Can the Creditor demand EMI when matter(SARFAESI) is pending

1.During the pendency of an application u/s 17(1) of the SARFASI Act the bank can not demand EMI from the borrower.Bring the matter notice to the DRT.   2.Cheque bounce is a seperate issue where bank can file a case u/s 138 N.I.Act.

When there is Interim Stay Order issued by DRT against further proceedings under SARFAESI Act, bank can not proceed any further under the said Act.  If the cheque issued by you is bounced, bank gets the right to proceed under Sec.138 of N.I.Act.

Though I agree with the views submitted by my learned friends, I would like to share my views also.

The banks cannot demand the EMIs when the matter is stayed by the DRT and pending before it. Even assuming that the matter is not stayed by DRT, the payment they demand cannot be way of EMIs. Bu way of a  demand notice under section 13(2) the secured creditor recalls the loan and calls upon the borrower to pay the entire loan amount. When the loan is recalled, there is no question of paying back the money by way of EMIs unless the pending dues are paid by the borrower and the account is regularised by the secured creditor. If the secured creditor has not regularised your account, then what ever amount the amount paid by the borrower subsequent to the demand notice has to be adjusted towards the total outstanding.

I request Mr.Raju to share his views on this.

Although the proceedings under SARFAESI Act was Stayed by DRT, if the bank is having post-dated cheques of the borrower and if he presented those cheques, that will not be considered as proceeding under the SARFAESI Act and hence not in violation of the DRT Order.  Such methods are adopted by banks, to threaten the borrower, of criminal proceedings under Sec.138 of the NI Act.  Normally all banks, keep pending all proceedings once Stay Order is granted by DRT /DRAT, till such Stay was vacated.

Dear Mr.Raju,

I agree that the proceedings of the Negotiable instruments are totally different from that of the SARFAESI Proceedings. I've been watching your answers in the forum for quite some time. To my knowledge you have not misled any people and never given any irrelevant answer. Since I thought of having a debate with you regarding the answer given by me earlier, I invited you to share your views on my reply given above.

Dear Mr.Uday,

Thank you for your kind words. For 32 years I was working in bank, then resigned being fed up and later for the last 8 years, I am a practicing lawyer, mainly handling DRT and DRAT cases.  I am happy to share my views, based on my experiences, if it is useful to the needy.

I invite Mr.Radhakrishnan from Chennai to participate in this topic and give his views.