Borrowers are not defaulters

 

 

 

To,            date 21.09.2022

 

1      The Chief Justice of Punjab and Haryana High Court, Chandigarh

 

2.     Presiding officer DRAT, New Delhi.

 

SUB: Information regarding Violation of constitution and oath of office by Pos & ROs of DRTs showing blind favoritism towards ARCs (private land mafias) and corrupt bankers.

 

Sir,

 

FACTS;-

1      It is gross misconception that Bank suffers loss due to mortgagor/ borrowers. Fact is that Banks lose money;-    

a)     When bank employees lend money without adequate security on account of personal relations, % commission via agents/CAs. Corrupt Bank employees are solely responsible for this loss.

OR

b)     Where Bank employees took adequate security for loan, then they in collusion with land mafias sells secured assets at peanuts/ throwaway value to Asset reconstruction companies hereinafter called ARCs @ land mafias. ARCs are in fact asset destruction companies since they destroy the assets of public sector banks giving meager /peanuts of their value to banks thus causing loss to public money and windfall gain to themselves and corrupt employees of banks.

 

Modus operandii of ARCs

2.     ARCs misuse loopholes in Securitization Act just like Big Bull Harshad Mehta used loopholes in Banking system in early 1990s to cause loss to banks. in 1990s, banks legally used private broker for inter bank sale purchase of securities allowing broker 15 days use of such money which Harshad Mehta used to artificially fuel stock market. Similarly ARCs use loopholes in securitization act banks to purchase valuable assets of banks at throwaway price causing great loss to banks. Loss to bank is not caused by mortgagors but by bank employees who in collusion sell assets of bank at meager, throwaway price to ARCs. ARCS are not public sector banks. ARCs and corrupt bank employees are defaulters. ARCS are not at par with Banks.

 

Incompetence of bank employees;-

3.     Mortgagors/borrowers entered into barter system. They cannot cause loss to bank as property is given in exchange of money. But instead of taking instant action as enshrined in mortgage/ hypothecation agreement and SERFREASI Act to recover dues within 90 days of default, corrupt incompetent bankers do nothing for years and keep on piling interest over interest and debiting account by expenses of valuation, audit, insurance court cases etc etc and later close the account by underselling security at throwaway price to ARCs.

 

Matters before DRTs do not warrant blind favoritism.

4.     Cause of bank losses is not because of matters before DRTs. The cases before DRT/ DRATs are mostly of middle class or poor persons who mortgaged their own houses/properties to start business. The amount of NPAs will not be affected even if all cases before DRTs and DRATs are allowed in favor of ARCs/banks or FIs. The sum total of all cases pending before any one DRAT and subordinate DRTS is not even equal to one case pending before NCLT minimum of which goes into 40,000-50,000 crores plus, where recovery is being done via insolvency and bankruptcy code in NCLTs. Statement made by prime minister on floor of the parliament on 20.7.18 in this context is A-1. Relevant part is ;-

“Our government has created the insolvency and bankruptcy codes. By this, top twelve defaulters, which are 25 percent of the total NPA. These cases have been done by the National Company Law Tribunal. In these 12 large cases an amount of about three lakh crore rupees is hanging. In just one year, in three of these big cases, our government has got about 55 percent recovery. On the other hand, about 12 major cases which were reported, about 45 percent of them have been recovered.”

 

5.     Favoritism, violation of oath, constitution and the statutes;-

Fraud by ARCs with public money is apparent from their assignment deeds. It is noticed that POs ROs are indulging in Favoritism towards ARCs by violation of oath, constitution and the statutes as under;-

i).     Facts , pleading of mortgagors are either not allowed to be read or concealed in orders.

ii).     Constitutional provisions, rules and provisions of statute citied by of mortgagors are either not allowed to be read or concealed in orders.

iii).    whatever is stated by ARCs becomes order. Such type of one sided orders can be passed by any 10th pass having knowledge of english and how to copy and paste pleadings of ARCs.

It is a privately joked among lawyers that PO / RO will probably not get any salary if paltry amount of Rs 500/- is deducted for every order suffering from concealment/amendment of facts, constitution and statutory provisions. Hence this information.

PRAYER

It is therefore prayed that POs ROs of DRTs be advised;-

1.     POs should check assignment deeds. In case fraud is noticed they should invoke sec.22(1) of RDB act to give them same percentage of recovery at which they got assigned the principle secured debt. For Example; if Rs 10 cr principle secured debt is bought by ARC at say Rs 1 cr ie 10% than ARCS should get 10% of their investment ie 10% of 1 cr means Rs 10 lakhs only. Principles of natural justice (quid pro quo) enshrined in section 22(1) of RDB act of deciding cases in DRTs. Option to direct investigation by agencies is also an option available to judges in appropriate cases.

2.     POs and ROs of DRTs should not treat ARCS at par with Banks but treat ARCs as defaulters.

3.     POs and ROs should truthfully & honestly mention and discuss Facts, pleading of mortgagors in orders.

4.     POs and ROs should honestly mention and discuss Constitutional and statutory provisions citied by mortgagors in orders.

It is duty of every court to go by constitution and the statute. It should not apply general presumptions surmises (thumb rule) while deciding cases. If feel appropriate, this letter be brought to notice of benches dealing with DRT cases. I have no case pending either directly or indirectly regarding DRT matters in High Court.

K D Aggarwal Advocate