Appendix – 2
A
Model Form of
Rules and Regulations of Society :
1. Name of the society : : LEGAL FORUM OF
INDIA
2. Head office of the society : 402,
Samavsaran Appartments, Kanchan Bagh Main Road, Indore, M.P.
3. Objects of the society : (1) To
Promote the application of modern management and technology in the legal and
judicial system.
(2)
To
do legal research and provide necessary legal assistance to the members of
the society and the public at large, in order to make the justice available
at fast pace and at low cost, by applying technology for e-filing of cases
and video arguments throughout the country. To promote legal awareness
amongst the public by providing necessary changes in the law through
journal/e-mail etc.
(3) To
take up other ancillary assignments in the legal field, as may be decided by
the market and or as decided by the managing committee of the society.
4. Working field of the society : State of
M. P.
5. Membership
Any
person who is major and willing to bound himself with the regulations may
become member by paying fee or charges etc.
[A] Life Membership – Any member who pays a donation of Rs.
5000/- (Rupees Five Thousand) only, in lump sum, will be the life member of
the society.
[B] Ordinary membership – Any person who will pay Rs.100/- per
month or Rs.1200/- in a year will be a ordinary member of the society.
[C] Honourable Membership – The managing committee of the
society may call any person(s) as Honourable Members for the time-being, as
it thinks fit, for their moral support and guidance to the society. Such
members can take part in the general meeting but will not have the right of
vote in the meeting.
6. Procedure for Membership
Any
person willing to become a member of the society should apply in writing
with prescribed fee. The application will be considered in the executive /
Management committee and decision will be taken to or fro. If the
application is rejected reason for that will be drawn accordingly.
7. Qualifications of the Members
To become the member of society, a person should have
qualifications as below:
(A) He
should be major;
(B) Should
be a Indian Citizen;
(C) Promises
to abide by rules and regulation of the society;
(D) Should
be of sound mind;
(E) Should
not be lunatic or disqualified under any law;
(F) Should
be of good and moral character;
(G) Should
be free from intoxicating drinks and drugs,; and
(H) Should
pay member ship fee regularly.
8. Penalty and termination of Membership :
(A) Any
member who has not deposited Annual fee as per rule, he will have to deposit
25% more than the prescribed fee as penalty, to continue as member in the
respective category.
(B) Any
member not depositing monthly subscription regularly has to deposit 10% more
within 3 months from the date of default.
(C) If
the member refuses to subscribe the said amount, a notice will be served on
him, and if no action is taken, then the matter will be taken up by the
managing committee and a decision to terminate the membership may be taken
accordingly.
(D) If
any member is acting against the objectives and/or regulations of the
society and harming to the property of the society or making hindrances in
achieving the objects of the society, his membership may be terminated by
taking decision in general meeting.
(E) Any
other lawful reason for termination of membership.
9. Information as to decision
Notice seeking clarification from such member, will be served on such member
whose membership is taken up for termination, by management body.
10. Cessation of Membership:
The membership of any member will cease on the following
grounds-
(A) On
the death of member;
(B) On
becoming of unsound mind;
(C) When
he does not subscribe membership fee as stated above;
(D) On
resignation from the membership, if it is accepted;
(E) On
absent in three or more consecutive meeting without the permission of
chairman;
(F) On
acting against the objectives of society and the managing committee after
enquiry has taken decision to remove him from membership;
(G) When
he is debarred for membership in the society by any legal order;
(H) If
he has become insolvent;
(I) When
he does not abide himself, with the rules and regulations of the society.
11. Committees of the society:
The society will form two bodies or committees for its
management i.e.
(i) General Committee/body; and
(ii) Managing Committee.
(i) General Committee/body -
(A) Formation –
In this committee the members will be according to rule 5 of these
regulations. It will consist at least Seven members.
(B) Meeting –
The general meeting will be held as and when necessary. It is necessary to
hold general meeting once in a year.
(C) Time
& place of meeting – The executive body will decide the place, time and
date of the general meeting.
(D) Notice
of the meeting – A notice of date of meeting to be held, will be served
on every member at least 7 (seven) days prior to date of meeting.
(E)
Quorum –
The quorum of the meeting will be at least 1/3 of the total membership. If
the quorum is not complete the meeting will be adjourned for one hour and
after that there will be no quorum. Members present can take meeting in
absence of Quorum after adjournment.
