Lawfarm Team
in Consumer Law Criminal Law Corporate Law RTI and PIL Contracts Law Civil Law Labour Law
Asked June 02, 2016

Bank wrongly demanding repayment of cash credit loan.

  • 1 Answer
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I have cash credit loan from ***** bank in 2006. limit was 7 lachs. but last 1 year 85000 was due, Which i paid in march. But now they are asking me to pay the whole amount. Yesterday, they pasted a notice in front of our house. how can i stay that order and a case file against bank manager? What do I do?

Answer 1

The first step for you is to go to the Bank Manager directly with a formal written letter stating your grievances and error on the part of the Bank. Also, attach a copy of receipt collected by you from the bank, for the payment of loan amount made by you, as evidence. In most cases, such notices, even after timely payment by the borrower, are the result of negligence on the part of the bank employees. *** bank, being a reputed commercial bank, cares about its goodwill in the market and is most likely to rectify its error. You can also demand for an apology from their side in newspapers as they have already put up an ad in the newspaper which is damaging to your reputation. Along with the letter, you can appeal for a stay order in the Debts Recovery Tribunal (DRT) under S. 17 of the SARFESI Act, 2002[1], against the bank’s possession of your property under S. 13(4) of the SARFAESI Act, 2002. This is a comparatively longer procedure, but an essential step, since you have only 45 days from the date of this notice, within which you can appeal to the DRT. The letter, with the attached copy of receipt, given to the manager should be sufficient; however, the appeal filed under DRT would ensure that the bank is not able to wrongfully profit from your property even after your timely payment. However, DRT will entertain your appeal only if you deposit with it 70% of the amount claimed in the notice. This can be waived by the DRT only if it gives in writing the terms and reasons of such waiver. Under S.19 of the SARFAESI Act, 2002[2], if the DRT finds that the possession of your property is wrongful on the part of the bank, it can direct the bank to return your property to your possession and also you will be entitled to payment of such compensation and cost as directed by the DRT. Inspite of the option to prosecute the manager through an appeal before the DRT, it is advisable to follow the first step initially, as the letter to the manager would help you avoid the court fees (70% of the amount claimed in the notice). Filing an appeal before the DRT is the only legal course of action available before you at the moment, as S. 34 of the SARFAESI Act, 2002[3], clearly bars the civil court from entertaining cases for which the DRT has jurisdiction.   [1] Available at: http://www.advocatekhoj.com/library/bareacts/securitisation/17.php?Title=Securitisation%20and%20Reconstruction%20of%20Financial%20Assets%20and%20Enforcement%20of%20Security%20Interest%20Act,%202002&STitle=Right%20to%20appeal. [2] Available at: http://www.advocatekhoj.com/library/bareacts/securitisation/19.php?Title=Securitisation%20and%20Reconstruction%20of%20Financial%20Assets%20and%20Enforcement%20of%20Security%20Interest%20Act,%202002&STitle=Right%20of%20borrower%20to%20receive%20compensation%20and%20costs%20in%20certain%20cases. [3] Available at: http://www.advocatekhoj.com/library/bareacts/securitisation/34.php?Title=Securitisation%20and%20Reconstruction%20of%20Financial%20Assets%20and%20Enforcement%20of%20Security%20Interest%20Act,%202002&STitle=Civil%20court%20not%20to%20have%20jurisdiction.
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