RAVI (Law Student) 13 March 2010

SARFASEAI Process

Recently one of running pharma co has been possessed under sarfaseai act by a reputed private bank as per the dist magistrate court (the factory building and land has mortaged to bank).The bank has served the notice for 60 days and filed the at dist court(the factory land in dist court juridiction) and dist court magistrae appointed the two advocate commissioner to seize the running co.The advocate commisioner has siezed the factory land with stocks and finished goods as where basis and has due for submitting the report at dist court.

the factory has under the custody of bank till 10 days and then the pharma co has approached to DRT and filed appeal for stay and requested for preserve the raw material and finished goods.The DRT court also has appointed one advocate comm to verify the stock and steps to preserve the raw material and finished goods.And the pharama co has appealed for 4 cr damages towards the raw material and finished good.

1) Hw the pharma co can approch to DRT and get the saty?

2) Hw the bank can follow steps to recover the dues?

3) Hw the further legal proceesding will happens from both the sides and judjemeents?

(Im a student and doing project with respect to sarafaseai act.Pls answer your opinions )

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2 Replies

Rama chary Rachakonda (Secunderabad/Telangana state Highcourt practice watsapp no.9989324294 ) 14 March 2010

Mr. Ravi,

Debt Recovery Tribunal is a semi judiciary functioning. Rs.10 lakhs or its above cases comes under banking money recovery cases. Mostly the cases between banks and institutions.Further information see the tribunal site.

Rama chary Rachakonda (Secunderabad/Telangana state Highcourt practice watsapp no.9989324294 ) 14 March 2010

Mr. Ravi,

The Debt Recovery Tribunals have been established by the Government of India under an Act of Parliament (Act 51 of 1993) for expeditious adjudication and recovery of debts due to banks and financial institutions.

The Debt Recovery Tribunal is also the appellate authority for appeals filed against the proceedings initiated by secured creditors under the Securatizaton and Reconstruction of Financial Assets and Enforcement of Security Interest Act.

Important: DRT Act/Rules:

    * The Securitisation and Reconstruction of Financial Assets and Enforcement of SecurityInterest Act, 2002
    * The Recovery of Debts Due to Banks and Financial Institutions Act, 1993
    * The Security Interest (Enforcement) Rules, 2002
    * The Debts Recovery Tribunal (Procedure) Rules, 1993
    * The Debts Recovery Appellate Tribunal (Procedure) Rules, 1994
    * The Debts Recovery Tribunal (Financial and Administrative Power) Rules, 1997
    * The Debts Recovery Appellate Tribunal (Financial and Administrative Power) Rules, 1997
    * The Securitisation and Reconstruction of Financial Assets and Enforcement of SecurityInterest (Removal of Difficulties) Order, 2004
    * The Securitisation Companies and Reconstruction Companies (Reserve Bank) Guidelines and Directions, 2003
    * Forms of Application for Registration of Securitisation/Reconstruction Companies
    * Revised Guidelines for Compromise Settlement of Chronic Non-Performing Assets (NPAs) of Public Sector Banks
    * Relevant Provision of Enactments Amended/Refered
There are five DRAT:
Debt Recovery Appellate Tribunals in India,
situated at Allahabad, Delhi, Mumbai, Kolkata and Chennai.

DRATs are appellate tribunals For DRT:

Debt RecoveryTribunals.
In India there are more than 33 DRTs: Debt Recovery Tribunals,
situated at different State/City.

    * Following Appeals can be filed in DRAT:

   1. Against the final orders passed by the Presiding Officers of various DRTs.
   2. Against Interim orders/directions given by the Presiding Officers of various DRTs.
   3. Against orders on MA/IA/Appeal against RO’s orders, etc passed by the Presiding Officers of various DRTs.
   4. Against orders on appeals filed under The Securitisation & Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002, passed by the Presiding Officers of various DRTs.
   5. Applications under subsection (6) of section 17 of the Securitisation & Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002.