at all these courts etc. The proceedings in forthcoming NCLT (in short for National Company Law Tribunal) as well as simultaneous proceedings under the DRT Act and NPA Act on account of the latest judgment of the Supreme Court will further add to the complications and complexities of the said recovery litigations. Scarcity of finances for survival and litigation expenses for the borrower, no such financial problems for the lending banks and financial institutions and elements of corruption add further to existing complications and complexities of the entire adjucatory process.  

It was desired that compared with civil courts, the DRTs would be able to achieve quicker recoveries. When this was found not happening, the Securitisation Act was enacted. The handicap of not having simultaneous proceedings has also been removed with the Supreme Court judgment. Despite all these, the contemplated quick recoveries will not and can not be achieved as legal process is simultaneous proceedings of the two contesting parties i.e. lender and borrower. The former is beauracracy managed and the later is privately owned entrepreneurship. The excessive pressure for recovery alone rebounds with only greater exposure of inbuilt inefficiency and incompetence of the former. As a result, not only the adjudicatory process will take time but may result in payout of damages rather than recoveries. Hence it is more appropriate to recognize that the recovery out of profit by way of running of the business is the better option rather than destroying the business by all out pressure only for recoveries out of the assets of the borrowers and guarantors and thus killing the entrepreneur and converting his assets into cash with huge depletion of value. The bank and the FIs are better advised to be more careful in appraisal so that once sanction of the loan is awarded, the only security should be surplus generating business and during periods of losses, interest and repayment of loan suspended till surplus generating mode is accomplished. With such approach only, production and productivity will rise and ultimate recoveries will be better and the real NPA will be at the lowest as well as the recovery litigation will be the least. The initiative has to be taken by the lenders otherwise the counter-claims and damage suits will compel them to transform themselves as proposed.    

Legal defence for Borrowers:-

 The genuine and innocent borrowers and guarantors in above mentioned litigations feel trapped, helpless, victimized and cheated more so when they are unable to find suitable advocates to understand their points of view. On one hand, he is deprived of all his assets and belongings. He finds even bare survival difficult leave alone legal fight with the banks and FIs who have no such financial problems for litigation. The general environment and thinking also happens to be in favour of banks and FIs. To that extent, the Judges also carry such opinions. The fight is just like between a sick hungry child and a well fed strong experienced wrestler. Such fight is highly against equity. As a result many of litigant borrowers have fled away, some have committed suicides. Under such facts, circumstances, consequences and backdrop, in this article, we have analyzed the rights and liabilities of the contesting parties as well as the related legal aspects.

Despite above, there is a silver lining. The existing Constitution of India and the legal procedures provide all solutions to achieve ultimate justice based on well defined principles of justice, equity and good conscience. The basic requirement is that, first, the borrower himself will have to pay adequate attention to the entire legal process.  The advocates and judges have their own limitations. At every stage of adjudication and before every date of hearing, the borrower will have to study the requirements of substantive and procedural law. All out efforts should be made to obtain admissions from the opposite party so that no avenue is left for exercise of discretion by the judges. We provide complete professional help and guidance during the entire process of litigation in DRT, ADRT, High Court and Supreme Court .If the borrower is not so extremely vigilant and cautious, he will be defeated in DRT. With such defeat in lower courts, nothing better may be achieved in higher courts like ADRT, High Court and Supreme Court as they rarely interfere with the decision of the lowest court particularly in respect of facts.. Hence the borrowers must regard the litigation in DRT as the first, last and ultimate court battle and accordingly the DRT fight should be with the best preparation on every date. It must be kept in view that the banks and FIs will employ best advocates in all the courts upto Supreme Court. Hence the borrower has to work hard himself from day one to the last verdict of the Supreme Court. Accordingly he has to choose a lawyer who can also work hard on every date of the proceedings. 

In the above backdrop, we now describe below, the most fundamental legal and factual aspects of the entire process particularly concerning industrial and business finance under examination in this article.  

