Success Story: Managing One of Our Most Complex Debt Recovery Assignments
We were entrusted by a leading nationalised bank with the recovery of a high-value Non-Performing Asset (NPA) involving a prominent handicrafts manufacturer and exporter based in Rajasthan. The borrower owned extensive immovable assets, including a large building and land of palace’s annexure, 35 shops in commercial complex in heart of the city, and a vast inventory of handicraft articles. The case was complicated by prolonged litigation, administrative challenges, and the borrower's substantial influence in every aspect.
Our engagement began with an extensive pre-possession due diligence exercise. The team conducted site inspections, verified the mortgaged properties as per the title deed documents, and formulated a recovery strategy. After analysing the legal position, we advised the bank to proceed directly for physical possession under Section 14 of the SARFAESI Act rather than traditional approach of first taking symbolic possession under Section 13(4), thereby reducing the possibility of procedural delays.
An application was filed before the District Magistrate seeking assistance for physical possession. Despite repeated attempts by the borrower to delay the proceedings through legal and administrative channels, our legal team successfully obtained the required orders. The borrower subsequently challenged the proceedings before the Debt Recovery Tribunal (DRT). Since a caveat had already been filed on behalf of the bank, timely notice was received, enabling the bank to effectively contest the matter. No interim stay was granted.
Following the Section 14 order, administrative delays arose in securing police assistance. The nationalised banks generally do not go against the Government or its officials. However, as recovery action in this account was delayed for months together, the bank was permitted by their Head Office to initiate appropriate legal proceedings before the High Court, to ensure prompt enforcement action. Once the concerned authorities were called upon to explain the delay, the required administrative and police support were promptly provided, enabling the possession process to proceed smoothly.
The possession operation itself was one of the most demanding assignments undertaken by our organisation. The operation involved the Authorised Officer of the bank, senior police officers, armed police personnel, our advocates, inventory experts, photographers, videographers, security personnel. For ensuring the possession was taken smoothly, the team was sub divided into 8 smaller teams, comprising of 1 team led by a Senior Advocate supported by 5 advocates, and a further 6 teams consisting of one colleague to note the inventory, one colleague to help the inventory maker, one colleague to check the inventory makers description, one colleague for general assistant, one videographer and one photographer, and a few people to spare to help.
In all, there were around 48 of our staff called from different parts of Rajasthan, Gujarat, Delhi & Haryana. Further, we had taken 10 security guards to be deployed after taking the possession.
The primary asset comprised a massive palace’s annexure along with an enormous collection of handicraft articles of varying sizes and descriptions.
Preparing a comprehensive inventory of thousands of individual articles was an exceptionally challenging task. Our experienced teams meticulously documented every item through detailed inventories, photography, and videography, ensuring complete transparency and legal compliance. The borrower later challenged the possession proceedings before the DRT; however, the precision of our documentation and strict adherence to statutory procedures ensured that every challenge was successfully defended.
The assignment also involved taking possession of thirty-five mortgaged commercial shops located within a shopping complex. Several premises were occupied by tenants, while others had been transferred to third parties. Through careful planning and lawful execution, all the mortgaged shops were vacated wherever legally permissible, secured, and sealed in accordance with the bank's rights under the SARFAESI Act.
Asset disposal presented another significant challenge. Initial public auctions faced repeated disruptions and objections raised by the borrower’s COTERIE and by implanted persons participating in the auctions, resulting in adjournments. Anticipating further attempts to delay the recovery process; we recommended a revised sale strategy. The bank subsequently conducted the sale through a sealed tender process at a branch office situated on the outskirts of the city. The revised approach proved successful, resulting in the sale of the principal property together with the extensive handicraft inventory. The commercial shops were also sold separately, enabling substantial recovery of the bank's outstanding dues.
This assignment involved the successful possession, documentation, protection, and disposal of assets comprising huge property (palace’s annexure), thirty-five shops in commercial complex, and an enormous inventory of handicraft articles which may have required transportation in multiple truckloads. Every stage—from legal strategy and litigation management to possession, inventory preparation, auction planning—was executed with meticulous attention to detail and full statutory compliance.
With the successful conclusion of this complex recovery assignment, our reputation for handling high-value, litigation-intensive debt recovery matters was cemented in the industry. In recognition of our performance, the nationalised banks empanelled our organisation as one of its preferred debt recovery partners across all regions where we maintain operational offices.
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