DRT Solutions Weekly Mail – 320^th Issue dated 27^th June ’14

All Weekly mails right from 1^st Issue to latest, click links on top of this page

(1) Damages under Law of Torts is Most Appropriate Remedy particularly when Statutory Authorities are Involved in Wrong Doings

In developed countries, Law of Torts occupies a prominent place but in our country, this important branch of common law is not practiced. This subject is taught in law colleges past more than 150 years. The first edition of famous Indian Book on this law written by Ratan Lal & Dhiraj Lal was published in 1897. Updated 26^th edition of this popular book has appeared in 2013. Thus Indian Legal Community has been using this book past 117 years. Several British and American legal authorities as well as their Press have profusely appreciated this book. The Standard (London) opined that “ – there is no better text-book for legal students of the law of Torts by any English writer” The Harvard Law Review (USA) commented that “The work is more comprehensive than many other text-books on the subject” There are also several other Indian books on Law of Torts. Thus the legal community in our country is well aware of this law

This important branch of law is highly useful particularly when wrong doings of the statutory authorities are involved. This law did not grow in our country because the British never liked any action to be taken against its statutory authorities. After independence, the Indian Bureaucracy and the politicians also did not like that any action to be taken against them. The legal community is also not much interested in spreading the application of this law.

We have using this law in preparing pleadings for counter-claims in banking matters past more than 24  years and most of our clients have been greatly benefitted.

Recently we have found that there are numerous cases of illegal constructions and orders for demolitions of the same are being passed by the courts without paying any compensation to the owners. Further the builders and statutory authorities who are mainly responsible for the said wrong doings get scot free.

When a multistoried business complex was demolished in Indore, we studied all the related laws and came to the following conclusions:-

(a)   The title of the land and its use is examined by the colony cell of the Collector’s office. Only after the approval of the said cell, permission is given for building construction. The above mentioned business complex was demolished because the land belongs to ‘Nazul’ i.e. the Govt. Thus the first illegalitiy was committed by the said colony cell and hence its officials as well as the Collector are the wrong doers and damages must be filed against them.

(b)   A licened Architect prepares the building plan and submits to the Town & Country Planning. They are supposed to check the titles of the land. Hence in this case the Architect and the Town and Country Planning are also the wrong doers and hence they must be impleaded in the said damages.

(c)   The moment any construction starts, the inspecting authorities of the Municipal Corporation of the concerned area are supposed to verify the land, its use, approval for builging plans and if there is any illegality, construction is not allowed to commence. Hence in this case the said inspection authorities and the Municipal Corporation are also the wrong doers and hence they must be impleaded in the said damages.

(d)   As soon as the building is completed, completion certificate is issued by concerned colony cell and the Town and Country Planning. If any illegality is committed, these authorities are the wrong doers and hence they must be impleaded in the said damages.

(e)   When all the prescribed certificates are issued, then only the water and electricity connections are provided by the Municipal Corporation. After this only occupation certificate is issued.  If any illegality is committed in issuing the occupation certificate, these authorities of the Municipal Corporation are the wrong doers and hence they must be impleaded in the said damages.

(f)    In all the above matters, the builder is required to obtain the said certificate and keep the copies on the spot. The buyers of the property should inspect the said certificates and obtain the copies. They may also obtain the copies from the said authorities.

(g)   The society of the flat owners is entitled to inspect and to obtain the copies of the said certificates from the builder and or from the said statutory authorities.

(h)   If any possession is taken without the said certificates, it is the builder and the said statutory authorities who are primarily responsible and accountable to ensure that the said certificates are legally issued and provided to the flat owners.

(i)    The above mentioned damages should include all types of damages, i.e. direct loss and damages, damages causing mental tension, torture, image and reputation etc. The damages must include aggravated and exemplary damages. When all types of permissible category of damages, the quantum becomes quite huge compared with the cost of the flats. The damages also have the element of interest at the prevailing market rate.

(j)    Once a civil suit is filed for the said damages and all the heads of the said statutory authorities, concerned officials and the builder are impleaded, there will be sufficient pressure created on them. If there is any delay in the judicial process, the damages will continue to increase due to interest element. If there is any order for demolition, the same can not be implemented till the said damages are decided and paid.

(k)   There is no limitation for filing the said suit for damages as the characteristics of the said damages pertains to ‘continuing breaches and torts’ We have even filed a case after 21 years.

(l)    If such cases for the damages would have been filed in the matter of Campa Cola or Noida Colonies, the flat owners would have not been in such a pitiable conditions as at present. The real wrong doers i.e. the builders and the statutory authorities would have been exposed and legally entangled with the flat owners commanding superior position. Rushing to High Courts without filing damages in the trial courts is a grave legal mistake and creates a painful situation to the flat owners due to no action against the real wrong doers.

(m) We have been pioneer in introducing above concepts in the arena of banking since 1989 and such approach has greatly benefited our clients.

