DRT Solutions Weekly Mail – 40th Issue dated 13th Feb. ’09
Amended &
Updated on 29.08.16
All Weekly mails right from 1st Issue to latest, click links
above
(1) ‘Video Arguments in Judicial Proceedings’
– a Special Address by Mr. Ram Kishan in National Conference:-
On 22.02.09, the Indore Branch of ‘ICAI’ (Institute of Chartered
Accountants of India) in the ensuing ‘National Conference at Indore’ has invited
Mr. Ram Kishan to deliver a Special Address on ‘Video Arguments in Judicial
Proceedings’ An exclusive article on this topic has been published on our web
site vide link
http://www.drtsolutions.com/courtech.htm
. This article will also be published on their Souvenir specially being brought
out on this occasion. Video Recording of the proposed Address will also be
available to the interested persons. Further details will be announced in the
regular weekly mails.
The above proposed Address will
create further interest in all concerned persons in the society. A responsive
and efficient Judiciary is firs pre-requisite of an effective democratic society
like ours. Through our concentrated efforts in ‘DRT Trials’ pertaining to defence of Borrowers and Guarantors, we intend to make all possible suggestions
in the arena of court proceedings, legislation, management and technology.
DRT Solutions Weekly Mail – 39th Issue dated 6th Feb. ’09
Amended &
Updated on 29.08.16
(1) DRAT Mumbai orders transfer of the case from DRT III to DRT I:-
In case of one of our clients at Mumbai, it was informed that
their bankers, on the same matter, have filed two cases in two different DRTs.
viz. OA under DRT Act and Proceedings u/s 17 of the Securitisation Act The said
two cases under adjudication in two DRTs may result in conflicting and or
contradictory decisions. Hence we advised our client to approach the DRAT Mumbai
to transfer one of the case so that both the cases are dealt with by one DRT
only. The said DRAT was pleased to order the require transfer from DRT III to
DRT I despite opposition by the bank.
(2) Dealing with a strict and biased DRT Judge:-
The advocate of the above mentioned client at Mumbai pointed
out that the judge where the
cases were transferred was quite strict. We are of the view that we
should not bother about the judge being strict and biased. It is needless to
mention that the judge also is required to follow law and procedure of law. In
fact we should always submit written arguments with such judge. As soon as the
said judge issues any order, the same must be examined and review and appeal
filed respectively in the said DRT and DRAT. With exhaustive applications,
written arguments, review petition etc. we may create sufficient record for the
success in the said court or in appeal to succeed.
(3) Reply to Notice u/s 138 NI Act:-
One of our clients at Indore approached us to prepare reply
to the bank notice u/s 138 of NI Act. We prepared an exhaustive
reply laying down the conditions precedents resulting into the dishonor of the
relevant cheque. The wrong doings committed by the bank which resulted into the
loss and damages were also pleaded. Since the said loss and damages were much
more than the alleged claim of the bank and hence there was ‘No Debt Due’ Under
such facts and circumstances, the bank was not required to process the said
cheque.
We are also contemplating to advise our client to file criminal
complaint against the bank officials for committing criminal breach of trust.
(4) PO, DRT not accepting the applications:-
One of the our clients at Mumbai informed that the PO DRT was
not accepting
interim application terming them a tool causing unnecessary delay. We
asked our client to submit the said applications to the Registrar of the said
DRT as well as to send the said application by registered post. With such
approach the said application could reach to the said PO who had no option but
to adjudicate the same.
(5) ‘Video Arguments in Judicial Proceedings’ – a Talk by Ram Kishan:-
On 22.02.09, the Indore Branch of ‘ICAI’ (Institute of
Chartered Accountants of India) in the ensuing
‘National Conference at Indore’ has invited Mr. Ram Kishan to
deliver a talk on ‘Video Arguments in Judicial Proceedings’ An exclusive article
on this topic will appear on our web site shortly. Video Recording of the
proposed talk will also be available to the interested persons. Further details
will be announced in the regular weekly mails.
DRT Solutions Weekly Mail – 38th Issue dated 30th Jan ’09
Amended &
Updated on 29.08.16
(1) Counter-claim/damage suit can be filed at any time if it is based on
continuing cause of action:-
The question of limitation is being repeatedly
raised by the litigant borrowers and guarantors. If the
counter-claim is based on continuing cause of action, it can be filed at any
time, but preferably before commencement of trial.
This is just for information of all concerned that
recently we have prepared a damage suit against a bank on the initial
cause of action of 1987 i.e. nearly 21 years ago. It will be filed in the civil
court just after 60 days of notice prescribed under the relevant act relating to
the bank concerned.
(2) Verifications in pleadings and affidavits:-
In many cases we have observed that the
verification of pleadings and affidavits by the litigant borrowers is not
made correctly. The said verification is to be based on records and documents of
the company/firm and not the personal knowledge of the borrower otherwise it
will create a lacuna if it is questioned by the opposite party. If such a
mistake is committed by the bank officials, they may be questioned accordingly
in the counter-affidavit or during the cross-examination.
