|
| |
DRT Solutions Weekly Mail – 60th Issue dated 3rd July
’09
All Weekly mails right from 1st Issue to latest, click links
above
(1) Counter-claim can be filed even if WS has not been filed by the
defendants in DRT:-
In the
matter of one of our clients in Mumbai, a special situation has arisen that
the matter relating to OA Dismissal is under consideration with DRT, DRAT
and High Court. Accordingly the submission of the WS is linked with decision
of these courts about the OA Dismissal
Under the
above facts and circumstances, the defendant can file his counter-claim in
DRT or damage suit in civil court against the bank. Such right accrues to
the borrower the moment bank files the OA. If subsequently the OA is
dismissed, the counter-claim will continue and has to be decided by the DRT .
(2) Pleadings in WS and Counter-claim in DRTs:-
(a)
As per the Preamble of the DRT Act, the DRTs are special
courts established for expeditious adjudication of recovery of debt due to
the banks and financial institutions and for matters connected therewith or
incidental to it .
(b)
As per the Section 22 of the said Act, the said Tribunals
shall not be bound by the procedure laid down by the CPC 1908 but shall be
guided by the principles of natural justice. These Tribunals shall have
powers to regulate their own procedure.
(c)
In view of above, the pleadings in WS and Counter-claim in
DRTs are not bound by the provisions under the CPC and the practices so far
being followed .
(d)
There is worldwide movement for simplification of language
used in the legal documents so that it is easily understood by the litigants
vide the book ‘Plain Language for Lawyers’ 2nd Edition written
by Michele M Asprey, Solicitor of the Supreme Court of New South Wales
(Plain Language Writing Consultant).
(e)
Consequent on Nationalization of Banks in 1969 in India, the
security of industrial loans moved from Assets to Productivity i.e. surplus
generation, such loans became based on much more complex factors compared
with simple personal loans.
(f)
Taking into account all the above facts and circumstances, we
have evolved suitable pleadings for the WS and the Counter-claims in
DRTs.
(g)
In respect of ‘Personal Guarantee of Directors of the Limited
Companies’ we have done special research in 2008 and the concept has been
evolved for the first time in India. Hence such pleadings have been made
comprehensive enough even having court judgments so that the advocates can
understand the concept thoroughly as well as the pleadings are self
contained.
(h)
Our pleadings have been highly appreciated by Senior
Advocates and Judges.
(i)
With passage of time and after comprehensive trials based on
such pleadings, there will be leading judgments which will be the precedents
and accordingly the pattern of pleadings will undergo a change. This is how
the complex facts relating to banking, industry and finance will be
judicially determined to be understood by one and all in the legal community
of advocates and judges particularly in the expert courts like DRTs .
(3) Breakthrough in DRT Madurai:-
One of our clients in Madurai and his Advocate
has achieved a breakthrough in DRT. The said client wrote us a letter on 2nd
July ’09 which is reproduced below and is self explanatory:-
“Dear Mr. Ramkishan ji,
‘Dharm’
and ‘Truth’ lately emerges to stand by the side of the victimized
Man. It is happened in my case on 30.06.2009.
The
long awaited consideration of ‘Road to Justice’ on Merits in the hearing
on 30.06.2009 in my case is continued with the Proper Judicial
Determination by the Hon’ble P.O/Madurai who rendered his order
meticulously by Application of Laws apparent on the face of the Records
on 22.04.2009. We have made out this break through with proper pleas
after excruciatingly 11 years with the valuable and timely guidance and
assistance by Mr.Ramkishan and Mr.Dubey
You
have tirelessly elucidated and illuminated the Defendants who are
victimized, should draw the attention of the Trial Judge who is always
impartial with proper pleas and with the application of different
provision of laws for ‘Discovery of Facts’ which are suppressed by the
banks conveniently.
It
is further to be noted that the provision given in ‘Bankers Books
Evidence Act’ that the certified copies of the Original Documents can be
produced in the Court as ‘Prima-Fascia’ Documents, is comfortably
exploited and misused by the erred officers at the cost of the ignorance
of the Defendants who are unaware of the Banking Laws.
The bank
has no grounds but to impress the Trial Judge by narrating the story of
public funds locked up. It is well known that the entrepreneurs who are
the back bone of the growth of Industries. Few
unscrupulous elements did mistakes and it is blown as a big issue and
sits in the minds of the public as well in the minds of the Trial Judge.
It does not mean 99.99 of the Industrialists in this way. The obstinate
Banks and Financial Institutions inculcate the Trial Judge with
verisimilitude averments and made the Trial Judge that the Defendants
are willfully flouting the Public Money by suppressing all the wrong
doings by the banks.
The
Trial Judge is so far has this mindset which is also influenced by media
that the defendants are cheating the Public Money and thus it becomes
the stone wall. It is difficult to break such opinion while the genuine
case of mine, placed before the Hon’ble P.O. The wrong doings of the
Bank is properly placed in First Reply Statement and then Proof
Affidavit, Counter Proof Affidavit followed by other written statements
in Interlocutory applications in which the bank is trapped and unable to
substantiate their claim with proper Prima-facie evidence and file with
elusive and evading reply without proper grounds and irrelevant
materials to fill up the number of papers.
These statements have been articulately prepared and timely placed and
argued by my Dynamic spirited young Lawyer Mr.Arun Murugan with the
assistance of Mr. Ramkishan and Mr.Dubey. Mr.Arun Murugan having
acquired deep knowledge of Acts, Banking Laws, CPC, IPC, proceedings,
related citations and the Case History of the Defendants argued with
clarity specifically with issue of conflict with supportive evidence in
my case in past 11 years and at last the Hon’ble P.O/Madurai convinced
that my contention in my case is a genuine.
Mr.Arun Murugan has placed his contention (Legal and factual) solely on
the point of application why the Applicant Bank refuses to produce
original documents under its Power and Possession with clean hands while
the verisimilitude pseudo documents produced in main application are
challenged. The Hon’ble P.O found the non-compliance of procedure on the
part of the Applicant Bank and allowed plea of the Defendant to mark the
documents of the Defendants. At this juncture I am happy that at last
the Trial Court identified the tricky play with fraud of the Applicant
Bank.
As
per the advice of Mr.Dubey I started collected all the certified copies
of the proceedings and it helped me and insinuated us timely to file
proper application as per the advice of Mr. Ramkishan in order to
complete all the process in the Trial Court such as Applications for
Review, Reopen, Cross examination, Marking documents etc., Thus the
completion of all the Procedures by availing all the opportunities, the
Higher Legal forums has the sympathy on the Defendants and render
Judicial Determination on merits and render justice without consuming
the time.
By
having the certified copies of the proceedings from the start date, we
came to know that the Applicant Bank failed to comply with the orders of
the Hon’ble P.O past several years before and when this is raised the
Hon’ble Tribunal gave the final opportunity to the Applicant Bank to
comply with the order.
The
following is the message from me.
Persistently Mr. Ramkishan regularly conveys his guidance of ‘Gold Mine’
through his ‘Weekly Mail’ and instant reply to anyone, even in midnight.
I followed and came to this breakthrough. The Respectable Mr.Dubey is
the instrument to inspire me and encourage, challenging the mighty Bank
who is ready to spend many crores of rupees for mere recovery of few
lacks for rupees to preserve their false Image and Reputation.
The
aggrieved Defendants need not have the fear of contesting the bank. This
has been clearly emphasized by Mr. Ramkishan in his Weekly Mails and
please peruses the last addition on 26.09.09:
·
DRTs are an expert
court on matters connected with banking, industry and finance.
·
Advocates and
Judges in DRTs will have expert knowledge in the arena of banking,
industry and finance.
·
In DRTs every
matter is mostly viewed from the legal angle of such persons not having
intimate knowledge about the facts.
·
DRTs in our country
are not independent bodies. They are working under Ministry of Finance,
Banking Division and get regular briefings and have meetings with the
Banking Division. It is glaring violation of Principles of Natural
Justice.
·
The Defendants are
required
to understand the impact and
consequences of above and fight on the legal as well as factual points..
As an example, the matter of OA Dismissal agitated by our clients
throughout the country has brought out few DRAT and High Court judgments
in favour of borrowers.
The Defendants are necessarily to engage a
very competent versatile professional counsel with expert
knowledge in Banking, Industry, finance, RDDBFI Act, Securitization Act,
CPC and more Practice in DRT & DRAT in this specified field and
insinuate and explicate him frequently with clear of all the hands on
materials for his acquaintance of their cases thoroughly and follow all
the proceedings since the lawyer has not only your case but with other
cases.
