Though the tribunals did get going, their travails are far from over. In
fact, their plight is worse than that of civil courts. Last week, the
Supreme Court set forth a comprehensive plan to make the 33 tribunals
and their five appellate apparatuses in the country work.
It all started from Chandigarh where one bench was installed in a rented
building. Since it was not able to handle the stream of complaints,
another bench was set up. But owing to space constraints, both benches
were squeezed in at the same place. The bar association moved the high
court pointing out the inadequate infrastructure of the two benches. The
high court passed an order to the Central government to provide adequate
facilities. It also asked the government to frame rules for the
recruitment of presiding officers and recovery officers. The government
appealed to the Supreme Court against these directions. Thus, the issues
took a national colour.
The Supreme Court called the additional solicitor general, appointed an amicus
curiae (counsel
to assist it) and invited suggestions from bar associations. In the past
two years, all of them cooperated in bringing forward several proposals.
The government did not take an adversary stand and agreed to the
recommendations made by the amicus. It
is another matter whether or not the suggestions, incorporated in the
order, will be implemented.
The court noted that tribunals suffered from severe infrastructural
constraints — most of them being run from rented, constricted premises,
paying exorbitant rents and unsure of renewal of leases. With the
agreement of the government, the court raised the minimum area for a
tribunal from 5,000 to 7,200 sq ft.
The government has agreed before the court that more tribunals will be
set up on the basis of the pendency of cases before the existing ones.
The government has also promised to anticipate vacancies for the post of
senior officers and fill them up as soon as they arise. Provision of
accommodation for the staff will be given prime consideration. There is
an “e-DRT” project to automate and improve the services by building
information technology systems. This will be expedited.
The court wanted the government to give preference in appointments to
those who have either legal experience or hold a degree in law. They
will be trained through regular programmes to gain working knowledge of
procedures followed by tribunals. The Supreme Court wanted the high
courts to use their power of superintendence to ensure that tribunals
worked “smoothly, efficiently and transparently”. If they don’t, the
case may be taken up again.
These well-meaning recommendations could be adopted by other tribunals,
too. However, the real hitch is the will of the government to implement
them in letter and spirit. In practice, the government starves these
tribunals of funds and personnel. On Tuesday, the Supreme Court heard a
case to provide accommodation to green tribunal members. This is a
symptom of a constant tussle over appointments that are often stymied by
rival contenders among bureaucrats. Even within the panel, rivalry and
mistrust between judicial members and civil servants, retired or on
deputation, are not uncommon. It would take herculean efforts to pull
the wheels of tribunals out of the present rut.
------------------------------------------------------
DRT Solutions Weekly Mail – 247th Issue
dated 1st February
‘13
All Weekly mails right from 1st Issue to latest, click links
on top of the page
(1) OA Dismissal – Our contentions past 8 Years Proved by Patna High
Court
Following is the extract from our web page vide link
http://www.drtsolutions.com/securitisation_securitization_SARFAESI_SA_Act.htm
Our contentions past 8 years regarding
OA Dismissal (under certain conditions) has now been proved by the
judgment of Patna High Court. This judgment was sent to us by Mr. Sanjay
Jain, one of our clients from Nagpur. The said judgment has been
reproduced in full on our web site vide link
http://www.drtsolutions.com/OA_Dismissal.htm
The
history of our journey past 8 years has been given below. There are
several other contentions which we are fighting past 24 years (e.g.
counter-claim, perfect trial, etc) will also be proved with passage of
time. We are not surprised because the Indian Judiciary is ranked 74th
in the world i.e. there are 73 countries which are having better
judiciary . As per Justice Krishna Iyer in 1988, we are 200 years
behind. The challenge is to the Bar Counsel of India, Law Colleges,
Advocates, Judges and the common men. The entire democracy depends on
how soon Indian Judiciary is improved. The present Govt and Political
Parties don't want as they prefer to continue the British System which
was just to keep the public as their servants and loot the country
whereas the Democracy aims at making the public as master and Public
Officers as Servants. The public will have to fight for real freedom.
The silver lining is that the persons like Swami Ramdevji, Anna Hazare,
Kejriwal have spearheaded this fight. Technology is also helping e.g.
