How can I get stay order as my property has been possessed by bank and bank is not going into OTS, as i need stay order to put pressure on bank?
Response
When borrowers fail to repay the loan, after a 90 days’ notice period, banks declare the loan as a non-performing asset(NPA). They take possession of properties offered as a collateral for auction under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest, or SARFAESI Act, 2002.
To secure their loans, banks take mortgaged property from borrowers with clear and marketable title to recover their money in case of defaults. Under the provisions of Sarfaesi Act, 2002, banks may take over the physical possession of the assets and sell them to recover their dues. OTS is an agreement wherein defaulting borrower agrees to pay part of the dues in order stop banks from taking legal action against them.
The Jurisdictions of Civil Court has bean clearly barred under Section 34 of the SARFAESI Act, stating that no injunction shall be granted by any court or other authority In respect of any action taken or to be taken under Sarfaesi Act. Therefore, your other options are-
-On receipt of possession notice as per Section 13(4) of the Act, the borrower (you) can appeal before Debt Recovery Tribunal under Section 17, seeking stay of proceedings and to set aside the action initiated.
-The Debt Recovery Tribunal has elaborate powers and it can even restore the possession back to the borrower, in the event it finds the Bank’s actions illegal or incorrect. The Supreme Court has clearly held in the case of [Mardia Chemicals Ltd. Etc. Etc vs U.O.I. & Ors. Etc. Etc, Transfer Case (civil) 92-95 of 2002] that the proceeding under Section 17 of SARFAESI is in the nature of original proceeding and that even the amount which is claimed to be due to a bank as stated in the notice as per Section 13(2) can be challenged by the borrower.
Reference: Section 13, 17, 34 of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest, or SARFAESI Act, 2002.
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