Receiving a notice from bank initiating proceedings under DRT Stay & Interim Relief: How to Stop Possession SARFAESI ACT can make fear of losing your house/shop/factory/secured property real. All depends on what notices have been served, stage of recovery, documents available etc., whether the action taken by bank can be challenged at Debts Recovery Tribunal.
What Is DRT Interim Relief in a Possession Matter?
Interim relief means the temporary protection that an individual seeks before the final application for securitisation is heard by the DRT. An aggrieved person can apply for relief against further coercive action, possession or sale, if the case so warrants. Facts are considered based on urgency, merit and balance of convenience.
Can DRT Stop Physical Possession Under SARFAESI?
Measures adopted under Section 13(4) of SARFAESI Act can be looked into by a DRT while dealing with an application filed under Section 17 by an aggrieved person. Interim protection can be sought against taking over physical possession or continuation of enforcement etc., subject to facts and circumstances. Filing of a case does not operate as a stay automatically.
Which Issues May Support Interim Protection?
Grounds for challenging possession include defective notices served, incorrect amounts claimed as outstanding, denial of an opportunity to be heard against objections raised, questions over mortgage rights, procedural errors or action considered to be prejudicial against the SARFAESI Act. Financial distress on its own may be insufficient as relief from DRT is primarily decided on legal and factual bases.
Why Is Timing Important Before Possession?
Delay can limit the practical choices available. When symbolic possession is followed by steps towards physical possession, a S14 order or an auction programme then time tends to become of the essence. Parties served with possession action should retain the latest notice of seeking possession, possession notice/demand notice, statement of account, mortgage documents, correspondence and any orders already made. It can be crucial to review documents at an early stage where possession action is imminent.
Does Filing a DRT Case Automatically Stop the Bank?
No. The mere act of filing an application for securitisation does not operate as a stay. In the absence of an interim order by the Tribunal, the secured creditor is free to proceed with legal enforcement processes. Hence, the importance of the application for interim relief when the possession/auction action is imminent.
Can Conditions Be Imposed While Granting Stay?
Yes. Interim protection can be conditioned upon terms subject to facts of each case. We have also seen Supreme Court record cases where matters involving DRT proceedings granted interim protection from sale conditioned upon payment. Not complying with said condition.
What Documents Matter in a DRT Possession Dispute?
Typical documents of importance are Section 13(2) demand notice, borrower's objections, lender's reply, Section 13(4) possession notice, Section 14 documents, where available, the loan and security documents, evidence of payment, statements of account, sale notice, any previous DRT or court orders.
Can Tenants or Third Parties Seek DRT Relief?
Tenants, guarantors, purchasers, or other persons who claim an interest in the secured property may object in proper circumstances. Their rights are dependent on facts of valid documents, dates, recording requirements and type of interest.
Why Professional Review Matters
Request for stay of possession should be consistent with the stage of SARFAESI process that has been reached. Blanket objections will not work. This may be discussed with Advocate BK Singh for examination of notices,possession risk, documents and legal issues pertaining to proceeding before DRT.
Conclusion
DRT Stay & Interim Relief: How to Stop Possession can still be critical when possession under SARFAESI is about to take place. However, whether such protection can be obtained depends on the facts of the case and the merit of the challenge being made to the enforcement action. It is important for borrowers to act quickly, preserve all notices and payment documents, know where the enforcement action is in the process and not rely on the mere filing of a DRT complaint to prevent possession from taking place.
FAQs
1.How can DRT be stayed from a SARFAESI possession notice?
Interim relief can be granted in a fit case based on facts, legal merits, urgency & prayer and satisfaction of the Tribunal.
2.Is a stay from DRT automatic on filing?
No. An application for an Interim order is required to be made separately to restrain from enforcing possession.
3.Can you challenge possession after 13(4) is issued?
Any person who is aggrieved by any action taken by the banking institution or its agents in exercise of the powers under section 13(4), may approach the Debts Recovery Tribunal established under this Act by way of application.
4.Can DRT order prevent auction?
Interim relief can be claimed against auction/sale where lawful grounds are brought before the Tribunal.
5.What papers are needed to be checked?
Notice, securities held by the bank, payment evidences, bank statement, correspondence and orders passed till date needs to be checked together.
6.Can interim relief be claimed by Guarantor?
Wherever a Guarantor is affected by the enforcing action his remedies would depend upon the security provided, notices received and facts of the case.
7.Will financial difficulty help in getting stay?
Financial difficulty of the borrower would not necessarily help you in establishing a legal ground for claiming Interim relief.
8.Can tenant challenge bank’s possession notice?
An Occupancy Tenant having lawful beneficial interest may claim his rights against the action of the bank in a fit case.
9.What happens if you don’t comply with the stay conditions?
There is a risk of vacation of the interim protection granted to you.
10. Who can help with DRT possession notices?
You may consult Advocate BK Singh. DRAT lawyer offering professional consultancy service to help with DRT and DRAT related matters only.
Website - https://www.drtlawyer.com/
Read More - Choosing a DRAT Lawyer for Debt Recovery Appeals?