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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(2) DRT PO changes his stand after the writ is filed against him in High Court
One of our clients from Mumbai informed that the PO Madurai disregarded giving any decision on pending interim applications as well as appeal pending in DRAT Chennai. The said PO made use of a very old ex-parte order to quash certain proceedings and created all pressures to undertake final arguments. Since such approach of the said PO were against the Principles of Natural Justice, the said client and his advocated filed a writ in High Court.
Surprisingly the behaviour of the said PO changed completely. He informed the client that he would dispose off the pending applications first and also pay attention to all the pending matters
DRT Solutions Weekly Mail – 48th Issue dated 10th April ’09
(3) Application for OA Dismissal and Filing of WS
One of our clients from Mumbai has informed that during adjudication of his application for dismissal of OA in DRT, the following points have emerged:-
(A) PO is of the opinion that first WS be filed, the said WS may contain the said pleadings contained in the present application for OA Dismissal.
(I) As per the DRT Act, the DRTs have to evolve their own procedures and the same have to be based on Principles of Natural Justice. Since the DRT is a new Court, the evolution of its procedure will take some time e.g. the CPC 1908 took more than 200 years to evolve. When there is no well defined procedure, the DRT has to adopt the well defined procedure laid down in CPC.
(ii) Whatever PO says is not the procedure duly evolved in DRT, its his own opinion which can be judicially questioned when he mentions the same in his order. The said order will be adjudicated upon through the established chain of DRAT, High Court and Supreme Court. The final verdict given by the apex court will alone validate the proposed procedure.
(iii) As the matter regarding the OA Dismissal stands, the established law laid down in CPC 1908 is O-7 R-11 i.e. Rejection of Plaint (i.e. OA) After this only there is the stage of O-8 which is on WS. This must be told to the PO orally as well as in writing through Written Arguments. His orders be examined and if he persist with his own opinion, further action be taken through Review and Appeal.
(iv) Generally the POs and Banks are in a hurry to pressurize for the WS and affidavits followed by final arguments and the final order. This is highly illegal and the ignorant borrowers (who are already victims of banks) become victims of Judicial System in the name of quick disposal. Subsequently there is no corrective measures in higher courts as the said order of the lower courts is generally not interfered. On account of such state of affairs, the borrowers must enforce the provisions of law strictly at every stage and every date of the complete trial in respect of the adjudication of the said application for OA Dismissal as per the O-7 R-11 without agreeing to submission of WS.
(v) It is needless to mention that DRT Mumbai has already dismissed few OAs. The banks have lost their appeal in DRAT in respect of such dismissals. Our clients have raised this matter since 2002 and got success. After all the Banks as well as the POs are duty bound to follow the law laid down by the Supreme Court in the matter of Central Bank vs Ravindra as well as the law laid down in DRT Rules and Bankers Books Evidence Act. The banks are having their established law departments and competent counsels as well as the audit and resources. Despite this they are not framing correct OA as per the law, they have to suffer. In fact the Registry of the DRTs should not entertain such OAs. Why the borrower should be forced to undergo full trial when the case can be dismissed at the stage of filing of OA itself. Hence the dismissal of OAs must be with heavy costs so that the bankers become law abiding.
(B) Another point has been raised that if we do not agree to the opinion of the PO, he may be annoyed and pass derogatory comments and orders.
(I) In democratic setup like ours, even the Chief Justice, Supreme Court has no such power and authority. They are Public Servants. Even CPC 1908 has mentioned them as Public Officers whose duty is to serve the public. If any judge does like this, he is not a Judge at such moments when he becomes annoyed. We have advised our clients to file affidavits on such behavior and include the same in written arguments.
(ii) If the said Judge behaves persistently, we should apply for change in court. Each and every of their orders must be scrutinized and questioned by way of Review and Appeal. Since everything is available in writing i.e. Daily Proceedings and Written Arguments, no Judge will dare to misuse his power and authority.
(iii) We have advised our clients to maintain their behavior nicely but to be very strict in creating written records. The trial court is a foundation which must be handled with all thoroughness and perfection without bothering about time element as the Indian Judiciary is already 90 times overloaded and hence the perfect trial will take more than 90 times the time compared with developed countries. We have high hopes from the DRT litigants as they are competent as well as resourceful compared with the common public in civil courts. As a result there are now many decisions in favour of the borrowers.
