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The
Act on Recovery of Debts of Banks and Financial Institutions, 2058(2002)
Date of Royal
assent and Publication
2058.10.17 (30 January 2002)
Act number 16 of the year 2058 (2002)
An Act made to provide for recovery of Debts of banks and
financial institutions
Preamble:
Whereas, it is
expedient to make provisions for the recovery of principal and interest of debts
recoverable from borrowers by trying and settling cases relating to recovery of debts of
banks and financial institutions in a speedy and prompt manner;
Now, therefore,
be it enacted by Parliament in the first year of reign of Government
of Nepal
Chapter-1
Preliminary
1.
Short title and commencement:
(a) This
Act may be cited as the “Act on Recovery of Debts of Banks and Financial
Institutions, 2058(2002)”.
(b) This
Act shall commence on such date as may be appointed by His majesty’s Government, upon
a notification in the Nepal Gazette.
2.
Definitions: Unless the subject or the context otherwise requires, in this Act:-
(a)
“Bank and financial institution” means a bank and financial institution as
referred to in Section 3.
“Tribunal”
means the tribunal established pursuant to Section 4.
“Member”
means a member of the tribunal established pursuant to Section 4, and this term includes
the chairman of the tribunal.
“Appellate
tribunal” means the appellate tribunal established pursuant to Section 8.
“Appeal
hearing authority” means the person appointed pursuant to Section 9.
“Debt”
means principal and interest of a debt lent by a bank or financial institution to a
borrower with or without security, mortgage of a movable or immovable property or other
necessary security or guarantee, and this term includes arrears due and receivable from
the off balance sheet transactions or fee, commission and interest chargeable therefor.
“Borrower”
means a person, firm, company or corporate body established pursuant to the prevailing law
who borrows a debt from a bank or financial institution, and this term includes a
guarantor.
“Debt
recovery officer” means the officer specified pursuant to Section 28.
“Prescribed”
or “as prescribed” means prescribed or as prescribed in the rules framed under
this Act.
3.
Banks and financial institutions to which provisions of the Act apply: The
provisions of this Act shall apply to cases relating to recovery of debts of the following
banks and financial institutions.
(a)
Agricultural development banks established under the Agricultural Development Bank Act,
2024(1967),
(b)
Commercial banks established under the Commercial Bank Act, 2031(1974),
(c) Nepal
Industrial Development Corporation established under the Nepal Industrial Development
Corporation Act, 2046 (1989),
(d) Such
other financial institutions as may be specified by Nepal Rastra bank from time to time.
Provided,
however, that the provisions of this Act shall not apply to the recovery of a debt of
which principal is less than five hundred thousand rupees.
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Chapter-2
Establishment and Formation of Tribunal and Appellate Tribunal
4.
Establishment and formation of tribunal:
(1) Government
of Nepal may, by a notification in the Nepal Gazette, establish the debt
recovery tribunal, as per necessity, in order to originally try and settle cases relating
to recovery of debts of banks and financial institutions.
(2) The
seat and territorial jurisdiction of the tribunal to be established under sub-section (1)
shall be as specified in such a notice.
(3) The
tribunal shall have the members as follows.
(a) Law
member,
(b) Banking member, and
(c) Accounts member.
(4) The
law member shall be the chairman of the tribunal and, in his absence, the banking member
shall chair the tribunal.
(5)
Notwithstanding anything contained elsewhere in this section, His Majesty’s
Government may, by a notification in the Nepal Gazette, add territorial jurisdiction of
the tribunal and give power to originally try and settle cases relating to debt recovery.
5.
Appointment of member: His Majesty’s Government shall, by a
notification in the Nepal Gazette, appoint the member from amongst the persons having
possessed qualifications as referred to in Section 6.
Provided,
however, that while appointing the banking member and the accounts member, Government
of Nepal shall consult Nepal Rastra Bank.
6.
Qualifications for member: One has to possess the qualifications as follows in
order to be member.
(a) For
the law member, one who is incumbent or has already become or is qualified to become a
judge of the District Court,
(b) For
the banking member, one who, having possessed at least bachelor’s degree in economics
or commerce, has gained at least ten years of experience in a post of at least
second-class officer level post in a bank or financial institution established pursuant to
the prevailing law,
(c) For
the accounts member, one who, having possessed at least bachelor’s degree in commerce
or passed chartered accountancy or examination equivalent thereto, has obtained the
auditor certificate of at least “b” class and gained at least ten years of
experience in auditing of the bank or financial institution sector.
7. Tenure
of member: A member shall hold office for a period of five years from the date of his
appointment to the post and may be re-appointed.
8.
Establishment of appellate tribunal:
(1) For purposes
of hearing appeal against a decision made by the tribunal under this Act, Government
of Nepal may, by a notification in the Nepal Gazette, establish the debt
recovery appellate tribunal, as per necessity.
(2) In
establishing the appellate tribunal pursuant to sub-section (1), the seat and territorial
jurisdiction of such appellate tribunal shall also be specified.
(3) Government
of Nepal may, by a notification in the Nepal Gazette, so specify that any
appellate tribunal may hear appeal against an order or decision made by a tribunal outside
its territorial jurisdiction.
9.
Appointment of appeal hearing authority:
Government of Nepal may, by a notification in the Nepal Gazette, appoint any person
who is an incumbent judge, or has already become or is eligible to become judge, of the
Appellate Court to the post of appeal hearing authority of the appellate tribunal.
10.
Tenure of appeal hearing authority:
The appeal
hearing authority shall hold office for a period of five years from the date of his
appointment to the post and may be reappointed.
11.
Remuneration and facility: The remuneration and facilities and other
conditions of service of the member and the appeal hearing authority shall be as
prescribed.
12.
Vacation of seat:
(1) The member
or the appeal hearing authority shall cease to hold his office in the following
circumstances:-
(a) If his
tenure expires pursuant to this Act,
(b) If the
resignation tendered from his office is accepted by His Government
of Nepal,
(c) If he is
removed by Government of Nepal on ground of bad conduct or lack of competency.
(2) Government
of Nepal shall, prior to issuing an order to remove him from office
pursuant to clause (c) of sub-section (1), give him a reasonable opportunity to defend
himself.
13.Fulfillment
of vacant post:
If the post of
chairman or appeal hearing authority falls vacant under Section 12 or for any other
reason, the post so fallen vacant shall be filled in accordance with the procedures
referred to in Section 5 or Section 9 for the remainder of his term.