(2) Advocate General favours Multi-pronged Approach to Lift Judiciary’s Image

The following news item is self explanatory:-

AG favours multi-pronged approach to lift judiciary's image

IANS  |  New Delhi  

June 19, 2014 Last Updated at 22:34 IST

http://www.business-standard.com/article/news-ians/ag-favours-multi-pronged-approach-to-lift-judiciary-s-image-114061901382_1.html

Attorney General Mukul Rohtagi Thursday said that lifting up the Indian judiciary's sagging image burdened with a backlog of 3.3 million cases required a multi-pronged approach and no single approach alone including reducing the number of holidays was going to solve the problem.

"Image of the judiciary is sagging and you have to shake every part of the judicial functioning," Rohatgi said adding that redundant laws and redundant procedures in criminal laws had to be shed.

Speaking to newsmen after assuming the charge of his office Rohatgi said that number of holidays should be scaled down but was not certain to what extent. At one point he suggested that summer break could be scaled down from existing seven weeks to two weeks.

He said that Supreme Court should be restored the status for which it was set up and that not every case should travel to apex court. He said that Supreme Court was not equipped to hear every decision of the high court or tribunals.

Officials should shed the mindset of leaving all contentious issues to the courts and not taking decisions themselves, Rohatgi said. "... these attitudes have to be changed."

The Attorney General called for a rethink that orders of the tribunals including that of National Green Tribunal or the Armed Forces Tribunal can be challenged directly before the Supreme Court. "You may have a statute but you can't take away the right under Article 226 (Power of high Courts to issue certain writs)," he said.

He favoured a multi-pronged strategy to reduce the number of cases coming to courts rooted in government - the biggest litigant.

Rohatgi also called for transparency in the working in of the Supreme Court including in the appointment of judges.

"What applies to government (transparent functioning) applies to judiciary also. Sunlight is the best disinfectant," he underlined, adding "transparency was the anti-thesis of arbitrariness".

He also favoured senior lawyers being consulted before the appointment of judges including elevation to the apex court.

Advocating more transparency in judges' appointment, Rohatgi said that all the stake holders including judiciary, government, lawyers and litigants should also be involved in the process.

"If a law is required to be changed then it can be changed," he when asked if there should be an amendment to overcome the existing collegium system of appointment of judges.

Ultimately these are experiments, he said, pointing out that for 40 years, it was the government that was appointing the judges and another 20 years that collegium system is in operation. "Now you need to have another experiment," he said espousing the National Judicial Commission for the appointment of judges.

Urging a time limit on the arguments by the counsel before the court, Rohatgi said that in no other country, arguments goes on for days, weeks and even months. He said that every counsel on the conclusion of arguments should give a four-five page written submission.

He said that the idea of the Negotiable Instrument Act was to scare the people so that they pay in bounced cheque cases, noting that conviction in these cases does not result in the recovery of money and parallel proceeding has got to be initiated for recovery.

"Why not give power to same judge to pass money decree also," Rohatgi observed.

DRT Solutions Weekly Mail – 319^th Issue dated 20^th June ’14

All Weekly mails right from 1^st Issue to latest, click links on top of this page

(1) Important Feedback to the Advocates

I personally had a bitter experience from an advocate described below:-

(a)   My younger brother (who is abroad) for his personal work desired services of an advocate at City “A” of India.

(b)   I found that an advocate staying near to that city attended DRT Conference in 2008.

(c)   On 18.05.14, I sent a mail to the said advocate. On next day i.e. 19^th May, he replied back stating that he would be glad to handle the assignment. On the same day I informed him that on account of his express consent, I shall discuss the matter with my brother and also confirmed him that we shall bear all his expenses and professional charges.

(d)   On 27^th May, we mailed him all the documents and desired his mobile no for discussions and for ascertaining the advance to be remitted.

(e)   On 30^th May, he informed that he was away on fortnight vacation and will be back on 8^th June and also confirmed that he will complete the assignment soonest then.

(f)    On 8^th June I sent a mail to him reminding him to inform his mobile no so that myself and my brother may discuss the matter.

(g)   Since there was no reply I sent another reminder mail on 14^th June.

(h)   The said advocate kept silent and hence I sent another reminder mail on 17^th June in detail. In the meantime, my brother got his mobile no on JustDial. On ringing him on the said no, we got a message – Pl check the number you have dialed.

(i)    It was too much for us to follow a known person who was simply keeping quiet since 30^th May. In one of the mail even I explained him as to how much we care about the mail queries even from unknown persons. Mostly we reply on the same day. Our telephone numbers are given on our web site as well as the same are given with every mail reply. We attend all phone calls within 3 rings. For us it was extremely sad experience and that too from a known person. Since till date we had not received any reply from him except two mail responses on 19^th and 30^th May and then he kept quiet despite our 3 reminders.

(j)    A final detailed reminder was sent to him on 19^th June. Side by side we started efforts on the net to locate another advocate.

(k)   This incidence is being narrated here as a feedback to the advocates. We as human beings are supposed to have a minimum standard of conduct for the communication for the fellow human beings. The standards for the client are much higher. The reputation of the profession as well as that of the person is spoilt the moment he neglects his duty to respond quickly to the communication through mails or phone calls.  

