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(1) Importance of Counter-claim - Misconceptions

Despite our repeated emphasis on the importance of counter-claim, still lot of misconceptions exist among the litigants and the advocates. Our comments are as under:-

(a)    The banks are initiating recovery actions stating their alleged debt due in money value.

(b)    The borrowers do not have adequate in-depth knowledge about banking and banking laws. Accordingly whatever they know, they tell to their lawyers. Thus the lawyers knowledge is limited to what the are told to them by their clients.

(c)    Most of the books and literature available is helpful and inclined towards banks.

(d)    On account of historical reasons and prevalent practice, we continue to base our thinking on lending and borrowing based on security, collateral, guarantee etc.

(e)    Prior to Nationalization of Banks in 1969-70, the complete lending was based on security.

(f)      We were under British Rule, when the concept and practices of ‘Object and Project Oriented Lending’ based on appraisal was started in the developed countries.

(g)    After independence, our govt also desired to resort to the modern lending but all the bankers declined and the govt was forced to nationalize them in 1969-70.

(h)    The new concept of lending was not introduced for which the banks were nationalized. Even till today, the banks continue to resort to multiple securities which are all against the law enshrined in the Nationalization Act of 1970.

(i)      Another erroneous aspect was delayed development of Administrative Law in our country. The British knowingly did not allow the same. Even after independence, it took for the said law to develop. The leading judgment of Kripack in 1970 has still not been put into practice.

(j)      The mandatory RBI Guidelines still are not being followed followed by the banks. Such violations are continuing since 1976 when some of the most important guidelines relating to Sickness and Rehabilitation were issued.

(k)    All the above legally amount to wrong doings by the banks. Some of them are known to the litigants and accordingly are mentioned in the pleadings.

(l)      Simply pleading the violations will not lead to remedies by the courts. What we have been emphasizing that the said violations result into loss and damages and the said loss and damages must be claimed as part of the counter-claim.

(m)  In absence of the said counter-claim, the defence will never be complete. That is why we have been emphasizing that ‘Counter-claim is the only and ultimate defence in bank litigations’

(n)    Proper preparation of the said counter-claim requires complete knowledge about banking, business, industry, law of torts, law of damages, project, balace sheets etc. It does not end with the preparation of pleadings, complete knowledge is required on all dates in the trial court. There are cases which are going on since 1989 and the parties still come to us for guidance and advice.

(o)    Some of our clients got counter-claims prepared by us but their advocates advised not to file it. Subsequently on account of legal troubles, they realized their mistakes and came to conclusion that the counter-claim should have been filed. They approached us and we advised them to file the same. Slowly their legal position improved after filing the counter-claim. Some of the clients did not seek our guidance and advice after filing the counter-claim but when they encountered problems, they came to us. It is needless to mention that we have keen taking interest and actively involving ourselves in these matters since 1989 and that is why we have acquired the relevant knowledge and experience. Hence we advise our clients to keep in touch with us, understand pros and cons and then take any decision during the trial. Without achieving perfect trials, one should never approach to the higher courts otherwise, the entire case may be spoilt or lost.

(2) Law of Defamation and its Application

Past one year we have been working on the law of defamation. There are judgments which are dating back to even 1670. After thorough study of the subject for about one year, recently we have prepared a notice against a central govt deptt which colluded with a leading news paper group of the country to defame our client. Through such notice we have claimed damages of Rs 1400 crores. We shall now be equipping our web site on the matter of defamation.

(3) Progress of e-filing in Supreme Court

On 26.11.11, we filed a PIL writ in the Supreme Court through the process of e-filing. On 19.12.11, the Registry of the Supreme Court allotted the Diary No 38573/2011 and informed the defects. We have cured the defects on 29.12.11 through e-fling. We have now acquired necessary knowhow and experience in the said e-filing. The entire process is quite nice and results in tremendous saving of time and expenditure. Its available round the clock on 24x7 basis. One can work from his home without any person or document physically travelling. The expenditure in court fee was on Rs. 248 in filing and Rs. 110 in curing the defects. This is one of the best example of application of modern technology.

(4) Love and Marriage

Mr. Firoz Poonawalla has sent the followingn interesting piece:-

A student asks a teacher, "What is love?"The teacher said, "in order to answer your question, go to the wheat field and choose the biggest wheat and come back.

But the rule is: you can go through them only once and cannot turn back o pick.

"The student went to the field, go thru first row, he saw one big wheat, but he wonders....may be there is a bigger one later.

Then he saw another bigger one... But may be there is an even bigger one waiting for him.

Later, when he finished more than half of the wheat field, he start to realize that the wheat is not as big as the previous one he saw, 
he know he has missed the biggest one, and he regretted.
So, he ended up went back to the teacher with empty hand. The teacher told him, "...this is love... You keep looking for a better one, but when later you realize, you have already miss the person...."

*"What is marriage then?" the student asked.
The teacher said, "in order to answer your question, go to the corn field and choose the biggest corn and come back. But the rule is: you can go through them only once and cannot turn back to pick.

"The student went to the corn field, this time he is careful not to repeat the previous mistake, when he reach the middle of the field, he has picked one medium corn that he feel satisfy, and come back to the teacher.

The teacher told him, "this time you bring back a corn.... You look for one that is just nice, and you have faith and believe this is the best one you get.... This is marriage."

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DRT Solutions Weekly Mail – 189^th Issue dated 23^rd Dec. ’11

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(1) Govt introduces SARFAESI Amendment Bill in Parliament to effectively deal with Bad Loan Recovery  

The following news item appeared in the internet edition of Economic Times dated 23^rd Dec ’11, 03 22 AM:- 

23 DEC, 2011, 03.22AM IST, AVINASH CELESTINE,ET BUREAU 

Sarfaesi laws may lessen banks' bad loan burden 

NEW DELHI: Banks will be allowed to take property seized from defaulting borrowers onto their own books, or in effect 'buy' the asset they secured, thus reducing their non-performing loans, according to a revised securitisation law awaiting parliamentary sanction. 

In effect, this would allow banks to clean up their books but at the risk of being saddled with an asset worth far less than what the bank paid for it. 

This change, which forms a part of the proposed amendments to the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Sarfaesi), introduced last week, comes at a time when banks face the risk of rising non-performing loans, and of being saddled with property seized from borrowers unable to pay back their loans. 

Worse, a weak property market means that banks may be unable to find buyers for the property they have seized - at least at the price they want. 

The same set of amendments also propose to give the finance ministry wide-ranging powers to notify certain types of banks to whom the provisions of Sarfaesi will not apply, or apply only with certain 'exceptions, modifications and adaptations'. 

It also brings multi-state co-operative banks within the ambit of Sarfaesi and allows asset reconstruction companies (ARCs) to convert debt into equity as part of a restructuring. At present, Sarfaesi allows banks and ARCs to seize assets from loan defaulters, which in many cases include immoveable property. Banks then typically hold an auction to sell the property. 

However, if a bank is unable to find buyers willing to bid above the reserve price, or the minimum bid amount, it currently has little option but to postpone the auction to a future date, and hope for a better bid. 

Under the proposed changes, in case of a failed auction, the bank can depute one of its own officers to bid for the property at the reserve price at any future auction. If there are no other bidders yet again, or the bank's own bid is the highest, the property stands 'sold' to the bank. Under current law, a bank is not allowed to bid for property it puts up for auction. 

"This is allowed under the Civil Procedure Code and the incometax recovery laws," said MR Umarji, chief advisor-legal, Indian Banks' Association. The changes also apply to ARCs.

Our Comments

(a)    The said amendments are very minor in nature and will not materially expedite the recovery against the legally competent litigants. Small or Ignorant borrowers however will face more problems.

(b)    We have been advising our clients to raise thorough Representation and Objections to the notice u/s 13(2) which should include the loss and damages due to the wrong doings of the banks and the copy should be endorsed to the Chairman. We welcome the enhancement of limit of 7 days to 15 days for the reply to the said Representation and Objections. It is needless to mention that as per the verdict of the Supreme Court in the matter of Mardia Chemicals, the reply has to be given with due application of mind. The subsequent pleadings should mention that the banks have been double of the time period to reply properly.

(c)    Any transfer of the property to the bank will only be possible if there is debt due and so decided by the DRT. In the event of ‘No Debt Due’ situation when the said loss and damages are more than the claim of the bank, the proposed transfer or conversion of debt into equity will become legally questionable before DRT.

(d)    We have been emphasizing since 2001 that the best recovery is through earnings of the business for which as per the RBI Guidelines, the banks should make sincere and serious efforts for restructuring, reviving or rehabilitating the business rather than coercive powers which will only increase the litigations. Such litigations will result in greater burden on the judicial system which is already highly burdened. In such context, we have been advising our clients to have perfect pleadings right from the inception and perfect adjudication on every date by competent and experienced trial lawyers.

(2) Man O Man !  

The following interesting piece was sent by Mr. Firoz Poonawalla:-

When he is without money, he eats vegetables at home;
When he has money, he eats vegetables in a fine restaurant.

========================================== 

When he is without money, he rides bicycle to work; 
When he has money, he rides bicycle to exercise.
===============================

When he is without money, he walks to eat food;
When he has money, he walks to burn food.

============================================= 

When he is without money, he wishes to get married;
When he has money, he wishes to get divorced.

