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(Debts Recovery Tribunal Legal Solutions) is an India based

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Govt and RBI have framed Special Policies to help Borrowers affected by Pandemic Corona-19  The Pandemic Corona-19 has seriously affected the business all over the world. Government of India took special actions to help the borrowers affected by the said Pandemic Corona-19. The RBI constituted special Committee known as Kamath Committee which framed special RBI Circulars to help the affected borrowers. At the instance of the said circulars, the Board of the lenders had to issued special "Board Approved Policy" to help the assisted borrowers. In such cases, if proper pleadings are prepared, the said borrowers will definitely win their cases in DRTs. We have handled such cases. The affected borrowers may contact us on our M-9691103689.

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. You get instantaneous advice on our mobile no. 9691103689 .

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.

Senior Citizens - Longevity दीर्घायु & Health Problems - I am 78 years young as on 01.01.2021 and my hobby is to maintain good health, rather becoming younger day by day. Recently I have published few important videos [ (1) दीर्घायु क्यों व कैसे (2) दीर्घायु उपयोगी चर्चा (3) दीर्घायु व घुटनों की समस्या (4) दीर्घायु व वृध्दावस्था के लिए अमृत है कीटो डाइट]  on Facebook and YouTube on the important topic of Longevity ie  दीर्घायु To reach to my the said videos, you may search ' Ram Kishan Longevity' or रामकिशन दीर्घायु in Google or YouTube.  My profile link on facebook is https://www.facebook.com/ram.kishan.777

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

DVDs of the 2nd All India DRT Conference held on 8th and 9th Jan ’11 are available – these DVDs contain goldmine of useful information to borrowers, guarantors and their advocates 

We are pleased to inform that 5 DVDs and 1 CD of the said Conference are available at a token price of Rs. 1000=00. This amount is peanut compared to that spent by the participants who came from far off places like Cochin, Kolkata, Chandigarh, Chennai etc at their own expenses, stayed at Indore and paid the participation fee of Rs. 4500=00 per head.

These  5 DVDs are complete video record of the whole conference and are gold mine of the current information on:-

(a)    Securitisation Act, important questions and answers, practical aspects of stay and trial in DRTs,

(b)    Important court judgments and their applications,

(c)    Court  procedures and critical applications,

(d)    Bank documents and their inspection,

(e)    Legal maxims and their applications,

(f)      Important provisions of Constitution and PILs,

(g)    Present state of Indian Judiciary, problems and solutions,

(h)    Application of modern management and  technology etc.

We have provided in one CD complete audio record of the whole conference so that one can listen the same on i-pod. As a whole these DVDs and the CD provide the most latest and useful knowledge to the borrowers and guarantors as well as their advocates. The procedure for getting these DVDs is as under:-

(1)   You may deposit Rs. 1000=00 in our bank account details of which may be obtained by sending SMS to us.

(2)   Pl inform the particulars of the above deposit to us by e-mail and by SMS to our mobile no 09691103689

(3)   Pl inform your postal address and telephone number by e-mail

(4)   The DVDs will be dispatched within a fortnight

Our Client wins in Securitisation Appeal against 4 Banks in DRT – amount involved nearly Rs. 90 crores and a tooth & nail fight of 4 years

Entire Judgment reproduced below


(1)     The PO DRT II Mumbai in his order dated 29.06.10 in respect of Securitisation Application No 33/2006 allowed the same asking the 4 respondent banks to redeliver possession of the properties within 4 weeks.

(2)     This has been most historic legal fight in DRTs for a period of nearly 4 years by law departments of 4 banks against securitization notices dated 30.12.05 and 02.01.06 for Rs. 64.44 crores  and banking aspects of Representation & Objections, NPA, Accounts, Inspection of Documents etc. 

(3)     Such consortium of 4 banks losing Securitisation Appeal fighting tooth and nail for relatively large amount of Rs. 90 crores is most significant.

(4)     The party came to us in 2006. We prepared their damage suit for Rs. 1904 crores which was filed in May 2007. They have been in touch with us practically every day. They worked hard in implementing our philosophy of perfect pleadings and perfect trial on every date. At times they had eloquent fight with their advocates and had to change them. They attended DRT conference at Indore in May 2008. They spread our message to their advocates and other suffering borrowers.

(5)     While on one hand, the said 4 banks have lost their legal battle for recovery through the tool of Securitisation in DRT, the party’s damage suit against the banks filed in 2007 is still continuing wherein the banks are already losing heavily. The case has come to ‘Striking of defence of the banks’ due to non-submission of documents for inspection despite repeated court order.

(6)     This case is a solid proof that a determined borrower can win against banks in DRT. It demolishes the myth that the DRTs favour the banks.