400 TV Channels, more than 70 crores mobiles, increasing use of
Internet, growing Social Media etc. Anyway, the said history regarding
OA Dismissal is as under:-
(a) - 15.12.06 -
First application regarding OA Dismissal prepared by us for a client at
Mumbai. Since then we have prepared such applications for several of our
clients all over the country.
(b) - 05.05.08 -
This item was discussed in the First All India DRT Conference held at
Indore.
(c) - 26.12.08 -
Our Weekly Mail 33rd Issue item no 1 which gives our detailed comments
on this topic'
(d) - 19.12.08 -
Our Weekly Mail 32nd Issue item no 6 which mentions that application for
OA Dismissal prepared by us 2 years back was being contested by one of
our clients.
(e) - 09.01.11 -
This item was discussed in the Second All India DRT Conference held at
Indore.
(f) - 05.12.11 -
On this date we have introduced this special web page. We have been
repeatedly emphasizing that as soon as the Securitisation Act is invoked
and if there is OA pending or OA is initiated, the same should be
dismissed. In such circumstances, we have been advising our clients
accordingly. A comprehensive article (reproduced below) has been
prepared by Mr. N.K. Sharma, ex-GM (Law) and our Associate. The concepts
propounded in this Article have been used by us to prepare and contest
relevant application for OA Dismissal.
(g) - 01.02.13 -
Past 8 years, we have been proposing that just after invoking
Securitisation Act, if the bank files OA, the same should be dismissed.
Accordingly for our several clients, we have prepared such applications.
The said applications were first opposed by their advocates. After
filing, the same were opposed by the banks. The DRTs also could not
decide the same. Now our such contentions have been proved by the Patna
High Court vide their judgment delivered on 27.08.12 in the matter of
Purnea Cold Storage vs State Bank of India vide copy reproduced in full
on our web site vide link http://www.drtsolutions.com/OA_Dismissal.htm
(2) Our Website drtsolutions.com Hosted
on Better Server
Following is the extract from our web page vide link
http://www.drtsolutions.com/securitisation_securitization_SARFAESI_SA_Act.htm
In order to give better service to our clients and visitors of web site www.drtsolutions.com ,
we have hosted it on a better server. Some of our clients and
acquaintances evaluated the performance and found it better. Some of the
comments received from them are as under:-
From: Varadarajan Seshadri <sudarshan_aroma@yahoo.co.in>
Date: Fri, Jan 25, 2013 at 4:21 PM
Subject: Re: DRT Solutions Weekly Mail - Special Issue - Performance of
our web site
To: Ram Kishan <ramkishandrt@gmail.com>
Sir
I read the new format uploaded in the web
it is very nice to look and coverage of cliental information is also
more
I wish for the future guidance in all drt maters.
Best wishes,
Iyengar S Varadarajan
From: Firoz Poonawalla <firozpoonawalla@hotmail.com>
Date: Fri, Jan 25, 2013 at 3:25 PM
Subject: RE: DRT Solutions Weekly Mail - Special Issue - Performance of
our web site
To: "ramkishandrt@gmail.com"
<ramkishandrt@gmail.com>
My
Dear Ram Kishan,
Compliments on a great Website you have produced . All your weekly mails
are also of very, very informative values. But this comprehensive web
is absolutely worth storing as a reference data which can be recalled as
and when need arises. All those who have problems like DRT and Cheque
bouncing will find this website an absolutely a must as a reference not
only for lawyers but also for defenders.
Congratulations , yet again.
Warm Regards,
From: Krishna Kishore Ganguly <gangulykk@gmail.com>
Date: Fri, Jan 25, 2013 at 12:26 PM
Subject: Re: DRT Solutions Weekly Mail - Special Issue - Performance of
our web site
To: Ram Kishan <ramkishandrt@gmail.com>
Dear Mr. Ram Kishan,
The performance of your site has certainly improved. This site is of
great use for the Advocates representing the borrowers. In fact your
idea of counter claim has benefited me immensely.
I
will suggest you to open a question & answer page where in you shall
accept queries from public/borrowers & your experts will answer the
same.
Thanks & best of wishes.
Adv. K.K. Ganguly
High Court, Calcutta
From: ushakant desai <ucdesai72@yahoo.com>
Date: Fri, Jan 25, 2013 at 11:16 AM
Subject: Re: DRT Solutions Weekly Mail - Special Issue - Performance of
our web site
To: Ram Kishan <ramkishandrt@gmail.com>
Dear Ram Kishanji,
Yes, I checked new web site, it is fast and effective too.
