SARFAESI

It seems that there was an order of conditional stay by DRT, directing you to pay 20 % of the amount due in 2 installments but you have complied with the first installment alone. You have stated that you sought waiver of the 2nd installment but no orders in this regards favouring you is seemed to have passed. From the facts given by you, I understand that the conditional stay ought to have got vacated automatically for non-compliance of the 2nd installment and hence the bank should have proceeded with the auction after obtaining an order from DRT in this regards. 

You can file an appeal before the DRAT against the order pased by the DRT, even though the sale is completed and seek stay of all further proceedings. In the alternative you can also approach High Court under Article 226 by way of a writ petition in case the amount paid by you as first installment would have covered the 3 installments that you defaulted.

In any case unless all the orders are looked into, a full and proper advice could not be given. In any event dont lose hope that the property is sold. In case you are able to mobilise the balance due, we can still save the property.  

Dear Sir,

Thanks a lot for your kind advice.

DRT asked us to pay we would have paid the rest 10%  they were not given any chance the waiver appeal is pending almost six months case is adjourned for almost 6 months for the banker not given any counter i understand that lot lot mis-representation happened in my case instead of challenging the stay counsel had filed waiver application.

Also we were informed DRT that they were published in the newspaper regarding auction sale. DRT gave order after six months stating dismissing all my petitions. Both banker and DRT not given any opportunity to hearing my side. They issued SARFAESI and i had paid all the dues and moreover they were not regularized after case pending in DRT also we are paying the EMI till date.

Can i directly approach High court for writ appeal could you please suggest me.

Thanks & Regards,

Rajasekar

This is a fit case, where a writ petition can be filed. I fully concur with the views of Shri.Prakash

My sincere thanks to Lawyer Mr. Y. Prakash and Lawyer Mr. Rajendran Nallusamy for guiding me in my case for supporting legal advice.

Best Regards,

Rajasekar

Dear Rajasekar,

Let me know the reason.. that the  counsel adviced you to approach the High Court... Though DRAT is situated in Chennai..... Please its very useful for me to go up....

Dear Surya,

In my case DRT has dismissed all my representations and passed orders favoring the Bank. DRT has not heard or given any chance for me even i am prepared to settle the entire loan. God's grace my property sale has not been confirmed by DRT and it has adjourned for the month. In this time gap we were approached the high court under article 226 of the constitution we filed the Writ petition along with the evidence and facts 2 member bench heard our plea and qushed the orders of DRT and allowed writ and they made order favoring to us. One advice i wanted to give when you approach the highcourt when filing Writ the borrower should mobilise the outstanding loan fund and he is ready to settle in one month.

Thanks & Regards,

Rajasekar

Dear Advocate Mr. Prakash & Advocate Nagendran Nallusamy,

Thanks for your advice  and i had approached the high court under article 226 filed the Writ petition. God's grace we won the case and high court has quashed the orders of DRT and quashed the auction sale.

We got back to our property.

Thanks & Regards,

Rajasekar

A mortgage suit has been filed in the sub court  for realizing a loan advanced for housing,which was dismissed without passing preliminary decree on the grounds that the rate of interest charged by the financial institution was exhorbitant and the F I has not proved as to how the calculation of suit amount was arrived at.

Now the FI had preferred an appeal before Dist.Court and pending for orders. The dues o/s are more than 6 lacs as on date. Please clarify as to whether the financial institution can invoke the provisions of SARFAESI act 2002 to realize the proceeds. Property a house site measuring 5 cents situated in Tier II city.

Dear Law Experts,

I’m writing the following on behalf of my cousin.

One of my cousins availed a Mortgage loan of Rs. 10 Lakhs on Oct’2007 from one of the nationalized bank in Chennai and the Loan tenure is about 5 years. The Interest is w.r.to the current PLR and of daily diminishing from the outstanding. Initially for a period of 23 months (almost 2 yrs.), my cousin happily paid the Principal as well as the interest without any delay.  But unfortunately, Due to global recession, he lost his job and also been hospitalized for some months because of illness. So at this situation, he couldn’t able to re-pay the EMIs for about 4 months collectively, however, he made some adjustments in his loan account in the subsequent months and mobilized accordingly. Suppose, if he couldn’t able to pay the EMI by the month of January, he must dropped both Jan & Feb month’s EMIs by the next subsequent month i.e., by February. Likewise, he tried to regularize his loan.