(7)     Such fight proves the power of knowledge of banking, industry, finance and law. Above all this affirms that in a democratic country, citizens have adequate powers and protection against the wrong doings of bueauracracy due to ‘Rule of Law’ being above all.

(8)     We appreciate the sincere and hard work done by our client at every moment of time and they rightly deserve such epoch making victory which will prove to be a mile stone in the history of banking litigations in the country. 

(9)     The party has sent following mail to us:-


From national flask ind. ltd.

To ramkishan ramkishan@drtsolutions.com & ramkishandrt  ramkishandrt@gmail.com  


Date Wed, Jun 30, 2010 at 6:01 PM

Subject MESSAGE 


Kind Attn: Mr.Ramkishanji. 

Dear Sir, 

We take this opportunity to thank you very much  for your timely guidance / suggestions during the proceedings of Securitisation Application in DRT.  Because of your guidance, we have succeeded in DRT. The DRT has allowed our Securitisation Application and directed the consortium bankers to repossession of the properties. You have given your best guidance for,

1.         application for  inspection of documents to bring facts on record,

2.         affidavits / rejoinder to put facts on records,

3.         other correspondence with the consortium bankers and,

4.         preparing the arguments,    


We once again thank you for your kind support.

Thanking you,

Yours faithfully,


horizontal rule

PRESENTED ON-19/09/2006

REGISTERED ON-21/09/2006

DECiDED ON – 29/06/2010

DECIDED PM – 29/06/2010

DURATION –            Y.       M.        d

03        09        08



Before Shri K.J. Paratwar, Presiding Officer. 

S. A. No 33/2006


1.         M/s. National Flask Industries Ltd.

            A/2, Shed No. 502, G.I.D.C., Sarigam, Dist.

            Valsad, Pin Code 396 155, Gujarat.


2.         Mr. Arun M. Gandhi, M/s. National Flask Industries Ltd.,

            22, Interlink Industries Estate, Caves Road,

            Jogeshwari [East],

            Mumbai 400 068


3.         Mr. Shashikant M. Gandhi, M/s. National Flask Industries Ltd.,

            22, Interlink Industries Estate, Caves Road,

            Jogeshwari [East],

            Mumbai 400 068


4.         Smt. Meena H. Gandhi,

            18, Gangadwar, Sanyas Ashram, V.P. Road,

            Vile Parle [West],

            Mumbai 400 056


5.         Mr. Haresh M. Gandhi,

            18, Gangadwar, Sanyas Ashram, V.P. Road,

            Vile Parle [West],

            Mumbai 400 056


6.         Smt. Daksha Arun Gandhi,

            18, Gangadwar, Sanyas Ashram, V.P. Road,

            Vile Parle [West],

            Mumbai 400 056


7.         M/s. Crown Industries,

            22, Inter Link Indl. Estate, Caves Road,

            Jogeshwari [East],

            Mumbai 400 068

                                                                                                            ..          Applicants




1.         The Saraswat Co-op. Bank Ltd., having its Head Office at

            Sailor Building, D.H. Road, Next to American Dry Fruit Store,

            Opp. Hutatma Chowk, Fort,

            Mumbai 400 001 


            having its recovery department at 74-C, Samadhan Bldg., 2nd Floor,

            Senapati Bapat Marg, [Tulsi – Pipe Road],

            Dadar [West],

            Mumbai 400 028 


            having its branch office at Pratiksha Apartment, Opp. Filmistan Studio,

            S.V. Road, Goregaon [W],

            Mumbai 400 062


2.         The Shamrao Vithal Co-op. Bank Ltd., having its registered Office at

            CTS No. 948/B, Village Kole Kalyan, Nehru Road, Opp. Vakola Market,

            Santacruz [East],

            Mumbai 400 055 


            having its branch office at 12, Udyog Nagar,

            Time Star Bldg., S.V. Road,

            Goregaon [West],

            Mumbai 400 062


3.         The Cosmos Co-op. Bank Ltd. having its registered office at

            Cosmos Heights, 269/270, Shaniwar Peth,

            Pune 411 030 


            having its branch office at

            45, Saraswati Niwas, Hanuman Road,

            Vile-Parle [E],

            Mumbai 400 057


4.         The North Kanara GSB Co-op. Bank Ltd., having its registered office at

            Laxmi Sadan, 361, V.P. Road, Girgaum,

            Mumbai 400 004 


            Shree Niketan, Hindu Friends Society Road,

            Jogeshwari [East],

            Mumbai 400 060

                                                                                                            .. Respondents


Mr. Rishabh Shah with Mr. Jay Choksi, holding for Mr. Rohit Shetty, Adv. for the Applicants. 