U.C.DESAI 25-1-2013 11 A.M
DRT Solutions Weekly Mail – 246th Issue
dated 25thJanuary ‘13
All Weekly mails right from 1st Issue to latest, click links
on top of this page
(1) PO DRT discussing Pending DRT Cases with Bank Officials
Following is the extract from our web page vide link
http://www.drtsolutions.com/securitisation_securitization_SARFAESI_SA_Act.htm
One of our clients informed that the PO DRT has been discussing pending
DRT cases with the bank officials. Such conduct of the said PO is highly
against the law enshrined in the principles of natural justice. In such
cases, complaint must be lodged with the Administrative Judge of the
High Court as he is responsible for supervising the conduct of the
Judges in the State.
(2) Bank Officials & Magistrate misusing the Provisions of Sec 14 of the
Act
Following is the extract from our web page vide link
http://www.drtsolutions.com/securitisation_securitization_SARFAESI_SA_Act.htm
One of our clients had filed his SA in DRT and the adjudication was
going on. The said client filed an amendment to the SA claiming loss and
damages. In the meantime, the bank went to the Magistrate and obtained
possession order suppressing material facts about the pending SA. This
is how the Magistrate was misled by the bank officials. With the help of
police, the possession of the residential property was forcibly taken.
We have advised the said client to submit all the facts before the DRT
through an injunction application requesting restoration of the
possession till the SA is finally decided.
In order to prevent such happenings, the borrowers should file caveat
with the Magistrate just after submission of the representation and
objections u/s 13(3A) so that full opportunity is provided to the
borrower before the Magistrate. Further they should be in touch and
liason with the office of the Magistrate so that whenever any
application is filed by the bank, the borrower comes to know about it.
On account of the new amendment of the Securitisation Act, the
Magistrate is required to follow various provisions of the Act and hence
the borrowers can refer to the opportunity enshrined in the principles
of natural justice as well as the caveat. If the borrower is alert and
vigilant, proper pleadings are made including loss and damages in the SA
and the Advocate is forceful to submit all the relevant facts and law
properly, the scare caused by the impending physical possession will be
highly minimized.
DRT Solutions Weekly Mail – 245th Issue
dated 18thJanuary ‘13
All Weekly mails right from 1st Issue to latest, click links
on top of the page
(1) Our Comments on Recent Amendment to the Securitisation Act
Following is the extract from our web page vide link
http://www.drtsolutions.com/securitisation_securitization_SARFAESI_SA_Act.htm
Our comments are as under:-
(a) The
bill was finally passed by the parliament on 20.12.12. Accordingly the
sections 2, 5, 9, 13 and 14 of the Act were amended
(b) In
section 2 of the Securitisation and Reconstruction of Financial Assets
and Enforcement of Security Interest Act, 2002 (hereafter in this
Chapter referred to as the 54 of 2002. principal Act), in clause (c),
after sub-clause (iv), the following sub-clause shall be inserted,
(c) namely:—
“(iva) a multi-State co-operative bank; or”.
Our Comments
(d) The
DRTs will now have jurisdiction over the multi-state co-operative banks.
This will cause increase on the number of cases and workload of the DRTs.
The relevant pending Supreme Court case will have to be decided as early
as possible.
-------------------------------------------------------------------------------------------------------------------------
(e) In
section 5 of the principal Act, after sub-section (4), the following
sub-section shall be inserted, namely:—
“(5) On acquisition of financial assets under sub-section (1), the
securitisation company or reconstruction company, may with the consent
of the originator, file an application before the Debts Recovery
Tribunal or the Appellate Tribunal or any court or other Authority for
the purpose of substitution of its name in any pending suit, appeal or
other proceedings and on receipt of such application, such Debts
Recovery Tribunal or the Appellate Tribunal or court or Authority shall
pass orders for the substitution of the securitisation company or
reconstruction company in such pending suit, appeal or other
proceedings.”.
Our Comments
(f) If
there are wrong doings committed by the bank, one should implead the
said bank despite the above mentioned application.