==================================================== 

When he is without money, his wife becomes secretary;
When he has money, his secretary becomes wife.

====================================================== 

When he is without money, he acts like a rich man;
When he has money, he acts like a pauper. 

==============================================
He says share market is bad but he keeps on speculating;
He says money is evil but he keeps on craving for it.

=========================================================== 
He says high positions are lonely but he keeps on struggling for it;
He says gambling & drinking is bad but he keeps on indulging in it.

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DRT Solutions Weekly Mail – 188^th Issue dated 16^th Dec. ’11

(1) Ignorance, Lack of Knowledge and or Defective Knowledge – Pathetic Condition of Borrowers and Guarantors facing Recovery Actions

On 15^th instant we have received the following mail which shows the pathetic condition of the borrower. Our comments given below shows that such condition has arisen due to total lack of knowledge on part of the borrower and his advocate:-

“Dear Sir,

I have a case with bank in DRT. They issued notices under 13(2) and 13(4) and and have taken possession of the property. They have made a publication for auction of the asset for 1.96 crores. There were no bidders. after some time they brought down the upset price to 1.36 crores and made a publication. Then we approached drt and the tribunal gave an order asking us to pay the 50% of the upset price in 20 days and the balance in 20 days. we then approached DRAT and were asked to pay 80 lacs in one month. we approached the high court and the court directed us to pay 80 lacs in one month. we did not honour the court order, as we could not pool in the required amount.

There was one bidder for 1.58 crores during the second auction. The bank has sold the property to that bidder and transfered the property to him.

As the value of the property is more than 5 crores as on date and the bankers valuer at the time of granting loan has assessed the same property for 3.72 crores.

Sir, can i get some relief by setting aside the sale proceedings........ kindly help”

Our Comments

(a)    The borrower discussed the matter over phone. It was revealed that there was total lack of knowledge on his part as well as his advocate. We asked him to discuss the matter personally along with the documents.

(b)    As soon as the notice u/s 13(2) is received, we must send a legal notice to the bank asking for the documents. Side by side, we must prepare the ‘Representation and Objections’ to be submitted within 60 days of receipt of the said notice. This should be quite exhustive to deal with the wrong doigs committed by the bank along with the loss and damages suffered. Copy must be sent to the Chairman of the bank.

(c)    A caveat must be filed with the CMM and or DM of the place where the secured assets are situated requesting to provide opportunity for hearing whenever the bank approaches u/s 14 of the Securitisation Act for taking physical possession of the secured assets.

(d)    As soon as the notice u/s 13(4) is received, legal notice should be sent to the bank intimating that application u/s 17 will be filed within 45 days.

(e)    No deposit is required by any authority at any stage if all the provisions of law are fully understood,properly pleaded and contested.  No physical possession of the secured assets can be taken till the application u/s 17 is fully decided which will take few years. On the other hand there will be tremendous pressure on the bank to settle the case.

(2) Caveat to be filed before CMM or DM

Despite our repeated emphasis, the caveats are not being filed before CMM or DM and as a result the bankers are approaching these authorities to get ex-parte orders for taking physical possession of the secured assets. The caveat is meant for opportunity of hearing when the bankers approach the Magistrate for taking physical possession of the secured assets. Opportunity for hearing is one of the principles of natural justice and is also a fundamental right. It is the duty of the Magistrate and the Banker to honour such caveat otherwise it will a contempt of the court.

(3) Finance Ministry pushes Banks for Fast-track Bad Loan Recovery

The following news item appeared in The Economic Times, Mumbai in its issue dated 12 Dec. ’11. Our comments are given below:-

MUMBAI: The finance ministry is pushing capital-strapped public sector banks to hasten recovery of bad loans to improve health, and has promised to fill vacancies at debt recovery tribunals (DRT) across the nation, partly responsible for inordinate delays in ending disputes. 

"Needless to say that Rs 2 lakh crore (of bad loans) are a drag on the capital of banks," a bureaucrat from the finance ministry wrote to bank chairmen recently. 

"All cases should be reviewed and... ensured that all cases pending above two years should be cleared by March 2012." Banks last year wrote off almost 10% of their gross bad loans as various recovery forums failed. 

Recovery through DRTs fell to 28% of the total referred cases in 2011, from 32% ayear earlier, data from the Reserve Bank of India (RBI) shows. 

Under the SARFAESI Act, it was a little better at 38%, compared with 30% in the same period previous year. 

Bankers had complained to the finance ministry that the DRT mechanism was not functioning efficiently, which in turn was making it difficult for them to recover dues. They had said the tribunals lacked presiding officers and recovery officers.

Our Comments

(a)    It is the same Ministry of Finance which is not even caring about the verdict of the Supreme Court to transfer the administration of DRTs from its fold to the Ministry of Law. Hence the present working of DRTs is itself questionable.

(b)    The said Ministry of Finance is making several illegal appointments of the Presiding Officers of the DRTs out of the Bankers. Such cases are being questioned in the court of law.

(c)    If quicker recovery is required, the Ministry should ask the banks to introduce ‘Legal Audit’ before approaching the DRTs so that all the wrong doings of the bank are set right before case if filed in DRTs.

(d)    It must be understood that the best recovery is out of of profits of the running of the business and not by legal actions or by selling the securities.

(4) A must-read – Surprising Benefits of Lemon!   

Mr. Firoz Poonawalla has sent the following useful piece:-.

================================

Institute of Health Sciences, 819 N. L.L.C. Charles Street Baltimore , MD 1201.

This is the latest in medicine, effective for cancer!

Read carefully & you be the judge.

Lemon (Citrus) is a miraculous product to kill cancer cells. It is 10,000 times stronger thanchemotherapy.

Why do we not know about that? Because there are laboratories interested in making a synthetic version that will bring them huge profits. You can now help a friend in need by letting him/her know that lemon juice is beneficial in preventing the disease. Its taste is pleasant and it does not produce the horrific effects of chemotherapy. How many people will die while this closely guarded secret is kept, so as not to jeopardize the beneficial multimillionaires large corporations? As you know, the lemon tree is known for its varieties of lemons and limes. You can eat the fruit in different ways: you can eat the pulp, juice press, prepare drinks, sorbets, pastries, etc... It is credited with many virtues, but the most interesting is the effect it produces on cysts and tumors. This plant is a proven remedy against cancers of all types. Some say it is very useful in all variants of cancer. It is considered also as an anti microbial spectrum against bacterial infections and fungi, effective against internal parasites and worms, it regulates blood pressure which is too high and an antidepressant, combats stress and nervous disorders.

The source of this information is fascinating: it comes from one of the largest drug manufacturers in the world, says that after more than 20 laboratory tests since 1970, the extracts revealed that: It destroys the malignant cells in 12 cancers, including colon, breast, prostate, lung and pancreas ... The compounds of this tree showed 10,000 times better than the product Adriamycin, a drug normally used chemotherapeutic in the world, slowing the growth of cancer cells. And what is even more astonishing: this type of therapy with lemon extract only destroys malignant cancer cells and it does not affect healthy cells.

DRT Solutions Weekly Mail – 187^th Issue dated 9^th Dec. ’11

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(1) OA Dismissal – Existence of SA – DRT Recovery Action – Article - ‘Transcore Vs UOI’- A Judicial Monocracy to Anyhow Uphold Unwarranted Multiple Action(s) of the Banks/FIs.’  

We have been repeatedly emphasizing that as soon as the Securitisation Act is invoked and if there is OA pending or OA is initiated, the same should be dismissed. In such circumstances, we have been advising our clients accordingly. A comprehensive article with title as above has been prepared by Mr. N.K. Sharma, ex-GM (Law) and our Associate. The same has been published on our web site vide link  http://www.drtsolutions.com/OA_Dismissal.htm  

(2) Threat and or Fear of Physical Possession of Secured Assets   

It is observed that the banks are taking undue advantage of ignorance of the borrowers. They threaten physical possession of secured assets by saying that they have unlimited powers to do so after the enactment of the Securitisation Act. The relevant legal aspects are as under:-

(a)                No physical possession by the banks can be taken without any order of court of law i.e. Magistrate, DRT, &  or Civil court.

(b)                If any bank official or police officials approach the borrower for delivering physical possession, they should be asked to produce the court order. In absence of valid and genuine court order, no physical possession should be given.

(c)                If there is no court order, the borrower is not bound to give physical possession.

(d)                The borrower should file an FIR for such visit of the banker and or police without court order.

(e)                If the bank officials demand any deposit or promise for deposit for postponing the physical possession, no such condition should be agreed upon.

(f)                  The facts and circumstances as above should be included in the application u/s 17 before the DRT treating as a wrong doing involving additional loss and damages.

(3) Simple but Effective and Important Exercise – ‘Jin Ji Du Li’   

Mr. Firoz Poonawalla has sent the following interesting piece:-

The essence of the exercise is that your "Eyes Must be Closed" when you are doing this exercise. You must practice the "Jin Ji Du Li" exercise with the eyes closed. This exercise was so simple and amazing that I thought I had to share it here. 

Here is the exercise:

Stand on one leg while your eyes are closed. That is all. Just try it right now, stop reading and stand up, close your eyes and try standing on one foot. 

If you are not able to stand for less than 10 seconds, it means that your body has degenerated to 60 to 70 years old level in other words, you may be only 40 years old, but your body has aged a lot faster. 