(iv) What is required is perfect implementation of law and procedure of law at every stage and on every date. Any sweet behavior will not correct the illegalities if we are afraid of getting anybody's annoyance. In many cases we have found that the Judges started becoming more careful and delivering better judgments if one sticks to law rigidly.
(v) We have no comments in respect of advocates as they are already under great pressure due to quick disposal by the Judges apart from cut throat and deadly competition which leaves very little time for them to do any legal research and studies or specialize in complex fields like banking, finance, law of torts and law of damages. On account of these factors only, we have been empowering the clients who are the only player with ultimate stakes.
(vi) Further we have no comments about the atmosphere in High Court and Supreme Court as we have found that most of weakness in DRT Cases are due to defective and hurried trial to finish off the case quickly and hence all our efforts and focus is in DRTs.
(4) Powerful Tool of Sec. 24 of CPC may be used if there are definite signs of Injustice created by the Justice Delivery System.
One of our clients at Mumbai and his Advocate are fighting a praiseworthy battle with all inputs and guidance from us every moment of time. The PO DRT is now pressurizing them to go for final arguments without disposing of the interim applications for inspection of documents and cross-examination, fixing quicker dates even once he ordered to submit written arguments within 4 hours. Since all his requirements are being fulfilled he has become damn annoyed. His annoyance has also been recorded in court records. All this has infuriated him so much that he has made it a prestige issue. This is a typical characteristic of any bueauracracy. We agree that judges are being highly pressurized for quick disposal but the law of the land does not permit to cause any injustice. Every one has to be fair and reasonable. Now enough documents have been created, our client should use the powerful tool of ‘Sec 24 of the CPC 1908’ i.e. transfer of the proceedings in other courts. The salient feature of this provision to be applied in the present case are:-
(1) Application is to be made to DRAT Chennai to transfer the case to other DRT.
(2) Since the injustice will be definitely proved, the bank or the court should provide the expenses to go and attend other DRT as there is only one DRT in Mumbai. Why the litigant should suffer for fault of the Justice Delivery System.
(3) If such application is rejected by DRAT, the entire case denovo can be filed in Chennai High Court which has already criticized the banks and judicial officers for the credit card case wherein 5000 cases have been taken over from the lower judiciary to be directly tried by the High Court itself, shall provide the complete judgment to the really needy persons
“Our attention was drawn by learned counsel Dr. Singhvi on the observations of this Court in The Barium Chemicals Ltd. vs. Company Law Board  Supp. SCR 311 where at page 352 of the report the Court observed that where evidence was adduced by affidavits, such affidavits might be properly verified either on knowledge or from sources. But the basis of such knowledge or source of information must be clearly stated. This was laid down as early as 1909 by Jenkins, C.J. and Woodroofe, J. in Padmabati Dasi v. RasikLal Dhar, [ILR XXXVII Calcutta 259] where the Division Bench of the Calcutta High Court observed that the provisions of Order XIX Rule 3 of the Code of Civil Procedure, must be strictly observed: every affidavit should clearly express how much is a statement of the deponent's knowledge and how much of the statement was in his belief, and the grounds of belief must be stated with sufficient particularity. This has been followed more or less universally by courts in matters where reliance is placed on affidavits. This view has been reiterated by this Court in The State of Bombay v. Purushottam Jog Naik.  SCR 674 It is on this principle that Dr. Singhvi urged that the original petition should not have been entertained because of the defective affidavit in this case. Undoubtedly the affidavit and the petition were defective as mentioned hereinbefore.”
(4) Caution in Submission of Citations
It is observed that following mistakes or deficiencies are committed while submitting the citations before Court of Law:-
DRT Solutions Weekly Mail – 45th Issue dated 20th March ’09
(1) An Important Judgment of the Supreme Court which has highly discouraged the Bankers
This refers to the news item with the caption ‘The Final word on secured lending’ at page 13 of the Economic Times Mumbai dated 18th March ’09 which is based on the Judgment of the Supreme Court of India delivered on 27th February ‘9 This judgment dilutes the rights of the banks under the DRT and Securitisation Acts. These acts do not create first charge in favor of the banks, financial institutions and other lenders. The effect of the said Supreme Court judgment is that the claims of the State Govt. for arrears of sales tax and other taxes, if given a statutory first charge over the properties of the assesses, will have the priority over the claims of the secured creditors.