It
is the duty and responsibility of the counsel who represents and place
the material with his articulate professional talent of consummate
knowledge in this specialized field with all Laws and Acts. In this case
I have to appreciate Mr.Arun Murugan for his dedication and involvement
in the case as if it is own personal case. He is patient and listens and
consoles the Defendants. I admire his attitude and quality and I
observed even the Senior Counsels appear their presence during the
argument in DRT and extend their due Respect.
Unless I have the valuable guidance and advice of Respected Mr.
Ramkishan, Mr.Dubey and Mr.Arun Murugan I would be a aggrieved Defendant
lost in the ocean and I am indebted for these Professionals of High
Caliber.
Dear Sir, it is my request to place this letter in your weekly mail if
this matches to your requirement for the awareness of the aggrieved
Defendants.
Regards
Sundararajan”
DRT Solutions Weekly Mail – 59th Issue dated 26th June
’09
(1) OA Dismissal and filing of WS in DRTs:-
(1)
The Tribunals have been evolved to be an expert court on a certain matter
e.g. DRTs are an expert court on matters connected with banking, industry
and finance.
(2)
Hence it is expected that the Advocates and Judges in DRTs will have expert
knowledge in the arena of banking, industry and finance .
(3)
In our country there is neither separate Bar Association for Trial Lawyers
(as in US) nor the Bar Association organizes suitable training programs for
the specialized Tribunals (as in US and UK ).
(4)
In our country, in DRTs every matter is mostly viewed from the legal angle
of such persons not having intimate knowledge about the facts .
(5)
Further the DRTs in our country are not independent bodies. They are working
under Ministry of Finance, Banking Division and get regular briefings and
have meetings with the Banking Division. It is glaring violation of
Principles of Natural Justice .
(6)
In our country though we have gone for specialized Tribunals but we have not
devised statutory Public Bodies for social control and monitoring on these
Tribunals as in UK. Hence the ultimate goal of DRTs instead of justice is
quick Disposal in the interest of Banks. The conditional legislation putting
time for disposal as Six Months is itself is illegal being Impossible for a
full fledged trial of complex facts relating to Banking, Industry and
Finance. Normal bank suits in civil courts take nearly 15 years for which
prescribing 6 months is nothing but impossible. It is interesting to note
that some of our clients are contesting their cases since 1998 i.e. past 11
years .
(7)
On account of above facts and circumstances, we have been empowering our
clients to understand the impact and consequences of above and fight on the
legal as well as factual points with tooth and nail so that no stone is left
unturned. Such fights will result in leading judgments which will gradually
bring in the real objectives of independent and impartial DRTs. As an
example, the matter of OA Dismissal agitated by our clients throughout the
country has brought out few DRAT and High Court judgments in favour of
borrowers .
(8)
OA Dismissal to akin to Rejection of Plaints. When the OA itself gets
dismissed and the case is quickly disposed off by the DRT, there is no need
of submission of WS. There is no prejudice to the banks as they may invoke
other recovery actions e.g. Securitisation Act .
(9)
Time is not far when independent and impartial DRTs headed by a Expert
Member and a Judicial Member will come down heavily on the Banks due to
illegal accounts (which is their primary job) not being maintained properly
despite several audits as well as open violations of RBI Guidelines. Perhaps
a certificate from Legal Audit may be prescribed along with the OA. Under
these circumstances, OA Dismissals alone will force the banks and their
audits to correct the present sorry state of affairs .
(2) Counter-claim by the Borrowers – Behaviour of Banks and DRTs:-
As is
widely known to all concerned that the Counter-claim or Damage Suit against
the Bank or the FIs is the only and ultimate defence for the Borrowers and
Guarantors in DRTs. Since we emphasized this
concept
in 2001 through our article published in Financial Express viz. ‘Who’s
afraid of DRTs’, the message has gone far and wide. Numerous counter-claim
and damage suits have been filed. Now the DRT
advocates
have started demanding and emphasizing the said counter-claim and damage
suits .
The
reaction and behaviour of the Banks have been interesting and is broadly as
under:-
(a)
Initially the bank officials and bank advocates laughed at the counter-claim
or suits involving hundreds and thousands of crores .
(b)
As the cases advanced the banks were forced to submit their written
statements .
(c)
As usual, the bank officials having typical characteristics of beauracrats,
avoided their involvements and finally it was the bank advocate who had no
option but to prepare the said WS on behalf of the bank .
(d)
The said bank advocate had no option but to prepare usual WS based on
general and evasive denials. This is how the bank has started losing the
case .
(e)
When all the facts were denied, the case is destined to take a very long
time of several years of trial .
(f)
The borrower has to take only one precaution to have a very competent trial
lawyer in DRT. The inspection of documents will take few years. The evidence
and cross-examination will bring about all the wrong doings of the bank. The
person who has to cross-examine the bank officials should have intimate
knowledge of banking, industry and finance. We have trained highly skilled
retired bank officers in this arena. Cases prepared by us since 2001, this
stage has not come yet .
The reaction
and behaviour of the DRTs have also been interesting and is broadly as
under:-
(a)
On one hand, the DRTs provide sufficient time to bank to file their WS
against the said counter-claim of the borrower (we have seen even few years)
but they don’t permit so much of time to borrowers. These facts must be
noted and highlighted during crucial arguments .
(b)
The PO DRTs in order to have quick disposal of the case, force the borrowers
to submit the proof affidavit and fix up final arguments. This is a trap for
ignorant borrowers as just after the final arguments, in most of the cases,
matter is decided in favour of the banks despite strong defence of the
borrowers .
(c)
Under such facts and circumstances, we have been advising our clients to be
very strict about the discovery of the facts, framing of the issues,
cross-examination of the bank officials etc. so that all the wrong doings of
the bank and its officials are proved beyond doubt on paper. We have
observed that all such things are greatly resisted by the banks and the PO
DRTs. The borrowers should not bother about such resistance. Let everything
be put down in writing and each and every decisions at all stages be
reviewed and appealed. The delay, if any, does not affect the borrower as on
account of interest, the counter-claim continues to grow and hence the
situation of ‘no debt due’ continues .
(3) Arguments at DRT Bangalore:-
Mr. B.K. Dubey,
our Senior Advocate and Head of our Advocacy Wing has been arguing a case in
DRT-Bangalore past several months. We have been reporting important features
of his arguments in various weekly mails. PO DRT Bangalore is regarded to be
a strict PO with fast disposal. We have observed that outcome of arguments
before him much depends on quick and proper replies to his queries during
the arguments. One needs to have mastery of facts and mastery of law to face
him. This was once again illustrated during the last arguments held on
22.06.09 and may be seen from the extract of the following report from Mr.
Dubey:-
Proceedings at DRT Bangalore on 22.06.2009
The matter was posted for hearing on the application filed by
the defendant company on 18.05.2009, for seeking directions of the Tribunal,
against the bank for providing the documents in terms of the memo of
documents served on the bank vide dt. 2nd May’09, in compliance
with the directions (oral) given by the Tribunal, after being satisfied
about the bonafide need of the demand for documents sought form the bank .Since, the bank did not submit/provide the documents as per
memo of demand, the application was filed by the defendants under compulsion
alongwith copy of the memo of documents and proof of service thereof before
the Tribunal.The bank instead of providing the documents, filed counter
against the application of the defendant company, before the Tribunal, and
the matter was posted for arguments on 22.06.09.
Arguments heard, and now the matter is posted for orders on
this interim application, to be delivered on 7th of July 2009.
While hearing the arguments, the counsel for the bank was
time and again narrating the story of OTS proposal given by the defendant
company and duly accepted by the bank and was trying to impress the Judge
that, the defendant company bought time again and again for paying the dues
of the bank until the last moment, but, instead of paying the dues under the
agreed OTS, filed the SA, which is nothing but, abuse of the process of law.
It was further argued by the said counsel that, now the defendant company is
buying time by filing application for seeking documents from the bank which
have no relevancy with the case under the SA. The
Judge of the Tribunal got irritated and warned the advocate of the bank to
limit his arguments solely on the point of application for providing the
documents to the applicant company, and that, the advocate of the
bank should not argue the case on merits of the appeal filed by the company. Said contentions of the bank were opposed vehemently, and the
attention of the court was drawn to the provisions of section 17(3) of the
Securitisation Act, according which the Tribunal has to determine the case
on the basis of the evidence in the light of the facts and circumstances of
the case. It was further argued that, the facts of the case are in the
documents executed by the company and guarantors, and the documents in
original are in the power and possession of the bank, and until the said
documents are brought on record of the court, it is not possible for the
company to lead the evidence. It was further argued that, it is the bank
that has not followed the guidelines issued by the RBI for conduct of the
loan accounts of the project financed under consortium of the banks, and
only due to such violations on the part of the bank, the company has been
deprived of its’ legitimate right to continue the power generation activity
and it is the lead bank for whose default, the company has suffered, despite
there being on record of the banks’ minutes of various meetings that, the
company always ahead of, in bringing their contribution in excess of the
stipulations for project finance. Thus, it was argued convincingly that, the
documents sought from the bank are very much relevant, and that, in absence
of the said documents, the company would be deprived of its’ valuable right
of hearing, thereby causing injustice, which would be against the provisions
of the Constitution, the Special statute, as well as the law laid down by
the Apex court of the country.