(F)
Annual Meeting –
The annual meeting will be held in the second week of April every year. The
financial year of the society will be from April to March period.
(G)
First meeting of the society –
The first general meeting of the society will held within the 3 months from
its registration, in which officiating members will be elected as per rules
and law.
(H)
Powers and duties –
The general body/committee will be competent to -
(i)
approve annual report and progress report;
(ii)
manage fix property and funds;
(iii) appoint auditor for audit purposes;
(iv)
accept income and expenditure statement;
(v)
approve budget for the year;
(vi)
make policy for the fulfillment of its objects and purpose;
(vii) select and form management committee/body;
(viii) any other matter with the permission of chairman.
(ii)
Managing Committee –
(A)
Formation – Member
whose name is enrolled in the register of members, will be empowered to
elect the members of managing committee. This committee will consist at
least seven members.
(B)
Officiating members – Member
will be elected for the following post in the society namely –
(i)
Chairman or President;
(ii) Vice Chairman or Vice President;
(iii) Secretary;
(C)
Term of the Committee –
The
term of the committee will be three years. On the expiry of the time if a
new committee is not elected the present committee will continue for further
3 months, but its approval from general committee will be essential. A
member of this committee will be eligible for re-election.
(D)
Honorarium or allowances –
If
the chairman, secretary etc., devote full time to work for the society, an
appropriate amount may be given to him on the approval of managing
committee.
(E)
Meeting –
The managing committee will hold meeting in every three months. But a
special meeting may be called by president/chairman on written request from
members.
(F) Notice of the meeting –
The notice of the meeting will be served on the members at least 7 days
prior to the date of meeting. But in special cases, a notice of 3 days will
be sufficient.
(G) Powers
and duties -
The
committee will have power to –
(i)
achieve purposes and objects of society and act accordingly;
(ii)
present audited accounts before the general committee for approval;
(iii) raise funds, purchase property for the welfare of society;
(iv)
pay all legal taxes levied on the property of the society;
(v)
appoint employees for the society;
(vi)
pay remuneration, pays and allowances to the employees and workers;
(vii) follow all rules and regulations;
(viii) Any proposal of amendment approved in the general meeting to be sent
to Registrar, will be dealt with by this committee;
(ix) deal in any other work entrusted to the committee by general body.
12. Powers, duties and responsibilities of the Chairman /
President:
(i) He will preside over all the meetings of general body and
managing body;
(ii) He will manage the meeting through the Secretary;
(iii) He will co-operate with members of working of society;
(iv)
He will also control all activities of society for achievement of purposes
and objects.
13. Powers of the Vice-President:
He
will act in the absence of President and preside over the meeting using all
powers of President.
14. Duties of the Secretary
(i)
To call and manage the meetings of general body and managing body. He will
take permission and consent of President and decide place, date and time for
meetings.
(ii)
To prepare society’s account books, money receipt and payment etc.
(iii) He will get it audited and present before the general meeting.
(iv)
To prepare all relevant documents and minutes of the meetings.
(v)
To be responsible for the correspondence of society.
(vi)
He will be authorized to keep Rs.______ with him at one time for society and
can spend Rs.______ in one time.
17. Bank Account:
All the funds of society will be kep in _____ Bank branch at
Indore.
Withdrawal of the money from the bank may be done by joint signature of
President and Secretary.
The
Secretary will keep Rs._____ for daily expenses of society.
18. Records to be kept:
Register of members, cash book, stock register, record of assets and
liabilities, bank account and pass book etc. will be kept in the society’s
office.
Records related to the general meeting, list of members, audited accounts
which are to be sent to Registrar under section 27 & 28 will be maintained
and kept.
19. Amendment in regulation and bye-laws:
Any
amendment in bye-laws for regulations may be done in the general meeting of
society by passing resolution by 2/3 members of the total members.
For
the welfare of the society, if any amendment, as per rule, is made by the
Registrar, the same will be binding on all members.
20. Assets and funds:
All
the assets and funds will belong to the society. All movable and immovable
property will also belong to the society. It will not belong to any member
in his name. The immovable property can not be sold out, transferred or
donated without the permission of the Registrar.
