Can drt admit an application u/s17 when the borrower has not been dispossessed?
K.K.Ganguly
(Querist) 24 October 2011
This query is : Resolved
Would the Ld. Experts give their valuable opinion on the following matter?
Can DRT admit an application u/s 17 of SARFAESI Act,2002 from a borrower who has defaulted in paying and whose account has become NPA, against the lending Bank for its just issuing notice of possession u/s 13(4), when possession has been refused & the applicant is still residing at the mortgaged premises as mentioned in the Application?
Thanks.
Devajyoti Barman
(Expert) 24 October 2011
Yes very much.
Rather it is high time that before actual taking of possession the borrower should file application u/s 17 of the Act and pray for injunction against taking possession of the property.
K.K.Ganguly
(Querist) 24 October 2011
But the Act says that the borrower has to be aggrieved by any of the measures referred to in Sub-section (4) of Section 13 taken by the Secured Creditor.Here the measures u/s 13(4) are taking possession of the property, business etc.If possession of mortgaged property is not taken, then how the borrower can be aggrieved? Kindly enlighten.
Devajyoti Barman
(Expert) 24 October 2011
The attachment/possession notice is itself an act by which the borrower can be aggrieved. Is there any yardstick in the Act under which only the borrower would be counted as aggrieved person like other Acts like PWDV Act.
Raj Kumar Makkad
(Expert) 24 October 2011
The application by borrower at this stage is appropriate and if he delays, he can be sufferer.
M V Gupta
(Expert) 27 October 2011
Section 17 (1) of the Securitization Act provides - " Any person (including the borrower) aggrieved by any of the measures referred to in Sub Sec.(4) of Sec 13 taken by the Secured creditor may prefer an appeal to the DRT .... within 45 days from the date on which such measure is taken ...". The words "aggrieved by any of the measures" .. "taken by the secured creditor" very clearly and unambiguously indicate that an application to the DRT can be made only if the possession of the assets is taken over by the secured creditor or the managemnt is taken over by it.I am therefore inclined to agree with the querist that an application before occurence of the actual take over of the possession or the managment etc of the securted assets would be premature and can be challenged by the borrower. The reason is that the borrower can always negotiate with the creditor and avert the actual take over.
RAJU O.F.,
(Expert) 27 October 2011
Once Possession Notice u/S 13(4) of SARFAESI Act is issued by the bank, in spite of symbolic or physical possession taken by the bank, the DRT will admit the appeal u/S 17 if it is within 45 days from such possession notice. DRT can also Order Interim Stay of all further proceedings, if it is convinced.