(3) Improvements in the format and presentation of the Pleadings and Written
Arguments:-
We have carried out following three improvements in
the format and presentation of the Pleadings and Written
Arguments:-
(a) The Microsoft Word has provision of marking line
nos on a page. Thus a more accurate reference of a certain
location on the document can be made by making reference to the Page No and Line
No.
(b) If you are making any reference to the extract of
certain order, document or ruling, you may insert the copy of that
extract on a page and then make the pleadings or comments. This will make the
job of the reader or the Judge quite simple.
(c) At the end of the document, detailed index can be
made by giving reference of the Page No and Line No. This is the
system followed in USA in all the written documents submitted to any court of
law.
(4) Appointment of Judges:-
In our country, the appointment of trial court judges in
civil court is based on competitive examination of fresh law
graduates. Such practice is based on the system introduced by the British. But
in UK itself, after 900 years of such practice, they have changed to appointment
by special commission which is an independent public body without any
interference from the government, politicians or judges. Further in order to win
the confidence of the public, the judges are being appointed from all walks of
life with the condition that they must have legal education and 5 to 7 years of
experience in particular field where they will be posted as Judge. Further the
appointments are for a contractual period of 4 to 5 years after which the
contract is to be renewed depending on the performance and results.
The above has been evolved in UK based on American Judicial
System.
Hence the day is not far when in our country also such reforms
will take place. Till such time we have to carry on with the Judges particularly
in Trial Courts where the fresh law graduates enter the job without any actual
field experience. With passage of time and due to heavy work load, hardly there
is any chance for them to acquire essential knowledge of the field. That is why
the performance of most of the departmental judges is not found satisfactory in
the trial court or even on promotion to Higher Courts. Some of such Judges are
also getting posted in the DRTs and that is why we are receiving complaints
about their questionable behavior.
The above is base on the information on the internet relating to
the appointment of Judges in UK vide link
http://www.judicialappointments.gov.uk/select/select.htm
DRT Solutions Weekly Mail – 37th Issue dated 23rd Jan ’09
Amended &
Updated on 29.08.16
(1) Gujrat High Court holds debt assignment or its substitution illegal:-
On 12.01.09, the Division Bench of Gujrat High Court in the
matter of Kotak Mahindra Bank Ltd. Vs Official Liquidator of APS Star Industries
Ltd. has delivered an important verdict stating that buying and selling of the
debt with the underlying securities can not be part of the activity of lending.
Finally the High Court has declared the assignment by way of substitution of
debt as an illegal activity. This judgment will adversely affect operations of
all the Securitisation Companies.
(2) Distt. Collector withdraws his notice after being fired by Chief Justice,
Madras High Court:-
As reported in our weekly mail issue no 35th dated 9th
Jan. ’09, the Distt. Collector was fired by the Chief Justice, Madras High Court
for having issued a notice under the SARFAESI Act in respect of one of our
clients from Chennai. The said Collector withdrew his notice and informed the
High Court accordingly on 19th Jan ’09. The copy of the order and
proceedings of the High Court are still awaited.
(3) Possession Notice under Securitisation Act:-
We have been approached by parties from Indore, Mumbai, Cochin
and Bhuvaneshwar who are worried on getting possession notice from their bankers
under Securitisation Act. We have informed them that the only remedy is to file
appeal u/s 17 of the Securitisation Act. This appeal is a misnomer and is in
fact akin to civil suit. We are preparing the said suit in a very exhaustive
manner. We shall provide all guidance as to how to fight such suit. In due
course of time, exhaustive damage suit / counter-claim must be filed as that
will be the ultimate defence.
(4) Next Conference of Legal Forum of India:-
We are getting numerous queries as to when we are holding next
conference. The news about our conference at Indore has spread far and wide.
DRT Solutions Weekly Mail – 36th Issue dated 16th Jan ’09
Amended &
Updated on 29.08.16
(1) Another Counter-claim decreed by DRT:-
One of the visitors of our web site informed that DRT has decreed
their counter-claim as full set off to bank’s claim of Rs. 79.51 lacs. In the
judgment, DRT stated that “The counter-claim is averred in clumsy, haphazard &
repetitive manner. There is lack of continuity and correlation in several
contentions.” The bank has appealed to DRAT against the said verdict of the DRT.
The party has approached us seeking our advice for further action
in the matter.
This is the second case of counter-claim decreed by DRT which has
come to our notice. The first one was from DRT Bangalore, details of which were
reported in 28th issue of our weekly mail.
In both the above cases we find that pleadings of the
counter-claim have not been prepared properly. All the legally permissible
categories of damages have not been claimed. As a result the parties have
approached us to amend the counter-claims.