After giving a patient hearing the matter has been kept for
orders on the IA of the company, to be pronounced on 7th of July
2009.
DRT Solutions Weekly Mail – 58th Issue dated 19th June
’09
OA Dismissal in DRTs– concept and practice:-
(1)
The DRT Act, DRT Rules, Bankers’ Books Evidence Act, SC
ruling in the matter of Central Bank vs Ravindra and DRT Regulations have
prescribed the format, contents and certification of Accounts Documents to
be filed along with the OA by the banks and financial institutions.
(2)
The DRTs are meant to be a specialized technical courts for
the matters connected with banking and industrial finance.
(3)
The Tiwari Committee at whose instance the DRTs have been
constituted in its reports published by the RBI in 1984 at page 77
recommended that “These tribunals should be manned by persons having
specialized knowledge in the functioning of banks, financial institutions
and industry ."
This has not been implemented by the Govt yet. When such recommendation is
fully implemented, the various factual aspects in DRT litigations pointed by
us will be understood properly.
(4)
At the moment the Banks and FIs having recovery cases
amounting to more than Rs. 10 lacs are required to approach the DRTs. There
are 28 DRTs and 5 DRATs in the country to handle the cases involving NPAs of
nearly Rs. 1,50,000 crores .
(5)
The DRTs have been equipped with much wider powers than the
Civil Courts with ultimate goal and objective to achieve complete justice .
(6)
At the moment there is a misconceptions that the DRTs are
meant only for bank recoveries. In a democratic setup like ours, there is a
rule of law and not rule by any individual. It is only when everyone
strictly abides by law, then only ultimate justice will be achieved .
(7)
If the above concepts are applied, the banks have no power,
authority and jurisdictions to violate the legal provisions mentioned in Sl.
No. (1) above. The banks are not authorized to prepare any documents
violating the above provisions .
(8)
The DRTs have no power, authority and jurisdiction to accept
such illegal documents. If by mistake, the DRTs accept such documents, as
soon as such illegality is detected, the OA is rendered illegal .
(9)
The dismissal of OA is akin to rejection of plaint prescribed
in O-7 R-11 of CPC. Until and unless such matter is decided, the stage of
submission of WS is not reached. In fact by such OA Dismissal, the case is
decided expeditiously .
(10)
It is only when the DRTs follow the above law and as soon as the OAs are
dismissed, the banks will be forced to observe law not only in documentation
but in other spheres also e.g. the bank officials don’t care about the RBI
guidelines which are in existence since 1976 .
(11)
This is how the public servants in banks and the DRTs will transform
themselves to abide by law which is the first requisite to attain the
democracy. The public (borrowers) will have to fight initially but with
passage of time we will also have the Councils (members being citizens) as
in USA and UK, which have statutory powers to monitor and supervise the said
public servants in banks and tribunals like DRTs .
(12)
There are cases in DRTs Maharashtra where such OAs have been dismissed and
the DRAT Mumbai and Bombay High Court
have not interfered the said dismissal of DRTs .
Our clients from DRT Nagpur, DRT Jabalpur, DRT Lucknow, DRT Mumbai have been
specifically benefited by raising the matter of OA Dismissal past 6 years.
(13)
The borrower is within his rights to defend his interest on all possible
ways. The DRT litigations comprises of numerous complex facts relating to
banking, industry, finance, contracts, torts, damages which must be pleaded
in the counter-claim. Such exhaustive counter-claim must be tried within the
framework and procedure of law available for complete trial. It is observed
that the banks as usual deny all the material facts and hence the trial
takes a long time for full judicial determination of facts based on law of
evidence. One has to be patient and resourceful enough to achieve perfect
trial on all dates. With exhaustive and complete trials only, the law
relating to DRTs will develop and leading judgments so achieved will solve
most of the problems faced by the entrepreneurs regarding adequate and
timely bank finance.
DRT Solutions Weekly Mail – 57th Issue dated 12th June
’09
(1) Cases in DRTs pertain to Administrative Law :-
The British
established the modern Court System in India but they never allowed the
study and application of Administrative Law. There was no separation of
powers between legislative, judiciary and executive. The whole system,
organization and structure was designed to rule India. The litigations were
confined to private against private only. There was no provision or scope
for private against the Govt. Our mindset or legacy is based on such system.
Interestingly the UK does not have a written constitution, no statutes like
Evidence Act or Law of Torts.
As soon as our
country became free and after adoption, enactment and promulgation of the
Constitution of India, the most important aspects were (1) Fundamental
Rights of the Citizens and (2) Separation of Powers between legislative,
Judicial and Executive wings of the Government .
Attention was paid to
study and Reports by Law Commission of India as well as to the
Administrative Law. Indian authors like Justice D.D. Basu and Prof MP Jain
wrote books on Administrative Law. Courses on this subject were first
introduced in LLM syllabus.
Administrative Law
like the Law of Torts is a judge made law. In fact most of the cases being
fought under Art 226 in the High Court belong to Administrative Law rather
than the
Constitutional Law because
the practicing Indian Advocates as well as the High Court Judges have not
paid requisite attention to this important aspect.
The Bank Litigations
in DRT and Court correctly speaking belong to Administrative Law .
If one applies the
‘Principles of Administrative Law’ to the Bank Litigations, the following
picture will emerge:-
(1)
Activity and
Function :- Industrial and Business Finance by Banks and FIs
(2)
Legislative
:- RBI
(3)
Judicial :-
DRTs and Courts
(4)
Executive :-
Banks, FIs and Entrepreneurs/Promoters
The Tribunals have
much wider scope than the Courts as the Courts have certain limitations on
account of CPC which the Tribunals don’t have. The ultimate goal is Justice
for both i.e Tribunals and Courts.
An exhaustive
analysis of functions, powers and jurisdictions of the Tribunals and Courts
have been given by the Supreme Court of India vide AIR 1965 SC 1595, ACC vs
Sharma.
We
request the Advocates, Judges and the Litigants involved with the Bank
Litigations to study and apply the Administrative Law thoroughly in DRTs and
Civil Courts. If it is done so, Lot of present problems particularly in
Trials will be solved.
We have chalked out
complete plan of action, guidance and advice for those clients who are
personally interested but it is not possible to provide the same to their
representatives or employees on account of obvious reasons. It is needless
to mention that the stakes of the entrepreneur/promoter are the highest and
hence the seriousness which he will have, can not be expected from his
representative/employees. The counter-claims and Damage Suits running in
hundreds and thousands of crores call for matching seriousness, interest and
preparations particularly when the complete environment is against the
borrowers .
(2) Huge Court
Fees collections in DRTs call for either reduction in Court Fee or increase
in number of benches:-
It is observed that
huge court fee is being collected in DRTs and DRATs resulting into huge
surplus remittance to the Government. Courts are not meant for earning
profits. In fact no court fee should be charged as has been recommended by
the Law Commission of India .
Our clients are
requested to apply to their respective DRTs under RTI Act to provide the
statement of accounts so that quantum of surplus may be actually ascertained .
On basis of above,
writ petition or PIL may be filed either to reduce the court fee or to
increase the benches.
(3) If POs coming from Banking Sector are allowed than those from Industrial
Sector should also be allowed :-
It is learnt that bank
officials are being posted as the POs of the DRTs. As soon as such thing
happens, matter may be raised to post matching no of Indusrialists/Businessmen
as the POs. In fact the Tiwari Committee on whose recommendations in 1984,
the DRTs were constituted proposed that the POs of the DRTs should have
knowledge and experience in banking, industries and finance. This
recommendation has not yet been implemented. It was only in British days,
the public servants had a higher status than the public but now in
democratic setup the public should have higher status than the public
servants but still we have not become free from the clutches of the
servants.
(4) Application of Principles of Natural Justice:-
The initial
application of doctrine of natural justice was to the courts that is to say,
in respect of judicial functions and it is from that sphere that the
doctrine has been extended to statutory authorities or tribunal exercising
‘quasi-judicial’ functions and later to any administrative authority who has
the function of determining civil rights or obligations .
