DRT Legal Solutions
(Debts Recovery Tribunal Legal Solutions) is an India based
Law Firm specializing in DRT, Securitisation, NCLT, Borrowers and Guarantors Solutions in Debts Recovery Tribunals,
Pioneers in Counter-claims and Damage Suits based on Law of Torts and Law of Damages
Phones (India) - Mobile - +91-930-2103689, Off. & Res.- +91-731-4049358 and +91-731-3290201
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DRT Solutions Weekly Mail – 40th Issue dated 13th Feb. ’09
(1) ‘Video Arguments in Judicial Proceedings’ – a Special Address by Mr. Ram Kishan in National Conference:-
On 22.02.09, the Indore Branch of ‘ICAI’ (Institute of Chartered Accountants of India) in the ensuing ‘National Conference at Indore’ has invited Mr. Ram Kishan to deliver a Special Address on ‘Video Arguments in Judicial Proceedings’ An exclusive article on this topic has been published on our web site vide link http://www.drtsolutions.com/courtech.htm . This article will also be published on their Souvenir specially being brought out on this occasion. Video Recording of the proposed Address will also be available to the interested persons. Further details will be announced in the regular weekly mails.
In this connection, we are pleased to inform that our two DVDs on this particular matter are in great demand. The above proposed Address will create further interest in all concerned persons in the society. A responsive and efficient Judiciary is firs pre-requisite of an effective democratic society like ours. Through our concentrated efforts in ‘DRT Trials’ pertaining to defence of Borrowers and Guarantors, we intend to make all possible suggestions in the arena of court proceedings, legislation, management and technology.
(2) Options and Strategy in filing Damage Suit / Counter-claim during commencement of DRT Proceedings under Securitisation Act:-
In case of one of our clients at Indore, raised this matter, our reply to him is reproduced below:-
“Dear Mr. ,
The various options are as under:-
(1) There is no well defined legal provision under Securitisation Act to file Counter-claim against the Bank. The constitutional validity of the said Act will have to be questioned till it is amended to incorporate Counter-claim. It will be a long drawn process and hence this option, at the moment, is ruled out.
(2) The next best option is to file counter-claim under DRT Act as there is well defined provision for the same under sec 19 of the said Act. But that can be done only after the Bank has filed its claim under the said Act. The court fee will be Rs. 1.5 lacs maximum. Hence we have to wait till the said claim is filed by the Bank. Hence at the moment, this option is also ruled out.
(3) The last option is to file Damage Suit against the Bank in civil court. But the problem is the Court Fee which in our case will be quite huge and hence we shall file the said Damage Suit as an Indigent Person under Order-33 of CPC. The hitch is that the determination of indigency may take long time (even years if the bank opposes upto the Supreme Court). Hence till the Indigency is declared, the said Damage Suit may not be treated as effective.”
(4) In view of above, the best option is to wait till the Bank files OA under DRT Act.
(3) Entrepreneurs – the Change Agents for the Society :-
The human beings in the stone age were living just like animals in jungles and caves. They reached to modern way of living on account of constant efforts and innovations by the entrepreneurs. The entrepreneurs are inclined to take risks. In present context, the entrepreneurship is ultimately for wealth, power and status. The society which encourages and cultivates entrepreneurs develops at a faster rate. India has a rather stony ground for the entrepreneurs. They have to live and survive against several odds. The moral standards of the entrepreneurs will be similar to other constituents of the society. Until and unless we respect the productive entrepreneurs more compared with, the unproductive or destructive ones, the society will not advance. We shall deal with ‘Misdirection of Entrepreneurship’ – An article by William J. Baumol, a distinguished economic historian.
DRT Solutions Weekly Mail – 39th Issue dated 6th Feb. ’09
(1) DRAT Mumbai orders transfer of the case from DRT III to DRT I:-
In case of one of our clients at Mumbai, it was informed that their bankers, on the same matter, have filed two cases in two different DRTs. viz. OA under DRT Act and Proceedings u/s 17 of the Securitisation Act The said two cases under adjudication in two DRTs may result in conflicting and or contradictory decisions. Hence we advised our client to approach the DRAT Mumbai to transfer one of the case so that both the cases are dealt with by one DRT only. The said DRAT was pleased to order the require transfer from DRT III to DRT I despite opposition by the bank.
(2) Dealing with a strict and biased DRT Judge:-
The advocate of the above mentioned client at Mumbai pointed out that the judge where the cases were transferred was quite strict. We are of the view that we should not bother about the judge being strict and biased. It is needless to mention that the judge also is required to follow law and procedure of law. In fact we should always submit written arguments with such judge. As soon as the said judge issues any order, the same must be examined and review and appeal filed respectively in the said DRT and DRAT. With exhaustive applications, written arguments, review petition etc. we may create sufficient record for the success in the said court or in appeal to succeed.
(3) Reply to Notice u/s 138 NI Act:-
One of our clients at Indore approached us to prepare reply to the bank notice u/s 138 of NI Act. We prepared an exhaustive reply laying down the conditions precedents resulting into the dishonor of the relevant cheque. The wrong doings committed by the bank which resulted into the loss and damages were also pleaded. Since the said loss and damages were much more than the alleged claim of the bank and hence there was ‘No Debt Due’ Under such facts and circumstances, the bank was not required to process the said cheque.
We are also contemplating to advise our client to file criminal complaint against the bank officials for committing criminal breach of trust.
(4) PO, DRT not accepting the applications:-
One of the our clients at Mumbai informed that the PO DRT was not accepting interim application terming them a tool causing unnecessary delay. We asked our client to submit the said applications to the Registrar of the said DRT as well as to send the said application by registered post. With such approach the said application could reach to the said PO who had no option but to adjudicate the same.
