● Pre and Post Sanction Inspection of the assets of the borrowers /
guarantors are really important in today’s scenario.
● If it is found that the assets are lower than the amount advanced then
immediate measures can be taken.
● In Asian countries, on many occasions, willful defaulters create third party interests or try to alienate/dispose of their assets.
● Locating defaulters and their movable assets such as Cars, Furniture, etc., immovable assets such as Land, Building, Plant and Machinery, etc., and liquid assets such as shares, debentures, Fix deposits, etc. is really essential.
● Obtaining certified copies from various government departments will always help in seeking attachments of the assets.
● Lis Pendens means pending Dispute or Litigation. Registering Lis Pendens
on the located assets based on a pending dispute with the registrar of Land, records can save many problems.
● Once Lis Pendens is registered the properties cannot be easily sold/alienated by the defaulters. Because when the purchaser takes title search
of the property, he will come to know about the dispute.
● Even if it is sold by the defaulter, the bank can challenge the said transaction.
● In case banks have judgment and decree of UAE Courts Execution petition can be filed in the respective jurisdiction where the assets are located. For eg. If the property is located In Mumbai then the execution Application can be filed
in Mumbai.
● The court will initiate the process of attachment and auction.
● To recover maximum amount it is very essential that the asset is auctioned or sold to the Highest Bidder.
● To fetch the maximum value of the property it is essential that maximum number of people take an active part in the auction/sale.
● Court battles many times take a lot of time. Mediation is an effective tool to save the time of litigation, settle disputes, and quick recovery of money.
● If the Banks, corporate and individuals are ready to negotiate and
reduce some part of interest or principal the mediation can be worked
out.
● After attachment of the assets, it may take a lot of time for the auction and getting the sale proceeds/litigation in various courts. We can always try for the Amicable settlement of Disputes via effective mediation.
● Many times we notice that the defaulters flee away to their country of origin or some other country.
● As far as Indian Jurisdiction is concerned, we need to approach criminal courts in India for filing a petition for the impounding of passport.
● This process can be initiated simultaneously along with the attachment of properties.
● Post-COVID 19 situations will restrict establishment’s / Legal/recovery Department’s visits to India for attending Indian Court dates.
● The court procedure always takes its own time. In some cases defaulted contests the matter in trial / appellate court. The Banks, corporate will require legal assistance from the person having a thorough knowledge of the Legal system in India or a foreign country.
● Many times borrower decides to put an end to litigation after effective mediation.
● But because of credit history or fears of getting arrested in UAE defaulted may not venture to come back to UAE/any foreign country.
● In such cases, the Power of Attorneys from the borrower can be obtained in favor of Bank’s representative in UAE so that the sale of their assets in UAE/foreign countries can be effected quickly and the dispute can be settled amicably.
