Appeal u/s 17 of sarfaesi act
Ram
(Querist) 27 October 2014
This query is : Resolved
Can a borrower file S.A after receiving a Intimation Notice to take possession of secured assets U/s 13(4)?
Advocate M.Bhadra
(Expert) 27 October 2014
After getting notice usec.13(4) of the SARFESAI Act form the lending bank borrower can file an application u/sec.17(1) of the said Act in Debts Recovery Tribunal within 45 days.
Ram
(Querist) 27 October 2014
Sir,
As per my knowledge Notice U/s 13(4) is issued after taking possession of property. Before taking possession of propertty Bank issues notice requesting borrower to hand over peacefull possession of property.
Can borrower rely on that letter of intimation of taking possession ad file S.A?
Devajyoti Barman
(Expert) 27 October 2014
13(2) notice is issued before taking possession.
Ram
(Querist) 27 October 2014
Sir,
with all due respect, I am also an Advocate have little knowledge of DRT.
I have asked this query because i have seen borrowers filing S.A based on intimation notices (which are issued before taking possession U/s 13(4) of SARFAESI Act)
S.17 is clear any person aggreived by action taken U/s 13(4).
Ram
(Querist) 28 October 2014
Mr. Bhadra,
Can S.A be filed based on intimation notice requesting borrower to hand over peacefull possession of property, issued by bank prior to taking symbolic/physical possession of property?
T. Kalaiselvan, Advocate
(Expert) 29 October 2014
For redressing the grievances the borrowers can approach DRT and then DRAT in appeal. The limitations is 45 days and 30 days respectively. The DRT have been empowered to entertain appeals against the misuse of powers given to banks. Any person aggrieved by the order of DRT may prefer an appeal against the said order before DRAT within 30 days. The DRT can look into the issue of ‘debt’, objections regarding debt and the correctness of the procedure followed by the Bank under SARFAESI Act, 2002. if the Bank takes a decision to classify an account as NPA and rejects the objections or the request by the borrower, then, apart from writ remedy, the remedy available to the borrower is to file an appeal under section 17 of the SARFAESI Act, 2002. Based on the merits of the case, the DRT will grant interim relief and finally, only when it is established that there is a procedural irregularity, the DRT will allow the SARFAESI Appeal and can order the restoration of property if the physical possession has already been taken by the Bank pursuant to steps taken under section 13 (4) or by taking assistance of the police etc. using the mechanism provided under section 14 of SARFAESI Act, 2002. When the borrower prefers an Appeal under section 17 against the Bank, the DRT can grant ex-parte stay of proceedings against the Bank if there is sufficient ground to that affect from the averments in the ‘Grounds of Appeal’ and also the documents produced.
Courts have also liberally interpreted the provisions dealing with the ‘right of appeal’ provided to the borrower and the borrower can question every action initiated by the Bank under the provisions of SARFAESI Act, 2002. The borrower or any person aggrieved can approach the Civil Court in a very limited situation where actually there is fraud or serious dispute with regard to the title of the ‘secured asset’/property mortgaged. Though there can be no bar on the jurisdiction of High Courts under Article 226 in dealing with the grievances of the borrower against the Bank when the Bank initiates action, the High Courts do desist in being alternative to the remedy available before the DRT normally.
