Reply to Sarfaesi 13(2) notice.
s.loganathan
(Querist) 13 February 2010
This query is : Resolved
I had been served with 13(2) and before expiry of 60 days, had sent a comprehensive reply to the bank's authorised officer. The bank has failed to give me a written reply within 7 days as mandated by law using 'reasonableness and fairness' through evolving an internal mechanism, apply its mind and respond. At the time when I hand delivered my response and got acknowledgement, the banks officer had told me to propose an OTS amount. Only after that did he receive & sign the copy. Would a statement like that be construed as a reply to my letter. I have not received any written communication, and what are the consequences of the bank defaulting to reply within the 7 days period?
Devajyoti Barman
(Expert) 13 February 2010
Though the bank after considering such representation is expected to communicate you within 7 days as prescribed by sec13(3A)of the Act, such communication or not is does not empower you to challenge the notice u/s13(2). You have to wait for appeal before the DRT u/s 17 of the Act till the bank takes any action under the provisions as prescribed by section 13(4) of the Act.
N RAMESH.
(Expert) 13 February 2010
I agree with Mr.Barman
H. S. Thukral
(Expert) 13 February 2010
Taking any action by the Institution under section 13(4) shall be illegal if it does not respond to your reply.
s.loganathan
(Querist) 13 February 2010
Mr, Barman, what is the legal consequence of not replying within 7 days to my reply for 13(2)? Would you and the rest of the gentlemen agree with Mr.Singh that the bank would be acting illegally if it proceeds with 13(4) (cause of action for appeal to DRT)? What will probably happen? It appears paradoxical.
H. S. Thukral
(Expert) 28 February 2010
It is mandatory to dispose off your representation. If the financial institution does not respond and resorts to action under 13(4) it will be illegal. There are several case laws on this aspect.
s.loganathan
(Querist) 01 March 2010
Thank you Mr. Singh, but unfortunately the Bank has invoked 13(4). The Bank sent me a reply after 10 days and not within the 7 days as mandated. I have an acknowledgement from the bank dated 6/2/2010, but the reply states that the objection to 13(2) was received on 9/2/2010 and accordingly replied on 15/02/2010. Also the description of property in 13(2) notice & 13(4) notice differs. In my 13(2) objection I had stated that the very declaration of NPA on the purported date itself is not possible as I had active transactions prior to , and after the purported date of NPA. Inspite of bringing to the notice of the executing officer all of these facts and informing him that the 13(4) notice is defective & not enforceable, he proceeded. It has been 8 days now, and the bank has not made any paper publication with regard to 13(4) action.Must I deposit a huge amount with the DRT just to tell them that they are wrong?
H. S. Thukral
(Expert) 12 March 2010
File an appeal before the DRT and ask for stay of the action initiated by bank.
s.loganathan
(Querist) 12 March 2010
Thank you Mr.Singh. I am going to make an application to the DRT. And by the way, the Bank has failed to publish the 13(4) notice in the paper within 7 days and have vitiated the process. What will they do next? Unbelievably, the bank has flaunted and defaulted on just about all the statutory requirements of RBI & Supreme Courts observations. I am going to ask for restoration of my property by DRT. Is there any relief that I must seek from DRT?
H. S. Thukral
(Expert) 13 March 2010
You file an appeal under the provisions of the Sarfaesi Act that the proposes action is illegal on grounds which in your opinion are just. The important is that the bank has not discharged their mandatory requirement of disposal of your representation to notice. You can find several of judgments where the proposed action has been held illegal where the bank kept quiet to the representation. Meanwhile ask for interim relief of stay of action.