Important Legal aspects:-

In this connection, it is highly essential to comprehend the material facts relating to the industrial and business finance. In our country there is no ‘No Fault Insurance’ We have yet to enact formal ‘Lenders’ Liability Law’ Further the basic facts involved in the complete process of industrial and business finance have not yet been pleaded before the trial courts and DRTs. As a result, judicial determination of these facts have not taken place and hence there are no precedents available. On account of unadjudicated facts of modern complex industrial finance, the legal community  like judges will continue to apply their opinions, common sense and hearsay based on day to day experience of personal finance i.e. loan for personal consumption and full recovery out of security only whereas the industrial and business finance have entirely different attributes due to appraisal for technical feasibility and financial viability, security by way of positive viability for projected turnover for 5 to 10 years, etc.

With such handicaps, borrower has to apply the fundamentals of law enshrined in the common as well as statute laws in our country. First step is drafting of the pleadings. The person drafting the pleadings should have mastery of all the relevant laws as well as mastery of relevant facts The said person having mastery over the related business laws need to have adequate understanding of complex facts involved in the entire process of business and industrial creation, development and growth. Thus the pleadings need to be drafted only by the person having mastery of law and mastery of facts. Such person alone should provide guidance and course correction at every moment of the trial to the borrower. With such setup only, one can think about getting justice in our country otherwise not. Since the type of industrial litigation under analysis in this article is at the nascent and evolutionary stage, it would take few years to attain logical outcome. 

The banks, FIs and Industries in India are governed by RBI Act 1934, Banking Regulations Act 1949, IDR Act 1951, SFC Act 1951, Companies Act 1956, IDBI Act  1964, Banking Companies (Transfer of Undertaking) Act 1970, NI Act 1881, Evidence Act 1872, Bankers’ Books Evidence Act 1891, IT Act 2000, DICGCI Act 1961, DRT Act 1993, Securitisation Act 2002 etc. along with fundamentals of law contained in Constitution of India, law of torts, law of damages and principles of natural justice. It is needless to mention that the justice is above all. The entire setup of all the courts right from DRTs to the Supreme Court is to attain justice. No other considerations can overshadow, override or supersede the said objective of achieving justice. The litigant borrowers in DRTs and higher courts must keep this objective always in view and wherever they find that the process, procedure or order affects this objective, they must not allow the process to continue till the objective at that stage is achieved. This is how leading judgments will be obtained and will be useful to the future litigants.   

Violations of RBI Guidelines and Law of Torts:--

The public policies in respect of banking decided in the Parliament are communicated by the Central Government to the RBI (in short for Reserve Bank of India). The RBI in turn communicates the same to the Chairmen or Heads of all the banks in the country. These are called RBI Guidelines and have been held to be statutory and mandatory for the banks and FIs. The said Chairmen or Heads issue internal circulars in their respective banks so that all the employees and functionaries are bound by them. Thus the said public policies are intended to be duly implemented with the all pervasive and binding tool of the law, a most important process in modern democratic society like ours. Any violation of the said RBI Guidelines amounts to wrong doings on part of the bank and concerned officials. The wrong doings, if any, cause legal damage to the affected person apart from actual damage, if any.  Such damages commence the moment, the wrong doings are committed. Further as per the law of torts, the bank officials have no power or authority to cause any injury to their clients intentionally or even unintentionally. On the other hand, they owe a duty of care towards the assisted borrowers. If any injury is caused on account of the said wrong doings or violation of the duty of care, the affected person is entitled for compensation for unliquidated damages. If the wrong doings are willfully caused, knowingly continued and if they are arbitrary, unconstitutional and oppressive, the affected person is entitled for aggravated and exemplary damages.  

The above framework of law emanates from the Constitution of India. All the functionaries of the lending banks and financial institutions, the borrowers as well as the courts including DRTs are bound by the said framework of law. 