(5) ‘Video Arguments in Judicial Proceedings’ – a Talk by Ram Kishan:-
On 22.02.09, the Indore Branch of ‘ICAI’ (Institute of Chartered Accountants of India) in the ensuing ‘National Conference at Indore’ has invited Mr. Ram Kishan to deliver a talk on ‘Video Arguments in Judicial Proceedings’ An exclusive article on this topic will appear on our web site shortly. Video Recording of the proposed talk will also be available to the interested persons. Further details will be announced in the regular weekly mails.
DRT Solutions Weekly Mail – 38th Issue dated 30th Jan ’09
(1) Counter-claim/damage suit can be filed at any time if it is based on continuing cause of action:-
The question of limitation is being repeatedly raised by the litigant borrowers and guarantors. If the counter-claim is based on continuing cause of action, it can be filed at any time, but preferably before commencement of trial.
This is just for information of all concerned that recently we have prepared a damage suit against a bank on the initial cause of action of 1987 i.e. nearly 21 years ago. It will be filed in the civil court just after 60 days of notice prescribed under the relevant act relating to the bank concerned.
(2) Verifications in pleadings and affidavits:-
In many cases we have observed that the verification of pleadings and affidavits by the litigant borrowers is not made correctly. The said verification is to be based on records and documents of the company/firm and not the personal knowledge of the borrower otherwise it will create a lacuna if it is questioned by the opposite party. If such a mistake is committed by the bank officials, they may be questioned accordingly in the counter-affidavit or during the cross-examination.
(3) Improvements in the format and presentation of the Pleadings and Written Arguments:-
We have carried out following three improvements in the format and presentation of the Pleadings and Written Arguments:-
(a) The Microsoft Word has provision of marking line nos on a page. Thus a more accurate reference of a certain location on the document can be made by making reference to the Page No and Line No.
(b) If you are making any reference to the extract of certain order, document or ruling, you may insert the copy of that extract on a page and then make the pleadings or comments. This will make the job of the reader or the Judge quite simple.
(c) At the end of the document, detailed index can be made by giving reference of the Page No and Line No. This is the system followed in USA in all the written documents submitted to any court of law.
(4) Appointment of Judges:-
In our country, the appointment of trial court judges in civil court is based on competitive examination of fresh law graduates. Such practice is based on the system introduced by the British. But in UK itself, after 900 years of such practice, they have changed to appointment by special commission which is an independent public body without any interference from the government, politicians or judges. Further in order to win the confidence of the public, the judges are being appointed from all walks of life with the condition that they must have legal education and 5 to 7 years of experience in particular field where they will be posted as Judge. Further the appointments are for a contractual period of 4 to 5 years after which the contract is to be renewed depending on the performance and results.
The above has been evolved in UK based on American Judicial System.
Hence the day is not far when in our country also such reforms will take place. Till such time we have to carry on with the Judges particularly in Trial Courts where the fresh law graduates enter the job without any actual field experience. With passage of time and due to heavy work load, hardly there is any chance for them to acquire essential knowledge of the field. That is why the performance of most of the departmental judges is not found satisfactory in the trial court or even on promotion to Higher Courts. Some of such Judges are also getting posted in the DRTs and that is why we are receiving complaints about their questionable behavior.
The above is base on the information on the internet relating to the appointment of Judges in UK vide link http://www.judicialappointments.gov.uk/select/select.htm
DRT Solutions Weekly Mail – 37th Issue dated 23rd Jan ’09
(1) Gujrat High Court holds debt assignment or its substitution illegal:-
On 12.01.09, the Division Bench of Gujrat High Court in the matter of Kotak Mahindra Bank Ltd. Vs Official Liquidator of APS Star Industries Ltd. has delivered an important verdict stating that buying and selling of the debt with the underlying securities can not be part of the activity of lending. Finally the High Court has declared the assignment by way of substitution of debt as an illegal activity. This judgment will adversely affect operations of all the Securitisation Companies.
(2) Distt. Collector withdraws his notice after being fired by Chief Justice, Madras High Court:-
As reported in our weekly mail issue no 35th dated 9th Jan. ’09, the Distt. Collector was fired by the Chief Justice, Madras High Court for having issued a notice under the SARFAESI Act in respect of one of our clients from Chennai. The said Collector withdrew his notice and informed the High Court accordingly on 19th Jan ’09. The copy of the order and proceedings of the High Court are still awaited.
(3) Possession Notice under Securitisation Act:-
We have been approached by parties from Indore, Mumbai, Cochin and Bhuvaneshwar who are worried on getting possession notice from their bankers under Securitisation Act. We have informed them that the only remedy is to file appeal u/s 17 of the Securitisation Act. This appeal is a misnomer and is in fact akin to civil suit. We are preparing the said suit in a very exhaustive manner. We shall provide all guidance as to how to fight such suit. In due course of time, exhaustive damage suit / counter-claim must be filed as that will be the ultimate defence.
(4) Next Conference of Legal Forum of India:-
We are getting numerous queries as to when we are holding next conference. The news about our conference at Indore has spread far and wide and the DVDs are great in demand even from NRIs who have stood guarantors and cases are going on in DRTs. Next conference will have much larger attendance. Lot of time and efforts are required in organizing and holding a good conference. Tentatively we have decided to hold next conference at the end of 2010 and preparations for the same will commence six months in advance.
