Procedure followed under under drt n sarfesi act
Querist :
Anonymous
(Querist) 30 January 2012
This query is : Resolved
Dear Experts
There is a property under LIEN with financial Institution like HDFC my client has failed to pay 4 EMI's and Dey have send notice under DRT n Sarfesi act
I want to know how this Financial Institution will go about it what is d normal procedure
how will dispossess dat person leaving n how will dey sell it under auction
In case of above matter how can defend my client what r the procedural for the same
ajay sethi
(Expert) 30 January 2012
since you are a lawyer we would advise you to read the provisions of the act and commentary attached to it .
if you fail to pay HDFC will file recovery proceedings against your client in DRT if claim is over 10 lakhs or in high court if claim is below 10 lakhs .
HDFC will obtain ad interim reliefs restraining your cleints from creating thrid party rights . after obtainig decree property will be attached and subseqently sold for realisation of dues .
ajay sethi
(Expert) 30 January 2012
the Bank will proceed to make a demand under Section13 (2) informing the borrower about the outstanding amount in the loan account and also the consequences. The notice under section 13 (2) should substantially comply with the requirements Normally, borrowers may choose to remain silent after receiving a demand notice under section 13 (2), though, they can send their objections to the Bank/Secured Creditor. If the borrower sends any objections to the notice under section 13 (2) of the Act, then, the Bank should carefully consider those objections and should be fair in looking and replying to the objections. There should be a reply to the objections raised by the borrower under section 13 (3A).
If the Bank failed to reply to the objections raised by the borrower, then, the borrower can raise the same before the Debt Recovery Tribunal in an appeal under section 17 of the Act. This is the adjudication part and the Bank is supposed to act fairly at this stage considering the object of the special legislation ‘SARFAESI Act, 2002’.
3. After the adjudication part is over, then, the Bank proceeds to issue a possession notice under section 13 (4) of the Act informing the borrower that they have taken symbolic possession of the property. This is not actual possession of the ‘secured asset’ or property of the borrower. The borrower gets a right to question the notice under section 13 (4) and all subsequent measures initiated by the Bank under section 17 of SARFAESI Act, 2002. In view of the clear provision in the Act about the time limit to file an appeal under section 17, the borrower is normally advised to file an appeal under section 13 (4) within the prescribed period.
After the possession notice under section 13 (4) and if there is no stay of further proceedings, the Bank will proceed to take physical possession of the property under Section 14 of the Act through District Magistrate or Chief Metropolitan Magistrate etc
H. S. Thukral
(Expert) 30 January 2012
First of all it is very vital for you to reply to the notice. If you have sufficient cause which requires a further reply by the financial institution and it omits to do so before proceeding further, then there shall be good defence for you to go in appeal under section 17.
DEFENSE ADVOCATE.-firmaction@g
(Expert) 30 January 2012
You can delay but can not stop , find a buyer if can not arrange funds during breathing time since HDFC will sale it cheap.
Raj Kumar Makkad
(Expert) 30 January 2012
I have also similar views as expressed above.
Devajyoti Barman
(Expert) 31 January 2012
The bank has reliefs under SARFEISI Act.
So if you reply its notice and present a repayment model the bank without considering your proposal can not move ahead.
Anyway you have always relief under section 17 of the Act.