--------------------------------------------------------------------------------------------------------------------------
(g) In
section 9 of the principal Act, after clause (f), the following clause
shall be inserted, namely:—
“(g) to convert any portion of debt into shares of a borrower company:
Provided that conversion of any part of debt into shares of a borrower
company shall be deemed always to have been valid, as if the provisions
of this clause were in force at all material times.”.
Our Comments
(h) This
will have no impact on the borrowers. The aim appears to clean up the
balance sheets of the bank.
--------------------------------------------------------------------------------------------------------------------------
(i) In
section 13 of the principal Act,—
(a) in
sub-section (3A), for the words “within one week”, the words “within
fifteen days” shall be substituted;
Our Comments
This will have no impact on the borrowers.
-----------------------------------------------------------------------------------------------------------------------------------
In section 13 of the principal Act,—
(b) after
sub-section (5), the following sub-sections shall be inserted, namely:—
“(5A) Where the sale of an immovable property, for which a reserve price
has been specified, has been postponed for want of a bid of an amount
not less than such reserve price, it shall be lawful for any officer of
the secured creditor, if so authorised by the secured creditor in this
behalf, to bid for the immovable property on behalf of the secured
creditor at any subsequent sale.
(5B) Where the secured creditor, referred to in sub-section (5A), is
declared to be the purchaser of the immovable property at any subsequent
sale, the amount of the purchase price shall be adjusted towards the
amount of the claim of the secured creditor for which the auction of
enforcement of security interest is taken by the secured creditor, under
sub-section (4) of section 13.
(5C) The provisions of section 9 of the Banking Regulation Act, 1949 10
of 1949. shall, as far as may be, apply to the immovable property
acquired by secured creditor under sub-section (5A).”.
Our Comments
It appears that the banks are in desperate hurry to clean up their
balance sheets. In longer run it will recoil on the banks only. They
will be flooded with the unsalable properties which may cause ultimate
loss to the banks. There may be scandals due to purchase of such
properties by the bank officials. There will be multiple litigations. It
is reiterated that we must raise loss and damages or counter-claims
against the bank if the borrower desires to have ultimate defence. In
that situation, the banks will not be able to apply this amended section
due to ‘No Debt Due’ situation. Actually smaller borrowers will become
innocent victims and as a whole it will bring great disrepute to the
banks and immense problems to the politicians.
----------------------------------------------------------------------------------------------------------------------
(c) in
the opening portion of sub-section (9), and in the Explanation thereto,
for the words “three-fourth”, occurring at both the places, the words
“sixty per cent”. shall be substituted
Our Comments
It will only result in increase in number of cases and workload on the
DRTs.
-----------------------------------------------------------------------------------------------------------------------
6. In section 14 of the principal Act,—
(a) in sub-section (1), the following provisos shall be inserted,
namely:—
“Provided that any application by the secured creditor shall be
accompanied by an affidavit duly affirmed by the authorised officer of
the secured creditor, declaring that—
(i) the aggregate amount of financial assistance granted and the total
claim of the Bank as on the date of filing the application;
(ii) the borrower has created security interest over various properties
and that the Bank or Financial Institution is holding a valid and
subsisting security interest over such properties and the claim of the
Bank or Financial Institution is within the limitation period;
(iii) the borrower has created security interest over various properties
giving the details of properties referred to in sub-clause (ii) above;
(iv) the borrower has committed default in repayment of the financial
assistance granted aggregating the specified amount;
(v) consequent upon such default in repayment of the financial
assistance the account of the borrower has been classified as a
non-performing asset;
(vi) affirming that the period of sixty days notice as required by the
provisions of sub-section (2) of section 13, demanding payment of the
defaulted financial assistance has been served on the borrower;
(vii) the objection or representation in reply to the notice received
from the borrower has been considered by the secured creditor and
reasons for non-acceptance of such objection or representation had been
communicated to the borrower;
(viii) the borrower has not made any repayment of the financial
assistance in spite of the above notice and the Authorised Officer is,
therefore, entitled to take possession of the secured assets under the
provisions of sub-section (4) of section 13 read with section 14 of the
principal Act;
(ix) that the provisions of this Act and the rules made thereunder had
been complied with:
Provided further that on receipt of the affidavit from the Authorised
Officer, the District Magistrate or the Chief Metropolitan Magistrate,
as the case may be, shall after satisfying the contents of the affidavit
pass suitable orders for the purpose of taking possession of the secured
assets:
Provided also that the requirement of filing affidavit stated in the
first proviso shall not apply to proceeding pending before any District
Magistrate or the Chief Metropolitan Magistrate, as the case may be, on
the date of commencement of this Act.”;
(b) after sub-section (1), the following sub-section shall be inserted,
namely:—
“(1A) The District Magistrate or the Chief Metropolitan Magistrate may
authorise any officer subordinate to him,—
(i) to take possession of such assets and documents relating thereto;
and
(ii) to forward such assets and documents to the secured creditor.”;
(c) in sub-section (3), after the words “the District Magistrate”, the
words “any officer authorised by the Chief Metropolitan Magistrate or
District Magistrate” shall be inserted.
