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CS Professional · Corporate Restructuring, Valuation and Insolvency · Debt Recovery and SARFAESI

A borrower files a section 17 application before the DRT on 1 June challenging possession taken by the bank. The DRT has not disposed of it by 1 October, which is beyond four months, and no valid extension order exists. What may a party do under the SARFAESI Act?

A party may apply to the Appellate Tribunal, which may order the DRT to dispose of the pending application expeditiously. Section 17 requires disposal within sixty days, extendable to a maximum of four months, and gives this remedy if that outer limit is crossed.

  1. ATreat the bank's measure as automatically declared invalid
  2. BApply to the Appellate Tribunal for directing the DRT to dispose of the application expeditiouslyCorrect
  3. CWithdraw and refile before the same DRT to restart the sixty-day period
  4. DApply to the Recovery Officer for ordering the DRT to decide

Explanation

Section 17(5) requires disposal within sixty days, extendable for recorded reasons, but the total pendency cannot exceed four months. Under section 17(6), if not disposed of within four months, any party may apply to the Appellate Tribunal for directing expeditious disposal. The Act does not provide for automatic invalidation of the bank's measure.

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