• How do you defend your property from a Bank Recovery Process?
• What are the courts & tribunal and related provisions in law that secures you from exorbitant penal Interests, penalties and gaining you sufficient time for paying your debts?
• Whom you should contact?
• When you should contact?
• How to deal it?

I try to explain the matter little bit brief.

In Reality, Most of the people think that Bank Recovery actions are absolutely a process against the borrowers and the borrowers were not be heard with their merits and feel that they are absolutely insecure. Therefore, most of the people surrender unconditionally with the Banks and pleading for sufficient time and agreed to pay the Principle with Interest even it is the highest interest rate in the market along with all penalties.

The Branch Manager of the bank is continuously in communicating with you but the legal wing is continuing and sending the SARFAESI Notices in another side. When you ask what is the necessity of legal notices when you in communicating with the bank regularly? The Bank use to respond that the legal department is totally a different authority and convincing you for a One Time Settlement.

When you trust them, they unleash the Recovery proceeding on right time by taking the possession. Bank is completely known when they can take the recovery action against the borrowers but you don't. The borrowers are completely vulnerable and suffering without getting sufficient time for paying the debts and cornered with penal interest rate. They went through enormous mental stress and subject to harassment during the recovery process and finally end up in losing their property and money.

Bank can initiate their Recovery Process not only in Debt Recovery Tribunal, but also in Chief Metropolitan Magistrate and Judicial Magistrate courts. When Bank is deciding to initiate such process, they will be serving you the Notice under Section 13 (2) of SARFAESI Act, that your account has been classified as Non Performing Asset and demanding you to pay the Principle amount along with the interest within the specified time, normally 60-90 days. If you are not paying the money within the specified time, you will be served again with 13 (4) of SARFAESI notice and ultimately bank is advancement in taking the possession of your property.

When you are receiving a notice under 13 (4) SARFAESI notice, you should rush to Debt Recovery Tribunal immediately without any further delay. You should file your petition under Section 17 (1) of SARFAESI Act immediately Interim Petition for Stay the Recovery proceedings. You make sure that your petition with all the case facts, all your merits with suitable grounds, than copying some grounds from another DRT application. You can also consider in keeping an Interim Application for waiver of huge interest by referring the RBI guidelines. Hence you can be heard very carefully by the Tribunal and you may get a better relief.

Otherwise, Bank will file the petition under Section 14 of SARFAESI Act before the Chief Metropolitan Magistrate and District Magistrate Court for taking over the physical possession of the property. The Bank may appoint an Advocate Commissioner through court and advancing the recovery processing for obtaining the physical possession. Because, the provision in Section 13(7) of SARFAESI act allow the Bank to recover the entire costs, charges and all expenses from the Borrower and from the very beginning of NPA to till date.

The SARFAESI Act, knowingly The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act under Section 13, Section 14- Not matter what stages of recovery proceeding, you are still able to protect your property and defend your family. All you required is an Advocate who has better experience in handling the DRT case and damn good knowledge in High Court Writs, whom you can rely for obtaining sufficient time for paying the debt and possible interest waiver.

When you are filing a case in DRT against the Bank your petition, you case number is allotted vide SA number. When Bank is already initiated a case against you in DRT, it will be referred as Original Application number or OA Number.

What so ever, you have to ensure you file your Interim Application for stay the proceeding and DRT usually grant the stay against the recovery proceedings with some conditions and you are bound to comply the conditional order and submit a memo before the DRT that you complied the Order and obtain the stay.

Otherwise, DRT may not aware that you have complied with the conditional order and dismiss your petition. Any small ignorance at your side may end up in advantage to the bank. So, please be careful.

DRT is a Tribunal and they usually not required to follow the civil procedure codes like Honorable courts. DRT usually expeditiously adjudicating the matters and taking comprehensive decision; obviously not heard the borrower in full and passing orders that may favors the bank usually. There were thousands and thousands of WRIT Petitions recorded in High courts that DRT acted against the principle of natural justice and Hon'ble High court has heard the appropriate petitions and has passed orders by setting aside/ quashing the DRT's impugned orders.

All you have remember, DRT is not bound to follow the civil procedure code and can make comprehensive decision expeditiously. They are completely a TRIBUNAL and not COURT and you should aware that any small ignorance of your side will be highly advantage to the bank in recovery proceedings.

As told earlier, Commonly DRAT is the appellate tribunal for DRT and the Second Appeal for the SARFAESI Act cases. The DRAT Chennai is appellate authority for all Southern Region DRTs, including DRT I Chennai, DRT II Chennai, DRT III Chennai , DRT I Bangalore, DRT II Bangalore, DRT I Ernakularm, DRT II Ernakularm , DRT Coimbatore and DRT Madurai .

As I told, you are free to approach the Hon'ble High Court by filing a Writ Petition when you have significant proof that the DRT/ DRAT acted against the principle of natural justice and plead before court for set aside/ quash the implunged orders by the Tribunals. There are thousands of cases laws you can found in the related legal virtual sites.

No matter what stage is the recovery, i-e, symbolic possession, physical possession, auction , sale,… even up to recovery certificate stage, you can defend your property in appropriate Tribunals & Apex Courts and stay the recovery process without believing the oral promise of the bank and obtain sufficient time and get rid of the unethical penal interest.

All you have to do is believe in Law and legal protection in appropriate courts and not believing the oral promises of bank.

The purpose of the article is to assist you in the critical stage and guiding you with appropriate remedies during the bank recovery process.

Written By: V.Ravikumar. M.L., Advocate.
Research Scholar, Presidency University