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Honble DRT issued conditional stay order for the SA filed by Borrower
4 months ago
I got sale confirmation mail on behalf of AO of the bank, from MSTC on the same day of e-auction. Immediately I have paid 25 % of bid price. On the next day bank informed that the NPA borrower filed SA in DRT and obtained conditional STAY order and the possession of the property is also with the borrower. Bank informed that until the vacation of stay order, they can not issue sale certificate. The borrower have complied with the conditions and filed for extension of stay. As DRT issued no directions to auction purchase in the order, I have deposited entire bid price as per sale confirmation mail. Even after 45 days after e auction sale, bank not filed counter to the SA. I followed everything as per sale notice. I preferred the property over the money
I deposited. I tried to represent my self as a party in the case but DRT not allowed as I am not a party in the SA and advised wait until I become party in the case. Is there any chance I get the property on my name ? How to implead in case and represent my self as auction purchaser?
A.Dear Client,
Sub-section (3A) of Section 13 of the SARFAESI Act, introduced in 2004, allows borrowers to raise objections to the notice issued under subsection (2). The creditor must consider such representations within fifteen days and communicate reasons for non-acceptance if the objection lacks merit. The Delhi High Court, referencing the Supreme Court judgment in ITC Limited v. Blue Coast Hotels Ltd. & Ors., emphasized the mandatory nature of Section 13(3A), stressing that the lender must assess objections before taking possession under Section 13(4). Any aggrieved party can challenge measures under Section 13(4) at the Debts Recovery Tribunal (DRT) through a securitization application (SA) under Section 17(1) within 45 days. The DRT is obligated to expedite the SA, with the option to extend for four months, and failing to do so allows parties to approach the Debts Recovery Appellate Tribunal (DRAT). Pending the DRT's final order, one must wait, and if the ruling favors the borrower, the bank is obligated to refund the entire auction purchase deposit.
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Sub-section (3A) of Section 13 of the SARFAESI Act, introduced in 2004, allows borrowers to raise objections to the notice issued under subsection (2). The creditor must consider such representations within fifteen days and communicate reasons for non-acceptance if the objection lacks merit. The Delhi High Court, referencing the Supreme Court judgment in ITC Limited v. Blue Coast Hotels Ltd. & Ors., emphasized the mandatory nature of Section 13(3A), stressing that the lender must assess objections before taking possession under Section 13(4). Any aggrieved party can challenge measures under Section 13(4) at the Debts Recovery Tribunal (DRT) through a securitization application (SA) under Section 17(1) within 45 days. The DRT is obligated to expedite the SA, with the option to extend for four months, and failing to do so allows parties to approach the Debts Recovery Appellate Tribunal (DRAT). Pending the DRT's final order, one must wait, and if the ruling favors the borrower, the bank is obligated to refund the entire auction purchase deposit.
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A.Dear Client,
Sub-section (3A) of Section 13 of the SARFAESI Act was introduced by way of an amendment in the year 2004 whereby (3A) the borrower is allowed to make representation or raise an objection concerning the notice issued under subsection (2). A further duty is imposed on the creditor to consider such representation/objection and if the creditor concludes that such representation or objection is meritless, he shall communicate within fifteen days of receipt of such representation or objection the reasons for non-acceptance of the representation or objection to the borrower. The Delhi High Court discussed the facts and ratio of the judgment of the Supreme Court in ITC Limited v. Blue Coast Hotels Ltd. & Ors.: 2018 SCC OnLine SC 237, which was the basis of the entire case of the petitioner. It was held by the Court that undoubtedly, the provisions of Section 13(3A) of the SARFAESI Act are mandatory and the lender must consider the representation/objection made by the borrower in response to the notice issued under Section 13(2) of the SARFAESI Act. The Delhi High Court observed that the intention of the Legislature in introducing sub-section (3A) is to ensure that objection/representation of a borrower against any action for enforcement of security interest is considered before a creditor proceeds to take possession of the secured assets in terms of Section 13(4) of the SARFAESI Act. The Court opined that bearing the aforesaid object in mind, it became at once clear that the creditor/Bank must consider the objection and representation furnished by the borrower before resorting to any action under Section 13(4) of the SARFAESI Act. Any person who is aggrieved by any of the measures taken under Section 13(4) by the secured creditor, can challenge the same before Debts Recovery Tribunal (DRT) by filing a securitization application (SA) under Section 17(1) of the SARFAESI Act within 45 days from the date of taking such measure by the secured creditor. Further, Section 17(5) casts an obligation on the DRT to deal with the SA filed under Section 17(1) as expeditiously as possible and dispose it of within sixty days from the date of such SA. The proviso to Section 17(5) empowers the DRT to extend the said period for a maximum period of four months from the date of making such SA. Pertinently, the DRT is required to record its reasons in writing for extending such a period. Section 17(6) further states that if the DRT fails to dispose of the said SA within four months, then any party to the SA may apply to the Debts Recovery Appellate Tribunal (DRAT) for expeditious disposal of the said SA. Therefore, based on the status of the stay order passed by DRT you have to wait till the final order from DRT and in case the order goes in favour of the Borrower, the bank has to refund back the entire money you deposited to purchase the property through an auction sale.
Sub-section (3A) of Section 13 of the SARFAESI Act was introduced by way of an amendment in the year 2004 whereby (3A) the borrower is allowed to make representation or raise an objection concerning the notice issued under subsection (2). A further duty is imposed on the creditor to consider such representation/objection and if the creditor concludes that such representation or objection is meritless, he shall communicate within fifteen days of receipt of such representation or objection the reasons for non-acceptance of the representation or objection to the borrower. The Delhi High Court discussed the facts and ratio of the judgment of the Supreme Court in ITC Limited v. Blue Coast Hotels Ltd. & Ors.: 2018 SCC OnLine SC 237, which was the basis of the entire case of the petitioner. It was held by the Court that undoubtedly, the provisions of Section 13(3A) of the SARFAESI Act are mandatory and the lender must consider the representation/objection made by the borrower in response to the notice issued under Section 13(2) of the SARFAESI Act. The Delhi High Court observed that the intention of the Legislature in introducing sub-section (3A) is to ensure that objection/representation of a borrower against any action for enforcement of security interest is considered before a creditor proceeds to take possession of the secured assets in terms of Section 13(4) of the SARFAESI Act. The Court opined that bearing the aforesaid object in mind, it became at once clear that the creditor/Bank must consider the objection and representation furnished by the borrower before resorting to any action under Section 13(4) of the SARFAESI Act. Any person who is aggrieved by any of the measures taken under Section 13(4) by the secured creditor, can challenge the same before Debts Recovery Tribunal (DRT) by filing a securitization application (SA) under Section 17(1) of the SARFAESI Act within 45 days from the date of taking such measure by the secured creditor. Further, Section 17(5) casts an obligation on the DRT to deal with the SA filed under Section 17(1) as expeditiously as possible and dispose it of within sixty days from the date of such SA. The proviso to Section 17(5) empowers the DRT to extend the said period for a maximum period of four months from the date of making such SA. Pertinently, the DRT is required to record its reasons in writing for extending such a period. Section 17(6) further states that if the DRT fails to dispose of the said SA within four months, then any party to the SA may apply to the Debts Recovery Appellate Tribunal (DRAT) for expeditious disposal of the said SA. Therefore, based on the status of the stay order passed by DRT you have to wait till the final order from DRT and in case the order goes in favour of the Borrower, the bank has to refund back the entire money you deposited to purchase the property through an auction sale.
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