Mr. Harshad Bhadbhade, Adv. For the Respondents



(Delivered on this 29th day of June, 2010

            This application U/s. 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 [for short ‘SARFAESI Act’] pertains to these properties of Applicant No. 1 : 

?  Plot of land bearing No. A-2, 502, in the Sarigaon Industrial Estate, Survey No. 29/p, Village Sarigaon, Taluka Umbergaon, Dist. Valsad, Gujarat, admeasuring 1,816 sq. meters; 

?  Factory land & building bearing No. 166/p, Village Naroli, Silvasa, Union Territory, Dadra & Nagar Haveli, admeasuring 18900 sq. meters. 

of Applicant No. 7 : 

? Office premises situated at 22, Inter Link Industrial Estate, Caves Road, Jogeshwari [E], Mumbai 400 060 admeasuring about 2000 sq. ft. 

2.         The Respondents took possession U/s. 13(4) of the SARFAESI Act of the properties – situated – at Jogeshwari on 17.09.2006, at Silvasa on 24.10.2006 and at Sarigaon on 24.08.2006 – on the Applicant’s failure to pay the amounts demanded by notice U/s. 13(2) of SARFAESI Act to the Applicant No. 1 on 30.12.2005 and to rest of the Applicants Dt. 02.01.2006. This has aggrieved the applicants who have assailed the action under SARFAESI Act in this 64 pages long S.A. having copious reference and reproduction of RBI guidelines and other unnecessary facts. 

3.         Under caption “The background of the matter is as under” the Applicants have stated several facts about the reasons of the Company’s precarious financial condition, etc. It is stated that major fire broke on 04.06.2001 in the Company causing damage / loss of around Rs.17 /18 Crores from out of which a sum of Rs.5.70 Crores was received against the insurance claim. Under the orders of Hon’ble High Court of Judicature at Bombay in Review Petition No. 40 of 2005, the amount is kept with Respondent No. 1 in interest bearing no lien account. Due top the loss, the Company was badly in need of additional finance which the Respondents did not sanction. The Company also did not get any relief under Corporate Debt Restructuring Scheme [CDR Scheme]. The failure on the part of Respondents to grant ad-hoc limits led to the closure of operations of the Company. The Company suffered loss, due to the Respondents’ not adhering to the RBI guidelines, to the extent of Rs.119.17 Crores, for which the Company has filed suit in Civil Court at Silvasa. Therefore there is no ‘debt’. 

4.         The Respondents issued notice U/s. 13(2) of SARFAESI Act. The Applicants gave reply / representation to the same raising 105 objections. A Petition came to be filed in the Hon’ble High Court of Judicature at Bombay by worker union in which offer for settlement of Rs. 7 Crores was made but the Banks insisted for Rs.9 Crores. Since the settlement did not materialize, the Banks gave reply U/s. 13(3-A) of SARFAESI Act to the representation / reply to the demand notice. The Banks were about to take recourse to Section 13(4) whereupon the applicant Company filed Writ Petition [Stamp] No. 1644 of 2006 which however came to be disposed of in view of remedy U/s. 17 of SARFAESI Act. The Respondents ultimately took possession of the properties as stated earlier. 

5.         After the aforesaid facts, the Applicants have set out the grounds. The grounds common to all the Respondents are thus: The notice is illegal. The challenge is external and internal. By external, I refer to the contention that the issuance of two demand notices U/s. 13(2) are illegal. The first notice Dt. 30.12.2005 was issued to the Company while the second notice Dt.02.01.2006 was issued to the Applicant Nos. 2 to 7 from amongst whom Applicant No. 7 is mortgager of Jogeshwari Property. By internal challenge what is meant is the exorbitant demand. Firstly, the demand was in excess by Rs.23,22,65,631/-, in the aggregate, taking the amounts certified by the Banks in the Certificates of dues, to be the basis. The excess demand of each Bank as set out in S.A. in the tabular form is extracted below: 

A)        The Saraswat Co-op. Bank Ltd.           

Loan No.

Balance as per Bank Certificate Dt. 17.06.2005 upto 31.03.2005

Amount as per SARFAESI notice U/s. 13(2)

Difference Amount

SL 4611




SL 4569




SL 4923




SL 4585




SL 4818




OD 2672




SL 5508









B)        The Shamrao Vithal Co-op. Bank Ltd. 

Loan No.

Balance as per Bank Certificate Dt. 17.06.2005 upto 31.03.2005

(in Rupees)

Amount as per SARFAESI notice U/s. 13(2)

(in Rupees)

Difference Amount



(in Rupees)

TL 728




TL 754




OD 79









C)        The North Kanara GSB Co-op. Bank Ltd. 

Loan No.

