DRT Solutions Weekly Mail – 240th Issue
dated 14thDecember ‘12
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(1) Bankers complaining against DRTs
Following is the extract from our web page vide link
http://www.drtsolutions.com/securitisation_securitization_SARFAESI_SA_Act.htm
Following news item appeared at page 3 of the Economic Times, Mumbai as
well as the internet edition :-
Shortage of staff forces DRTs to put off cases
http://economictimes.indiatimes.com/news/economy/finance/staff-crunch-forces-debt-recovery-tribunals-to-put-off-cases/articleshow/17551652.cms
(DRTs), an important mechanism for loan recovery by banks, are
foundering amid charges of lack of professionalism and shortage of staff
as bad loans are crippling banks. The disposal of cases has been falling
as a few members have to handle enormous amount of claims and the
delaying tactics employed by defaulters by going in appeal against every
order are defeating the purpose
In fact, bankers at a recent meeting with the finance ministry officials
have charged that unjustified orders are being passed by some DRT
officials in connivance with promoters who want to protect their assets.
"We had complained about the unilateral stays that the registrars of the
debt recovery tribunals are granting to the borrowers without giving
banks a proper hearing,'' said a bank chairman, who did not want to be
identified. "The issue was raised by us at a DRT forum where finance
ministry officials were also present."
There are at least 33 DRTs and
five appellate bodies to deal with cases. Although the mechanism was
brought in with a noble aim to decide on the cases within 6 months, the
lack of adequate staff and timely replacements have hit their
operations. With corruption spreading, some say, even DRTs are not
immune to it. "Borrowers are taking advantage of the debt recovery
appellate tribunal and appealing against the order issued by the DRTs,''
said advocate Ravi Goenka of Goenka Law Associates who
represents financial institutions like asset reconstruction firm Arcil
and OBC.
"According to the law, DRTs have to dispose off cases in six months, but
it's taking almost two to three years.'' In 2011-12, of the total amount
recovered through the Sarfaesi Act, DRTs and Lok Adalats registered a
decline of 8.2% at 14,400 crore, from 15,700 crore a year earlier
despite a surge in bad loans.
There is only one member looking after the Western region comprising
entire Maharashtra, Gujarat and Goa. For a long time, the post of
presiding officer was vacant and presiding officer of the Kolkata bench
was looking after the Western region appellate tribunal as additional
portfolio. Mumbai-based banks had to go to Kolkata to file a case in
most of the cases, said a lawyer representing a bank.
The long duration taken by DRTs to decide on the cases is reflected in
the fact that the Oriental Bank of Commerce and Bank
of India are
still fighting a case to recover dues from former stock broker Ketan
Parekh in
a case relating to the 2001 securities scandal. He was barred from
trading at the Indian stock exchanges till 2017.
During June to December 2012, some important cases involving companies
like Som Developers (owing 390 crore to SBI, UBI and other
banks), Sterling Biotech (
322 crore debt towards a subsidiary of LIC) and Aeroflex ( 181 crore
towards SBI) were admitted. "The DRTs were to finish cases in six month.
However, they are not able to adhere to the timeline as they have become
like a civil court,'' said the legal head of a private sector bank.
Our Comments
(a) The
Tiwari Committee which proposed in 1984 establishment of DRTs
recommended that the DRTs’ Judges and Advocates should have specialized
knowledge in functioning of banks, financial institutions and industry.
The DRTs were constituted in 1993. Till date the original recommendation
of Tiwari Committee has yet been implemented. The DRT judges and
advocates continue to function in DRTs without the required knowledge of
banking, industry and finance. Hence instead of complaining about the
DRTs, the banks should organize training programe for the said
specialized knowledge. In reality it will also help the borrowers.
(b) DRT
is a trial court. The time of 6 months is too small a period. The civil
court normally take 15 to 20 years for a normal trial. In fact the DRTs
will take much more time as the procedure is yet to be established and
the DRT Advocate and Judges do not have specialized knowledge of
banking, industry and finance.
(c) On
account of defective trial in DRT, extra time is required in higher
court in appeal etc.
(d) Despite
Supreme Court verdict 15 years back, the control of DRTs is not being
transferred from Ministry of Finance to Ministry of Law. As a result,
the bank officials are being posted as Judges and Recovery Officers
resulting into biased judgments and orders. Such defective judgments and
orders create further delay due to appeal, review and revisions.