21. Meeting by Registrar:
If
no meeting is held in due course of time by general or managing body, the
Registrar may call meeting and decide subjects to be considered in the
meeting. He will call the meeting under the law.
22. Dissolution of the society:
The
proposal for dissolution may be passed by 3/5 voters of total members
enrolled in the register of members.
After dissolution, all the property will vest in the Government according to
the provisions of the Act.
23. Any dispute may be decided in the general meeting by the
president. If it is not decided in the meeting, it will be sent to Registrar
for disposal. The decision of the Registrar will be final and binding on the
society.
The forum will initiate actions in the following areas as well:-
(1)
Better Management & Improved Technology in Indian Judiciary :- The
well known Supreme Court Judge, Justice V.R. Krishna Iyer in his famous book
'Law, Lawyers and Justice' 1988 edition at page 133 had said that Indian
Judiciary is backward by 200 years compared with developed nations. The
forum will spearhead implementation of better management techniques and
improved technology in Indian Court Rooms.
(2) Questioning the legal validity of the Securitisation Act :- Despite
the Supreme Court of India declaring the said Act legally valid, still there
are several provisions of the said Act which are questionable. The
constitutional wing of the forum will go in depth and prepare its
recommendations. Accordingly, the forum will initiate filing of suitable
action before an High Court where the forum can monitor, provide proper
guidance and pursue up to the Supreme Court. This task is gigantic
particularly when the Act has already been declared valid. Whole exercise
has to be done with application of superb knowledge of constitutional law.
(3) Proper Implementation of the Provisions of existing Securitisation Act
:-
(4) Seeking for Enactment - Lenders' Liability Act:-
(5) Implementation of Fair Practice Code (as framed by Indian Banks'
Association) by Banks & FIs :-
(6)
Some of the areas already spotted are as under:-
(A) Framing of Illegal Bank Documents and Getting signatures under undue
influence :-
(1) Most
of the documents got signed from the borrowers and guarantors contain one
sided terms and conditions. Since the documents are got signed at the time
of acute financial needs, the said signatory has no option but to sign the
said documents under undue influence. At times signatures are taken on blank
printed forms
(2) When
the above illegalities are pointed out during the litigation, the said
signatory is silenced that he should have not signed if the documents had
above such deficiencies and illegalities. He feels cheated and becomes
victim of a serious deliberate trap and wrong doings
(3) Such
wrong doings are pointed out in all the written statements of the borrowers
and guarantors. Lot of time and efforts of the litigating entrepreneurs,
industrialists and businessmen as well as the advocates, courts and judges
is being wasted on these matters with no remedies to the suffering party
(4) The
only solution is to have a proper legislation specifically on bank
documentation so that it will not be possible to commit above wrong doings
and illegalities.
(5) There
are several such matters requiring legislations. One of the aims and
objectives of this forum is to frame a draft legislation, move the same as a
bill in the parliament, convince the house members to pass such bills. This
is a genuine need. The industrialist and business community is paying huge
amount to the national exchequer apart from huge contribution to the
political parties and hence with concerted efforts, such bill can be turned
into legislation.
(B) Absence of impartial third party between lenders and borrowers
(1) At
present in India, there is no independent and impartial third agency between
the lender and borrowers. In USA, legal agencies are appointed as third such
agencies right from the beginning.
(2) In
existing system in India, the so called third agencies such as Ombudsmen are
not impartial as they are appointed by the lenders only. The RBI does not
listen to individual cases. The Ministry of Finance does not have any
independent outlook. The judicial system like civil courts take years to
give verdict. The DRT’s decisions are mostly biased in favour of lenders.
(3) In
view of above, agencies such as industrial associations, CAs, law firms and
or advocates must be assigned the task of the said third agencies right from
the stage of signing of the documents or creation of mortgage so that during
any disputes, both the lender and borrower approach them for resolution or
arbitration.
(4) Suitable
legislation for the above will result in expeditious dispute resolution
during the financial transactions and as a result the assets will not be
idling for years as at present. Further such proceedings even will be
helpful during the legal trials.
(C)Calculations of NPA and rehabilitation of sick units
(1) There
is basic lacuna in calculations of NPAs and preparation of rehabilitation
plans. The cost of unreasonable delay or wrong doings by the lenders is
never considered as part of the overburden.
