Abatement of reference before aaifr
sruti gupta
(Querist) 26 December 2013
This query is : Resolved
Reference of a company before BIFR was abated to which the said company appealed before AAIFR. However in the mean while a secured creditor claiming to hold 3/4th of the debt undertook an action under sec. 13(4) of SARFAESI Act. when the such action of the secured creditor was countered by the Company AAIFR directed the Company to move to DRT saying that it do not have jurisdiction to adjudicate the same. While the Company moved before DRT, can AAIFR legally abate the Company's reference before it. Plz advice.
Advocate M.Bhadra
(Expert) 26 December 2013
To realize the debts and the clear objective behind enacting SARFAESI Act, 2002, to reduce the levels of Non-performing Assets (NPA). Courts have dealt with the issue of limitation to approach the Debt Recovery Tribunal under section 17 of SARFAESI Act, 2002, it is the wonderful interpretation by Courts in giving the borrower a right to challenge the Bank’s action on all measures pursuant to section 13 (4) of the Act. In the recent past, there was also a consistency with regard to entertaining Writ Petitions under Article 226 of Constitution of India in respect of SARFAESI matters. The borrowers’ interest is also protected even at the stage when the Bank approaches the Magistrate Court under section 14 of the Act and gets an order to take the physical possession of the ‘secured asset’. Civil Courts in entertaining Civil Suits in respect of SARFAESI proceedings given the limited scope, it is important to look at the issue of making a counter claim in the form of damages or compensation against the Bank. Section 19 of the SARFAESI Act, 2002 provides an authority to the Debt Recovery Tribunal to order compensation against the Bank in appropriate cases. The interpretation of section 19 would definitely be a key thing. The compensation can not be limited to the issue of procedural lacunae on the part of the Bank in taking steps under the provisions of SARFAESI Act, 2002. In appropriate cases, the claim of compensation or the damages can also be looked at while entertaining a plea for granting stay of SARFAESI proceedings initiated by the Bank.
sruti gupta
(Querist) 26 December 2013
Thank you Sir, for your kind response. But my question is still left unanswered
T. Kalaiselvan, Advocate 
(Expert) 27 December 2013
You may consult your lawyer for further clarifications about abatement by AAIFR with all available papers in this connection and for next move.
Rajendra K Goyal
(Expert) 28 December 2013
Consult your lawyer, show him all the documents.