(e) The
element of corruption in DRTs is more or less same as in other courts or
even in banks.
(f) Instead
of complaining about DRTs, the banks should devise a system by which the
wrong doings committed by the banks are checked and corrected before
filing a case in DRTs. This will drastically reduce the cases being
filed in DRTs.
(g) Competent
and trained judges and advocates in DRTs with maximum use of modern
technology will alone reduce the time being consumed by the DRTs.
(h) In
this connection, it will be worthwhile to know that all the above
problems arose in UK also when Tribunals were established in 1800 and it
took 157 years to find a workable solutions through the recommendations
of Sir Frank Committee. But our beauracracy does not want to learn from
such experience. That is why our country is ranked 78th among
97 countries in respect of functioning of Judiciary. In 1988, eminent
Justice Krishna Iyer said that we are 200 years behind developed
countries.
(i) It
is reiterated that businessmen and industrialist facing litigation in
DRTs will definitely help in bringing about judicial reforms which will
contribute to the improvement of Judiciary as a whole. This is for the
simple reason that they compared with the ordinary public litigants in
civil courts are much more competent and capable.
DRT Solutions Weekly Mail – 239th Issue
dated 7thDecember ‘12
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(1) During OTS (i.e. One Time Settle) Process, initiating Recovery under
Securitisation Act held Illegal by Allahabad High Court
Following is the extract from our web page vide link
http://www.drtsolutions.com/securitisation_securitization_SARFAESI_SA_Act.htm
Mr. Bharat Gandhi, Advocate Mumbai, has drawn our attention to Allahabad
High Court judgment delivered on 29.02.12 by D.B. vide citation 2012(3)
Bankers’ Journal 201, Shyama Ice & Cold Storage (P) Ltd vs Syndicate
Bank according to which when the OTS was under active consideration,
initiation action under the Securitisation Act is not permissible as it
would amount to simultaneous proceeding against the borrower to wield
the sword and stick at the same time. Notice under Sec 13(2) was
quashed.
(2) Writ Petition by Bank Dismissed - Bank’s Request to Direct Police
for taking Physical Possession held without Locus Standi by Kolkata High
Court
Following is the extract from our web page vide link
http://www.drtsolutions.com/securitisation_securitization_SARFAESI_SA_Act.htm
Mr. Jagdish Bagri, Chairman, The Vaibhavi Foundation, Asansol in his
mail of 5th instt
has informed as under:-
“Sir, Please recall my Visit to Indore some time in Feb 2011 where I had
discussed my case with bank of Baroda and you had guided me accordingly.
I am writing this for sharing with other readers of our website/Weekly
Newsletter.
After serving several Notices under Sec 13(2) and 13(4), which were
dully opposed, The Bank had filed OA in the DRT, which is still pending.
Simultaneously, the Bank had approached the DM and Local Police to
forcefully recover our residential Property, which is still pending
Partition under the Mitakshara School of Law. Bank had also paid the
requisite fees to the Police Department for providing Force some time
in June 2010. But we had filed a petition under sections 144, 116 & also
107.
The bank had filed a writ Petition in Kolkata High Court against the
SP/ASP etc seeking an order to direct the Police to provide force. The
writ petition has been dismissed today on ground that the bank has no
locus standi.
Shall send the detailed order in a few days.
Thanks and Regards”
DRT Solutions Weekly Mail – 238th Issue
dated 30thNovember ‘12
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(1) Impact of Personal Involvement of the Borrower in the Court
Arguments
Following is the extract from our web page vide link.
http://www.drtsolutions.com/drt_DRT.htm
The arguments before the court or DRT in respect of bank litigation
require intimate knowledge of banking, industry and finance as the case
may be. Most of the advocates may not be having desired level of the
said knowledge. That is why we emphasize active involvement of our
clients in their litigation. At times when it is observed that the
particular material facts are not being placed before the judge, the
borrower can submit the same with due permission of the court. Based on
our such advice, few of our clients got tremendous benefits in court
decisions.
