DRT Lawyer
Loan will become a big issue when bank start there recovery process. You may get notice of demand, notice of possession, notice of auction or your loan may come in front of Debt Recovery Tribunal. In such situations you should know what you are getting into. A DRT lawyer will help you to analyze the proceedings. Find out if anything can be challenged. What timelines are there and represent you in the concerned forum.
What Does a DRT Lawyer Do in a Bank Recovery Matter?
A DRT lawyer will be well versed with all sorts of issues between Bank/ Financial Institution, Secured Loans, Recovery process and Enforcement of security. He goes through the Loan Agreement, Sanction papers, statements, security papers, Notices, Communication and recovery process carried out so far.
Each Default may give rise to different legal position. The right or remedy which you have can be based on the type of loan, security created, quantum of dues, Notice's served and recovery process undertaken. Hence going through all these documents is very crucial before you respond to any proceedings.
Why Are SARFAESI Notices Important for Borrowers?
Under the provisions of the SARFAESI act the secured creditor can take steps to enforce the qualifying security interest without having to get a decree from the Civil court provided conditions as per the act are met.
When a demand notice is issued under section 13(2) of the act the borrower has to repay the amount mentioned by the secured creditor within a period of 60 days. They can also file a representation which will be considered under section 13(3A) of the act.
Once qualifying action is taken under section 13(4) of the act a person who feels aggrieved can approach the Debt Recovery tribunal and avail himself of the relief given under section 17. The time at which these actions are performed plays a very crucial role. Since these are acts they have a limitation period attached to them.
Can a DRT Lawyer Help When Property Faces Auction?
Recovery from property auction is one of the delicate issues to deal with since it could be house or commercial/industrial properties. The query could be regarding possession, value of property, reserve price, publication, auction notice, dues or following due process.
If you hire a DRT lawyer who deals in property auctions they will look into your recovery record and tell if there is any point of law which needs to be brought in front of Tribunal. Borrower should not assume that once a case is filed no auction can happen. It all depends on the facts, prayers, law and the order passed by appropriate forum.
What Is a Securitisation Application Before DRT?
As per section 17 of SARFAESI act you can file an application before the Jurisdictional DRT if any measure has been taken by them u/s 13(4) of the act. Such an application is filed before DRT by way of Securitisation Application or SA for short.
While filing such application one should take care of what measures have been challenged, documents relied upon, on what ground the challenge is being made, dates and reliefs prayed for. As there are certain legal consequences which can arise out of delay. Hence the borrower should keep in mind the date when the measure was taken from which challenge is being made (possession or auction).
Can DRT Proceedings Involve Bank Loan Recovery Cases?
Yes they will be dealing with recovery applications by Banks or any authorized Financial institution as per the recovery law.
Defendant can take objection on the amount due, calculation of interest, security, guarantees, documents, payments made and so on which they feel is wrong against the loan account. Our Bank recovery DRT Lawyers can analyse the objection filed and write a defence for you based on your case and documents.
What Documents Should a Borrower Keep Ready?
Documents play a crucial role in how successfully the facts of a recovery dispute can be established. Borrowers should keep loan agreements, sanction letters, repayment evidence, account statements, email conversations, settlement discussions, demand notices, notices of possession, auction notices, valuation- related documents received etc. All previous legal notices should also be kept. Guarantors should keep guarantee documents, and all correspondence relating to the claimed liability. If records are lost, it can be difficult to piece together the timeline of events in the dispute.
Can Loan Settlement and DRT Proceedings Exist Together?
Sometimes borrowers consider an One-Time Settlement/negotiated settlement during the pendency of recovery proceedings. Please remember that settlement talks and litigation are two different things.
Submitting a settlement offer will not automatically stay SARFAESI proceedings/possession proceedings/auction sale/already filed DRT case. Borrowers must be careful to understand the legal impact of each communication/order rather than relying on the fact that talks are underway.
Why Does Timing Matter in DRT and SARFAESI Cases?
Dates are very important in recovery disputes as there are statutory timelines involved. Delaying till the last minute of an auction leaves you with very less time to review documents and draft pleadings. A DRT lawyer will be able to see from the dates when notices were served, when possession was sought, when else important events took place to know what provisions apply and what limitation periods may apply.
What Should Borrowers Expect From DRT Legal Representation?
Legal representation should start with the facts, not promises. Lawyers should review documents, explain the recovery process, outline disputed issues and explain legal options realistically.
Promising a stay, settlement or specific judgment is irresponsible. The facts, law, procedure, arguments and discretion of both sides will determine the outcome.
Conclusion
Bank Recovery Proceedings may impact the property involved, running business, guarantors, and financial planning. Knowledge of the notices, documents, limitation periods and Tribunal proceedings at an early stage can help you choose an informed decision. DRAT lawyer can advise you on SARFAESI notices, DRT proceedings, possession, bank recovery disputes or auction of property and provide legal services in accordance with the facts and applicable laws. The matter may also be referred to Advocate BK Singh who would evaluate the documents, stage of recovery and issues involved.
Frequently Asked Questions
1. Who is a DRT lawyer?
Advocates practicing DRT specialize in Debt Recovery Tribunals (“DRT”), bank recovery actions, secured debts, SARFAESI (“Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act”) and connected legal matters.
2. Can a borrower file cases in DRT against SARFAESI action?
Subject to conditions and Limitation, any person aggrieved by any measure taken by the secured creditor may file an appeal before the DRT under Section 17 against such qualifying measures as were taken u/s 13(4).
3. If we file a case in DRT, will it automatically stop auction?
Merely filing the proceedings will not guarantee a stay of any action. Interim relief is subject to facts, legalities, and orders granted by the Tribunal.
4. What is SARFAESI Section 13(2) notice?
It is a legal notice sent by a secured creditor to a borrower under the SARFAESI Act which allows 60 days time for the borrower to clear his liability.
5. Can we file objections against SARFAESI notice?
A borrower or debtor can file an objection/representation to a SARFAESI Section 13(2) demand notice served. Legal validity would be subject to facts and provable interpretation of law.
6. What is Securitisation Application?
Securitisation Applications are filed most often to dispute certain actions performed by a secured creditor under Section 13(4) of the SARFAESI Act before the appropriate DRT.
7. Can recovery be initiated against Guarantor in DRT?
Yes, Guarantors are often added to the recovery lawsuit in accordance with the guarantee and the transaction. Review of the loan and guarantee deed is recommended.
8. Does an OTS proposal stop recovery by bank?
OTS proposal when submitted or negotiated does not necessarily stop the recovery process. Recovery measures will continue unless there is an effective legal stay or an order from the Court / Tribunal.
9. What are the important documents for DRT disputes?
Loan documents, account statements, sanction letter, record of repayments, bank notices, possession notices, auction notices, guarantee deed, OTP etc. and correspondence on any Loan Settlement.
10. When should a borrower meet a DRT lawyer?
It’s best to seek help at the onset of major recovery notices or communications received. You should get your documents reviewed at the earliest because SARFAESI and DRT remedies are time bound.
Read More - How Can Borrowers Defend Against Bank Recovery Proceedings Before the DRT?
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