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Chapter-3
Jurisdiction
and Procedures of Tribunal and Appellate Tribunal
14.
Functions, duties and jurisdiction:
(1)
Following the establishment of the tribunal pursuant to this Act, the tribunal shall have
powers to originally try and settle cases on recovery of debts of banks and financial
institutions under its jurisdiction.
(2) The
three members shall collectively exercise jurisdiction of the tribunal. Majority opinion
shall be deemed to be a decision of the tribunal.
(3)
Notwithstanding anything contained in sub-section (2), if two members including the law
member are present, cases may be tried and settled. Other actions except deciding a case
or issuing a final order may be taken if two members other than the law member are
present.
(4) If
unanimity is not made while trying and settling a case in presence of two members pursuant
to sub-section (3), the case shall be submitted for action and settlement in presence of
the absent member, as well.
(5) If
majority is not there even on submission pursuant to sub-section (4), it shall be written
to the appellate tribunal for a way-out in respect of such a case.
(6) The
appellate tribunal shall, following its establishment, have the final power to hear appeal
against any order issued by the tribunal under its jurisdiction.
(7)
Notwithstanding anything contained in this Act, a bank and financial institution may, in
respect of a debt recoverable by it, file a petition on recovery of the debt only in
respect whereof the following conditions are fulfilled.
Ample
discussions and activities were held and carried out with the borrower to settle, or cause
to be settled, the debt,
The bank
and financial institution took adequate action on the recovery of debt but the debt could
not be recovered.
15.Filing
of petition with tribunal:
(1) If a
bank or financial institution fails to recover any amount recoverable from the borrower,
it has to file a petition, accompanied by the prescribed fees, in the prescribed format,
to the tribunal within the following time limit so as to have such amount recovered.
In the case of
debts already matured at the time of commencement of this Act, within three years from the
date of commencement of this Act.
In the case of
debts matured after commencement of this Act, within three years from the date of such
maturity.
(2) In
filing a petition pursuant to sub-section (1), the concerned bank or financial institution
has also to pay an amount to be set by 0.25 per cent of the amount claimed by it to the
tribunal in advance as the debt recovery fee.
(3) No later
than fifteen days of the date of receipt of the petition as referred to in sub-section
(1), the tribunal has to issue a 15-day summons to the defendant to file a note of defense
in order to defend him accompanied by proofs and evidence, and the defendant has to file
the note of defense within that time limit.
Provided,
however, that if the defendant fails to file a note of defense within the time limit
because of occurrence of a circumstance beyond control and makes a petition within 15
fifteen days thereafter, setting out reasons therefore, and if the contents of such
application appear reasonable, the tribunal may extend the time limit not exceeding
fifteen days.
16.
Power to issue interim orders:
(1) If, in
respect of a case under its consideration, the tribunal thinks, upon a petition of the
party, that it is necessary to so withhold the security furnished for borrowing the debt
or the movable or immovable property owned or possessed by, or title to which belongs to,
the guarantor of the borrower as to prevent such security or property from being
transferred, transmitted or sold, the tribunal may issue an interim order to the concerned
office to withhold such property until another order is issued.
(2) It
shall be the duty of the concerned office to observe the order as referred to in
sub-section (1).
17.
Period for trying and settling cases:
The tribunal has
to try and settle a case filed under this Act no later than one hundred fifty days from
the date of submission of a note of defense where the note of defense is filed and from
the date of expiration of the time limit for the filing of a note of defense where such
note is not submitted.
Provided,
however, that no case shall be tried and settled finally until the time limit allowed for
extending the expired time limit pursuant to sub-section (3) of Section 15 is expired.
18.
To read out decision:
(1) Decision
made by the tribunal has to be read out to the present parties or their attorneys and a
deed has to be got executed by them that they have heard the decision.
(2) If the
concerned parties or their attorneys are not present at the time of making decision,
information of decision has to be sent to them within seven days of making decision.
19.
Appeal:
(1) A party who
is not satisfied with the decision made by the tribunal may file an appeal, accompanied by
the prescribed appeal fee, in the prescribed format, to the concerned appellate tribunal
within fifteen of receipt of duplicate copy of the decision.
(2) No
later than seven days of registration of the appeal as referred to in sub-section (1), the
appellate tribunal has to give a thirty-day time limit to the defendant to file a note of
defense, accompanied by proofs and evidence, for his defense; and the defendant has to
file the note of defense within that time limit.
Provided,
however, that if the defendant fails to file a note of defense within that time limit
because of occurrence of a circumstance beyond control and makes a petition, setting out
reasons therefore, the appellate tribunal may extend a time limit of fifteen days.
20.
Compromise:
(1)
Notwithstanding anything contained elsewhere in this Act, if both plaintiff and defendant,
with a view to compromising any case yet to be tried and settled pursuant to this Act,
make an application on compromise to the tribunal or appellate tribunal, and both parties
agree to enter into compromise after hearing the contents of the application read out to
them and understanding the meanings and consequences thereof made well known to them, the
tribunal or appellate tribunal may have compromise irrespective of the stage of case
proceedings.
(2) For
having compromise pursuant to sub-section (1), each of the plaintiff and the defendant has
to pay half the compromise fee in a sum to be set by 0.50 percent of the claimed amount to
the tribunal. The fee chargeable for compromise required to be so paid by the plaintiff
shall be deducted from the debt recovery fee paid by him in advance, pursuant to
sub-section (2) of Section 15, and collected accordingly.
(3) The
tribunal so making compromise has to order the debt recovery officer to implement the
compromise made pursuant to sub-section (1).
21.
Implementation of decision: (1) After reading out a decision pursuant to Section
18, the tribunal has to issue an order in the name of the debt recovery officer to
implement the decision, after receipt of decision of the appellate tribunal where appeal
has been filed against that decision and after expiration of the time limit for appeal
where appeal has not been filed.
(2) The
tribunal may, in issuing an order pursuant to sub-section (1), also specify a period for
the implementation of decision.
22.
Deposit to be furnished for appeal: In making appeal pursuant to Section 19, the
borrower has to furnish cash deposit in a sum that is thirty per cent of the amount held
recoverable by a decision made by the tribunal.
23.