Our Comments
The implications are huge. Massive comments are needed. It will only
result in numerous legal complications to the bank officials, the
Magistrates, POs of the DRTs, High Courts and the Supreme Court
particularly when loss and damages or counter-claims have been raised by
the borrowers. On the other hand small borrowers will greatly suffer as
they do not have adequate knowledge and resources to the desired legal
fight. Ultimately the banks will suffer as the amount recovered will be
small but the disrepute will be massive.
-------------------------------------------------------------------------------------------------------------------------
7. After section 18B of the principal Act, the following section shall
be inserted,
namely:—
“18C. (1) Where an application or an appeal is expected to be made or
has been made under sub-section (1) of section 17 or section 17A or
sub-section (1) of section
Insertion of new section 18C.
Right to lodge a caveat.
18 or section 18B, the secured creditor or any person claiming a right
to appear before
the Tribunal or the Court of District Judge or the Appellate Tribunal or
the High Court, as the case may be, on the hearing of such application
or appeal, may lodge a caveat in respect thereof.
(2) Where a caveat has been lodged under sub-section (1),—
(a) the secured creditor by whom the caveat has been lodged (hereafter
in this section referred to as the caveator) shall serve notice of the
caveat by registered post, acknowledgement due, on the person by whom
the application has been or is expected to be made under sub-section
(1);
(b) any person by whom the caveat has been lodged (hereafter in this
section referred to as the caveator) shall serve notice of the caveat by
registered post, acknowledgement due, on the person by whom the
application has been or is expected to be made under sub-section (1).
(3) Where after a caveat has been lodged under sub-section (1), any
application or appeal is filed before the Tribunal or the court of
District Judge or the Appellate Tribunal or the High Court, as the case
may be, the Tribunal or the District Judge or the Appellate Tribunal or
the High Court, as the case may be, shall serve a notice of application
or appeal filed by the applicant or the appellant on the caveator.
(4) Where a notice of any caveat has been served on the applicant or the
Appellant, he shall periodically furnish the caveator with a copy of the
application or the appeal made by him and also with copies of any paper
or document which has been or may be filed by him in support of the
application or the appeal.
(5) Where a caveat has been lodged under sub-section (1), such caveat
shall not remain in force after the expiry of the period of ninety days
from the date on which it was lodged unless the application or appeal
referred to in sub-section (1) has been made before the expiry of the
said period.”.
Our Comments
This is a welcome provision as it has vindicated our stand about the
caveats. Legally knowledgeable borrowers will intelligently use this
tool compared with the bankers. The litigation process will result
in greater justice to the alert and conscious party. It is needless
to mention that the ‘No Debt Due’ situation is a must. Again the
small borrowers will have painful process due to lack of knowledge
and resources to fight.
Amendment 8. In section 23 of the principal Act, after the proviso, the
following proviso shall be of section 23. inserted, namely:—
“Provided further that the Central Government may, by notification,
require registration of all transactions of securitisation, or asset
reconstruction or creation of security interest which are subsisting on
or before the date of establishment of the Central Registry under
sub-section (1) of section 20 within such period and on payment of such
fees as may be prescribed.”.
Our Comments
At the moment there is no impact as the Central Registry has not yet
started functioning.
Insertion of 9. After section 26 of the principal Act, the following
section shall be inserted,
new section namely:— 26A.