I tried this exercise myself when I read the mail. I thought “oh, big deal, I’m sure I can do this easily” I was fooling myself, I’m glad I tried it because I discovered much to my surprise that while I could stand easily on one foot with my eyes open, trying the same thing with my eyes closed was another story! I just could not keep my balance for more than two to three seconds before I started wobbling and hopping around. 

You do not need to lift your leg high, if your internal organs are out of synch, even lifting your leg this bit will make you wobble. 

Now this was quite scary because it told me that my body was almost 60 years old and here was me, barely into my forties! These Chinese are really very advanced in their knowledge of the human body. It was very heartening to know that frequent and regular practice can help you recover your sense of balance. In fact Chinese specialists suggest daily practice of Jin Ji Du Li for 1 minute, this helps prevent dementia. 

You can try slightly closing both eyes while practicing Jin Ji Du Li, instead of completely closing them; in fact this is what the health specialist Zhong Li Ba Ren recommends. 

Daily practice of Jin Ji Du Li, can help in healing many illnesses or diseases like

·         Hypertension,

·         High Blood Sugar or diabetes,

·         Neck and Spinal diseases,

·         it can also prevent you from getting dementia. 

Zhong Li Ba Ren has written a book titled "Self Help is Better than Seeking Doctors' Help", which is a bestselling book that has been the best seller health book in China since it was first published last year. Its success can be measured by the fact that it has been reprinted 12 times within 6 months, with more than 1 million copies sold. The book is a hot seller because is it teaches many simple practical health tips. 

It is said that according to the understanding of Chinese physicians, diseases appear in the body because the coordination between the various internal organs encounter problems and that causes the body to lose its balance. Jin Ji Du Li can readjust this inter-relationship of the organs and how they function with each other. Zhong Li Ba Ren stated that many people can't stand on one foot with their eyes closed for even 5 seconds, but later on as they practice it daily, are able to stand for more than 2 minutes. 

As you gain ability to stand for longer time, the feeling of "head heavy, light feet” disappears. As benefits or practising Jin Ji Du Li, you will experience that the quality of sleep improves, the mind clears up and memory improves significantly. Most importantly if you can practice Jin Ji Du Li with your eyes closed for 1 minute every day, you will not get dementia. (I think it this also means the brain will remain healthy). 

Zhong Li Ba Ren explained that there are 6 important meridians passing through our legs. When you stand on a single leg, the weak meridian will feel sore while getting the necessary exercise, and as this happens, the corresponding organs of these meridians and their path-ways, start getting the necessary tuning. This method can focus or concentrate the awareness, and channel the body's qi to the foot. The beneficial effects of practising Jin Ji Du Li on various illnesses associated with hypertension, diabetes, neck and spinal diseases are quick to be seen and felt. Jin Ji Du Li can also prevent gout. 

Jin Ji Du Li helps to Strengthen body Immunity rapidly

Jin Ji Du Li it is suitable for everyone generally. It is the basic cure for "Cold Feet Disease” and it can also strengthen the body’s immunity. You do not have to wait until you have any illness to start practising Jin Ji Du Li. It is especially beneficial for young people, when they practice it daily while they are healthy, so that their chances of contracting the various illness associated with aging is comparative lower. 

Please note that it is not suitable for people over 70 years old, or those old people whose legs are not strong and cannot stand steadily.

 =====================================================================

DRT Solutions Weekly Mail – 186^th Issue dated 2^nd Dec. ’11

(1) DRT though not bound by CPC can seek aid of principles of CPC by applying them wherever it matters  

The Madras High Court vide 2011 (2) DRTC 695 (Mad) in the matter of Dr. E. Prabhakaran vs Lakshmi Vilas Bank in its judgment dated 11.4.11 stated that “No wonder, the Tribunal is a creation of a statute which is to observe the principles of natural justice by adopting/deciding its own procedure in dealing with the disputes before it. Admittedly the provisions of CPC are not applicable to the Tribunal constituted under the DRT Act. Of course there is no embargo for the Tribunal under the DRT Act to seek the aid of principles of CPC in applying them wherever it matters.”

Our Comments  

The Supreme Court of India vide 1999 AIR(SC) 1975 in the matter of ICICI vs Grapco Industries has ruled that DRTs can exercise the power of civil court and even can travel beyond the scope of CPC for the purpose of CPC.

In fact, the CPC is nothing but codification of principles of natural justice and hence the scope the said principles is much higher than that under the CPC. Hence the DRTs has much wider scope than CPC.

(2) Precondition of minimum 25% Deposit u/s 18 of the Securitisation Act becoming great Handicap for the Litigants as well as Judiciary in several cases  

There are now several judgments where the said precondition of minimum 25% Deposit u/s 18 of the Securitisation Act becoming great Handicap for the Litigants as well as Judiciary. We have been voicing our concern since last two years. The constitutional validity of this provision needs to be questions without further delay otherwise many genuine litigants will be deprived of the justice on account of such oppressive and unconstitutional provision.

(3) Mr. Satya Pal Anand e-files a PIL Writ in the Supreme Court challenging the 9 Judges verdict  

Mr. Satya Pal Anand, the famous PIL expert from Indore prepared an important PIL writ challenging the 9 Judges majority verdict vide AIR 1967 SC 1 in the matter of Naresh Shridhar Mirakar vs State of Maharashtra. We helped Mr. Anand to e-file the said PIL Writ on 26.11.11 vide Sl No 22819. We shall request the Supreme Court to allow arguments by Video Conferencing. We have been helping the veteran legal persons like Mr. Anand to learn and use modern technology like computer, tablet, e-mailing and e-filing in the field of judiciary. The progress of this case will be reported from time to time.  

(4) Eight clues to Happiness  

Mr. Firoz Poonawalla has sent the following beautiful piece:- 

Having lived a reasonably contented life, I was musing over what a person should strive for to achieve happiness. I drew up a list of a few essentials which I put forward for the readers' appraisal

1. First and foremost is GOOD HEALTH. If you do not enjoy good health you can never be happy. Any ailment, however trivial, will deduct from your happiness. 

2. Second, A HEALTHY BANK BALANCE. It need not run into crores (millions) but should be enough to provide for creature comforts and something to spare for recreation, like eating out, going to the pictures, travelling or going on holidays to the hills or by the sea. Shortage of money can be only demoralizing. Living on credit or borrowing is demeaning and lowers one in one's own eyes. 

3. Third, A HOME OF YOUR OWN. Rented premises can never give you the snug feeling of a nest which is yours for keeps that a home provides: if it has a garden space, all the better. Plant your own trees and flowers, see them grow and blossom, cultivate a sense of kinship with them. 

4. Fourth, AN UNDERSTANDING COMPANION, be it your spouse or a friend. If there are too many misunderstandings, they will rob you of your peace of mind. It is better to be divorced than to bicker all the time. 

5. Fifth, LACK OF ENVY towards those who have done better than you in life; risen higher, made more money, or earned more fame. Envy can be very corroding; avoid comparing yourself with others. 

6. Sixth, DO NOT ALLOW OTHER PEOPLEto descend on you for gup-shup (gossip). By the time you get rid of them, you will feel exhausted and poisoned by their gossip-mongering.

7. Seventh, CULTIVATE SOME HOBBIESwhich can bring you a sense of fulfilment, such as gardening, reading, writing, painting, playing or listening to music. Going to clubs or parties to get free drinks or to meet celebrities is criminal waste of time. 

8. Eighth, every morning and evening, devote 15 minutes to INTROSPECTION. In the morning, 10 minutes should be spent on stilling the mind and then five in listing things you have to do that day. In the evening, five minutes to still the mind again, and ten to go over what you had undertaken to do. 

DRT Solutions Weekly Mail – 185^th Issue dated 25^th Nov. ’11

(1) Bar of Civil Court in Securitisation Act - Extent  

This important matter is exhaustively dealt with in the Civil Revision decided on 11.02.11 by Bombay High Court vide 2011(3) Bankers’ Journal 659, State Bank of India vs Sagar & Others. The sum and substance of the decision in brief are as under:-

(i)                  The jurisdiction of civil court in respect of the property which is subject matter of security interest is barred only to the extent of the matters which DRT and DRAT is empowered under the Act to determine.

(ii)                For remaining matters, the jurisdiction of the civil court is not outested or barred under the provision of sec 34 of the Act.

(iii)              In order to decide whether the jurisdiction of the civil court under sec 9 of the CPC is ousted or not, the real test would be to find out whether the DRT under sec 17 is empowered to hold an enquiry on a particular question and to grant relief in respect thereof.

(iv)              The jurisdiction of civil court in respect of the matters covered by sec 13 of the Act is completely barred.

(v)                The matter connected with the partition and separate possession of the property is not barred.

(vi)              The matter connected with declaration that action of the secured creditor in respect of the secured assets is fraudulent and void is not barred.

(vii)            The matters of permanent and temporary injuction for taking possession of the property in respect of (vi) is however barred.

(viii)          But when matter in respect of (vi) has been decided, the injuction and relief may be granted by the civil court.

(ix)              The coclusion as in (viii) is also applicable in respect of suits relating to partition and separate possession.

(x)                It is open for the affected person to lodge his objections u/s 17 of the Act to protect his interest and also to balance the equities.

(xi)              The effect of the decree passed by the civil court can be determined only after culmination of both proceedings and not before.
 