(2) DRTs Bogged Down by Inadequate Infrastructure & Red Tape

The following news item is self explanatory:-

Debt Recovery Tribunals bogged down by inadequate infrastructure and red tape

By Raghav Ohri, ET Bureau | 10 Jun, 2014, 04.00AM IST

http://economictimes.indiatimes.com/news/economy/infrastructure/debt-recovery-tribunals-bogged-down-by-inadequate-infrastructure-and-red-tape/articleshow/36316928.cms

NEW DELHI: Never mind the El Nino, at least one government official is nervous about what might happen if the monsoon is anywhere near normal. The rain could flood his office, turning files involving thousands of crores of rupees of litigation into a soggy mess. 

The Delhi Debt Recovery Tribunal (DRT) is located in a building where the roof leaks when it rains. This state of affairs reflects a picture of neglect that seems to have undermined what was a well-intentioned plan. 

Conceived two decades ago, the idea behind the DRTs was to speed up the recovery of loans by banks, a process that otherwise tended to wind its tortuous way through the courts with excruciating slowness. 

Given the current state of government-owned banks, all of them burdened by rising bad loans, the DRTs should have been seen as their saviour, ensuring they got their money back quickly. But the tribunals too have been bogged down by inadequate infrastructure and red tape, with cases taking years, even decades, to be resolved. 

Gross non-performing assets (NPAs) of state-run banks rose to Rs 2.03 lakh crore at the end of September last year from Rs 1.55 lakh crore on 31 March, 2013. There are 33 DRTs across India and three Debt Recovery Appellate Tribunals (DRATs) in Delhi, Mumbai and Chennai. They function under the ambit of the finance ministry. The appellate authority has to be headed by a retired high court judge. 

In Allahabad, the DRT operates from the bedroom of a rented house. The Jaipur DRT is located in space meant for a shop, while the one in Chandigarh functions from a building belonging to Maruti Suzuki. 

Most of the DRTs are themselves fighting cases with building owners who want the premises vacated. The Delhi DRAT meanwhile is based at the government-owned Hotel Samrat in Chanakyapuri, a holdover from Soviet-style accommodations reminiscent of the 1970s and 80s. 

DRTs are also woefully understaffed, lacking judgment writers, clerks and support staff. At a recent meeting with bank officers, the Punjab DRT chief asked them to loan him personnel so cases could be decided and judgments delivered. That's because the tribunal is unable to pay full-time employees salaries for months at a time as money doesn't come from the Centre. 

Because of this, DRTs are compelled to hire staff on contract, at times offering only one-fourth of salaries elsewhere. 

The Punjab DRT chief and other officials don't even get money to pay for stamps, court notices etc, having to foot these bills out of their own pocket in the hope of being reimbursed at some point. "We have been paying for the telephone bills, court notices, stamps so that at least the tribunal's orders are delivered and recovery of debts is made," said Harcharan Singh, presiding officer of the Punjab DRT in Chandigarh. 

Sometimes tribunal officials pool in cash to raise Rs 500 for stamps to complete court formalities. "The tribunal does not even have half of the staff sanctioned to us," Singh said. "As against three stenos, I only have one. Remaining staff has either been outsourced or taken from banks." Singh's personal secretary is also a bank employee. 
Against a sanctioned staff strength of 40, the Punjab DRT has 19 employees, including those on contract at very low salaries. "One cannot expect quality work from an employee who is being paid one fourth of what he can fetch in the market. 
So poor quality of employees also is an additional burden which consumes time and energy of tribunals," said advocate IP Singh, president of the DRT Bar Association. 

One of Delhi's three DRTs has been directed by a court to vacate its office. Interestingly, the three Delhi tribunals all function from buildings that belong to the Rashtriya Swayamsevak Sangh (RSS). 

Even the appellate authority in Delhi got a court eviction order from Hotel Samrat but the Delhi High Court stayed the order. In Chandigarh, Maruti Suzuki has moved court against the DRT office housed in its building. 

Ironically, DRTs are among the top revenue-generating tribunals, given the charges they levy litigants. The fee for filing a normal claim is Rs 1 lakh. 

Banks usually first issue a notice on bad debt and then a show cause notice. The next step is to approach the DRT. In 2002, under the Securitisation Act, the Central government empowered banks to directly recover bad debts from defaulters. In this eventuality, the defaulter can approach the DRT. So, defaulters too can move the DRT, but only under the Securitisation Act. 

The newly appointed chief of DRAT Delhi and Allahabad DRT, Justice (retd) Ranjit Singh, has taken up the matter of neglect with the finance ministry, asking it to fix things quickly. 

Singh, a retired judge of the Punjab and Haryana High Court, told ET he has asked the ministry to provide for staff and adequate infrastructure. He has recommended that "DRTs should be made financially independent" and that salaries of employees should not be included in the expenditure fund of the tribunals. 

He also warned that unless something was done quickly to redeem the situation, the unthinkable could happen at the Delhi DRT cited above and files could be irretrievably lost, given that the rainy season may be just weeks away.

DRT Solutions Weekly Mail – 318^th Issue dated 13^th June ’14

All Weekly mails right from 1^st Issue to latest, click links on top of this page

(1) Campa Cola Demolition – The Only Complete Solution for Such Cases

The Present Approach

The relevant material facts and circumstances in such cases are as under:-

(a)   There are numerous acts and laws governing land, design and approval of the colony, its layout , buildings and flats, sale and transfer of the ownership etc.

