Your Rights against Bank Debts
By Adv. M V Kini
The Hon’ble Supreme Court has held that not to give any hearing to the borrower till all his charged properties are sold and adjusted the Banks dues, is not in conformity with the laws of a democratic state. Therefore, on the guidelines of the Hon’ble Supreme Court, a provision was made by inserting sub-clause 3 (a) to Sec. 13 of the Securitisation Act. The borrower has been given a right to make a representation and raise any objection after getting a notice under section. 13 within expiry of the notice period of 60 days and the Bank is bound to consider such representation/objection and if the representation is found to be unacceptable or untenable, the bank is bound to communicate within “one week” of such representation and give reasons for non-acceptance of their representation made by the borrower. However, it has been specifically provided that the reasonability of the Banks non-acceptance of the representation cannot be challenged either in DRT under Sec.17 or in Court of a District Judge (in case of Jammu & Kashmir). Therefore, it is clear that though “opportunity of being heard” is given to the borrower, but decision communicated by the Bank is not subject to “Appeal” in DRT or in any Civil Courts. However, the borrower’s (citizens) right guaranteed under the Constitution of India to prefer a Writ Petition under Article 226 & 227 is not taken away, as otherwise that section would have been declared as unconstitutional by the Supreme Court. Therefore, the possibility of the borrower to approach the Hon’ble High Court under a “writ” challenging the rejection of his plea by the Bank by giving reasons as to why the action of the Bank is illegal, such petitions cannot be avoided. However, even the High Courts would not like to interfere in such matters, unless the injustice is totally gross. Therefore, the Banks while rejecting the objections or representations made by the borrower should give proper reasons for rejection so that if and when the borrower approach the High Court under a writ, court may find that bank has acted in a bonafide manner and reasons communicated are reasonable so that the writ may be dismissed in limine. If the rejection of the objections is not properly drafted, it may not be in the interest of the bank, as the Hon’ble High Court under writ jurisdiction may call for the “Bank Say” and this will delay the action under the Securitisation Act.
The 2nd amendment made in the year 2004 to the Securitisation Act consequent to the Hon’ble Supreme Court’s judgement in the case of Mardia Chemicals is that, after the sale proceeds were adjusted, the borrower has been given a power to approach the DRT without requiring to deposit any money within 45 days from the date on which such measures were taken by the Bank, and the borrower need not deposit any percentage of the claim of the Bank while approaching the DRT under Sec. 17 of the Securitisation Act. However, there is a time limit prescribed under Sec. 17 that the borrower can approach the DRT within 45 days from the date on which action against the borrower is taken by the Bank. The Tribunal is bound to dispose of this application within a period of 60 days from the date of such application. Under any circumstances, the delay should not be more than 4 months in deciding the application made by the borrower.
Your Rights against Bank Debts