DRT Solutions Weekly Mail – 36th Issue dated 16th Jan ’09
(1) Another Counter-claim decreed by DRT:-
One of the visitors of our web site informed that DRT has decreed their counter-claim as full set off to bank’s claim of Rs. 79.51 lacs. In the judgment, DRT stated that “The counter-claim is averred in clumsy, haphazard & repetitive manner. There is lack of continuity and correlation in several contentions.” The bank has appealed to DRAT against the said verdict of the DRT.
The party has approached us seeking our advice for further action in the matter.
This is the second case of counter-claim decreed by DRT which has come to our notice. The first one was from DRT Bangalore, details of which were reported in 28th issue of our weekly mail.
In both the above cases we find that pleadings of the counter-claim have not been prepared properly. All the legally permissible categories of damages have not been claimed. As a result the parties have approached us to amend the counter-claims.
(2) Justification for cross-examination of bank officials tendering affidavits:-
One of our clients from Mumbai sought our advice on further action to be taken on the affidavit submitted by the bank in the matter of the borrower’s application for dismissal of OA filed by the bank. The bank’s affidavit mainly contains general and evasive denials.
Similarly in case of one of our clients from Indore, the bank has submitted reply to the appeal filed by the borrower. The borrower has decided to file rejoinder to the said affidavit. In this case also the bank’s appeal contains mostly general and evasive denials.
In both the above cases, for correct judicial determination of facts, there is no option but the cross-examine the bank officials who have tendered defective averments in their affidavit/reply. Applications giving examples of some of such averments be made to the DRT, such facts be explained during the oral arguments as well as written arguments be submitted. The order issued by the DRT be examined, more so if adverse, to ascertain whether it contains the parameters of ‘Review’ All out efforts be made for complete judicial determination of facts.
(3) Review – Interpretation of Citations:-
One of our clients from Indore Informed us that during arguments for ‘Review’ of an order in the matter of an application relating to Sec 24 of CPC, the opposite counsel for the bank submitted 7 citations. On examination of these citations, it was found that 6 citations were not applicable and one was in favour of the Review Petitioner. It appears that the said citations were submitted on rudimentary reading of the ‘Index Notes’ Actually the complete judgment must be read thoroughly before coming to any conclusion otherwise one will have to cut a sorry figure as in this case.
(4) Tools for ‘Distant Advocacy’:-
Consequent on demands from several of our clients all over the country we have developed following modern tools for the ‘Distant Advocacy’ :-
(a) ‘Voice Opinion’ :- In several cases, we have prepared our opinion in voice (MP3 format) and e-mailed it to our client who may listen the same and play the same to his advocate. If required, any steno may transcribe such ‘Voice Opinion’
(b) ‘Video Brief’ :- We have evolved brief in form of ‘PowerPoint Presentation’ which is contained in a DVD format. It contains complete brief showing the documents and citations with full explanations.
(c) ‘Video Arguments’ The complete arguments are available in form of the ‘PowerPoint Presentation’ showing the documents and citations.
The above tools have been shown to the eminent persons like retired judges and senior advocates who have appreciated the same as the same would be highly useful to the advocates and judges.
The day is nor far when the above improved method for court room will become as common as mobile phone. The efficiency of the complete process of litigation will improve tremendously as well as drastic reduction in costs.
DRT Solutions Weekly Mail – 35th Issue dated 9th Jan ’09
(1) Collector fired by the High Court in the matter of Securitistion Act:-
One of our clients from Chennai through his e-mail dated 6th Jan. ’09 informed as under:-
"A writ was filed before the High Court of Madras against the Distt. Collector for having issued a notice under sarfaesi act and for not complying to provide a copy of the complaint from the bank and threatening to take action by seizing the assets given as collaterals.
A single judge sitting during vacation on 31st Dec posted the matter before the Division Bench on account of being under sarfaesi act.
The matter came up today before the bench, where the acting Chief Justice Magopadhya was sitting along with justice Dhanabalan.
The item was 42nd which came up at 4 PM.
On examining the documents, the acting CJ asked, " Who is this collector? What is his name? What is he thinking of himself? A king of the district?? Which district ??
The Govt. Pleader said it was Vellore district and he does not know his name.
The CJ said, " I shall pass strictures against him if he does not answer in 5 days time. I give 5 days time for him to withdraw this notice. "
"Under sec 14 of the sarfaesi act, a Distt. Collector or magistrate has only the duty of taking possession after the recovery office makes a certificate under the directions of a decree or order. and only to assist such recovery officer and not to assist the secured creditor !! that too for assisting in possession to the recovery officer and not to conduct enquiry !! What does he think of himself?? if he still feels he has anything to say let him file a counter by 19th"
The court was in echo with his loud voice.
He continued and instructed to record the above. he said " in my opinion a work shop needs to be conducted for such officers with the changing trends in the Act and with new judgments passed by High Courts and the Supreme Court"
To all of us, a new definition and procedure of sec 14 in sarfaesi act has been interpreted. One more head down of the draconian Act. A new leaf to be added to our defence folders."
We are awaiting the copy of the actual order. Our comments will follow after receipt of the copy of the said order.
(2) Appeal u/s 17 of Securitisation Act is the first and last action for the Borrower to ventilate all his grievances:-
The Supreme Court in the matter of Mardia Chemicals has laid down that the appeal u/s 17 is akin to a civil suit. Being the first civil action in the DRT i.e. a trial court, the borrower must raise his complete defence. All the factual and legal aspects of the said defence must be pleaded in the said suit. All the said facts must be judicially determined, proper law be applied to the said judicially determined facts to achieve complete justice. It is presumed that in the said trial all the tools like determination of the facts by way of discovery of documents and through cross examination of the witnesses be used. Hence the said appeal u/s 17 is the first and last action for the borrower to ventilate all his grievances. Any lapse on these aspects will create a lacuna which can not be corrected later on.
