• NPA Sarfaesi act passport impounding notice

I live in abroad and I am a guarantor for my fathers business and mortgaged one of the house under my name and other assets under my family members name to get bank loan. Unfortunately, my dad was unable to pay interest due to loss in business and bank has declared  NPA and using sarfaesi act to recover debts.In this process, we got an impounding notice from bank addressing to passport office to seize all our passports since there is a chance that we may go out of the country. My question is if I go to India now, will my passport be seized at the airport? I am not a director in my father's business. If they seize my passport what are my options to get that back. Please let me know.
Asked 2 months ago in Property Law from United States
Religion: Hindu
1) your passport would be impounded 

2) you can with court permission travel abroad 
Ajay Sethi
Advocate, Mumbai
23386 Answers
1229 Consultations
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1. Did you reply to the notice under SARFAESI Act? The liability of a guarantor is co-extensive with that of the borrower. The bank is free to attach and sell the assets of the guarantor to apply the sale proceeds towards the repayment of loan, but it cannot apply for impounding of passport unless there is an apprehension that the guarantor will alienate the mortgaged assets and fly out of India with sale proceeds thereof.

2. You can seek injunction against the passport office and bank through a suit for injunction to restrain them from impounding your passport. Take preemptive measures as it will be a long drawn legal battle to recover the passport once it is impounded. 
Ashish Davessar
Advocate, Jaipur
18259 Answers
450 Consultations
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1. Generally application for impounding passport of borrowers/guarantors are filed before the DRT who pass such orders though DRT has no jurisdiction to impound any body's passport.

2. As on date there is a case pending before the Supreme court against such order passed by one DRT of our Country.

3. The immigration officials will not act based on the order of DRT for impounding the passport.

4. Bank has no authority to write to passport authority to impound anybody's passport.

5. In view of the above there is hardly any chance that your passport will be impounded after you reach India. 
Krishna Kishore Ganguly
Advocate, Kolkata
12143 Answers
233 Consultations
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1. Bank has no authority to write to the passport authority to impound your passport.

2. You can term it as an illegal notice issued by the Bank beyond their jurisdiction and authority.

3. You should now file an application before the DRT alongwith your father praying for quashing and setting aside the illegal and unauthorised notice sent by the Bank to the passport authorities.

4. While standing as a guarantor for your father's loan you have siged a guarantee agreement wherein your amount of guarantee has been specified. You are liable to stand as guarantor up to the said amount and till the said amount is realised from you.

Krishna Kishore Ganguly
Advocate, Kolkata
12143 Answers
233 Consultations
5.0 on 5.0
This is only notice to passport officer send by bank and not any order passed by passport authority, even the passport authority have no right to impound your passport based on bank complaint or notice because right to travel abroad is your fundamental right and nobody can restrain you for that even court can not impound your passport.

Only the passport authority have right to impound your passport based on passport act.



Feel Free to call
Nadeem Qureshi
Advocate, New Delhi
3537 Answers
130 Consultations
4.9 on 5.0
1) in application made in DRT for injunction you can seek order for release of your passport 

2) you would be liable for  payment of balance amount as you are a guarantor 
Ajay Sethi
Advocate, Mumbai
23386 Answers
1229 Consultations
5.0 on 5.0
1. It was a blunder to have not replied to the notice.
2. Injunction will not be granted unless your father deposits at least 50% of the amount to be repaid.
3. The notice for impounding of passport is actionable through a separate suit for injunction in the civil court. 
4. The guarantor's assets can be attached for the entire amount the repayment of which he has guaranteed. 
Ashish Davessar
Advocate, Jaipur
18259 Answers
450 Consultations
5.0 on 5.0
1) it is doubtful you will get stay in 4 days time 

