Criminal Trident Pack: IPC, CrPC and IEA by Sr. Adv. G.S Shukla and Adv. Raghav Arora
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Cgtmse ,defaulter npa, photo publishing

(Querist) 09 December 2013 This query is : Resolved 
Respected Sir/Madam,

I am an entrepreneur and have borrowed a loan under cgtmse of Rs. 4.75 lakhs from State Bank Of India, the total loan was of 11 lacs, out of which based on 25% of m yc ontribution the bank sanctioned 7 lacs, 4.7s lacs used for machinery and rest was working capital , which we dint borrow. its just 2years passed for the taken loan, the total period of repayment is 5 years.

so far i have paid 1,66,000 Rs. however there had been delay in payment in between because of financial problems. after i took the loan we couldnt start our company because the raw material( chips also called as electronic IC's)were faulty and the whole design failed. i had to start from scratch, and the work of redevelopment was going on and in the mean time i was paying installments from my own pockets. but the situation got worst as the price of dollar started increasing.from Rs 42 it climbed to 58 and then to Rs 62. most of the components in my product are to be imported from abroad as india doesnt have microchip manufacturing industry. and it became difficult for me to enter production with the amount i personally had and the bank started threatning me on delay of installments,

once the account even became npa which i regularised after 6months by arranging the funds. and asked the branch manager to to rescheduling or restructuring of the loan, which he clearly denied. I gave him the genuine reason that the factors where beyond my control and based on economical reason i am unable to enter the production so please restructure the loan and increase the time period of repayment, instead of helping us the bank manager sent me a notice of publishing a photo of being defaulter. some how i was still paying the installments .

later on my mother was seriously ill and was hospitalised and later on expired the hospital bill was enormous, and i had to manage that too from relative and friends. in the mean time the installments to the bank delayed and the manager started to threaten me again and then i requested him to restructure and he denied again, and issues a photo publishing notice in leading local newspapers. i use to search a lot on internet about restructuring of loan for CGTMSE and i found the below attached RBI guidelines for sme-msme.

and it clearly says that the bank should help the sme the moment it understand that the company is going into npa, should identify a viable report and take quick hand holding actions.it has also removed the clause that the company should be in 2years of minimum production period and it says that even if the company couldnt start production after 6 months from the day it borrowed the loan , the bank should help it. restructuring can be financial help or not or can be extending the repayment period less then 10 years and waiving of some interest.

even the the bank manager clearly said that he will not provide additional finance and asked me to give business plan of other product that we can manufacture, so i gave him the business plan of other product, he took and sat quite for 6 months. no reply from him. and the mean time we were working on our other product too. the bank manager calls me and after 6 months and threatens me again that the account is NPA and i am going to publish the photo.and there is no such guideline to help cgtmse. as none of your business are working.

In the mean time i got notice form his higher branch that i have 60 days period and i can settle the npa account within 6odays else they will confiscate the machine that has been borrowed by banks money. when asked the bank manager, about the notice he says i dont know who had sent that to you. the 60 days get over on dec 18 2013.
so based on the threat calls i gave him proof of citation of Hon. High court of kolkatta and madras of similiar npa cases where the high court has objected the banks photo publishing action as the defaulters are not wilful defaulters, and i forwarded the same to the bank manager. he again replies me that the seniors have ordered him to publish the photo. so i replied him that you show those citations to the seniors and read the rbi guidelines and restructure and stop from defaming me. instead the bank manager without giving me any written notice published my photo in a news paper other then news paper that was told to me, and before publishing the photo we had started to pay the installments in step wise and informed the same to the manger, and still he published my photo and the period of 60 days is not over yet and the bank has taken all the data and sent the valuator for restructuring and had done nothing at all. i never wanted to cheat the bank as i am running the company with my own savings. and the bank manager has defamed me. i realised that the bank doesnt follow rbi guidelines, and Hon. High courts judgement is challenged by the bank and i have all the evidence of above mentioned cases in the form of emails, notice, acknowledgments and phone recordings where the bank manager has threatened me to spoil my name in business world. on the first meeting he had also told me that the bank makes the defaulter sleep on ice slab and whips them until they surrender all there property, but i dont have recordings of it,but i have witness as my friend. I want to file a case against the manager and his seniors and defamation case, please suggest me the necessary steps i should take, the bank manager ignores the lawyers notice too and acts like a barbarian.
R.K Nanda (Expert) 09 December 2013
consult lawyer personally.
RAVI B SHAH (Expert) 10 December 2013
Consult Lawyer immediately.
You can also file complaint in "Baking Ombudsman(Lokpal)" against officer/bank illegal action and for not following RBI guideline.
You will get the address of the concern Banking Ombudsman from RBI website.
Biswanath Roy (Expert) 10 December 2013
Your Banker is acting illegally. It is purely a case of high handedness of the Bank Manager. File an application under Article 226 of the Constitution of India in the High Court making Reserve Bank as another party. If you need my help for drafting appropriate petition I can help you. Besides, you can file damage and compensation suit against the Bank if you so like. Over and above you file defamation suit against the Banker and its Manager. If you are a resident of W.B. I can help you to win these cases as a Senior Counsel.
K.K.Ganguly (Expert) 10 December 2013
1. It appears that you have received Demand Notice issued under Section 13(2) of SARFAESI Act, 2002 by the Authorised Officer of the Bank,