Our Comments :- The above news item has been prepared by Mr. MR Umarji, Chief Advisor (Law) IBA. Mr. Umarji is the person who originally drafted the Securitisation Act. He is the former Executive Director of the RBI. He has also authored a book on the Securitisation Act, 2nd Edition of which was published in 2004. The said judgment has heavily discouraged the bankers. Our view right from the inception has been that even Mr. Umarji and the bank officials are not paying requisite attention to the Constitution of India as well as various enactments which if applied with an unbiased application of mind will conclude that the best recovery is out of running of the business and not the securities. Above referred judgment of the Supreme Court has strengthened our views. Since the dues of the Govt and the dues of the workers will rank senior to that of the secured creditors, the intended recoveries by the bankers through the Securitisation Act and DRT Act will have to move to back seat. Litigation aspects will create new complications and hence delays.
(2) The Bankers feel that DRTs are a Failure
One of our clients from Mumbai has sent us a copy of a news item ‘DRT recovers 32% of dues in six years’ published in the Times of India. According to the RBI, in the period 2001-07, of the Rs. 1,88,00,000 outstanding amount, DRTs could recover only 32% i.e. 62,983 crores. One of the Borivli residents has filed a PIL in Bombay High Court. The said PIL says that the Ministry of Finance has failed to expedite the functioning of DRTs. Even the Securitisation Act of 2002 failed to help reduce the burden on DRTs. The lender and borrowers are hand in glove in the settlements and there is no scrutiny by RBI, DRTs or any other authority. The amount written off by banks in 2000 was Rs. 4,500 crores which went up to Rs. 13,490 crores in 2004. In the meantime the Govt has pumped in Rs. 37,000 crores to maintain the capital adequacy ratio of the banks.
Our Comments :- On account of the poor recovery results as mentioned above, the Bank Officials generally feel that the DRTs are a failure. This is born out of their mistaken view that the DRTs are the Recovery Arm of the banks. We have been emphasizing that the DRTs are Courts and the more borrowers become aware of the working of the courts, not only the DRTs will take more time but with the tools like Counter-claims or Damage Suits, the recovery will be nearly impossible even in decades. The scenario will be more difficult for the banks when the NCLTs will come into play when the big borrowers who are availing BIFR stay will start fighting DRTs cases. As a result there will be several judgments coming from the courts which will favor the borrowers. Finally the DRTs will be reduced to nothing better than the civil courts. That is why we have been telling since 2001 that instead of forming new courts like DRTs, the existing civil courts should have been improved. Now the DRTs are suffering the same ills of mismanagement and lack of technology as in civil court apart from chaos due to heavy workload resulting into more reviews, appeals and change in courts.
(3) Cross-examination of Bank Officials is a must in Counter-claim and or Damage Suits
It was said that the cross-examination is a rarity in the DRTs but in respect of several of our clients we find that the cross-examination is going to be a regular feature in all the DRT cases. This we predicted in 2001 itself. Our view is based on the normal behavior of the Bank Officials emanating from the buearacratic and dominating attitude after the Nationalization of the Banks in 1969. As a result, they have been mostly ignoring the RBI Guidelines resulting into serious wrong doings which are questioned in the legal defence by the borrowers in DRTs. The usual denial mode adopted by the bank officials creates a situation for the cross-examination of the concerned bank officials. Ultimately the said wrong doings will come out by an effective cross-examination. The person cross-examining the bank officials should have mastery of facts and mastery of law in the arena of banking, industry, finance, CPC, Evidence Act and Banking Laws.
DRT Solutions Weekly Mail – 44th Issue dated 13th March ’09
(1) Reference to High Court u/s 113 of CPC
As per Sec 113 of CPC 1908, subject to such conditions and limitations as may be prescribed, any Court may state a case and refer the same for the opinion of the High Court, and High Court may make such order thereon as it thinks fit.
An important proviso was added to the above section in 1951 by way of CP Code (Am) 24 according to which where the Court is satisfied that a case pending before it involves a question of as to the validity of any Act ……, the determination of which is necessary for the disposal of the case ……., the Court shall state a case setting out its opinion and the reasons thereof, and refer the same for the opinion of the High Court.
On account of the above proviso, the scope of Sec 113 has become much wider than Art. 228 of Constitution as the later is only confined to substantial questions of law as to the interpretation of the Constitution and nothing else.
