During this year a three judge bench of Supreme Court
had disposed off four cases related to the above matter
where the Kerala State Sales Tax law was considered.
The gist of the judgements is as under: Section 26 B of the
Kerala Act gives priority over the banks' dues and the state
government can even revoke the sale effected by the bank
in its efforts of recovery of state revenue.
Further the invocationcan be at different
stages of litigation and can even be done with
retrospective effect. Some details are as under:
1. In C.A. No. 95/2005 between
Central Bank of India and State of Kerala,
the state authorities had invoked their priority
of charge before the suit filed by the bank is
decreed and their priority was upheld.
2. In C.A.3549/2006 between IOB and state of Kerala,
the suit filed by the bank in DRT was decreed
but the bank's appeal against the quashing of their
request to restrain the state sales tax officials from
claiming their dues was declined despite the fact that
the said section 26B was inserted in Kerala Act
w.e.f. 01.04.1999 after the suit was filed by the
bank was decreed in their favour.
3. In C.A. 3973/2006 between BOB and State of Kerala,
the supreme court had upheld the decision of the bench
of High court where they expressed that "State has
got priority in the matter of recovery of debts due
and specific statutory charge created under the Sales
Tax notwithstanding the equitable mortgages created by
defaulters in favour of banks prior to the liability in favour
of the state".
In had opined further that till the decree passed by a
civil court is executed through executing court, the title
of the mortgaged property remains with the mortgagor
and the state's overriding rights would not be disturbed.
4. In C.A. 4174/2006 involving one
Mr. Ahmad Koya and the District collector, the Canara Bank
which was a creditor had obtained a decree in the DRT
on17.02.2000 and obtained recovery certificate on 24.08.2000
.Before actually recovery was effected the District collector
had invoked Recovery Act on 18.07.2000 and attached the
property and on 13.02.2001 had tried to sell the property.
On a petition from the bank the sale notice was stayed. Bank
sold a part of the property to Mr. Koya for Rs. 60,60,010/-
as it sufficed their dues. State of Kerala had sought and obtained
a decree nullifying the sale by the recovery officer since he did no
give notice to the state though he is aware of the attachment of
the property by the state.
Mr. Koya contended that since the attachment is
after the date of decree the bank is not wrong in
disposing of the property and further that there is
another piece of property which can be auctioned by
the state for recovering its dues.
However the court had upheld the High court order
which nullified the sale as the state is not informed of
the same despite the property under attachment.
The bench of the Supreme Court had given the freedom
to Mr. Koya to take appropriate remedial steps
for getting back the amount paid by him.
Wednesday, December 9, 2009
DRT cracks the whip again
Abhay Vaidya,
|
PUNE: The Debt Recovery Tribunal (DRT), Pune,
which in May created a stir by attaching state
government properties and treasury account, has now
taken the extraordinary step of initiating proceedings
to issue arrest warrants against the members of prominent
industrialist family in the city.
The DRT has upheld the State Bank of India’s (SBI)
application for the “arrest and detention” of 11 members
of the Ashok Lunkad family (owners of the Nav Maharashtra
Chakan oil mills) for failing to clear dues of Rs 16.60 crore
with the SBI’s industrial finance branch,Wakdewadi, Pune.
DRT recovery officer S. Ravinder Yadav issued his order on
Wednesday, stating that jail warrants against 11 members of
the Lunkad family for six months’ detention in civil prison
would be issued once SBI deposits “subsistence allowance”
with the tribunal, “equivalent to a period of one month in
the first instance, and thereafter, every month in advance”.
“We have decided to deposit subsistence amount for 15 days
initially.
The main grievance of the bank is that the Lunkads are trying
to create hurdles in the recovery process,” advocate Ramesh Ganbote,
representing SBI, Representing the Lunkads,
advocates Rajendra Jagtap and M.M. Joshi filed two separate
applications with the DRT on Thursday, appealing for a “stay”
against the order.
While Jagtap has appealed for a 30-day stay, Joshi, along with one
of the defendants, Nitin Lunkad, has appealed for a 10-day stay “for
the purpose of filing an appeal.” The DRT is scheduled to hear these
applications on Friday.
The SBI’s application for the “arrest and detention” of the Lunkads
relates to its case against the Nav Maharashtra Chakan oil mills, Ahmednagar,
and 11 partners in the firm, namely, Ashok Mohanlal Lunkad,
his brothers Vijay and Subhash Lunkad, Abhijit Ashok Lunkad,
Shantilal Ratanchand Lunkad, Pravin Surajmal Lunkad, Tushar
Shantilal Lunkad, Mohanlal Pranlal Lunkad, Nitin Mohanlal
Lunkad, Atul Ashok Lunkad and Mitesh Subhash Lunkad.