Rectification “26A. (1) The Central Government, on being satisfied— by
Central Government (a) that the omission to file with the Registrar the
particulars of any in matters of transaction of securitisation, asset
reconstruction or security interest or registration, modification or
satisfaction of such transaction or; the omission or mis-statement
modification and of any particular with respect to any such transaction
or modification or with satisfaction, respect to any satisfaction or
other entry made in pursuance of section 23 or etc. section 24 or
section 25 of the principal Act was accidental or due to inadvertence or
some other sufficient cause or it is not of a nature to prejudice the
position of creditors; or
(b) that on other grounds, it is just and equitable to grant relief,
may, on the application of a secured creditor or securitisation company
or reconstruction company or any other person interested on such terms
and conditions as it may seem to the Central Government just and
expedient, direct that the time for filing of the particulars of the
transaction for registration or modification or satisfaction shall be
extended or, as the case may require, the omission or mis-statement
shall be rectified.
(2) Where the Central Government extends the time for the registration
of transaction of security interest or securitisation or asset
reconstruction or modification or satisfaction thereof, the order shall
not prejudice any rights acquired in respect of the property concerned
or financial asset before the transaction is actually registered.”.
10. For section 30 of the principal Act, the following section shall be
substituted, namely:—
“30. (1) No court shall take cognizance of any offence punishable under
section 27 in relation to non-compliance with the provisions of section
23, section 24 or section 25 or under section 28 or section 29 or any
other provisions of the Act, except upon a complaint in writing made by
an officer of the Central Registry or an officer of the Reserve Bank,
generally or specially authorised in writing in this behalf by the
Central Registrar or, as the case may be, the Reserve Bank.
(2) No court inferior to that of a Metropolitan Magistrate or a Judicial
Magistrate of the first class shall try any offence punishable under
this Act.”
Our Comments
Such ideal provisions are not practical. They will result in
numerous litigations and headaches to the banks, registrars, courts
and the central govt. At the moment there is no impact as the
Central Registry has not yet started functioning.
After section 31 of the principal Act, the following section shall be
inserted, namely:—
“31A. (1) The Central Government may, by notification in the public
interest, direct that any of the provisions of this Act,—
(a) shall not apply to such class or classes of banks or financial
institutions; or
(b) shall apply to the class or classes of banks or financial
institutions with such exceptions, modifications and adaptations, as may
be specified in the notification.
(2) A copy of every notification proposed to be issued under sub-section
(1), shall be laid in draft before each House of Parliament, while it is
in session, for a total period of thirty days which may be comprised in
one session or in two or more successive sessions, and if, before the
expiry of the session immediately following the session or the
successive sessions aforesaid, both Houses agree in disapproving the
issue of the notification or both Houses agree in making any
modification in the notification, the notification shall not be issued
or, as the case may be, shall be issued only in such modified form as
may be agreed upon by both the Houses.”.
Our Comments
This is a usual legal provision.
DRT Solutions Weekly Mail – 244th Issue
dated 11thJanuary ‘13
All Weekly mails right from 1st Issue to latest, click links
on top of this page
(1) Remedies when Bank Officials threaten for taking physical possession
of secured assets
Following is the extract from our web page vide link
http://www.drtsolutions.com/securitisation_securitization_SARFAESI_SA_Act.htm
Recently one of our clients informed that bank officials visited him and
threatened they the bank will take physical possession of their
residential house. We informed him to take the following steps:-
(a) The
bank officials are public servants. They are duty bound to obey govt
policies and RBI Guidelines and the Constitution of India.
(b) You
must make a audio and video record of all the discussions and tell them
that such records are being made. When they know that such records are
being made, they will be careful in their utterances and will not dare
to threaten unnecessarily.
(c) Just
after their visit, write down the complete text of the threats made by
them and issue a letter to the bank with copy to the Chairman of the
bank.
(d) The
bank officials do not have any power or authority to make threats of any
kind. The physical possession of any property can only be taken after
order of any court or the magistrate. If the bank official make any
threat, ask them to produce copy of the court order. In absence of any
court order, no physical possession should be given.
(e) If
they produce any court order, file appeal against the said court order.
Normally no court will issue such order without hearing the affected
person. If you don’t get justice from the said court, you must appeal to
higher courts till justice is obtained.
(f) In
our several weekly mails, we have covered all the related aspects in
detail. All the weekly mails are available on our web site. In your free
time, you must study all the weekly mails.
(g) Knowledge
is power. Ignorance generates fear and unhappiness. Study of our weekly
mails will equip you with requisite knowledge. All imaginary fear and
unhappiness will go away.