Period for settling appeal: The appeallate tribunal has to finally settle an
appeal made under this Act within ninety days from the date of submission of a note of
defense of appeal where such note of defense has been submitted and from the date of
expiration of the time limit for submission of a note of defense where such note of
defense has not been submitted and send information thereof to the concerned tribunal no
later than fifteen days from the date of final settlement.
24.
Powers and procedures of tribunal and appellate tribunal:
(1) In trying
and settling cases filed under this Act, the tribunal and the appellate tribunal may
determine their procedures on their own, subject to this Act or the rules framed under
this Act.
(2) In
trying and settling cases filed under this Act, the tribunal or the appellate tribunal
shall have the same powers including to issue summons, summon presence of petitioner,
defendant, witness, administer oath, take deposition, examine proofs, evidence and
necessary documents or statements, require submission of documents, require furnishing of
security and impose punishment as the court of law has under the prevailing law.
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Chapter-4
Procedures of debt recovery
25.
Procedures of debt recovery:
(1) Upon receipt
of an order of the tribunal, the debt recovery officer has to recover the debt amount from
the borrower within the time limit specified in that order and get it provided to the
concerned bank and financial institution.
(2)In recovering
the principal and interest of a debt, the debt recovery officer may follow the following
procedures, subject to the prevailing law.
To take
possession of, or auction, the borrower's other movable or immovable property whether
furnished as security or not,
To take
possession of, or auction, the guarantor's movable or immovable property,
Where any
individual is a borrower or guarantor, to arrest such individual and detain him pursuant
to the prevailing law.
26.
Liability of guarantor:
(1) The
liability of a guarantor furnishing guarantee for a borrower shall be limited only to the
amount of guarantee furnished.
(2)
Notwithstanding anything contained in the prevailing law, the liability referred to in
sub-section (1) may be realized directly from the guarantor.
27.
Order of debt recovery office to be equal to that of tribunal:
(1) Any order
given by the debt recovery officer under this Act in respect of recovery of a debt shall
be equal to an order given by the tribunal, and it shall be the duty of all the concerned
to carry out such order.
(2) If any
person disobeys any order given by the debt recovery officer under this Act, the tribunal
may institute contempt proceedings against that person pursuant to Section 30.
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Chapter-5
Miscellaneous
28.
Designation of debt recovery officer:
(1) Government
of Nepal may designate at least the gazetted second class officer as the debt
recovery officer.
(2) The
functions, duties and powers of the debt recovery officer shall be as prescribed.
29.
Provisions relating to other employees:
Government of Nepal may provide required employees for the operation of functions of the tribunal
or appellate tribunal, in addition to the debt recovery officer.
30.
Power to institute action on contempt:
(1) The tribunal
or appellate tribunal may institute action on its contempt.
(2) If the
tribunal holds that its contempt has been committed, it may punish the accused with a fine
not exceeding one thousand rupees or with imprisonment for a term not exceeding three
months or with both.
(3)
Notwithstanding anything contained in sub-section (1) or (3), if the accused begs a pardon
to the satisfaction of the concerned tribunal or appellate tribunal, it may pardon him
without subjecting him to any punishment or lessen or pardon punishment where punishment
has already been specified or issue an order to suspend punishment and not to execute
punishment if the specified terms are observed.
31.
Payment of amount by bank and financial institution:
(1) After
a debt has been recovered under this Act, the concerned bank and financial institution
have to pay one percent of the debt amount to the tribunal for the debt recovery fee. In
so paying the debt recovery fee by the bank and financial institution, it has to pay only
the amount that remains after deducting the amount paid by it under sub-section (2) of
Section 15.
(2) The tribunal
has to deposit the amount paid pursuant to sub-section (1) with the consolidated fund as
prescribed by Government of Nepal.
32.
Transfer of cases:
The debt related
cases falling under jurisdiction of this Act and awaiting judgment by the District Court
and the Appellate Court shall be transferred to the concerned tribunal or appellate
tribunal.
33.
Power to frame rules:
Government of Nepal may frame necessary rules in order to implement the objectives of this Act.
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The Regulation on
Recovery of Debts of Banks and Financial Institutions, 2059(2002)
Date of publication
in Nepal Gazette
2059.8.12 (30
January 2002)
First Amendment
2060.10.29(12 February
2004)
In
exercise of the powers conferred by Section 33 of the Act on Recovery of
Debts of Banks and Financial Institutions, 2058(2002),
Government of Nepal has framed the following rules.
Chapter-1
Preliminary
1.
Short title and commencement:
(1) These rules
may be cited as the “Regulation on Recovery of Debts of Banks and Financial
Institutions, 2059(2002)”.
(2) This
Regulation shall commence forthwith.
2.
Definitions:
Unless the
subject or the context otherwise requires, in this Act,-
(a)
“Act” means the Act on Recovery of Debts of Banks and Financial Institutions,
2058(2002).
(b)
"Petition" means a petition filed by a bank or financial institution with the
tribunal pursuant to sub-section (1) of Section 15 of the Act.
(c)
"Registrar" means an officer designated by Government of
Nepal to carry out
acts pertaining to general administration of the tribunal or appellate tribunal pursuant
to Rule 32.
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Chapter-2
Provision relating to petition
3.
Petition to be filed:
In filing a
petition, a bank or financial institution has to file the petition with the tribunal in
the format as referred to in Schedule-1, accompanied also by a petition fee of five rupees
and amount for the debt recovery fee in a sum to be set by 0.25 percent of the claimed
amount.
4. Matters to be set out in petition: A petition to be filed pursuant to Rule 3 has to set
out the following matters:
(a)
Full name, surname and address of each of petitioner and
defendant,
(b)
Whether the petition has been filed within the time limit of
the Act and whether the petition fee and amount to be paid in advance
for the debt recovery have been accompanied thereby or not,
(c) Whether the bank or financial institution has,
in respect of the recovery of the debt, made or held correspondences,
discussions or negotiations with the borrower at several times or
carried out rescheduling or restructuring of the debt or similar other
acts or not,
(c1)
Whether the commercial bank or financial institution has, in respect of
the recovery of the debt, published a public notice in a newspaper of
national circulation to the effect that if the borrower fails to repay
the debt within the time limit specified by it in that notice, necessary
action shall be instituted against the borrower or a public notice on
the auction sale of the movable or immovable property furnished as the
security with the bank or financial institution or not, or whether the
movable or immovable property furnished as the security has been
auctioned even on the action of auction sale of such security or not,
(d) Whether any suit has been filed in any office
or court on the recovery of debt from the borrower pursuant to the
prevailing law or not,
(e) In the case of more than one defendant, whether
sufficient copies of the petition have been attached so that they may be
sent to all of them or not,
(f) Whether necessary evidence and documents in
corroboration of the claim mentioned in the petition have been attached
or not.