(2) Justification for cross-examination of bank officials tendering affidavits:-
One of our clients from Mumbai sought our advice on further
action to be taken on the affidavit submitted by the bank in the matter of the
borrower’s application for dismissal of OA filed by the bank. The bank’s
affidavit mainly contains general and evasive denials.
Similarly in case of one of our clients from Indore, the bank has
submitted reply to the appeal filed by the borrower. The borrower has decided to
file rejoinder to the said affidavit. In this case also the bank’s appeal
contains mostly general and evasive denials.
In both the above cases, for correct judicial determination of
facts, there is no option but the cross-examine the bank officials who have
tendered defective averments in their affidavit/reply. Applications giving
examples of some of such averments be made to the DRT, such facts be explained
during the oral arguments as well as written arguments be submitted. The order
issued by the DRT be examined, more so if adverse, to ascertain whether it
contains the parameters of ‘Review’ All out efforts be made for complete
judicial determination of facts.
(3) Review – Interpretation of Citations:-
One of our clients from Indore Informed us that during arguments
for ‘Review’ of an order in the matter of an application relating to Sec 24 of
CPC, the opposite counsel for the bank submitted 7 citations. On examination of
these citations, it was found that 6 citations were not applicable and one was
in favour of the Review Petitioner. It appears that the said citations were
submitted on rudimentary reading of the ‘Index Notes’ Actually the complete
judgment must be read thoroughly before coming to any conclusion otherwise one
will have to cut a sorry figure as in this case.
(4) Tools for ‘Distant Advocacy’:-
Consequent on demands from several of our clients all over the
country we have developed following modern tools for the ‘Distant Advocacy’ :-
(a)
‘Voice Opinion’ :- In several cases, we have
prepared our opinion in voice (MP3 format) and e-mailed it to our client who may
listen the same and play the same to his advocate. If required, any steno may
transcribe such ‘Voice Opinion’
(b)
‘Video Brief’ :- We have evolved brief in form
of ‘PowerPoint Presentation’. It contains
complete brief showing the documents and citations with full explanations.
(c)
‘Video Arguments’ The complete arguments are
available in form of the ‘PowerPoint Presentation’ showing the documents and
citations.
The above tools have been shown to the eminent persons like
retired judges and senior advocates who have appreciated the same as the same
would be highly useful to the advocates and judges.
The day is nor far when the above improved method for court room
will become as common as mobile phone. The efficiency of the complete process of
litigation will improve tremendously as well as drastic reduction in costs.
DRT Solutions Weekly Mail – 35th Issue dated 9th Jan ’09
Amended &
Updated on 29.08.16
(1) Collector fired by the High Court in the matter of Securitistion Act:-
One of our clients from Chennai through his e-mail dated 6th
Jan. ’09 informed as under:-
"A writ was filed before the High Court of
Madras against the Distt. Collector for having issued a
notice under sarfaesi act and for not complying to provide a copy of the
complaint from the bank and threatening to take action by seizing the assets
given as collaterals.
A single judge sitting during vacation on 31st
Dec posted the matter before the Division Bench
on account of being under sarfaesi act.
The matter came up today before the bench, where
the acting Chief Justice Magopadhya was sitting along with justice Dhanabalan.
The item was
42nd which came up at 4 PM.
On examining the documents, the acting CJ asked,
" Who is this collector? What is his name? What is he thinking of himself? A
king of the district?? Which district ??
The Govt.
Pleader said it was Vellore district and he does not know his name.
The CJ said, " I shall pass strictures against
him if he does not answer in 5 days time. I give 5 days time for him to withdraw
this notice. "
"Under sec 14 of the sarfaesi act, a Distt.
Collector or magistrate has only the duty of taking possession after the
recovery office makes a certificate under the directions of a decree or order.
and only to assist such recovery officer and not to assist the secured creditor
!! that too for assisting in possession to the recovery officer and not to
conduct enquiry !! What does he think of himself?? if he still feels he has
anything to say let him file a counter by 19th"
The court was
in echo with his loud voice.
He continued and instructed to record the above.
he said " in my opinion a work shop needs to be conducted for such officers with
the changing trends in the Act and with new judgments passed by High Courts and
the Supreme Court"
To all of us, a new definition and procedure of
sec 14 in sarfaesi act has been interpreted. One more head down of the draconian
Act. A new leaf to be added to our defence folders."
Our Comments
We are awaiting the copy of
the actual order. Our comments will follow after receipt of the copy of the said
order.
(2) Appeal u/s 17 of Securitisation Act is the first and last action for the
Borrower to ventilate all his grievances:-
The Supreme Court in the matter of Mardia Chemicals has laid down
that the appeal u/s 17 is akin to a civil suit. Being the first civil action in
the DRT i.e. a trial court, the borrower must raise his complete defence. All
the factual and legal aspects of the said defence must be pleaded in the said
suit. All the said facts must be judicially determined, proper law be applied to
the said judicially determined facts to achieve complete justice. It is presumed
that in the said trial all the tools like determination of the facts by way of
discovery of documents and through cross examination of the witnesses be used.