2) make an offer for one time settlement with the bank 

3) bank would grant you a year or so ti make payment 

4) make an application for dispensing with the pre deposit of outstanding dues on account of financial constraints .pre-deposit amount can only be reduced to 25% for the reasons recorded in writing
Ajay Sethi
Advocate, Mumbai
23386 Answers
1229 Consultations
5.0 on 5.0
the passport authority can not impound your passport on the above mention ground as raised by the bank because as per section 10 of the Passport Act-1967

read the below mention section
10. Variation, impounding and revocation of passports and travel documents

(1) The passport authority may, having regard to the provisions of sub-section (1) of section 6 or any notification under section 19, vary or cancel the endorsements on a passport or travel document or may, with the previous approval of the Central Government, vary or cancel the conditions (other than the prescribed conditions) subject to which a passport or travel document has been issued and may, for that purpose, require the holder of a passport or a travel document, by notice in writing, to deliver up the passport or travel document to it within such time as may be specified in the notice and the holder shall comply with such notice.

(2) The passport authority may, on the application of the holder of a passport or a travel document, and with the previous approval of the Central Government also vary or cancel the conditions (other than the prescribed conditions) of the passport or travel document.

(3) The passport authority may impound or cause to be impounded or revoke a passport or travel document,-

(a) if the passport authority is satisfied that the holder of the passport or travel document is in wrongful possession thereof;

(b) if the passport or travel document was obtained by the suppression of material information or on the basis of wrong information provided by the holder of the passport or travel document or any other person on his behalf;

5[Provided that if the holder of such passport obtains another passport the passport authority shall also impound or cause to be impounded or revoke such other passport]

(c) if the passport authority deems it necessary so to do in the interests of the sovereignty and integrity of India, the security of India, friendly relations of India with any foreign country, or in the interests of the general public;

(d) if the holder of the passport or travel document has, at any time after the issue of the passport or travel document, been convicted by a court in India for any offence involving moral turpitude and sentenced in respect thereof to imprisonment for not less than two years;

(e) if proceedings in respect of an offence alleged to have been committed by the holder of the passport or travel document are pending before a criminal court in India.

(f) if any of the conditions of the passport or travel document has been contravened;

(g) if the holder of the passport or travel document has failed to comply with a notice under sub-section (1) requiring him to deliver up the same;

(h) if it is brought to the notice of the passport authority that a warrant or summons for the appearance, or a warrant for the arrest, of the holder of the passport or travel document has been issued by a court under any law for the time being in force or if an order prohibiting the departure from India of the holder of the passport or other travel document has been made by any such court and the passport authority is satisfied that a warrant or summons has been so issued or an order has been so made.

(4) The passport authority may also revoke a passport or travel document on the application of the holder thereof.

(5) Where the passport authority makes an order varying or canceling the endorsements on, or varying the conditions of, a passport or travel document under sub-section (1) or an order impounding or revoking a passport or travel document under sub-section (3), it shall record in writing a brief statement of the reasons for making such order and furnish to the holder of the passport or travel document on demand a copy of the same unless in any case, the passport authority is of the opinion that it will not be in the interests of the sovereignty and integrity of India, the security of India. friendly relations of India with any foreign country or in the interests of the general public to furnish such a copy.

(6) The authority to whom the passport authority is subordinate may, by order in writing, impound or cause to be impounded or revoke a passport or travel document on any ground on which it may be impounded or revoked by the passport authority and the foregoing provisions of this section shall, as far as may be, apply in relation to the impounding or revocation of a passport or travel document by such authority.

(7) A court convicting the holder of a passport or travel document of any offence under this Act or the rules made thereunder may also revoke the passport or travel document:

Provided that if the conviction is set aside on appeal or otherwise the revocation shall become void.

(8) An order of revocation under sub-section (7) may also be made by an appellate court or by the High Court when exercising its powers of revision.

(9) On the revocation of a passport or travel document under this section the holder thereof shall, without delay, surrender the passport or travel document, if the same has not already been impounded, to the authority by whom it has been revoked or to such other authority as may be specified in this behalf in the order of revocation.