The first principle
of the Natural Justice is ‘Hear the Other Side’ Hearing means effective
hearing of the evidence and arguments. The second principle is ‘No one can
be judge in his own cause.’
It is surprising that
such an old doctrine (800 to 1000 years) originally meant for courts is not
being complied with some of the DRT judges. Thus our such courts are
backward by 800 to 1000 years.
Solutions Weekly Mail – 56th Issue dated 5th June
’09
(1) Article in 'Business Standard' on Conservatism of the Judiciary to use
new technology:-
At page 10 of 3rd June issue of ‘Business Standard’, in the
column ‘Catching up with science’, Mr. M.J. Antony has stated that the
Judiciary is wary of using new tech to improve procedures.
The judiciary is
perceived as a conservative institution. It does not easily accept
innovation in procedures and interpretation of law. However, it has begun to
admit, reluctantly, the recent advances in science and technology.
The high courts are lagging behind in
Computerization, and there is no coordination between the Supreme Court and
other courts. Many tribunals have neglected their sites after the
inauguration.
Some computer savvy judges have utilized web facilities in
writing judgments. The Madras High Court used a blog by a law student of IIT
Kharagpur in its recent judgment in the TVS Motor-Bajaj Auto row over the
patent for ‘Flame’ bike. The Supreme Court recently referred to Wikipedia in
two of its judgments. While one bench felt that it could not be relied upon,
another bench felt that it could be used to check definitions of
telecommunication devices.
In
this article it is further mentioned that some headway has been made in the
application of ‘Video Conferencing’, online cause lists, web sites of the
courts etc,
Our Comments:-
(1)
Justice V.R. Krishna Iyer in his book ‘Law, Lawyers and Justice’ (1988) at
page 133 has written that the Indian Courts are 200 years behind those in
developed countries.
(2)
The Information Technology Act was enacted in 2000. Much later i.e. on 9th
July 2007, laptop computers costing Rs. 40 crores were distributed to 15000
judges in the country with the provision of 3 months training. Nearly 2
years have passed, we don’t find such computers being used by the judges in
the court rooms.
(3)
We
indigenously developed complete system of ‘Video Arguments’ and demonstrated
the same before the District Judge, Indore on 10th Oct 2007 but
the judicial machinery is not at interested to use such system which will
greatly improve the quality, reduce costs as well as reduce the pendency in
the courts .
(4)
USA commenced computerization of court records as early as 1970 but even
after 39 years, we have not yet commenced such an important technological
application.
(5)
Our courts are heavily loaded, even to the extent of more than 90 times.
There is clamor for increasing the number of judges. Immediate application
of the Modern management techniques and technology will have much greater
impact compared with only increasing the number of judges.
(2) Success of Litigation depends on Proper Reaction at every moment of
time:-
Peter Murphy in the Preface to First Edition of his
book ‘A Practical Approach to Evidence’, Second Edition 1985 stated that
‘Evidence presents problems without warning calling for immediate reaction.
Failure to object at the right time, or the making of an unfounded objection
may in some cases have serious consequences for the fate of the piece of
evidence concerned, or the case as a whole. One’s opponent’s objections,
whether well or ill founded must be dealt with. In his opinion, there was
only one rule of evidence namely, a reaction of instinct on hearing any
words spoken in court. That sort of instinct takes time to develop and
thorough knowledge of rules but it is of incalculable importance .
Our comments:-
In the
context of DRT Litigation particularly the borrowers have to be always alert
and vigilant over any word in writing or oral from the bank or it’s
advocate. Proper reaction by the Borrower and or his advocate will have a
great impact on the success of the litigation. It is needless to mention
that the reaction must come from a person having mastery of facts and
mastery of law. The facts concerns banking, industry and finance, whereas
the law concerns DRT Act, Securitisation Act, Law of Damages, Law of Torts,
Evidence Act, CPC, Principles of Natural Justice, various relevant SC
judgments etc.
(3) Sources and Factors of Injustice in DRTs/Civil Courts:-
The goal, purpose, objective and duty of the Judicial
Machinery is to obtain, achieve and maintain justice at every moment of
time. The sources and factors of Injustice in DRTs/Civil Courts are as
under:-
(1)
The courts are heavily overloaded:-
A rough estimate shows that
Indian courts are ninty times more loaded compared with those in developed
countries. This seriously affects the working and efficiencies of Judges,
their staff and Advocates .
(2)
Old Management Systems and poor TechnologyComputerization
in courts in USA started in 1970 whereas in our courts it has just started.
On 9th July 2007, 15,000 laptops costing Rs. 40 crores were
provided to all judges in the country but they are not being used till date
despite supervision by high courts and pressure for disposal.
(3)
DRTs were intended to be headed by expert persons having knowledge of
banking, industry and finance. At present instead only legal persons like
retired District Judges are heading the DRTsThe
original recommendation in 1984 of Tiwari Committee at whose instance the
DRTs were created was that the proposed tribunals should be headed by expert
persons having knowledge of banking, industry and finance. That
recommendation has not yet been implemented by the Govt.
(4)
DRT is an original trial court working on principles of natural justice
The DRT is the first
and final trial court where the complex facts relating to banking, industry
and finance are intended to be judicially determined. There is no handicap
or limitation as the DRTs can even travel beyond CPC. Hence the full trial
conducted by DRTs for complete justice will definitely take more time than
the civil courts.
(5)
Lack of legal education among the litigants
The Bar Councils in
developed countries have massive programs for legal education of the public
and litigants as only can become watch dogs and direct the judicial system
to attain the only goal i.e. justice. The Advocates, Judges and Law Colleges
just can not do so on account of their own personal goals and limitations.
(6)
Conclusion
On account of above facts
and circumstances, we have undertaken
(a)
To frame pleadings of counter-claim or damages based on law of torts with
full knowledge of banking, industry and finance.
(b)
To provide guidance and advice on every date
(c)
To provide trained advocates
(d)
To provide comprehensive knowledge through our web site
www.drtsolutions.com and weekly mails
(e)
We conducted an All India DRT Conference in May 2008. DVDs are available
which contain the complete proceedings of the said conference .
DRT Solutions Weekly Mail – 55th Issue dated 29th May
’09
(1) An Important Judgment on DRT Counter-claim:-
One of our clients
from Mumbai has forwarded the following judgment seeking our analysis and
advice. Our comments are as under:-
(a)
The citation is 2007(2) Bank CLR 549 (DRAT Kol), State Bank
of India vs J.S. Oil Fats (P) Ltd
(b)
The bank's OA
of 1999 for Rs. 68.58 lacs was rejected by DRT Guwahati on 22.08.02 as the
said OA was premature and bank did not have any cause of action. In respect
of Counter-claim which was filed in 2001 for Rs. 90.93 lacs, the said DRT on
22.08.02 decreed the counter-claim to the extent of Rs. 45 lacs .
(c)
The DRAT Kolkata on 14.11.03 upheld the said decision of DRT
rejecting the said OA as well as decreeing the counter-claim .
(d)
This matter
went upto Supreme Court which set aside the part of the decree which related
to the counter-claim and remitted the case to DRAT to reconsider the matter.
The relevant extract of the order of the SC was as under:-
“There may be substance in what is being stated by learned
counsel of the respondents, but we feel that the matter required a more
detailed consideration of the material on record. We, therefore, set aside
that part of the decree which relates to the counter-claim and remit the
matter to the DRAT to reconsider the matter after hearing the parties and to
record the findings as to the extent of the counter-claim which may be
allowed.”
(e)
DRAT reexamined the entire matter and reversed the original
judgment of DRT.
(2) Analysis of above Important Judgment on DRT Counter-claim:-
The judgment reveals lot of important aspects of pleadings
and trial, our comments are as under: -
(a) The borrower in his counter-claim has claimed only direct
loss sustained. Various other legally permissible loss and damages like
profit lost, mental tension, image and reputation, aggravated damages,
exemplary damages etc. have not been claimed .
(b) The above deficiency has not been revealed at the level
of DRT, DRAT, High Court and Supreme Court. That is why we have been
emphasizing that the person who is drafting the pleadings must have mastery
of facts and mastery of law. The facts include those pertaining to banking,
industry and finance. The law includes banking law, law of torts, law of
damages, law of evidence, CPC, contracts, law relating to principles of
natural justice etc. That is why we took up the job of preparing the
pleadings since 2001 and all our clients have benefited due to our perfect
pleadings. We have also found many borrowers suffering as proper pleadings
have not been prepared .