Hence the said appeal u/s 17 is the first and last action for the borrower to
ventilate all his grievances. Any lapse on these aspects will create a lacuna
which can not be corrected later on.
(3) Proper Pleadings including counter-claim and Trial in DRTs is the foundation
for success in Bank Litigations:-
The foundation for achieving success in bank litigations in DRTs
is the proper pleadings including counter-claim and then all the aspects of
trial as laid down by the Supreme Court in the matter of Swaranlata vide
citation AIR 1969 SC 1167. The recovery statutes viz. DRT Act and Securitisation
Act are in addition to and not in derogation of the Constitution of India which
includes the Art 141 according to which the law down by the Supreme Court shall
be binding on all courts in the territory of India. The details of all these
matters have been covered in detail with practical aspects in our web site
www.drtsolutions.com .
(4) Blame and allegation for Delay:-
Since the DRT Act and Securitisation Act are latest recovery
enactments. The DRT courts itself is a relatively new establishment. The
relevant law and procedure of law in the DRTs is under constant evolution and
development. On one hand, the bankers are under pressure to expedite recovery,
most of the affected borrowers are neither having adequate knowledge nor
resources for the resultant legal battle. The civil courts are also facing huge
burden of pendency and pressure for quick disposal. The matter gets complicated
when there is dearth of competent trial advocates in DRTs. Above all, the facts
relating to banking, industries, finance and relevant law are highly complex and
without precedents as such battles have not been fought in past. Since in modern
times, everybody is extremely busy and have shortage of time, there is no time
for research, review, study and contemplation. Using modern management and
technology, we have created a global platform for interactions of the affected
persons.
Our emphasis is on perfect pleadings and perfect trial on every
date in DRTs. Any deviation with such approach will result in defeat in higher
courts. This is on account of obvious bias of the system in favour of banks and
against the borrowers. Very competent advocates and judges are available in
higher courts but they are not meant for corrections or defect removal of
mistakes or deficiencies in the trial courts like DRTs. At the most the actions
may be to remand for retrial as happened in the matter of Swaranlata (AIR 1969
SC 1167 Para 13) when the Supreme Court in 1969 made the following statement:-
“ 13. We are, therefore, constrained to come to the conclusion
that there has been no real trial of the defendant’s case. It is a very
unfortunate state of affairs that eighteen years after the date on which the
suit was instituted, we have to remand the suit for trail according to the law.
But we see no other satisfactory alternative.”
Despite more competent advocates and judges in 1951 to 1969,
lesser wastage of time due to absence of TV and comparatively less busy modern
life of those days and hence more time for studies; when retrial was needed in
1969; the conditions are worse nowadays. Practically every case is having lot of
defects at the trial stage. That is why we have emphasized greater use of tools
like Review and Change in Court despite perfect pleadings. One need not worry
for delays as the interest in counter-claim will continue to ensure protection
from recoveries.
In view of above, if there is any allegation of causing delay,
the borrower must narrate the above facts and circumstances which are in the
interest of justice, equity and good conscience.
DRT Solutions Weekly Mail – 34th Issue dated 2nd Jan ’09
Amended &
Updated on 29.08.16
(1) Legislation and Constant Periodic Revision:-
Following is the extract from Pgs. 500 and 501 from the Book –
“Outlines of Indian Legal & Constitutional History” by Prof. M.P. Jain Sixth
Edition Reprint 2007 published by ‘Wadhwa Nagpur’ :-
Law is never static. Since human society constantly undergoes
changes because of social economic process, law also must change keeping pace
with social changes. Even if the law is codified, there is no finality about
law.
Sir Henry Maine (Member 3rd Law Commission – 1862 to
1869 during tenure of which 211 Acts were passed) in his famous book ‘Ancient
Law’ points out that the
sign of a progressive human
society is whether law keeps
on growing after its codification1 A
country with codified law needs to look into the statutes
from time to time, revise them and re-enact
them in order to bring them up-to-date. After codification, the function of the courts undergoes some change. It becomes
less creative. Instead of developing the law to embrace new relationships or new
set of facts, the courts confine themselves by and large to the narrower task of interpreting parliamentary
language. The early British codifiers of law for India had envisaged that
the codes being enacted would need constant periodical revision.