The case relates to the default on extension of Rs 10 crore in May, 1994,
under the cash credit facility and import letter of credit.
The loans were extended against a number of properties mortgaged
with the bank by the Lunkads.
This is the first such action against a prominent Pune-based
industrialist family taken by the DRT, which established an
independent presence in Pune two years ago.
Pointing out that the purpose of the DRT is to uphold the
“Recovery of Debts due to Bank and Financial Institutions Act, 1993”,
Yadav in his order has said, “If a softpedalling policy on the matter
of sentence is adopted in a case of this nature, it will not only
send wrong signals to other defaulters, but also the public will
lose faith in banking institutions.”
Yadav also said, “A deterrent sentence of maximum period
of six months would be commensurate and just keeping in
mind” that the defaulters “are illegally retaining the huge
amount of Rs 16.60 crore of public money in spite of
having sufficient means to discharge their liability.”
The DRT Pune’s previous actions forced the state government
to compromise with the IDBI (Industrial Development Bank of India)
and other lending institutions to the tune of Rs 200 crore and the
auctioning of the prominent Holiday Inn premises and Hotel Amir
premises owned by prominent city-based businessman, R.L. Bhojwani.
Source:TOI
|
PUNE: The Debt Recovery Tribunal (DRT), Pune,
which in May created a stir by attaching state
government properties and treasury account, has now
taken the extraordinary step of initiating proceedings
to issue arrest warrants against the members of prominent
industrialist family in the city.
The DRT has upheld the State Bank of India’s (SBI)
application for the “arrest and detention” of 11 members
of the Ashok Lunkad family (owners of the Nav Maharashtra
Chakan oil mills) for failing to clear dues of Rs 16.60 crore
with the SBI’s industrial finance branch,Wakdewadi, Pune.
DRT recovery officer S. Ravinder Yadav issued his order on
Wednesday, stating that jail warrants against 11 members of
the Lunkad family for six months’ detention in civil prison
would be issued once SBI deposits “subsistence allowance”
with the tribunal, “equivalent to a period of one month in
the first instance, and thereafter, every month in advance”.
“We have decided to deposit subsistence amount for 15 days
initially.
The main grievance of the bank is that the Lunkads are trying
to create hurdles in the recovery process,” advocate Ramesh Ganbote,
representing SBI, Representing the Lunkads,
advocates Rajendra Jagtap and M.M. Joshi filed two separate
applications with the DRT on Thursday, appealing for a “stay”
against the order.
While Jagtap has appealed for a 30-day stay, Joshi, along with one
of the defendants, Nitin Lunkad, has appealed for a 10-day stay “for
the purpose of filing an appeal.” The DRT is scheduled to hear these
applications on Friday.
The SBI’s application for the “arrest and detention” of the Lunkads
relates to its case against the Nav Maharashtra Chakan oil mills, Ahmednagar,
and 11 partners in the firm, namely, Ashok Mohanlal Lunkad,
his brothers Vijay and Subhash Lunkad, Abhijit Ashok Lunkad,
Shantilal Ratanchand Lunkad, Pravin Surajmal Lunkad, Tushar
Shantilal Lunkad, Mohanlal Pranlal Lunkad, Nitin Mohanlal
Lunkad, Atul Ashok Lunkad and Mitesh Subhash Lunkad.
The case relates to the default on extension of Rs 10 crore in May, 1994,
under the cash credit facility and import letter of credit.
The loans were extended against a number of properties mortgaged
with the bank by the Lunkads.
This is the first such action against a prominent Pune-based
industrialist family taken by the DRT, which established an
independent presence in Pune two years ago.
Pointing out that the purpose of the DRT is to uphold the
“Recovery of Debts due to Bank and Financial Institutions Act, 1993”,
Yadav in his order has said, “If a softpedalling policy on the matter
of sentence is adopted in a case of this nature, it will not only
send wrong signals to other defaulters, but also the public will
lose faith in banking institutions.”
Yadav also said, “A deterrent sentence of maximum period
of six months would be commensurate and just keeping in
mind” that the defaulters “are illegally retaining the huge
amount of Rs 16.60 crore of public money in spite of
having sufficient means to discharge their liability.”