(2) Deposit Conditions for Appeal in DRT Act and  Securitisation Act  

The above Acts incorporate deposit conditions for Appeal. Our comments are as under:-

(a)                As per Rule No 9 of the DRAT, 75% of the debt due is to be deposited with the DRAT. The DRAT is empowered to waive or reduce this amount. Hence proper pleadings should be made before DRT supported by documents like balance sheets so that when time comes for the appeal, the deposit is waived.

(b)                As per the sec. 18 of the Securitisation Act, minimum 25% of the decided amount of debt due has to be decided. We have been repeatedly emphasizing that such provision needs to be challenged.

(c)                On account of above, it is all the more important that complete pleadings be made before DRT right from the inception and case fought perfectly on all dates. The raising of counter-claim in the matter of DRT Act and the loss and damages in the matter of Securitisation Act becomes highly essential.  

(3) Amount of Counter-claim  

It is observed that all categories of damages are not being claimed in our country and as a result only bare minimum direct losses only are claimed. But the law of damages is highly developed and numerous types of loss and damages such as those pertaining to opportunity lost, loss of image and reputation, nervous and mental tension, stresses, aggravated damages, exemplary damages etc need to be claimed. These are based on the project report, appraisal, correspondence and balance sheets. We have described the various factors in our website in the pages relating to ‘Notes on Damages’ and Notes on Law of Torts’ If all the factors are considered, the damages work out to be quite huge compare with the alleged claim of the secured creditor and hence the situation becomes that of ‘No Debt Due’ This is the only and ultimate defence for the litigant borrowers in DRTs.

(4) Petrol Tips – info!! (Must Read)  

Mr. Firoz Poonawalla has sent the following useful piece:-

 
 With  Petrol expected to reach £2 per litre by end of  2011 these tips that I received from a friend  might come in  handy.      

 TIPS  ON PUMPING PETROL    
 
 I  don't know what you guys are paying for  petrol.... I am paying  up to £1.35 to £1.50 per litre. My line of work  is in petroleum for about 31 years now, so here  are some tricks to get more of your money's  worth for every Litre:    
 
 Here  at the Shell Pipeline where I work ,  we deliver about 4 million litres in a 24-hour  period .. One day is diesel the  next day is jet fuel, and petrol, regular and  premium grades. We have 34-storage tanks here  with a total capacity of 16,800,000  Litres.    
 
 Only  buy or fill up your car or truck in the early  morning when the ground temperature is still  cold.Remember  that all service stations have their storage  tanks buried below ground. The colder the ground  the more dense the petrol, when it gets warmer  petrol expands, so buying in the afternoon or in  the evening....your litre is not exactly a  litre. In the petroleum business, the specific  gravity and the temperature of the petrol,  diesel and jet fuel, ethanol and other petroleum  products plays an important  role.    
 
 A  1-degree rise in temperature is a big deal for  this business. But the service stations do not  have temperature compensation at the  pumps.    
 
 When  you're filling up do not squeeze the trigger of  the nozzle to a fast mode  If you look you will see that the trigger has  three (3) stages: low, middle, and high. You  should be pumping on low mode, thereby  minimizing the vapours that are created while  you are pumping. All hoses at the pump have a  vapour return. If you are pumping on the fast  rate, some of the liquid that goes to your tank  becomes vapour. Those vapours are being sucked  up and back into the underground storage tank so  you're getting less worth for your  money.  
  
 One  of the most important tips is to fill up when  your Petrol tank is HALF FULL. The reason  for this is the more Petrol you have in your  tank the less air occupying its empty space.  petrol evaporates faster than you can imagine.  petrol storage tanks have an internal floating  roof. This roof serves as zero clearance between  the Petrol and the atmosphere, so it minimizes  the evaporation. Unlike service stations, here  where I work, every truck that we load is  temperature compensated so that every litre is  actually the exact amount.    
 
 Another  reminder, if there is a petrol truck pumping  into the storage tanks when you stop to buy  Petrol, DO NOT fill up; most likely  the petrol is being stirred up as the Petrol is  being delivered, and you might pick up some of  the dirt that normally settles on the  bottom.    
 
 To  have an impact, we need to reach literally  millions of Petrol buyers. It's really simple to  do.    
 
 I'm  sending this note to about thirty people. If each  of you send it to at least ten more (30 x 10 =  300)...and those 300 send it to at least ten more  (300 x 10 = 3,000) and so on, by the time the  message reaches the sixth generation of people, we  will have reached overTHREE MILLION consumers  !!!!!!! If those three million get excited and  pass this on to ten friends each, then 30 million  people will have been contacted!    
 
 If  It goes one level further, you guessed it..... THREE  HUNDRED MILLION PEOPLE!!!   
 
 Again,  all you have to do issend this to 10 people. How  long would it take?

DRT Solutions Weekly Mail – 184^th Issue dated 18^th Nov. ’11 – Camp Sagar

(1) Securitisation Act – Sec 13(4) – Possession Notice - Publication in Newspapers – Stay thereof  

One of our clients from Tamilnadu approached us informing that he has received the possession notice u/s 13(4) of the Securitisation Act and he desired to obtain stay against the publication of the said notice in the news paapers. He further informed that his advocate has proposed to approach the DRT to grant stay for further action by the secured creditor. Our comments are as under:-

(a)                As per Rule 8(2) of ‘The Security Interest (Enforcement) Rules, 2002, the possession notice (which has been affixed on the outer door) shall also be published in two leading newspapers …..

(b)                Since the said rule uses the word ‘shall’, it will be mandatory for the secured creditor.

(c)                Further, as per the established law relating to ‘Ownersip and Possession of Properties’, the possession is legally valid only after it is made known to world at large. Hence after the notice, the publication in newspapers is a must.

(d)                In view of above, DRT Judge has no legal authority for staying the publication in newspapers. Even if he does so, such decision will be reversed by the higher courts.

(e)                Hence our view is that the said prescribed publication of possession notice can not be stayed and hence such exercise will be premature and infructuous. The expenses involved in court fee and advocacy will be a waste apart from secured creditor registering a victory on such well established matter. We came across two such cases in Chennai and Ahemdabad, when the DRTs dismissed the SA on this count.

(2) Counter-claim is the only ultimate defence for the borrowers in DRTs  

Recently we came to know that one of our clients contesting his case in DRT Hyderabad got counter-claim prepared by us but after advice of his advocate, the said counter-calim was not filed. Our comments are as under:-

(a)    There was no specific provision of counter-claim in the DRT Act 1993. On account of insistence of the Supreme Court of India, specific provision of counter-claim was made in the said Act in 2000.

(b)    It is observed that the secured creditors are committing numerous wrong doings in almost all the cases resulting into huge loss and damages to the borrower.

(c)    It is further observed that almost in all the cases, the said counter-claim is much more than the alleged debt due and hence there is ‘No Debt Due’

(d)    The said ‘No Debt Due’ has to be first decided by the trial court of the DRT as per law and the procedure of law. Till the final verdict is obtained, no recovery action can be carried out.

(e)    With our experience of past 22 years, we have found that in those cases where counter-claim was setup, the bankers either lost the case or approached the borrower to settle. In one of the case, the settlement was within 5% and in several cases the settlement amount ranged from 15% to 25%.

(f)      We have voicing the above approach through our web site www.drtsolutions.com since 2000.

(g)    One of our Mumbai clients got two counter-claims prepared from us and at the instance of his advocate, the said counter-claims were not filed. After two years, the client experienced certain problems which could be solved only by filing the said counter-claims. With such experience, he approached us for preparing counter-claim for his third case.

(h)    We welcome open discussions with any legal authority to prove and validate our above mentioned contentions.

(3) God’s Accuracy  

Mr. Firoz Poonawalla has sent the following interesting piece:-

Don't know if all this is correct; it's truly amazing if it is.And some say
there is no God!

=====================================
God's accuracy may be observed in the hatching of eggs.

For example:

-the eggs of the potato bug hatch in 7 days;

-those of the canary in 14 days;

-those of the barnyard hen in 21 days;

-The eggs of ducks and geese hatch in 28 days;

-those of the mallard in 35 days;

-The eggs of the parrot and the ostrich hatch in 42 days.

(Notice, they are all divisible by seven, the number of days in a week!)

God's wisdom is seen in the making of an elephant.

The four legs of this great beast all bend forward in the same direction. No other quadruped is so made. God planned that this animal would have a huge
body, too large to live on two legs.

For this reason He gave it four fulcrums so that it can rise from the ground easily.

The horse rises from the ground on its two front legs first.

A cow rises from the ground with its two hind legs first.

God's wisdom is revealed in His arrangement of sections and segments, as well as in the number of grains.

-Each watermelon has an even number of stripes on the rind.

-Each orange has an even number of segments.

-Each ear of corn has an even number of rows.

-Each stalk of wheat has an even number of grains.

-Every bunch of bananas has on its lowest row an even number of bananas, and each row decreases by one, so that one row has an even number and the next row an odd number.

-The waves of the sea roll in on shore twenty-six to the minute in all kinds of weather.

All grains are found in even numbers on the stalks, and the Lord specified thirty fold, sixty fold, and a hundred fold - all even numbers.

He has caused the flowers to blossom at certain specified times during the day, so that Linnaeus, the great botanist, once said that if he had a conservatory containing the right kind of soil, moisture and temperature, he could tell the time of day or night by the flowers that were open and those that were closed!