Balance as per Bank Certificate Dt. 17.06.2005 upto 31.03.2005

(in Rupees)

Amount as per SARFAESI notice U/s. 13(2)

(in Rupees)

Difference Amount



(in Rupees)

TL 417




TL 418




TL 421




TL 469




OD 1698









d)         The Cosmos Co-op. Bank Ltd. 

Loan No.

Balance as per Bank Certificate Dt. 07.06.2005 upto 31.03.2005

(in Rupees)

Amount as per SARFAESI notice U/s. 13(2)

(in Rupees)

Difference Amount



(in Rupees)

OD 990007





6.         The other ground common to the Respondent Banks is that the charged interest is far in excess. The Applicant Company had pointed out the same by several letters and had even shown from the certificate issued by M/s. Kiran Matani & Asso., Chartered Accounts that the interest charges is in excess by Rs.12,77,84,368/- as on 30.11.2005 as per the table extracted below for ready reference: 





Nature of


Amount as per Notice U/s.13(2) of SARFAESI as on 30.11.2005

Amount as per calculation as on 30.11.2005

Excess interest upto 30.11.2005

Excess and illegal Debits upto



The Saraswat Co-op. Bank Ltd.








The Saraswat Co-op. Bank Ltd.







The Saraswat Co-op. Bank Ltd.







The Saraswat Co-op. Bank Ltd.







The Saraswat Co-op. Bank Ltd.







The Saraswat Co-op. Bank Ltd.







The Saraswat Co-op. Bank Ltd.







The Saraswat Co-op. Bank Ltd.







The Shamrao Vithal Co-op. Bank Ltd.







The Shamrao Vithal Co-op. Bank Ltd. 








The Shamrao Vithal Co-op. Bank Ltd.







The North Kanara GSB Co-op. Bank Ltd.







The North Kanara GSB Co-op. Bank Ltd.







The North Kanara GSB Co-op. Bank Ltd.







The North Kanara GSB Co-op. Bank Ltd.







The North Kanara GSB Co-op. Bank Ltd.







The Cosmos Co-op. Bank Ltd.















Total of excess debited by Bank (E)++(F)




7.         The Banks have not produced advice for interest rates charged. The reply given by the secured creditors is without application of mind. The miscellaneous contentions are that the penal interest is not quantified and is also compounded. The notice U/s. 13(2) to the Guarantor does not mention dates of NPA. The transaction is not registered with the central registry. The Respondents have not produced any authority U/s. 49 of Maharashtra Society’s Act from the Applicants. 

8.         After the aforesaid grounds common to all the Respondent Banks, the Applicants have raised individual contentions in respect of Banks many of which do not constitute grounds within the scope of SARFAESI Act. The contentions as regards The Saraswat Co-op. Bank Ltd. are thus: 

(i)         In the statement issued on 31.03.2002, balance in forced Letter of Credit account is shown Rs.2,89,07,849/-. However, in the notice U/s. 13(2) the amount as on 30.11.2005 is shown Rs.6,29,67,724.35. This means that the amount has gone up by Rs.3,40,59,875.35 in 44 months which is obviously exorbitant.  

(ii)        The Bank Guarantee has not been invoked. Yet, the Bank demanded in the notice is Rs.55,07,443/- thereunder. 

(iii)       The Bank classified account as NPA on 31.03.2001. Yet, it forcibly obtained cheque of Rs.5.70 Lacs after the NPA date. The cheque was transferred to the account of sister concern namely M/s. National Plastic. From said account the Bank took cheque and unauthorisely transferred money to Suspense Account at Kandivali Branch. This ground is not pressed into service perhaps realizing that the state grievance cannot be addressed in the application U/s. 17 of SARFAESI Act.  

(iv)       The Bank did not credit interest of Rs.5,38,531.51 on the margin money deposited in FDR for Letter of Credit. This ground is also not perused. 

(v)               Vide letter Dt. 31.03.2001, the bank reviewed the then existing limits and decided to issue NOC to IDBI allowing the first charge over fixed assets to be financed by IDBI and to induct Indian Bank in consortium. Yet, inconceivable the account is said to have became NPA on same date i.e. 31.03.2001. 

9.         The grounds in respect of The Shamrao Vithal Co-op. Bank Ltd. are thus:

(i)         The Bank debited, without advice or authority, from time to time between 23.02.1998 to 31.10.1998 a sum of Rs.2,64,28,790.02 as set out on Page 23 & 24 of the S.A. This ground is not pressed into service probably realizing that the challenge to the debit entries taken before about seven years does not fall within the scope of the application. 

(ii)        The Bank did not give credit to margin amount of Rs.1,93,11,642/-. This contention is also not pressed into service. 

(iii)       The amount demanded under notice U/s. 13(2) is against two Cash Credit Facilities while there was only one Cash Credit Facility. In this regard, it is ultimately admitted that the amount of Rs.1,92,62,589.38 is wrongly said to be under Cash Credit although it is under Term Loan. The attempt to exploit the technical mistake was abandoned. 

