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PUNJAB & SIND BANK

H.O.LAW & RECOVERY DEPTT.


4
TH
Floor, BANK HOUSE
21, RAJENDRA PLACE
NEW DELHI

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LAW CIRCULATORY LETTER NO. : 53 Dated: February 20, 2013
CODE No. of the Department: H-9010
Number of pages of Circulatory letter: 2
Running Circulatory letter No. of the Bank:
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ALL BRANCHES/CONTROLLING OFFICES


Reg: Steps for expediting the recovery cases pending at DRTs.


With the enactment of Debt Recovery Tribunal Act in 1993, the objective was to
have speedy recovery. A maximum time frame of 6 months was visualized for
settling the recovery cases by the Banks. However, in reality, we find many cases
are dragging for years together.

We have been informed by DRTs that the Banks are not taking suitable steps to
expedite the recovery proceedings even in cases where Recovery Certificates have
been issued by Honble Presiding Officer of respective DRTs. It has come to their
notice that quite often there are deficiencies in procedure followed by the Secured
Creditors (Banks) for putting the property to auction, which can be easily avoided.

In their endeavour to reduce the time taken in disposing of cases and to speed up
Bank recoveries, DRT-II, Chandigarh has forwarded to us certain observations
w.r.t. the procedure followed by the Banks for effecting recovery in cases where
Recovery Certificate has been issued by DRTs.

As soon as a new Recovery Certificate is issued, it is incumbent upon the Bank to
get valuation report relating to the property mortgaged with the Bank. In case the
property is not demarcated, the demarcation should be got done till the service of
notices is completed on the CDs.

With a view to expedite the recovery proceedings, notices under Rule 2 of Schedule
II of Income Tax Act, 1961, are being issued by DRT upon the defaulter to pay the
amount specified in the Certificate within fifteen days from the date of service of
the notice. These notices are being issued by DRT so that the time taken by the
Banks for service of notices is minimized.

However, DRT has observed the following deficiencies in the procedure being
followed by the Banks in such cases: -

(2)

Reg: Steps for expediting the recovery cases pending at DRTs.


1. That first the Banks wait for issue of notices under Rule 2. Then the Banks wait
for service of notices on the CDs by way of substituted services i.e. publication
of notices. Then the Bank takes its own time for filing valuation report and in
this process several months are being wasted which can be easily avoided if the
officers are aware about the importance of recovery of loan.


2. That after issue of notices under Rule 2, substituted service by way of
publication should be done by the Bank without seeking any adjournment so
that no time is wasted in effecting service upon the CDs. But the Banks are
seeking adjournments for the same again and again.

To mitigate this problem, DRT has desired that in case the Banks do not get the
notices published on the very first occasion, notices should be got published by
DRT for which the concerned Branch/ Office of the Bank will be liable to pay bill
for publication directly to the publication agency.

3. That the Nodal Officers should have a proper liaison with their Advocates which,
at present, is lacking. Complete list of pending cases has already been provided
to the Nodal Officers. The Nodal Officers should also come fully prepared so
that the respective Tribunals may be able to take some concrete steps for
recovery of dues.

It is matter of record that as per the initiative of Ministry of Finance, Nodal
Officers were appointed for each DRT who were supposed to regularly visit
DRTs, monitor all cases pending therein and meet POs and ROs regularly to see
that the cases are pursued vigorously in the Courts. The roles and
responsibilities of such Nodal Officers have been sparsely specified in Law
Circular No.210 dated 17.11.2011. We hope that these Nodal Officers must be
performing functions as advised in the said Circular so as to serve the purpose
for which they have been nominated.

Please take note of the points emerging out of the above mentioned deficiencies
found by DRTs and also discuss these issued with concerned Advocates, so that the
said anomalies, if any, w.r.t. procedure of the Bank be carefully taken care off so
that the time taken in disposing of cases before DRTs is reduced.



(H.S.GUJRAL)
Asstt.General Manager (L& R)