I HOPE YOU FIND THIS AS FASCINATING AS I DID.

DRT Solutions Weekly Mail – 183rd Issue dated 11.11.11

(1) Willful Defaulters’ Norms–Different for Corporate Sector and remaining Sectors  

Mr. N.K. Sharma, one of our Associates and ex-GM (Law) has drawn our attention to the following news item published on 31.10.11:- 

One lakh crore credits on Industrialist families 

http://jaipur.co/one-lakh-crore-credits-on-industrialist-families/ 

Jaipur: The reputation of the government bank is losing its credibility because of Industrialist families. The loan of 1.5 lakh crore taken by the government bank is still missing out of which more than 70 percent loan is taken by the industrialist families. 

On Sunday (30.10.2011), All India Bank Officers Association’s two day conference being here in which this issue was brought in to light. The National President Alok Khare and General Secretary R.J.Sridharan said in the meeting that private banks earned around 45 thousand crore in the year 2011, but because of centre’s leniency around 20 thousand crore rupees is being distributed like corporate loan. 

The banks which are running on the orders of the Reserve Bank publish the defaulter list of the common people but they don’t have the list of the defaulters of the corporate families. According to the bankers in the Bank Director’s meeting also this list is never mentioned, because of which till today the list have not come into existence. Some specialists blame the government for this. For the common man there are norms to return the money in a given time whereas there are no norms for the corporate families. There are laws of recovery but it is only implemented on the common man. 

Our Comments  

(1) The above news item confirms our views regarding wrong doings committed by the banks in declairng willful defaulters.

(2) As a result we have been advising our clients to file Injunction suits in civil courts to stay their actions to declare the borrower as willful defaulter.

(3) The said suit is to be based on specific RBI guidelines and the Chairman of the bank must be made as a necessary party.

(4) Such suit has been filed by one of our clients from Mumbai and another client from Bhubneshwar has been contemplating to file the same.  

(2) Sec 14 of the Securitisation Act – Attempt for Physical Possession by the secured creditor – Precautionary Measures   

Our long held views in this respect have now getting supported by the court judgments. We have now started advising our clients to initiate precautionary actions as soon as the 60 days period as under sec 13(2) is over. A notice should be sent to the secured creditor that since there is no debt due [having informed about the loss and damages being much more than the alleged claim in the said notice u/s 13(2)] due to several wrong doings committed by the said creditor, application u/s 17 will be made in due course of time, no action should be initiated u/s 14 and if it is done, application will be made u/s 17 within 45 days of such initiation. Side by side caveat be filed with the Magistrate. The borrower should be alert and vigilant to pursue these actions in DRT as well as in the court of Magistrate. 

(3) Tablet PC – A most useful device for the Borrowers and the Advocates

We have been using the Tablet PC since October 2010 and found it to be of great utility for the borrowers and the advocates. We have illustrated the use with real life applications. As a result, our Associtates and the acquintances have started using the tablets. There are lot of pockets of free time in our day to day life such as waiting, travelling etc. A tablet can be used during such free time. The reading of mails, judgments, articles and books can be done in standing and walking mode and thus one is freed of sitting which is greates source of modern life style diseases like high blood pressure, diabetes and consequent complications, aging etc. The use of tablets is further enhanced with the use of digital camera for scanning the documents. The scanning of documents and the articles is done with the least time of clicking and the scanned image may be transferred dirctly to the tablet for record and study. Time is not far when we shall find tablets being used along with the mobiles in day to day life. 

(4) Ranking of Our Website in Google  

Our web site www.drtsolutions.com has been topping the Google and other search engings. Please go to Google and search for ‘drt’ The result of ranking may be mailed to us. It will help us in maintaining proper ranking and hence proper service to the borrowers and guarantors. 

(5) Really worth reading – The Mayonnaise Jar  

Mr. Dinesh Kakkad has sent the folloiwng beautitful piece:- 

When things in your life seem, almost too much to handle,
When 24 Hours in a day is not enough,
Remember the mayonnaise jar and 2 cups of coffee.

A professor stood before his philosophy class
and had some items in front of him.
When the class began, wordlessly,
He picked up a very large and empty mayonnaise jar
And proceeded to fill it with golf balls.

He then asked the students, if the jar was full.
They agreed that it was.

The professor then picked up a box of pebbles and poured
them into the jar. He shook the jar lightly.
The pebbles rolled into the open Areas between the golf balls.

He then asked the students again if the jar was full. They agreed it was.

The professor next picked up a box of sand and poured it into the jar.
Of course, the sand filled up everything else.
He asked once more if the jar was full. The students responded with a unanimous 'yes.'

The professor then produced two cups of coffee from under the table and poured the entire contents into the jar, effectively
filling the empty space between the sand. The students laughed.

'Now,' said the professor, as the laughter subsided,
'I want you to recognize that this jar represents your life.
The golf balls are the important things - family,
children, health, Friends, and Favorite passions –
Things that if everything else was lost and only they remained, Your life would still be full.

The pebbles are the other things that matter like your job, house, and car.

The sand is everything else --The small stuff.

'If you put the sand into the jar first,' He continued,
there is no room for the pebbles or the golf balls.
The same goes for life.

If you spend all your time and energy on the small stuff,
You will never have room for the things that are important to you.

So...

Pay attention to the things that are critical to your happiness.
Play With your children.
Take time to get medical checkups.
Take your partner out to dinner.

There will always be time to clean the house and fix the disposal.

'Take care of the golf balls first --
The things that really matter.
Set your priorities. The rest is just sand.'

One of the students raised her hand and inquired what the coffee represented.

The professor smiled.
'I'm glad you asked'.

It just goes to show you that no matter how full your life may seem,
there's always room for a couple of cups of coffee with a friend.'

Please share this with other "Golf Balls"
I just did......

DRT Solutions Weekly Mail – 182^nd Issue dated 4^thNovember ’11

(1) Appointment of PO by Ministry of Finance found to be Defective as he was not qualified for the said Post

One of our clients from Trichi informed that the Presiding Officer at DRT Madurai is not qualified to hold that post and this information was obtained through RTI by an advocate from chennai and he has filed a writ of quo warranto. It is also learnt that another two writs on the same basis has been filed against the PO of Coimbatore and Chennai. It seems that the Min. of Finance had blundered in making appointments to the posts of these Presiding Officers. The relevant RTI Applications and the Writs have been reproduced at the end of this weekly mail.

There have been several allegations against the Ministry of Finance which is not even caring for implementing the orders of the Supreme Court of India to transfer the DRTs from its control to the Mininistry of Law. It is proposed that all such wrongful acts of the Ministry of Finance must be submitted as ‘Special Pleas’ in the pleadings at the stage of DRT so that one of the important sources of injustice is also highlighted in the arguments and becomes part of the proceedings eligible to be dealt with in the judicial orders.

All the affected persons suffering on account of above must file Reviews and Appeals to cure the consequent injustice. Such proceedings will pressurize the Ministry of Finance to abide by the orders of the Supreme Court to transfer the establishment of the DRTs to Ministry of Law.

It is hightime that the above is spread among the borrowers and guarantors so that concerted efforts are made by one and all through the tool of the RTI and pleadings to do away with the wrong doings of the Ministry of Finance.

(2) An Useful and Important judgment of the Bombay High Court – All possible grievances can be raised before DRT u/s 17 of the Securitisation Act

The Bombay High Court in its judgment vide 2011 (2) DRTC 496 (Bom), B.D. Agarwal vs Official Assignee has held that all possible grievances can be raised before DRT u/s 17 of the Securitisation Act as the said proceedings are in lieu of a suit.

We have been holding this view past several years and in all our pleadings we were even including loss and damages due to wrong doings of the secured creditors. The above judgment has supported our views. Since the Securitisation Act is a complete code in itself and as per the sec 34 of the said Act, there is specific bar against invoking the civil court, all grievances of the affected borrower has to be raised u/s 17 to obtain complete relief.

(3) Time for Fun – Did I read that sign right?

Mr. Firoz Poonawall has sent the following interesting piece:-

In an office:
TOILET OUT OF ORDER...... PLEASE USE FLOOR BELOW

In a Laundromat:
AUTOMATIC WASHING MACHINES: PLEASE REMOVE ALL YOUR CLOTHES WHEN THE LIGHT GOES OUT

In a London department store:
BARGAIN BASEMENT UPSTAIRS

In an office:
WOULD THE PERSON WHO TOOK THE STEP LADDER YESTERDAY PLEASE BRING IT BACK OR FURTHER STEPS WILL BE TAKEN

In an office:
AFTER TEA BREAK STAFF SHOULD EMPTY THE TEAPOT AND STAND UPSIDE DOWN ON THE DRAINING BOARD

Outside a secondhand shop:
WE EXCHANGE ANYTHING - BICYCLES, WASHING MACHINES, ETC. WHY NOT BRING YOUR WIFE ALONG AND GET A WONDERFUL BARGAIN?

Notice in health food shop window:
CLOSED DUE TO ILLNESS

Spotted in a safari park:
ELEPHANTS PLEASE STAY IN YOUR CAR

Seen during a conference:
FOR ANYONE WHO HAS CHILDREN AND DOESN'T KNOW IT, THERE IS A DAY CARE ON THE 1ST FLOOR

Notice in a farmer's field:
THE FARMER ALLOWS WALKERS TO CROSS THE FIELD FOR FREE, BUT THE BULL CHARGES.