(3) Proper Pleadings including counter-claim and Trial in DRTs is the foundation for success in Bank Litigations:-
The foundation for achieving success in bank litigations in DRTs is the proper pleadings including counter-claim and then all the aspects of trial as laid down by the Supreme Court in the matter of Swaranlata vide citation AIR 1969 SC 1167. The recovery statutes viz. DRT Act and Securitisation Act are in addition to and not in derogation of the Constitution of India which includes the Art 141 according to which the law down by the Supreme Court shall be binding on all courts in the territory of India. The details of all these matters have been covered in detail with practical aspects in our web site www.drtsolutions.com and the DVDs pertaining to the Indore Conference.
(4) Blame and allegation for Delay:-
Since the DRT Act and Securitisation Act are latest recovery enactments. The DRT courts itself is a relatively new establishment. The relevant law and procedure of law in the DRTs is under constant evolution and development. On one hand, the bankers are under pressure to expedite recovery, most of the affected borrowers are neither having adequate knowledge nor resources for the resultant legal battle. The civil courts are also facing huge burden of pendency and pressure for quick disposal. The matter gets complicated when there is dearth of competent trial advocates in DRTs. Above all, the facts relating to banking, industries, finance and relevant law are highly complex and without precedents as such battles have not been fought in past. Since in modern times, everybody is extremely busy and have shortage of time, there is no time for research, review, study and contemplation. Using modern management and technology, we have created a global platform for interactions of the affected persons.
Our emphasis is on perfect pleadings and perfect trial on every date in DRTs. Any deviation with such approach will result in defeat in higher courts. This is on account of obvious bias of the system in favour of banks and against the borrowers. Very competent advocates and judges are available in higher courts but they are not meant for corrections or defect removal of mistakes or deficiencies in the trial courts like DRTs. At the most the actions may be to remand for retrial as happened in the matter of Swaranlata (AIR 1969 SC 1167 Para 13) when the Supreme Court in 1969 made the following statement:-
“ 13. We are, therefore, constrained to come to the conclusion that there has been no real trial of the defendant’s case. It is a very unfortunate state of affairs that eighteen years after the date on which the suit was instituted, we have to remand the suit for trail according to the law. But we see no other satisfactory alternative.”
Despite more competent advocates and judges in 1951 to 1969, lesser wastage of time due to absence of TV and comparatively less busy modern life of those days and hence more time for studies; when retrial was needed in 1969; the conditions are worse nowadays. Practically every case is having lot of defects at the trial stage. That is why we have emphasized greater use of tools like Review and Change in Court despite perfect pleadings. One need not worry for delays as the interest in counter-claim will continue to ensure protection from recoveries.
In view of above, if there is any allegation of causing delay, the borrower must narrate the above facts and circumstances which are in the interest of justice, equity and good conscience.
DRT Solutions Weekly Mail – 34th Issue dated 2nd Jan ’09
(1) Legislation and Constant Periodic Revision:-
Following is the extract from Pgs. 500 and 501 from the Book – “Outlines of Indian Legal & Constitutional History” by Prof. M.P. Jain Sixth Edition Reprint 2007 published by ‘Wadhwa Nagpur’ :-
Law is never static. Since human society constantly undergoes changes because of social economic process, law also must change keeping pace with social changes. Even if the law is codified, there is no finality about law.
Sir Henry Maine (Member 3rd Law Commission – 1862 to 1869 during tenure of which 211 Acts were passed) in his famous book ‘Ancient Law’ points out that the sign of a progressive human society is whether law keeps on growing after its codification1 A country with codified law needs to look into the statutes from time to time, revise them and re-enact them in order to bring them up-to-date. After codification, the function of the courts undergoes some change. It becomes less creative. Instead of developing the law to embrace new relationships or new set of facts, the courts confine themselves by and large to the narrower task of interpreting parliamentary language. The early British codifiers of law for India had envisaged that the codes being enacted would need constant periodical revision.
Lord Macaulay said while submitting the draft Penal Code to Lord Auckland "Sometimes it will be found that a case has arisen respecting which the Code is silent. In such a case it will be proper to supply the omission. Sometimes it may be found that the Code is inconsistent with itself. If so, inconsistency ought to be removed. Sometimes it will be found that the words of the law are not sufficiently precise. In such a ease it will be proper to substitute others... In this manner every successive edition of the Code will solve all the important questions as to the construction, of the Code which have arisen since the appearance of the edition immediately preceding'' Sir James Stephen once said: "Re-enactments of the various codifying Acts are as necessary as repairs are to a railway.”' He went on to emphasize upon the need of constant revision of newly enacted codes in these words: "It is nearly impossible, when an Act is first drawn, to foresee every case which can arise in reference to the subject, unless it has already been exhausted by judicial decisions. Judicial decisions are the material from which codifying acts should be drawn and it cannot I think be expected that a really important Act of this sort should reach its full maturity till after several enactments."4 In his view, no Act of importance ought to last for more than ten or twelve years. It should then be examined carefully "from end to end" and "it should be improved or corrected at every point at which experience has shown that it required improvement and correction..."
Even John Stuart Mill proposed a permanent commission to watch over codified law, protect it from deterioration and make further improvements therein as often as required. The statute book needs to be consolidated and expurgated occasionally. During the course of working of the statutes, certain lacunae might he revealed. The courts in the process of interpreting the statutes may give conflicting and divergent decisions contradictory and inconsistent case-law may accumulate around some statutory provisions. It thus becomes necessary from time to time to reconcile the conflicting cases, to assimilate the judicial pronouncements, and to improve and revise the law in the light of these rulings. Errors of drafting may be revealed; social changes may dictate changes in law. Revision of statutory law is, therefore, a perennial and continuous process in any developing society.