We intend to utilize the above in questioning certain deficiencies of the Securitisation Act in DRTs. The progress will be reported in Weekly Mails in due course of time
(2) Judge had to personally pay the Costs
As per citation AIR 1968 Bombay 439LS Sherlekar vs DL Agarwal, the High Court held and directed the subordinate Judge to personally pay the costs of the other party’s Counsel
This shows that Justice is above all, even the Law bends before Justice. The Courts are meant only for Justice and nothing else
(3) Chances of Winning against Bank in Recovery Litigations- Importance of Perfect Trial
We are repeatedly being approached by the Borrowers facing DRT cases enquiring as to chances of winning against bank. The chances are quite high provided following aspects are kept in view-
(a) The person preparing the pleadings should have mastery of facts and mastery of law
(b) The facts include those relating to Banking, Finance, Industry and Business
(c) The law includes that relating to Pleadings, Constitution, Torts, Damages, CPC, Law of Evidence, Banking including RBI
(d) The advocate should also have above mastery of facts and mastery of law
(e) The Indian Courts are heavily overloaded to the extent of even 9000 per cent compared with those in developed countries. Hence the disposal on every date is likely to be defective. Even a single defect will seriously affect the chances of winning. There is no other option but to ensure that such defect does not occur. This requires hard work and patience in bringing everything in writing
(f) All the material facts are to be judicially determined. The procedural law laid down by the Supreme Court vide citation AIR 1969 Supreme Court 1167 Swaran Lata vs Harendra Kumar has to be strictly followed
(g) The bank cases are based only on documents. All the documents are in possession of the banks. Full use of CPC Order 11 will result in getting all the documents or getting the defence of the banks closed in respect of damage suits or counter-claim
(h) Since the banks do not admit their wrong doings in pleadings, there is no option but to examine the bank officials (at least Chairman and Branch Manager) in witness box by a person having mastery of facts and mastery of law
(i) Since the common sense of the judges is in favor of the banks, nothing should be left for any decision by the judge i.e. complete admission of the wrong doings of the banks must be obtained before any decision is taken by the Judge
(j) The above assumes that a perfect counter-claim or Damage Suit has been filed at proper time resulting in a situation of ‘No Debt Due
(k) The above may take a long time but if any hurry is caused, the chances of winning will come down drastically. Any correction by Higher Courts will not be possible
(l) All our clients who are following our guidance and advice are definitely progressing to win their cases against the bank
(m) Each case is different from the other
(n) Until and unless success is obtained in DRTs (i.e. Trial Court) or the facts have been judicially determined, one should never approach High Court or Supreme Court. These courts can not do anything about the facts. If by chance one has to approach these higher courts, each and every fact should have clearcut determination by the lower courts otherwise it may boomerang and future corrections will be impossible
(o) The advocates of our clients are requested to hold periodical dialogues with us so that there is no lacuna or deficiencies in the .
(4) Future of Trial Courts in India
We are repeatedly being approached by the Borrowers facing DRT cases enquiring as to the future of trials (i.e. in DRTs) in India. Our views are as under-
(a) The UNO finalized a model IT Act (Information and Technology Act) in 1998 and sent to all its member countries to enact the same in their individual country
(b) Accordingly India enacted the IT Act 2000
(c) At the instance of Dr. Abdul Kalam Azad, the then President of India, on 9th July 2007, laptops were distributed to 15,000 Judges in the countries with the provision of 3 months training
(d) The Supreme Court of India and the High Courts are continuously adopting modern IT technology in their court rooms. The Annul Chief Justices’ Conference is emphasizing use of such technology in Trial Courts and accordingly e-courts are being established. All the 14,000 courts are being interconnected with an outlay of Rs. 450 crores in next 5 years
(e) Many of the Advocates have started using modern IT tools in their day to day operations
(f) We have developed a superior method of ‘Video Arguments’ for the first time in India and demonstrated the same on 10th July 2007 before the District Judge, Indore. The said method was also demonstrated before the Legal Forum of India on 4th May 2008 and before the All India Conference of Chartered Accountants on 22nd February 2009
(g) The TV Program like ‘Aapki Kachahry’ by Dr. Kiran Bedi will become a Model for commencing such Courts not only in the country but throughout the world. As a result the bulk of the small cases will be decided by such community courts