On a repair shop door:
WE CAN REPAIR ANYTHING. (PLEASE KNOCK HARD ON THE DOOR - THE BELL DOESN'T WORK)

(a) Copy of the Writ in respect of Madurai PO

THE HIGH COURT OF JUDICATURE AT MADRAS

(Special original jurisdiction)

W.P.No.                 of 2011

XXXXXXXXXXXXXXX

S/o, Mr.XXXXXXXXXXXX

xxxxxxxx, Chennai – 600 010.                         :: Petitioner

              Vs

1.Mr. - - - ,

Presiding officer,

DEBTS RECOVERY TRIBUNAL ,MADURAI

2. Union Of India

Represented by its Under Secretary

Ministry Of Finanace,

Department of Financial Services,

“Jeevan Deep” Sansad Marg,           :: Respondent.

AFFIDAVIT OF XXXXXXXXXXXXXXXXXXXXX

I, xxxxxxxxxxxxxxxxxx son of Mr. xxxxxxxxxxxx aged 34 years residing at No.xx, xxxxxxxx Street, xxx xxxxxxxx Road, xxxxxxx, Chennai – 600 010, do herby solemnly and sincerely affirm and state as follows:-

1.     I submit that I am a lawyer enrolled before the bar council of Tamil Nadu. I am practicing at Chennai.

2.     I submit that I am filing this writ petition seeking issuance of writ of Quo Warranto against the 1st Respondent.

3.     I submit that the 1st Respondent is holding office as presiding officer Debts Recovery Tribunal Madurai . I submit that under section 5 of the Recovery of Debts Due to banks and Financial Institutions Act, 1993 the 1st Respondent cannot be appointed as Presiding Officer of the Debts Recovery Tribunal unless he is qualified to be appointed as a district judge.

4.     I Submit while submitting application for the post of Presiding Officer of Debts Recovery Tribunal the 1st Respondent has given years of practice as about four and a half years.

     5.     I submit that the 1st Respondent was not a judicial officer and promoted  as the presiding officer Debts Recovery Tribunal Madurai. He is a direct recruit.

    6.     I submit that for appointment of District Judges by direct recruitment minimum qualification is 7 of years of practice as an advocate. The 1st Respondent is not qualified to hold office or continue to work as Presiding Officer Debts Recovery Tribunal in  or in any other area.

I therefore pray that this Hon’ble court may be pleased to issue a writ of quo warrantodirecting the 1st Respondent abovenamed, requiring him to show cause by what authority he claims to have, use, enjoy and perform the rights, duties privileges of the office of presiding officer Debts Recovery Tribunal Madurai and pass such other or further orders as this  may deem fit and proper in the circumstances of the case and render justice.

   I also pray that this Hon’ble court may be pleased to pass an order of injunction restraining the 1st Respondent from holding the office as Presiding Officer Debts Recovery Tribunal Madurai pending disposal of the above writ petition and render justice.     

Solemnly affirmed before me at Chennai on this the   12th   day of October  2011 and signed his name in my presence

                Advocate, Chennai.

(b) Copy of the RTI Application to Ministry of Finance

From,                                                                                      08-08-2011

xxxxxxxxxxxxxxxxxxxxx                                            Chennai

Advocate,

xxxxxxxxxxxxxxxxx,

Chennai – 600 001

To

The CPIO under RTI Act

Ministry of Finance (Financial Services/DRT Section)

Jeewandeep Buildings,

11, Parliament Street, New Delhi

Sir,

          Sub: Queries/Information sought for under the RTI Act.

          Kindly furnish the necessary information asked for and replies to queries.

          Enclosed herewith is a postal order for Rs.10/-(Rupees Ten only, IPO no.                                      ) towards application charges and postal orders for Rs.200/-(Rupees Two hundred only IPO no’s.                                                       

       Of Rs.100/- each) towards copying and other charges. The postal orders are in favour of the “Section Officer Banking Division”. I undertake to pay any further / additional amount if necessary.

Encl : as above.                                                      Yours sincerely

                                                (xxxxxxxxxxxxxxxxxxxxxxxxxxxxx)    

QUERIES 

Copy of the full bio data of the presiding officer of DRT  Madurai, Shri Stanley David submitted while applying for the post, may be furnished. 

Whether any additional information (other than the information given in

the bio data) has been called for from the presiding officer of DRT Madurai at any point of time. If so, a copy of the said additional information may be furnished. 

Details about the number applications received for the post of presiding Officer DRT –  while the present presiding officer Mr.Stanley David Applied may be furnished.  

Copy of application for the post of DRT Madurai of all the Applicants who applied for DRT Madurai when the present presiding officer Mr.Stanley David Applied may be furnished.  

   Details about the number of candidates and the list of candidates who were all interviewed for the post of Presiding officer DRT Madurai may be furnished.  

  Grounds/Criteria based on which the applicants other than Mr.Stanley David was selected for the post of presiding officer DRT Madurai, may be furnished. 

Name and designation of the persons present in the selection committee which selected Mr.Stanley David as Presiding officer DRT Madurai may be furnished. 

copy of the appointment letter of the Presiding Officers of DRT Madurai may be furnished. 

DRT Solutions Weekly Mail – 181^st Issue dated 28^th  October ’11

(1) Most Useful & Important Judgment of Kerala High Court – Our Contentions upheld – Even Approach to Magistrate for Physical Possession is appealable to DRT – Entire Judgment reproduced at the end of this Weekly Mail 

For past several years, we have been emphasizing that the even the approaching the Magistrate by the secured creditor is appealable to the DRT. On our own, we have even started the practice of filing caveat to secure opportunity of hearing before the Magistrate. Our contentions have now been upheld by the High Court Kerala (entire judgment reproduced at the end of this weekly mail) which stated as reproduced below (marked red in the para 6 of the judgment:- 

I am of opinion that despite the vehement protestations of Counsel for the banks, particularly by the Union Bank of India, going by the decisions of the Supreme Court, the very fact of the financial institutions approaching the Magistrate under Section 14 itself would constitute a measure under Section 13 (4) of the Act, against which an appeal can be filed by the aggrieved person before the Tribunal under Section 17. 

All the borrowers and persons reading this mail should provide copy of this judgment to their advocates in all DRTs so that this knowledge spread far and wide to end the sleepless nights which the borrowers are suffering due to the impending threat of physical possession. As soon as any notice under sec 13(2) is received, the borrowers should keep in touch with the office of the Magistrate as well as file caveat so that as soon as it is learnt that the banks have approached the Magistrate, appeal under sec 17 be filed with DRT. 

(2) DRAT and HC separately order to deliver back the possession of the properties wrongly taken over – Banks directed to return money deposited by the auction purchasers with interest till date of payment  

There are now several judgments of DRATs and HCs ordering to deliver back the possession of the properties wrongly taken over and the banks directed to return money deposited by the auction purchasers with interest till date of payments. Two recent judgments are as under:-

(a)    2011 (3) Bankers’ Journal 350 (DRAT, Delhi) – Girish Lalwani vs Punjab National Bank.

(b)    2011 (3) Bankers’ Journal 362 (Calcutta High Court) – Debasree Das vs State of Bengal

(3) 17 Interesting Tricks of the Human Body  

Mr Firoz Poonawalla has sent the following interesting information:-

1. If Your Throat Tickles, Scratch Your Ear.!

When you were 9, playing your armpit was a cool trick. Now, as an adult, you can still appreciate a good body-based feat, but you’re more discriminating. Take that tickle in your throat; it’s not worth gagging over. Here’s a better way to scratch your itch: “When the nerves in the ear are stimulated, it creates a reflex in the throat that can cause a muscle spasm,” says Scott Schaffer, M.D., President of an ear, nose & throat specialty center in Gibbsboro, New Jersey. “This spasm relieves the tickle.” 

2. Experience Supersonic Hearing.!
If you’re stuck chatting up a mumbler at a cocktail party, lean in with your right ear. It’s better than your left at following the rapid rhythms of speech, according to researchers at the UCLA David Geffen School of Medicine. If, on the other hand, you’re trying to identify that song playing softly in the elevator, turn your left ear toward the sound. The left ear is better at picking up music tones.

3. Feel No Pain.!
German researchers have discovered that coughing during an injection can lessen the pain of the needle stick. According to Taras Usichenko, author of a study on the phenomenon, the trick causes a sudden, temporary rise in pressure in the chest and spinal canal, inhibiting the pain-conducting structures of the spinal cord. 

4. Clear Your Stuffed Nose.!
Forget nose drops… an easier, quicker and cheaper way to relieve sinus pressure is by alternately thrusting your tongue against the roof of your mouth, then pressing between your eyebrows with one finger. This causes the vomer bone, which runs through the nasal passages to the mouth, to rock back and forth, says Lisa DeStefano, D.O., an assistant professor at the Michigan State University College of Osteopathic Medicine. The motion loosens congestion; after 20 seconds, you’ll feel your sinuses start to drain.

5. Avoid Reflux.!
Worried those wings will “repeat” on you tonight? “Sleep on your left side,” says Anthony A. Starpoli, M.D., aNew York City gastroenterologist and assistant professor of medicine at New York Medical College. Studies have shown that patients who sleep on their left sides are less likely to suffer from acid reflux. The esophagus and stomach connect at an angle. When you sleep on your right, the stomach is higher than the esophagus, allowing food and stomach acid to slide up your throat. When you’re on your left, the stomach is lower than the esophagus, so gravity’s in your favor. 