(c)
The Supreme Court remitted the case to DRAT. The said DRAT conducted the
retrial. This should have been resisted by the borrower. The retrial should
have been conducted by the DRT.
(d) No new matter or documents were permitted in the said
retrial. This also should have been resisted. All the deficiencies should
have been corrected in the said retrial in the interest of complete justice .
(e) The retrial conducted by the DRAT was also defective and
objectionable. This also should have been objected to by the borrower .
(f)
A thorough analysis of this case confirms our oft repeated insistence that
one has to be perfect in the pleadings as well as adjudication on every date
right from the day one. The DRT is the court of first trial where all the
disputed facts are to be judicially determined. Since everything of the
counter-claim is resisted and denied by the bank, the whole process is
automatically delayed. No hurry to cut short the adjudication should be
tolerated otherwise it will result in incurable mistake.
(3) Suspected Reaction of SC on Counter-claim:-
One of our clients
has expressed his doubt whether SC will permit decree of Counter-claim on
the Banks. Our opinion is as under:-
(1) SC as any other
court in the country has to abide by law, procedure of law and the
Constitution of India .
(2) Since all odds
are against the borrowers, we have been advising our clients that they have
to be very careful right from the day one so that no court in the country
including the SC is able to locate any legal flaw in the procedure of law as
well as application of law at any stage of the adjudication .
(3)
Facts of each and every case differ and hence no two cases can be compared
in the factual aspects. It is only in regard to the law and procedure of law
the SC can find deficiencies.
(4) The first most
important stage is ‘Preparation of Pleadings of the Counter-claim’ It must
be prepared by a person having mastery of law and mastery of facts. Further
the trial has to be conducted thoroughly by such DRT advocate who are quite
knowledgeable, proficient and experienced in trials including those
involving principles of natural justice .
(4) Law of Evidence fully applicable in DRT:-
As per the DRT Act,
while the DRTs are not bound by CPC but they are required to be guided by
the principles of natural justice. As per the Supreme Court, the DRTs can
travel beyond CPC. Thus the DRTs are supposed to be an expert court in the
matter of banking recovery disputes with the objective of expeditious trials .
The DRTs as trial
courts have to abide by the Law of Evidence. Past 10 years we have observed
that the trials in DRTs require proper advocates who are experienced in
trials. Since these advocates should have expert knowledge in factual
aspects of banking, industry and finance, they are required to apply law of
evidence particularly in respect of documentary evidence. They are also
required to be expert in cross-examination of the bank officials .
Looking to the above
requirements, we have created an expert Advocacy wing to conduct arguments
before DRTs and DRATs as well as cross-examination of bank officials.
(5) Standard of Proof for Counter-claim:-
We have closely observed
the working of DRTs for more than a decade. We find that the DRTs are not
independent rather they are biased towards the banks. Further the standard
of proof for the borrowers and guarantors is very high compared with that
for the banks. Hence the trial of counter-claim becomes highly challenging
and difficult. One has to be more than expert in application of law of
evidence in proving each and every disputed fact. We are of the opinion that
one has to be cautious right from the stage of pleadings when it must be
thought of and planned as to how he is going to prove his averments. Since
the required standard of proof is very high, lot of ground work has to done
right from the beginning. All the provisions of Law of Evidence particularly
those pertaining to the documentary evidence must be mastered and
practically applied in respect of all the facts contained in the
counter-claim.
(6) Various models of Advocacy for DRT Defence
We have observed
various models of advocacy in DRT Defence. Assuming that the pleadings of
counter-claim has been prepared by us. Our comments are as under:-
(a) Client takes
active interest. He is in constant touch with us for our guidance and
advice. In turn he himself interacts with his advocate. All interim
documents are prepared by the client and his advocate. This model depends on
client and his advocate. If they are competent, the model may be successful
as well as economical .
(b) Client takes
active interest and employs our junior representative local advocate.
Interim applications and other documents are prepared by us at our
professional charges. Crucial arguments are handled by our advocate. This
model is successful but comparatively costly .
(c) Complete work is
handled by us including complete drafting and advocacy. This model is highly
successful but is costly .
DRT Solutions Weekly Mail – 54th Issue dated 22nd May
’09
(1) Power of Competent Advocacy in DRT:-
One of our clients from
Bangalore in past complaint that the PO DRT Bangalore was not listening to
the arguments of the advocate and was awarding orders and judgments in favor
of bank only. We advised our client to submit everything in writing as well
as explain everything during arguments followed by written arguments.
Despite all our guidance, the advocate of our said client could not achieve
desired results
Another client having case
in DRT Bangalore hired our full professional services including the
advocacy. We achieved good results from the said PO vide highlights as
under:-
(1)
In all the
cases pertaining to Securitisation Appeal, the said PO had been insisting
for deposits before granting any stay. When the same matter was argued by
our Senior Advocate Mr. Dubey, the said PO granted stay without any deposit.
In fact the PO raised many factual questions which were replied to his full
satisfaction and also convincing arguments were submitted as to why the
deposit should not be insisted.
(2)
On the next
date, when it was submitted by Mr. Dubey that originals of the material
documents need to be inspected, the said PO said that he will not permit
usual procedure of submitting an application, reply by the opposite party,
arguments and then order – all of which consume considerable time. Instead
he ordered that a list of such documents be sent to the bank asking them to
provide inspection. Accordingly an exhaustive list of documents was sent .
(3)
On the next
date, finding that the bank could not grant the desired inspection, the said
PO suggested to proceed with the provision that the adverse inference will
be drawn about the said documents. Our senior advocate Mr. Dubey vehemently
opposed and proved that the concept of adverse inference is not applicable.
and hence the said PO had to agree to the usual procedure and accepted the
application. PO said that DRT itself will send notice to the bank. The date
for arguments was also fixed up .
(4)
The above
illustrates the power of competency of the Advocate particularly when the PO
raises any question about the fact and law, that must be replied then and
there with full details .
(5)
On account of
above only, we have been advising our clients that crucial arguments should
be handled by our Advocacy wing which is headed by Mr. Dubey .
(6)
Our
observations are that most of the advocates in DRTs are not having required
knowledge and experience in the factual aspects of banking, industry,
finance, banking laws, procedural law applicable to trials, principles of
natural justice, law of damages, law of torts, RBI Guidelines, SC judgments
etc. Hence they are not so well versed in answering the spot questions put
forth by the POs. The main purpose of arguments is to convince the POs and
that can be done only by a person having mastery of facts and mastery of
law. Usual method of seeking adjournment will not serve the purpose. There
is no easy substitute of hard work required in thorough understanding and
preparation of the case. We spend lot of time in analyzing all the facts and
laws before giving any appearance. Half hearted preparation and hurry spoils
the cases and such judgments will become difficult to be remedied in the
higher courts. Its better to hire a competent advocate in the very beginning
rather than going for a cheaper option which ultimately will prove to be
costlier and time consuming without any relief .
(2) Counter-claim (more than the claim of the bank) awarded by Court
We have been getting lot of
queries by our clients as well as the visitors of our web site enquiring
whether any counter-claim (more than the claim of the bank) has been awarded
by court of law. The below is particulars and reference of such a case:-
(1)
Special Civil
Suit no 231 of 1977
(2)
Court :-
Civil Judge, Senior Division, Kolhapur
(3)
Parties :-
State Bank of India vs MJ Fertilizers & Others, Kolhapur
(4)
Decided on :-
13.10.93
(5)
Order
(i)
Defendants’ counter-claim decreed as Rs. 73.50 lacs .
(ii)
Banks’ claim decreed as Rs. 59.63 lacs
(iii)
Balance amount to be paid by Bank :- Rs. 13.87 lacs with
interest @ 10% pa from January 1981 till the amount is received by the
defendants
(iv)
Bank to bear own costs
(v)
Bank to pay proportionate costs to the defendants .
(6)
Our
Comments
(a)
We have
reported in our previous weekly mails three cases of counter-claim awarded
by the DRTs, one from Bangalore, another Mumbai and third one from Guahati.
But in all these cases, the claim of the bank was more than the
counter-claim .
(b)
In the above
case, the counter-claim has been more than the claim of the bank .
(c)
We have
observed that bare minimum of direct losses have been claimed in the
counter-claim. All other categories of damages such as damages to image and
reputation, mental tension and torture, aggravated damages, exemplary
damages etc. have not been claimed. It appears neither the litigants nor the
advocates/judges are aware about the various damages which are permissible
in law of damages .
(d)
In all these
cases, the damages are based on law of contract. The law of torts would have
yielded much better scope for various types of damages .