(2) The
third agency will ensure that such expenses are invariably incorporated and
in that eventuality, the correct calculations of NPAs or rehabilitation
plans will emerge conforming to the principles of justice, equity and good
conscience.
(D) Provision of legal expenses for borrowers whose business or industries
have become sick
(1) It
is observed in the cases of sick industrial or business units, the recovery
suits are filed by the lenders in DRTs and the borrowers do not have
financial resources to fight legal battles.
(2) On
the other hand the lenders have unlimited access to finances for legal
expenses. Further they have well established law departments, experienced
law personnels, experienced advocates on their panel etc. Since such
comprehensive battles have not taken place in past, there are not many
precedences in favour of the borrowers and guarantors. The complete legal
battle is on most unequal footings.
(3) There
must be provision of legal expenses so that if there is any litigation after
the unit becomes sick, the expenses must be made available.
(4) The
proposed legislation may take care of the above requirements.
(E) Provision of survival and legal expenses for certain borrowers whose
business or industries have become sick
(1) There
are certain borrowers like Seed Capital Assisted Entrepreneurs who are
solely dependent on their project and there is no other source of income for
them. This will be will known at the initial appraisal of the project. If
such project become sick due to reasons beyond control of the said borrower,
there must be provision for survival and legal expenses for the said
borrower till such time he gets another source of income.
(F) Initiation of legal action especially against those borrowers whose
business or industries have become sick
(1) All
the factors must be considered before initiating the legal action. The third
agency must have the consent for the same. The legal expenses are to be
provided. Rehabilitation of the sick unit should be the first consideration.
(G) Dealings with the banks and FIs in respect of industrial and business
finance are based on law of torts rather than contracts
(1) Treating
the above transactions of industrial and business finance under the law of
contracts is a grave legal error. There may be contract in respect of
security measures but the financial assistance is based on torts only
(H) Amendment in Sec 138 NI act under special circumstances
(1) The
sec 138 ni act dealing with dishonour of cheques needs amendment in respect
of special circumstances when the limits are under renewal or being
sanctioned or being extended, the banks should not dishonour the cheques
issued for the needs of the business and if they do so, the criminal
provisions will be applicable to them instead of the borrowers.
(I) Personal guarantee of the directors of the borrowing company
(1) The
lenders are providing financial assistance after full satisfaction of
technical and financial appraisal of the viability of the industry or
business and hence no such personal guarantee should be called for. In case
it is insisted, the directors of the lenders should also render such
personal guarantee in the interest of justice, equity and good conscience.
(J) RBI Guidelines and provisions thereunder
(1) The
RBI Guidelines have been held statutory and mandatory in several Supreme
Court judgments. All the connected legislations need to be suitably amended.
The provisions under the RBI Guidelines dealing with all the aspects of
Industrial Finance and Business Finance should find place in the proposed
legislations.
(K) Several other areas like Income Tax, Excise, Sales Tax, Payment of
Minimum Wages Act, Provident Fund Act etc require review and suitable
amendments keeping in view the state of industrial and business sickness
(1) After
the basic legislation, all the connected legislations like RBI Act, Banking
Regulation Act, DRT Act, Securitisation Act, Income Tax Act, SFC Act,
Excise, Sales Tax Act, Payment of Minimum Wages Act, Provident Fund Act,
Civil Procedure Code, Indian Penal Code etc need to be suitably amended.
(L) Unreasonable delay in provision of working capital, giving inadequate
working capital as well as many of the above mentioned wrong doings must be
held criminal with prescribed jail terms
(1) When
dishonour of cheques is a crime with jail terms, not submitting returns to
Registrar of Companies is a crime with jail terms, why the above mentioned
underfinancing should not be a crime with jail terms.
(2) It is most commonly talked about that the industrialists and
businessmen are diverting funds but if some one goes in depth it would be
found that if such a thing happens it is due to collusion of the officials
of the lenders and if jail term is awarded to the borrowers, the said
officials would also get the equal jail term rather more as they are doing
such wrong doings in several cases.
(3) There is no social security for the industrialists and businessmen for
which also legislation is needed. Business is fraught with uncertainties and
there are lot of circumstances which are beyond control of the borrowers, In
our country there is no 'no fault liability' legislation. The
'Securitisation Act' was to be passed with 'Lenders Liability Act' Whereas
the Securitisation Act has been passed, the Lenders Liability Act has not
yet been framed.