(2) Govt asks Banks to Penalize Wilful Defaulters
Following is the extract from our web page vide link
http://www.drtsolutions.com/drt_DRT.htm
Vide news item on page 8 of the Economic Times, New Delhi dated 29th Nov
issue, worried over rising bad loans, the Govt has asked the state-owned
banks to crack the whip on willful defaulters and initiate penal
proceedings against them. This issue figured in meetings of the bankers
with finance minister. Besides, the PSU bank chiefs were also advised to
expedite steps to deal with willful loan defaulters. The gross NPAs or
bad loans of all public sector banks taken together have increased to
4.01% in the second quarter.
Our Comments:-
The borrowers must study the relevant RBI’s master circular and
carefully watch the actions of the bank. Proper correspondence must be
carried out to record the procedural lapses. Despite such precautions,
if the bank attempts to classify the account and the directors as
willful defaulters, injunction suit must be immediately filed in the
court.
DRT Solutions Weekly Mail – 237th Issue
dated 23rdNovember ‘12
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(1) Arbitrators can not decide Mortgage Suits – Supreme Court
Following is the extract from our web page vide link
http://www.drtsolutions.com/drt_DRT.htm
Mr.
N. K. Sharma, ex-GM(Law) & our Associate and Mr. Bharat Gandhi,
Advocate, Mumbai has respectively sent soft copy and hard copy of the
relevant Supreme Court ruling in the matter of BOOZ
ALLEN AND HAMILTON INC. Appellant VERSUS SBI
HOME FINANCE LTD. & ORS. Respondents
Civil Appeal No.5440 of 2002-Decided on 15-04-2011 wherein it is laid
down as under:-
“28. A decree for sale
of a mortgaged property as in the case of a decree for order of winding
up, requires the court to protect the interests of persons other than
the parties to the suit/petition and empowers the court to entertain and
adjudicate upon rights and liabilities of third parties (other than
those who are parties to the arbitration agreement). Therefore, a suit
for sale, foreclosure or redemption of a mortgaged property, should only
be tried by a public forum, and not by an arbitral tribunal.
Consequently, it follows that the court where the mortgage suit is
pending, should not refer the parties to arbitration.
30. Having
regard to our finding on question (iv) it has to be held that the suit
being one for enforcement of a mortgage by sale, it should be tried by
the court and not by an arbitral tribunal”
Impact
of Above Ruling
(1) Wherever
the Arbitrators are handling mortgage loans, cases needs to be
immediately transferred to the Courts or the Tribunals as the case may
be.
(2) Co-operative
Banks will be affected to maximum extent as their recovery cases can
neither be handled by DRTs under Securitisation Act nor by the
Arbitrators. They will have to confine to Co-operative courts only. It
is needless to mention that the said Courts are governed by the CPC and
hence such recoveries will take considerable time.
(2) Problems faced by DRT Litigant Borrowers
Following is the extract from our web page vide link
http://www.drtsolutions.com/drt_DRT.htm
From the continuous feedback from our clients and interactions with
their advocates, we find that they continue to face the following
problems from their advocates:-
(a) The
pleadings do not contain the impact of wrong doings by the banks in form
of money values i.e. loss and damages or counter-claims are not raised.
(b) When
such borrowers come to us, we prepare the amendments to the said
pleadings to incorporate the above deficiencies.
(c) The
concerned advocates do not comprehend the said amendments despite
telephonic interactions with us.
(d) It
is proposed that the said advocates are welcome to visit us at their
convenient time even on holidays or Sundays so that we shall provide
legal validations to the said amendment to the pleadings.
(e) Without
such face to face interactions based on legal documents, books,
judgments, video clips etc, the borrowers will be deprived of the
complete defence. Once the case is decided by the DRT, it will be
extremely difficult correct or remedy the situation.
DRT Solutions Weekly Mail – 236th Issue
dated 16thNovember ‘12
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(1) HC Justice Ramachandran says SARFAECI Act should be removed or
amended
Following is the extract from our web page vide link http://www.drtsolutions.com/securitisation_securitization_SARFAESI_SA_Act.htm
Mr. T.R. Radhakrishnan, Banking Expert and our associate has sent the
following very useful news item:-
“Justice C N Ramachandran Nair said that the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest
(SARFAESI) Act which came into effect in 2002 should be removed since it
has brought much harm to the loan borrowers from banks. If not revoked,
it should be amended so as to benefit the borrowers, he said
Justice Ramachandran was speaking at the inauguration of a seminar on
implications of action taken by the bankers against borrowers under
SARFAESI Act.