(e)
In the above
case, the trial has lasted for 16 years. This is a normal time for a
complete trial in our country. For such complete trial, the DRTs will take
more time as their procedure has not yet been finalized .
(f)
In view of
above only, we have been emphasizing that the counter-claim is the only and
ultimate remedy in DRTs. Many of our clients who got counter-claim drafted
from us are now much in more stronger position compared with the banks .
(3) Interesting case from DRT Ahemdabad
One of our clients
from Mumbai has referred his another case recently decreed in DRT Ahemdabad.
The highlights are as under: -
(1)
ICICI Bank
filed an OA in 2003 in DRT Ahemdabad .
(2)
Usual WS was
submitted denying the various allegations of the bank. The pleadings also
mentioned about the loss and damages caused by the bank. But no
counter-claim was filed .
(3)
Usual proof
affidavits were filed by both the parties .
(4)
In the
meantime the debt was assigned to Kotak Mahindra Bank .
(5)
Recently an
application was filed questioning the legality of the said debt assignment.
(6)
Based on
above the PO DRT Ahemdabad on 28.4.09 decreed the claim in favour of the
bank .
Our comments
:-
(a)
We have
observed many illegalities in the trial as well as in the final order. We
intend to advise the party to submit Review Petition. If the party agrees,
our advocate will conduct the final arguments on Review .
(b)
We intend to
file the damage suit against the bank to claim the loss and damages
mentioned in the WS .
(c)
We advise all
the borrowers that they should go in for comprehensive trial right from the
beginning so that counter-claim is filed, all the material facts are
judicially determined, documentary evidence are discovered, bank officials
are cross-examined and then only final arguments should be held .
(4)
Counter-claim or Damage Suit is the only
and ultimate Defence in DRT
Many of our clients who have filed Counter-claim or Damage Suit against the
Bank are in much stronger position compared with the Bank. Each and every
case is different and ultimate results will defend on thoroughness and
completeness of pleadings as well as how the case is fought on each date. As
emphasized again and again, we have found since so far neither such
pleadings have been made nor cases have been fought, any citation will not
serve the purpose. Those of our clients who themselves are taking personal
interest and availing services of experienced and knowledgeable trial
lawyers have much better chance of winning. We are providing all guidance
and advice to such clients.
DRT Solutions Weekly Mail – 53rd Issue dated 15th May
’09
(1) Bank losing in Securitisation Actions:-
Recently we prepared ‘Representation and Objections’
for one of our clients from Mumbai. The bank officials instead of replying
to the ‘Representation and Objections’, approached our client informing that
the Chairman of the Bank desires meeting with the said client. In the
meantime since the Bank did not reply within 7 days we have informed the
Bank about the deliberate violation of law.
The authorized officer of the bank and those connected
with the ‘Internal Mechanism’ have become questionable as to how an illegal
notice was issued and as to why reply has not been sent with the prescribed
period of 7 days.
Under the above facts and circumstances, the said
Securitisation Notice will definitely be held illegal .
(2) Strategy for Trials in DRTs:-
Many of our clients whose
Damage Suits / Counter-claims were prepared by us have started receiving
‘Written Statements’ from the Banks. We have advised such clients as
under:-
(1)
DRT is a trial court. It is the first and last trial. Since
we had taken care of all the material facts in the pleadings, the said facts
are to be judicially determined .
(2)
The approach of the Bank is to expedite the said trial by
harping on delay in recovery of public funds. Further the Bank tries to
reveal the least particularly the material documents like appraisal reports,
basis of sanctions, proceedings of the internal mechanism, NPA calculations,
proceedings relating to declaration of willful defaulter, violations of RBI
Guidelines, documents relating to wrong doings committed due to violations
of law of torts etc. The Bank avoids inspection of all such material
documents. The Bank avoids impleading the higher officials like the Chairman
of the Bank and other Senior Officials. The Bank avoids the
cross-examination of such officials .
(3)
The pleadings of the Bank are very poor particularly in
respect of the material facts relating to banking, industry and finance as
such pleadings are prepared by the advocates only for the obvious reasons
that the Bank Officials themselves avoid involvement in legal affairs .
(4)
The affidavits filed by the Banks are highly defective
particularly in respect of material facts and documents .
(5)
Since the advocates are not having sufficient free time, we
ask our clients to involve themselves in all above matters so that proper
help is extended to their advocates. Wherever the clients have abided by our
guidance and advice, they have become quite strong in their litigations
against the bank .
(6)
We also ask our clients to go through latest court judgments
and provide the same to their advocates .
(7)
All the above study requires proper understanding of facts
which is only possible by the clients and not by the advocates .
(8)
We have found that those clients who abide by our guidance
and advice are in much better placed compared with the bank .
(9)
One has to be perfect and prepared in advance on each and
every date. Any lapse or deficiency will be fatal as the whole system is
generally in favour of banks and against the borrowers and guarantors .
(10)
The court
proceedings must be examined from time to time so that the same are recorded
accurately .
(11)
In bank
litigations, the facts are contained in the documents and the documents are
in possession with the banks. Hence the O-11 of the CPC must be followed
thoroughly .
(12)
The scope of
‘Principles of Natural Justice’ is much wider than the CPC and hence the
trial in DRT may be more comprehensive than the civil
court.
(13)
Trial can not
be just made summary so as to violate the justice .
(14)
If there is
any attempt by anyone including the judges and or advocates to cut short the
Justice, complete record must be made and filed in the court .
(15)
There is a
rule of law and not rule of persons .
(16)
If the banks
are concerned with public funds, they should be law abiding first otherwise
their wrong doings will be thrown open by the application of law and they
themselves will be responsible for the delay being caused in consequent
recoveries .
(17)
The damage
suit or counter-claim is the only remedy in bank litigations. These should
be drafted with full mastery of facts and mastery of law .
(18)
Thorough
trial of the said damage suit or counter-claim is a fundamental right .
(19)
Ultimate goal
of the trial should be judicial determination of material facts by
inspection and cross-examination so that the wrong doings are admitted. In
that eventuality discretion will not find place in the final order .
(20)
The above
approach requires highly experienced and knowledgeable advocate in the field
of trial, law of torts, law of damages with well versed in banking, industry
and finance .
(21)
Looking to
all the above aspects, we have devised many models suiting to our clients.
We are pioneer in Pleadings of the damage suits and counter-claims in
banking litigations. Guidance and advice are provided to the clients. Lastly
full fledged advocacy services are also available .
(3) Bank desires transfer of the Counter-claim to civil court:-
In case of one of our clients from Ludhiana, the Bank
has approached DRT to exclude the counter-claim out of the OA with the
further prayer that the claimant be relegated to the civil court. Our
specific comments are as under: -
(a)
The counter-claim is Rs. 1965 crores approx filed in early
2006 against a FI, State Industrial Development Corporation and a Public
Sector Bank individually, severally and jointly .
(b)
Initially no court fee was affixed but later on the
prescribed maximum DRT court fee of Rs. 1.5 lac was paid.
(c)
The contention of the Bank is that it may not be possible to
adjudicate the said counter-claim without segregated cause of action and
claims against different institutions.
Our Comment
:- The said contention is misconceived and wrong. The project and promoters
suffered loss and damages due to wrong doings of the said institutions.
Either of the institutions could have prevented the said loss and damages
and hence they are individually, jointly and severally responsible,
accountable and liable. Under such facts and circumstances, neither cause of
action nor the claim can be segregated. It is just like recovery action
being taken against the borrowers and guarantors wherein they are held
liable individually, jointly and severally and cause of action and claims
are not segregated.
(d)
The Bank cited the case of Indian Bank vs ABS Marine Products
[2006 AIR (SC) 1899]
Our Comment
:- It appears that the Bank has not understood the facts submitted in the
counter-claim and cited such a judgment if studied thoroughly well will
reveal that it supports the case of the borrowers rather than the Bank.
(e)
The Bank prayed to exclude the counter-claim out of the OA
and further prayed to relegate the defendants to remedy of a civil suit
Our Comment
:- If the pleadings of the counter-claim are studied, it will be found that
the subject matter of the OA and the counter-claim are the same with few
additional parties. If the counter-claim is excluded and tried in civil
court, it will result in multiplicity of proceedings entailing more cost and
time. Since the counter-claim is much more than the claim of the bank, the
recovery of the bank can not be made till the counter-claim is decided
finally which will take much longer time in the civil court. The DRT is a
specialized court in the matter of banking, industry and finance, it will be
better to try the said counter-claim in DRT itself. As regards, the
additional parties, they are necessary parties for the adjudication of the
counter-claim and it has nothing to do whether they are present in the
original claim or not. The working of the tribunal is in the interest of
natural justice rather than being bound by CPC. Hence from all
considerations, it would be much more appropriate that the counter-claim
continues in DRT itself.
