SARFAESI
Harshpal
(Querist) 16 October 2010
This query is : Resolved
I am Director of a company based in Dehradun. We were enjoying credit facilities from the bank since 2003 and were having A+ credit rating all through. Because of overall recession in 2008 our business suffered a setback & subsequent cash flow problems our business operations came to standstill. We requested our bank for additional funds but the sanctioning authority declined our request because of her negative attitude. Somehow we managed funds from our own sources & restarted the business but in the process we could not meet our repayment obligation in time. The bank instead of cooperating with us initiated recovery proceedings against us under SARFAESI.
On June 3 the bank took possession of our movable as well as immovable assets in our absence. The possession notice was affixed on the building & a copy was given to one of our ex employees. Who was a junior level employee & did not have any authorization even when he was working with us. He informed me on telephone about all this. I protested with the Bank Officers on phone. They said they are doing everything as per law & I can go to court.
The bank did not follow any procedure as laid down in Rule 4 of the rules made as under the Act. After 7 days the bank gave a press notice in which the language & content of the possession notice was totally changed. There was no mention of movable assets in the press notice only immovable assets were mentioned & a word was mentioned the possession is symbolic. On seeing this notice we contacted the bank & enquired; what is the actual position especially about movable assets as both the notices have a contradiction. The bank was evasive in its replies. About movables we were informed that it is also in bank possession. We protested that the bank has not followed the procedure while taking possession of movables as prescribed under SARFAESI. We did not get any response from the Authorized Officer. Than we wrote to the CMD of the bank we did not get any response.
We filed a criminal complaint against the authorized officer of the bank for contravention of the Act under section 29 of the Act in CJM’s court. Our complaint was dismissed.
We requested the Authorized officer to take steps for the preservation of our stock. They have not taken any steps. The stock or major part of it must have perished. Now to absolve them of their responsibility they have replied that they took only symbolic possession of the stock. We have responded to them by saying that there is no provision for symbolic possession of movables. They have not responded to our letter.
Pleae advise what to do
R.Ramachandran
(Expert) 16 October 2010
From what you have stated above, it appears that the bank has pasted a notice on your door, and locked with their lock and seal. They have not removed any thing i.e. any movable assets from the premises. Am I correct in my understanding? Please confirm.
Further, you say the movables will perishable. What kind of movables are there which are perishable according to you?
So long has they have not removed anything physically, it is called symbolic possession.
Harshpal
(Querist) 16 October 2010
I do not know whhether they have put a lock or seal or not. I do not know they have removed anything or not. Because once they have taken the possession it is none of my responsibility to see whether lock or seal is there or not. Legally once the Authorised officer takes the possession of the movable assets it is his responsibility to take its care & take steps for its preservation. I am not even supposed to do anything with the assets which are not in my possession.
The movables are stock of food items. I specifically draw your attention to Rule 4(1)(2)(3)(4) of the Rules made thereunder.
The bank has deliberately kept the ambugity
DEFENSE ADVOCATE.-firmaction@g
(Expert) 17 October 2010
First you must have recieved notice u/s 13 (2) ; that time you should have started taking steps.
Now it is lengthy procedure , you have to approach DRT of your area.
There are methods for criminal cases which only an experienced local advocate can help.
RAVI B SHAH
(Expert) 18 October 2010
I agree with MR.Sashikumar's advice. You can file an appeal in to the High Court and also advise you to negotiate with the bank officer and sort out the matter.