“The Act was brought into effect to help banks so that they could
recover their dues from the borrowers. It has helped the bankers.
However, it has given them unnecessary power since they can auction off
the properties of the owner without their consent at a much lesser price
than the market price. This will bring huge losses to the borrower as
the market price of land is presently at an all time high,” Justice
Ramachandran said.
Speaking about the atrocities being meted out by the bankers to the
borrowers through this Act around the country, the High Court Justice
pressed for the need of the Parliamentarians to amend the Act so that
the owner gets a right to sell his land at his own price, after the bank
auctions off a portion of the land to get back his dues. Justice
Ramachandran added many suicides have been committed in the past because
the borrowers, especially the farmers, are not provided any security.
By Express News Service - KOCHI
29th July 2012 10:44 AM”
(2) Discovery of Documents – Most Important part of DRT Litigation
Following is the extract from our web page vide link
http://www.drtsolutions.com/drt_DRT.htm
All the bank transactions and dealings are recorded on documents. Hence
these documents form the basis on which the pleadings are to be framed
as well as the case is adjudicated upon in the DRTs. The bank officials
commit several wrong doings on account of which the borrower suffers
loss and damages. The pleadings, therefore, should contain the said loss
and damages or the counter-claim. Only after preparation of perfect
pleadings, the case should be allowed to proceed further in the DRTs. It
is observed that the banks take time to reply to such perfect pleadings.
After the receipt of the reply from the bank, one should prepare list of
important documents. Application be filed for inspection of the said
documents. In many cases it is observed that the banks do not allow
inspection of all the documents. Whereas as per the law, all the
documents which are related with the case are to be produced. Resolution
of such issue itself may take several years.
DRT Solutions Weekly Mail – 235th Issue
dated 9thNovember ‘12
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(1) Counter-claim filed much later than WS – Permissible – Supreme Court
Judgment
Following is the extract from our web page vide link
http://www.drtsolutions.com/drt_DRT.htm
One of our clients informed that his advocate has objected to the
counter-claim prepared by us as WS was filed long back and hence the
counter-claim can not be filed now as as per the DRT Act it should have
been filed along with the WS.
Another of our clients filed the counter-claim much after the WS. The
bank submitted an application stating that such counter-claim is not
maintainable.
We informed the above clients that the particular provisions in the DRT
Act are exactly same as those in the CPC. Such issue came up in the
civil courts and the Supreme Court ruled that the counter-claim if based
on the facts on or before the date of filing of the WS is maintainable
even if filed much later than the WS. The relevant extract from the said
Supreme Court judgment are reproduced below, which are self
explanatory:-
(1) Mahendra
Kumar vs State of Madhya Pradesh decided on 04.05.87 vide citations 1987
(3) SCC 265 : 1987 AIR(SC) 1395 : 1987 (2) JT 524 : 1987 (1) Scale 1257
: 1987 (3) SCR 155 : 1987 (2) UJ(SC) 274 : 1987 Legal Eagle 475
Extract :-
(15) THE next point that remains to be considered is whether
Rule 6-A(1) of Order VIII of the Code of Civil Procedure bars the filing
of a counter-claim after the filing of a written statement. This point
need not detain us long, for Rule 6-A(1) does not, on the face of it,
bar the filing of a counter-claim by the defendant after he had filed
the written statement. What is laid down under Rule 6-A(1) is that a
counter-claim can be filed, provided the cause of action had accrued to
the defendant before the defendant had delivered his defence or before
the time limited for delivering his defence has expired, whether such
counter-claim is in the nature of a claim for damages or not. The High
court, in our opinion, has misread and misunderstood the provision of
Rule 6-A(1) in holding that as the appellants had filed the
counter-claim after the filing of the written statement, the
counter-claim was not maintainable. The finding of the High court does
not get any support from Rule 6-A( 1) of the Code of Civil Procedure. As
the cause of action for the counter-claim had arisen before the filing
of the written statement, the counter-claim was, therefore, quite
maintainable. Under Article 113 of the Limitation Act, 1963, the period
of limitation of three years from the date the right to sue accrues, has
been provided for any suit for which no period of limitation is provided
elsewhere in the Schedule. It is not disputed that a counter-claim,
which is treated as a suit under S. 3(2)(b) of the Limitation Act has
been filed by the appellants within three years from the date of accrual
to them of the right to sue. The learned District Judge and the High
court were wrong in dismissing the counter-claim.