6. Cure Your Toothache Without Opening Your Mouth.!
Just rub ice on the back of your hand, on the V-shaped webbed area between your thumb and index finger. A Canadian study found that this technique reduces toothache pain by as much as 50 percent compared with using no ice. The nerve pathways at the base of that ‘V’ stimulate an area of the brain that blocks pain signals from the face and hands. 

7. Make Burns Disappear.!
When you accidentally singe your finger on the stove, clean the skin and apply light pressure with the finger pads of your unmarred hand. Ice will relieve your pain more quickly, Dr. DeStefano says, but since the natural method brings the burned skin back to a normal temperature, the skin is less likely to blister. 

8. Stop The World From Spinning.!
One too many drinks left you dizzy? Put your hand on something stable. The part of your ear responsible for balance… the cupula… floats in a fluid of the same density as blood. “As alcohol dilutes blood in the cupula, the cupula becomes less dense and rises,” says Dr. Schaffer. This confuses your brain. The tactile input from a stable object gives the brain a second opinion, and you feel more in balance. Because the nerves in the hand are so sensitive, this works better than the conventional foot-on-the-floor wisdom. 

9. Unstitch Your Side.!
If you’re like most people, when you run, you exhale as your right foot hits the ground. This puts downward pressure on your liver (which lives on your right side), which then tugs at the diaphragm and creates a side stitch, according to ‘The Doctors Book of Home Remedies for Men’… the fix is… Exhale as your left foot strikes the ground. 

10. Stanch Blood With A Single Finger.!
Pinching your nose and leaning back is a great way to stop a nosebleed - if you don’t mind choking on your own blood. A more civil approach is to put some cotton on your upper gums - just behind that small dent below your nose - and press against it, hard. “Most bleeds come from the front of the septum, the cartilage wall that divides the nose,” says Peter Desmarais, M.D., an ear, nose, and throat specialist at Entabeni Hospital, inDurban, South Africa. “Pressing here helps stop them.” 

11. Make Your Heart Stand Still.!
Trying to quell first-date jitters? Blow on your thumb. The vagus nerve, which governs heart rate, can be controlled through breathing, says Ben Abo, an emergency medical-services specialist at the University ofPittsburgh. It’ll get your heart rate back to normal. 

12. Thaw Your Brain.!
Too much cold stuff too fast will freeze the brains of lesser men. As for you, press your tongue flat against the roof of your mouth, covering as much as you can. “Since the nerves in the roof of your mouth get extremely cold, your body thinks your brain is freezing, too.” “In compensating, it overheats, causing an ice-cream headache.” The more pressure you apply to the roof of your mouth, the faster your headache will subside. 

13. Prevent Near-Sightedness.!
Poor distance vision is rarely caused by genetics, says Anne Barber, O.D., an optometrist in Tacoma,Washington. “It’s usually caused by near-point stress.” In other words, staring at your computer screen for too long. So flex your way to 20/20 vision. Every few hours during the day, close your eyes, tense your body, take a deep breath, and, after a few seconds, release your breath and muscles at the same time. Tightening and releasing muscles such as the biceps and glutes can trick involuntary muscles - like the eyes - into relaxing as well. 

14. Wake The Dead.!
If your hand falls asleep while you’re driving or sitting in an odd position, rock your head from side to side. It’ll painlessly banish your pins and needles in less than a minute, says Dr. DeStefano. A tingly hand or arm is often the result of compression in the bundle of nerves in your neck; loosening your neck muscles releases the pressure. Compressed nerves lower in the body govern the feet, so don’t let your sleeping dogs lie. Stand up and walk around. 

15. Impress Your Friends.!
Next time you’re at a party, try this trick: Have a person hold one arm straight out to the side, palm down, and instruct him to maintain this position. Then place two fingers on his wrist and push down. He’ll resist. Now have him put one foot on a surface that’s a half inch higher (a few magazines) and repeat. This time his arm will fold like a house of cards. By misaligning his hips, you’ve offset his spine, says Rachel Cosgrove, C.S.C.S., co-owner of Results Fitness, in Santa Clarita, California. Your brain senses that the spine is vulnerable, so it shuts down the body’s ability to resist. 

16. Breathe Underwater.!
If you’re dying to retrieve that quarter from the bottom of the pool, take several short breaths first - essentially, hyperventilate. When you’re underwater, it’s not a lack of oxygen that makes you desperate for a breath; it’s the buildup of carbon dioxide, which makes your blood acidic, which signals your brain that something ain’t right. “When you hyperventilate, the influx of oxygen lowers blood acidity,” says Jonathan Armbruster, Ph.D., an associate professor of biology at Auburn University. “This tricks your brain into thinking it has more oxygen.” It’ll buy you up to 10 seconds. 

17. Read Minds!
Your own.! “If you’re giving a speech the next day, review it before falling asleep,” says Candi Heimgartner, an instructor of biological sciences at the University of Idaho. Since most memory consolidation happens during sleep, anything you read right before bed is more likely to be encoded as long-term memory.

2011 (3) Bankers' Journal 293
(Kerala High Court)

Before:

HON'BLE S. SIRI JAGAN, J.

Sami ................................................................................................. Petitioner

Versus

Bank of India .................................................................................. Respondent

W.P. (C) No. 17843 of 2011 alongwith Connected Cases, decided on
22.7.2011

Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, Sections 17, 13 (4) and 14- Appeal-Right of-Circular issued by DRT-Legality of-Circular issued by DRT to the effect that unless possession is actually taken by financial institution, no appeal would be entertained-Clearly being against provisions of Act-Very action of financial institution in approaching Magistrate under Section 14 itself would constitute a measure under Section 13 (4), which would give rise to an aggrieved person to approach DRT-Not necessary for an aggrieved person to wait till actual or symbolic possession is taken before resorting to the remedy as provided under Section 17 of the Act. (Paras 6 and 7)

Cases referred :

(2009) 8 S.c.c. 366; (2010) 8 S.C.C.110; (2011) 2 S.c.c. 782; 2004 (2)
KL.T. 273 rs.c.» 2008 (4) KL.T. l.

Advocates appeared :

Mr. George Karithanam Varghese, Mr. Jose Kuriakose (Vilangattil) and Mr. C.S. Ullas, for the petitioner.

Mr. Devan Ramachandran, Mr. P.P. Joy, Mr. KM. Aneesh and Mr. A.S.P. Kurup, for the respondent.

Mr. KN. Sasidharan Nair, for the Amicus Curiae.

JUDGMENT

S. Siri Jagan, J.-In all these writ petitions, the one common question that arises for consideration is as to whether, without taking possession of the secured asset symbolically or actually by the bank in proceedings
under the Securitisation and Reconstruction of Financial Assets and 
Enforcement of Security Interest Act, 2002, the borrower or anybody
aggrieved by the action of the bank can file an application/appeal under
Section17 of the Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002. The petitioners in these writ
petitions are persons against whose properties, proceedings under Section 14 of the Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 have been initiated. Their
grievance is that the Debts Recovery Tribunal is not entertaining applications/ appeals despite the Banks initiating action to take possession
through the Magistrate, which is a measure under Section 13(4) of the
Act. The Debts Recovery Tribunal themselves have issued a circular, which
is produced as Ext. PS in W.P(C) No. 17843/11, which reads thus:

"1.      It is once again reiterated and brought to the notice of all
concerned that following consistent decisions taken by this
Hon'ble Tribunal, in true, with pronouncements of the
Hon'ble Apex Courts, as far as the Securitization
Application concerned, the Securitization Application filed
beyond 45 days from the date on which measures, if any,
(for instance, in case of possession-either symbolic or
physical) taken under Section 13(4) of the SRFAESI Act,
2002 cannot be entertained. It is further clarified that Section
5 of the Limitation Act, 1963 is not applicable to the original
SA Proceedings filed under Section 17(1) of the SRFAESI
Act.

2.             And that no Securitization Application will lie against the
order passed under Section 14 of the SRFAESI Act,
contemplating the possession of secured assets. In this
context it is made clear that a Securitization Application
can be entertained only when any of the measures has
actually been taken (for instance, in case of possession-either
symbolic or physical possession) pursuant to the order of
the authorities under Section 14 of the SRFAESI Act, 2002.
Needless to state the same position applies to any other
measures stipulated under the said Section 13(4).

3.             Further, as per the Hon'ble Tribunal's view in a given case
when symbolic possession had already been taken and 45
days have elapsed since, then, and that subsequently in
order under Section 14 of the SRFAESI Act, 2002
contemplating the physical possession taken, the
securitization application cannot be entertained.

4.             As such the aforesaid legal position shall be taken note of
while presenting fresh Securitization Application before the
Registry of this Tribunal." (Underlining supplied)

2. In all these writ petitions, the petitioners have not been served with
any notice of possession and possession has not. actually or symbolically
been taken by the banks concerned. The banks have straight away
approached the concerned Chief Judicial Magistrate or Additional District
Magistrate, having jurisdiction under Section 14 of the Act for assistance
to take possession of the respective security asset. Some of these petitioners
have tried filing an application under Section 17 of the Act before the
Debts Recovery Tribunal, Ernakulam. But, the registry of the Debts
Recovery Tribunal refused to entertain the same on the ground that unless
possession has been taken, the appeal under Section 17 is not maintainable.

