The Recovery of Debts and Bankruptcy Act provides for a system which is available to banks and other
financial institutions to recover their debts from faulty daters within the minimum amount of time.
Bank seeks back the money that is owed to it and for the same the bank can take action under
certain provisions;
Under section 25 order of the RDB Act
a. The recovery officer shall on the receipt of the copy of the certificate under section 7 of section 19 proceed to recover the amount of debt which has been specified the modes that can be used or attachment and sale of the movable or immovable property of the defendant taking possession of property over which the security interest is created any other property of the defendant can also be attached.
b. The arrest of the defendant and his detention in civil prison can be done.
c. Receiver is appointed for the management of such properties of the defendant including movable and immovable.
d. Any other modes that are prescribed by the central government can also be followed for recovery of the debt.
Under section 28 of the RDB Act
1. Upon receiving a certificate which is issued to the recovery officer he may recover the amount by one or more of the debts via modes provided under section 25, recover the debt.
2. If any amount which is due from any other third party through the defendant the recovery officer may require such person to deduct the amount specified and such person shall comply with any such requisition and pay the sum which is the deducted to the recovery officer.
3. The recovery officer by providing a notice in writing requires any person from whom the money is due or may become due to the defendant or anybody who holds money for or on account of the defendant shall be asked to pay the debt due from the defendant.
4. A notice under this section shall be given and issued to any person who holds any such money or account of the defendant jointly with any other person a copy shall also be forwarded to the defendant and his last known address.
5. Every person to whom and it notices issued shall be bound to comply with such notices when a notice is issued to a post office bank, an insurer or a financial institution; it shall not be necessary for any kind of document to be produced or endorsed.
6. The Recovery Officer shall grant a receipt of the amount paid as per the compliance, and the person once pays the same shall be fully discharged from his liability to the defendant to the extent of that amount.
7. If any person to whom the notice is issued, fails to make the payments shall be deemed to a defendant in default in respect of the amount specified. Further proceedings can be taken against him for realization of amounts as if it were a debt due from him.
8. The recovery officer may apply to the court in whose custody there is money belonging to the defendant for payment to him. He may be ordered to execute the certificate of recovery.
9. The recovery officer may recover any amount of debt due from the defendant by selling off his movable property.
However, the Recovery Officer shall recover under this Section only by taking into account Section 60 of Code of Civil Procedure.
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