(2) Shanti
Rani Das Dewanjee vs Dineshchandra
Day decided on 18.09.97 vide
citations:- 1997 (8) SCC 174
: 1997 (8) JT 228 : 1997 (8) Supreme 374 : 1997 Legal Eagle 1193
Extract :-
“(2) IN
our view, the impugned decision does not warrant interference. Such
question was specifically raised before this court in Mahendra Kumar v.
State of M.P. It has been held by this court that right to file a
counter claim under Order VIII Rule 6-A of the Code of Civil Procedure
is referable to the date of accrual of the cause of action. If the cause
of action had arisen before or after the filing of the suit, and such
cause of action continued up to the date of filing written statement or
extended date of filing written statement, such counter-claim can be
filed even after filing the written statement. The said Civil Case No.
248 of 1982, in which the application under Order VIII Rule 6-A has been
filed by the defendant-respondents was instituted on 15/7/1982 and the
application under Order VIII Rule 6-A was presented on 22/6/1985. It
cannot be held that the cause of action for the suit or counter-claim
was ex facie barred by limitation under the Limitation Act. It has been
sought to be contended by the learned counsel for the appellant that in
the instant case, the cause of action had arisen long before the
institution of the said Civil Case No. 248 of 1982 and, therefore, the
suit and counter-claim were barred under the Limitation Act. Such
question was not raised before the court below and, therefore, had not
been gone into. It is therefore, not necessary for this court to decide
the same because the question of limitation regarding the suit if raised
will be decided after ascertaining the date of accrual of the cause of
action on the basis of relevant materials to be placed on record. We are
therefore, not expressing any opinion on the said contention sought to
be raised by the learned counsel for the appellant, for the first time
before this court. As the application under Order VIII Rule 6-A is not
ex facie barred the impugned order cannot be held to be incorrect on the
grounds urged before the court below. We therefore find no reason to
interfere with the impugned order. This appeal, therefore, fails and is
dismissed without any order as to costs.”
(2) Mortgage Loans cannot be decided by Arbitrators – Supreme Court
Judgment
Following is the extract from our web page vide link
http://www.drtsolutions.com/drt_DRT.htm
Recently Supreme Court of India has ruled that Mortgage Loans can not be
dealt with by the Arbitrators. The details will be furnished in the
future weekly mail. This ruling will have far reaching consequences.
DRT Solutions Weekly Mail – 234th Issue dated 2nd
November ‘12
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(1) Hurried Publication by Banks for Auction of Secured Assets
Following is the extract from our web page vide link
http://www.drtsolutions.com/securitisation_securitization_SARFAESI_SA_Act.htm
In many cases it is observed that the Banks are jumping for auctioning
of the assets by hurried publication in news papers. They are not
bothered even to wait for outcome of the adjudication by the DRTs. In
three cases, our clients submitted before the banks that since the SAs
are pending and in the said SAs, the borrowers have put up their claim
for loss and damages due to the wrong doings committed by the banks.
Further since the said loss and damages were much more than the claim of
the banks and hence there was ‘No Debt Due’ Since the banks did not pay
any heed to such submissions by the borrowers, the borrowers prepared
their counter advertisements in the news papers highlighting the wrong
doings by the banks as well as the ‘No Debt Due’ situation. When such
publications were read by the intending purchasers, they preferred to
abstain from such hurried auction fearing that the purchase of such
properties will result in long drawn litigations. Thus the entire
exercise by the banks became fruitless.
(2) DRTs are at Cross Roads
Following is the extract from our web page vide link
http://www.drtsolutions.com/drt_DRT.htm
The objectives and roles of the DRTs have become questionable. The
relevant aspects are as under:-
(a) The
DRTs were evolved and constituted based on recommendations of Tiwari
Committee set up by RBI at the instance of the Central Govt. The said
committee in its recommendations published by the RBI in 1984 laid down
that the DRTs should be manned (i.e. the Advocates and Judges in DRTs)
by persons having expertise in banking, industry and finance. Till date
the said important recommendation has not been implemented by the
government. As a result the pleadings, adjudications and judgments are
greatly suffering due to lack of knowledge of banking, industry and
finance by the DRT Advocates and DRT Judges. They are mostly working to
recover alleged dues of the bank by hook or crook even ignoring the
fundamentals of trial.