Lord Macaulay said while
submitting
the draft Penal Code to Lord Auckland
"Sometimes it will be found that a case has arisen respecting which the Code is
silent. In such
a case it will be proper to supply the
omission. Sometimes it may be found that the Code is
inconsistent with itself. If so, inconsistency ought to be removed. Sometimes it
will be found
that the words of the law are not sufficiently precise. In such a
ease it will be proper to substitute
others... In this manner every successive edition of the Code will solve all the
important questions as to the
construction, of the Code which have arisen since the appearance of the
edition immediately preceding'' Sir James
Stephen once said: "Re-enactments of the various
codifying Acts are as necessary as repairs are to a railway.”' He went on
to emphasize upon the need of constant revision of newly enacted codes in
these words: "It is nearly impossible, when an Act is first drawn, to foresee every case which can arise in
reference to the subject, unless it has already been exhausted by judicial
decisions. Judicial decisions are the material
from which codifying acts should be drawn and it cannot I think be
expected that a really important Act
of this sort should reach its full maturity till after several enactments."4
In his
view, no Act of importance ought to last for more than ten or twelve years. It
should then be
examined carefully "from end to end" and "it should be improved or corrected at
every point at which experience has shown that it required improvement and
correction..."
Even John Stuart
Mill
proposed a permanent commission to watch
over codified law, protect it from deterioration and make further improvements
therein as often as required. The statute book needs to be consolidated and
expurgated occasionally. During the course of working
of the statutes, certain lacunae might he revealed. The courts in the
process of
interpreting the statutes may give conflicting and divergent decisions
contradictory and inconsistent case-law may
accumulate around some statutory provisions. It thus becomes necessary
from time to time to reconcile the conflicting cases, to assimilate the judicial
pronouncements, and to improve and revise
the law in the light of these rulings. Errors of drafting
may be revealed; social changes may dictate changes in law.
Revision of statutory law is,
therefore, a perennial and continuous process in any developing society.
On the need for
effecting changes in the law from time to time, the Supreme
Court of India ( vide AIR 1986 SC at 1584) has observed as follows:3
"The law exists to serve the needs of the
society which is governed by u II the law is to
play its allotted role of serving the needs of the society, it must reflect the
ideas and ideologies of that society. It must keep time
with the heartbeats of the society and with the needs
and aspirations of die people... The law must, therefore, in a changing society
march in tune
with the changed ideas and ideologies..."
Our Comments:-
We have inherited the British Judicial System having the concept of constant
updation of law in accordance with the needs of the society. While we enact the
statute but we have no assured built-in system of updation. Macaulay as
mentioned above has pointed out (about 150 years ago) that such updation should
take place in 10 to 12 years. On account of fast pace of life in present time,
it should take place every year or two.
Our view is that the knowledgeable persons must contact the
‘Law Commission’ and the ‘Legislative’ wing in the Ministry of Law and submit
their proposals from time to time and ensure that the amendment or updation is
accomplished without any hitch. Such amended acts be placed and passed by the
parliament.
Through the ‘Legal Forum of India’ we intend to do so in
respect of ‘DRT Act’, ‘Securitisation Act’ and ‘NCLT Act’ Our concern is in
respect of those piece of legislation which relate to the defence of Borrowers
and Guarantors.
The above will avoid challenging the constitutional
validity of the statute under considerations through court of law. The proposed
updation will enhance the quality of the pleadings as well as unnecessary legal
fights in court of law, which in turn will improve the quality of litigations.
The cost of the litigation will also come down.
(2) Datum for Counter-claim:-
The broad principles are as under:-
(a)
It is assumed that the fundamentals of the
lending based on viability have been pleaded properly in the counter-claim.
(b)
The first wrong doing by the lender which can
be proved by Law of Evidence has been located.
(c)
If there are any admissions by the borrower,
the same must be considered properly if they have any sizable impact on the said
wrong doing.
(d)
Having fixed the said wrong doing in accordance
with above, the datum may be fixed based on the said wrong doing.
(e)
Another test is the capability of the borrower
for possible corrections during the period subsequent to the said datum.
(f)
Having fixed the datum, the yearly impact be
assessed and the happening during the subsequent period need to be examined.
(g)
The pleadings then should be finalized taking
into considerations the law of torts, law of damages and law of evidence.
(3) Coverage of our Weekly Mails:-
During every week we receive several mails from our clients and
visitors of our web site. Accordingly we have numerous interactions, questions
and answers. Out of these, we select those which will have utility to the public
(our public is the community of Borrowers and Guarantors facing litigation in
DRTs) are published first on our web site and then the same is communicated as
weekly mail. All these weekly mails right from the issue no 1 to the latest are
available on the web site. Any new comer to our mailing list is advised to go
through all the mails right from the 1st one. The language of these
weekly mails are purposely kept so that the same is easily understood by the
public. Sometimes there may be repetitions but the presentation is latest as the
same topic is felt of paramount importance in the interactions during the week
under review.
The purpose of these weekly mails is to empower the public to
understand the legal process, issues and solutions to the current problems in
DRTs with emphasis on the practical utility. With passage of time, our weekly
mails are read by thousands of borrowers and guarantors and their advocates.
If you feel the utility, you may forward these mails to your
known persons. If someone desires to be regular recipient of our mails, he may
contact us to add his e-mail ID on our address book. He will get these mails
regularly on every Friday before 6AM.
All the weekly mails right from the 1st issue is a very good source
material for facing the litigation in DRTs.