(iv)       The Bank wrongfully made payment to Income Tax of Rs.68,35,165/- without consent of B.I.F.R. This ground is also not pressed into service. 

(v)        The dividend of Rs.4,050/- of the shares in the name of the Directors was credited in the Company’s account. This ground is also abandoned.  

10.       There are no specific and substantive individual grounds in respect of the Cosmos Co-op. Bank Ltd. It is stated that agreed rate of interest is @ 16.50% while the interest levied is at said rate with quarterly rests. 

11.       In case of the North Kanara GSB Co-op. Bank Ltd., the contention is that by letter Dt.10.10.2002 it had informed that the account became NPA from December 2010 but in letter Dt.31.03.2001 the NPA date is 31.03.2001 while the S.A. states that the NPA date is 01.08.2000.  

12.       The S.A. is sought to be allowed on the aforesaid grounds. 

13.       The Respondents resisted the S.A. by reply [Exh.9] in the nature of affidavit of Mr. Ajit S. Rege, D.G.M. of Respondent No. 1 Bank. It is contended that the Respondents [the Respondent No. 1 being the leader] in consortium had granted several facilities to the Applicant No. 1 Company. The Applicant Nos. 1 & 7 created mortgage. The Borrower [Applicant No.1] committed defaults and the account became irregular and consequently the same was classified by Saraswat Bank as NPA with effect from 31.03.2001 and by other Banks on the respective dates. The Respondents had issued notice U/s. 13(2). It is stated that the actual possession of Silvasa and Sarigaon property is taken but only symbolic possession of Jogeshwari property is taken. The Banks admit about the fire on 04.06.2001 in the Company’s Silvasa Unit. It is also admitted that the Bank did not grant Ad-hoc Facility of Rs.2 Crores as sought by the Company. But that was because huge amounts were due and the account was classified as NPA on 31.03.2001. the averments about OTS are admitted but it is denied that the banks were ready for settlement for Rs. 9 Crores which amount in fact was suggested by the Applicant Company. 

14.       While meeting the contentions about the excess amount by Rs.23,22,65,631/-, it is stated that the amounts mentioned in the Bank Certificate [upon the basis of which the Applicants assailed the amount], are only principal amounts. This is so because as per the RBI guidelines the interest cannot be debited [and was not debited] in the account after the date of NPA. It is also denied that excess interest of Rs.12,77,84,368/- is charged. The Applicants never raised any objection about the amount. In fact, they admitted the extent of the Company’s liability in its balance sheet. The contentions about the grounds which are not pressed into service are also denied. The S.A. is sought to be dismissed on aforesaid grounds. 

15.       The Applicants filed rejoinder in the nature of affidavit of Mr. H. Gandhi, Director of Applicant No. 1 at Exh.34. The Applicants also filed copies of the Bank Certificate, Statement of Account and other documents. The Respondents filed Statement of Account at Exh. 25 to 28. the additional affidavit of Mr. H. Gandhi is filed at Exh. 77 and copies of the balance sheets for the year 2007-08 to 2008-09 below Exh. 78 for explaining the admission of liability in the earlier balance sheets. 

16.       I have heard arguments of Learned Counsel representing the rival parties. 

17.       At the very threshold, the contention about the legality of notice U/s. 13(2) is taken up. As noted earlier, the contention is two fold. The notice dt. 30.12.2005 since not addressed to the Guarantor – Mortgager, is said to be bad. It is not possible to endorese this submission qua Applicant Nos. 2 to 6 since they are not mortgagors and therefore cannot be said to be ‘Borrowers’ for the purpose of SARFAESI Act. Therefore, it was unnecessary to issue notice to them. The Applicant No. 7 is mortgagor of one property. Therefore, in law, it was unnecessary to issue a notice U/s. 13(2) to it. What the Respondent did was to merely endorse copy to Applicant No. 7 without even calling upon it to discharge the liability. Notice Dt. 30.12.2005 therefore cannot be treated to be statutory notice U/s. 13(2) against Applicant no. 7. 

18.       Realizing the above position, the notice U/s. 13(2) was given on 02.01.2006 to Applicant Nos. 2 to 7. The Applicants’ contention that said notice supercedes the first notice is mentioned for the purpose of rejection; for said notice is not given to the principal Borrower and is given mainly to Applicant No. 7 who is ‘Borrower’ [being mortgagor of Jogeshwari property]. The bare perusal of said notice shows that it does not meet requirement of Section 13(2) & (3) of SARFAESI Act. It is so because by said notice, a sum in the aggregate is claimed by Respondent Nos. 1 to 3 without giving the amounts claimed under each facility muchless the amounts of principal and interest. Such a omnibus demand is not in conformity with the requirement of Sub-section (2) & (3) of Section 13 of SARFAESI Act. What is required is that the notice gives ‘details’ of the amount payable by the Borrower. Said notice therefore in itself is untenable. But, the facility wise amount was demanded in the notice Dt.30.12.2005, a copy of which was sent to Applicant No. 7. This can be construed to be demand under each facility. The external challenge to the notice therefore fails. 