5.
Non-registration of petition not in order:
The Registrar
has to endorse a received petition which does not set out the matters required to be set
out or is not accompanied by the documents required to be accompanied by pursuant to Rule
4 by indicating in such petition that it does not meet the requirements, and return it to
the concerned bank or financial institution.
6.
Registration of petition and issuance of receipt:
If a petition
filed by a bank or financial institution appears to meet the requirements pursuant to the
Act and this Regulation, the Registrar has to register such a petition and give a receipt
thereof to the concerned bank or financial institution.
7.
Inquiry into and dismissal of petition:
(1) After the
filing of a petition, the tribunal has to enquire into the following matters in that
respect.
(a)
Whether the grounds of claim for recovery of debt are clear or not,
(b)
Whether the evidence and documents accompanied by the petition are adequate to corroborate
the claim or not.
(2) If the
tribunal thinks, upon an inquiry pursuant to sub-rule (1), that the grounds for claim
mentioned in the petition are not clear and thus the claim cannot lie, it may dismiss the
petition.
(3) If the
tribunal thinks that the claim cannot be substantiated from the evidence and documents
attached with the petition, it may give a time limit of seven days and order the concerned
bank or financial institution to submit additional necessary evidence and documents. If
the concerned bank or financial institution fails to submit additional necessary evidence
or documents within the time limit so specified or if it appears that the claim cannot be
substantiated from the submitted documents, the tribunal may dismiss such a petition.
(4) If the
tribunal dismisses a petition pursuant to sub-rule (2) or (3), it has to give information
thereof to the concerned bank or financial institution no later than seven days from the
date of dismissal of petition.
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Chapter-3
Provisions
on service of summons and examination of evidence
8. Issuance of summons for filing of note of
defense: (1) No later than fifteen days from
the date of registration of a petition in the Tribunal, the Tribunal has
to issue the summons, also accompanied by one copy of the petition,
in the name of the concerned defendant, in the format as referred to in
Schedule-2.
(2) The summons
issued pursuant to sub-rule (1) has to be served by delivering it to the
defendant or any Member of his own family. If the defendant or any
Member of his own family is not found or his house or dwelling is not
traced in so delivering the summons, the summons has to be posted in the
public place where the house or dwelling is located in presence of any
Member of the concerned village development committee or municipality or
of any two local persons; and after the summons has been so posted, it
shall be deemed to have been duly served notwithstanding anything
contained in the prevailing law.
Provided, however, that in
cases where the defendant or his house or abode has not been traced
because of the fact that the bank or financial institution has indicated
a wrong address or the Tribunal has mentioned a wrong address, the
summons shall not be deemed to have been duly served despite that it has
been so posted.
(3) An employee who goes to serve the summons
referred to in sub-rule (2) has to complete the service of summons
generally
within two days except the time required for journey.
(4) Notwithstanding
anything contained elsewhere in this Regulation, in issuing the summons
to be served on a defendant who is a firm, company or body for the
submission of a note of defense, if the summons is sent by a registered
post to the registered office of such a firm, company or body or sent
through telefax, email or other electronic communication means of such
office, such summons shall be deemed to have been duly served.
------------------------
9. Extension of time limit:
(1) If, as a result of expiration of the time limit of the summons
issued to the defendant to submit a note of defense pursuant to Rule 8
because of the occurrence of a circumstance beyond control of the
defendant, the defendant is unable to submit the note of defense and the
defendant makes an application, setting out the reasons therefore, to the
Tribunal for having the expired time limit extended, no later than
fifteen days from the date of expiration, and the contents of such an
application appear to be reasonable, the Tribunal may extend a time
limit of a maximum of fifteen days for the applicant or defendant to
submit the note of defense.
(2) If any petitioner or
defendant who is to make appearance on a fixed day in any case under
consideration pursuant to the Act and this Regulation fails to make
presence on such a fixed day, he shall not be allowed to have the
expired day for appearance extended.
Provided, however, that if
the fixed day for appearance expires because of occurrence of a
circumstance beyond control of the petitioner or the defendant and an
application is made to the Tribunal no later than fifteen days from the
date of expiration, and the contents of such an application appear to be
reasonable, the Tribunal may extend it for a maximum period of fifteen
days for the petitioner or the defendant.
10. Examination of evidence: (1) The petitioner has to submit the original copy of
documentary evidence that is to remain with him by virtue of its nature
or that he may submit and one duplicate copy thereof along with the
petition.
(2) The defendant
has to submit the original copy of documentary evidence that is to
remain with him by virtue of its nature or that he may submit and one
duplicate copy thereof along with the not of defense.
Provided, however, that
documentary evidence may be submitted or examined as follows in the
following circumstances.
(a)
In the case of documentary evidence that cannot be submitted
to the Tribunal, only a duplicate copy thereof may be submitted.
(b)
If the petitioner or the defendant does not know or obtain
any new or important documentary evidence at the time of filing or
submitting the petition or note of defense despite his best effort and
makes an application to the Tribunal to submit such evidence after he
knows or obtains it and the matter appears to be reasonable, the
Tribunal may execute a memorandum and examine such documentary evidence.
(c)
If the petitioner or the defendant, showing a reasonable
reason makes an application for appointment of another day for
submitting any documentary evidence, the Tribunal may specify another
day to give him a reasonable opportunity to submit that documentary
evidence.
(4)
On the day specified for the examination of evidence and
proof, the original documentary evidence of the petitioner has to be
shown and read out to the defendant and that of the defendant to the
petitioner and get him to make deposition as to whether it is genuine,
forged or fake whatever he says. If in so getting him to record his
deposition, he is not able to name it as genuine, forged or fake at the
moment and the Tribunal holds to give a time limit at its discretion, it
may give a time limit not exceeding three days.
(5)
After the petitioner or the defendant has submitted the
documentary evidence mentioned as such in the petition or the note of
defense to the Tribunal, the Registrar has to prepare a
duplicate copy thereof, verify such copy with the original, get the
petitioner or the defendant who has submitted that document to write the
duplicate copy corresponds to the original in that document and sign it
if the copy verifies with the original, and retain it in the case file.
