COMPROMISE PROCEDURE IN CASE OF DRT
A business entity is referred to DRT for recovery. The business is a SME and covered under CGTMSME. The business man has approached the bank (SBI) for compromise settlement. Bank has agreed for a 50% of the balance payment. They are asking for depositing 15% along with the proposal for compromise, but are refusing to issue any letter to this effect. SBI is saying that after the proposal is submitted along with the 15% deposit, they will send the proposal for approval. If accepted they will give a letter. But what is not clear is what is the guarantee that the bank will withdraw the case in DRT court after the amount is paid? Should the business man agree for a settlement without informing the court or should he go for settlement through the court? What is the right approach in such case? Please give your expert opinion on the issue.
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r the assets seized as per SRFAESI 2002 before approaching DRT, as that is the first step for recovery stipulated as per provisions of CGTMSE. Has the bank claimed reimbursement on default amount as per provisions of CGTMSE. Settlement with consent of CGTMSE is permissible as per provisions, but with permission of CGTMSE. There are many concessionary provisions under the CGTMSE which normally the bank or DRT obstructs or denies. an application on affidavit seeking waiver of 50% for settlement without prejudice to rights may be submitted to DRT , and the Bank may submit its say, with necessary approvals. Or an application may be submitted to Bank that he is ready to pay 15% by borrowings/sale of assets/etc, and then the manager should get approval on it, and after getting the approval borrower can deposit 15% of the amount. this wud be normal procedure. Meanwhile copy of the application may be submitted to DRT seeking adjournments. more
Sep 06