(b)   On one hand the individual flat buyer is not conversant with the intricacies of the said legal provisions, the builder or the colonizer is well versed with the same.

(c)   In most of the cases, the various approving and inspecting authorities are in league with the builders. Hence various documents are also prepared in a dubious manner.

(d)   The legal provisions hold the owner responsible for the legal violations if any and he is supposed to verify and satisfy himself before buying the property.

(e)   In such backdrop, lot of illegalities and violations are committed. If the same are detected at a later date and the illegal portion of the building is ordered to be demolished, the usual and approach is to file a writ in the High Court and the legal battle continues from High Court ot the Supreme Court. The process takes few years and finally the Apex Court also orders demolition as recently happpend in case of Campa Cola.

(f)    The builders and various authorities who were in hand-in-glove go scot free and the innocent flat owner is thrown on the street.

Flaw in the Present Approach 

The High Court and the Supreme Court are respectively Court of Law and Court of Justice. They concentrate mainly on legal violations and not the factual violations. The later go undetected and the real culprits are not brought to books. The phenomena is well known to everybody but the Judges express their inability as they decide the cases as are presented to them.

Our Proposal 

The various material facts and circumstances which must come before the Judical Process are as under:-

(a)   At every stage of creation, development and transfer of the  property, there are prescribed authorities for inspection and approval. These are contained in various documents.

(b)   All the docuemts right from the inception need to be examined thoroughly. The same need to be compared with the happenings on the spot. This exercise will reveal many variations, alterations and modifications some of which will be found against the legal provisions.

(c)   The said documents, the concerned authorities, their duties and reponsibilites as well as the impact of violations must be listed.

(d)   Under such facts and circumstances particularly when statutory authoritiesa are involved, the tool of the law of torts is most appropriate.

(e)   In view of above, a suit for loss and damages due to the said violations be filed in civil court. The damages for the individual flat owner will be quite huge compared witht the value of the flat and will have the element of interest and other increases with passage of time.

(f)    Since the authorities as well as the builder will be individually, jointly and severally will be responsible and accountable for the said loss and damges, if there is any order for demolition, the flat owner will be required to be fully compensated before he is asked to leave or the demolition will have to be stayed. Alternatively if the judiciary is in a hurry for demolition, they should be in equal hurry to decide the damages quickly.

(g)   Due to such cases, the said authorites will alo be very careful in future and such violations will come down drastically.

(h)   Past 15 years we have tried the above concepts in the arena of banking. The damages and counter-claim created so much pressure on banks that many cases were settled from 5% to 25% of bank dues. Such cases are reported on our web site.

(i)    It is high time that use of law of torts and consequent damages be resorted to in all such areas where the statutory authrities are involved. In Mumbai itself, 48% of the buiIdings are yet to be issued occupation certificate. The flat owners in these buildings can start this exercise, obtain all the documents directly or with the use of RTI Act, examine them and in case of illegalities, file damage suits which will protect them in future. It is needless to mention that in developed countries, it is the fear of damages due to torts which have made the authorities  more responsible and accountable and as a result the corruption also has come down. 

(2) Chief Justice, Supreme Court wants to Cancel Long Vacations but the Lawyers are not Very Keen.

The following news item is self explanatory:-

Chief Justice wants to cancel long vacations for Indian courts, but lawyers aren't very keen

http://scroll.in/article/664862/Chief-Justice-wants-to-cancel-long-vacations-for-Indian-courts,-but-lawyers-aren't-very-keen

Getting courts to work all year could address the massive backlog of pending cases, but lawyers are concerned about how it could affect their own vacations.

The Supreme Court and several high courts across India are currently on a long summer vacation. This annual break from hearing cases has been a practice since well before Independence, but India’s newly-appointed Chief Justice RM Lodha recentlyproposed that this vacation system should be scrapped and courts remain open all year.

The move, he believes, would be a great step forward in clearing the massive, growing pile of pending cases across Indian courts. The Supreme Court itself has a more than 63,800 pending cases and the national backlog is possibly close to three crore cases. Against this backdrop, it seems like a luxury for the higher courts to be closed for an average of two months a year, during summer, Diwali and winter.

Lodha has recommended that instead of all the judges going on vacation all at one time, individual judges should take their leave at different times through the year, so that the courts are constantly open and there are always benches present to hear cases.

On Wednesday, after Lodha sought feedback from all stakeholders on the issue, the national Bar Council of India held an official meeting with the heads of all state-level Bar Councils to assess how the proposal could be implemented. "None of us are opposed to the idea of courts being open for longer, but we need to deliberate on the details of how it could be implemented," said advocate Biri Singh Sinsinwar, the chairman of the Bar Council of India, which represents Indian advocates and lawyers.

The Council is now preparing to constitute an 11-member committee to discuss implementation with the chief justice. "Our main concern is how a new system would affect advocates," said Sinsinwar. "When would they get to go on leave?"

The preoccupation with accommodating lawyers' vacations is a surprising aspect of a rather old debate over court holidays and its role in creating an enormous backlog of cases in India. In 2008, the Parliamentary Standing Committee on Law and Justice tabled a report that described the system of vacations as a “colonial legacy” that is irrelevant today, recommending that they be done away with. In 2009, the Law Commission of India also recommended that the number of working days for judges should be increased to tackle the backlog of cases.