(6)
The original documents as referred to in sub-rule (5) have to
be given consecutive number and the office seal stamped on the reverse
thereof; and such original documents have then to be returned to the
concerned person.
11.
Submission of evidence by other on behalf of absent defendant:
If any heir of
the same family of the defendant or any other person, showing any reasonable reason for
failure of the defendant to submit a note of defense in any case within the time limit
issued under this Regulation, submits any evidence refuting the petitioner's claim no
later than seven days from expiration of that time limit, the tribunal has also to examine
that evidence too and try and settle the case.
12.
Party need not keep on appearing on appointed day:
(1) After
the tribunal has examined the evidence of both petitioner and defendant, any party may, if
he so intends, not keep on appearing on the appointed day, with the permission of the
tribunal.
(2) Even
if the petitioner only or the defendant too expires the appointed day for presence after
the petitioner has submitted his evidence, the case has not to be dismissed but it has to
be tried and settled based on the evidence examined.
13.
Examination of witness:
(1) Following an
order by the tribunal for issuing summons in the name of witness, the Registrar has to
prepare and send the summons.
(2) In
sending the summons by the Registrar pursuant to sub-rule (1), a time limit of seven days
has to be given.
14.
Deposition of witness:
(1) The
Registrar has to obtain name list of their witnesses from the petitioner and the defendant
present on the day appointed for presence immediately upon commencement of tribunal's
action on that day, retain the list in the case file and submit the same to the tribunal
for deposition.
(2) Even
if the other party be not present by two p.m. on the day appointed for examination of
witness, making deposition of the witness of the party present has not to be stopped.
15.
Power to issue order for submission of documentary evidence:
In cases where
any document, design, information, detail etc. that can be taken as evidence under the
prevailing law has not been submitted to the tribunal for any reason, the tribunal may
order the concerned party to submit such evidence to the tribunal prior to enlistment of
the case in the cause list.
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Chapter-4
Provisions relating to decision
16.
Period for decision:
After a case has
become matured upon examination of the required evidence by the tribunal from the
petitioner or defendant, the tribunal has to decide the case no later than fifteen days
from the date of its maturity for decision, subject to the period of time specified by
Section 17 of the Act.
17.
Format of decision and order:
Any decision to
be made by the tribunal shall be in the format referred to in Schedule-3 and other order
in the format referred to in Schedule-4.
18.
Prohibition on alteration in decision or order:
Any decision or
order already signed by the members has not to be altered in any other manner except
correction of minor grammatical and typo errors.
19.
Implementation of decision:
(1) After the
tribunal has made a decision, and issued an order to the debt recovery officer for
implementation of that decision pursuant to Section 21 of the Act, that decision has to be
implemented within the period indicated in that order.
(2) If the debt
recovery officer be in need in the course of implementation of a decision pursuant to
sub-rule (1), he may seek assistance of the local administration and police. If assistance
is so sought by the debt recovery officer, the local administration and police have to
render assistance to the officer.
20.
Execution of compromise:
(1) If it has
been so decided by the tribunal or appellate tribunal under sub-section (1) of Section 20
of the Act that compromise can be made, the concerned parties have to execute the
compromise on their own.
(2) If the
tribunal or appellate tribunal has issued an order to the debt recovery officer pursuant
to sub-section (3) of Section 20 of the Act because of failure of one party to execute
compromise pursuant to sub-rule (1), he has to get the compromise executed.
(3) The
procedures for execution of compromise pursuant to sub-rule (2) shall be the same as the
procedures for implementation of the decision made by the tribunal or appellate tribunal.
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Chapter-5
Provisions relating to appeal
21.
Making of appeal:
In making appeal
against a decision made by the tribunal pursuant to the Act and this Regulation, a
memorandum of appeal has to be filed in the tribunal in the format referred to in
Schedule-5, accompanied by a fee of five rupees.
22.
Matters to be set out in memorandum of appeal:
The following
matters have to be set out in the memorandum of appeal to be filed pursuant to Rule 21.
(a) Appellant's
name, surname and address,
(b) Name,
surname and address of person or body to be named as respondent,
(c) Name of
tribunal having made decision with which the appellant is not satisfied,
(d) Matter of
being petitioner or defendant in the case of first instance,
(e) Date of
decision and details thereof,
(f) Amount in
controversy as claimed in the case of first instance and amount set in such case,
(g) Matters
of dissatisfaction in the decision, reasons therefore and matters demanded in the appeal,
(h) Where the
amount in controversy has not been set out in the case appealed, estimated value of such
amount,
(i) Matter
whether the appellant knows as to any appeal made by other party or respondent, if any,
(j) Matter that
under which law appeal is made,
(k) Matter that
appeal is within the limitation,
(l) Other
necessary matters.
23.
Examination and registration of memorandum of appeal:
(1) Any appeal
received by the appellate tribunal has to be examined whether it meets the requirements
under Rules 21 and 22, and such memorandum of appeal has to be registered if it meets such
requirements, and a proof thereof has to be given to the concerned appellant.
(2) If the
memorandum of appeal does not appear to meet the requirements upon its examination
pursuant to sub-rule (1), the matter that it does not so meet the requirements has to be
mentioned and endorsement made, and such memorandum of appeal has to be returned.
24.
Procedures following registration of memorandum of appeal:
(1) The
appellate tribunal has to procure the case file of the case of which memorandum of appeal
has been filed from the concerned tribunal.
(2) After the
appellate tribunal has received the case file procured by it pursuant to sub-rule (1), the
Registrar has to specify the day for presence for trial and settlement of that appeal,
enter the case in the weekly and daily cause list and refer it to the appellate tribunal.
(3) The
memorandum of appeal and deed of attorney (Vakalatnama) submitted in the case shall all be
recorded in the appellate case file.
25.
Issuance of summons for filing note of defense:
(1) After
registration of a memorandum of appeal in the appellate tribunal, the appellate tribunal
has to issue summons, also accompanied by one copy each of the memorandum of appeal and
evidence and document attached with it, in the name of the concerned respondent, in the
format as referred to in Schedule-6, for filing a note of defense.
(2) In
issuing the summons under sub-rule (1), the procedures referred to in sub-rules (2), (3)
and (4) of Rule 8 have to be followed.
