Confusion about npa date

Meha Harish (Querist) 12 December 2012 This query is : Resolved
As per statement of accounts - Bank classified all Working Capital and Machinery term Loan a/c's as NPA on 02.07.07 and reversed interest entries during April-June'07 and also stopped charging interest to all accounts thereafter. On 31.07.07 it issued Sarfaesi act 13(2) notice wherein it stated that NPA is on 07.04.07 and gave no reasons.

At DRT it initially stated date of NPA as 07.04.07 and gave no details in the OA. After our rejoinder to COD and our consistent stand that there were no overdues and NPA classification is illegal, they gave some Mach Term Loan EMI overdue amounts (Jan'07 to April'07 - 4 EMI's)which are not true.

1. Can we challenge that the date of NPA - 07.04.07 stated by bank itself is false because it continued to charge interest during April-June'07 and also did not reverse unrealised interest in April'07??

2. Bank had given several letters during April-May'07 seeking various documents - latest stock statement, provisional Balance Sheet, orders in hand, etc for annual renewal of accounts which was due in Nov'06 but nowhere stated about accounts being already classified as NPA on 07.4.07 nor did it mention about any overdues in any accounts.

3. There was sufficient balance in cash Credit account during March'07. We gave letter to bank on 20.03.07 to adjust all interest and EMI dues to avoid NPA classification on 31.03.07. On 20.03.07 they debited the account for Rs. 1.80 Lakhs but did not clear the Interest/EMI dues nor given credit to any other account. This resulted in EMI outstanding in one Term loan account for Jan-March'07.Interest / EMI in all other accounts was paid till Feb'07.

4. Could we state that it is a case of NPA due to siphoning or misappropriation of funds.

5. Can bank classify NPA with back date??

6. Is bank legally correct in invoking Sarfaesi act on 31.03.07 whereas NPA classification was done on 02.07.07. Is it deliberately stating a back date to justify this illegality??

Please advise how I could legally defend myself at DRT.

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ajay sethi (Expert) 12 December 2012
we dont reply to anonymous queries .

Meha Harish (Querist) 12 December 2012
Dear Mr. Sethi,
I apologise for the wrong profile. It is changed now. I will sincerely appreciate your advise now.

Regards

ajay sethi (Expert) 12 December 2012
frankly it is necessary to go through the papers of application filed before DRT to suggest line of defence .

it is better you make an application for OTS . reach an amicable settlement with bank .

Raj Kumar Makkad (Expert) 12 December 2012
Until and unless we go through your relevant documents, the exact date of NPA is difficult to tell me with desired relief/process to move ahead.