The scenario of banking in India underwent a significantly change in 1970 on account of Bank Nationalization Act. Also the security based lending was altered to object, purpose and project oriented financing. The application for industrial or business loan is required to include a project report or scheme. The said project report is appraised by experts in the lending institutions from the angle of technical feasibility of the scheme or project and financial viability of the same based on future projections of 5 to 10 years. When those experts and hence the said lending institutions or banks are fully satisfied with the appraisal, then only the loan is sanctioned. At this stage there is no existence of any secured asset or any other physical security or guarantee. The only and sole security is the viability i.e. surplus wealth i.e. profit generation capacity of the project or scheme. It is to be noted that in the said appraisal, the interest as well as the repayment of loan is out of the profit. The appraisal does not say that if there is no profit, the interest and repayment of loan will be paid out of any other source or securities, if any, and hence in the event of ‘no profit’ the payment of interest and repayment of loan should wait. Under no circumstances, these should be out of securities or personal guarantees as the same did not exist at the time of the appraisal and sanction of loan. These important aspects are to be kept in view by the borrowers and guarantors so that it is pleaded in defence if there is any litigation for recovery initiated by the lenders.  

The Objectives and Purpose of Securities:-

Question arises as to what for the securities and guarantees are taken. As stated above, during the periods of loss, the payment of interest and repayment of loans should wait. The borrowers should be helped so that profit is achieved as early as possible. As soon as the profit state is achieved, the suspended payments may commence without affecting the health of the assisted unit. Interest burden during the suspended period may be borne by the borrower if the sickness is due to him but for conditions beyond his control, it should be shared equally between the lender and borrower. If the sickness is due to wrong doings of the lender, the said burden should be borne by the lender. Rehabilitation Term Loan should be provided on realistic basis. Correct executive decision would be arrived at by the bank officials if they picture themselves in the situation faced by the borrower.

It is pertinent to note that this year, the Nobel Peace Prize has been awarded to Mohammed Yunus, founder of Grameen Bank in Bangla Desh who provided working capital loans to poor for self employment without security. Such loans totalled over Rs. 20,000 crores. The repayment rates against such loans have been healthy 98% as in absence of securities, the banker concentrated on running of the business first and then recoveries out of profit generated. In our country bankers obtain multiple securities and guarantees and hence when the business faces rough weather, the banker concentrates on recoveries by recourse to court of law, seizing and selling securities etc. For this purpose, even the bank beauracracy initiated and followed up for special legislations like DRT Act, setting up special tribunals like DRTs and Securitisation Act etc.. 

In case, the acts and omissions of the bank officials are not keeping the above aspects in practice, it would amount to wrong doings attracting compensation for the loss and damages, legal as well as actual which become due the moment, the wrong doings are caused. The borrower can claim the said compensation in form of counter-claim or may file a damage suit in the court of law. Since the said loss and damages are on continuing cause of action, there is no bar due to limitation. Further the said compensation attracts interest on the same footing as charged by the bankers i.e. on monthly rests basis as at present. In most of the cases we have observed that the said counter-claim is much more than the claim of the lenders and hence prima facie, there is no debt due and hence the lenders can not invoke DRT Act or Securitisation Act. The pleadings of the counter-claim must conform to Law of Pleadings and should be based on documents such as Project Report, Application for Financial Assistance, Appraisal Report, Sanction for Financial Assistance, Correspondence, Minutes of Meetings, Balance Sheets, Annual Reports etc. Wherever the facts are denied, the opposite party must be called to witness box to elicit the real facts as well as to admit the wrong doings. All the facts must be proved by way of admission either in writing or orally in witness box. Nothing should be left for decision by way of discretion by the judge. This should be the goal for the borrower if he desires to achieve justice. With such approach, the judge will be left with no alternative but to award decision in favour of the borrower. The higher courts also will not be able to disagree. 

Impact and consequences of SC Judgment:-

On account of the above mentioned Supreme Court judgment, the lenders have resorted to simultaneous proceedings under DRT Act and Securitisation Act. Pleadings may be same in the written statement in both the proceedings. The counter-claim may also be filed therein. Counter-claim can also be filed in SA under sec 17 of the SARFAESI Act vide DRAT ruling in the matter of Vijaya Bank vs B.L. Gupta decided in 2011. Copy of the said judgment has been given on this website which you may see by clicking http://www.drtsolutions.com/counterclaim-SA.htm  Both the proceedings may have to be combined together to avoid any conflicting decisions. Since as per the DRT Act, the claim and counter-claim are to decided together, the same will now be true in respects of proceedings under the Securitisation Act. 