On the need for effecting changes in the law from time to time, the Supreme Court of India ( vide AIR 1986 SC at 1584) has observed as follows:3
"The law exists to serve the needs of the society which is governed by u II the law is to play its allotted role of serving the needs of the society, it must reflect the ideas and ideologies of that society. It must keep time with the heartbeats of the society and with the needs and aspirations of die people... The law must, therefore, in a changing society march in tune with the changed ideas and ideologies..."
Our Comments:- We have inherited the British Judicial System having the concept of constant updation of law in accordance with the needs of the society. While we enact the statute but we have no assured built-in system of updation. Macaulay as mentioned above has pointed out (about 150 years ago) that such updation should take place in 10 to 12 years. On account of fast pace of life in present time, it should take place every year or two.
Our view is that the knowledgeable persons must contact the ‘Law Commission’ and the ‘Legislative’ wing in the Ministry of Law and submit their proposals from time to time and ensure that the amendment or updation is accomplished without any hitch. Such amended acts be placed and passed by the parliament.
Through the ‘Legal Forum of India’ we intend to do so in respect of ‘DRT Act’, ‘Securitisation Act’ and ‘NCLT Act’ Our concern is in respect of those piece of legislation which relate to the defence of Borrowers and Guarantors.
The above will avoid challenging the constitutional validity of the statute under considerations through court of law. The proposed updation will enhance the quality of the pleadings as well as unnecessary legal fights in court of law, which in turn will improve the quality of litigations. The cost of the litigation will also come down.
(2) Datum for Counter-claim:-
The broad principles are as under:-
(a) It is assumed that the fundamentals of the lending based on viability have been pleaded properly in the counter-claim.
(b) The first wrong doing by the lender which can be proved by Law of Evidence has been located.
(c) If there are any admissions by the borrower, the same must be considered properly if they have any sizable impact on the said wrong doing.
(d) Having fixed the said wrong doing in accordance with above, the datum may be fixed based on the said wrong doing.
(e) Another test is the capability of the borrower for possible corrections during the period subsequent to the said datum.
(f) Having fixed the datum, the yearly impact be assessed and the happening during the subsequent period need to be examined.
(g) The pleadings then should be finalized taking into considerations the law of torts, law of damages and law of evidence.
(3) Coverage of our Weekly Mails:-
During every week we receive several mails from our clients and visitors of our web site. Accordingly we have numerous interactions, questions and answers. Out of these, we select those which will have utility to the public (our public is the community of Borrowers and Guarantors facing litigation in DRTs) are published first on our web site and then the same is communicated as weekly mail. All these weekly mails right from the issue no 1 to the latest are available on the web site. Any new comer to our mailing list is advised to go through all the mails right from the 1st one. The language of these weekly mails are purposely kept so that the same is easily understood by the public. Sometimes there may be repetitions but the presentation is latest as the same topic is felt of paramount importance in the interactions during the week under review.
The purpose of these weekly mails is to empower the public to understand the legal process, issues and solutions to the current problems in DRTs with emphasis on the practical utility. With passage of time, our weekly mails are read by thousands of borrowers and guarantors and their advocates.
If you feel the utility, you may forward these mails to your known persons. If someone desires to be regular recipient of our mails, he may contact us to add his e-mail ID on our address book. He will get these mails regularly on every Friday before 6AM.
All the weekly mails right from the 1st issue along with the DVDs of the conference and ‘Video Argument’ is a very good source material for facing the litigation in DRTs.
You are free to ask questions and make suggestions to enable us to incorporate the same in the future issues.
DRT Solutions Weekly Mail – 33rd Issue dated 26th Dec. ’08
(1) Pending OA Dismissal Application and filing of Counter-claim:-
In the matter of one of our clients from Indore, an application for dismissal of OA has been pending in DRT Jabalpur. In the meantime, the bank has initiated action under 13(4) of the Securitisation Act. While Appeal u/s 17 is being filed, it has been decided to file the counter-claim against the OA. The WS is not being filed as the said application for dismissal of OA is still undecided. The proposed counter-claim is much more than the claim of the bank and hence it will result in ‘No Debt Due’ situation which will also form a good defence against the Securitisation action. At the end of the day, until and unless the counter-claim is decided the recovery against both the actions viz. OA and Securitisation will not be possible. For full adjudication, the counter-claim must be fought perfectly and thoroughly so that all the material facts are judicially determined and the bank admits all their wrong doings. The tools of discovery and cross-examination will have to be used with full legal and factual knowledge and competency. The goal should be that nothing is left to the discretion of the judge. On account of the existing age old technology and poor management in courts, the process will easily take 10 to 20 years at the trial court only. There will be pressures for shortcuts which will have to be resisted otherwise justice will not be achieved.
(2) Review wrongly rejected by the Registrar of DRT in the matter of SA:-
In the matter of one of our clients from Ranchi, the Registrar, DRT Ranchi has rejected the application of Review filed against an interim order pertaining to application u/s 17 of the Securitisation Act.
When the various provisions such as Sec 17(7) and 37 of the Securitisation Act, DRT Act, Rules under Securitisation and DRT Act and law laid down by the Supreme Court in the matter of Mardia Chemicals are considered, it will be found that the action taken by the Registrar is not correct. We have advised the client to appeal to PO DRT.
This is one of the example which shows that any efforts just to concentrate and expedite the recovery even by resorting to coercive legislation like Securitisation Act will ultimately never be successful for the following reasons:-
(1) Any enactment and procedure thereof has ultimately to follow the Constitution and the law declared by the Supreme Court.