2. SARFAESI Act is a Draconian Act & you shall have to repay the loan as per the terms you had agreed upon before availing the loan otherwise the possession of your mortgaged property will be taken over for selling it off in order to realise the outstanding due & no Civil Court has any jurisdiction to hear the matter,

3. Only Debt Recovery Tribunal can be approached in this regard that too if you find any lapses on the part of the Bank in implementing the SARFAESI proceeding,

4. You are now required to send a representation before the expiry of the said 60 days demand period putting forth your grievance and ellaborating Bank's mistakes asking for regularising your NPA account & withdrawal of the said Demand Notice,

5. After this the Bank is expected to reply you with in two weeks & if they fail, you can ask for setting aside the SARFAESI Proceeding leter on before the DRT,

6. Subsequently the Bank will take possession of your property (may be symbolic) by issuing Possession Notice u/s13(4) of the Act & will take physical possession with the help of police by applying to the DM u/s14 of the Act,

7. After this, the Bank will issue Sale Notice, sending you a copy thereof, to sell off your said mortgaged property to realise it's dues with upto date interest & expenses,

8. So, take the matter seriously & engage a lawyer having expertise in dealing with SARFAESI matters,

9. Before that try to settle the matter with the Bank but file an application u/s17 of the Act with in 45 days from the date of receipt of Possession Notice, if the same is issued by the Bank.
Biswanath Roy (Expert) 10 December 2013
Sorry to say SARFAESI ACT 2002 does not empower a banker to ignore the guidelines of R B I for recovery of loan and the Bank cannot override upon the rules laid down by the High Court and apex court in the same similar and identical cases. Further any officer of a Bank cannot do criminal wrong during the course of recovery of debts more particularly by virtue of their power of SARFAESI ACT.
RAVI B SHAH (Expert) 10 December 2013
I am fully agree with both of you Sirs but I think that you have to take chance by filing Writ Petition in high court but before doing this I strongly suggest you to make detail representation to the concern authority and send the same to the RBI also. It will help you in High Court as well as in DRT.
Ryan (Querist) 11 December 2013
Respected Sir(k.k. ganguly) I have a collateral free loan applied under CGTMSE scheme. it means if i dont pay the loan the bank will acquire the machines that i bought with there money and the rest will be paid by the CGTMSE trust of india. In short its a secured loan. i.e if the entrepreneur fails to pay the loan atleast 75% of the loan will be paid by CGTMSE. and yes they had sent me a SARFAESI 13(2) notice. and i have hired a lawyer to represent myself.and even my lawyer has told that the bank manager has taken action in wrong way, and hasnt followed any RBI guidelines. Thanks for your suggestion.
Ryan (Querist) 11 December 2013
Mr. Ravi B Shah: Sir i would definitely contact you if i need to approach the High court.