DRT Solutions Weekly Mail – 52nd Issue dated 8th May ’09
(First Anniversary Issue)
Note :- All the weekly mails right from 41st to the latest have been
published on our web site, the link being http://www.drtsolutions.com/weekly-news.htm
31st to 40th Issues available vide link
being http://www.drtsolutions.com/WeeklyMail-31-40.htm
21st to 30th Issues available vide link being http://www.drtsolutions.com/WeeklyMail-21-30.htm
11th to 20th Issues available vide link being http://www.drtsolutions.com/WeeklyMail-11-20.htm
1st to 10th Issues available vide link being http://drtsolutions.com/WeeklyMail-1-10.htm
(1) Why are we backward by 200 years in Trial Courts/DRTs - remedial
measures:-
Eminent Justice V.R.
Krishna Iyer (age 94 years) in his book ‘Law, Lawyers and Justice’
(published in 1988 by B.R. Publishing Corporation, New Delhi) at page 133
has written that the Indian Courts are behind 200 years. He further wrote
that there is no awareness that the senior lawyers and senior judges need to
be educated in the rapid developments of new jural horizons. Despite such
comments, there is not much action.
Even in 1969 vide
citation AIR 1969 SC 1169, Swaran Lata vs Harendra Kumar, in Para 13, the
Supreme Court of India stated that “It is very unfortunate state of affairs
that eighteen years after the date on which the suit was instituted, we have
to remand the suit for trial according to law. But we see no other
satisfactory alternative” It is sad that the Supreme Court or Judicial
Machinery in our country in 1969 and even thereafter did not take any
effective steps to improve the trials.
Even in 1924 vide
FOREWORD of Mr. Justice C. Walsh, High Court Allahabad to the book ‘Sarkar
on Evidence’ 12th Edition 1977, elaborated the thoroughness of preparation,
importance and value of discovery, inspection of material documents,
strategy for evidence, important witnesses and their cross-examination, He
said that everything ought to be done strictly, particularly in law. He
emphasized value of perfection for competent practice and procedure.
Conclusion and Remedial
Measures in DRT Trials
(1) DRT is the court for
the first trial. The litigants are entitled for complete justice based on
judicial determination of material and relevant facts contained in the
pleadings.
(2) It is needless to
mention that the pleadings must be prepared by person having mastery of
facts (relating to banking, finance and industry) and law (relating to
banking, torts, damages, evidence and procedures)
(3) The DRT Advocate
must be having adequate experience and knowledge on the above mentioned
facts and law.
(4) One must prepare at
least 7 days in advance under guidance from the person who prepared the
pleadings. Every date must be dealt with thoroughly and perfectly.
(5) The purpose and
objective of all courts including DRTs is to award justice. Any act and or
activity causing injustice is neither permissible nor can be allowed.
(6) If any injustice is
caused or noticed, written records be created and utilized at the earliest
possible time.
(7) The DRTs shall be
guided by principles of natural justice. The Supreme Court has laid down
that one can travel beyond CPC and the only fetter is principles of natural
justice.
(8) In view of above,
the DRT Advocate should have experience of Senior Trial Court Advocate
having additional knowledge of application of principles of natural justice.
Unfortunately such advocates are rarely found in DRTs all over the country.
(9) After achieving
excellent standard of pleadings, we have organized an advocacy cell
specifically for guidance and advice to DRT litigations. As a result our
clients who are going by our guidance have achieved remarkable results.
(2) Origin and History of Tribunals in Judicial World
It was nearly more than
past 200 years in UK, the judicial machinery observed and took various
actions as under:-
(a) The
adjudication in the trial courts in UK were based on Civil Procedure Code
which was evolved during several centuries prior to 1800.
(b) The
said Civil Procedure Code was resulting into trials lasting several years
and the said period of trial was going up year to year.
(c) In
order to expedite the trials, new courts were setup and were named as
tribunals which came into function round about 1830 in UK.
(d) Lot of
problems and difficulties were faced for nearly 100 years. Several
experiments were carried out from time to time. During the period 1937 to
1957, major reforms took place in improving the working of tribunals.
(e) On
1st Nov 1955, the
British Govt appointed a committee under the chairmanship of Sir Oliver
Franks. The said committee submitted its report in July 1957. On basis of
this report, a permanent statutory advisory body was created in 1958, which
was called ‘Council on Tribunals’
(f) The
said Council consists of 10 to 15 eminent persons from public including
representatives of users. This Council is the apex body to review, enquire
and lay down the constitution and working of the Tribunals (There are nearly
200 different types of Tribunals in UK)
(g) The
said Council has laid down the following 3 standards for the Tribunals:-
(1) Standard 1 ;
Tribunals should be independent and provide for open, fair and impartial
hearings.
(2) Standard 2 :
Tribunals should be accessible to users and focus on the needs of the users.
(3) Standard 3 :
Tribunals should offer cost effective procedures and be properly resourced
and organized.
(h) Thus
the Tribunals in UK are controlled by a public body (which includes
representatives of users) having statutory powers. The Tribunals are free
from any control by the Govt or any higher Judiciary. The Tribunals use
modern management techniques and latest technology.
(3) Tribunals in India such as DRTs are 200 years back compared to those in
UK.
In India concept of
Tribunal is quite latest i.e. 1976 (when the constitution was amended)
compared with 1800 in UK. The concept of controlling Tribunals by a public
body and users in India has not come at all. It will take several years.
Modern management and technology has not yet been introduced in the
Tribunals in India.
In the context of DRTs,
the Tiwari Committee in 1984 recommended that the DRTs should be manned by
persons having specialized knowledge in the functioning of banks, financial
institutions and industry. DRTs were constituted in 1993 and Even after 16 years
that recommendation has not yet been introduced.
Conclusion
(1) In
India even Trials in civil courts are not being conducted properly. Proper
trials by tribunals is far fetched idea.
(2) The
Courts are overloaded to the extent of 90 times compared with developed
country. How can we achieve fair trial and hence justice by such overloaded
courts and tribunals?
(3) US
commenced computerization of courts in 1970, we have not yet started.
(4) On
9th July 2007, all the
judges (15000) in the country were provided lap tops costing Rs, 40 crores
with provision of 3 months training. We don’t find any judge using laptops
in court rooms.
(5) Until
and unless public bodies as in UK control these DRTs, no improvement is
expected. Till such time, the borrowers will have to work hard on every date
so that perfect trials are achieved on all dates. The legal tools like
Review, Appeal and Change in Court will have to be used constantly.
Accordingly the DRT Advocate and the litigant will have to work very hard on
each case on every date.
(4) Counter-claim having excellent pleadings requires equally excellent
trial
We have prepared
pleadings in respect of counter-claims and damage suits for several
borrowers in the country, which have been appreciated by senior, experience
lawyers and judges. We have been empowering our clients so that they may
guide their advocates. Those clients who were having regular guidance are in
much better position compared with those who are going by their advocates
only. Excellent pleadings as are prepared by us alone will not be sufficient
to win against banks. We need equally excellent trials on every date. Any
deficiency or defect on any date will create a weakness in the case which
even may be difficult or impossible to cure later on.
(5) Selection of DRT Advocate
After achieving high
standards of pleadings, we found that our clients were not getting proper
advocates in DRTs, we created our own Advocacy wing. We carried out lot of
research and observed the following:-
(1) There is already
huge shortage of proper Trial Lawyers in our country. In fact we have not
yet achieved the desired standards for Trial Advocacy which were prevailing
in 1800 in UK.
(2) The DRT Lawyer
should have first very good experience and knowledge of Trials in Civil
courts. He should have mastery of facts in banking, industry and finance as
well as banking laws, CPC, Evidence, law of damages, law of torts, RBI
Guidelines etc.
(3) So far our clients
could get success either in 2 ways:-
(a)
Either the client himself worked hard and took our guidance on all dates, or
(b)
Hired the full services of our Advocacy Wing.
(4) Any other option
resulted in spoiling of the case, correction of which became nearly
impossible later on.
(6) This is our First Anniversary Issue of Weekly Mail
We have completed one
year of Weekly Mails and this is our First Anniversary Issue. We started
Weekly Mail just after 4th May '08 after the DRT Conference at Indore. All
the weekly mails past one year were published without fail on every Friday
without any delay. On three occasions, these mails were publishes from
outstations. There is a great demand for our weekly mails and we get lot of
appreciation through mails and phones even from Senior Advocates and Judges.