In view of above, the bankers must examine, at their end, before invoking the DRT Act and or NPA Act, that no wrong doings have been committed and they have fully abided by all the RBI Guidelines, otherwise, they will have to face counter-claim or damage suit from the borrowers and guarantors. In the cases already filed, they must carry out this examination and if they are at fault, they should settle with the borrowers. In the current matters of financial assistance, the bankers must keep all the above aspects in view so that the NPAs are calculated correctly only after implementing all the RBI Guidelines. For potentially sick viable units, the bankers may even arrange postponement of declaration of NPA. 

The contesting borrowers will have to be always vigilant and alert to ensure that DRTs act keeping in view the fundamental principles of justice, equity and good conscience. The DRTs must treat the banker and borrower as two contesting parties on equal footing. Isolated discussions with the bankers or Ministry of Finance are against the principles of equity and fair trial. In the matter of violations, the borrowers must raise objections and if the situation does not improve, they must ask for change from one DRT to another. 

It is needless to mention that entire setup of the courts and DRTs is meant for  justice. No reason or interpretation can justify that the DRT has any limitation or restriction in securing or awarding justice. In fact since the DRT is not bound by CPC and is to work on the principles of natural justice , it has much wider powers, authority and jurisdiction to discover the real facts as well as admission from the opposite party. Until and unless all the required facts have been judicially determined, the borrower should not proceed with the arguments. Justice is above all. Legal technicalities and procedures can not come in way of getting justice.  Unnecessary hurry and delay have no place in perfect judicial process.  All out efforts must be made to complete the trial in DRT or civil court in all respect so that no deficiency arises in higher courts during the process of appeal, if any. No chance or scope should be left for higher courts to point out the deficiencies, if any, in the lower court or DRT. This is all the more important when the existing facts, circumstances and consequences are more favourable to the banks. The present generation of the contesting borrowers have greater responsibilities towards their  coming generation to fight out the battle successfully against greater odds. With missionary zeal and undaunted spirits, the borrowers can win against the banks and such leading judgments will make the task easier in future.   


In order to expedite bank litigations, the DRT Act 1993 was enacted and special courts in form of tribunal i.e. DRTs were created. The specialized knowledge in banking, industries, finance and related laws is growing in the DRTs day by day. The litigant borrowers and guarantors as well as their advocates have started using the above knowledge in contesting their cases and with passage of time, useful judgments continuously are and will be delivered. Such leading cases will form the precedents. All these will create better environment not only for development, creation and sustained growth of industries and business but also appropriate banking in our country. Under such facts, circumstances and consequences, the real NPAs as well as litigations in DRTs will come down. We are in this line since 1989 and thus have experience for more than 30 years. Our website was setup in 2000 exclusive for defence of borrowers  and since then we have long exposure particularly to the problems of borrowers and solutions thereof. Whenever you have any problem, you may contact us on our phone M-9691103689 during week days. You will get instant advice. In the meantime, please study our this web site. We wish you all the best.

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*Mr. Ram Kishan, now 81 years, has rich and wide professional experience in the field of management, industries and law since 1989. His web site www.drtsolutions.com was created in 2000 ie more than 20 years of such online exposure presents most useful and practical knowledge pertaining to all aspects of DRT  Act and Securitisation Act. He is always available on M-9691103689.    

Contact Information :-  


205, Morya Palace, Opp Bansi Trade Centre,

5/1, Diamond Colony, New Palasia,



Mobile- 969-1103689, LL-731-4049358,

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Contact Information :-


Office & Residence - 205, Morya Palace, Opp Bansi Trade Centre,

5/1, Diamond Colony, New Palasia,



Mobile--969-1103689, LL-731-4049358,


E-mail - ramkishandrt@gmail.com

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Popularity of our web site :- The key word for search of our website is 'drt'  or any phrase commencing with 'drt'  We are on the top in Google Search for 'drt' among 28,60,000 results globally. In most of the search engines like yahoo, msn, google, excite, altavista, mamma, alexa etc., To verify, you may visit www.yahoo.com, www.msn.com, www.rediff.com, www.indiatimes.com, www.altavista.com, www.google.com, www.excite.com, www.hotbot.com, www.123india.com, www.aol.com, etc. Our reference appears in www.economictimes.com, www.amazon.comwww.financialexpress.com, www.lawcrawler.com, www.findlaw.com, www.law.com, www.supremecourtofindia.com, www.supremecourtonline.com

