NPA DUE TO BANK’S MISTAKE ? REMEDIES AVAILABLE TO THE BORROWER ? SARFAESI ACT – A CASE STUDY?
28Feb
It appears to me that the SARFAESI Act, 2002 was enacted on the assumption that the Bank will commit no mistake in the course of its business relations with the borrowers. It is understandable as to why the Banks need a special legislation like SARFAESI Act, 2002, but, there can not be any justification for not providing an effective remedy to the borrowers in case they have a genuine grievance. The Bank will sanction loans to the borrowers on specific terms and conditions. There can be variety of credit facilities. In the course of adhering to the terms and conditions; like borrowers, the Banks too can commit mistakes and there can not be any doubt in this regard. Looking at the provisions of the SARFAESI Act, 2002, the rules, the practice and few precedents; borrowers and also professionals alike are doubtful in getting relief from the specially constituted Debt Recovery Tribunal which entertains appeals from the borrowers under section 17 of the Act. I have heard many borrowers saying that the Debt Recovery Tribunals will support the Banks and their actions, and will not effectively listen to the grievances of the ... [more..]
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