Legal Question in Banking Law in India
Bank had initiated action under SARFAESI Act. However before taking possesion of the property, the mortgagor filed a application before DRT for stay. As DRT did not pass any orders in the said stay application, the guarantor approched High court and Highcourt in directed DRT to dispose of the application within 15 days. However no stay is granted as per the order. DRT has not yet passed any orders in the pettiion even after expiry of about 3 months. Is the Bank in order in taking further action under the SARFAESI Act, in view of the direction of High court or can the Bank proceed further as there is no stay in the matter. Will the Bank be bound to wait till orders are passed by DRT.
3 Answers from Attorneys
The bank can proceed as there is no stay and take possession and thereafter sell properties.
The application to DRT before the Bank takes possession (symbolically) under Sec.13(4) of the SARFAESI Act is bound to fail. If the application is after the above step by the bank, you can seek stay of further proceedings under SARFAESI Act of the Bank , in DRT. You should have sound grounds to assail the action of the Bank and should be in a position to point out that the provisions of the Act have not been complied with by the Bank. If you don't have any such material, better negotiate with the Bank for one time settlement. Otherwise, the mortgagor is bound to fail. In the absence of stay the Bank can proceed further. However many banks wait and watch the position before proceeding further until the application before the DRT is dismissed.
I agree with Shri J. Radhakrishnan. Please contact on 09426334688 for further professional guiadance
Pravin Vaidya
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