Sarfaesi act - permission by dm u/s 14 while sa and oa pending with drt
Bharati Agarwal
(Querist) 09 June 2016
This query is : Resolved
One Residential Proerty self acquired by my late husband had been as third party collateral towards the Limits by one private limited company.Upon demise of my husband, we insisted to borrower to get release of the same, but it did not happen.The borrower had been sanction further enhancement with our property continuing under collateral whereas we,(04 legal heirs) did not execute the guarantee documents.The account is now NPA, Bank has exercised section 13(2) and 13(4) and section 14 of Sarfaesi Act has moved to DM seeking permission for obtaining physical possession of the collaterals including our property which is not actually mortaged in absence of fresh execution of guarantee at the juncture of fresh revison/sanction.Ban has filed OA with DRT and we have filed SA with DRT which are pending for disposal. We are advised that we have good case and our property should be discharged by DRT.
Our Query:-
Can DM pass an order for obtaining physical while the OA and SA is pending for disposal at DRT, where I have a strong and justified case of discharge ?
Kindly opine.
Thankjs & Regards.
P. Venu
(Expert) 10 June 2016
What is the opinion of your advocate?
Rajendra K Goyal
(Expert) 11 June 2016
Engage local lawyer and oppose the move of the Bank before the DM. File appeal if not accepted.
All the account statements, date of renewals of loan after demise of guarantor need to be referred.
Whether fact of demise of guarantor was informed to the Bank in writing with acknowledgement?
Your lawyer should explore the possibility of application of Rule in Claytons case. If after the demise of the guarantor, there are credit in the account to the extent of outstanding on date, the liability of guarantor is exhausted. Deceased guarantor would not be liable for subsequent debit raised if any.
Vinesh K Chhaya
(Expert) 05 July 2016
DM Can not appoint any executive magistrate as a receiver for recovery procedure during the matter is sub judice in any forum or any court
you have some remedies as my opinion
You can move to civil court under provision of section 151 CPC to restrain DM for taking further action
2. application before DRT for interim stay against DM
3. You can also move before HC and pray for direction against the procedure of DM before final order of SA or OA in DRT