(b) The
Supreme Court in the matter of Mardia Chemicals in 2004 laid down that
the SA is in lieu of a civil suit and borrowers cannot be left
remediless. Since then the SAs are being prepared similar to civil
suits.
(c) The
Supreme Court in the matter of Grapco Industires Ltd in 1999 laid down
that the DRTs even can travel beyond the scope of CPC for the purpose of
natural justice. This greatly widened the scope of adjudication. It is
more so due to bar of civil court prescribed in Sec 34 of the SARFAESI
Act.
(d) The
above provisions helped in including in the SAs the loss and damages
caused due to wrong doings of the banks in pursuance of the law of torts
and law of damages.
(e) The
Supreme Court has restricted the interference by the High Courts and
laid down that DRTs alone should first judicially determine the facts.
(f) The
resultant scenario has greatly enhanced the scope and wide coverage of
DRT litigations and progressively it is becoming highly complex.
(g) The
continuance of DRTs under Ministry of Finance in place of Ministry of
Law despite 15 years old Supreme Court directive is making the whole DRT
setup and working highly biased in favour of banks. Further provisions
like compulsory deposit of 25% in appeal to DRAT in the matter of SAs
have forced the borrower to accord maximum focus to DRT as virtually
there is no appeal. Hence the DRT litigations will tend to become much
more complex and complicated.
(h) Similar
situation happened about 30 years back when the Industrial Tribunals had
to be closed down due to ever increasing complexities.
(i) As
a whole, no one can ignore our Constitution which promises and ensures
Justice to all. Any short cut or summary action will give ample scope to
the sufferer to go for further legal remedies like reviews and appeals
which itself will take long time to decide.
(j) We
are not learning from the experience of Tribunals in UK. The tribunals
were first formed there in 1800. The litigations became progressively
complicated. It took 157 years to find out workable solution based on
Sir Frank Committee report.
(k) In
conclusion, the DRT litigations can not be viewed only from legal angle.
It is not a simple money recovery. The government policies and RBI
Guidelines have numerous protections by way of revival, rehabilitations
and restructurings which the banks are duty bound to obey before coming
to DRTs which they are not doing and hence such lapses are boomeranging
on them only. The banks are disillusioned. Their dreams of getting quick
recoveries have not come true as they unable to become Pathans or
Vasool Rajas.
DRT Solutions Weekly Mail – 233rd Issue
dated 26thOctober ‘12
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(1) Transfer of DRTs from Ministry of Finance to Ministry of Law
Following is the extract from our web page vide link
http://www.drtsolutions.com/drt_DRT.htm
Dr. Suresh, Founder, Borrowers’ Rights Forum and one of our clients have
sought information under RTI Act from Ministry of Finance. Highlights of
the reply received are as under:-
(a) The
first meeting of the Inter Ministerial Group (IMG) was held on
13.09.12. The minutes of the meeting shows that various ministries are
at very initial stage to implement the decisions of the Supreme Court of
1997 and 2010. There is no consensus among them.
(b) Govt
deptts do not initiate any contempt proceedings.
(c) Ministry
of Law is taking necessary actions to implement the decision of the
Supreme Court of India.
(d) If
the orders passed by the DRTs are unconstitutional and illegal,
concerned parties should file appeal against those orders.
Our Comments
(a) As
a whole, the ministries are not at all serious about the decision of the
Supreme Court passed in 1997, ie 15 years back.
(b) The
bank lobby got the DRT Act and Securitisation Act enacted as per their
requirements. They avoided enactment of ‘Lenders’ Liability Act’
(c) The
said bank lobby is appointing and posting bank officials as the POs and
Recovery Officers in the DRTs. They are holding regular meetings with
the said DRT Officials. They will not allow transfer of DRTs from
Ministry of Finance to Ministry of Law. They have the audacity to ignore
the Supreme Court verdict past 15 years. Thus there is clearcut bias in
favour of banks.