(h) At present 70% of the litigations are at the instance of the Govt or Public Sectors. The scheme of Ombudsman will come up in a large way. A mandatory certificate from Legal Audit or Ombudsman will settle most of the case before coming to the regular courts
(i) The Alternative Dispute Redressal by way of Lok Adalat, Arbitration and Mediation will be more effective in reducing the incidence of cases coming to the regular courts
(j) Legal Education of the litigants as we have started for our clients will improve the quality of disposal on every date of the litigations
(k) As in USA and UK, complete proceedings of the courts will be video recorded, televised online, transcribed on the same day and all such information available on the internet on the same day will definitely improve the quality of disposal on every day. The requirement of ‘Open Court in presence of parties’ will be truly served
(l) On account of all the above measures there may be separate ‘Bar Association of Trial Lawyers’ as in USA
(m) Most of the above will be achieved in next 5 years
(n) The litigants of the DRTs will give the lead as they constitute the most competent and able litigants being Entrepreneurs, Businessmen and Industrialists who have capabilities as well as the resources to bring in better management and improved technology in the DRTs (i.e. Trial Courts) in India
Note:-This issue of the weekly mail is prepared and published from Sagar where Mr. Ram Kishan is staying with effect from 11th March to 15th March ’09
DRT Solutions Weekly Mail – 43rd Issue dated 6th March ’09
(1) Impact of E-mail to CMD of a Public Sector Bank
In respect of one of our clients from Indore, the Authorised Officer of the Bank took objections to the reply being submitted by the Advocate of our client. He was informed that the proceedings being quasi-judicial in nature, no such objection is tenable in the eyes of law. When this matter was complained through an E-mail endorsement by Mr. B.K. Dubey, our Senior Advocate to the CMD of the Bank, the Law Division of the Head Office of the said Bank, immediately on the same day replied through E-mail as under (name of the bank and its officials have been suppressed to maintain professional secrecy). We wish that the problems of the borrowers are also handled with such seriousness and urgency. Our contention is proved that the CMD of the Bank must be informed and made as a necessary party in the DRT pleadings will definitely improve the overall quality of the defence.
---------- Forwarded message ----------
Date: Thu, Mar 5, 2009 at 4:05 PM
Shri BK Dubey,
We have received your email message dated 5.3.2009, addressed to Chairman & Managing Director, which has been brought to our notice.
We have since advised the concerned official that the representations received from the advocates, on behalf of their clients, under SARFAESI Act, be also appropriately replied by the authorized official.
Our authorized official has already replied to the representation which you have raised directly to your client. However, we are advising the authorized official to send copy thereof to you.
H.O., NEW DELHI
(2) DRT Mumbai rules that until and unless Counter-claim has been decided, no recovery action can be taken by the Bank
One of our Associate Advocates from Mumbai has informed that one of the DRTs in Mumbai has ruled that since the counter-claim was more than the claim of the bank and hence there was ‘No Debt Due’, no coercive action for recovery can be taken under the Securitisation Act. The details of the case shall be given in the future Weekly Mail when the same are received by us.
(3) SC Ruling – ‘Statutory First Charge in favour of State has primacy over right of banks to recover its dues.
Mr. Rajendra Seth, Mumbai has been kind enough to communicate us copy of an important Supreme Court ruling decided on 27th Feb. 2009 in the matter of Central Bank vs State of Kerala, Civil Appeal No 95 of 2005 according to which “statutory charge created in favour of the state has primacy over the right of the bank to recover its dues under the Securitisation Act or DRT Act.”
(4) Limitation in the matter of Counter-claims or Damage Suits of Borrowers
We continue to receive several queries in respect of the limitation in the matter of Counter-claims or the Damage Suits filed by the borrowers and Guarantors against the banks and FIs in DRTs.
In almost all the cases, we have found that the loss and damages caused are continuing in nature and are covered under Sec. 22 of the Limitation Act, 1963 reproduced below:-
“22. Continuing breaches and torts. – In the case of a continuing breaches of contract or in the case of a continuing tort, a fresh period of limitation begins to run at every moment of the time during which the breach or tort, as the case may be, continues.”
In view of above and in the event of continuing cause of action, there is no limitation for initiation action for counter-claims or damage suits by the borrowers and guarantors.
