Enforcement and Bankruptcy Law Article 67 – Cancellation of Objection
The creditor whose claim is objected to may file a lawsuit for the cancellation of the objection within one year from the date of notification of the objection by applying to the court and proving the existence of their claim under the general provisions.
If the court rules that the debtor’s objection is unjustified in this lawsuit, and if the debtor is found to have acted unjustly and in bad faith in the enforcement proceeding, the creditor may, upon the request of the other party, be awarded appropriate compensation amounting to not less than twenty percent of the rejected or adjudicated amount, depending on the circumstances of both parties, the nature of the case, and the tolerability of the ruling.
If the objector is a guardian, custodian, or heir, the awarding of compensation against the debtor depends on proving bad faith.
The creditor who misses the deadline for filing a cancellation of objection lawsuit as specified in the first paragraph still retains the right to sue for their claim under the general provisions.
What is a Lawsuit for Cancellation of Objection?
It is a lawsuit filed to cancel the objection in order to continue the enforcement proceedings when the enforcement initiated by the creditor is stopped due to the debtor’s objection.
The Competent Court for the Cancellation of Objection
The competent courts are generally the civil courts of first instance; however, depending on the nature of the claim or demand, the peace courts, commercial courts of first instance, or consumer courts may also have jurisdiction.
In cancellation of objection cases, general procedural rules apply. Since the court examines the case according to general provisions, general rules of evidence and proof are valid. This case is subject to fees according to general provisions. However, the creditor’s advance fee of five per thousand paid when filing the enforcement request is refunded to them or, if the creditor requests, credited toward the cancellation lawsuit fee.
The judgment given at the end of this case, once finalized, constitutes a final judgment.
Statute of Limitations for the Cancellation of Objection Lawsuit
The cancellation of objection lawsuit must be filed within one year from the date the objection is served (Enforcement and Bankruptcy Law, Article 67/1).
The decision of the Supreme Court General Assembly of Civil Law dated 18.06.2019, numbered 2017/19-1651 E., 2019/707 K.:
The period specified in Article 67 of the Enforcement and Bankruptcy Law (İİK) is a forfeiture period. A forfeiture period is the time during which the right holder fails to perform the actions or procedures required by law or contract within the specified timeframe to protect their right, resulting in the termination of that right. At the end of the forfeiture period, the termination of the right occurs automatically without the need for the opposing party or debtor to take any action. The forfeiture period expires automatically once elapsed. Forfeiture periods have the nature of objections. Parties may raise the forfeiture period defense at any stage of the case, even after the decision has been overturned. Furthermore, the examination of forfeiture periods is not left to the discretion of the parties. The judge must consider it ex officio and subject it to investigation and review.
In light of this principle and explanations, when evaluating the specific case; upon examination of file No. 2010/308 of the Nazilli 2nd Enforcement Office, it is understood that the plaintiff, T. Vakıflar Bankası T.A.O, initiated enforcement proceedings to collect a total debt of 49,824.66 TL against the defendant … and third-party debtors, that the defendant timely objected to the payment order on 13.06.2011, that the objection petition was not served to the creditor pursuing the enforcement, and that the plaintiff filed a lawsuit for annulment of the objection on 01.10.2014.
As detailed above, the annulment of objection lawsuit must be filed within the one-year forfeiture period, and according to clear legal provisions, the filing period starts from the notification of the objection. If the objection to the payment order is not served to the enforcement creditor in accordance with the provisions of Notification Law No. 7201, the one-year period stipulated by law will not begin. Considering the regulation in Article 67/1 of the Enforcement and Bankruptcy Law (İİK), it is also clear that the creditor’s execution actions in the enforcement file do not equate to the notification of the objection. In this case, the court should consider that the lawsuit was filed within the deadline and proceed to examine the merits of the case and make a decision accordingly.
What is Enforcement Denial Compensation?
If a cancellation decision is made as a result of the objection annulment lawsuit, it is the compensation that the debtor must pay. If the debtor’s objection is found to be unjustified, the debtor must pay 20% of the disputed debt amount in favor of the creditor as compensation.
(Closed) 6th Civil Chamber, Case No. 2009/9943, Decision No. 2010/3705
“Case Text”
COURT: … Enforcement Court
The decision rendered by the Enforcement Court, dated and numbered as stated above, was timely appealed by the plaintiff. All documents in the file were read, and the matter was duly considered and deliberated.
The plaintiff creditor initiated an enforcement proceeding with a request for eviction to collect a total rent of 11,060 TL for the rental period from June 6, 2008, to July 6, 2009, against the defendant debtor tenant … and the defendant joint guarantor …. Upon the defendants’ objection to the enforcement proceeding, the plaintiff applied to the enforcement court for the removal of the objection and continuation of the proceeding.
The court decided to remove the objection concerning the defendant … for 2,549 TL rent, 127.50 TL accrued interest, and 254.90 TL penalty clause; to grant the plaintiff enforcement denial compensation amounting to 1,019.60 TL, which is 40% of the accepted principal debt; to grant the defendant … enforcement denial compensation of 3,951 TL, which is 40% of the rejected debt amounting to 9,989 TL; to reject the case against guarantor Necla; and to grant the defendant guarantor enforcement denial compensation of 4,971 TL, which corresponds to 40% of the enforcement amount.
1- According to the file contents, the collected evidence, and the reasoning on which the decision is based, the plaintiff’s appeal objections outside the scope of the following paragraph are unfounded.
2- Regarding the plaintiff creditor’s appeal objections related to the enforcement denial compensation: Since the plaintiff accepted in the lawsuit petition that the eviction occurred on 11.10.2008 and the defendant is responsible for the rent payments up to this date, and because the rent amount after this date requires litigation, the plaintiff creditor cannot be held liable for enforcement denial compensation based on this amount. In this case, the court should not have granted enforcement denial compensation in favor of the defendant debtors based on the rejected amount. Therefore, it was correct to overturn the decision because granting enforcement denial compensation to the defendant debtor on the rejected portion was incorrect.
CONCLUSION: For the reasons explained in paragraph 2 above, it was unanimously decided on 31.3.2010 to accept the plaintiff’s appeal objections, to OVERTURN the decision regarding enforcement denial compensation, and to refund the prepaid appeal fee to the appellant upon request.
Results in Cases of Acceptance and Rejection of the Lawsuit
If the case is dismissed, the enforcement proceeding is canceled upon the finalization of the decision, and compensation is awarded upon request.
If the case is accepted, the objection is annulled; since the court finds the debtor liable, it cancels the debtor’s objection and orders the debtor to pay the debt. The creditor may submit this decision to the enforcement office to resume the suspended proceeding and request the seizure of assets (Execution and Bankruptcy Law, Article 78), and compensation is awarded upon request.
What is the difference between the annulment of objection and the removal of objection procedures?
After a lawsuit for annulment of objection is filed, it is not possible to file a lawsuit for removal of objection; however, if the order is reversed, it is possible to file a lawsuit for annulment of objection after a lawsuit for removal of objection. While the annulment of objection lawsuit is filed in the courts mentioned above, the removal of objection requires application to the enforcement court. The result of the annulment of objection lawsuit constitutes a final judgment, whereas the ruling in the removal of objection case is not final and only constitutes a determination within enforcement law. There is also a difference in the statutes of limitation: the annulment of objection lawsuit can be filed within one year from the date of notification, while for removal of objection, this period is six months.
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