Legal Question in Banking Law in India

sarfaesi

DRT had decreed an OA filed by

the Bank. DRT had awarded

lesser rate of interest as against

the contractual rate. Thereafter

Bank had issued--name removed--

sarfaesi notice

stating that an amount of 90 Lakh

is due as per the original loan

documents executed. However as

per the decree the amount due will

be only around 75 Lakhs. The

borrower had therefore send--name

removed--

reply to the demand notice stating

that only the amount as per the

decree ie 75 Lakhs only can be

claimed. To the said reply the Bank

had replied stating that the

borrower need pay only the decree

amount. Now sixty days is over from

the date of receipt of the bank's

reply. Can the Bank now proceed

with taking possesion or will the

notice originally send become

invalid because the bank had

instead of claiming the amount as

per the decree demanded an

amount of Rs90 Lakhs calculated

as per the original interest rate. In

this respect it is added that in the

original demand notice, the Bank

had added--name removed--

sentence to the effect

that the liability is subject to the

orders of DRT. Kindly advise.


Asked on 7/15/09, 3:30 pm

2 Answers from Attorneys
Pranav Desai PD Legal & Associates

Re: sarfaesi

yes, the borrower need to pay decreed amount.

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Answered on 7/18/09, 3:22 am
J. Radhakrishnan independent Practice

Re: sarfaesi

The borrower need pay only the amount as decreed by the DRT. No need for the Bank to issue fresh notice. The earlier notice does not become invalid because of mention of higher amount as the Bank in its reply has stated that only the amount as decreed by DRT need alone be paid. They can now take possession and issue auction notice for amount as decreed by DRT

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Answered on 7/15/09, 8:13 pm


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