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INDIAN BARE ACTS

RELEVANT PORTIONS PERTAINING TO DRT/DRAT IN THE SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT, 2002 (54 of 2002)

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Illustration from the first edition of Little Dorrit by Charles Dickens. See filename for original image title. (Photo credit: Wikipedia)

DEBT RECOVERY APPELLATE
TRIBUNAL, CHENNAI
RELEVANT PORTIONS PERTAINING TO DRT/DRAT IN
THE SECURITISATION AND RECONSTRUCTION OF
FINANCIAL ASSETS AND ENFORCEMENT OF
SECURITY INTEREST ACT, 2002 (54 of 2002)
An Act to regulate securitisation and reconstruction of financial
assets and enforcement of security interest and for matters connected
therewith or incidental thereto.
Section 13: Enforcement of Security Interest
(Sub Section 10): When the dues of the secured creditor are not fully
satisfied with the sale proceeds of the secured assets, the secured creditor
may file an application in the form and manner may be prescribed to the
Debt Recovery Tribunal having Jurisdiction or a competent court, as the
case may be, for recovery of the balance amount from the borrower
Section 17. Right to appeal.- (1) Any person (including borrower),
aggrieved by any of the measures referred to in sub-section (4) of section
13* taken by the secured creditor or his authorised officer under this
Chapter, may prefer an appeal to the Debts Recovery Tribunal having
jurisdiction in the matter within forty-five days from the date on which such
measures had been taken.
2
(3)Save as otherwise provided in this Act, the Debts Recovery
Tribunal shall, as far as may be, dispose of the appeal in accordance with the
provisions of the Recovery of Debts Due to Banks and Financial Institutions
Act, 993(51 of 1993) and rules made there under.
Objections and Reasons-Clause17.-This Clause contains provisions
relating to appeal.
Sub-clause (1) of this clause provides that any person (including
borrower) aggrieved by any of the measures referred to in sub-clause(4) of
clause 13 taken by the secured creditor or his authorised officer under the
proposed legislation, may prefer an appeal to the Debts Recovery Tribunal
having jurisdiction in the matter within forty-five days from the date on
which such measures had been taken.
Sub-clause(3) of this provides that the Debts Recovery Tribunal shall,
as far as may be, dispose of the appeal in accordance with the provisions of
the Recovery of Debts Due to Banks and Financial Institutions Act, 1993
and rules made thereunder.
*[Sub Section.4 of Section 13: In case the borrower fails to discharge his liability
in full within the period specified in sub-section (2), the secured creditor may take
recourse to one or more of the following measures to recover his secured debt, namely:-
(a) take possession of the secured assets of the borrower including the right to
transfer by way of lease, assignment or sale for realizing the secured asset;
(b)take over the management of the secured assets of the borrower including the
right to transfer by way of lease, assignment or sale and realize the secured asset;
(c)Appoint any person (hereafter referred to as the manager), to manage the
secured assets the possession of which has been taken over by the secured creditor;
(d) require at any time by notice in writing, any person who has acquired any of
the secured assets from the borrower and from whom any money is due or may become
due to the borrower, to pay the secured creditor, so much of the money as is sufficient to
pay the secured debt.]
Section 18. Appeal to Appellate Tribunal.-(1) Any person aggrieved, by
any order made by the Debts Recovery Tribunal under section 17, may
prefer an appeal to the Appellate Tribunal within thirty days from the date of
receipt of the order of Debts Recovery Tribunal. 3
(2) Save as otherwise provided in this Act, the Appellate Tribunal
shall, as far as may be, dispose of the appeal in accordance with the
provisions of The Recovery of Debts Due to Banks and Financial
Institutions Act, 1993 (51 of 1993) and rules made thereunder.
Objects and Reasons- Clause 18.- This clause contains provisions relating
to the appeal to Appellate Tribunal.
Sub-clause(1) of this clause provides that any person aggrieved by
any order made by the Debts Recovery Tribunal under clause 17 may prefer
an appeal to the Appellate Tribunal within thirty days from the date of
receipt of the order of the Debts Recovery Tribunal.
Sub-clause(2) of this provides that the Appellate Tribunal shall, as far
as may be, dispose of the appeal in accordance with the provisions of the
Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and
rules made thereunder
Section 19. Right of borrower to receive compensation and costs in
certain cases.- If the Debts Recovery Tribunal or the Appellate Tribunal, as
the case may be, on an appeal filed under section 17 or section 18 holds the
possession of secured assets by the secured creditor as wrongful and directs
the secured creditor to return such secured assets to the concerned borrower,
such borrower shall be entitled to payment of such compensation and costs
as may be determined by such Tribunal or Appellate Tribunal.
Objects and Reasons-Clause 19.- This clause contains provisions relating to
the right of borrower to receive compensation and costs in certain cases.
If the Debts Recovery Tribunal or the Appellate Tribunal holds the
possession of secured assets by the secured creditor as wrongful possession,
and directs the secured creditor to return such secured assets to the
concerned borrower, such borrower shall be entitled to payment of such
compensation and costs as may be determined by such Tribunal or Appellate
Tribunal. 4
THE SECURITY INTEREST (ENFORCEMENT) RULES,2002
In exercise of the powers conferred by sub-section (1) and clause(b)
of sub-section (2) of section 38 read with sub-section (4), (10) and (12) of
section 13 of the Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Ordinance, 2002 (Ord.3 of 2002), the
Central Government hereby makes the following rules, namely:-

