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DRT-II, Chandigarh has forwarded to us certain observations w.r.t. The procedure followed by the Banks for effecting recovery in cases where Recovery Certificate has been issued by DRTs. If the property is not demarcated, the demarcation should be got done till the service of notices on the CDs. In cases where a new Recovery Certificate is issued, it is incumbent upon the Bank to get valuation report relating to the property mortgaged with the Bank.
DRT-II, Chandigarh has forwarded to us certain observations w.r.t. The procedure followed by the Banks for effecting recovery in cases where Recovery Certificate has been issued by DRTs. If the property is not demarcated, the demarcation should be got done till the service of notices on the CDs. In cases where a new Recovery Certificate is issued, it is incumbent upon the Bank to get valuation report relating to the property mortgaged with the Bank.
DRT-II, Chandigarh has forwarded to us certain observations w.r.t. The procedure followed by the Banks for effecting recovery in cases where Recovery Certificate has been issued by DRTs. If the property is not demarcated, the demarcation should be got done till the service of notices on the CDs. In cases where a new Recovery Certificate is issued, it is incumbent upon the Bank to get valuation report relating to the property mortgaged with the Bank.
4 TH Floor, BANK HOUSE 21, RAJENDRA PLACE NEW DELHI
------------------------------------------------------------------------------------------------------------------------------- LAW CIRCULATORY LETTER NO. : 53 Dated: February 20, 2013 CODE No. of the Department: H-9010 Number of pages of Circulatory letter: 2 Running Circulatory letter No. of the Bank: ------------------------------------------------------------------------------------------------------------------------------- ALL BRANCHES/CONTROLLING OFFICES
Reg: Steps for expediting the recovery cases pending at DRTs.
With the enactment of Debt Recovery Tribunal Act in 1993, the objective was to have speedy recovery. A maximum time frame of 6 months was visualized for settling the recovery cases by the Banks. However, in reality, we find many cases are dragging for years together.
We have been informed by DRTs that the Banks are not taking suitable steps to expedite the recovery proceedings even in cases where Recovery Certificates have been issued by Honble Presiding Officer of respective DRTs. It has come to their notice that quite often there are deficiencies in procedure followed by the Secured Creditors (Banks) for putting the property to auction, which can be easily avoided.
In their endeavour to reduce the time taken in disposing of cases and to speed up Bank recoveries, DRT-II, Chandigarh has forwarded to us certain observations w.r.t. the procedure followed by the Banks for effecting recovery in cases where Recovery Certificate has been issued by DRTs.
As soon as a new Recovery Certificate is issued, it is incumbent upon the Bank to get valuation report relating to the property mortgaged with the Bank. In case the property is not demarcated, the demarcation should be got done till the service of notices is completed on the CDs.
With a view to expedite the recovery proceedings, notices under Rule 2 of Schedule II of Income Tax Act, 1961, are being issued by DRT upon the defaulter to pay the amount specified in the Certificate within fifteen days from the date of service of the notice. These notices are being issued by DRT so that the time taken by the Banks for service of notices is minimized.
However, DRT has observed the following deficiencies in the procedure being followed by the Banks in such cases: -
(2)
Reg: Steps for expediting the recovery cases pending at DRTs.
1. That first the Banks wait for issue of notices under Rule 2. Then the Banks wait for service of notices on the CDs by way of substituted services i.e. publication of notices. Then the Bank takes its own time for filing valuation report and in this process several months are being wasted which can be easily avoided if the officers are aware about the importance of recovery of loan.
2. That after issue of notices under Rule 2, substituted service by way of publication should be done by the Bank without seeking any adjournment so that no time is wasted in effecting service upon the CDs. But the Banks are seeking adjournments for the same again and again.
To mitigate this problem, DRT has desired that in case the Banks do not get the notices published on the very first occasion, notices should be got published by DRT for which the concerned Branch/ Office of the Bank will be liable to pay bill for publication directly to the publication agency.
3. That the Nodal Officers should have a proper liaison with their Advocates which, at present, is lacking. Complete list of pending cases has already been provided to the Nodal Officers. The Nodal Officers should also come fully prepared so that the respective Tribunals may be able to take some concrete steps for recovery of dues.
It is matter of record that as per the initiative of Ministry of Finance, Nodal Officers were appointed for each DRT who were supposed to regularly visit DRTs, monitor all cases pending therein and meet POs and ROs regularly to see that the cases are pursued vigorously in the Courts. The roles and responsibilities of such Nodal Officers have been sparsely specified in Law Circular No.210 dated 17.11.2011. We hope that these Nodal Officers must be performing functions as advised in the said Circular so as to serve the purpose for which they have been nominated.
Please take note of the points emerging out of the above mentioned deficiencies found by DRTs and also discuss these issued with concerned Advocates, so that the said anomalies, if any, w.r.t. procedure of the Bank be carefully taken care off so that the time taken in disposing of cases before DRTs is reduced.