Loss due to delay in share encashment by bank officials
Meha Harish
(Querist) 11 December 2012
This query is : Resolved
In response to banks Sarfaesi act 13(4) possession notice and also written assurance that measures towards flow of funds to our SSI unit shall be taken on payment of about Rs. 4 Lakhs overdues, I gave the bank shares of Blue chip companies - Siemens & G E Shipping worth about Rs 10 Lakhs in Nov07 in physical form with stamped share transfer forms duly discharged with request to encash and adjust against all dues.
The bank officials delayed the encashment process by 7 months and realised only 4.5 lakhs in May'07 due share market crash in Jan'08.
At DRT, bank states that delay was due to long process and of transfer in Bank's name the Demat and then sell. They stated that initially share transfer registrars returned the transfer requests due to signature authorisation stamp / letter, etc etc. I smell foul play because blank signed share transfer form were given. Physical Shares could be encashed straightaway with any broker in 4-5 days.
Please guide on what grounds I could nail the bank for the loss as well as fraud because they also promised revival of funds. This foul play is extremely damaging especially in view of the fact that it was a case of recovery under Sarfaesi act.
Thanks in advance.
Raj Kumar Makkad
(Expert) 11 December 2012
You shall have to put your case vigorously and effectively before DRT in the same flow that the banker could have sold the shares to any of the brokers and its delivery physically could have been given had banker been vigilant and thus wrong procedure if any adopted by banker to first get the same transferred in its name and then to sale is solely of the banker and you are entitled to be credited the same value as it was prevalent at the time of delivery of shares.
Meha Harish
(Querist) 11 December 2012
Dear Mr. Makkad,
Thanks for your advise.
At DRT can I take a stand that since the bank promised revival of accounts on payment of all dues after Sarfaesi act and I did pay my dues, all subsequent actions taken by bank under Sarfaesi act are illegal and bank has exposed itself to claim of loss and damages.
Raj Kumar Makkad
(Expert) 11 December 2012
Yes. Your stand is correct and you should perfectly put your similar stand before DRT.
Meha Harish
(Querist) 11 December 2012
Dear Mr. Makkad,
You have been extremely cooperative. My sincere thanks to you.
Unfortunately you are not residing in Mumbai. I would have preferred to engage your services to represent by case.
Raj Kumar Makkad
(Expert) 12 December 2012
harish! Thanks a lot for your appreciation. Even if I am not in Mumbai, my professional services can also be hired as and whern you require. You may personally contact me if you desire.
RAJU O.F.,
(Expert) 15 December 2012
Against the Possession Notice under SARFAESI Act, you have to immediately prefer an appeal u/S 17 of the Act in DRT through a good advocate who is conversant with DRT and SARFAESI proceedings and seek stay of all further actions, for the reasons stated in your query. If bank had filed suit (OA) in DRT, you also file a counter-claim as provided under Sec.19(8) of the DRT Act for the loss caused by the negligence of the bank and also for compensation.