The following rule is related to DRTs and DRATs.
Rule 11. Procedure for Recovery of shortfall of secured debt.-(1)An
application for recovery of balance amount by any secured creditor pursuant
to sub-section (1) of section 13 of the Ordinance shall be presented to the
Debts Recovery Tribunal in the form annexed as Appendix VI to these rules
by the authorised officer or his agent or by a duly authorised legal
practitioner, to the Registrar of the Bench within whose jurisdiction his case
falls or shall be sent by registered post addressed to the Registrar of Debts
Recovery Tribunal.
(2) The provisions of the Debts Recovery Tribunal (procedure) Rules,
1993 made under Recovery of Debts Due to Banks and Financial Institutions
Act, 1993 (51 of 1993), shall mutatis mutandis apply to any application filed
by under sub-rule (1)
(3) An application under sub-rule (1) shall be accompanied with fee as
provided in rule 7 of the Debts Recovery Tribunal (Procedure) Rules, 1993. 5
APPENDIX VI
FORM
(See Rule 11(1))
Application under sub-section (10) of section 13 of the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest (Second)
Ordinance, 2002.
For use in Office.
Date of filing ……………….
Date of receipt by post……
Date of receipt by post……
Registration No……………
Signature
Registrar
IN THE DEBTS RECOVERY TRIBUNAL
(NAME OF THE PLACE)
Between
A.B.
Applicant
And
C.D.
Defendant
Delete whichever is not applicable
Details of the Application:
1. Particulars of the applicant
(i) Name of the applicant :
(ii) Address of Registered Office :
(iii) Address for service of all notice :
2. Particulars of the (defendant)
(i) Name of the (defendant) :
(ii) Office address of the (defendant) :
(iii) Address for service of all notices :
3. Jurisdiction of the Tribunal. –The applicant
declares that the subject-matter of the
recovery of debt due falls within the
jurisdiction of the Tribunal.
4. Limitation.- The applicant further declares
That the application is within the limitation
Prescribed in section 24 of the Recovery of
Debts Due to Banks and Financial
Institutions Act, 1993. 6
5. Facts of the case.- The facts of the case are
Given below:
(Give here a concise statement of facts in
a chronological order, each paragraph
containing as nearly as possible a
separate issue, fact or otherwise.)
6. Details of recoveries made by sale of securities:-
(Give here securitywise details of sale/s
conducted and realiszations, appropriations
of sale proceeds towards, costs, interest and
principal amount and the balance amount to
be recovered.)
7. Relief sought for.-In view of the facts mentioned
in Para 5 above, the applicant prays for the following
relief(s):-
(Specify below the relief(s) sought explaining the
ground for relief(s) and the legal provisions
(if any relief sought upon).)
8. Interim order, if prayed for.- Pending
final decision on the application, the
applicant seeks issue of the following interim order:
(Give here the nature of the interim order
prayed for with reasons.)
9. Matter not pending with any other Court, etc.-
The applicant further declares that the matter
Regarding which this application has been made
is not pending before any Court of law or any
other authority or any other Bench of the Tribunal.
10. Particulars of Bank Draft/Postal Order in respect of
the application fee:-
(1) Name of the Bank on which drawn :
(2) Demand Draft No. :
or
(1) Number of Indian Postal Order(s) :
(2) Name of the Issuing Post Office :
(3) Date of issue of Postal Order(s) :
(4) Post Office at which payable :
11. Details of Index.-An index in duplicate containing 7
the details of the documents to be relied upon is
enclosed.
(Such documents should include copies of sale
certificates or any other documents relating to sale
of secured assets and sale proceeds realised.)
12. List of enclosures.-
VERIFICATION
I,………………(Name in full and block letters), son/daughter/wife of
Shri………………being the ……..(designation)……(name of the company)
holding a valid power of attorney from ……..(name of the company) do hereby
verify that the contents of Paras 1 to 11 are true to my personal knowledge and
belief and that I have not suppressed any material facts.
Signature of the Applicant
Place:
Date:
To:
The Registrar
………..
………… 8
MINISTRY OF FINANCE
(Department of Economic Affairs)
(Banking Division)
ORDER
New Delhi, the 6
th
April, 2004
S.O.466(E)- Whereas the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002 (54
of 2002) (hereinafter referred to as the said Act came into force on the
18
th
day of December, 2002;
And whereas any person (including borrower), aggrieved by
any of the measures referred to in sub-section(4) of section 13 of the
said Act taken by the secured creditor or his authorised officer under
Chapter III of the said Act, may prefer an appeal under sub-section (1)
of section 17of the said Act to the Debts Recovery Tribunal
established under sub-section (1) of section 3 of the Recovery of
Debts Due to Banks and Financial Institutions Act, 1993 having
jurisdiction in the matter;

