DRT decisions challenged in other courts
KATHMANDU, DEC 28 -
The Debt Recovery Tribunal ( DRT ) has been having a hard time implementing its decisions regarding transfer of forfeited collateral of delinquent borrowers as they are being challenged in other courts.
As a result, those who have purchased such properties have not been able to take possession despite having paid for them.
Ujjwol Kumar Karki of Bhuwaneshwori, Sindhuli purchased a piece of land owned by a loanee of NIDC Capital Market Govinda Prasad Shrestha at Panchkhel VDC of Kavre on Nov 23, 2012 at an auction made by the DRT .
Karki paid Rs 807,155 to purchase the land. When he went to the Land Revenue Office by taking a letter of DRT to transfer the land in his name, he found that the Kathmandu District Court had already stopped the transfer of that land in his name.
After Shrestha’s family members filed a case of property feud at the court, the district court had already directed the land revenue office not to transfer the land.
According to DRT officials, they were not informed about the decision of the Kathmandu District Court and they moved ahead with the auction process.
Although the auctioned land was not put up as collateral, it was found by NIDC Capital Market and had asked the DRT to help in recovering a loan worth Rs 3.68 million. The Act on Recovery of Debts of Banks and Financial Institution has allowed the DRT to take such property in its possession and action to recover the loans issued by banks and financial institutions (BFIs).
Finally, Karki has got justice from the same court as the court gave a verdict in favour of the DRT and himself. Then he rushed to the land revenue office in Kavre along with an NIDC Capital official on Thursday to register the land in his name.
“It is the first case that the DRT ’s decision was halted by another court in our case,” said NIDC Capital CEO Khum Bahadur Hira Singh Rana. “There are several such cases filed against us when we take the collateral in our possession from loanees.”
In another example, Mahantha Prasad Kushwaha of Birgunj purchased 1 kattha 12 dhur of land at Satbariya VDC-6, Parsa owned by a loanee of Rastriya Banijya Bank (RBB) Sumitra Kumari Devi Rauniyar at an auction held by the DRT to recover the loan for RBB.
The DRT had approved the auction to Kushwaha on May 15, 2012. Kushwaha paid Rs 1.34 million for the land. Before Kushwaha used the land, a person close to Sumitra registered a case at the District Court, Parsa seeking a court order to stop the auction of the land claiming he or she also has money to be recovered from Sumitra.
Then Sumitra’s family filed a writ at the Supreme Court asking the highest court to stop the auction of her land. Then the Parsa District Court kept the case pending until the Supreme Court takes a decision in this regard.
“Kushwaha now may have to wait for years to utilize the land he purchased at the auction as the Supreme Court will take time to give a verdict on the issue due to the limited number of judges there,” said Indra Dhungana, debt recovery officer at the DRT . “If other courts continue to overrule our verdict repeatedly, BFIs will find it hard to recover outstanding loans from defaulters.
He said that the DRT should be legally strong to settle such issues. “For this, the DRT and Appeal Tribunal should be given absolute rights to decide the issue preventing loanees from filing a case in other courts,” he added.
The Act on Recovery of Debts of Banks and Financial Institution has provisioned two tribunals in the case of debt recovery, the DRT and the Appeal Tribunal. In case a defendant is not satisfied with the DRT ’s verdict, he or she can file a case at the Appeal Tribunal.
“However, the loanees go to other courts with complaints other than perceived injustice by the DRT which has made loan recovery difficult,” Dhungana said. The act has stated that if the cases filed at the district court and any other Appellate Court falls under the jurisdiction of the DRT , they should transfer such cases to it.
Dhungana said that he was facing a number of problems in implementing the DRT ’s decision due to other practical problems too. In some cases, the collateral isn’t secured, a number of properties in different places have been put up as collateral, BFIs fail to show the properties of the loanees and sometimes they themselves don’t cooperate with the debt recovery officer showing time constraints and other responsibilities of their staff, according to Dhungana.
Source: The Kathmandu Post