(M) All the court judgments must include a conclusion as to which area of
the case requires new legislation
(1) A
law is needed which should require all the judgments to include specific
comment of the judge whether any new legislation is required
(2) Till such time such new law is made, time bound program be made to
examine the existing judgments and the substance of new legislation
located.
(3) Several recommendations of the Law Commission are pending for
legislation, those affecting industrialists and businessmen need to be
implemented in form of legislation.
(N) Capability and competency of industrial and business community to
achieve above legislations
(1) The
industry and business sector is generating huge revenue for the government
and the society. The political parties get contributions for their various
purposes including elections. The industrial and business community is
within their rights to have the above and other legislations which are based
on justice, equity and good consciousness.
(O) Your views and suggestions are invited
(1) We
are forming the ‘Legal Forum of India' to achieve the legislations in the
proposed focus area as above. There will be other focus areas in future in
the arena of better management and improved technology in Indian Judiciary.
(2) In
the meantime, we request you to discuss the above among the industrialists
and businessmen. Your and their views as well as suggestions may kindly be
mailed to us at our idramkishan@drtsolutions.com If
you desire to interact with us, you are welcome to visit us at the following
address with prior appointment on phone.
(3) With
your views and suggestions, we shall continuously enrich this page till a
new web site comes up. the URL registered for the same is www.legalforum.in
Thanking you and with warm regards,
Ram Kishan
Legal Forum of India
ramkishan@drtsolutions.com
Phone nos – M – 093 0210 3689, Off-cum-res – 073 1404 9358 and 073 1329 0201
DRT Solutions Weekly Mail – 153rd Issue dated 15th
April ’11
(1) Transfer of DRTs from Ministry of Finance to Ministry of Law – Borrowers
to start movement by writing to Ministry of Finance under RTI Act
Despite writ filed by ‘Borrowers
Rights Forum’ in Andhra Pradesh High Court as well as contempt proceedings,
the Ministry of Finance continues to exercise administrative control on DRTs
resulting into injustice caused to the litigant borrowers. Many borrowers
have started applying pressure on the concerned Ministries using the
provisions under the RTI Act.. A sample draft of letter is reproduced below.
It will be appreciated that each and every litigant borrower addresses such
communication so that with the pressure so generated the DRTs are
transferred to Ministry of Law at the earliest:-
SPEED POST AD
April , 2011
To,
The Under Secretary (Jus) /
Public Information Officer (RTI Act),
Department of Justice
Ministry of Law & Justice
,
Jaisalmer House, 26, Mansingh Road
,
NEW DELHI 110 003
Sub:
Information under Right to Information Act 2005
Re
: Unconstitutional functioning of DRT’s & DRAT’s uder Administrative
control of Ministry of Finance
Dear Sir,
The undersigned would like to bring to your notice that the DRT’s & DRAT’s
are functioning unconstitutionally under
Ministry of Finance. The Question of Judicial Independence, appointments,
safety of tenure, termination, funding for salaries, benefits and
facilities were examined by the
Constitutional Bench of Hon’ble Supreme Court of India in Union of India Vs
R. Gandhi, President Madras Bar Association and Union of India (2010 INDLAW
SC 405 = 2010 (4) Supreme 193). The said judgment states in Para 56
(xiii)…. “The administrative support for all Tribunals should be from the
Ministry of Law & Justice. Neither the Tribunals nor its members shall seek
or be provided with facilities from the respective sponsoring or parent
Ministries or concerned department.”
In violation and in Contempt of Hon’ble Supreme Court Constitutional Bench
Judgment, the Ministry of Finance still maintains Administrative control of
DRTs & DRATs.
It is learnt that the Ministry of Finance has replied to some of the
queries that the implementation of the above Hon’ble Supreme Court Judgment
is under active consideration of Department of Justice, Ministry of Law and
Justice. Accordingly the Ministry of Finance has advised
to take up the matter with Ministry of Law & Justice.
In view of the above I seek the following information under the RTI Act
2005. Please let me have the certified Xerox copies of the documents
pertaining to the following:
01. What
action has been taken about implementation of the above Hon’ble Supreme
Court Judgment by Department of Justice, Ministry of Law & Justice since May
2010 - when the above judgment was
delivered.