You are free to ask questions and make suggestions to enable us
to incorporate the same in the future issues.
DRT Solutions Weekly Mail – 33rd Issue dated 26th Dec. ’08
Amended &
Updated on 29.08.16
(1) Pending OA Dismissal Application and filing of Counter-claim:-
In the matter of one of our clients from Indore, an application
for dismissal of OA has been pending in DRT Jabalpur. In the meantime, the bank
has initiated action under 13(4) of the Securitisation Act. While Appeal u/s 17
is being filed, it has been decided to file the counter-claim against the OA.
The WS is not being filed as the said application for dismissal of OA is still
undecided. The proposed counter-claim is much more than the claim of the bank
and hence it will result in ‘No Debt Due’ situation which will also form a good
defence against the Securitisation action. At the end of the day, until and
unless the counter-claim is decided the recovery against both the actions viz.
OA and Securitisation will not be possible. For full adjudication, the
counter-claim must be fought perfectly and thoroughly so that all the material
facts are judicially determined and the bank admits all their wrong doings. The
tools of discovery and cross-examination will have to be used with full legal
and factual knowledge and competency. The goal should be that nothing is left to
the discretion of the judge. On account of the existing age old technology and
poor management in courts, the process will easily take 10 to 20 years at the
trial court only. There will be pressures for shortcuts which will have to be
resisted otherwise justice will not be achieved.
(2) Review wrongly rejected by the Registrar of DRT in the matter of SA:-
In the matter of one of our clients from Ranchi, the Registrar,
DRT Ranchi has rejected the application of Review filed against an interim order
pertaining to application u/s 17 of the Securitisation Act.
When the various provisions such as Sec 17(7) and 37 of the
Securitisation Act, DRT Act, Rules under Securitisation and DRT Act and law laid
down by the Supreme Court in the matter of Mardia Chemicals are considered, it
will be found that the action taken by the Registrar is not correct. We have
advised the client to appeal to PO DRT.
This is one of the example which shows that any efforts just to
concentrate and expedite the recovery even by resorting to coercive legislation
like Securitisation Act will ultimately never be successful for the
following reasons:-
(1) Any enactment and procedure thereof has ultimately to follow
the Constitution and the law declared by the Supreme Court.
(2) Since the new enactments like the DRT Act and Securitisation
Act are neither comprehensive nor the relevant procedures have been developed,
the deficiencies and shortcomings will be questioned during the adjudication
only. Such questioning will take years to settle.
(3) In eyes of law laid down by the Constitution and SC, the sole
objective of all courts is same i.e. 'Justice' whether it is Civil Court or DRT. No one has
power to resort to short-cuts.
(4) In view of above, the borrowers and guarantors should be
quite vigilant and alert on every date and stick to the procedure of trial laid
down by the Supreme Court in the matter of Swaranlata (AIR 1969 SC 1167). Since
the advocates may not have so much time and patience, the litigants only will
have to involve themselves to achieve judicial determination of all material
facts and till such time, no final arguments should be allowed to take place.
(3) Cross-examination – entitlement in the event of any submission made by
opposite party in form of pleadings, statement, affidavit etc. :-
In the matter of one of our clients from Mumbai, we advised them
to cross-examine the bank official who has submitted an affidavit which contain
several misleading and false submission.
In several cases reported by our clients elsewhere also, it is
found that the banks are in habit of submitting general and evasive pleadings.
Similarly affidavits are being submitted by the bank officials containing
disputed facts. The only remedy in all these cases is to cross-examine the
relevant bank officials. Such cross-examination be held in such a manner that
the real facts are discovered ultimately leading to ‘Undisputed Facts on Record’
It is only after this, such facts be subjected to analysis by application of
relevant law. Any lapse on this count will result in unsuccessful trial.
(4) Negotiation and settlement with the banks:-
In the several cases, our clients inform that they desire
settlement with the banks but such settlements are not successful. The main
reason for failure is that any negotiation must be indulged only from position
of ‘Strength’ and not ‘Weakness’
The position of ‘Strength’ can only be created by application of law
and procedure of law by which the bank and its officials reach to a point of no
return i.e. either their defence is closed or their case reaches close to
dismissal.
In this respect filing and contesting ‘Counter-claim’ thoroughly will be of
great help. On account of such approach, few of our clients could settle their
debt at 3% to 5% of the due amount. Such situation can be reached only when
the borrower himself takes interest in the litigation. Leaving the case only to
the advocate can never create the desired position of ‘Strength’
(5) Use of Voice Mail in rendering quick replies and Legal Opinions:-
Many a times our clients approach us for our legal opinion or
comments at the last moment. Sometimes such opinions are quite lengthy and
exhaustive. Under such circumstances particularly when the matters are crucial and
critical, we prepare ‘Voice Mail’ containing the complete opinion incorporating
the law, court citations etc. Such ‘Voice Mails’ in MP3 format are sent through
e-mails which after downloading, may be played or transcribed by the steno.