We have huge number of topics waiting to be covered. These mails have
created a common platform for the borrowers, guarantors and their advocates.
We try to provide only practical knowledge with emphasis on Proper Trials in
DRTs so that the Bank Victims do not become victims of Advocates and Judges.
Such knowledge is not available elsewhere We thank our recipients of these
mails particularly those who give us the feedback and suggestions for
improvements.
DRT Solutions Weekly Mail – 51st Issue dated 1st May ’09
Note :- All the weekly mails right from 41st to the latest have been
published on our web site, the link being http://www.drtsolutions.com/weekly-news.htm
31st to 40th Issues available vide link
being http://www.drtsolutions.com/WeeklyMail-31-40.htm
21st to 30th Issues available vide link being http://www.drtsolutions.com/WeeklyMail-21-30.htm
11th to 20th Issues available vide link being http://www.drtsolutions.com/WeeklyMail-11-20.htm
1st to 10th Issues available vide link being http://drtsolutions.com/WeeklyMail-1-10.htm
(1) Chairman Bank sentenced to 14 years Jail with fine of Rs. 70 lacs.
The Economic
Times, Mumbai at Pg 4 of its 28th April
’09 issue reported that Indian Bank’s ex-Chairman and Managing Director Mr.
M. Gopalakrishnan was sentenced to 14 years rigorous imprisonment and fined
Rs. 70 lacs by CBI Court (Chennai) for committing wrongful losses to the
bank. The AGM of the bank Mr. SV Shanmugasundaram was also found guilty and
sentenced to 14 years of rigorous imprisonment with a fine of Rs. 80 lacs.
This news confirms
our contentions that in all the counter-claims, damage suits and injunction
suits like those pertaining to declaring willful defaulter, criminal
complaints etc., the Chairman of the Bank must be impleaded he is found
violating RBI Guidelines.
(2) Our Chennai client achieves a breakthrough against bank
An extract from
e-mail dated 30th April
’09 from one of our Chennai clients is as under:-
“Dear Shri
Ram Kishan Ji,
Namaste
I have a wonderful
break-through interim order from
The High Court of Chennai; the second time from the beginning of this year.
I dedicate them to my mentors i.e Yourself and Shri Dubey ji.
I wish to
share it with the all your clients and readers of your weekly journal. This
pool of knowledge shall give hope and rise the spirits of those destitute
borrowers (Industrial) such as me.
1) The
First Order is against the DIstrict Collector who
was approached by the Bank as well as the Recovery Agent to seize the
properties in spite of several cases pending in different forums of DRT
awaiting Adjudication. I have already informed you the reaction of the
Acting Chief Justice on the admission day 6th of Jan 2009.
Subsequently, the Dist Collector had withdrawn his notice and the Judgment
copy is herewith attached for your records which clearly states that, 'A
Dist Collector may assist in the matter of recovery of Debt from the
Borrower if any Decree is passed by the Debt Recovery Tribunal and Recovery
Officer may take steps to recover the amount.' and so on.
2)
Today’s Interim order in the Writ Petition filed by me on the appointment of
Recovery / Resolution Agents by the Bank
For the
past 6 months I have been trying to investigate role of Recovery Agents;
from the RBI Regulations as well as the SARFAESI Act.
In my
thorough investigation there is only one Securitisation Company in India
which fits the Sec.3 of the Act and as far as a Recovery Agent is concerned
he is only the recovery arm of the Bank who is only assisting him and he is
also to be qualified after such conditions mentioned in the updated circular DBOD.No.Leg.BC.75
/09.07.005/2007-08.
As such
in my case the Recovery Agent / Resolution Agent was appointed in haste much
prior to the 13(4) Possession Notice.
I myself
drafted the writ, and provided it in final format as attached herein and
after much contemplation finally dared to file it and bring the same to the
2nd bench where the same Justice Magopadhya and another Justice Krupakaran
was sitting today.
Our item
was 10, and as soon it came the bench was clear that it was a new technical
challenge. THe senior Judge said, 'you are mistaken. A recovery agent can
also be a (muscle man) employed literally to recover, and it does not fit
into Sec.3' As advised to my counsel by me, we pointed to the Certified
copies of the Registrar of Companies wherein the Main Objective of the
appointed agent was to perform as a Resolution / Asset Reconstruction Agent.
And the Order was passed.......
'IT
IS HEREBY ORDERED THAT THE BANK HEREBY STAY ALL RECOVERY PROCEEDURES THROUGH
ITS RECOVERY AGENT UNTIL FURTHER NOTICE. CASE POSTED TO 22 /6/09'
My
affidavit contains a can of worms which will be tough for the Bank to
defend.
The
pathetic situation of the Bank would be; it cannot disown them now, it has
to produce all records under what yardstick it has appointed the said
recovery agent, and under what terms. It cannot even support their act of
'the imposter'.
I have to do a lot of
homework in the ensuing week linking all matters to the irregularities and
crimes committed by the Bank under the Sec 13, Recovery Proceedings.
All relevant documents
attached. Today's order yet to be received in hand.
Kind Regards,”
Our Comments:- The
bank in collusion with the said recovery agent ( a body of retired bankers,
collector and legal personnel) was all out to destroy the borrower. The said
agent even dared to take part in the DRT proceedings. Our client fought the
battle virtually single handedly under our guidance by creating records in
the court and now finally complete scandal has been exposed before the DRT
and the High Court. This validates our approach to create complete records
in the trial court first by adhering to law and procedure of law even if the
court/DRT is annoyed. Such records alone will be of immense use in the
higher courts.
(3) Our Madurai client reports complete change in the attitude of PO DRT
An extract from e-mail
dated 30th April ’09
from one of our Chennai clients is as under:-
“Dear Mr. Ram Kishan,
The hearing in High Court was on 27.04.09 and
the Bank represented and requested for time for counter in the Writ
petition. The judges told since it a simple matter why you need counter and
granted time and posted on 09.06.2005 while Mr. Arun (our Advocate) pleaded
to take up the matter on 28.04.09.
Today only I obtained the copy of the
proceedings of 22.04.2009.
As I previously told after we filed memo to DRT
that the appeal is pending before High Court, the DRT hurriedly listed on
22.04.09 and numbered all the I.As such as ‘Marking of documents’,
‘Reopening’, ‘Set-aside Petition of Ex-pare order’.
Besides all, the very important order is that
DRT directed the bank to serve notice to the Official Receiver as per the
previous orders obtained by them and to amend the original
Application/Plaint and file the same.
The approach of Mr. Arun Murugan move to High
court is highly commendable.
The following is the extract of the proceedings
dated on 22.04.2009.
Regards”
Our Comments:- This
is yet another practical example when the PO DRT became so much annoyed with
our client and his advocate that he was determined to ignore them completely
by not deciding the interim applications, not numbering the documents and
not paying any attention to the proceedings pertaining to official receiver
as well as those in DRAT. Our client and his advocate worked day and night,
had several telephonic interactions with us and created massive records
against the said PO DRT Madurai. Such records and the behavior of the said
PO were cited in the writ filed before the High Court. As soon as the PO
came to know about the said writ, his behavior was suddenly changed. He took
immediate action which were all ignored. This
again validates our approach to create complete records in the trial court
first by adhering to law and procedure of law even if the court/DRT is
irritated and annoyed. Such records alone will be of immense use in the
higher courts as illustrated in this particular case. The courts are meant
only for justice and not for personal likes and dislikes of the
judges/advocates. The judges are public servants and the moment they are
powered by emotions/sentiments, they are not judges. At such moments only
records must be created so that such records are put up before the higher
courts when needed.
(4) Damage suit filed after 21 years
One of our clients from
Indore (present age 75 years) who came to us after fighting a long legal
battle of 21 years during which his factory and residence were sold by the
bank desired to file damage suit against the bank. We drafted the said
damage suit and the same was filed on 24.04.09 before the District Judge,
Indore. Since the loss and damages of Rs. 69.37 crores in the said suit are
based on continuing cause of action, the time limitation was no problem.
The draft of the above
mentioned damage suit was examined and approved by top legal experts in the
country.
(5) DRT Regulations
We have received the
“DRT Regulations 2003 for Maharashtra and Goa’ from one of our clients from
Mumbai. On critical examination, it is found that many of the” DRT
Regulations 1997” provided by the Govt. have been downgraded and so far none
has raised this issue. We shall provide the basic material to our clients in
Mumbai so that the same is agitated before the DRT Mumbai.
The said Regulations
from other places are awaited. Our clients and the recipient of this Weekly
Mail are once again requested to send us a copy of the Regulations being
used in their respective DRT.
|
