Filing suit in DRT
3 months ago
I had taken loan by mortgaging my house property due to my financial constraints I stopped paying instalments. The financer has obtained decree from DM for taking possession of my house and demanding a huge amount. Can I file a suit in DRT expecting relief in the amount and stay in respect of vacating premises.
A.Dear Client,
Sub-section (3A) of Section 13 of the SARFAESI Act, introduced through a 2004 amendment, allows borrowers to present objections or representations regarding the notice issued under subsection (2). The creditor is obligated to assess such objections and, if deemed meritless, communicate the reasons for non-acceptance within fifteen days. The Delhi High Court emphasized the mandatory nature of Section 13(3A) in light of the Supreme Court's judgment in ITC Limited v. Blue Coast Hotels Ltd. & Ors.: 2018 SCC OnLine SC 237, forming the basis of the petitioner's case. The Court clarified that the intention behind sub-section (3A) is to ensure borrower objections are considered before the creditor proceeds with Section 13(4) actions. If aggrieved by measures under Section 13(4), an individual can challenge them before the Debts Recovery Tribunal (DRT) by filing a securitization application (SA) under Section 17(1) within 45 days. DRT is obligated to expeditiously dispose of the SA within sixty days, extendable up to four months with recorded reasons. Failure to meet this deadline empowers parties to apply to the Debts Recovery Appellate Tribunal (DRAT) for prompt resolution. Seek guidance from an Advocate experienced in DRT matters for further steps.
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Sub-section (3A) of Section 13 of the SARFAESI Act, introduced through a 2004 amendment, allows borrowers to present objections or representations regarding the notice issued under subsection (2). The creditor is obligated to assess such objections and, if deemed meritless, communicate the reasons for non-acceptance within fifteen days. The Delhi High Court emphasized the mandatory nature of Section 13(3A) in light of the Supreme Court's judgment in ITC Limited v. Blue Coast Hotels Ltd. & Ors.: 2018 SCC OnLine SC 237, forming the basis of the petitioner's case. The Court clarified that the intention behind sub-section (3A) is to ensure borrower objections are considered before the creditor proceeds with Section 13(4) actions. If aggrieved by measures under Section 13(4), an individual can challenge them before the Debts Recovery Tribunal (DRT) by filing a securitization application (SA) under Section 17(1) within 45 days. DRT is obligated to expeditiously dispose of the SA within sixty days, extendable up to four months with recorded reasons. Failure to meet this deadline empowers parties to apply to the Debts Recovery Appellate Tribunal (DRAT) for prompt resolution. Seek guidance from an Advocate experienced in DRT matters for further steps.
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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. Reach out to an Advocate experienced in DRT matters for guidance and steps.
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. Reach out to an Advocate experienced in DRT matters for guidance and steps.
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