DRT Solutions Weekly Mail – 32nd Issue dated 19th Dec. ’08
Amended &
Updated on 20.08.16
(1) Affidavit by Govt withdrawn – on the application for cross-examining the
said official:-
In the matter of one of our clients from Mumbai, we advised them
to cross-examine the bank official who submitted the affidavit. For this purpose
we prepared an exclusive application which will be submitted in due course of
time. Just after this, a news item appeared in the Economic Times, Mumbai 12th
Dec ’08 issue at page 1 entitled ‘ Govt. withdraws affidavit in RIL-RNRL gas
dispute case.
We have observed that in many case, false, erroneous and
misleading affidavits are filed by the bank officials. The only remedy is to
cross-examine them so that real truth will come out. It is needless to mention
that the person cross-examining the said bank officials should have mastery of
banking facts, related laws including evidence act.
We have constituted a special cell for this purpose having
experts in banking and banking laws. We intend to conduct such cross-examination
using the modern technique of video conferencing.
(2) Delay caused by Bank in submission of WS in the matter of counter-claim:-
In the matter of one of our clients from Chandigarh, the bank has
been delaying to submit their WS to the Counter-claim filed in civil court.
Initially, the judge imposed costs of Rs. 500 which on subsequent dates was
enhanced to Rs. 2000 and then Rs. 5000. The bank officials are under great
pressure but it is not so easy to submit reply to the counter-claim drafted by
us. This is how the beauracracy in banks is made to realize the responsibility
and accountability right from the CMD of the bank to the level of Branch Manager
who have been made parties as they all have well defined duties under the RBI
Guidelines. In many cases we have observed that on account of non-submission of
WS, the stage came upto the closure of defence. To avoid the same, ultimately
the advocate of the bank had to submit the said WS by making simple, general and
evasive denial. This is how the case of the bank is weakened. By such denials,
the borrower has right to make full discovery of documents as well as thorough
cross-examination. These are the tools by which all the material facts will be
judicially determined. It is only after getting all the admissions of the wrong
doings by the banks, the arguments may be held otherwise the trial will not be
complete. Once such rights are ignored, the higher courts can not correct the
situation.
(3) Reply affidavit by Bank in the matter of SA:-
In the matter of one of our clients from Indore, the bank
officials have submitted a a reply affidavit. We have advised the client to
examine the same in light of the principles mentioned in above items as well as
those covered by us in previous weekly mails.
It is needless to mention that the appeal in the Securitisation
Act under the Sec . 17 is akin to civil suit as per the law declared by the
Supreme Court in the matter of Mardia Chemicals. Hence the above mentioned
affidavit must be adjudicated upon thoroughly for judicial determination of
material facts as per the detailed procedure mentioned in previous paragraph.
(4) Appreciation of our efforts in the arena of ‘Review’:-
One of our mail recipient who is an Advocate in Delhi appreciated
our efforts for spreading the knowledge about ‘Review’ Extract of his mail dated
17th Dec. ’08 is reproduced below:-
“Thank you very much for
the update especially as to aspect of reviewability of the order passed by drt.
Thank you once again for this effort..
Thanks & regards,”
We sent the following
reply:-
(1) Many thanks for your
understanding and appreciation.
(2) The legal community in
our country has not paid due attention to the essential attributes of a trial
and as a result the judicial determination of facts have suffered a lot.
(3) Similarly the provision
of Review has not been understood properly.
(4) In whatever form of
judicial process, the British left; we did neither understand it properly nor
develop it.
(5) The greatest
complication was introduced when our Constitution was promulgated.
(6) The entire legal
community is at cross-road and the correct remedy is near impossible rather a
mirage.
(7) We have therefore
decided to concentrate at the level of trial only. We have chosen DRT as it is
only place of trial where we can find some litigants who can afford the cost of
legal battle which, on account of above factors, has become long drawn, highly
time consuming and hence very expensive. We hope to achieve some leading
judgments which will help all others who can not afford such battle. We are also
using tools of appropriate management and modern technology to create awareness
among the existing players. The task is gigantic but efforts are worth the
desirable social impact.
With best wishes,
Ram Kishan
(5) On account of counter-claim, the bank officials are after the borrower to
settle the case:-
In a small value case (less than Rs. One lac for a car loan), the
borrower at Indore, filed counter-claim in the Consumer Forum. The bank
officials have verbally admitted their wrong doings and are now running after
the borrower to settle the case. In several cases we find that the bank has no
choice but to settle if the counter-claim is properly prepared, filed and
pursued in the court of law.
(6) Case of OA Dismissal in DRT Nagpur:-
In the matter of one of our clients from Nagpur, past nearly two
years, the bank is unable to reply the application for OA Dismissal submitted by
the borrower. We are sure that either the bank will lose their OA or will come
forward for settlement as the relevant law has been well settled particularly in
the region covered by Mumbai DRAT.
