Sarfaesi act
Terry DCruz
(Querist) 29 November 2014
This query is : Resolved
My query before the learned experts are :-
Can a nationalised bank initiate action under 13(2) of Sarfaesi Act after dismissal of their money suit?
There is a clear bar from entertaining a fresh suit on same cause of action under CPC but can 13(2) be initiated?
ROHIT SHARMA
(Expert) 29 November 2014
1. Proceedings can be filed under SAEFESI act as this will not attract the provision of bar of filing suit u/s 12 or u/s 11 of C.P.C. since the proceedings under the SARFESI Act do not allow any interference by civil courts and neither D.R.T. is a court.
Advocate. Arunagiri
(Expert) 29 November 2014
On what grounds the money suit was dismissed?
Is there any property mortgaged for the said loan?
ajay sethi
(Expert) 29 November 2014
state detailed facts of your case .
Rajendra K Goyal
(Expert) 29 November 2014
Consult local lawyer with full case file.
R.K Nanda
(Expert) 29 November 2014
state detailed facts.
Terry DCruz
(Querist) 29 November 2014
Sir(s)
1. The loan was an SME loan sanctioned with the condition that repayment shall be made out of the profit generated from the business.
2. There was a change in Govt. Policy prohibiting the business as such no much profit was earned.
3. Bank initiated Sarfaesi 13(2), reply was given within 60 days highlighting all the difficulties.
4. The Business was sealed by the Governemnt stating it to be on the basis of an Interim order of Supreme Court(Owner was not a party in that case)
4. Bank filed a money suit immediately concealing the material facts. In the WS all facts were narrated also Interrogatories were filed. Bank did not come forward, case was dismissed for default after 2 years. Filed restoration that too got dismissed due to falsehood in the petition.
5. The interim Order of Apex Court got reversed after 3 years. The property was de-sealed and given it back to the owner without any compensation.
6. Damage suits as well as writ for restitution was filed by the owner against the Govt. for illegal deprivation of property. The losses incurred by the owner is much more than the Bank's claim.
In the Suit Govt. is not filing WS even after 1 year. In writ the affidavit in opposition is yet to be filed.
7. At this stage Bank again issued a fresh 13(2) notice under Sarfaesi Act.
KUMAR JAGADEESAN
(Expert) 30 November 2014
As far as the Bank is concerned if the account has become NPA they are right in proceeding under SARFAESI Act whatever be the reasons behind the account becoming NPA. However in the existing circumstances caused by the act of the Government the same can be explained to the Bank for rescheduling/ rephasing the loan and time can be obtained through the DRT also. Provided the business and its prospects are still intact
Pragnya B Mishra
(Expert) 01 December 2014
But what is this 'falsehood' you are referring to which resulted in the money suit for recovery getting dismissed even after restoration?
Nadeem Qureshi
(Expert) 01 December 2014
Dear Querist
the bank may issue notice u/s 13(2) of SARFAESI Act and can take action u/s 13(4) of SARFAESI Act,2002 without interference of the Civil Court but the borrower has right to file a Secrutization application/appeal before DRT against the action taken by bank.
Feel Free to call
Pragnya B Mishra
(Expert) 01 December 2014
There is no point first allowing such 13(4) action to take place and then litigating. Prudence calls for an attempt to negotiate with the bank for a rescheduling of payment which should first option- cite the entire history of difficulties. You can also to check if you have force majeure clauses, supervening impossibility clauses which cover you for such sudden change in govt policy/law or at least allow you a scope to renegotiate the terms of loan agreement.(There should be some clause in the agreement )
If bank is still not willing, you should reply to the notice suitably with the help of a lawyer.