(2) Since the new enactments like the DRT Act and Securitisation Act are neither comprehensive nor the relevant procedures have been developed, the deficiencies and shortcomings will be questioned during the adjudication only. Such questioning will take years to settle.
(3) In eyes of law laid down by the Constitution and SC, the sole objective of all courts is same i.e. 'Justice' whether it is Civil Court or DRT. No one has power to resort to short-cuts.
(4) In view of above, the borrowers and guarantors should be quite vigilant and alert on every date and stick to the procedure of trial laid down by the Supreme Court in the matter of Swaranlata (AIR 1969 SC 1167). Since the advocates may not have so much time and patience, the litigants only will have to involve themselves to achieve judicial determination of all material facts and till such time, no final arguments should be allowed to take place.
(3) Cross-examination – entitlement in the event of any submission made by opposite party in form of pleadings, statement, affidavit etc. :-
In the matter of one of our clients from Mumbai, we advised them to cross-examine the bank official who has submitted an affidavit which contain several misleading and false submission.
In several cases reported by our clients elsewhere also, it is found that the banks are in habit of submitting general and evasive pleadings. Similarly affidavits are being submitted by the bank officials containing disputed facts. The only remedy in all these cases is to cross-examine the relevant bank officials. Such cross-examination be held in such a manner that the real facts are discovered ultimately leading to ‘Undisputed Facts on Record’ It is only after this, such facts be subjected to analysis by application of relevant law. Any lapse on this count will result in unsuccessful trial.
(4) Negotiation and settlement with the banks:-
In the several cases, our clients inform that they desire settlement with the banks but such settlements are not successful. The main reason for failure is that any negotiation must be indulged only from position of ‘Strength’ and not ‘Weakness’
The position of ‘Strength’ can only be created by application of law and procedure of law by which the bank and its officials reach to a point of no return i.e. either their defence is closed or their case reaches close to dismissal. In this respect filing and contesting ‘Counter-claim’ thoroughly will be of great help. On account of such approach, few of our clients could settle their debt at 3% to 5% of the due amount. Such situation can be reached only when the borrower himself takes interest in the litigation. Leaving the case only to the advocate can never create the desired position of ‘Strength’
(5) Use of Voice Mail in rendering quick replies and Legal Opinions:-
Many a times our clients approach us for our legal opinion or comments at the last moment. Sometimes such opinions are quite lengthy and exhaustive. Under such circumstances particularly when the matters are crucial and critical, we prepare ‘Voice Mail’ containing the complete opinion incorporating the law, court citations etc. Such ‘Voice Mails’ in MP3 format are sent through e-mails which after downloading, may be played or transcribed by the steno.
DRT Solutions Weekly Mail – 32nd Issue dated 19th Dec. ’08
(1) Affidavit by Govt withdrawn – on the application for cross-examining the said official:-
In the matter of one of our clients from Mumbai, we advised them to cross-examine the bank official who submitted the affidavit. For this purpose we prepared an exclusive application which will be submitted in due course of time. Just after this, a news item appeared in the Economic Times, Mumbai 12th Dec ’08 issue at page 1 entitled ‘ Govt. withdraws affidavit in RIL-RNRL gas dispute case.
We have observed that in many case, false, erroneous and misleading affidavits are filed by the bank officials. The only remedy is to cross-examine them so that real truth will come out. It is needless to mention that the person cross-examining the said bank officials should have mastery of banking facts, related laws including evidence act.
We have constituted a special cell for this purpose having experts in banking and banking laws. We intend to conduct such cross-examination using the modern technique of video conferencing.
(2) Delay caused by Bank in submission of WS in the matter of counter-claim:-
In the matter of one of our clients from Chandigarh, the bank has been delaying to submit their WS to the Counter-claim filed in civil court. Initially, the judge imposed costs of Rs. 500 which on subsequent dates was enhanced to Rs. 2000 and then Rs. 5000. The bank officials are under great pressure but it is not so easy to submit reply to the counter-claim drafted by us. This is how the beauracracy in banks is made to realize the responsibility and accountability right from the CMD of the bank to the level of Branch Manager who have been made parties as they all have well defined duties under the RBI Guidelines. In many cases we have observed that on account of non-submission of WS, the stage came upto the closure of defence. To avoid the same, ultimately the advocate of the bank had to submit the said WS by making simple, general and evasive denial. This is how the case of the bank is weakened. By such denials, the borrower has right to make full discovery of documents as well as thorough cross-examination. These are the tools by which all the material facts will be judicially determined. It is only after getting all the admissions of the wrong doings by the banks, the arguments may be held otherwise the trial will not be complete. Once such rights are ignored, the higher courts can not correct the situation.
(3) Reply affidavit by Bank in the matter of SA:-
In the matter of one of our clients from Indore, the bank officials have submitted a a reply affidavit. We have advised the client to examine the same in light of the principles mentioned in above items as well as those covered by us in previous weekly mails.
It is needless to mention that the appeal in the Securitisation Act under the Sec . 17 is akin to civil suit as per the law declared by the Supreme Court in the matter of Mardia Chemicals. Hence the above mentioned affidavit must be adjudicated upon thoroughly for judicial determination of material facts as per the detailed procedure mentioned in previous paragraph.
(4) Appreciation of our efforts in the arena of ‘Review’:-
One of our mail recipient who is an Advocate in Delhi appreciated our efforts for spreading the knowledge about ‘Review’ Extract of his mail dated 17th Dec. ’08 is reproduced below:-
“Thank you very much for the update especially as to aspect of reviewability of the order passed by drt. Thank you once again for this effort..
