In brief
A non-performing account does not recover itself. Banks and NBFCs need the notice served, the security identified, the sale conducted, and the balance pursued if the sale falls short. That is the work of this practice.
Discuss this matter
Security
Possession and sale under the SARFAESI Act.
Settlement
One-time settlement and restructuring, when the numbers work.
The balance
DRT proceedings, guarantees, and insolvency where the debt remains.
The brief
What clients ask us
Choose a question. The answer sets out the work we actually take in this practice, in plain language.
Answer
It begins with a clear demand and a clear account of what is secured. A notice that is vague, or served on the wrong person, is the objection we see most often later.
- Legal notices to defaulting borrowers
- Reading the security documents before any step is taken
How does a recovery begin?
Answer
It begins with a clear demand and a clear account of what is secured. A notice that is vague, or served on the wrong person, is the objection we see most often later.
- Legal notices to defaulting borrowers
- Reading the security documents before any step is taken
How do you take and sell a secured asset?
Answer
Possession, valuation, and sale are separate steps. Each one has to be capable of being defended if the borrower goes to the tribunal.
- Possession under the SARFAESI Act
- Valuation of what has been repossessed
- Public auction or a private sale
- Advice on securitisation of the financial asset
Is there room to settle before a sale?
Answer
Often yes. A settlement is useful when it recovers more, or faster, than the sale the bank can actually complete.
- One-time settlement
- Restructuring of the loan
- Work with asset reconstruction companies
What if the sale does not clear the debt?
Answer
The unsold balance, and a guarantee that has not been enforced, still have to be pursued in the right forum. For a corporate borrower, insolvency may be the cleaner route.
- Proceedings before the DRT and other courts for the remaining debt
- Enforcement of personal guarantees
- Corporate insolvency under the Insolvency and Bankruptcy Code
How do you find assets and stay inside the rules?
Answer
Recovery fails when the asset cannot be found, or when the method of recovery is one the regulator will not stand behind.
- Asset tracing
- Compliance with RBI directions on recovery
- Borrower objections, answered rather than ignored
The path
How a matter moves
01
The account
We read the sanction, the security, the default, and the classification of the account.
02
Demand
The notice goes to the borrower and the guarantor in the form the statute requires.
03
Possession and price
The asset is taken, valued, and offered for sale on a record that can be defended.
04
The shortfall
Whatever the sale does not cover is pursued by settlement, tribunal, guarantee, or insolvency.
Before you instruct us
Questions on this practice
Do you act for NBFCs as well as banks?
Yes. The security and the licence differ, and the recovery steps are built around the statute that actually applies to that lender.
Can a guarantor be proceeded against with the borrower?
Yes. Enforcement of a personal guarantee is a separate piece of work, and it is often where the remaining recovery sits.
What if the borrower says the recovery is harassment?
We look at the step that was taken and the rule that governs it. A lawful recovery should be able to answer that objection. An unlawful one should be stopped.
Will you coordinate with an asset reconstruction company?
Yes. Assignment to an ARC changes who gives instructions, not the need for the underlying security to be in order.
When is insolvency a better recovery than a sale?
When the borrower is a company, the security is contested or insufficient, and a collective process will reach assets a single sale will not. We advise on that choice before a petition is filed.
These answers describe the practice. They are not advice on the facts of your matter.
Next step