(d) In
view of above, there is no option but to include the above in the
pleadings, implead the Ministry of Finance and Ministry of Law, implead
the Chairman of the bank, plead counter-claim and use all legal tools
like Reviews at every stage of trials.
(2) Kingfisher Airlines Scandal in Bank Financing – Writeoff of huge
Bank Loans of Rs. 6000 crores
Following is the extract from our web page vide link
http://www.drtsolutions.com/drt_DRT.htm
There is talk about write off of huge bank loans of Rs. 6000 croes vide
news item in the Economic Times dated 24.10.12, page 1 title ‘Banks
may’ve to Write Off KFA Loans’ Our comments are as under:-
(a) Write
off of huge amount of Rs 6000 crores just can not be done. This money
belongs to the public i.e. the depositors. The depositors must file PIL
in the Supreme Court for fixing responsibilities on the Chairmen and
Directors of the concerned banks. Even RBI officials, Ministers and
political parties may be involved.
(b) The
banks first make out all efforts for revival, rehabilitation and
restructuring of KFA before such a write off.
(c) Scheme
must be made as to how the depositors will be compensated out of the
reserves and future earnings of the banks.
(d) Why
KFA and Vijay Mallya are not being treated just like other borrowers.
They must be declared ‘Wilful Defaulter’, assets of their other
businesses should be seized and sold. If you can not do with them, they
such benefits must be extended to other borrowers.
(e) When
the banks can write off such a huge amounts of Rs. 6000 crores, why
loans of small borrowers and farmers who are committing suicides can not
be written off.
(f) This
particular case should be included in the pleadings and arguments of the
bank borrowers.
(2) Nutritious Diet & Our Own Recipe
Following is the extract from our web page vide link
http://www.drtsolutions.com/new_page_9.htm
It is well known that cooking destroys the micro elements in the food
prepared in our homes. The requirement of the body are as under:-
(a) The
food should be in the natural form i.e. raw i.e. raw vegetables and
sprouted grains. There should be maximum possible varieties but quantity
of each should be small. Apple can be regarded as vegetable.
(b) Vegetables
and Fruits should not be taken together as the enzymes for digestion are
different.
(c) There
should be minimum gap of 4 hours between the diets containing vegetables
and grains.
(d) Milk
should be taken alone with 2 hour gap from other eatables.
(e) Fruits
can be taken with gap of 1 hour.
(f) With
above restrictions and prescriptions, we prepared our own recipe. We
took small quantities of fresh 4 or 5 vegetalbes, cut into pieces, add
apple, garlic, honey and other items for taste and flavor and put all
these in a mixer grinder. The paste is just like Chatney. This can be
taken as a meal or combined with a meal with above timings.
(g) Such
diet provides all vitamins and food elements in most natural form and is
highly nutritious.
DRT Solutions Weekly Mail – 232nd Issue
dated 19thOctober ‘12
All Weekly mails right from 1st Issue to latest, click links
on top of this page
(1) Counter-claim is the only Total Defence for Borrowers in DRTs –
Fundamentals & Foundation
Following is the extract from our web page vide link
http://www.drtsolutions.com/drt_DRT.htm
Despite our repeated emphasis since 2001, the borrowers and or their
advocates are not filing counter-claim or loss and damages against the
wrong doings of the banks. Our views and suggestions are as under:-
(a) In
our democratic setup, based on the desires of the public, the Parliament
frames policies relating to banking, industry and finance and the same
are conveyed to RBI. The RBI prepares the same in form of RBI Guidelines
and the same are conveyed to the Chairman of every bank.
(b) The
Chairman of every bank is duty bound to convey the said RBI Guidelines
in form of Branch Circulars to all the officers of his bank to ensure
compliance in all respect. Thus this is how the desires of the public
are intended to be complied with by all the banks.
(c) On
account of above, all along we have been emphasizing to implead the
Chairman of the bank in all the pleadings.
(d) In
actual cases, it is found that the said RBI Guidelines are openly
violated at every stage right from the stage of sanction amounting to
wrong doings.
(e) As
per the law of torts, the borrowers are entitled for compensation for
the said wrong doings. The said compensation is called counter-claim or
claim for loss and damages.
