Right of borrower to receive compensation and costs in certain cases
Section 19 in The Securitisation And Reconstruction Of Financial Assets And Enforcement Of Security Interest Act, 2002
19. Right of borrower to receive compensation and costs in certain cases.
– If the Debts Recovery Tribunal or the Court of District Judge, on an application made under section 17 or section 17-A or the Appellate Tribunal or the High Court on an appeal preferred under section 18 or section 18-A, holds that the possession of secured assets by the secured creditor is not in accordance with the provisions of this Act and rules made thereunder and directs the secured creditors to return such secured assets to the [concerned borrowers or any other aggrieved person, who has filed the application under section 17 or section 17A or appeal under section 18 or section 18A, as the case may be, the borrower or such other person] shall be entitled to the payment of such compensation and costs as may be determined by such Tribunal or Court of District Judge or Appellate Tribunal or the High Court referred to in section 18-B.]
[Section 19 substituted by the Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Act, 2004 (30 of 2004), Section 14, (w.e.f. 11-11-2004).]
Section 19 — Right of Borrower to Receive Compensation and Costs
Section 19 gives protection to a borrower (or any other aggrieved person) if a bank or secured creditor takes possession of secured assets in violation of the SARFAESI Act or its rules.
When does this apply?
If any of the following authorities find that the secured creditor took possession improperly or illegally:
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Debts Recovery Tribunal (DRT) — on an application under Section 17
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District Judge — on an application under Section 17A
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Appellate Tribunal — on an appeal under Section 18
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High Court — on an appeal under Section 18A
And the authority orders that the secured asset must be returned to the borrower or other aggrieved person,
Then the borrower (or such aggrieved person) is entitled to:
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Compensation, and
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Costs
as determined by the Tribunal, District Judge, Appellate Tribunal, or High Court.
Purpose of this provision
This section ensures that:
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Lenders follow due process before taking possession of secured assets.
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Borrowers or affected persons are compensated if their rights are violated.