26. Extension of
time limit: If the time limit of summons issued to the respondent to submit a note of
defense pursuant to Rule 25 expires because of occurrence of a circumstance beyond control
and the respondent makes an application, setting out the reasons therefore, no later than
fifteen days, the appellate tribunal may extend the time limit for a maximum of fifteen
days pursuant to rule (9).
Top
Chapter –6
Provisions relating to debt recovery
27.
Functions, duties and powers of debt recovery officer:
(1) If, upon
receipt by the debt recovery officer of the tribunal order, the movable and immovable
property furnished as security by the borrower or the guarantor cannot satisfy the
principal and interest of the debt, and the debt has to be recovered also from other
movable and immovable property of the borrower or the guarantor, he has to immediately
write to the concerned office to withhold such movable and immovable property.
(2) Upon receipt
of the tribunal's order, the debt recovery officer has to get the debt recovered as
follows, subject to the time limit specified in that order.
(a) To give an
order to the borrower to repay in full the principal and interest of the debt repayable by
him to the bank or financial institution, by giving a time limit of seven days in maximum,
(b) If the
borrower does not repay the principal and interest of such debt within the time limit
referred to in clause (a), to take possession of movable and immovable property whether or
not subject to security furnished by the borrower,
(c) If the
movable and immovable property subject or not subject to security furnished by the
borrower does not satisfy the principal and interest of the debt and someone has furnished
guarantee, to take possession of the movable and immovable property belonging to such
guarantor,
(d) To auction
the movable and immovable property taken into possession pursuant tot clause (b) or (c).
28.
Procedures relating to debt recovery:
(1) In cases
where the movable and immovable property furnished as security by the borrower or as
guarantee by the guarantor is being possessed and enjoyed by him, and possession of such
movable and immovable property has to be detached from him, the debt recovery officer has
to enter the place where such property is located in presence of at least two local people
and representative of the concerned bank or financial institution; and in so taking
possession, an inventory of the movable and immovable properties so possessed has to be
prepared and a deed executed to that effect.
(2) If the
property taken into possession does not satisfy the principal and interest of the debt and
other movable, and immovable property of the borrower has to be detached from his
possession, the debt recovery officer has to enter the place where such property is
located in presence of at least two local people and representative of the concerned bank
or financial institution and take the property in his possession; and in so taking
possession, an inventory of the movable and immovable property so possessed has to be
prepared and a deed executed to that effect.
29. Procedures of auction sale: (1) The Debt Recovery Officer has to recover the debt by
auctioning the movable and immovable property taken into his possession
pursuant to Rule 28.
(2)
In making an auction pursuant to sub-rule (1), a notice inviting a
sealed tender or auction bid for the purpose of the auction sale has to
be published in a daily newspaper of national circulation, by giving a
time limit of thirty five days in the case of an immovable property and
that of fifteen days in the case of a movable property.
(2a)
A sealed tender made upon the notice published pursuant to sub-rule (1)
has to be opened and evaluated in the presence of a representative of
the local administration and the tendered or his representative. In
making such evaluation, the tender of the tendered who has quoted the
highest value has to be accepted, subject to the value fixed pursuant to
sub-rule (3), and the property has to be auctioned to that tendered.
(2b)
In making an auction sale on the basis of auction bid upon the notice
published pursuant to sub-rule (1), the property has to be auctioned
subject to the value fixed pursuant to sub-rule (3), in the presence of
a representative of the local administration and at least two local
people.
(3) Prior to
selling movable and immovable property by auction pursuant to sub-rule
(1), the Debt Recovery Officer has to fix the value of such movable and
immovable property in presence of a representative of the local
administration, a representative of the District Land Revenue Office and
a representative of the local body, also having regard to the
prevailing market rate of such property. In so fixing the value of a
movable and immovable property, the concerned expert may also be
consulted.
(4)
In auctioning pursuant to sub-rule (2a) or (2b), if the value
offered is less than the value of such movable and immovable property
fixed pursuant to sub-rule (3), a notice shall be published for the next
time in a newspaper of national circulation by giving a time limit of
fifteen days in the case of immovable property and of seven days in the
case of movable property and such property shall then be auctioned.
(5) If, even if in
auctioning the movable and immovable property pursuant to sub-rule (4)
for the second time, the value offered is less than the value of such
movable and immovable property fixed pursuant to sub-rule (3), a notice
shall be published in a newspaper of national circulation by giving a
time limit of ten days in the case of immovable property and of five
days in the case of movable property and such property shall then be
auctioned. If, even if in so auctioning for the third time, the value
offered is less than the value of such movable and immovable property
fixed pursuant to sub-rule (3), the concerned bank or financial
institution has to accept and buy such movable and immovable property at
the fixed value/price. After that bank or financial institution has so
accepted and bought that movable and immovable property, the
account shall be adjusted as if the debt of such bank or financial
institution were repaid.
Explanation: For purposes of this
Chapter, a movable property means any movable property except cash.
29A.
Expenditure incurred in auction sale: (1) The Debt
Recovery Officer shall, in recovering the debt by auctioning the movable
and immovable property taken in his possession pursuant to Rule 28, get
the amount, which is receivable by the concerned bank or financial
institution, provided to such bank or financial institution from the
proceeds of the auction sale remaining after the deduction of all the
expenditures incurred in the course of making such auction sale from
such proceeds.
(2) The amount which remains after deducting all the
expenditures incurred in the course of making the auction
sale pursuant to sub-rule (1) and the amount, which is receivable by the
concerned bank or financial institution from the proceeds of such sale
has to be refunded to the concerned borrower or guarantor.
(3) Notwithstanding
anything contained in sub-rule (1), the Tribunal may, if it considers
necessary, require the concerned bank or financial institution to
furnish in advance an amount of expenditure estimated to be incurred in
the auction sale of the movable and immovable property, prior to making
such sale of such property.
29B.
Reward: If, in a circumstance where a debt
repayable to a bank or financial institution is not sufficiently repaid
up from the value of the property furnished by the borrower or guarantor
for the security of the debt and any other property of the borrower or
guarantor is not found out, any person gives a written information to
the Tribunal about any property of such borrower or guarantor and such
property is found on the basis of such information, the Tribunal shall
give a reward in a sum to be set by 5% of the proceeds of sale of such
property to such person from such proceeds.
30. Execution: (1) The Debt Recovery Officer has
to give the person who buys a movable and immovable property through
auction pursuant to Rule 29 a possession slip of such movable and
immovable property and execute possession of such movable and immovable
property.