19.       That brings me to the internal challenge to the notice Dt.30.12.2005. The notice is said to be bad on the ground that the amount demanded is highly exaggerated and inflated as stated in the tables in Para 4, supra. It is settled in law that adjudication of the amount is not to be done in the S.A. Therefore, it is impermissible to find out the exact outstandings. At the same time, simply because the extent of claim is not to be adjudicated in the S.A., it does not mean that secured creditor can demand any amount. The amount demanded may not be accurate and precise but has to be close to the secured creditor’s entitlement. The secure creditor ought to demand the reasonably correct amount. 

20.       An amount of Rs.23,22,65,631/- is said to have been demanded in excess. In reply, the Respondent Banks have contended that the aforesaid amount is in fact interest from the dates of respective NPA up to 30.11.2005. After hearing the parties at great length and on going through the record, I find that the Applicants have completely overlooked interest from the date of NPA up to 30.11.2005. The Applicants have simply taken the figures [in Column No. 2 of the table] as given in the certificates issued by the Bank and harped upon the date therein [say for e.g. 31.03.2005 in case of Saraswat Co-op. Bank Ltd.]. It can be seen from the Statement of Account that the amount in the certificate does not include interest up to the aforesaid date. At the same time, it is not that the amount does not at all include interest after the date of NPA. The Learned Counsel for the bank admitted that although the account of Saraswat Co-op. bank Ltd. was classified as NPA on 31.03.2001, the interest has been debited in the account from time to time up to 31.12.2002. Mr. Bhadbhade Learned Counsel has tried to submit across the bar that it was so because attempts for restructuring the account were going on and therefore the account was in operation. This however is not contended in the reply / say and therefore cannot be entertained especially when not clarified in the notice. At the end of the Statement of Account, Saraswat Co-op. Bank Ltd. has merely given said figures of interest under the heading ‘unapplied interest up to 30.11.2005’. This in my view is absolutely wrong. Have regard to the peculiar facts of the case, it was necessary to give the date of commencement of unapplied interest and the rates at which it has been applied from time to time. Moreover, if that was so, it is not understood as to how the interest for about 33 months [01.01.2003 to 30.11.2005] would be as high as given in Column No. 3 of the table. 

21.       What is said in respect of Saraswat Co-op. Bank Ltd. is generally and broadly applicable in respect of amount of unapplied interest as shown in third column of table in Para 4 above of remaining three Banks. The date of NPA of Shamrao Vithal Co-op. Bank Ltd. is 30.06.2001 but the Statement of Account of CC No. 79 shown that interest has been debited on 31.03.2003, 31.05.2003 and 30.06.2003. Thus, it is not as if that no interest has been debited after the date of NPA. In the absence of period and rate of unapplied interest, it was not possible to the Borrower to know and verify the amounts of interest. 

22.       In case of North Kanara GSB Co-op. Bank Ltd., there are three dates of NPA at three places. At one place, the date of NPA is 01.08.2000 while at other place it has stated that the account became NPA in December 2000 and at yet another place the date of NPA is 31.03.2001. This Bank also has not clarified the period and rate of unapplied interest which amounts to not giving ‘details’ as contemplated by Sub-section (3) of Section 13 of SARFAESI Act. The Statement of Account of Cosmos Co-op. Bank Ltd. shows that is it has levied interest after the date of NPA Dt. 31.03.2001. There are several debit entries of interest from 30.06.2001 to 30.06.2003. No doubt, there are also reversal entries of interest but, such entries are not of all debit entries.   

23.       In view of the above, it is more than obvious that the demand in the notice although made in respect of outstandings under each facility is omnibus. Not only principal amount and interest amount should have been separately given but it was necessary to give the period of rate of interest. The failure amounts to not giving ‘details’ as required by Sub-section (3) of Section of SARFAESI Act. Mr. Bhadbhade, Learned Defence Counsel has submitted that in the audited balance sheet, the Applicant No. 1 has admitted the liability of the Respondent banks and therefore the challenge to the extent of outstandings cannot be entertained. The copy of the audited balance sheet for the financial year 2005-06 partly supports this contention. But, the amount stated therein is Rs.54 Crores plus while the amount demanded by notice is about Rs.64 Crores plus. The difference thus is of about Rs.10 Crores. Thus, it cannot be said that there is admission of liability about extent of outstandings. This only shows that the Applicants have highly exaggerated their contention. Yet, there is substantial difference in the correct outstandings and demanded amount. Therefore, the conclusion that the notice is bad in law remains undisturbed. 

