Legal Question in Banking Law in India

Trust not a bank

The case:

SBI branch completely written off my account on 27.03.04. But,SBI HO assigned the said written off AUCANPA debt under sec. 5(1)(b) of Securitisation Act on 29.03.04 to ARCIL as Trustee of a Trust. Turst is a bankruptcy remote SPV. The said Trust (SPV) is the legal owner of the financial assets sold to it where ARCIL acts only as Trustee/ Manager. Trust is neither a Company nor a Bank/ FI nor registered with RBI as Securitisation Company. Trust works under Indian Trust Act for the benifit of its benificiaries and security receipt holders. RBI differentiated Trust by stipulated different norms for Trust as well as for SC/RC.

My question:

WHETHER ARCIL AS A TRUSTEE OF A TRUST CAN APPROACH DRT TO RECOVER Bank DUES OR ASSIGNED DEBT OF A TRUST BY SUBSTITUING ITS NAME OVER THE NAME OF ORIGINAL APPLICANT BANK?

Kindly reply to my above querry.

Background :

I am one of the victim of Bank. The present SBI DMD Mr. S.K.Hariharn had completed ruined my project worth Rs. 721 Lacs as I could not meet his and his gang's demand of ''speed money''. I am a tiny insect compared to his might supported CVC, MOF and DRAT.

He marked my account NPA on 01.04.1997, six months before any commercial production could start. Al


Asked on 4/25/05, 8:47 am

4 Answers from Attorneys

Kumar Manish Kalp Associates

Re: Trust not a bank

Dear Sir,

I acknowledge with thanks receipt of your query. I have perused your query and the limited information provided by you.

First and foremost I would like to suggest you that kindly avoid using any name of an Official as this may arise a cause of action for defamation.

The accounts are declared NPA based on RBI Guidelines and no official can do so on his whims and fancies. It is not surprising that corruption is rampant and discretion is misused, but any legal action can be undertaken only on the basis of facts supported with evidence.

Now coming to the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 only Banks, Financial Institutions, SC, RC and alike can take any action against the defaulters. As per the limited information it appears that your trust cannot initiate any legal action as per the SRFAESE Act, 2002. Further, for any other legal action to be undertaken by any trustee on behalf of the trust, he needs to be duly authorized by the trust.

In order to provide any conclusive opinion and to suggest the suitable legal action to be undertaken, kindly provide the detail information as to following:

1. Details as to the written of account,

2. Objective, rules, regulations of the Trust,

3. Details as to why to wish to step into the shoes of the applicant bank.

4. Project and its details, which failed because of non cooperation of the Bank.

5. Details as to various communications with the Banks etc.

Should you require any information/ clarification, please feel free to contact us.

Thanking you,

Yours truly,

Kumar Manish,

Advocate

Read more
Answered on 4/30/05, 1:05 am
Sudhakar Joshi NACHIKETA ASSOCIATES

Re: Trust not a bank

I have read your querry which appears to be very complicated as well as serious but at the same time I am competent to deal with such matters and therefore further communication between us is required for which, pls contact at the below mentioned contact address of ours. Please contact us very immidiately as further information is reuired for better assistance and to decide correct line of action.

On the first instance it appears that, you have a good case and this matter can be taken up to the High Court Level.Oour contact details are:

Mob: 09824033212

09824386738

Mail: [email protected]

Read more
Answered on 4/25/05, 10:17 am
Vivek Anand M/S.VIVEK ASSOCIATES

Re: Trust not a bank

It ball depends on the nature of activities the institution is carrying on. We need to go thru the memorandum of the Trust to analyse the problem on hand.

Read more
Answered on 4/27/05, 1:54 am
Jayesh Desai Jayesh Desai

Re: Trust not a bank

Your matter is a complex one & needs proper care and attention - more input in terms of facts supported by documents is also necessary - A writ or a civil suit or an appeal can be filed depending upon the facts & circumstances of your case - delay would be prejudicial to your interest - please contact a lawyer in your area to assist you immediately.

Read more
Answered on 4/26/05, 2:30 am


Related Questions & Answers

More Banking Law questions and answers in India