Mr. Biswanath Roy: I am based in maharashtra. thanks for your kind suggestions.
K.K.Ganguly (Expert) 11 December 2013
1. Yes, as per the said Credit Guatantee Scheme,the Bank will get the 75% of the loan amount but the Bank will initiate SARFAESi Peoceeding & if the entire loan outstanding is realised, will return the said 75% amount it had received,

2. Bank will follow SARFAESI Act,2002 to realise its dues. RBI guidelines will be followed while classifying the account as NPA, declaring someone as wilfull defaulter & for such matters,

3. If you or your lawyer feel that the Bank has not followed the RBI Guidelines, then you should send a representtion within the stipulated period to the A.O. of the Bank who has issued you the said Demand Notice u/s13(2) of the Act.
Biswanath Roy (Expert) 11 December 2013
When you are based in Maharashtra you may contact with my Assistant in Bombay High Court namely:- A. K. SAXENA
Advocate, Bombay High Court,
Bar Library, Room no.-56
3rd. Floor, MUMBAI-400 032
Ryan (Querist) 12 December 2013
Respected Sir(k.k. ganguly):- My lawyer has sent a reply to them for representation. However he says its not that easy to file a defamation case against the manager. as he has published my photograph.without following RBI guidelines inspite of requesting him to follow rbi rules for passed one year.

we had replied the regional manager, but no use. they all are interlinked. as the manager told me tht my seniors only tell me that " ja chor ko pakad ke leke aa" ( go an catch the thief(borrower)). we had also given him the citation of Hon. High courts of kolkotta and madras where the court has objected on such act of publishing photo. but that too was of no use. its not that i am not paying anything. i pay as i get money. but sometimes they are irregular. The main moto of this manager is to make the branch NPA free under any circumstances.

I am to trying to find how to file a defamation suit and teach that manager a lesson. i would like to know what points should be covered, because he has spoiled my name as well as my family name as people know me because of my family and also my companies name. your suggestion on this would be helpful to me.
Ryan (Querist) 12 December 2013
Also i would like to know, how to demand the loss interms of money in defamation case.

Because i am entrepreneur, i am in touch with industries big investors who are reviewing our project to fund it in crores. and few multinationals are interested to work with us in our projects. i am winner of international tech contests. so can i prove with this that i have a name that is recognised internationally among industry investors and other entrepreneurs.
Biswanath Roy (Expert) 12 December 2013
For filing an appropriate defamation petition and to know something more about, you may contact me through P M [Personal Message]. You will be 100% successful to curb down the mischief of the Manager and can bang him.
K.K.Ganguly (Expert) 12 December 2013
1. Please try to understand one thing. You need not ask for justice from the Bank Manager. You will ask him to follow SARFAESI Proceeding correctly for which you have submitted your representation with in the stipulated period after receiving the Demand Notice u/s13(2) of the Act & the said Bank Manager is also required to reply your representation within 2 weeks thereof.If he fails to reply within 2 weeks then the SARFAESI proceeding intiated by him gets vitiated, hence becomes invalid & unenforceable,

2. There is nothing in the Act by which the Bank Manager can seperately publish your photograph or threaten you to do that. They can publish your photograph alongwith the Possession Notice to be issued by them u/s 13(4) of the Act,

3. DRT has the jurisdiction only to check whether the SARFAESI Act has been correctly followed by the Bank or not. It will not see anything else. The Act has been made like that to ensure fast recovery of Debt. That is why this Act has been termed as a Draconian Act. But the Act has to be followed in toto which has not been done in your case as you have been treatened/black mailed,

4. Defamation suit against the Manager may not be of much use as Section 32 of SARFAESI Act,2002 has immunised the securede creditor or any of its officers by giving complete protection for 'action taken in good faith'. Your filing the Defamation suit is not the last thing, the Bank's lawyer also will submit his version. You may discuss this point with your lawyer,

5. However, are you sure that the Bank has not taken any document signed by you which says that the Bank is free to publish your particulars? If yes, then you will have no say. You must write to the Bank manager under copy to all his seniors asking him not to publish your photograph in any Notice to be issued by the Bank in future,

6. Before the Bank issues you & publishes the Possession Notice, lodge a complaint to the Bank's Ombudsman under copy to the C&MD of the Bank enclosing the High Court citations calling upon them to instruct the A.O.of the Bank not to publish your photograph. It may work.

