Over draft & npa
Vinod Shah
(Querist) 05 July 2013
This query is : Resolved
Hi,
My uncle had a property worth of Rs.72 Lakhs. He had taken over draft worth Rs. 30L, but had many defaults. He seeked help of high court to extend the time. He could pay only part of it. Bank aucioned his property for 54 Lakhs and balance is paid to him.
The problem is there was only 1 bidder and the property is not yet regisered in the name of bidder. Bank is claiming the sale is conducted.
Uncle has approached DRT as the bank has charged him heavy interested rate (21% for over draft) and also the legal expenses were claimed to be 4.5 Lakhs by the bank which was deducted after the sale of property. So he got only petty amount after sale was conducted.Can DRT help in getting his property back and also get back any extra amount charged by bank?
Please let me know.
Thanks,
Vinod
Advocate M.Bhadra
(Expert) 05 July 2013
Andhra High Court
Signatory Sri P.D. Prasad vs Indian Overseas Bank Represented ...
WRIT APPEAL NO.893 OF 2012
12-9-2012
M/s. India Finlease Securities Limited,Chennai, Rep. by its Authorized Signatory Sri P.D. Prasad
Indian Overseas Bank Represented by its Branch Manager Andhra Loyola College Branch, Vijaywada Krishna District and others
COUNSEL FOR PETITIONER: Sri D. Prakash Reddy, Senior Counsel, appeared for Sri C. Ramachandra Raju
COUNSEL FOR RESPONDENT NOs.1 AND 2: Sri A. Krishnam Raju
COUNSEL FOR RESPONDENT NO.3: Sri B. Adinarayana Rao, appeared for Sri Challa Gunaranjan
JUDGMENT: (Per the Hon'ble the Acting Chief Justice)
Whether under sub-section (8) of Section 13 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Act 54 of 2002) (hereinafter referred to as 'the Securitization Act") a borrower is permitted to redeem the immovable secured asset after the secured asset was sold but before the confirmation of sale by the secured creditor under the Security Interest (Enforcement) Rules, 2002 (hereinafter referred to as 'the Rules') is the question involved in this appeal filed by the auction purchaser under Clause 15 of the Letters Patent challenging the order of the learned single Judge opining that the borrower is entitled to redeem the immovable secured asset before the confirmation of sale.
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As regards the contention that the proceedings initiated by the borrower before the DRT are without jurisdiction, needless to state that against the sale proceedings of the authorized officer, the borrower has a right to approach the DRT under Section 17 of the Act. In the instant case, as already held, the sale is not confirmed by the secured creditor and the borrower has approached the DRT on 3.4.2012 and the Tribunal issued directions giving liberty to the borrower to pay the amounts within five weeks which have been complied with by the borrower. Therefore, it cannot be said that the proceedings before the DRT are without jurisdiction. The DRT is well within its competence to take up the matter. Since we have dealt with the interpretation of sub-section (8) of Section 13 in extenso we are not inclined to deal with the issue of maintainability of the writ petition.
We, therefore, hold that under the Securitization Act, a borrower has the right to redeem the property under sub-section (8) of Section 13 of the Act at any time before the date the property is transferred to the auction purchaser by confirmation of sale by the secured creditor as required under sub-rule (6) of Rule 9 of the Rules.
Raj Kumar Makkad
(Expert) 05 July 2013
Bhadra has produced the best judgment applicable in the case. If your uncle is ready to pay the arrears of the bank within the given time by DRT then definitely he can save his property and this has become possible because the sale has still not been confirmed by the banker.
Vinod Shah
(Querist) 05 July 2013
Thanks a lot Bhadra sir and Rajkumar sir.
R.K Nanda
(Expert) 05 July 2013
nothing to add.
