- How do you defend your property from a Bank Recovery Process?
- What are the courts & tribunal and related provisions in law that
secures you from exorbitant penal Interests, penalties and gaining you
sufficient time for paying your debts?
- Whom you should contact?
- When you should contact?
- How to deal it?
to explain the matter little bit brief.
In Reality, Most of the people think that Bank Recovery actions are absolutely a
process against the borrowers and the borrowers were not be heard with their
merits and feel that they are absolutely insecure. Therefore, most of the people
surrender unconditionally with the Banks and pleading for sufficient time and
agreed to pay the Principle with Interest even it is the highest interest rate
in the market along with all penalties.
The Branch Manager of the bank is continuously in communicating with you but the
legal wing is continuing and sending the SARFAESI Notices in another side. When
you ask what is the necessity of legal notices when you in communicating with
the bank regularly? The Bank use to respond that the legal department is totally
a different authority and convincing you for a One Time Settlement.
When you trust them, they unleash the Recovery proceeding on right time by
taking the possession. Bank is completely known when they can take the recovery
action against the borrowers but you don't. The borrowers are completely
vulnerable and suffering without getting sufficient time for paying the debts
and cornered with penal interest rate. They went through enormous mental stress
and subject to harassment during the recovery process and finally end up in
losing their property and money.
Bank can initiate their Recovery Process not only in Debt Recovery Tribunal, but
also in Chief Metropolitan Magistrate and Judicial Magistrate courts. When Bank
is deciding to initiate such process, they will be serving you the Notice under
Section 13 (2) of SARFAESI Act, that your account has been classified as Non
Performing Asset and demanding you to pay the Principle amount along with the
interest within the specified time, normally 60-90 days. If you are not paying
the money within the specified time, you will be served again with 13 (4) of
SARFAESI notice and ultimately bank is advancement in taking the possession of
When you are receiving a notice under 13 (4) SARFAESI notice, you should rush to
Debt Recovery Tribunal immediately without any further delay. You should file
your petition under Section 17 (1) of SARFAESI Act immediately Interim Petition
for Stay the Recovery proceedings. You make sure that your petition with all the
case facts, all your merits with suitable grounds, than copying some grounds
from another DRT application. You can also consider in keeping an Interim
Application for waiver of huge interest by referring the RBI guidelines. Hence
you can be heard very carefully by the Tribunal and you may get a better relief.
Otherwise, Bank will file the petition under Section 14 of SARFAESI Act before
the Chief Metropolitan Magistrate and District Magistrate Court for taking over
the physical possession of the property. The Bank may appoint an Advocate
Commissioner through court and advancing the recovery processing for obtaining
the physical possession. Because, the provision in Section 13(7) of SARFAESI act
allow the Bank to recover the entire costs, charges and all expenses from the
Borrower and from the very beginning of NPA to till date.
The SARFAESI Act, knowingly The Securitization and Reconstruction of Financial
Assets and Enforcement of Security Interest Act under Section 13, Section 14-
Not matter what stages of recovery proceeding, you are still able to protect
your property and defend your family. All you required is an Advocate who has
better experience in handling the DRT case and damn good knowledge in High Court
Writs, whom you can rely for obtaining sufficient time for paying the debt and
possible interest waiver.
When you are filing a case in DRT against the Bank your petition, you case
number is allotted vide SA number. When Bank is already initiated a case against
you in DRT, it will be referred as Original Application number or OA Number.
What so ever, you have to ensure you file your Interim Application for stay the
proceeding and DRT usually grant the stay against the recovery proceedings with
some conditions and you are bound to comply the conditional order and submit a
memo before the DRT that you complied the Order and obtain the stay.
Otherwise, DRT may not aware that you have complied with the conditional
order and dismiss your petition. Any small ignorance at your side may end up
in advantage to the bank. So, please be careful.
DRT is a Tribunal and they usually not required to follow the civil procedure
codes like Honorable courts. DRT usually expeditiously adjudicating the matters
and taking comprehensive decision; obviously not heard the borrower in full and
passing orders that may favors the bank usually. There were thousands and
thousands of WRIT Petitions recorded in High courts that DRT acted against the
principle of natural justice and Hon'ble High court has heard the appropriate
petitions and has passed orders by setting aside/ quashing the DRT's impugned
All you have remember, DRT is not bound to follow the civil procedure code and
can make comprehensive decision expeditiously. They are completely a TRIBUNAL
and not COURT and you should aware that any small ignorance of your side will be
highly advantage to the bank in recovery proceedings.
As told earlier, Commonly DRAT is the appellate tribunal for DRT and the Second
Appeal for the SARFAESI Act cases. The DRAT Chennai is appellate authority for
all Southern Region DRTs, including DRT I Chennai, DRT II Chennai, DRT III
Chennai , DRT I Bangalore, DRT II Bangalore, DRT I Ernakularm, DRT II
, DRT Coimbatore and DRT Madurai .
As I told, you are free to approach the Hon'ble High Court by filing a Writ
Petition when you have significant proof that the DRT/ DRAT acted against the
principle of natural justice and plead before court for set aside/ quash the
implunged orders by the Tribunals. There are thousands of cases laws you can
found in the related legal virtual sites.
No matter what stage is the recovery, i-e, symbolic possession, physical
possession, auction , sale,… even up to recovery certificate stage, you can
defend your property in appropriate Tribunals & Apex Courts and stay the
recovery process without believing the oral promise of the bank and obtain
sufficient time and get rid of the unethical penal interest.
All you have to do is believe in Law and legal protection in appropriate courts
and not believing the oral promises of bank.
The purpose of the article is to assist you in the critical stage and guiding
you with appropriate remedies during the bank recovery process.
Written By: V.Ravikumar. M.L., Advocate.
Research Scholar, Presidency University