Our Articles for Borrowers and Guarantors:- Our articles on DRT matters have been published in the Financial Express. The All India Manufacturers Organisation in its famous web site www.aimoindia.org has reproduced copies of our four articles. These original articles can be searched in the archive of the Financial Express in its web site www.financialexpress.com Two of these articles have been reproduced in other pages of this web site. 

Useful link www.WorldVideoBusiness.com :- WorldVideoBusiness-WVB® is a business to business e-marketplace source of international trade leads, and tender opportunities from companies and government organizations around the globe.

About Us in Brief :-  (1) We specialize in DRT (Debt Recovery Tribunal), Counter-claim and SARFAESI Act matters. As a whole you may approach us for all DRT Problems and Solutions.  (2) For your all problems including those in DRT, please phone us or send e-mail. Please give your contact details along with your problems in brief. As a whole you may approach us for all DRT Problems and Solutions.  (2) With our Legal Opinion, you need not worry about the Securitisation Act or other DRT matters. Please visit the page Products & Services and Frequently Asked Questions (3) On account of our expertise in the Law of Torts and Banking and experience past more than 35 years, we can help you to submit suitable defence with winning strategy in DRT cases, Securitisation Act, Guarantors' defence etc.  (4) We need only copies of all available documents  to render our expert 'Legal Opinion' which will be quite useful and valuable to you particularly in DRT i.e. Debt recovery Tribunal. (5) The DRT counterclaims is to be prepared well in advance so that it could be raised at proper time in DRT or other forum to safeguard the securities and assets. (6) Several DRT counterclaims drafted by us are being handled by different advocates at DRT Mumbai, DRT Delhi, DRT Jabalpur etc. (7) This site is updated daily with latest material. (8) For further details about us, please visit the page About Us-DRT Solutions As a whole you may approach us for all DRT Problems and Solutions.  

Our this web site is dedicated to Yoga Rishi Baba Ramdev Ji Maharaj:- Our this web site is respectfully dedicated to Yoga Rishi Baba Ramdev Ji Maharaj whose method of Pranayam has cured even incurable diseases and thus has revolutionized modern medical science.

Site also dedicated to:-   (1) Swami Ramdevji, Acharya Balkishan and their Guru Pradumn Maharaj.

                                             (2) H.H. Maharishi Mahesh Yogi and Acharya Rajnish, the greatest gurus of all time www.maharishi.com, www.osho.com

                                             (3) Shri Hira Ratan Manek (HRM) for his pioneering work on Solar healing vide his web site www.solarhealing.com and forum at www.lifemysteries.com                                    

We regularly practice TM and SCI of Maharishi Mahesh Yogi. We also regularly practice Hath Yoga including Pranayam based on Baba Ramdev Ji  Maharaj. We daily watch his global TV program on Astha Channel from 05:30 AM to 8AM and 8PM to 9PM Indian Standards Time. On Sanskar channel, we daily view the discourse of Pradumn Maharaj from 4 AM to 5:30 AM. Many chronic diseases such as Cancer, Parkinsons' disease, Polio, Asthma, Hypertension, diabetes etc. have been cured by the said method of Pranayam which can be learnt even by watching his program on TV. Since 30th March '06, we have started practicing Sun Gazing as prescribed by HRM.

Disclaimer:- We have no branch or setup other than at Indore. It is observed that some persons are using name of our firm as well as name of our web site. We have not given  any such authority to anyone to do so. Under such facts and circumstances, if anybody suffers any loss, we shall not be responsible. If such instance comes to notice of someone, we may kindly be informed.

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