(f) In
almost all the cases, the said compensation is found to be much more
than the alleged claim of the bank resulting into ‘No Debt Due’
(g) Under
the situation of ‘No Debt Due’, no recovery can be made till the actual
dues are determined by the process of adjudication. The borrower is
entitled for complete justice using established law and procedure of
law. The trial in DRT is first and last. Thorough and perfect trial will
take time.
(h) If
no counter-claim is filed, the wrong doings of the bank will never come
to light, justice for the borrower will never be achieved and the
alleged claim of the bank will be easily decreed.
(i) The
pleadings of the counter-claim be prepared by a person having knowledge
of banking, industry, finance, law of torts, law of damages, law of
evidence and all the relevant procedural laws.
(j) Past
23 years, we have observed that wherever perfect counter-claim has been
pleaded, the bankers themselves run after the borrower to settle the
matter or the banks have lost the case. In some cases, the settlements
have been even as low as 5%.
(k) On
the various aspects of the counter-claim, we have covered this topic in
our several weekly mails apart from sufficient space devoted in our web
site. Whenever our clients need any clarification or elaboration, we
provide to them.
DRT Solutions Weekly Mail – 231st Issue dated 12th
October ‘12
All Weekly mails right from 1st Issue to latest, click links
on top of this page
(1) Misconceptions of DRT Advocates
Following is the extract from our web page vide link
http://www.drtsolutions.com/drt_DRT.htm
Recently one of our clients asked his advocate to interact with us over
phone. We found the following misconceptions:-
(a)
Misconception
:- Past 3 years, several applications were rejected and hence no more
application can be made.
Our Reply:-
There is no limit for making applications. Even after 99 rejected
applications, 100th application can be made provided it is
essential to get justice.
(b)
Misconception
:- At such late stage, there is no scope for making counter-claim.
Our Reply:-
Counter-claim can be made at any stage. We have even made a counter
damage suit even after 21 years. Since the nature of damages is based on
continuing cause of action, there is no limitation for making claim for
such damages.
(c)
Misconception:-
The judge will reject such counter-claim.
Our Reply:-
The DRT Judge has no such power to reject the counter-claim out rightly.
He being a trial judge has to follow the law and the procedure of law
and has to give his order in writing. When an amendment application is
made to incorporate the loss and damages or counter-claim application is
filed, the judge has to give the same to the opposite party. After
receiving the reply, the matter is to be argued upon and then the order
Is to be issued whether the said claim can be incorporated. As per
several verdict of the Supreme Court the amendment applications have to
be liberally allowed in the interest of justice.
(d) Misconception:-
The DRT Judges are in favour of banks.
Our Reply:-
This view emanates when we are not having adequate knowledge of banking,
industry and finance. If the person having such knowledge makes the
pleadings, it is the bank which has to reply to such pleadings and the
DRT judge does not come into picture. We drew attention to the case of 4
banks which lost a recovery case of Rs. 90 crores in DRT Mumbai. The
entire judgment is reproduced in our web site vide link
(e)
Misconception:-
The case is fixed up for final orders, the judge will not allow any
further date.
Our Reply:-
In court craft, there are several methods and tools by which one may
obtain further date depending on the facts and circumstances of a case.
We described some of such methods.
Conclusion:-
We reiterated the following facts:-
(i)
The DRT is a trial court. When all the facts relating to banking,
industry and finance in respect of the case has been pleaded thoroughly
and perfectly, trial has to be conducted as per law and the procedure of
law.
(ii)
The bank litigations are based on documents. All the documents
are in power and possession of the bank. It is only when all the
relevant documents have been inspected and certified copies have been
obtained and the pleadings have been amended to incorporate the impact
of the said documents, one can expect to win any bank case.
(iii)
To achieve a fair and complete trial is a constitutional right in
a democratic setup like ours.
(iv)
The defence of borrowers and guarantors will never be complete
without putting forth counter-claim in money value.
(v)
We invited the said advocate to visit us and have thorough
interactions to clear the above misconceptions.
(2) Hindi Movie – OMG – Oh My God – Damages filed against God – Court
battle fought by litigant himself
Following is the extract from our web page vide link
http://www.drtsolutions.com/new_page_9.htm
One of our clients informed that the above mentioned Hindi movie is
interesting comedy wherein damages are filed against God and the court
battle is filed by the litigant himself. The reviews in internet also
praise the movie.
