After how many days from NPA classification can sarfaesi act be invoked??
It is a case of Rs 26000 overdue in machinery Term Loan of an SSI and it is not a willful defaulter. Borrower claims that export payment receipts of Rs. 2.20 Lakhs were not credited by bank to any of his accounts before NPA and that's the reason for default in paying regular EMI. Even after 3 years, bank unable to explain where this credit of Rs. 2.20 Lakhs disappeared.
Bank never gave any letter to borower as to when and why the account is classified as NPA. Nor does Sarfaesi 13(2) notice give details of any overdues. Is this a serious defense for the borrower at DRT.
After Sarfaesi the borrower kept on paying all his overdues and requested the bank to upgrade account to standard. Bank refused and kept adjusting the payments to principal amount and kept the interest outstanding. Was the bank legally correct??
Currently, the entire principal amount is paid-up. The uncharged interest is disputed because the bank keeps on charging very high rate, compounded monthly + penal interest. The borrower is disputing this. The bank still harasses him under sarfaesi act to sell his home property for the dues in interest account. In this case what is defence of the borrower??