Notice u/s 13(2) sarfaesi act

If the loan due is substantial, bank may re-classify the account as out-of-NPA, if they are convinced that the borrower will further keep it out-of-NPA/  or shift to someother bank.  If the account is kept in NPA catagory, banker cannot appropriate any accured interest and also he has to debit provision of percentage of the total loan amount, at the cost of his profits. Hence, prudent banker would avoid NPA as far as possible.  They may not apply the same rule for small loan accounts, say, less than Rs.1 crore.

Dear Mr. Uday,

If one goes by your contention of the Andhra Pradesh High Court decision, then there is no need of DRT if the Bank has decided just to sell all the assets of all the NPAs.   Does it also mean that there is no relevance or reliance to be given on RBI guidelines.   I have come across all the cases in Supreme Court, that decisions have been taken in consonance with the RBI guidelines which are also issued as per Law/Act as RBI is competent to do so.   Court has not set aside the Prudential Norms definition of NPA so how the Banks can just resort to taking over assets without following due procedure.  

My query related to:

Challenging the NPA if it was wrongly declared, there can be mistakes on the part of Banks also

DRT 31(j) provision of 20% and Rs.1 lakh threshhold level of taking action

Definition of overdue in NPA cannot be entire amount

There may be cases where the assets available are much higher than the defaulted amount

Do you know how many have committed suicide bcz of wrongful action of Banks

 

After the bankers have tasted the benefits of SARFAESI proceedings, they enjoy in selling the properties of helpless borrowers/ mortgagors, joining with syndicates and recovery agents.  Unfortunately, Courts did not take a proactive role in these situations.  When the sales of properties conducted in courts are also managed by syndicates, one can imagine what will happen if sales are done inside the banks.  Many bankers have become richer, at the cost of SARFAESI.

Mr. Nadeem Qureshi

Absolutely there is no bar to take action under SARFAESI Act after filing OA/Suit in DRT/Civil Court as doctrine of election has no application. RDDB & FI Act and SARFAESI Act even though operate in different fields they are complimentary to one another( Supreme Court in Transcore Vs. Union of India & Another.

Mentioning of the date of NPA in the demand notice is not mandatory. However it is open to the borrower to challenge the correctness of classification of his account as NPA which is basis for initiating action under the Act. If the classification of the account is wrong entire action stands vitiated (sublato fundamento cadit opus).

I would like to thank various advises rendered by learned Advocates.  I have since paid all the dues of the Bank.  And Bank has released all my properties.   This I did because DRT or Bank would not listen to me because they have much higher securities with them, in spite of clear violations of various laws, court and RBI orders.  Can I now take up the matter to higher authorites for collateral damages done to me, to my family, friends, borrowers, employees, government statutory bodies like PF ESI overdue, etc. and loss of reputation, etc. etc. and advise me the right Forum whether it will be Ombudsman or High Court.

As you have closed your loan a/c and got released the secured properties, my best advice would be to forget a nightmare.  Banks are recovering only from right thinking persons who had mortgaged properties of large value, while availing loans.  Majority of large loan accounts of hundreds and thousands crores, there would be no security or nominal security only. 

In the instant case, I don't think any fruitful benefit, in case of further litigation/complaint against bank.  It will only spoil your money, energy and mental peace. 

There are only very very few judges, who appreciate the agony of the sincere borrower, on going through the actual facts of the case, to pass Orders in favour of borrower also. One such judge on retirement, has joined our forum, for which I am proud of.

Thank you Mr. O.F. Raju for your comments. In fact I thank you for guiding me to become expert member in the club. My only endeavor is to help general public and brother advocates while acquiring knowledge from persons like you. 

I do not want to sit back without justice. There have been instances where the High Courts have refunded money, penalised banks, reopened cases, allowed OTS revision, application accepted from parties again and again for revision of their proposals.......and many more, but I agree that these are negligible cases. I would also like to know the hon.judge who has joined your forum. I would like to meet and discuss my proposal with him. I have written to the Bank CMD and other officials now that I have cleared all the outstanding of the bank and is also willing to pay the revenue loss incurred by the Bank, to revive my factories by restoring the limits and am awaiting for their response

Dear Sukhbir,

Hope that your business and factories are revived soon.

The person you referred had commented in the same thread.