Nadeem Qureshi
Advocate, New Delhi
3537 Answers
130 Consultations
4.9 on 5.0
1. You do have the time to apply for and seek injunction if the attachment has not been made. 

2. The bank can file an appeal the very next day and apply for urgent listing of it.

3. The ordinary practice of DRTs is to insist on payment of 50% of amount, but this is no cast iron rule which cannot be departed from in certain cases.
Ashish Davessar
Advocate, Jaipur
18259 Answers
450 Consultations
5.0 on 5.0
we got an impounding notice from bank addressing to passport office to seize all our passports since there is a chance that we may go out of the country. My question is if I go to India now, will my passport be seized at the airport? I am not a director in my father's business. If they seize my passport what are my options to get that back. Please let me know.

You have not mentioned the orders of the passport office to impound the passport based on the notice issued by the bank.
It is not a joke to impound somebody's passport by a notice by any organisation.
Freedom of movement is a Constitutional right. A citizen is given the liberty to travel, work and reside at any place where he or she wants. 
The same can be curtailed only as per the procedure established by law. 
The question that arises now is can a passport be impounded by exercising power under section 102 read with section 165 and 104 of the Code of Criminal Procedure, 1973? The Hon'ble Supreme Court of India in Suresh Nanda vs. CBI has answered this question in negative and observed that while the police may have the power to seize a passport under Section 102(1) Criminal Procedure Code, 1973, it does not have the power to impound the same. Impounding of a passport can only be done by the passport authority under Section 10(3) of the Passports Act, 19673 .
It may be mentioned that there is a difference between seizing of a document and impounding a document. A seizure is made at a particular moment when a person or authority taxes into his possession some property which was earlier not in his possession.
the word "impound" has been defined to mean "to take possession of a document or thing for being held in custody in accordance with law".
Impounding of a passport can only be done by the passport authority under Section 10(3) of the Passports Act, 1967.
In your case there is no provision to invoke the section 10 of the passport act too, hence there is nothing to be worried about the airport authorities seizing your passport on your entry to India.
T Kalaiselvan
Advocate, Vellore
14161 Answers
128 Consultations
5.0 on 5.0
The bank has no authority to instruct the passport authority ton invoke the provisions of section 10 of the passport act in this regard and there is no provision for that for the bank to deal with the same directly without a court order on it. The bank's apprehension in this regard cannot become law.

As far as appeal before DRT is concerned you should act swiftly lest the bank will initiate auction proceedings for recovery of their debts against you.

For injunction also you may have to deposit an amount before DRT court, there is no exemption on that count, however your lawyer may find a different solution for this too, be in touch with him.
T Kalaiselvan
Advocate, Vellore
14161 Answers
128 Consultations
5.0 on 5.0
1. In this case the Bank accepts that the passport authority is empowered to impound passport on certain grounds.

2. As per Sec.10(3)(h) of Passport Act, 1967, the passport authority can impound the passport, inter alia, if any warrant or Summons for appearance has been issued by a Court. In your case the Summons is not for personal appearance. You can appear through your Advocate also before the DRT. So, in your case, Section 10 of the Act  is not applicable.

3.  It might not be possible on your part to surely state that you shall get an injunction order from the DRT since you shall have to prove with evidence the irregularity of the Bank in following the SARFAESI Act,2002 in your case.

4. Bank may not go for appeal at all now since the injunction, if you get at all, will be ad-interim at this stage and the Bank will try to get the said injunction vacated after filing the written statement before the DRT and get the matter heard.

5. Since it is a high value matter, as per direction of Ministry, DRT will give preference to its early hearing.

6. As per vthe recent amendment of SARFAESI Act, you shall have to submit 50% of the outstanding which DRT is not empowered to reduce. We are expecting that some one will approach the Supreme Court and get the said amount reduced. Till then you shall have to deposit 50% of your dues for filing the SARFAESI Application before the DRT.
Krishna Kishore Ganguly
Advocate, Kolkata
12143 Answers
233 Consultations
5.0 on 5.0

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