At present, the Supreme Court hears cases for 193 days a year, high courts are open for 210 days and trial courts work for 245 days. In England, which instituted the system in colonial India, high court judges work for just 185 to 190 days a year while district judges are expected to work for at least 215 days.

Singapore, much like India, officially grants Supreme Court vacations for three weeks in summer and one month in winter. Internationally, one of the few exceptions are several state and federal courts is the United States of America, where the concept of long court holidays was cast aside in favour of keeping courts open on all weekdays.

“Every day that a court is closed, the backlog of cases will always increase, so Justice Lodha’s suggestion is perfectly logical,” said retired high court judge RS Sodhi. “If leaves are regulated, the judicial process will not stop, and we will be able to deal with cases continuously.”

While Indian judges are open to the idea of flexible breaks some prominent lawyers have their own vacations in mind while expressing their opposition.

“When a lawyer takes up a case, he needs to be prepared to be called for a hearing at anytime,” said PH Parekh, president of the Supreme Court Bar Association. “If official vacation slots are scrapped, judges will still get their holidays, but lawyers will get no rest, because they could get called to court any time.” According to Parekh, it would be much more fruitful to reduce the number of vacation days for courts and to increase the number of working hours every day.

Delhi-based lawyer Nikhil Mehra, however, dismisses these concerns. "No one is stopping private lawyers from going on a holiday whenever they want to," said Mehra, who believes that chief justice's proposal should be implemented, at least on an experimental basis. "Once it is implemented, people are likely to adapt to the change and will align their holidays with lighter periods in the court schedule."

However, Mehra emphasises the fact that court vacations have their own utility. Vacation benches, for instance, hear a number of urgent cases during holidays, and judges also use the time to research and write judgements. "When the courts reopen, they usually deliver a spate of judgements that judges had been working on," said Mehra.

In addition to that, some lawyers are not convinced that scrapping vacations will be able to address the enormous number of pending cases in Indian courts. In fact, in 2010, Andhra Pradesh HC judge VV Rao had calculated that the Indian judiciary would need 320 years to clear the three-crore case backlog.

“The main problems are that we are short of judges, that judges often go on sudden leave and that litigants waste a lot of the courts’ time by prolonging their petitions,” said Mumbai-based lawyer Vandana Shah. “All of these issues have to be addressed simultaneously if we seriously want to address pending cases and stop people from using the slowness of our judicial system as a punishment in itself.”

DRT Solutions Weekly Mail – 317^th Issue dated 6^th June ’14

All Weekly mails right from 1^st Issue to latest, click links on top of this page

(1) Submissions before Shri Narendra Modi, PM

We have been approached by several parties to suggest as to what submissions be made before Mr. Narendra Modi, PM. Our suggestions are as under:-

(a)   Transfer of DRTs from control of Ministry of Finance to Ministry of Law:- 

Past more than 15 years, the Supreme Court of India has laid down a law that the Tribunals should not be under the control of parent Ministry and it should be transferred to Ministry of Law. As per Art 141 of the Constitution of India, the law laid down by the Supreme Court is binding on all courts in India. The DRTs, DRATs, High Courts and the Minstry of Finance continue to violate the said law laid down by the Apex Court. Great injustice is being caused to the litigant borrowers in DRTs because of the following:-

(i)             The banks are under the control of Ministry of Finance. Thus this Ministry has got vested interest being from the side of the bank.

(ii)           This Ministry is appointing the judges and the Recovery Officers of the DRTs and thus the entire structure of DRTs becomes biased to the Banks.

(iii)         This Ministry is holding regular meetings with the DRT Judges asking them to expedite the cases. This is highly against the principles of natural justice.

(iv)          Thus until and unless the DRTs are transferred to Ministry of Law, as laid down by the Supreme Court more than 15 years back, the borrowers can not bet justice from DRTs.

(b)    Video and Audio Recording of Proceedings in DRTs 

It is observed that there is no actual record of court proceedings in DRTs. In US, such records are bing made since 1935, Further many of the DRT advocates are not arguing the cases properly. Some of the Judges of the DRTs are not behaving properly. Under such facts and circumstances, immediate video and audiro recording of the proceedings of the DRTs will improve the performance of the DRTs. 

(c)   Training of DRT Advocates & Judges

 DRTs were created on the recommendations of the Tiwari Committee of the RBI. On page 77 of the said Report of the Committee published in 1984, it is stated that the Advocates and Judges of the proposed tribunals will be experts in banking, industry and finance. The said recommendation has not yet been implemented. Hence there must be regular training courses for the DRT Advocates and Judges in banking, industry and finance. Then only one can expect justice in DRTs.

(d)   Proper Work Load on the DRT Judges 

In US, they have made proper work load studies on the Judges and accordingly there are only 2 to 3 cases per day so that there are thorough trials of the cases.

The DRTs are required to conducdt trials pertaining to complex matters of industrial and business finance. If there are limited cases, real trials will be conducted and complete justice will be achieved.

It is needless to mention that huge court fees are being collected in DRTs. Hence the strength of the DRT Judges can be enhanced suitably. 

