services, but some safeguards are to be kept in view while giving effect to the agreement engaging such enforcing agencies. Such agreement restricts the rights of the commercial bank in engaging enforcement agents for effecting recoveries under the Act as per clause (xii) of the Circular dated April 24, 2008. The process of recovery through the process of the Civil Court or the Debt Recovery Tribunal stands at a different footing. But in the case, where the recovery process is to be initiated under the Act, it is the Bank, the secured creditor, who is permitted to realize its security without the intervention of the Court or the Tribunal. Keeping in view the aforesaid fact, though the circular dated 3.11.2006 permits outsourcing of certain services, but such outsourcing is restricted in case, if the process of recovery is to be initiated under the Act. The Act and the Rules contemplate an action by the secured creditor through its authorized officer. It is Authorized Officer who has taken action under the Act, when notice under Section 13(4) of the Act, was published for deemed possession of the property. Before the issuance of the notice under Section 13(4), the enforcement agency is not expected to take any action. In fact that is the stand of the Chief General Manager of the Bank. Even after the possession in terms of Section 13(4) of the Act is taken, the secured creditors can claim such expenses as are properly incurred in terms of Section 13(7) of the Act. The said provisions contemplated for reimbursement of expenses which the secured creditors have incurred. There cannot be any fixed expenses payable to the Enforcement Agents, irrespective of the costs, charges and expenses incurred by such Enforcement Agents. Therefore, the fixed amount claimed by the Enforcement Agency, without proof of actual expenses, is beyond the scope of Section 13(7) of the Act or the guidelines issued by the Reserve Bank of India.