(2) In executing
possession pursuant to sub-rule (1), the Debt Recovery Officer may, if
required, seek assistance of the local administration and police. It
shall be the duty of the local administration and police to render
assistance to the Debt Recovery Officer if such assistance is so sought.
30A.
Detention:
If any individual borrower or guarantor is to be held in detention
pursuant to clause (c) of sub-section (2) of Section 25 of the Act, a
request has to be made to the concerned police office to detain such
individual; and where such a request is made to it, the concerned police
office has to detain such individual.
31. Application to be made to institute action for
contempt: (1) In instituting action for
contempt pursuant to sub-section (2) of Section 27 of the Act, the Debt
Recovery Officer has to make an application setting out the matter to
the Tribunal or Appellate Tribunal.
If the Tribunal or
Appellate Tribunal receives the information pursuant to sub-rule (1)
that any person has violated an order given by the Debt Recovery
Officer, the Tribunal or Appellate Tribunal may institute action on
contempt against such person pursuant to Section 30 of the Act.
Top
Chapter-7
Provisions relating to Registrar
32.
Designation of Registrar: Government of Nepal has to designate one officer
level employee of the gazetted third class of Nepal Judicial Service to act as the
Registrar of the tribunal or appellate tribunal, in order to carry out functions relating
to general administration of the tribunal or appellate tribunal, subject to general
direction and control of such tribunal and appellate tribunal.
33.
Functions, duties and powers of Registrar: In addition to the functions, duties
and powers mentioned elsewhere in this regulation, the functions, duties and powers of the
Registrar shall be as follows.
(a) To examine
and verify documents including petitions, notes of defense and memoranda of appeals to be
filed with the tribunal or appellate tribunal and register them if they meet requirements
or endorse them with reasons if they cannot be registered,
(b) To verify
duplicate copies submitted in a case with the originals and certify them if they appear in
order, and if the originals appear to have some defects, to mention such defects and get
the concerned party to sign to that effect,
(c) To verify
whether documents submitted along with petitions, memoranda of appeal and notes of defense
are correct or not,
(d) To issue
summons and get it served,
(e) To appoint
days for appearance in cases, indicating reasonable reasons pursuant to law,
(f) To obtain
power of attorney and get a case assumed pursuant to prevailing law,
(g) To promptly
execute, or cause to be executed, actions as referred to in the order made by the Bench,
(h) To have
security or guarantee as per the order made by the Bench,
(i) To maintain,
or cause to be maintained, updated records including registration books,
(j) To maintain
personal records of employees,
(k) To safely
retain orders and directions in a serial order.
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Chapter-8
Provisions relating to remuneration and facilities
34.
Remuneration of member of tribunal and appeal hearing authority: (1) The members
of tribunal shall receive such monthly remuneration as prescribed by
Government of Nepal.
(2) The appeal
hearing authority shall receive such monthly remuneration as prescribed by
Government of Nepal.
35.
Housing facility:
(1) Monthly
facility of five thousand rupees shall be given to the members of tribunal and the appeal
hearing authority for the housing facility.
Provided,
however, that no housing facility shall be given to the member of tribunal or the appeal
hearing authority who has own house in the district where the tribunal or appellate
tribunal is located.
(2)
Notwithstanding anything contained in sub-rule (1), a monthly lump sum of two thousand
five hundred rupees shall be given to the member of tribunal or the appeal hearing
authority who is not entitled to the housing facility, for house repairing and sanitation
expenses.
36.
Vehicle and fuel facility:
One motor
vehicle with a driver and one hundred liter of petrol or diesel on monthly basis and five
liters of mobil on tri-monthly basis shall be given to each member of tribunal and appeal
hearing authority.
37.
Electricity, water and telephone facility:
(1) Expenditure
to be incurred in installing one line telephone in the residence of the member of tribunal
and the appeal hearing authority and amount chargeable for deposits therefore shall be
provided.
(2) A monthly
sum of one thousand five hundred rupees shall be provided in lump sum for tariff of
electricity, water supply and telephone installed in the residence of the member of
tribunal and the appeal hearing authority.
38. Dashain
expenditure: A sum equal to one month's remuneration shall be provided to the member of
tribunal and the appeal hearing authority each year for the Dashain expenditure.
39. Other
facilities: Provident fund, gratuity and pension, insurance, medial facility, daily and
traveling allowance for home country and foreign travel, leave and other facilities shall
be as prescribed by Government of Nepal.
Top
Chapter-9
Miscellaneous
40.
Power to have bench elsewhere:
The tribunal or
appellate tribunal may, in view of volume of petitions or appeals, have its bench in any
other plane under its jurisdiction for any certain period and carry out its activities.
41.
Provisions relating to duplicates:
The concerned
person may get duplicate copies of any document whatsoever attached with the case file of
a case filed in the tribunal or appellate tribunal by paying two rupees for each page.
42. Safety of case files, documents: (1) It shall be the duty of Registrar to secure the
case files and documents in the Tribunal or Appellate Tribunal.
(2) Except with the
order of the Member of Tribunal or the appeal hearing authority, no case
file, document and record, book in the Tribunal or Appellate Tribunal
shall be taken out and shown to any unauthorized person.
42A.
Power to have representation:
(1) A bank or financial institution making a petition, complaint,
appeal or note of defense or a borrower may appoint any legal
practitioner or accounts practitioner as its/his representative and get
represented by such representative in the Tribunal or Appellate
Tribunal.
(2) Notwithstanding anything contained in sub-rule (1), a bank
or financial institution may appoint any of its employees as its
representative and get it represented by such representative in the
Tribunal or Appellate Tribunal.
42B.
Service of summons outside
Kathmandu
Valley: If the Tribunal or Appellate Tribunal is to serve
the summons in a place outside the
Kathmandu Valley, it may depute any of its employees or request the
concerned District Court to serve the summons; and the summons shall be
served or caused to be served accordingly.
43.
Oath: The member of tribunal and the appeal hearing authority shall, prior to
taking up responsibilities of their respective offices, take an oath of own office before
the chief judge of the concerned Appellate Court in the format referred to in Schedule-7.
44.
Uniform of member: The member and the appeal hearing authority has to put on a
black cap, black coat and black shoes while on bench.
45.
Prevailing law to prevail: The matters contained in this Regulation shall be
governed by this Regulation and other matters by the prevailing law.