(e)   Use of Modern Technology & e-filing in DRTs 

Complete working of DRTs should be based on modern technology of court management. E-filing be introduced immediately so that cases can be filed from anywhere, all the proceedings are trancripted and made available on the net. Court room arguments are held by using video technology etc. The DRT judgments be publishd on the relevant web site of the DRT. All these will improve not only the efficiency but reduce the cost also. 

(f)    Certain Invalidities in Securitization Act to be removed

(i)            Deposit Condition for Appeal u/s 18 – This presumes that all the borrowers/guarantors appealing against the verdict in DRT will have at least 25% of debt due, which is an impossibility otherwise the account would have never become NPA.

(ii)           The Sec 2(f) treats borrowers and guarantors on same footing which is not correct

(iii)         At present when the definition of borrower includes guarantor, the provision of sec 13(11) is superfluous.

(2) Some Ray of Hope on NPA

New finance minister had meeting with The Governor of RBI. Among other issues subject of NPA was discussed. With new fresh approach ( uprooting of UPA government) can be expected dynamic and revolutionary also. Let us wait only one quarter ...till 30-9-'14 for result.

In this connection, Mr U.C. Desai, ex-Banker has expressed his view as under:-

Ten worlds of Life

HELL: All conditions of suffering and despair. In this state, we are utterly devoid of freedom, and undergo extreme and indescribable suffering. 

HUNGER: Consumed by desire and a sense of lack, Hunger is a state characterized by an insatiable desire. In this state, a person is tormented by relentless craving and by his inability to satisfy it. 

INSTINCT (ANIMALITY): The state of Animality is governed by instinct, and one has no sense of reason or morality. A person in the state of Animality is in fear of the strong, but despises and preys upon those weaker than himself. One is dominated by a selfish ego. A person in this state is compelled by the need to be superior to others in all things, despising others and valuing himself alone. 

ANGER: The fourth world is Anger. It's filled with various aspects of anger, hostility and rage, from whatever motivation and whether directed to others or toward oneself. This world also can involve striving for power and domination. 

*These four states are collectively called the four lower worlds. 

HUMANITY/TRANQUILIT WORLD: The fifth world is the normal basic state of neutral human experience. In this state, one can pass fair judgment, control one's instinctive desires with reason, and act in harmony with one's environment or society. 

RAPTURE: The sixth world is Heaven or Rapture. This state indicates the sense of pleasure and ecstasy one feels when desire is fulfilled. However, the joy in this state is temporary and disappears with the passage of time or with even a slight change in circumstances. It is said that the shortest road to Hell (suffering) is from Rapture. 

*These six worlds from Hell through Heaven are where the majority of people spend most of their time, moving back and forth among them. In these states, people are governed by reactions to external influences, and therefore they are extremely vulnerable to changing circumstances. 

LEARNING: In the seventh world, learning - seeking some lasting truth - pervades. Generally one enters this life condition after pursuing the truth of life through the teachings of others. This life condition is relatively free from avarice, anger, stupidity, arrogance and doubt, as well as from bias or depravity. However, a selfish or arrogant mind, although hidden, is still present to some extent in this life condition. 

REALIZATION: In this condition, one seeks some lasting truth through their own observations and effort, and attains a degree of emancipation by perceiving the chain of causation, or by observing the natural order. In other words, one understands cause and effect as the nature of life in the universe. Because this is a life condition reached by discovering the truth in the universe after much effort, the sense of fulfilment felt in this state may be deeper than that gained in the world of learning. *Realization and Learning can often turn into arrogance, because people in these life conditions become stubbornly attached to their own realization with its limited perspective. Learning and Realization are called the two vehicles. The defect of the two vehicles lies in the fact that persons in these states may primarily seek only their own salvation and enlightenment. 

COMPASSIONATE ALTRUISM In the ninth world, one aspires to enlightenment, and also devotes oneself to compassionate actions and altruism. Those in this state dwell among common mortals of the Six Paths humbly, while respecting others. They seek to serve and benefit others. This life condition is characterized by the great desire to extend help to those who are suffering. 

ENLIGHTENMENT or ACTUALIZATION: The highest life condition is a state of perfect and absolute freedom in which one enjoys boundless wisdom and compassion, and is filled with the courage and power to overcome all hardships. This is the condition underlying the rich, altruistic activities of the Bodhisattva, in which one takes the sufferings of others as his own and defies all obstacles to help others change their destiny. One demonstrates to others how they can call up their own Buddhahood from within .

U.C.DESAI  09374556625

DRT Solutions Weekly Mail – 316^th Issue dated 30^th May ’14

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(1) Dearth of Magistrates – Huge Pendency in Cheque Bounce Cases

The following news item from Times of India is self explanatory. There is no proper planning and management in Judiciary. After enanctment of 138 NI Act, nobody took any action to arrange required strength of Magistrates. As a result there is now huge pendency. Similarly in DRTs, now the pendency is growing at an alarming rate but there is no effective remedial measure. This is how the civil court pendency has crossed 3 crore cases. To clear the huge pendency the Chief Justice of India is proposing  3 shifts working in courts as if courts are factories. Similarly to tackle the 138 ni cases pendency, the SC has laid down that the Magistrate himself will send the summons through e-mails. All such measures are laughable showing that there is no understanding of scientific management and system analysis even at the level of Supreme Court.

