We are helping Banks, corporates and financial institutions in recovery of dues in all possible/ conceivable manner; however, the predominant mode of recovery involves filing of complaint under section-138 of Negotiable Instrument Act, 1881. N.I. Act has coercive colour in the form of sec-138 which may entail punishment of upto two years of imprisonment and fine which may go upto twice the cheque value. Coercive and punitive impact of statutory provision under N.I. Act have rendered a good service in the interest of recovery and helped restore sanctity of dealing in instruments in commercial intercourse, civil/Commercial recovery suit along with interim relief in the nature of injunction and appointment of Court receiver with direction to take possession of hypothecated property, complete proceedings under Arbitration  and Conciliation Act, 1996, application of Securitization and Reconstruction of Financial Assets and Enforcement  of security interest Act 2002 (SARFAESI Act), and Recovery of Debts due to Banks and Financial Institutions Act 1993, apart from general recovery suits in civil courts. SARFAESI action involves procuring order under S-14 of the Act from the court of jurisdiction which may be a Chief Metropolitan Magistrate / Chief Judicial Magistrate and District Magistrate.

Its important to note that S 14 order is just to help authorized officer exercise rights enumerated under S 13(4) of the Act and S 14(3) make this very clear that any order or action by Chief Metropolitan Magistrate does not give rise to any cause of action.

Scheme of the Act, allows interface with judiciary if any person is feeling aggrieved because of action under S 13(4) of the Act.  Act permits appeal U/s 17 of the Act against action U/s 13 (4) of the Act.  Though proceeding Under 17 is termed as appeal but it is the first adjudicatory process under the Act.  In the language of practice it is called Securitization Appeal before the Debt Recovery Tribunal.

Act also permits appeal against the order passed by the Hon’ble Debt Recovery Tribunal.  This second appeal lies in DRAT under S 18 of the Act. So, in a sense proceeding under SARFAESI Act could be three tier.        

• Court of CMM/ District Magistrate
• DRT
• DRAT

Apart from SARFAESI Act, I am also helping Banks and Financial Institutions in effecting recovery under Recovery of Debts and Bankruptcy Act, 1993. Proceedings under Recovery of Debts and Bankruptcy Act, 1993 are in the nature of Recovery through summary procedure. It is also permissible under the Act to seek interim relief in the nature of injunction, appointment of court receiver with direction to take possession of the subject assets etc.

In case jurisdiction of DRT is not made out, Recovery can be effected through Civil Courts of Jurisdiction which are also empowered to give interim relief in the nature of injunction possession through receiver etc.