02. If the
implementation of the Supreme Court judgment is under active consideration
then what is the time period and deadline decided by Ministry of Law &
Justice to transfer the functioning of DRT’s and DRAT’s under Administrative
control of Ministry of Law & Justice from Ministry of Finance.
03. Please
provide details of as to why the DRT’s and DRAT’s are still functioning
under the Ministry of Finance.
04. Please
provide details of as to why the Presiding Officers of Debt Recovery
Tribunals & DRAT’s continued to be appointed by Ministry of Finance.
05. In case
the implementation of Hon’ble Supreme Court Judgment is under active
consideration why the present functioning of DRT’s & DRAT’s not being
suspended till the time the functioning of DRT’s & DRAT’s is transferred to
Department of Justice Ministry of Law & Justice.
06. I
understand that substantial number of complaints have been received on the
subject of functioning of DRT’ and DRAT’ by Ministry of Finance and Ministry
of Law and Justice. I seek copies of all the complaints and redressal /
reply by the Ministry if any.
Please let me know the amount of fees to be remitted for duly certified
Xerox copies by speed post of the above documents.
Enclosed please find herewith Postal Order No. - - - for Rs. 10/- for
application fees.
Thanking you in anticipation of your early and timely reply.
Yours sincerely,
Encls: As above
(2) No more ‘My Lord’, ‘Your Lordship’ in Punjab & Haryana High Court
Mr. N.K. Sharma, Ex-GM(Law) and
our Associate has communicated the following news item which is self
explanatory :-
http://indialawyers.wordpress.com/2011/04/12/no-more-my-lord-your-lordship-in-punjab-haryana-hc/
Ajay Sura, TIMES OF INDIA
CHANDIGARH: In a historical move to
discard the colonial practice of addressing the judges of the high court as
'My Lord' or 'Your Lordship',
the Punjab
and Haryana High Court Bar
Association on
Thursday passed a resolution asking its members not to address the court
using the traditional phrase 'My Lord'.
In its resolution passed unanimously by around 4500 members strong lawyers
association has decided that in future the judges should be addressed as
'Sir' or 'Your Honour'. The decision was taken in the general house meeting
of the bar held in the jam-packed bar room of the high court on Thursday
afternoon. With this, the Punjab and Haryana high court has become second
high court in the country after Kerala
high court advocates
Association that had passed such resolution in June 2007 to take such step.
Talking to the development, President
of the High Court Bar
Association, Kulbir Singh Dhaliwal said that the bar body has unanimously
resolved to stop addressing judges as 'My Lord' or 'Your Lordship' from
Thursday.
Dhaliwal further stated, "We passed the resolution to endorse the already
existing rules in this concerned framed by the Bar
Council of India (BCI)
in 2006 that had resolved that the form of address in the Supreme
Court and high courts
should be 'Your Honour' or 'Honourable Court'. About the forcibility of the
resolution, Dhaliwal added that because of habit, some lawyers may continue
to say 'My Lord', but gradually they will get used to the new phrase. He
also said that bar has received positive response from the judges on this
issue.
Background:
The BCI - apex body of the lawyers in country had adopted a resolution in
April 2006 and added a new Rule 49(1)(j) in the Advocates Act. As per the
rule, lawyers can address the court as 'Your Honour' and refer to it as 'Honourable
Court'. If it is a subordinate court, lawyers can use terms such as 'Sir' or
any equivalent phrase in the regional language concerned. Explaining the
rationale behind the move, the Bar
Council had held that
the words such as 'My Lord' and 'Your Lordship' were "relics of the colonial
past".
The resolution has since been circulated to all state councils and the
Supreme Court for adoption but over five years now, the resolution largely
remained on paper. However, in an unprecedented move in October 2009, one of
the judges of Madras HC, Justice K Chandru had banned lawyers from
addressing his court as 'My lord' and 'Your lordship'
DRT Solutions Weekly Mail – 152nd Issue dated 8th
April ’11
(1) Securitisation Act – Appeal to DRAT – Relaxation in the Condition of
pre-deposit of 25% - Even Supreme Court says that the matter is beyond
jurisdiction of courts
This
matter was raised by us in the last weekly mail on account of a
Delhi High Court
judgment.
