Can a Bank settle with the borrower when there is a stay from proceeding further in DRAT in an appeal filed by the bidder, when the same DRAT in their earlier orders encouraged the Bank to amicably settle the loan account after the auction took place and when the Bank had bidder’s deposit with them?
- Amongst numerous other flaws in the SARFAESI proceedings and auction process is the fact that the bidder gave a cheque towards EMD and Bank accepted the cheque and did not even cash it for 10 days after the auction (Mandatory Published auction rules state that EMD has to be paid via DD or RTGS).
- Bidder also paid the following 15% and 75% of the bid amount by cheques, sale certificate was issued by the Bank on the day bank accepted a cheque for the 75% payment even prior to cheque being realized by the Bank. DRAT had ordered the Bank not to effect sale certificate and advised the Bank to amicably settle the loan account.
- We had approached the Bank on numerous occasions for settlement including through a published OTS (non discretionary and non discriminatory) but our requests were denied on the ground that value of property was higher than loan amount.
- Even while the alleged bidder’s money was with the Bank, the DRAT had on two occasions advised the Bank to amicably settle the account if we approach them for the same. The Bank declined to entertain our offer, since they had the bidder’s money.
Eventually DRT set aside the auction and allowed our SA. Bank returned bidder’s deposit. Bank immediately proceeded for a re-auction but bidder had filed an appeal in DRAT and got a stay on the bank from proceeding further. Even this stay was obtained by the bidder without even serving notice on us.
There is a new team in the local bank who may be willing to discuss about compromise. However, the stay at DRAT is the impediment.
Due to backlog caused by COVID, fill in Chairperson etc., it might be a while before the bidder’s appeal is decided.
- Since we have the funds to extinguish the loan, and the Bank is now open to our request, can they amicably settle the loan account citing the earlier orders of DRAT even though there is a current stay in the bidder’s appeal?
- Since the auction was set aside, did we get back our right of redemption and therefore Bank can settle with us?
- Based on the SARFASI Act and Rules, or based on case law is it possible for the Bank to close our account when the bidder has got a stay with the DRAT.
I am exploring possibilities where I can close my loan account without having to wait lot longer for DRAT to adjudicate the bidder’s appeal. Any help would be gratefully acknowledged.
Thank you