On November 2009, the Bank Manager has effected the Standing Instruction from his Saving Account where he has already with the same branch but without his mandate / consent. While my cousin questioned about this matter with the Bank Manager, the manager said that he only effected the SI under Sec-171 Act and also, said that he never need his mandate / consent to effect SI to recover the loan EMI. Is that been possible to do so? Please clarify me.

But as per RBI guidelines, we understand that ‘’Banks have a right to exercise lien under section 171 of the Indian Contract Act against the dues from constituents/customers. However, the banks CAN NOT exercise lien over the personal account of a customer on the ground that money was due to the bank in another account where he acts in a different capacity, if there is no agreement to that effect’’. If it is so, how the manager has effected the SI? Moreover, he admitted that he can take action under Sec-138. How it’s possible to enact such act in this case?

Till last January’2010, the past due is for 4 months (i.e., Rs. 22,500 per month). So, my cousin has to pay around Rs. 90, 000. But he has paid only Rs. 40,000, where he has only that much of amount at that time. Also, he communicated to manager that the rest will be paid soon. But the Manager has declared his loan A/C as NPA and sent the preliminary Notice to pay the outstanding due amount of Rs. 1, 35,000 within 10 days of time. Since my cousin has paid around Rs. 5.25 Lakhs till January’2010 (Principal cum Interest), he doubted that there’re some discrepancies in the amount mentioned. So, he asked the manager to send the 'Detailed Amortization Schedule / Statement' of his Loan A/C and asked the manager to re-classify his account as ‘Standard Account’ and asked for Re-Scheduling of re-payment plan after explaining his crisis. 

But, on the other hand, the manager said that my cousin has to pay 8 months EMI with some penal charges and also, he sent the Notice u/s 13(2) of SARFASI ACT immediately by next following week itself by giving 60 days of timeframe to settle the amount of Rs. 7.8 Lakhs (Principal cum Interest for the period served of 2 years / till date). The bank didn’t give any time to serve the notice period of 10 days as declared in the earlier preliminary notice. Later, my cousin has given a counter by sending ‘Representation/Objection under Sub-Sec-13(A) of Sec-13 of SARFAESI ACT’ based on the aforesaid grounds.  Although, there is another 3 years (apprx.) of tenure for full disbursement, we're forced to pay the full settlement now. However, we’re planning to settle the amount in FULL now and get the property back; but, we need some buffer time to arrange the said amount.

If there’s NO reply from banker side for our representation, shall we go appeal at DRT? If so, what are all the procedures? To appeal at DRT, is it mandatory to send Representation/Objection letter to the concerned Banker? And are we needed to wait till the notice period of 60 days to complete for appealing at DRT / DRAT? If they go for possession, is that symbolic possession or critical possession that they must enact and how long it will take for them to achieve the auction / sale? If we appealed at DRT / DRAT, can we get some benefits like interest free installments when disbursing of loan amount? Also, can we get some additional time to settle our loan amount? Furthermore, can we request the manager or DRT officials to Re-schedule his Mortgage Loan and grant him some 'Re-payment Holiday / Moratorium' until he get placed in a job (as he’s getting some job offers now). 

Also, let us know when an account has declared as NPA? As per RBI Guidelines, we understand that the account of any concern/individual can be declared NPA by the banks when NO amount (Interest/Principle) is deposited by the borrower in its account for the last 90 days (Earlier it was 180 days). Is that the 90 days period is of continuous or intermediate terms because he failed to make his EMI only for collective of 4 months, intermediately? 

Hope you can understand our above said queries and get us clarified, which helps my cousin to exit from his problems. Also, please correct us, if we were wrong anywhere.

Appreciate your immediate respond!

Thanks a lot for your valuable time!!