Schedule-1
(Relating to Rule 3)
Petition filed
in tribunal----------
Subject-------
---------------------------------------------Petitioner
Vs.
-----------------------------------------------Defendant
I/we, the
petitioner(s) hereby petition as follows.
1.------------------------
2.------------------------
3.------------------------
It is,
therefore, petitioned that, in this matter, an order of such matter be issued to so and so
person pursuant to so and so Act and Regulation.
The contents of
this petition are true and correct. If they are proved to be false, I/we shall bear and
pay according to the prevailing law.
Petitioner,
Authorized
person's signature-
Name of bank and
financial institution-
Address-
If there be more
than one petitioner, number 1, 2,3 has to be given and full name, surname and address of
the all mentioned and literate have to sign and other to put thumb impressions over there.
Done on ----day,
the ----day of the month of -----of the year ------
Note-
Contents of the
petition have to be mentioned in paragraphs with serial numbers; and the last two
paragraphs should not be given number, and the first should, to the extent possible,
indicate the Act, law under which the claim is made and the claim, and the second should
indicate the facts, as shown in the above format.
Schedule-2
(Relating to Rule 8)
Summons
issued by tribunal-------
As
-------bank/financial institution, situated at Ward No.----,
---Municipality/VDC,---District filed in this tribunal a petition on—case against you
on -------, you are hereby summoned to make presence in person or send an attorney or
legal practitioner pursuant to law to file a note of defense on the day on which this
tribunal remains open within fifteen days excluding the time required for journey. If you
fail to appear in person or do not send even your attorney or legal practitioner to file a
note of defense within that time limit, the case shall be decided in accordance with the
Act. None of your subsequent complaints shall be entertained.
Done on ----day,
the ----day of the month of -----of the year ------
Schedule-3
(Relating to Rule 17)
Tribunal---------
(1) Chairman
Mr.-----
(2) Member
Mr.------
(3) Member
Mr.----
Decision
Petition
registration No.---of the year –---
Case-
Petitioner's name,
surname an address-------------------------------------------------
--------------------------------------------------
--------------------------------------------------
Witness of Petitioner
--------------------------------------------------
Document
------------------------- |
Defendant's name,
surname an address --------------------------------------------------
--------------------------------------------------
--------------------------------------------------
Witness of Petitioner
--------------------------------------------------
Document
------------------------- |
Evidence
examined by tribunal
Witness---------------
Document------------
Short facts of
case-
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Verdict-
Upon studying
all documents of this case, the petitioner appears to claim so and so, the defendant
appears to contend so and so or so and so and so and so has happened; and because of so
and so evidence and so and so law, it is held to have so and so or as it appears so and
so, it is held to have so and so, we have handed down this decision. Done on ----day, the
----day of the month of -----of the year ------.
(1) Let it be
done so because of the verdict
(2) Let appeal
be made within the time limit
Note-
(1) Any one
member out of the deciding members has to write down or cause to be written down, on his
own. After the member who has so written down or caused to be written down or typed the
decision has signed the decision so prepared, the member who concurs the decision has also
to sign it.
(2) If, in
making decision, the members have a single opinion or details are different despite
divergence of opinion, a single decision has to be written down or caused to be written
down by those who have convergence of opinion and separate decision by those who have
divergence of opinion.
(3) One who has
written down decision as dictated by the chairman or the member, has to write down on the
left hand side at the end of decision that one has written down or typed it as dictated by
the chairman or member Mr.------ and sign there.
Schedule-4
(Relating to Rule 17)
Tribunal---------
Order
sheet
Petition
registration No.---of the year –---
---------------------------------------------------------------------------------------------------------------------Petitioner
and
---------------------------------------------------------------------------------------------------------------------Defendant
Order
-------------------------------------------------
Member
of tribunal
Date-
Signature-
Schedule-5
(Relating to Rule 21)
Memorandum of
appeal filed in appellate tribunal----------
Appeal
registration No.- or the year -------
So/so (full
name, surname and address of each)-------
Petitioner/Defendant
Appellant
Vs.
So/so (full
name, surname and address of each)------
Petitioner/Defendant
Respondent
As we are not
satisfied with the decision handed down in the case of---- by the ----tribunal on
-----requiring me/us to do so and so, I/we have made this appeal, attaching herewith a
proof of payment made for the amount in controversy in the case or fine and punishment of
such and such or while in detention. If the judgment made by the authority subsequently is
found reasonable, I/we shall bear and pay according to the Act for making appeal. I/we,
the appellant, have the following appeal claim in this matter.
1.------------------------
2.------------------------
Appellant,
So and so
residing in so and so place.
(If there be
more than one appellant, number 1, 2, 3 has to be given and full name, surname and address
of the all mentioned and literate ones have to sign and other to put thumb impressions
over there).
Done on ----day,
the ----day of the month of -----of the year ------
Note- This is a
general format of memorandum of appeal. Memorandum of appeal of any case ha to be written
in this format mutatis mutandis so as to fulfill the requirements under this Regulation.
Schedule-6
(Relating to Rule 25)
Summons issued
by appellate tribunal-------
As
-------bank/financial institution, situated at Ward No.----,
---Municipality/VDC,---District, filed in this tribunal a petition on—case against
you on -------, you are hereby summoned to make presence in person or send an attorney or
legal practitioner pursuant to law to file a note of defense on the day on which this
appellate tribunal remains open within fifteen days excluding the time required for
journey. If you fail to appear in person or do not send even your attorney or legal
practitioner to file a note of defense within that time limit, the case shall be decided
in accordance with the Act. None of your subsequent complaints shall be entertained.
Done on ----day,
the ----day of the month of -----of the year ------
Schedule-7
(Relating to Rule 43)
Oath
I------do
solemnly swear in the name of God that I shall discharge the functions assigned to me
as------ and those to be discharged by me pursuant to law honestly and to the best of my
knowledge and wisdom, being loyal to the country, Crown and duty, without fear, partiality
or enmity and being free from greed, avarice and favor. I shall not disclose any matter
related with debt recovery known to me in the course of discharging my duties to any
unauthorized person directly or indirectly in any case whether I hold or cease to hold
office, except in cases where such disclosure is required by law.
Signature-------
Name-----
Address---
Date-----
Person
certifying that it is true that oath has been taken-
Signature-------
Name-----
Designation---
Date-----
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