(5) Court Fee in the matter of Counter-claim or Damage Suits of Borrowers
The court fee in the matter of Counter-claims or Damage Suits of the Borrowers will depend on the following facts and circumstances:-
(a) In DRTs, the maximum court fee is Rs. 1.5 lac depending on the quantum of Loss and Damages.
(b) In civil court, one has to find out the schedule laid down under the Court Fee act of the State where the subject Counter-claim or Damage Suit is filed. In many of the States, it is ad-valorem and varies from 10% on wards. In some States like Maharashtra, the maximum court fee is Rs. 3 lacs.
(c) Depending on the quantum of the Loss and Damages, the court fee is calculated and if is beyond the financial means of the litigant, it is waived in accordance with the procedure laid down in Order 33 of the CPC applicable to ‘Suits by Indigent Persons’
(d) In case of Co-operative Courts, the maximum court fee is Rs. 15,000=00
(e) In certain Union Territories, the Court Fee is Rs. 6,000=00 maximum.
DRT Solutions Weekly Mail – 42nd Issue dated 27th Feb. ’09
(1) ‘Video Arguments in Judicial Proceedings’ – Special Address delivered in All India Conference of CAs on 22.02.09 at Indore
Mr. Ram Kishan delivered a special address on ‘Video Arguments in Judicial Proceedings’ on 22.02.09 in Dhirubhai Ambani Auditorium. Daly College, Indore during the 4th Technical Session of the National Conference of the CAs. A background paper was already published on our web site vide link http://www.drtsolutions.com/courtech.htm The ‘Present Method of Oral Arguments’, its deficiencies vis a vis ‘Proposed Method of Video Arguments’ were explained along with extract from an actual case. It was entirely a new concept to the large gathering of CAs. Mr. R. Bupathy, Chairman of the Session and Past President, ICAI, Chennai himself appreciated, took keen interest and desired to spend exclusive time. The entire address was video recorded and a DVD will be available in due course of time.
(2) Cross-examination of Bank Officials:-
We have received several queries regarding cross-examination of the bank officials. Our views are as under:-
(a) As per provisions under Sec. 22 of the DRT Act, the bank officials can be examined.
(b) In some cases when DRT PO has declined cross-examination, the High Courts in appeal have ordered to conduct cross-examination in accordance with the principles of natural justice as well as the provisions u/Sec 22 of the DRT Act.
(c) The stage for the cross-examination is reached only after all efforts have been made to discover the facts contained in the documents and the bank officials have declined to provide the required documents.
(d) The sole purpose of the cross-examination of the bank officials is to obtain their admissions for the wrong doings committed by them.
(e) The person conducting cross-examination should have mastery of facts and mastery of law relating to banking, industry, finance, evidence, contract, torts and damages. The principle of direct and best evidence is to be kept always in view.
(f) We have advocates as well as retired bank officials who have been specifically trained to conduct cross-examination of the bank officials.
(g) In bank litigation, the cross-examination of the bank officials is one of the most important tools to extract facts and admissions from the said bank officials.
(3) Damage Suit and or Counter-claim in Bank Litigations:-
We continue to receive several queries on this important subject. Our views are as under:-
(a) If the bank has filed an OA (Original Application) u/s 19 of the DRT Act and stage has been reached to file WS. Under such situation, the Counter-claim must be filed along with the WS. It is needless to mention that pleadings in the said Counter-claim has to be quite exhaustive as in a civil suit for damages. All the facts relating to project report, financial application, sanction, correspondence, balance sheets, all categories of loss and damages etc. must be pleaded along with the documents. It is needless to mention that the person drafting the said counter-claim should have mastery of facts and mastery of law relating to banking, industry, finance, torts and damages.
(b) We have seen that in many cases, the pleadings of the counter-claim are contained only in few paragraphs whereas the pleadings in properly drafted counter-claims run in 80 to 150 pages excluding the documents.
(c) In some cases, the counter-claim has not been set up the decree has been passed by the DRT and the borrower is at the stage of appeal. The said borrower must file his damage suit in the civil court.
(d) After passing of the decree by the DRT, if there is any possibility of retrial, counter-claim may be filed in DRT before restart of the trial.
(e) In almost all the cases, we have found that the amount of counter-claim or damages are much more than the claim of the bank and hence there is no debt due. Hence till the damage suit or the counter-claim is decided, no recovery action can be initiated.
