Frequently Asked Questions on Debts Recovery Tribunals

Sir I have a doubt--------  whether the DRT can entetain   application  for impleading the thrid parties-  who are claiming rights on the Mortgaged Properties as Purchaser - The  purchase is under  a Sale agreemnet   and obtained a Decree for specific performance  against the Mortgagor .

Bank filed  AO before the DRT  and it is pending and in the Reply of Mortgagor the fact of Sale agreement  and Decree agaisnt the Mortgagor are pleaded  and came to the  knowledge of the  the Bank .

The   said  purchasers can be impleaded on the application of the Bank  and all the claims agaisnt the Mortgaged Proeprty can be   adjudicated in the DRT .

I request  your valuable  opinion on this point .

.

Dear yedul, Thanks for the informative & useful FAQ.

Prakashji, Thank you for contributing your hard work for all of us. Very Informative.

Good information given by Prakashji.

Thanx Mr. Prakash. U have supplied very useful information for all of the members of lawyersclub.

Thanks a lot Prakashji.

A very useful information. Thanks Mr. Prakash.

Dear Mr. prakash, thanks a lot for extremely useful information provided. I have a few doubts and request your views on the same pls

1) When a borrower has paid more than 80% of the amount demanded under notice u/s 13(2) and 13(4) of SARFAESI ACt, that is, after commencement of proceedings but before actual physical possession while the proceedings were pending with Tehsildar for actual possession, will he be granted benefit of 31(j) which says that SARFAESI will not be applicable if outstanding is less than 80%?

2)Once loan account is reported to be REGULAR due to full payment of all overdues, can borrower demand SARFAESI proceedings to be set aside?

3) In a case where title deeds of a property are not actually given to a bank, and the bank has never demanded the same on record. In case of default after a few years of paying EMIs, will the bank be able to treat this loan (HOME LOAN) as secured? Will the bank able to initiate proceedings under SARFAESI since the bank does not have property documents and hence, no mortgage by depositing title deeds was completed? If no, will the bank able to initiate proceedings with DRT as unsecured loan?

4) If bank is recalling loan due to overdue EMIs, can it also demand PREPAYMENT CHARGES? The agreement provides for Prepayment Charges only when borrower is offering prepayment.

5) RBI's directives on floating interest rates stipulate that banks should not offer floating rate loan products with reference to their internal benchmark lending rate, but should refer the same to an external or market rate. Also, that loan agreements should have a clause stating that interest will be increased or reduced in accordance with increase or reduction in interest rates by RBI from time to time. In practice, banks do not comply with such directives and refer to their own PLRs which they do not revise downwards in accordance with RBI rate revisions, with the result the spread over RBI's repo rate which was once 5% at the time of taking loan, has gone to 9.25%!. What is the remedy with a borrower in such case?

Thank you in advance.

Dear Mr. prakash, thanks a lot for extremely useful information provided. I have a few doubts and request your views on the same pls

1) When a borrower has paid more than 80% of the amount demanded under notice u/s 13(2) and 13(4) of SARFAESI ACt, that is, after commencement of proceedings but before actual physical possession while the proceedings were pending with Tehsildar for actual possession, will he be granted benefit of 31(j) which says that SARFAESI will not be applicable if outstanding is less than 80%?

2)Once loan account is reported to be REGULAR due to full payment of all overdues, can borrower demand SARFAESI proceedings to be set aside?

3) In a case where title deeds of a property are not actually given to a bank, and the bank has never demanded the same on record. In case of default after a few years of paying EMIs, will the bank be able to treat this loan (HOME LOAN) as secured? Will the bank able to initiate proceedings under SARFAESI since the bank does not have property documents and hence, no mortgage by depositing title deeds was completed? If no, will the bank able to initiate proceedings with DRT as unsecured loan?

4) If bank is recalling loan due to overdue EMIs, can it also demand PREPAYMENT CHARGES? The agreement provides for Prepayment Charges only when borrower is offering prepayment.

5) RBI's directives on floating interest rates stipulate that banks should not offer floating rate loan products with reference to their internal benchmark lending rate, but should refer the same to an external or market rate. Also, that loan agreements should have a clause stating that interest will be increased or reduced in accordance with increase or reduction in interest rates by RBI from time to time. In practice, banks do not comply with such directives and refer to their own PLRs which they do not revise downwards in accordance with RBI rate revisions, with the result the spread over RBI's repo rate which was once 5% at the time of taking loan, has gone to 9.25%!. What is the remedy with a borrower in such case?

Thank you in advance.

Thanks Prakashji