The DRT Pune’s previous actions forced the state government
to compromise with the IDBI (Industrial Development Bank of India)
and other lending institutions to the tune of Rs 200 crore and the
auctioning of the prominent Holiday Inn premises and Hotel Amir
premises owned by prominent city-based businessman, R.L. Bhojwani.
Source:TOI
Monday, December 7, 2009
Don't stop recovery procedures
New Delhi December 07, 2009,
The Supreme Court last week set aside the judgement
of the Punjab and Haryana high court and declared that
the court could not stop the state financial institutions
from taking steps to recover loans given to industries.
The court cannot act as an appellate authority and nullify
the recovery steps unless they are against the law,
unreasonable and unfair.
The financial corporations are
“not expected to flounder public money for
promoting private interests”.
In this case,
Punjab Financial Corporation vs Surya Auto Industries,
the court observed that the borrower was recalcitrant
and did not accept the liberal terms offered by the
corporation. The high court altered the terms of the
agreement to suit the borrower, which was illegal.
Source:BS
The Supreme Court last week set aside the judgement
of the Punjab and Haryana high court and declared that
the court could not stop the state financial institutions
from taking steps to recover loans given to industries.
The court cannot act as an appellate authority and nullify
the recovery steps unless they are against the law,
unreasonable and unfair.
The financial corporations are
“not expected to flounder public money for
promoting private interests”.
In this case,
Punjab Financial Corporation vs Surya Auto Industries,
the court observed that the borrower was recalcitrant
and did not accept the liberal terms offered by the
corporation. The high court altered the terms of the
agreement to suit the borrower, which was illegal.
Source:BS
Sunday, December 6, 2009
Wednesday, December 2, 2009
Tuesday, December 1, 2009
A Cry For Help &Credit Consumers Association of India 's Response
A cry for help and our response
November 24, 2009
by vinodchandDear Mr. Kambli
I read about you in one of the news papers and was really happy to know that someone is voicing against these MNC banks who are charging exorbitant ROI and really sucking the blood of poor middle class who is un organised.
I read about you in one of the news papers and was really happy to know that someone is voicing against these MNC banks who are charging exorbitant ROI and really sucking the blood of poor middle class who is un organised.
RBI has also added to woes of middle class by creating CIBIL which will again hamper the middle class only. One really wonders why these banks need any protection when they are charging such a high rate of intrest.
The govt of India is also hand in glove with these banks as nothing is done against the recovery agents of these banks.CIBIL must be banned as it will kill the middle class in long run.
I have lost my job due to recession and now finding it very difficult to pay back as the amount is huge and there is no regular income for me and a family to look after. These cards have really messed up my life and I am totally frustrated . I have already informed all the credit cards co about the settlement but HDFC and ICICI bank are trying muscle power.
what is way out of this if you could guide me on this that will be a great help and what is right amount one can pay towards full and final settlement I am pursuing them for 30% of the total outstanding towards the full and final settlement as that s all i can manage at this jucture.looking forward for your response.
Regards
Jai
Jai
Our Response
Dear Sir,
Many thanks for sharing our concern vis-a-vis foreign and indian private banks. These banks are the modern version of Shylock.
Banks get protection because they are cleverly using the SYSTEM from the inside. They have deep pockets which are being used to grease some palms at the right places, common man be dammed.
Someone aptly defined a banker as a person who will lend you his umbrella while the sun is shining and take it away the moment it begins to rain! Our bankers are no different, they are indeed fair weather friends unless the sum involved runs into thousands of crores in which case they will give you still more in the hope of protecting their earlier exposure.
We empathize with your loss of job and the fact that credit cards have made your life miserable. Using credit cards is one of the worst thing that one can do in a crunch situation, it is better to borrow from friends and relatives to help you tide over tough times. But then often our ego gets the better of us.
We agree that CIBIL will systematically destroy the middle class and the banks will then have no one to lend to. The banks will not lend to the poor because they do not have the repayment capacity, the rich will not borrow and the middle class would have been made in-eligible by CIBIL!
A settlement of 30 to 40% can be negotiated for stressed assets. In your case too, take time to find out your principal outstanding with the banks(the amount you have actually spent, minus the interest, late fees, penalties, etc.). Banks will normally agree to settle on this amount.
If harassed or threatened, please approach your nearest police station and file a criminal complaint of intimidation against the person/ persons/ organizations that are indulging in this.
Please do not hesitate to write to us or call us for further help.
Regards
Vinod Chand
General Secretary
Credit Consumers Association of India
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