Thanks & regards,”
We sent the following reply:-
(1) Many thanks for your understanding and appreciation.
(2) The legal community in our country has not paid due attention to the essential attributes of a trial and as a result the judicial determination of facts have suffered a lot.
(3) Similarly the provision of Review has not been understood properly.
(4) In whatever form of judicial process, the British left; we did neither understand it properly nor develop it.
(5) The greatest complication was introduced when our Constitution was promulgated.
(6) The entire legal community is at cross-road and the correct remedy is near impossible rather a mirage.
(7) We have therefore decided to concentrate at the level of trial only. We have chosen DRT as it is only place of trial where we can find some litigants who can afford the cost of legal battle which, on account of above factors, has become long drawn, highly time consuming and hence very expensive. We hope to achieve some leading judgments which will help all others who can not afford such battle. We are also using tools of appropriate management and modern technology to create awareness among the existing players. The task is gigantic but efforts are worth the desirable social impact.
With best wishes,
(5) On account of counter-claim, the bank officials are after the borrower to settle the case:-
In a small value case (less than Rs. One lac for a car loan), the borrower at Indore, filed counter-claim in the Consumer Forum. The bank officials have verbally admitted their wrong doings and are now running after the borrower to settle the case. In several cases we find that the bank has no choice but to settle if the counter-claim is properly prepared, filed and pursued in the court of law.
(6) Case of OA Dismissal in DRT Nagpur:-
In the matter of one of our clients from Nagpur, past nearly two years, the bank is unable to reply the application for OA Dismissal submitted by the borrower. We are sure that either the bank will lose their OA or will come forward for settlement as the relevant law has been well settled particularly in the region covered by Mumbai DRAT.
DRT Solutions Weekly Mail – 31st Issue dated 12th Dec. ’08
(1) Affidavit by Bank Official – cross-examining the said official:-
In the matter of one of our clients from Mumbai, the bank official has submitted an affidavit which contain several erroneous and misleading facts as well as misconceptions of law. We have therefore advised our client to cross examine the said official in accordance with the Order 19 Rule 3 of CPC read with Sec 22(2)(a) of the DRT Act.
(2) Cross-examining the Bank official through Video Conferencing:-
For the purpose of the above mentioned cross-examination if the expert cross-examining the said bank official is situated at a distance, one may use the method of video conferencing. This will save overall time and costs apart from having accurate record in form of a CD which may be replayed whenever needed.
(3) Why ‘Review’ has become so highly important and essential in Indian Courts including DRTs:-
In the matter of one of our clients from Ranchi, the securitization appeal was decided in a very short period ignoring the complete trial. We advised the said client to file Review and Appeal.
It is observed that the Indian Courts and Tribunals are highly overloaded and there is huge pendency of cases. As a result there is pressure for quick disposal. All these factors in almost all the cases give rise to numerous defects in the orders and decrees fit for Reviews. The common concept is that the same judge will never accept his mistakes and hence the Review is seldom resorted to. In the matter of above mentioned case, we prepared a detailed voice mail and sent to the said client. The said mail contained detailed explanation based on several Supreme Court Citations. The advocate concerned very much appreciated our voice mail and accordingly he incorporated the same in the Review Petition.
In this connection, it is relevant to note that the Supreme Court vide citation 2007(14) Scale 624 in the matter of Mount Carmel School Society vs Delhi Development Authority stated:-
“15. A Judge’s record, as is well known, must be accepted as correct.
Appellant, thus could have filed an application for review before the learned Single Judge. The same was not done.
16. We are, therefore, of the opinion that the High Court can not be said to have committed any error in passing the impugned judgment.”
Hence in view of above SC Citation, if you have missed in filing Review, the higher court will hold you only responsible for the lapse and thus you will be deprived of one legal remedy.
(4) ‘Counter-claim or Damage Suit’ is the only and ultimate defence in DRT Bank Litigations:-
In all the recovery actions like OA under DRT Act or Notice under the Securitisation Act, the bank and or financial institution comes up with a claim in money value with interest. The defendant borrower or guarantor normally pleads wrong doings and or lapses of the creditor. The most appropriate remedy will be to quantify the said wrong doings in form of money value and file the same as counter-claim or damages. This is the only and ultimate defence in all the bank litigations. It is needless to mention that until and unless the said counter-claim is fought fully in accordance with all the provisions relating to a suit, court will be inclined to decide the case only in favour of the creditor. Hence all the defending borrowers and guarantors are advised to be perfect not only in the pleadings but on all dates in adhering to the full fledged legal procedure relating to a suit. It is a ground reality that if it is not done, the courts are inclined to pass orders and decrees in favour of the bank and financial institutions only.
It is important to bear in mind that the said counter-claim or damage suit must be filed as early as possible so that there is complete protection right from the inception of the litigation.
(5) Appeal u/s 17 of Securitisation Act needs to be contested as a Suit:-
It is once again emphasized that the said appeal being a suit as decided by the Supreme Court in the matter of Mardia Chemicals, is not being fought as such. It is again emphasized that the approach should be as mentioned in sl no 4 above and accordingly the said appeal must be fought as suit using all the provisions mentioned in CPC 1908.
(6) Decree passed by DRT is found having several defects:-
In the matter of one of our clients from Bangalore, the civil court and DRT has passed the decree after adjudication lasting over 10 years. The said decree has been found several defects and hence we have advised the client to file Review and Appeal.
