Summary suit
Arunpal
(Querist) 29 July 2013
This query is : Resolved
I have taken a current loan of rs 4.5 lacs from a bank for a small scale industry manufacturing oil and diesel filters for 4 wheelers in the year 1995 and I was the proprietor of the firm . Due to change in technology which started In the year 2001 as new cars with new engines were being launched my product became outdated and all my stock turned to a dead stock . The dealers also returned my product and did not paid which resulted in huge losses .
In the year 2003 the bank filed a summary suit for rs 6.97 lacs including interest on the principal amount of rs 4.5 lacs on me and my father who is the guarantor . But the bank didn't mentioned or subtracted the pledged security valued at rs 70 thousand of national savings certificate in the year 1994 and fix deposit of rs 35 thousand in the year 1994.
Meanwhile from the year 2011 agents of the bank visited me and negotiated to pay the amount . I then told them to subtract my pledged security but they were not having the details of the security . I pursued a lot but nor the agents nor the bank satisfied me .
In the year 2012 under some policy of the RBI I received a letter that my NPA is valued at 4.57 and if I settle the amount ill be given 15% discount and the amount to be paid in installments of one year and if I pay in one stroke ill be given further 10% discount . This was a big opportunity and I was ready to settle but I found that I have been credited in the year 2004 , rs 1.2 lacs against my pledged security of NSC's and 60 thousand against my pledged fix deposit .
According to me my NSC's were to mature in the year 2000 and as during that period the NSC used to get double in 6 years the amount shall be 1.4 lacs in the year 2000 and about 2lacs in the year 2004 . Similarly the fix deposit shall be 70 thousand in the year 2001 and about 95 thousand in the year 2004.
Hence according to them the pledged securities in the year 2004 were valued at rs 1. 8 lacs and according to me they shall be valued at rs 2.95 lacs in the year 2004 a difference of about rs 1.15 lacs
So if I pay in one stroke the settlement amount according to their calculation was about 3.49 lakhs and according to me it was 2.62 lacs and I was ready to settle on this amount . They told me to look into the matter . Their agents followed the case for about 2 months but then they stopped visiting me . I also became a little bit careless and didn't pursued the case.
Now their agent visited me about 2 months back and told me that my amount with interest is about 16 lacs but the bank is ready to settle it at 7 lacs and not less than that .
I told them I am ready to settle it at 2.62 lacs and I can give interest for 1 year . But they say that I have lost the opportunity and the scheme is closed .
I told them that it is the banks fault and till now they have not subtracted the correct amount and after no of enquiries they failed to produce the ORIGINAL NSC's and FIXED DEPOSIT .
They say that they are not having any copies of the NSC's or fix deposit and don't even know the date of issues . They are only having the said account and they have credited 1.2 lacs against NSC's and 60 thousand against FD and they don't have anything more on the record .
They have also not produced any record before the court .
I am having the xerox copy of the FD but no record of NSC's as at that time the NSC's wee purchased through the bank agents and they were mortgaged to the bank .
I am having the record in my income tax returns and if I may try I can get the copies from the post office or income tax office.
My father received the summary notice in the year 2005 but I am yet to receive the notice .
Please let me know is summary suit maintainable ?
What stand I shall take before the court and I myself may appear before the court or only after receiving the notice?
What is my position and what shall I do now ?
malipeddi jaggarao
(Expert) 30 July 2013
Two issues involved in the above query.
1. The Bank deposited the maturity proceeds of paper security after a long delay thus you have lost interest for the interim period. Bank obtains Letter of set-off and appropriation and it is the duty of the bank to present the paper securities on maturity and appropriate the proceeds in time if the account is overdue. If the account is not overdue as on that date, they should seek the instructions of the borrower. They failed and make you to loose interest for interim period. Hence you calculate the interest for the interim period and claim remission in the liability.
2. One Time Settlement - Do you have any letter about the last offer by the bank for the settlement? If you have, file in the court and represent the court you are willing pay the interest from the date of offer till now. This will give you good relief.
3. You are not a wilful defaulter. Circumstances made you to default. Hence you can request the court to apply simple rate of interest from the date of default. This will also give you good relief.
4. Apart from the paper securities, what other securities you have given to the Bank? Hypothecation of goods - they do not have any value now. If you have not given any immovable property as security, even though the Bank gets a decree in its favour it is very difficult for them to execute the decree in the absence of realizable value of assets. Bank will never file execution for civil imprisonment unless a frauld is committed, as the Bank is supposed to bear the expenses for such imprisonment. If you have means to pay, you take the above steps and claim remission. You can also bring these facts directly to the notice of the Bank (not through agents) and negotiate for a reaonsble One Time Settlment. If you do not have any means to pay, you can cross your fingers.
Nadeem Qureshi
(Expert) 30 July 2013
Dear Querist
first of all I want to tell you that if the summery suit had filed by the bank and your father has received the summons then he should be appear before court within 10 days of receiving the summons otherwise your father can not file his objection/written statement before the court and the matter will be fixed for summons for judgement,
as you informed that you have not received any summons then first of all try to search about process server report or report send to court by postal dept. may be deemed service of summons has been completed against you.
after that you can fight the can on merit
Arunpal
(Querist) 30 July 2013
My father received the notice in the year 2005 . My father appeared through advocste about two months after receiving the notice . He filed an application for condonation of delay . No order has been passed on the application till date.
Rajendra K Goyal
(Expert) 30 July 2013
One time settlement scheme was declared by the Banks for a very short period on the directives of RBI and also on the basis of Apex level decision of the Bank. You failed to avail the opportunity.
You may request the Bank to pay in installments with simple rate of interest after deducting overdue interest you lost in your securities.
If the senior level management decides to take decision your request can be accepted.
since you have not enough security Bank will not be able to recover from you any thing.
If some property was mortgaged, Bank may proceed under SARFAESI Act.