DRT Solutions Weekly Mail – 31st Issue dated 12th Dec. ’08
Amended &
Updated on 20.08.16
(1) Affidavit by Bank Official – cross-examining the said official:-
In the matter of one of our clients from Mumbai, the bank
official has submitted an affidavit which contain several erroneous and
misleading facts as well as misconceptions of law. We have therefore advised our
client to cross examine the said official in accordance with the Order 19 Rule 3
of CPC read with Sec 22(2)(a) of the DRT Act.
(2) Cross-examining the Bank official through Video Conferencing:-
For the purpose of the above mentioned cross-examination if the
expert cross-examining the said bank official is situated at a distance, one may
use the method of video conferencing. This will save overall time and costs
apart from having accurate record in form of a CD which may be replayed whenever
needed.
(3) Why ‘Review’ has become so highly important and essential in Indian Courts
including DRTs:-
In the matter of one of our clients from Ranchi, the
securitization appeal was decided in a very short period ignoring the complete
trial. We advised the said client to file Review and Appeal.
It is observed that the Indian Courts and Tribunals are highly
overloaded and there is huge pendency of cases. As a result there is pressure
for quick disposal. All these factors in almost all the cases give rise to
numerous defects in the orders and decrees fit for Reviews. The common concept
is that the same judge will never accept his mistakes and hence the Review is
seldom resorted to. In the matter of above mentioned case, we prepared a
detailed voice mail and sent to the said client. The said mail contained
detailed explanation based on several Supreme Court Citations. The advocate
concerned very much appreciated our voice mail and accordingly he incorporated
the same in the Review Petition.
In this connection, it is relevant to note that the Supreme Court
vide citation 2007(14) Scale 624 in the matter of Mount Carmel School Society vs
Delhi Development Authority stated:-
“15. A Judge’s record, as is well known, must be accepted as
correct.
Appellant, thus could have filed an application for review before
the learned Single Judge. The same was not done.
16. We are, therefore, of the opinion that the High Court can not
be said to have committed any error in passing the impugned judgment.”
Hence in view of above SC Citation, if you have missed in filing
Review, the higher court will hold you only responsible for the lapse and thus
you will be deprived of one legal remedy.
(4) ‘Counter-claim or Damage Suit’ is the only and ultimate defence in DRT Bank
Litigations:-
In all the recovery actions like OA under DRT Act or Notice under
the Securitisation Act, the bank and or financial institution comes up with a
claim in money value with interest. The defendant borrower or guarantor normally
pleads wrong doings and or lapses of the creditor. The most appropriate remedy
will be to quantify the said wrong doings in form of money value and file the
same as counter-claim or damages. This is the only and ultimate defence in all
the bank litigations. It is needless to mention that until and unless the said
counter-claim is fought fully in accordance with all the provisions relating to
a suit, court will be inclined to decide the case only in favour of the
creditor. Hence all the defending borrowers and guarantors are advised to be
perfect not only in the pleadings but on all dates in adhering to the full
fledged legal procedure relating to a suit. It is a ground reality that if it is
not done, the courts are inclined to pass orders and decrees in favour of the
bank and financial institutions only.
It is important to bear in mind that the said counter-claim or
damage suit must be filed as early as possible so that there is complete
protection right from the inception of the litigation.
(5) Appeal u/s 17 of Securitisation Act needs to be contested as a Suit:-
It is once again emphasized that the said appeal being a suit as
decided by the Supreme Court in the matter of Mardia Chemicals, is not being
fought as such. It is again emphasized that the approach should be as mentioned
in sl no 4 above and accordingly the said appeal must be fought as suit using
all the provisions mentioned in CPC 1908.
(6) Decree passed by DRT is found having several defects:-
In the matter of one of our clients from Bangalore, the civil
court and DRT has passed the decree after adjudication lasting over 10 years.
The said decree has been found several defects and hence we have advised the
client to file Review and Appeal.
This case also confirms our observations that the Indian Courts
including DRTs are heavily overloaded and the quality of adjudication is very
poor resulting into reviewable defects in almost all the cases. Both the
remedies i.e. Review and Appeal must be pursued by the defendant Borrowers and
Guarantors. This is only possible for such litigants who have financial
affordability, sufficient time and resources and those who have filed their
counter-claim and damage suits. Such legal battle ultimately gives returns as
the creditor/applicant bank is forced to settle even to the extent of less than
5% of the alleged dues. If the defendant borrower or guarantor do not have
patience, the judicial machinery will decide only in favour of the creditor and
once it is done at the level of the bottom court, chances of any correction by
the higher courts are extremely remote. That is why we have been insisting
perfect pleadings and perfect adjudication on all dates. Since this is not
practically possible for the advocates, the borrower will have to involve
himself otherwise results can not be assured. With passage of time, some leading
judgments including heavy damages against the banks will be achieved, In the
meantime, we hope that the management and technology in courts will also
improve.
