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BankDRT:: Debts Recovery Tribunal ( DRT, DRT Auctions, DRT Act, DRT Rules) SRFAESI Act

Now DRTs to work on all 6 days of week, with 2nd Saturdays as a additional Holiday.

The JPC clears Insolvency and Bankruptcy Code after adding stringent clauses to factor in overseas assets of ailing firms during winding up process.

RDDBFI Act and SARFAESI Act to be amended to speed up debt recovery process.

High levels NPAs likely to remain through 2017 as well.

Apex Court holds SARFAESI Act is not superior to State Rent Control Acts

SARFAESI Act cannot be used to bulldoze a tenant out of a mortgaged property without the due process of law

Tenancy created even after mortgage is entitled to same protection as a tenancy before the mortgage

Apex Court holds Tenancy under un-registered agreement is equally valid:

MM must examine the tenancy claims before allowing Banks/ police to evict tenants.

If tenancy is proved, then Banks/ Auction purchaser will have to legally evict the tenants

Muscle power cannot be used to evict tenants under guise of SARFAESI Act

Tenants must approach the MM with all the proofs of tenancy to protect themselves from eviction under SARFAESI Act

Tenants have good protection of law in case of eviction by Banks under SARFAESI Act

There are 115 willful defaulters in the country who owe Rs. 64,300 crore PSU Banks : MOSF

Banks and empowered to take all necessary actions against the willful defaulters. MOSF

Licenses of 56 NBFCs cancelled by the RBI on various grounds.

The gross NPAs of public sector banks were 6 per cent at the end of June, up from 5.2 per cent in March.

The NPA figures provided by the banks deferred with the numbers discovered by the RBI during their annual inspections.

Kangaroo Committees with Kangaroo procedures brands a person as willful defaulter?

Funding to MSME units likely to improve and become easier after the launch of the Mudra bank.

Three entities have been granted in-principle approval for setting up the Trade Receivables Discounting System (TReDS)

TReDS will allow SMEs to post their receivables on the system and get them financed.

TReDS will not only give MSME Units greater access to finance but also impose greater discipline on corporates to pay their dues on time.

TReDS will be integrated with Bharat Bill Payment Central Unit (BBPCU). MSME Units should plan their financials immediatley and if they cannot grow with these new measures they better leave the business.

The Debt Recovery Tribunal (DRT) and the National Company Law Tribunal (NCLT) shall be adjudicating authorities over individuals and unlimited liability partnership firms and companies and limited liability entities respectively.

Electrotherm takes OTS route to come out of its banking woes

Electrotherm has opted for the One Time Settlement (OTS) route to come out of its pernicious litigations with ICICI Bank.  It paid out a sum of Rs.12.50 Crores against an outstanding amount of Rs.55.97 Crores against full and final settlement of all issues.

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Lessons from Pokarna Engineered Stone exiting Corporate Debts Restructuring Scheme

Pokarna Engineered Stone (PES) is reported to have exited the Corporate Debts Restructuring (CDR) Scheme ahead of the schedule as it has been able to generate enough revenues to throw of the yolk set up by the banks.  And herein lies a  lesson for other units who have to deal with banks and cash crunch situations.

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NCDRC puts brakes on reckless charging of interest by banks under the floating rate of interest

National Consumer Disputes Redressal Commission New Delhi has put a brake on private banks charging unscrupulous rates of interest on their housing loan customers under the guise of Floating Rate of Interest (FRI) scheme.  The  commission has held that Banks cannot charge mindless rate of interest under their floating rate of interest scheme (FRR).

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Chief Judicial Magistrate not competent to seize properties under SARFAESI Act.

CJM is not an authority competent to pass orders under section 14 of the SRFAESI Act. The lenders must approach the Chief Metropolitan Magistrate,  and where Chief Metropolitan Magistrate is not there, then the District Magistrate.

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Non compliance with S. 13(2) notice results in auction of securities.

SRFAESI notices issued by banks looks like the fine print disclaimer clauses of an IPO advertisement. Most people do not have the energy to read it. But it contains vital clues on what the bank intents to do next. The borrower has a number of options to exercise, except the one to sit over it and not do any thing.

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DRAT have powers to condone delays in filing appeal : SC

The Supreme Court has ruled that Debts Recovery Appellate Tribunal (DRAT) have powers to condone delay in filing appeals under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests (SARFAESI) Act 2002 thus settling a very irritating question of law.

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Vishal N. Kalsaria Versus Bank of India & Ors.

SARFAESI Act is not superior to State Rent Control Acts

SARFAESI Act cannot be used to bulldoze a tenant out of a mortgaged property without the due process of law under the  local  rent control Laws.

Tenancy created even after mortgage is entitled to same protection as a tenancy before the mortgage.; Tenancy under un-registered agreement is equally valid;

Read Full Judgment...

Harshad Govardhan Sondagar vs. International Assets Reconstruction Co. Ltd. & Ors.

The CMM/ DMM cannot dispossess a tenant/ lessee of a mortgaged property.  
The remedy of appeal to DRT by ‘any aggrieved person’  is not a good remedy for a tenant or lessee, as the DRT has no powers to put a dispossessed  tenant/ lessee back into the property.  

The DRT  has powers to put only the owner of the asset back into the property, but no one else.
The CMM/ DM  should hear and decide whether the person staying in the mortgaged property is a tenant/ lessee and has a right to stay in the property before accepting an application of a bank to eject any person staying in the mortgaged property.

Maharashtra Rent Control Act is not saved by the SARFAESI Act hence a tenant/ lessee of a mortgaged property cannot go to the Court of Rent Controller over the order or CMM/DM u/s 14 of the SARFAESI Act.

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S.C. Chaturvedi & Another vs. Industrial Finance Corporation of India & Others
Where an application raises a mixed question of law and facts it cannot be dismissed merely as not being the right stage. The parties should be permitted to lead evidences and file their replies.
Where a question of limitation is raised the parties should be given a opportunity to lead evidence and submit replies thereto.
When a case is remanded back to the DRT on a limited issue, the parties cannot raise new or additional or any other ground other than for what it has been remanded back.

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All NPA accounts to be declared Willful defaulters?

Banks race against each other to declare Vijally Mallya as willful defaulter.

United Bank of India declares Vijay Mallya as Willful defaulter.

Other Banks may follow suit and declare Vijay Mallya as Willful defaulter.

Big debate whether the procedure for declaring a person as a Willful defaulter is judicious, transparent and non arbitrary? Send us your views

More Articles from our Archive

Has the Government unjustly sided the banks with SRFAESIA ?

Guarantors can peruse Appellate Remedies on their own

Borrowers can pursue independent actions against the Lenders: SC

Dues of a Government company are not dues of the Government.

Borrower is deemed to have signed the documents after reading and understanding the document.

1. Is the Recovery Officer barred from attaching and auctioning certain items?
2. I have just one house to stay in my old age. Is this house exempted from auction on humanitarian grounds?
3. Is the house occupied by a tenant exempted from auction?
4. The mortgaged house is jointly owned by brothers. Since the brother who mortgaged it to the bank didnt have the right to do so, can the house be exempted from auction?
5. Can the Recovery Officer seize even the personal belongings of the judgment debtor?

Read Full FAQ...