Your home, shop or place of business can be lost with a bank possession notice. Borrowers can fight back if secured creditors overstep their legal rights. Through a DRT Stay & Interim Relief: How to Stop Possession application you can seek temporary relief. During the period when a dispute is being investigated. It works if you file in time with credible evidence and the orders of the tribunal.
What Should You Do Immediately?
Verify who the creditor is. Take a picture of posted notices. Date the planned course of action. Never give originals without receiving a receipt. Forward correspondence with attorney, such as that from assigned recovery agents.
What Happens Before Bank Possession?
As per Section 13(2) of the SARFAESI Act, secured creditors eligible for enforcement action, will usually serve a demand notice on the borrowers requiring him to repay the dues mentioned therein within a period of 60 days. A borrower has right to make a written representation to the lender, who shall consider the same in the manner prescribed by law.
Only when repayment has not been received, action can be initiated u/s 13(4) and possession of secured assets taken. Section 14 of SARFAESI Act also contains provisions allowing creditors to approach a magistrate for assistance in taking possession of secured assets. Each of the above stages needs legal scrutiny.
When Can You Approach the DRT?
Ordinarily, Section 17 provides that an aggrieved person may challenge the measure adopted under Section 13(4) before the appropriate Debt Recovery Tribunal within 45 days of such measure. Issuance of a demand notice itself would not ordinarily give rise to a remedy under Section 17.
Your DRT lawyer can review your documents, work out the applicable deadline and file a securitisation application on your behalf. Time is of the essence here. If a possession date has been announced or is imminent, or if the property is about to be auctioned, you may have very little time to act.
How Does an Interim Stay Application Work?
Your lawyer can ask for an emergency hearing and temporary relief from possession/auction. The application will list the specific bank action being contested, what law it allegedly violates, the harm that will occur without relief and documents supporting your position.
DRT will review the circumstances and may issue suitable relief. This relief may be conditioned. Merely filing the application will not stay the bank. You need something more than a case number to stay possession. Only an order granting the relief you request will afford you the protection stated in the order.
Which Grounds May Support Your Case?
Potential grounds include improper service of notice, errors in the loan amount, failure to follow statutory requirements and problems with auction requirements. These are very fact dependent. Financial distress does not necessarily make an action for possession illegal.
Retain your loan documents, mortgage deed, demand letter, notice of possession, account statements, payment receipts and bank statements. If there is an auction keep a copy of the posting and sale terms.
Can You Recover Possession Already Taken?
Yes.. where the DRT finds that the enforcement measures taken were not in accordance with the SARFAESI Act or the rules made thereunder, Section 17 provides for orders declaring such measures void and directs restoration of possession of property if found to be warranted on the facts. Possession cannot be restored automatically, the Tribunal has to decide on evidence/additional facts before ordering restoration.
Should You Consider Loan Settlement?
Another option may be to execute a written one-time settlement. Request that the lender provide specific language dealing with payment, interest, release of property and pulling back any steps for recovery. Negotiating by itself will not stop them from taking possession. Time any agreement with your upcoming hearings.
Frequently Asked Questions
1 Can DRT Order Stop Physical Possession of My Property?
An interim order of protection from possession may be available when warranted. Relief is dependent upon the facts, law, and determination of the tribunal.
2 Can I Challenge Symbolic / Constructive Possession?
Yes. A qualifying possession or Distress for Rent-like measure under Section 13(4) may be challenged by notice of motion under Section 17, within the relevant limitation period.
3 What is the Limitation Period to File Such a Motion?
While timelines may vary, generally 45 days from the date of the challenged Section 13(4) action. Filing is not automatically required from every notice received from the bank.
4 If the bank sends me a demand notice, can I file something before they send me a Possession Notice?
Yes. If you receive a demand notice you may respond with a proposal. However, a Section 17 motion will generally require a qualifying enforcement action.
5 If I file such a Motion, will the property auction be automatically stayed?
No. You will need to obtain a specific order to protect your rights. Courts can consider motions on an urgent basis where an auction date is scheduled.
6 The bank is demanding I pay amounts not shown in my loan statement. What can I do?
Gather all payment documentation and seek legal review. A discrepancy, if properly supported may provide a basis to challenge.
7 Is a Guarantor Eligible to Seek Relief?
If aggrieved, a guarantor may be entitled to pursue available remedies, depending on the guarantee, security documents and enforcement action taken.
8 The Bank has already taken possession of my property. What can I do?
Counsel can review if a Section 17 challenge is timely and if restoration is legally possible.
9 Can I continue to negotiate with the bank during these proceedings?
Yes. You should put all settlement offers in writing and confirm whether any pause is with prejudice.
10 Can I file an appeal if DRT Order is passed against me?
An appeal from a qualifying SARFAESI matter will lie to the DRAT.
Conclusion:
Ignore notice of possession neither accept any oral promise. Note all deadlines, keep all documents and get help to file in the proper forum and seek proper relief. Options can be maintained with timely action, nothing is guaranteed. DRAT attorney offers case specific legal help with SARFAESI matters, DRT Stay & Interim Relief: How to Stop Possession applications, Bank auctions and DRAT appeals. We may also consult with Advocate BK Singh to review the facts, documents and your options.
Website - https://www.drtlawyer.com/
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