(2) Remedies when Bank Officials threaten for Publishing Photographs in
Newspapers
Following is the extract from our web page vide link
http://www.drtsolutions.com/securitisation_securitization_SARFAESI_SA_Act.htm
One
of our clients received a letter from the bank that they will publish
the photos of the borrowers and guarantors in the newspapers. Our
comments are as under:-
(a) A
legal reply notice should be sent to the bank informing the wrong doings
committed by the bank asking them that if such publication is made it
will amount to defamation and civil and criminal action will be taken.
(b) If
the bank still maintains its stand for the said publication, an
injunction suit be filed in civil court.
(c) Apart
from above, a legal notice be sent to the bank that if such publication
is made, counter publication will be made with the photos of the
Chairman of the bank and other senior officials listing down the wrong
doings and the loss and damages suffered consequently.
DRT Solutions Weekly Mail – 243rd Issue
dated 4th January
‘13
All Weekly mails right from 1st Issue to latest, click links
on top of the page-
(1) Important Judgment by Bombay High Court - Arbitrators appointed
under Multi-state Co-operative Societies Act, 2002 must follow
Principles of Natural Justice and Fair Play
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 sent this important judgment vide
citation 2011(4) Mh. L.J., Jayant Industrial Packaging Ltd vs Saraswat
Co-operative Bank Ltd. decided on 17.03.11. This judgment should be gone
through by the borrowers and their advocates who are facing arbitration
proceedings under the Multi-state Co-operative banks. The arbitrator has
to follow the Principles of Natural Justice and Fair Play. He can only
pass award under the Arbitration Act. He has no power to issue
Attachment Order of Injunction Orders which only Courts can issue.
Further the High Court has questioned the simultaneous proceedings under
the Securitisation Act and the Arbitration under the Multi-state
Co-operative Act. Apart from causing a great injustice and hardship to
the parties, there is always possibility of conflict of views and/or the
decisions in such parallel proceedings. Taking overall view of the
matter, the High Court quashed and set aside the said arbitration award.
The matter was remanded back for fresh hearing.
(2) DRT Act – Madras high allows application for setting aside ex-parte
order with costs as Rs. 250=00 for which the DRT and DRAT respectively
ordered to pay Rs. 35 lacs and 5 lacs
Following is the extract from our web page vide link
http://www.drtsolutions.com/drt_DRT.htm
The Madras High Court vide citation 2012(2) DRTC 829 (Mad) held that
while setting aside ex-parte order, the DRT and DRAT should not impose
onerous conditions under guise of setting aside ex-parte orders. They
can not recover amounts without taking up the matter on merits. The High
Court deprecated the hyper-technical attitude of DRT and DRAT in
ordering to pay sum of Rs. 35 lacs and 5 lacs. The High Court ordered
that the application be allowed with costs of Rs. 250=00 only as costs.
DRT Solutions Weekly Mail – 242nd Issue
dated 28thDecember ‘12
All Weekly mails right from 1st Issue to latest, click links
on top of page
(1) DRT Litigations – Important Aspects
Following is the extract from our web page vide link
http://www.drtsolutions.com/securitisation_securitization_SARFAESI_SA_Act.htm
On this topic, we have been emphasizing following aspects :-
(a) The
pleadings submitted before the Court is most important. All the relevant
matter must be raised before the Court in form of the pleadings.
(b) If
you don’t submit any matter, the Court on its own will not give any
verdict.
(c) The
pleadings should be prepared by the person having mastery of facts (i.e.
banking, industry and finance) and mastery of law (i.e. DRT Act,
Securitisation Act, Principles of Natural Justice, Banking laws, RBI
Guidelines, Law of Torts, Law of Damages, CPC, Law of Evidence,
Important Supreme Court Judgments) The said person should have knowledge
and experience of trial court.
(d) In
our experience of past 23 years of bank litigations, we have found that
the bankers are committing numerous wrong doings from the stage of
sanction of loans, calling for securities and initiating recoveries
resulting into huge loss and damages. Hence no pleading in bank
litigations will be complete without claiming said loss and damages or
counter-claim.
(e) If
the above aspects have not been included in the pleadings, the same
should be done as early as possible by way of amendment in the
pleadings.