24.       In view of the above, it is in fact not necessary to go into the other issues. But, since the arguments were advanced and for the purpose of completeness, I would deal them. The Applicants’ contention about charging of excess interest of Rs.12,77,84,368/- [as set out in Para 5] though is exaggerated is also not altogether incorrect. The figures of excess interest have been worked out by the Applicant on the basis of calculation by Applicant No. 1 and / or its auditors and therefore cannot be accepted on their face value. But, on the Banks own showing, the amount demanded at best includes not only penal interest but also interest on penal interest since penal interest has been compounded on regular basis. The settled law now is that although the Banks may be entitled to penal interest, they are not entitled to compounding part of the same. Therefore, it was necessary for the Respondents to have excluded the amount of interest on penal interest. Ordinarily, such amount is not much but in this case the claims are running into several crores and said amount also may be in Lacs and consequently not insignificant. 

25.       That brings me to the bankwise contentions. The first is in respect of Saraswat Co-op. Bank Ltd. : The amount of Rs.6,29,67,724.35 claimed in the notice under Letter of Credit. The amount in the hand written statement as on 01.01.2002 is Rs.2,89,07,849/-. In the computerized Statement of Account, however, the outstanding balance as on 30.11.2005 excluding interest is Rs.4,00,26,837.80. It is not known as to how the amount has gone up. Moreover, just as in other accounts, the period and rate of interest of unapplied interest as on 30.11.2005 of Rs.2,29,40,886.55 is not clarified. The demand in the absence of above clarification about the interest is bad in law. 

26.       It is also to be noted that the amount claimed by Saraswat Co-op. Bank Ltd. under Bank Guarantee of Rs.55 Lacs and odd amount was not due since admittedly the Bank Guarantees were invoked on the date of issuance of demand not notice. The said bank’s claim under said head therefore should not have been made. This adds to the illegality of the notice. 

27.       That brings me to the Applicants’ contention that the reply given by the secured creditors to the representation / objuection was without application of mind. The reply Dt. 10.07.2006 shows that the banks did not specifically consider the objections and denied the allegations by grouping them under 18 heads. Although this is not ordinarily acceptable, the same will have to be endorsed in this case having regard to the representation / objection. The advocate for the Applicants gave 1672 pages objection by letter Dt.25.02.2006. Although most of the same is by way of Annexures in bond four books, the proper objection also runs into 105 pages raising many frivolous issues and taking the contentions omnibusly and vaguely practically making it impossible to deal them. If the Applicants themselves have made the things unworkable, they cannot take the benefit. It the representation / objection are themselves not proper and reasonable as could be ordinarily dealt with, the secured creditor may not have any option but to deal it in the manner in which Respondents did it. As such, it is not possible to upheld this contention. 

28.       It is also contended on behalf of the Applicants that on 31.03.2001, Saraswat Co-op. bank Ltd. has reviewed the existing limit where because it cannot be said that the account was NPA on said date. The bank has not clarified as to how the account became NPA on said date. This also is not without significance. 

29.       For the aforesaid  reasons, the application of Applicant Nos. 1 & 7 is liable to be allowed, Applicant Nos. 2 to 6 being unnecessary parties. As the Banks may test the order, I propose to give four weeks time to redeliver the possession. Hence, following order; 

O R D E R 

            A)        The Securitisation Application of Applicant Nos. 1 & 7 is allowed with no order as to costs. 

B)        The Respondents shall redeliver possession of the properties to Applicant Nos. 1 & 7, as the case may be, within four weeks. 

C)        The parties shall bear their costs.


Mumbai                                                                                                                                                                                                                                                               (K.J. PARATWAR)

Dt.:29th June, 2010                                                                                                                                                                                                                                                Presiding Officer

Debts Recovery Tribunal, II,




Our Weekly Mails are DRT Guide and gold mine of practical information for the borrowers and guarantors :- The visitors of this web site particularly Borrowers and Guarantors will be immensely benefited by our weekly mails, all previous issues from 1st one till the last one may be viewed by clicking Drt Solutions Weekly Mail for Borrowers & Guarantors  Separate web pages have been created to contain these mails in batches of 10 so that pages open up fast. These mails are DRT Guide and gold mine of information on current topics giving lot of practical suggestions and comments. Any new comer to this site must go through all the weekly mails right from the issue no 1 to the latest. If possible please spread the reference of this web site and the weekly mail among the persons, borrowers and guarantors who are the bank victims. If anyone desires to get these mails regularly, he may write to us for inclusion of his e-mail ID in the regular mailing list. The weekly mail is issued on every Friday morning 6 AM. The particular issue of the weekly mail is first published on the web site and then mails are sent. These weekly mails have become quite popular among the borrowers and guarantors in the country as we are getting huge no of mails appreciating the same. We welcome suggestions for improvements as well as the topics on which more information is required.

