LCI Learning

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

sheeladharan (PROP)     20 July 2014

Sarfaesi act

sir

      in sarfaesi can the banker directly auction the 3rd party collaterals leaving the partners assets. the firm has got a ware housing loan of 160 lakhs and properties around 2000 lakhs .the firm is a general registered partnership. how can i safe guard my property

regards

sheeladharan



Learning

 12 Replies

SRISHAILA.DHARANI (Advocate&consultant)     21 July 2014

No, they cant sell directly.They have issue to the notice under section 13[2], calling for objections ,wait for 60 days, thereafter they have to issue possession notice under section 13[4] of the act , giving 45 days time to pay the amount and thereafter they have issue the public notice both for section 13[2] and [4], in two daily news papers, which is mandatory and thereafter , they have to call for auction sale the properties, for that also one month time is there, for which they will be receiving  the offers from bidders.

Please contact me further if necessary.

srishaila,advocate,bangalore,9741425514,sdharani120@gmail.com

c.p.s. ramachary (1500)     21 July 2014

Under SARFAESI Act there is no such contemplation that, the secured creditor should proceed first against the borrower's properties and thereafter against the third party's property. The secured creditor can choose any property over which security interest is created. You may pursue the borrower to get out of the clutches of the bank by negotiation through the borrower. 

c.p.s. ramachary (1500)     21 July 2014

Nadeem Qureshi (Advocate/ nadeemqureshi1@gmail.com)     21 July 2014

Dear Querist

there is no specific rules and law in SARFAESI act but it is against the natural justice that without the sale/auction the property of borrower the bank sale the guarantor's property, file an Appeal before DRT and get stay of this type of illegal auction.

Feel Free to Call

c.p.s. ramachary (1500)     21 July 2014

Mr. Nadeem Qureshi,

No appeal lies to DRT.

It is application under Sec.17 of SARFAESI Act.

Appeal lies to DRAT u/Sec.18.

In the margin note in Sec.17 it is wrongly worded as 'Appeal". Supreme Court in Transcore Vs. Union of India & Ors. had clarified on this point that it should be called as 'Application' and not appeal. 

On what grounds the party has to file Sec.17 application must be clearly advised. Filing Sec.17 application without merits and obtaining stay  would result in dismissal of the application. The party may consult an advocate practicing in DRT/DRAT for examining whether the party has tenable contest in the case. If the sale is being conducted without serving statutory notices under Sec.13 of the Act and the Rules framed there under then, the party may file Sec 17 application in DRT. The query of the party is as to whether the bank can proceed against his property leaving properties of the partners of the firm. I am of firm opinion that the bank can enforce any of the secured assets at its option and no one can dictate the bank as to which property is to be enforced first or next.

Biswanath Roy (Advocate)     22 July 2014

Attachment and sale of third party collaterals leaving the partners properties stands irregular and infringement of Rational  and substantative justice qua Natural Justice which can be remedied by filing a Writ of Mandamus under Article 226 of the Constitution of India. In this context I EMPHASIZE  SEC.13(2) OF THE SARFAESI ACT IS ULTRA-VIRUS and I CHALLENGED IT IN ONE OF MY CASE AT CALCUTTA HIGH COURT WHICH IS PENDING.

K.K.Ganguly (Advocate)     22 July 2014

1. Bank can sell the property mortgaged with it against a loan by initiating SARFAESI Proceeding i.e. issuing Notices u/s13(2) & 13(4) of SARFAESI Act,2002,

 

2. Lending Bank has to issue sale notice under copy to you and also publish the same in Nws papers,

 

3. You shall have to file an application u/s17 of the Act before the DRT after receiving notice u/s13(4) or sale notice,

 

4. SARFAESI Act is a draconian Act. Settle te maer with the Bank.

T. Kalaiselvan, Advocate (Advocate)     22 July 2014

I agree with the views of experts above on the subject query, nothing more to  add.

RAJU O.F., (Advocate)     06 August 2014

An expert advocte can find out several illegalities in the proceeding undertaken by the bank under the SARFAESI Act.. He can get remedy from DRT, if it was presented properly.

Biswanath Roy (Advocate)     06 August 2014

I AGREE WITH THE VIEWS OF LEARNED EXPERT Mr. RAJU.  In my views it is like a paper tiger.

K.K.Ganguly (Advocate)     06 August 2014

1. Yes, the Ld. Advocates of borrowers find out faults in the SARFAESI proceedings intitated by the Banks to take  stay orders on taking physical possession or sale by the Banks,

 

2. Banks have also come to know their general mistakes which the borrower pick up before the DRT to get stay order for which they also have become carefull now a days,

 

3. SARFAESI Act,2002 is  called a draconian act and it is difficult for me to accept it as paper tiger due to my experience in regularly practicing before the DRTs & DRAT at  Kolkata as Bank's lawyer and also as lawyers of private Borrowers.

Biswanath Roy (Advocate)     07 August 2014

The word 'DRACONIAN' means harsh or severe but such severity. or harshness can also be banged..

In the case of Soumil Cold Storage Ltd., vs. Small Industries Development Bank of India Ltd.,Case No.

C.S. 46 OF 2007 I obtained Ad-interim injunction order against application of Sec.13(2) of the SARFAESI ACT and in another case I challenged Sec.13 (2) of SARFAESI ACT as ULTRA VIRES (which is out of case list now) Both of the cases are in Calcutta High Court  TO DEAL WITH THE DRACONIAN LAW the Counsel must be sagacious in law. 


Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register  


Recent Topics


View More

Related Threads


Loading