(f) The loss and damages suffered are continuing in nature and hence there is no limitation. Hence the damage suit or counter-claim can be filed at any time.
(g) If the pleadings of the said damage suit or counter-claim are prepared thoroughly and are contested properly, it will be nearly impossible for any bank to recover their alleged claim which is always much less than the damage suit or the counter-claim of the borrowers. Ultimately, the banks will have no option but to settle the matter if the borrower agrees and the settled amount has been seen ranging from 3% to 20% in respect of many of our clients.
DRT Solutions Weekly Mail – 41st Issue dated 20th Feb. ’09
(1) Update on Gujrat High Court Kotak Mahindra Judgment holding debt assignment or its substitution illegal:-
In continuation of above matter reported in news item in 37th issue of weekly mail, the ICICI Bank has filed a SLP No 2240/2009 in the Supreme Court along with several SLPs. The petition was called on hearing on 16.02.09. It was ordered that if these SLPs are dismissed, the assignor banks and the assignee banks will have to reverse the transactions which they enter into during the interim period to be stipulated by the Supreme Court at the final hearing which will be held on 16.04.09.. Such order was passed to ensure that the secured debts do not go unrepresented. Further the SC directed that any disbursement to secured creditors shall, where the debt stands assigned, be made to the assignees. This order will not be construed as an acceptance of the assignments pending the present Special Leave Petitions.
(2) Query on provision of Counter-claim in Securitisation Act:-
With reference to the item no 2 In the last issue of the weekly mail, one of the mail recipients has raised a query reproduced below:-
I wonder why a field expert like you you have
changed from your earlier learned stand that a Securitisation Application is in
lieu of a civil suit and damages can be claimed in an SA.
There is no change in our stand. It is a question of strategy based on convenience due to existing legal provisions. Looking back to the history, the well defined provision of counter-claim in CPC 1908 was incorporated in 1976. Similarly it was done so in DRT Act 1993 in 2000. Such well defined amendment in Securitisation Act is still awaited. These do not mean that there were no counter-claims in civil courts prior to 1976 or in DRTs prior to 2000. They were there but one has to justify on the basis of fundamentals of law. Same thing will have to be done in the arena of Securitisation Act till there is well defined amendment. That is why our first approach is to explore possibility of filing counter-claim if there is any existing OA under DRT Act or there is any possibility of the same. If such situation does not exit, then there is no option but to file the damage claim in the appeal (i.e. civil suit) under section 17 of the Securitisation Act. That is why initially we mention in the said appeal about the loss and damages reserving our rights to file such claim in due course of time.
(3) Strategy for Borrowers’ litigation in DRTs :-
Several borrowers have been discussing with us about their strategy in DRT litigations. The following analysis will have a practical utility:-
(1) The Indian courts are heavily overloaded. Recently on 16th Feb 2009, it was reported in a news item that in Delhi High Court, a bench is disposing about 13,800 cases in a year. While making a comparison, it was informed that similar bench in UK disposes only 150 cases in a year. This means that our courts are overburdened nearly 90 times. If the aspects of management and technology is also considered, our courts are much more overloaded even beyond 90 times.
(2) The above is a stark reality which no one can shut his eyes. The result is that the trials in almost all the cases will be defective. That is why we have been emphasizing importance of review in almost all the interim orders. If these initial defects are not corrected at the trial stage, the Higher Courts will not be able to do anything.
(3) The civil suits in UK are decided in about one year. This means if thorough work is done in our courts, the suits will take 90 years. That is why we have been concluding that a thorough trial in DRTs will take 10 to 20 years.
(4) In view of above, we have been emphasizing our clients that they have to organize their litigation of counter-claim on thorough basis. Since the litigation is going to last for more than 10 to 20 years, the borrower must concentrate earning of wealth.
(5) Under the above facts and circumstances, since in almost all the cases, the counter-claim being much more than the claim of the lenders, there is no debt due and hence the recovery action as per law can not take place for the said period of 10 to 20 years, it would be worthwhile concentrating on earning. This will also create a strength for better litigation as well as settlement if any. All this is possible if one has prepared a thorough counter-claim followed by thorough fight on every date. That is why we have been emphasizing that the Counter-claim is the ultimate and the only defence for the Borrowers in DRTs.
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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.
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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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