Important Announcement - Video Arguments presented in Indian Court for the First Time :- We are pleased to announce that on 10th October 2007, proposed 'Computer Presentation' was held for the first time in the country by Mr. Ram Kishan before Hon'ble District Judge, Indore and the 'Video Arguments' were submitted and shown to the said Judge on 15.10.07. Thus a history has been made in the Judicial Management in our country. We have prepared two DVDs, one showing the method and system for such presentation, its advantages with a practical application. Another DVD showing the actual presentation before the District Judge, Indore on 10th October 2007. we have prepared an article titled 'Computer Presentation & Video Arguments' vide click here Court Technologies IT Presentation Video Arguments

DVDs containing Video Record of DRT Conference at Indore and Chennai:- All the proceedings were video recorded and the DVDs containing the same are available. Any one desiring to have the DVDs may send through e-mail their postal address, name of the company, and if possible details of the pending DRT case or Securitisation case and the amount involved, name of concerned person and his contact details including phone nos etc. to us. During these conferences, eminent DRT experts using PowerPoint Presentation dealt with all the aspects of Bank Litigations and Borrowers Defence. The participants from all over the country were highly impressed and benefited from the knowledge thus gained.

Important Victory of Our Client against Bank:- One of our important clients at Chandigarh who filed damage suit of Rs. 1825 crores against a public sector Bank on 13.01.05 registered an important victory on 03.03.07 when the Court waived the entire court fee despite all opposition by the defendant Bank. The alleged dues of the Bank are Rs. 30 crores. Since the damages are much more than the alleged claim of the bank, no recovery action can be executed till the said damage suit is finally decided. The usual delay in the litigation does not affect our client as the damages are increasing day by day due to interest charges at rate which is much higher than the increase in the alleged claim of the bank. The said damage suit was drafted by us and all necessary advice and guidance was provided on all dates of proceedings.

Consequent on better pleadings by the borrowers and guarantors as well as better efforts by their advocates, the DRTs have started recognizing in genuine cases that injustice is being done to the borrowers and guarantors. Hence slowly, DRTs have started issuing orders in favour of the borrowers and guarantors. Since DRTs judgments are not reported, we have been approached by the visitors of this web site to report such judgments here.

The above will be useful to the bankers also so that their officials and advocates will avoid the wrong doings reported in such judgments. Such gestures on their part will improve the banking and thus helping the industries in particular and society and the nation at large

Please await compilation of recent orders, which will appear shortly here.

The parties are requested to send photocopies of such orders to us, we shall publish the summary of such judgments with our comments.

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Application of Law of Torts in claiming Damages from Municipal Corporations for demolition of structures, closure of shops etc:- In many parts of the country, the Municipal Corporations are demolishing structures like shops and houses which existed for number of years. The shops existing for number of years are proposed to be shut down. The affected persons should claim Damages under the Law of Torts, which would be substantial. It is learnt that in Delhi itself about 5 lac shops are to be closed down and about 25 lac persons would be out of jobs. All these persons should file damage suits in the civil court. Since the damages would be substantial, the suits may be filed as Indigent Persons. Since the damages would attract interest, the usual delay by the civil courts will not affect the final outcome. The affected shop owners may discuss the details with us on phone.

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. 

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About Us in Brief :-  (1) We specialize in DRT (Debt Recovery Tribunal) and NCLT (National Company Law Tribunal) matters. As a whole you may approach us for all DRT Problems and Solutions as well as matters connected with ARCIL i.e. Asset Reconstruction Company (India) Limited,  We have a Joint Venture with an America based law firm for various activities like BPO, legal BPO and DRT. The details of the said American firm and the joint venture may be seen at the page - Our US Joint Venture with Anand Ahuja Associates or in www.usindolegal.com (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 or NCLT. 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 15 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) We have also handled assignments for preparation of damage claims against Electricity Boards, Insurance Companies, Municipal Corporations etc. all on the basis of the Law of Torts.  (6) 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. (7) Several DRT counterclaims drafted by us are being handled by different advocates at DRT Mumbai, DRT Delhi, DRT Jabalpur etc. Thus DRT advocates are available in these cities. Cases in other Debt Recovery Tribunals are under process. (8) This site is updated monthly mostly on every first Monday of the month or for urgent release on any day with latest material. (9) 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. We hail from the place to which Maharishi Mahesh Yogi and Acharya Rajnish belong and hence this site is dedicated to them.

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