This case also confirms our observations that the Indian Courts including DRTs are heavily overloaded and the quality of adjudication is very poor resulting into reviewable defects in almost all the cases. Both the remedies i.e. Review and Appeal must be pursued by the defendant Borrowers and Guarantors. This is only possible for such litigants who have financial affordability, sufficient time and resources and those who have filed their counter-claim and damage suits. Such legal battle ultimately gives returns as the creditor/applicant bank is forced to settle even to the extent of less than 5% of the alleged dues. If the defendant borrower or guarantor do not have patience, the judicial machinery will decide only in favour of the creditor and once it is done at the level of the bottom court, chances of any correction by the higher courts are extremely remote. That is why we have been insisting perfect pleadings and perfect adjudication on all dates. Since this is not practically possible for the advocates, the borrower will have to involve himself otherwise results can not be assured. With passage of time, some leading judgments including heavy damages against the banks will be achieved, In the meantime, we hope that the management and technology in courts will also improve.
DRT Legal Solutions
Attorneys at Law of Torts, Injury and IPR Claims
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(2) We have created a separate web site www.usindolegal.com which deals exclusively with our US joint venture enterprise for activities like BPO, legal BPO, DRT etc. This site has started appearing in the search results of Google, Mamma, Alexa and Yahoo.
Application of Law of Torts in claiming Damages from Municipal Corporations for demolition of structures, closure of shops etc:- In many parts of the country, the Municipal Corporations are demolishing structures like shops and houses which existed for number of years. The shops existing for number of years are proposed to be shut down. The affected persons should claim Damages under the Law of Torts, which would be substantial. It is learnt that in Delhi itself about 5 lac shops are to be closed down and about 25 lac persons would be out of jobs. All these persons should file damage suits in the civil court. Since the damages would be substantial, the suits may be filed as Indigent Persons. Since the damages would attract interest, the usual delay by the civil courts will not affect the final outcome. The affected shop owners may discuss the details with us on phone.
Our Articles for Borrowers and Guarantors:- Our articles on DRT matters have been published in the Financial Express. The All India Manufacturers Organisation in its famous web site www.aimoindia.org has reproduced copies of our four articles. These original articles can be searched in the archive of the Financial Express in its web site www.financialexpress.com Two of these articles have been reproduced in other pages of this web site.
Useful link www.WorldVideoBusiness.com :- WorldVideoBusiness-WVB® is a business to business e-marketplace source of international trade leads, and tender opportunities from companies and government organizations around the globe.
About Us in Brief :- (1) We specialize in DRT (Debt Recovery Tribunal) and NCLT (National Company Law Tribunal) matters. As a whole you may approach us for all DRT Problems and Solutions as well as matters connected with ARCIL i.e. Asset Reconstruction Company (India) Limited, We have a Joint Venture with an America based law firm for various activities like BPO, legal BPO and DRT. The details of the said American firm and the joint venture may be seen at the page - Our US Joint Venture with Anand Ahuja Associates or in www.usindolegal.com (2) For your all problems including those in DRT, please phone us or send e-mail. Please give your contact details along with your problems in brief. As a whole you may approach us for all DRT Problems and Solutions. (2) With our Legal Opinion, you need not worry about the Securitisation Act or other DRT matters or NCLT. Please visit the page Products & Services and Frequently Asked Questions (3) On account of our expertise in the Law of Torts and Banking and experience past 15 years, we can help you to submit suitable defence with winning strategy in DRT cases, Securitisation Act, Guarantors' defence etc. (4) We need only copies of all available documents to render our expert 'Legal Opinion' which will be quite useful and valuable to you particularly in DRT i.e. Debt recovery Tribunal. (5) We have also handled assignments for preparation of damage claims against Electricity Boards, Insurance Companies, Municipal Corporations etc. all on the basis of the Law of Torts. (6) The DRT counterclaims is to be prepared well in advance so that it could be raised at proper time in DRT or other forum to safeguard the securities and assets. (7) Several DRT counterclaims drafted by us are being handled by different advocates at DRT Mumbai, DRT Delhi, DRT Jabalpur etc. Thus DRT advocates are available in these cities. Cases in other Debt Recovery Tribunals are under process. (8) This site is updated monthly mostly on every first Monday of the month or for urgent release on any day with latest material. (9) For further details about us, please visit the page About Us-DRT Solutions As a whole you may approach us for all DRT Problems and Solutions. We hail from the place to which Maharishi Mahesh Yogi and Acharya Rajnish belong and hence this site is dedicated to them.
Our this web site is dedicated to Yoga Rishi Baba Ramdev Ji Maharaj:- Our this web site is respectfully dedicated to Yoga Rishi Baba Ramdev Ji Maharaj whose method of Pranayam has cured even incurable diseases and thus has revolutionized modern medical science. For further details please visit our special page by clicking here Baba Ramdev Ji Maharaj, Yoga Guru, Cure for All Diseases, Medical Science Revolution
Site also dedicated to:- (1) Swami Ramdevji, Acharya Balkishan and their Guru Pradumn Maharaj.
We regularly practice TM and SCI of Maharishi Mahesh Yogi. We also regularly practice Hath Yoga including Pranayam based on Baba Ramdev Ji Maharaj. We daily watch his global TV program on Astha Channel from 05:30 AM to 8AM and 8PM to 9PM Indian Standards Time. On Sanskar channel, we daily view the discourse of Pradumn Maharaj from 4 AM to 5:30 AM. Many chronic diseases such as Cancer, Parkinsons' disease, Polio, Asthma, Hypertension, diabetes etc. have been cured by the said method of Pranayam which can be learnt even by watching his program on TV. Since 30th March '06, we have started practicing Sun Gazing as prescribed by HRM.
(3) Shri Satyanarayan Morya alias 'Babaji' for his praiseworthy service to our nation. Please visit his site www.artistbaba.com
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