Dearth of magistrates leads to pending cheque bounce cases

Sulogna Mehta,TNN 

http://timesofindia.indiatimes.com/city/visakhapatnam/Dearth-of-magistrates-leads-to-pending-cheque-bounce-cases/articleshow/35353834.cms

VISAKHAPATNAM: Around 6,000 cheque bounce cases, which should have been disposed off within six months of being filed, have been pending in courts for nearly three years due to dearth of special magistrates.

According to sources, while there are nearly four lakh cheque bounce cases pending across India.Many of the nearly 6,000 cases pending in Vizag's special magistrate court have been pending since 2011.

Interestingly, in cheque bounce cases, it's not just the common public and rich businessmen that are bounced, even those issued by certain politicians have bounced, including that of a former MLA from Vizag, said legal sources.

Advocates point out that the money in the cheque bounce cases, pending in district court, ranges from a few thousands to several lakhs of rupees. "Every month, hundreds of new cases come up for hearing," said a lawyer. Cheque bouncing is an offence punishable with two years of imprisonment or fine double the cheque amount that has bounced. "As per the 13th Finance Commission, only special magistrates appointed from among retired district judges can deal with cheque bounce cases. But now, Vizag court has only four such magistrates as seven posts of special magistrates are lying vacant even though around 300-350 cases come up every month," stated senior advocate and president of Forum of Legal Professionals Kupilli Muralidhar.

"Since many of the retired district judges have relocated to other places, there's a dearth of special magistrates and cases have been pending for the last three to four years. In case of Debt Recovery Tribunals (DRT), there's a provision for appointing advocates as chairman of DRT. Similarly, if retired district judges are not available as special magistrates, it's advisable that the vacancies be filled up by senior advocates who can act as special magistrates and speedily dispose of the cases within six months," added the advocate.

As for the police, they express their inability to take action against defaulters on their own in cheque bounce cases. "We can't initiate action on our own as these are considered to be private complaints. We can take action only as per the court's directive and such cases should come to us only from the court," stated Md Iliyas, inspector, One Town Police Station, Vizag.

(2) Video Recording in DRTs – Immediate need

Last week there was an unfortunate happening in Mumbai DRT when the DRT Judge refused to hear the arguments from a senior advocate on behalf of a borrower. When the borrower has paid full court fee, his advocate has right to submit full arguments and it is the duty of the judge to listen the same. Under such facts and circumstances, there is urgent and immediate need to have video recording in DRTs so that exact happenings in the court room are known as to how the advocates are arguing and what questions are being raised by the judges. In USA, court room recording is being done since 1935. Our Supreme Court judges have been visiting the US Court rooms and spending crores of rupees in travelling expenses but they have not yet implemented the audio and video recording in court rooms. On one hand the Supreme Court is ordering video recording for evidence of prisoners and other witnesses from far off places, it is not keen to have video recording of the oral arguments which is so essential in the entire judicial process.  

DRT Solutions Weekly Mail – 315^th Issue dated 23^rd May ’14

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(1) DRTs – Advocates & Judges

The litigant borrowers are the customers and clients before DRTs. They are required to pay huge court fees out of which salaries are paid to the Judges and the staff of DRTs. They are also paying professional charges to the advocates. Thus the advocates and judges have to render proper and satisfactory service to them. Our views are as under:-

(a)   The DRTs were established consequent on the RBI’s ‘Tiwari Committee’ Report which was published by the RBI in 1984. The extract from the page 77 is reproduced as under:-

“These tribunals should be manned by persons having specialized knowledge in the functioning of banks, financial institutions and industry”

Hence the advocates and judges in DRTs were required to be trained in specialized knowledge of banking, industry and finance. This has not yet been done despite the said stipulation of 1984 i.e. of 29 years back. It is also not known as to when it will be done.

(b)   The DRT is required to deal with the industrial finance which is not a simple personal finance. The DRTs being trial court has to establish facts relating to the said industrial finance, appraisal, sanction, securities, revival, rehabilitation, restructuring, various RBI Guidelines, wrong doings committed by banks, damages due to the said wrong doings etc. The bureaucracy in banks is not doing their duties properly and are misleading the courts. All these will take long time to conduct full trials.

(c)   The Supreme Court of India in its clear verdict of 16 years back in respect of Tribunals has laid down the law that the Tribunals should be controlled by the Ministry of Law instead the parent ministries. Despite such law laid down by the Apex Court which as per Art 141 of the Constitution is binding on all courts in the country, the DRTs continue to be controlled by the Ministry of Finance. All complaints and agitations have been turned deaf years. The Ministry of Finance is appointing the DRT Judges and Recovery Officers. Ministry of Finance is holding regular meeting with them and issuing instructions for expeditious disposal. The DRATs and High Courts have passed strictures against few of the Judges and Recovery Officers.

(d)   There are more than 3 crore cases pending in different courts in the country. One of sitting judges in AP High Court stated that it will take 320 years to clear the pendency. Eminent SC Judge, V.R. Krishna Iyer said in 1988 that we are 200 years behind compared with the courts in developed countries.

