The step-wise procedure to be followed in DRT Proceedings in all available NPA accounts are as follows:
Demand notice by RPAD (Registered Post with Acknowledgement Due) should immediately be served to call upon the borrower or guarantor to repay the dues within a reasonable time from the date of receipt of the Notice before issuance of the same under Section 13(2) of the SARFAESI Act, 2002.
On receipt of such demand notice when the borrower and guarantor fail to make repayment of his/their dues within the time as specified in the notice, Bank should take steps for filing Original Application (OA) in DRT for recovery of dues.
It is necessary that the Bank should file an application along with the relevant documents in book form and required fees with the Registry of DRT within whose jurisdiction:
a) the applicant Bank functions,
b) the defendants or any of the defendants where there are more than one, actually or voluntarily reside, or carries on business, or personally works for gain, or
c) the cause of action, partly or wholly, arises, and if any discrepancy is found, he shall grant a specific time to the applicant Bank to rectify the same.
- On such rectification, the Registrar shall register the OA and give a serial number.
- On registration of the OA, the summons shall be served on the defendants by the Registrar.
- The defendant s is/are required to file the Written Statements within a maximum period of 30 days from the receipt date of summons unless an extension is allowed. Else, the OA shall be heard ex-parte.
- Evidence-on-Affidavit, along with the original documents, is to be filed by the Applicant Bank.
- Defendants has/have to file Evidence on Counter-Affidavits along with the papers relied upon by him/them.
- Arguments on behalf of the applicant bank shall be filed.
- An Argument on behalf of the defendant shall be filed.
- Detailed information as to the balance outstanding, cost and expenses, etc., incurred by the Bank in the account are to be submitted by the applicant Bank.
- The Judgement is passed, and the DRT issues the Recovery Certificate.
- Particulars of the Certificate Debtor (CD), i.e., Present Addresses, etc., to be submitted by the bank for the issuance of Demand Notices by the Recovery Officer.
- Demand Notices to be issued by the Recovery Officer directing the CDs to make payment in terms of Recovery Certificate.
- On failure of the CDs to make payment in terms of the demand notice, the property details (both secured and unsecured) of the CDs to be submitted by the bank for attachment.
- Order of attachment of the properties of the CDs is to be passed by the Recovery Officer.
- Order for sale of the properties of the CDs is to be passed by the Recovery Officer. Recovery Officer may appoint a Receiver for conducting the sale, taking into consideration the nature of the assets.
- Where any property is managed to be sold, the Recovery Officer shall cause a proclamation of the intended sale for public auction as per 2nd & 3rd Schedules to the I.T. Act, 1961 and the Rules made thereunder.
- After adjusting the sale proceeds if there is any shortfall, the application may be filed by the bank praying for arrest and civil imprisonment of the CDs.