(f) Assuming
that the above aspects of the pleadings have been taken care of, the
next most important aspect is that one should pay utmost attention to
the court proceedings.
(g) Preparation
for a date should be made at least a week in advance. All pleadings and
proceedings so far should be gone through. What is going to happen on
the next date should be understood and discussed threadbare with the
advocate.
(h) If
any application is to be submitted, the said application should be
drafted much in advance and discussed with the advocate. Connected law,
procedure of law and relevant court judgment should be gone through and
discussed.
(i) If
any arguments are to held, prior preparations and rehearsals are to be
made much in advance. Written arguments should be kept ready for
submission after the arguments are over.
(j) The
borrower has to do all the above as the advocates and judges are
extremely busy with their numerous cases. Further the stakes are much
more limited compared with that of the borrower.
(k) The
RBI as early as 1984 desired that the advocates and judges in the
proposed DRT courts should be having expert knowledge of banking,
industry and finance. But this has not yet been done. Hence the borrower
has to take the responsibility and initiative for such important lapse.
(l) As
early as 15 years back, the Supreme Court ruled that the administrative
control of the DRTs should be transferred from the Ministry of Finance
to the Ministry of Law. This has not yet been done and it is not known,
when it will be done. Hence the borrower must be very careful about the
impact of such important lapse on part of the Governement.
(m) The
principles of natural justice are hundreds of years old. Our
constitution is based on implementation of the said principles of
natural justice. The DRTs and the related acts aim at ensuring
implementation of the said principles. Unfortunately the same are openly
violated in the DRTs. The borrower has to ensure that the said
violations are covered in writing in the court records and proceedings.
(n) On
account of the above, the DRTs naturally are inclined to favour bank as
well as go against the borrower. To avoid such consequences, the
borrower must be quite vigilant and alert so that as soon such thing
happen, it should be put down in writing and attention of the judge
should be invited orally as well as in writing without any fear. He is a
public servant and his duty is to do justice without any bias and favour.
His violations if any should be taken most seriously.
(o) For
our clients we provide all guidance and advice right from the stage of
pleadings and court proceedings and many of our clients who follow our
such guidance and advice have been quite successful in their DRT
litigations.
DRT Solutions Weekly Mail – 241st Issue
dated 21stDecember ‘12
All Weekly mails right from 1st Issue to latest, click links
above
(1) Importance and Impact of Counter-claim
Following is the extract from our web page vide link
http://www.drtsolutions.com/securitisation_securitization_SARFAESI_SA_Act.htm
One of our clients from Orissa got Counter-claim prepared from us but
could not file it. The proceedings in DRT, DRAT and High Court resulted
in payment of certain deposit. Before fully honouring his full
commitment made before the High Court, he came to us nearly after three
years. We advised him to file the said counter-claim. We provided him
all necessary court judgments and citations. Accordingly the
counter-claim was filed and a situation of ‘No Debt Due’ was created.
Side by side, he hounoured his commitment about the deposit. When this
matter was put up before the High Court, the High Court in its order
asked the DRT to decide the counter-claim based on the law and the
procedure of law. We advised the said client to hire suitable advocate
having knowledge and experience of trials. Whenever, the counter-claim
is decided, the said deposit will have to be refunded with interest and
damages. Had the said counter-claim would have not been filed, the case
would have been closed without any benefit to the borrower on account of
the wrong doings committed by the bank. Hence it is reiterated in all
the bank litigations, one must file his counter-claim. It can be filed
at any stage and at any time. In one case we filed the counter-claim
even after 21 years.
(2) Purchasing the Assets of Borrowers in Auction conducted by Bank or
DRTs
Following is the extract from our web page vide link
http://www.drtsolutions.com/securitisation_securitization_SARFAESI_SA_Act.htm
Several persons approach us for guidance and advice for purchasing the
assets of the borrowers through the auctions conducted by the banks or
DRTs. Our comments are as under:-
(a) First
we tell them that we don’t deal in such matter. Rather we protect the
properties of the borrowers so that such properties are not sold.
(b) Despite
above, if they intend to purchase, they must check all the records in
banks and DRTs. They should get no objection or confirmation from the
borrower/guarantor.
(c) In
many cases, the banks keep the buyers in dark about the legal
complications. As a result, the possession of the property becomes
difficult. Hence one should never believe the bank officials and instead
should carry out their own independent verifications.