7.When the Bank publishes Possession Notice u/s13(4) of SARFAESI Act,2002,with or without your photograph, you may file an application u/s17 of the Act & in the said Application you may mention the fact of the Bank's illegally publishing your photograph or its threatening to do that against Calcutta High Court's order & ask to set aside the said impugned Demand Notice issued u/s13(2) of the Act,

8. If the Demand Notice is set aside, entire SARFAESI Proceeding has to be restarted by the Bank.
Ryan (Querist) 22 January 2014
My lawyer had sent a representation notice. and the Bank managers lawyer has replied that a posession notice was sent to me on 09/10/2013 and on 09/12/2013, 60 days were over and i had replied them on 10/12/2013 so it cannot be considered now and they prefer to take possession on 24/1/2014 of all the equipments. however i got the notice on 18/10/2013, and the notice had a date of 09/10/2013. and when i traced the registered post id on indian post website i found that the notice was posted on 15/10/2013. i have a hard copy of it to prove in court. so i showed it to my lawyer, he said that the valid date is considered from the day the client gets the notice. so if you got the notice on 18/10/2013 the 60 days period will end at 18/12/2013 and i have replied on 10/12/2013/ and the bank manager has replied me after 37 days that your representation notice has not been considered and hence you wont have a chance and you have to submit the equipment to the bank on or before 24/01/2013. else the bank has tie-up with some consultancy firm. who will take possession of your goods against all odds. in the mean time i got rti application reply from SBI that photograph can be published on;ly on case to case basis. howeve the high court judgement says if its a public limited company. whereas mine is proprietory. so my lawyer has suggested me to file a police complaint if they come to acquire the equipments as they havent followed SARFAESI ACT. and when i asked him to file a defamatory case he told me that i have to pay nearly 4%or 5% approx. of the defamation charges in the court as stamp duty. its true but i found this like unjustice as someone defames me and then i have to pay for defamation. Is there any another way to teach this bank manager a lesson,. he insults poor farmer and people as if he owns the bank. Please advice.
Ryan (Querist) 22 January 2014
Can i file an RTI application to obtain the copy of letter from his higher authorities who advised him to publish the photograph in news paper.

Biswanath Roy:- Sir can i have your mail id.
Ryan (Querist) 22 January 2014
we are still paying the installments, regulary, however the npa amount is pending.
Ryan (Querist) 22 January 2014
k.k. Ganguly:- Sir can i have your mail id too.
K.K.Ganguly (Expert) 22 January 2014
1. My mail ID is gangulykk@gmail.com,

2. Be clear in two things as follows,

a) You shall have to send you representation within the specified period of 60 days after getting the Demand Notice u/s13(2) of SARFAESI Act2002 &

b) You shall have to file an application u/s17 of the Act with in 45 days from the date of the Possession Notice issued u/s13(4) of the Act before the DRT praying for setting aside the SARFAESI notices for not complying with the Act
Biswanath Roy (Expert) 22 January 2014
MY MAIL id is bnroy.advocate@gmail.com
Mobile No- 9836858000
Ryan (Querist) 22 May 2014
Hi, All,

I came to know that if one want to file a civil defammation case against a bank or someone, I have to pay 5% AD-VALOREM fees ie. if the claim is of 50lakhs it will be 2.5 lakhs as fees and the time limit is just 1 year for civil defammation is this true. i googled but couldnt find much on ad-valorem fees.need a suggestion on this.

I have collected all the documents from the RBI,and the bank with whom i have an account and they take 1 month to reply for each RTI filed.

and consulted with a lawyer. he says your case is quite strong and has merit.

but the ad-valorem charges is like too huge at the moment.

you suggestions will be appreciated on this

R.K Nanda (Expert) 22 May 2014
consult local lawyer.
Biswanath Roy (Expert) 22 May 2014
Very soon I shall visit Mumbai as I am expecting one of my case in the Bombay High Court will appear on board for hearing . Probably in June when summer vacation of the court will be over. If you so like you may contact me to discuss your problem face to face and for creation of a successful legal strategy on usual professional terms.


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