According to the petitioners, the same is totally wrong, insofar as the very action of filing an application before the Chief Judicial Magistrate or the
Additional District Magistrate for assistance to take possession of the
secured asset, is a measure under Section -13(4), against which the
application under Section 17 of the Act would lie before the Debts Recovery
Tribunal. Therefore, the refusal on the part of the Debts Recovery Tribunal
to entertain application under Section 17 on the ground that unless
possession is taken by the financial institutions, no application under
Section 17 would lie, is totally arbitrary and unsustainable, is the
contention of the petitioners.

3. The learned Counsel for the banks would vehemently contend that
unless - possession is taken, no appeal or application under Section 17
would lie. Counsel for the Union Bank of India would contend that, that
is exactly the law declared by the Supreme Court of India. Counsel for
the bank refers me to the decisions of the Supreme Court on the subject,
namely, Mardia Chemicals Ltd. v. Union of India, 2004 (2) KL.T. 273 rs.c.:

: (2004) 4 S.c.c. 311 and then Transcore v. Union of India, (2008) 1 S.c.c. 125. According to him, those decisions are authorities for the proposition
that no appeal would lie under Section 17 unless and until possession is
taken by virtue of the provisions contained in Section 13(4). He points out
that tlie first measure contemplated under Section 13(4) is taking possession
itself and consequently, unless and until possession is taken, no appeal
under Section 17 would lie, which is what has been stated in the Mardia
Chemicals & Transcore decisions (supra). He would also take me to the
decision of the Division Bench of this Court in Muhammed Ashrafv. Union-
of India, 2008 (4) KL.T. I, wherein, this Court has held that against an
order under Section 14 of the Act, no appeal would lie before the Debts
Recovery Tribunal under Section 17, which would go to show that unless
possession is taken under Section 13(4), no appeal would lie.

5.On the other hand, the learned Counsel for the petitioners would
contend that the legal position has been settled by the Supreme Court
itself in favour of the position of law as canvassed by them. They would
take me to the decisions of the Supreme Court in Authorised Officer, Indian
Overseas Bank & Anr. v. Ashok Saw Mill, 2009 (8) S.c.c. 366, United Bank
of India v. Satyawati Tondon & Ors., 2010 (8) S.c.c. 110 and Kanaiyalal
LaIchand Sachdev & Ors. v. State of Maharashtra & Ors., 2011(2) S.c.c.
782; all of which, according to the petitioners, would go to show that the
mere act of the financial institution in approaching the Magistrate under
Section 14 itself would constitute a measure under Section 13(4) and
therefore an appeal would lie under Section 17(1) against that action.

5.      I have considered the rival contentions in detail.  

6. At the outset, I would note that although the Supreme Court has upheld the constitutional validity of the Act, it cannot be gain-said that the Act is a very harsh legislation, which results in very disastrous consequences to the owner of the property against which a measure under Section 13(4) of the Act has been taken. That being so, the provisions regarding the remedies provided for persons aggrieved by such action should be construed liberally. No doubt, the Supreme Court has  categorically held that no application/ appeal would lie against any action taken by the financial institution prior to taking a measure under Section 13(4). Therefore, the right to resort to remedies under Section 17 would
arise only when anyone of the measures contemplated under Section 13(4) or thereafter is initiated, is his contention. I am of opinion that it is not necessary for an aggrieved person to wait till actual or symbolic possession is taken by the financial institution before resorting to the remedy as provided under Section 17. Take for example, a case where a person against whom proceedings under the securitization proceedings have been initiated, has a case that he was not a party to the loan transaction at all, but by fraud or forgery, he has been made a borrower or a surety. In such cases, it would be nothing but sheer injustice to say that he has to wait till the financial institution takes possession and throws him out into the street before he can resort to the only remedy available to him under law, which is filing of an application/ appeal under Section 17 of the Act. I am of opinion that the rigour of the provisions of the Act should not be taken to that extreme extent to deny even the right of appeal under Section 17, which is the only remedy provided to an aggrieved person against a measure under Section 13(4). This is all the more so since the Supreme Court has time and again held that High Courts should not ordinarily entertain writ petitions challenging proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and should relegate the parties to the remedy by way of appeal under Section 17 of the Act before the Debts Recovery Tribunal. I am of opinion that despite the vehement protestations of Counsel for the banks, particularly by the Union Bank of India, going by the decisions of the Supreme Court, the very fact of the financial institutions approaching the Magistrate under Section 14 itself would constitute a measure under Section 13 (4) of the Act, against which an appeal can be filed by the aggrieved person before the Tribunal under Section 17. Counsel for the banks point out that in the decisions of Mardia Chemicals case & Transcore
case (supra), the Supreme Court has held that only when a measure under
Section 13(4) is actually taken, an appeal would lie. No doubt, that is the
legal position. But the question is when exactly a measure under Section
13(4) can be stated to be actually taken. I am not inclined to accept the
contention of the Counsel for the banks that that would only be when
possession is actually taken by the financial institution. Any measure under
Section 13(4) would constitute a cause of action for filing an appeal under
Section 17. The mere decision of the financial institution to approach the
Magistrate under Section 14 would also constitute a measure under Section
13 (4). Reliance by the learned Counsel for the Union Bank of India on the
Division Bench decision of this Court in Muhammed Ashraf'. s case (supra)
is misplaced, according to me. That decision only says that no appeal
would lie against an order of the Magistrate under Section 14 or the action of the Commissioner appointed by the Magistrate to take possession. That
decision does not say that the action of the bank in approaching the
Magistrate under Section 14 would not constitute a measure under Section

13(4).

7. In Authorised Officer, Indian Overseas Bank & Anr. v. Ashok Saw
Mill, 2009 (8) S.c.c. 366, the Supreme Court has stated thus in paragraph
37 :

        "37.          The consequences of the authority vested in the DRT under
sub-section (3) of Section 17 necessarily implies that the DRT is entitled to question the action taken by the secured creditor and the transactions entered into by virtue of Section 13 (4) of the Act. ..... "

Again, in United Bank of India v. Satyawati Tondon & Ors., 2010 (8) S.c.c. 110, the Supreme Court has held thus in paragraph 42 :

        "42.          There is another reason why the impugned order should be
set aside. If respondent 1 had any tangible grievance against the notice issued under Section 13(4) or action taken under Section 14, then she could have availed remedy by filing an application under Section 17(1). The expression "any person" used in Section 17(1) is of wide import. It takes within its fold, not only the borrower but also the guarantor or any other person who may be affected by the action taken under Section 13(4) or Section 14. Both, the Tribunal and the Appellate Tribunal are empowered to pass interim orders under Sections 17 and 18 and are required to decide the matters within a fixed time schedule. It is thus evident that the remedies available to an aggrieved person under the SRFAESI Act are both expeditious and effective."

Still further, in Kanaiyalal Lalchand Sachdev & Ors. v. State of
Maharashtra & Ors., 2011 (1) K.L.T. S.N. 87 (c. No. 117) (S.c.) : (2011) 2
S.c.c. 782, the Supreme Court has categorically held that resort to the
proceedings under Section14 by the bank itself will constitute a measure
under Section13(4), in paragraph 22, which reads thus:

         "22.         We are in respectful agreement with the above enunciation
of law on the point. It is manifest that an action under Section 14 of the Act constitutes an action taken after the stage of Section i3(4), and therefore, the same would fall within the ambit of Section 17(1) of the Act. Thus, the Act itself contemplates an efficacious remedy for the borrower or any person affected by an action under Section 13(4) of the Act, by providing for an appeal before the DRT."

In view of these decisions, I have absolutely no doubt in my mind
that the very action of the financial institution in approaching the
Magistrate under Section 14 itself would constitute a measure under
Section 13(4), which would give rise to an aggrieved person the cause of action to resort to the remedy by way of approaching the Debts Recovery
Tribunal under Section 17 of the Act. That being so, the circular issued by
the Debts Recovery Tribunal to the effect that unless possession is actually
taken by the financial institution, no appeal would be entertained, is clearly
against the provisions of the Act and the decisions of the Supreme Court.

8. Accordingly, Ext. PS in W.P(C) No. 17843/2011 is hereby quashed
to that extent. It is declared that all these petitioners are entitled to file
appeal under Section 17 against the proceedings impugned in these writ
petitions insofar as in all these writ petitions, the financial institution
concerned has already approached the Chief Judicial Magistrate or the
Additional District Magistrate under Section 14 of the Act, which would
constitute a measure under Section 13(4) of the Act. Therefore, if these
petitioners file appeals or re-present the appeal, which has been rejected,
within one week from the date of receipt of a certified copy of this judgment,
the same would be accepted as one filed within time and considered on
merits under Section 17 by the Debts Recovery Tribunal. If the appeal
filed has not been returned, the same shall be numbered and dealt with
on merits if there are no other defects. to enable the petitioners to move
the Debts Recovery Tribunal and seek interim orders, I direct that further
proceedings pursuant to the impugned proceedings be kept in abeyance
for a period of one month.

The writ petitions are disposed of as above.

I place on record the able assistance given to me by Adv. Sri. K.N. Sasidharan Nair in placing before me the various decisions applicable assisting this Court to come to a just and proper decision in these cases.

Writ petitions disposed off