Dear Experts,
A Borrower borrows an amount of Rs.10 Lacs from a Bank by mortgaging a property of his Guarantor in the yr. 2007. The Borrower repays the loan amount correctly till 2011; then after, he became Defaulter and the account becomes NPA. Later, the Borrower updates his account and paid Rs.10 Lacs till 2012 and requested the then Manager of that Bank for the OTS (One-Time Settlement) and rescheduling of the Loan. That Manager promised him to get the approval for the same from his higher-ups.
The innocent borrower trusted his speech and waited for his consent. The Borrower has sent many reminders via RPADs, e-mails and Phone Calls to the Bank's Chief Manager. But, he didn't heed or responded to any do that and simply says that he (the Bank Manager) would get back to him (Borrower), shortly. Simply, the Manager dragged this matter and later, he got transferred to some other place. This ‘delay of action’ and ‘breach of Promise’ of the Manager makes the innocent Borrower to wait for a long period and proportionally, it piled up the interest amount of the loan a/c, as well. So, who will be liable for this? Without knowing this, the Borrower called up the Manager's no. but the other guy picked up and told that he is appointed as the new Chief Manager…!
Then, the borrower narrated the whole story again and said that he's ready for OTS. The new Manager says that he'll listen to him and will do the needful. Also, the Borrower sent couple of e-mails as reminder and followed him on the phone as well. But to the surprise, the new Manager has initiated the process of Physical possession and served the notice to the Borrower and the Guarantor u/s 13(4) of SARFAESI Act. The shocked Borrower asked the Manager... why he has done so? For that, the Manager replied that he had already served the Notice of Symbolic Possession u/s 13(2) of SARFAESI and called upon the Borrower / Guarantor to close the loan a/c within 60 days. Since they failed to regularize he said that he has initiated the physical possession of the Guarantor's property.
But, the Symbolic Possession notice has not been served to the Borrower / Guarantor since the Banker has mentioned an incorrect / wrong address. However, the Borrower has paid around Rs. 13 Lacs (Rupees Thirteen Lakhs) up-to-date. So far, the Borrower had paid the Principal amount of Rs. 10 Lacs as well as the Interest amount Rs. 3 Lacs. But, the Banker says that they are not satisfying with this amount and threatening the Borrower to pay the entire amount immediately to avoid the Auction / Sale of the said mortgage property.
Above all, now, they locked up the Guarantor's property and taken physical possession when he had gone out of station. The Guarantor is a very honest, retired Govt. Officer. Now, the Banker creates defamation to the Guarantor with their rude approach. The Guarantor asked the Bank Manager that how the Bank initiated the physical possession for a minimum amount due and too without the Order of Court / District Magistrate (DM) / CMM? Moreover, the Baker has appointed a private security to the possession property. Is this kind of possession legal or illegal because, sometimes, the Banker initiates the possession falsely?
Can the Guarantor and/or the Borrower approach the DRT or CIVIL court or Lok Adalat or any other appropriate legal forum to challenge the Banker against his possession actions since they are very genuine and honest and intend to pay-off the outstanding dues but the Banker creates defamation to them unwarrantedly?
Need some clarifications on the following queries. So, pls help out them by giving your valuable comments:
(1) I believe that the Banks and Financial Institutions are required to file their claims in DRT / DRATs in respect of alleged Debts above Rs.10 Lacs. And even if, the Debt is less than Rs. 10 Lacs, are they able to approach the DRT? Are DRTs accepting their pleas?
(2) Suppose, if their pleas were rejected, what will they do to recover the dues from the Borrowers / Guarantors? And, what they would do with SARFAESI ACT (for debt lesser than Rs.10 Lacs)?!
(3) Similarly, are the Banks & FIs (Secured Creditors) able to initiate the Physical Possession of the Guarantor's Property u/s 13(4) of SARFAESI ACT, 2002, against an outstanding loan amount of the Borrower is very meager, say Rs. 3 Lacs only, and whereas the worth / current market value of the mortgaged property is about Rs. 1 CRORE?!
(4) Can the Borrower or the Guarantor approach the “DRT” and file an appeal (Securitization Application) against the Bank or Recovery Officer u/s 17 of SARFAESI Act (even if the Debt is less than 10 Lacs) ? Is there any time-frame to file the suit? What will be the Fee for SA for amount less than Rs.10 Lacs?
(5) Else, the Borrower or Guarantor can approach the “CIVIL Court” rather than DRT since the Debt is less than 10 Lacs?
(6) I came to know that once the account becomes NPA, then the interest will not be applied and/or levied. But, the Bank has levied some PENAL / ACCRUED INTEREST of Rs. 3 Lacs (apart from outstanding loan amount of 3 Lacs) plus some legal charges for the NPA ACCOUNT, which is exaggerated and exorbitant, and harass the Borrower / Guarantor to repay the dues(Rupees Six Lacs Only) in full, immediately. Is there any way out to waive-off the exorbitant ACCRUED INTEREST, at least?
(7) Irrespective of the debt, Whether DM / CMM order is mandatory to take Physical Possession of the mortgaged property?!
What will be your advise & recommendations to the Borrower as well as the Guarantor, in this case, and how to deal further?
Summary: Borrower borrows Rs.10 Lacs as Mortgaged Loan from the Bank and repaid Rs.13 Lacs (Principal plus Interest) till date to the Secured Creditor. The Outstanding Loan Amt. is less than Rs.3 Lacs but the Accrued Interest of the NPA a/c is 3 Lacs. So, the total dues mentioned as Rs.6 Lacs by the Banker and initiated physical possession of the mortgaged property of the Guarantor under SARFAESI Act. What will be the remedy for this? Pls advise.
