Legal Question in Banking Law in India

Re: non-performing-assets

On the basis of law laid down by the Hon'ble Supreme Court of India in Lotus Hotel's case, you may consider filing a suit against the bank for appropriate relief, after of course serving upon them an adequate notice of demand.

Re: non-performing-assets

The Act provides three alternative methods for recovery of NPAs, namely:

* Securitisation: It means issue of security by raising of receipts or funds by SCs/ARCs. A securitisation company or reconstruction company may raise funds from the QIBs by forming schemes for acquiring financial assets. The SC/ARC shall keep and maintain separate and distinct accounts in respect of each such scheme for every financial asset acquired, out of investments made by a QIB and ensure that realisations of such financial asset is held and applied towards redemption of investments and payment of returns assured on such investments under the relevant scheme.

* Asset Reconstruction: The SCs/ARCs for the purpose of asset reconstruction should provide for any one or more of the following measures:

� the proper management of the business of the borrower, by change in, or take over of, the management of the business of the borrower

� the sale or lease of a part or whole of the business of the borrower

� rescheduling of payment of debts payable by the borrower

� enforcement of security interest in accordance with the provisions of this Act

� settlement of dues payable by the borrower

� taking possession of secured assets in accordance with the provisions of this Act.

* Exemption from registration of security receipt: The Act also provides, notwithstanding anything contained in the Registration Act, 1908, for enforcement of security without Court intervention: (a) any security receipt issued by the SC or ARC, as the case may be, under section 7 of the Act, and not creating, declaring, assigning, limiting or extinguishing any right, title or interest to or in immovable property except in so far as it entitles the holder of the security receipt to an undivided interest afforded by a registered instrument; or (b) any transfer of security receipts, shall not require compulsory registration.

Try out these methods if they does not heed then mail back i shall suggest alternative.

Re: non-performing-assets

send letter by registered post acknowledgement due to the chairman of the Bank with copies to local officials, requesting them to reconsider their steps and provide for rehabilitation assistance and also requesting them that if they don't want to take steps on their own,at least refer the matter to the mediation and conciliation Centre attached to the High Court in whose jurisdiction the dispute has arisen. If that does not bear fruit and the Bank proceeds under Sec.13(2) of the SARFAESI Act, give a proper reply to the same putting forward all the facts in support of your case and if still the Bank takes steps under Sec.13(4) like taking possession etc., file an application under Sec.17 of the Act to the DRT and in that apart from contesting the matter on merits, express your willingness to have the matter adjudicated by LOK Adalath. You please consult a local lawyer reputed to have experience in these matters and proceed.