(e)   In global ranking, India occupies 74^th rank i.e. the judicial system of 73 countries is better than Indian Judicial System. Hence Judicial Reform is mother of all reforms in our country. Entire democracy depends on such reform.

(f)    All oral arguments in American Courts are audio and video recorded and the transcript of same are published on the web site on the same day so that the litigants know as to how the advocates have argued their case, what questions judges asked etc. Such records are available since 1935. Our legal personnel i.e. advocates and judges so called officers of the courts have visited the American Courts but till date such recording of oral arguments have not yet been implemented. We have even developed a system of video recording in 2007 and demonstrated before District Judge, Indore in 2007. It was appreciated by him as well as other advocates and judges. It was sent to the High Court and the Supreme Court but so far none has come forward to implement it.

(g)   The main objective of the courts is to render justice. This requires committed working, hard work and patience.

(h)   The officers of the court in DRTs i.e. the advocate and judges should take up the lead for the Judicial Reforms and should undertake to render complete justice to their clients i.e. the borrower litigants who are the victims of the system. The model so developed in DRTs can then be extended to other courts. Will the advocates and judges in DRTs realize their responsibility to this national cause? Till such time the advocates and judges perform their functions properly, the only option is that the borrowers should involve themselves. Their companies be represented by the advocates and they should represent themselves. All the proceedings should be in writing. Important facts be established through interim applications. The adverse interim judgments, if any be remedied with Review and Appeal. Some of our clients who followed our guidance and advice have either won their cases or the bank is forced to settle even at meager amount of 5% to 20%. Despite paying the huge court fee which meet up salaries of judges and other staff as well as the professional charges for the advocates, the borrowers themselves will have to work if they want justice. It is an interim phase, till proper  judiciary reforms are devised and implemented. The new generation using modern management and technology will definitely do it. 

(2) Condition of Deposit in DRTs

It is observed that pre-condition of deposit is prescribed in DRTs for awarding injunction. Our views are as under:-

(a)   Recovery action is initiated against a borrower when he is unable to honour his financial commitments with the bank.

(b)   Such situation normally arises when the unit becomes sick and starts generating losses instead of profits. Bank has got record of day-to-day transactions and hence due non-payment of interest, the unit is declared NPA.   

(c)   Under such adverse financial conditions, the borrower and his family even find difficult to survive. Some of the entrepreneurs have even committed suicides.

(d)   The role of the banks becomes very important. They are neither cautioning the borrower nor providing any guidance for safeguards. On the other hand they are forcing the borrowers to mortgage all their assets. Further they obtain the personal guarantees. The promotional and developmental agencies also do not provide any guidance and warning. The RBI is also silent on this important aspect. Thus the borrower is fully trapped and his condition is like Abhimanu. On the other hand, the banks keep themselves fully safe. Apart from multiple securities and mortgages, the Govt and RBI have prescribed compulsory CRR by which certain portion of funds have to kept reserved.

(e)   It is well known to the Govt and the banks that the entrepreneurs and the borrowers are operating virtually without any reserves. Such situation is highly dangerous for the country when even competent entrepreneurs are killed or get involved in long drawn litigations. Indirectly the Govt and the banks also suffer.

(f)    With such conditions precedent, the DRT prescribes deposits for injunctions to become effective.

(g)   In view of above, we include the important and material fact about the inability of providing any deposit in the pleadings right from the stage of ‘Representation and Objections’ to the ‘Application u/s 17’ or the WS against the OA with the stipulation to try this matter as a preliminary issue.

(h)   As regards the condition of minimum 25% deposit with the Appeal in DRAT in the securitization act, we include in our pleadings of the SA that full and complete trial with evidence has to be conducted in DRT because of virtual absence of any appeal due to the said deposit.

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Weekly Mails and DVDs are DRT Legal Guide and gold mine of practical information for the borrowers and guarantors - The mail recipient particularly Borrowers and Guarantors will be immensely benefited by our weekly mails and DVDs, all previous issues of weekly mails from 1st one till the last one may be viewed by clicking the links given at the top. Separate web pages have been created to contain these mails in batches of 10 so that pages open up fast. These mails are gold mine of information on current topics giving lot of practical suggestions and comments. Any new recipient to these mails must go through all the weekly mails right from the issue no 1 to the latest. If possible please spread the reference of our web site and the weekly mail among the persons, borrowers and guarantors who are the bank victims. If anyone desires to get these mails regularly, he may write to us for inclusion of his e-mail ID in the regular mailing list. The weekly mail is issued on every Friday. The particular issue of the weekly mail is first published on the web site and then mailed to borrowers, guarantors and their advocates in the country. This service is free in the best interest of society in general and litigant borrowers and guarantors in particular. We are getting huge no of mails appreciating our weekly mails.  We welcome suggestions.

DRT Solutions Weekly Mail – 314^th Issue dated 16^th May ’14

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(1) Justice Postponed is Justice Denied

The following news item is self explanatory:-

The Telegraph, Calcutta, India

Wednesday, May 14, 2014

http://www.telegraphindia.com/1140514/jsp/opinion/story_18339367.jsp#.U3MUwzssXQA