And whereas the provisions contained in sub-section (3) of
section 17 of the said Act provides that the Debts Recovery Tribunal
shall, as far as may be, dispose of an appeal arising with the said Act
in accordance with the provisions of the Recovery of Debts Due to
Banks and Financial Institutions Act, 1993 (51 of 1993) and Rules
made thereunder; 9
And whereas section 19 of the Recovery of Debts Due to Banks
and Financial Institutions Act, 1993, read with rule 7 of the Debts
Recovery Tribunal (Procedure) Rules, 1993 made under that Act,
specifies the fee for the purpose of filing an application to the Debts
Recovery Tribunal under the Act;
And whereas any person (including borrower), aggrieved by
any order made by the Debts Recovery Tribunal under sub-section (3)
of section 17 of the said Act may prefer an appeal under sub-section
(1) of section 18 of the said Act to the Debts Recovery Appellate
Tribunal referred to under sub-section (1) of section 8 of the Recovery
of Debts Due to Banks and Financial Institutions Act, 1993
(hereinafter referred to as the Appellate Tribunal) having jurisdiction
in the matter;
And whereas the provisions contained in sub-section (2) of
section 18 of the said Act provides that the Appellate Tribunal shall,
as far as may be, dispose of an appeal arising with the said Act in
accordance with the provisions of the Recovery of Debts Due to
Banks and Financial Institutions Act, 1993 and rules made thereunder;
And whereas section 20 of the Recovery of Debts Due to Banks
and Financial Institutions Act, 1993, read with rule 8 of the Debts
Recovery Appellate Tribunal (Procedure) Rules, 1994 made under
that Act, specifies the fee for the purpose of filing of an appeal to the
Appellate Tribunal; 10
And whereas in the absence of express provisions to levy fees,
difficulties have arisen in the matter of levying of fees for filing of
appeals under section 17 and 18 of the said Act to the Debts Recovery
Tribunal and the Appellate Tribunal established under the Recovery
of Debts Due to banks and Financial Institutions Act, 1993;
Now, therefore, in exercise of the powers conferred by subsection (1) of section 40 of the said Act, the Central Government
hereby makes the following Order to make the provisions for
levying of the fee for filing of appeals under sections 17 and 18 of
the said Act, being not inconsistent with the provisions of the Act,
to remove the difficulty, namely:-
1. Short title and commencement:
(i) This Order may be called the Securitisation and
Reconstruction of Financial Assets and Enforcement
of Security Interest (Removal of Difficulties ) Order,
2004.
(ii) It shall come into force at once.
2. Definition- Debts Recovery Tribunal (Procedure ) Rules,
1993 means the Debts Recovery Tribunal (Procedure) Rules, 1993
made under section 9 read with clause (e) of sub-section (2) of
section 36 of the Recovery of Debts Due to banks and Financial
Institutions Act, 1993. 11
3. Fee for filing of an appeal to Debts Recovery Tribunal. – The
fee for filing of an appeal to the Debts Recovery Tribunal under
sub-section (1) of section 17 of the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002 shall be mutatis Mutandis as provided for filing
of an application to the Debts Recovery Tribunal under rule 7 of
Debts Recovery Tribunal (Procedure) Rules, 1993.
4. Fee for filing of an appeal to Debts Recovery Appellate
Tribunal.- The fee for filing of an appeal to the Debts Recovery
Appellate Tribunal under sub-section (1) of section 18 of the
Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 shall be mutatis
mutandis as provided for filing of an appeal to the Debts
Recovery Appellate Tribunal under rule 8 of the Debts Recovery
Appellate Tribunal (Procedure) Rules, 1994.

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