Now the same verdict has been delivered by the Supreme Court. Mr. Sudhir
Bindal, one of our clients at Indore has mailed us the said judgment of the
Supreme Court in the matter of Narayan Chandra Ghose vs UCO Bank decided by
the Supreme Court on 18.03.11 vide citation 2011 STPL (Web) 310 SC . In our
last weekly mail we have stated that
“There are many instances when the appellant is not having
financial resources for the said deposit. Under such facts and
circumstances, it is necessary for the courts to have powers to waive the
prescribed condition of deposit. Such matter should be taken up by the
Borrowers or their associations through the mechanism of PIL to amend the
law.” The whole strategy should be as under:-
(a)
The borrowers should contact their existing Business and
Industrial Associations and request them to initiate matter by way of PIL.
(b)
The borrowers having their own Associations should initiate
such action.
(c)
If possible, the borrowers may form new Associations and
initiate such action.
(d)
Till such action is initiated, it would be worthwhile to
amend the pleadings suitably with the intention of establishing the fact
judicially that funds for such deposit are not available and then the matter
should be taken up for challenging the constitutional validity of the Act on
this count.
(e)
Efforts should be made to impress upon the local MP to
initiate amendment of the Act in the parliament.
It is needless
to mention that we have been voicing this matter for several years but could
not get suitable persons to initiate above actions. Recently we tried to
initiate such matter at Indore but due to not having consensus among the
litigant borrowers, we had no choice but to retreat and confine ourselves to
introduction of ‘Management and Technology in Judiciary’
In nutshell,
this is the matter of wrong legislation thrusted upon the borrowers by the
strong lobby of banks acting through Mr. M.R. Umarjee who was the main
person to draft the Securitisation Act 2002. It could have been corrected by
Mr. Mardia in 2004 but Mr. Mardia was not having time to discuss and
understand our point of view.
(2) Another Victory of one of our clients at Mumbai – DRT orders the Bank to
pay Rs. 77.54 lacs to the Applicant Borrower for shortage of goods in
custody
One of our
clients at Mumbai has conveyed the order dated 01.04.11 of DRT II Mumbai
arising from SA No 7 of 2007 in the matter of Prakash B. Rohra vs Greater
Bombay Co-operative Bank wherein the DRT has allowed the application of the
Applicant No 2 and the Respondent Bank has been ordered to pay the Applicant
the sum of Rs. 77,54,454/- with interest @ 9% p.a. after 3 months until full
payment towards the cost of shortfall in goods in possession of the bank
found at the time of redelivery.
DRT Solutions Weekly Mail – 151st Issue dated 1st
April ’11
(1) Securitisation Act – Appeal to DRAT – Condition of pre-deposit of 25% -
No purpose will be served by filing writ in the High Court under Art 226 –
better course of action will be by resorting to Public Interest Litigation
The
Delhi High Court in the matter of Satyavol Venkat Rao vs Union of India
decided on 13.09.10 has stated that Courts of Law can neither substitute
legal provisions nor legislate and Tribunal has no jurisdiction to reduce
the amount below 25% of the debt as it is required to act within the
statutory parameters.
Our Views
There
are many instances when the appellant is not having financial resources for
the said deposit. Under such facts and circumstances, it is necessary for
the courts to have powers to waive the prescribed condition of deposit. Such
matter should be taken up by the Borrowers or their associations through the
mechanism of PIL to amend the law.
(2) Rate of Interest – the Courts have the jurisdiction to ascertain
The
Patna High Court in the matter of Punjab National Bank vs M/s Sheovijoy
Udyog decided on 23.08.10 has concluded that the grant of rate of interest
during the pendency of suit and thereafter is a discretionary jurisdiction
of the Courts. After the suit is filed before the court of law, the rate of
interest agreed or claimed becomes immaterial and therefore the courts have
the jurisdiction to ascertain the rate of interest.
Our Views
In
respect of business and commercial projects where the financial appraisal of
the banks is based on generation of surplus as ascertained from the
projected balance sheets, the interest on the loans and the repayments are
to be made out of cash generation, during the sickness, the lenders should
resort to measures like nursing, rehabilitation or revival and till such
measures achieves the positive results, there should not be any pressure on
payment of interest or repayment which if is done should amount to wrong
doing calling for claim of loss and damages due to violation of duty of
care. If proper pleadings are made, the rate of interest during the said
period of sickness could be considered as even nil due to application of
above ruling.
