property owner expired
naveenraj jain
(Querist) 22 July 2014
This query is : Resolved
Respected sirs
A property situated in Bangalore. Mr.A gifted this property to his son mr.B thro registered gift deed. B later after expiry of mr.A gave the gift deed documents as colateral security to bank on behalf of Mr.C. Mr. C has defaulted the loan. During all this Mr. B died without any will. Loan was taken eight years ago. Mr. B expired three years ago. Surety of documents were physical not registered as loan. Encumbrance reflects no entry of loan from bank.
Now the bank people are persuading the family to vacate or pay the loan amount. Mr. C is hopeless and pauper now. What rights do the LR' s have with regard to right in this property and any solution on this from this platform will be grateful.
Vijyant Nigam (09807349001)
(Expert) 22 July 2014
Property is mortgaged as colateral security then the bank has right to recover its dues fron the said property
naveenraj jain
(Querist) 22 July 2014
Thanks sir. Process of recovery is not initiated nor any demand from banks till date. Only staff from banks told the family orally.
M/s. Y-not legal services
(Expert) 23 July 2014
If the borrower failed to make payment, guarantor is responsible for the said loan.
So the bank has rights to attach the secured property under section 13(4) of SARFASI ACT.
Dr J C Vashista
(Expert) 23 July 2014
Guarantor is also liable for refund of loan.
malipeddi jaggarao
(Expert) 23 July 2014
Mr.B delivered the documents to the Bank to secure loan for Mr.C. This is a creation of valid mortgage viz., equitable mortgage. If the principal borrower Mr.C. fails to pay Bank has got every right to recover the amount from the guarantor Mr.B. Since Mr.B is expired, the legal heirs of Mr.B. are not liable to pay the entire debt of Mr.C unless they sign fresh documents taking the liability of Mr.B on their head. However, their rights on that specific property is subject to satisfaction of the Bank loan of Mr.C. In other words, if the property is not sufficient to clear the entire debt, the Legal Heirs are not liable for the residual if they did not sign fresh set of documents taking the liability of Mr.B.given as guarantor.
You have to analyse the present value of that property and total dues to the Bank. If the present value is more than the total dues, instead of allowing the Bank to take action under SARFAESI Act and auction the property, the legal heirs can jointly represent the Bank that the principal borrower does not have any net worth to repay the loan, the original guarantor Mr.B. is deceased and we being the legal heirs of Mr.B., are willing to come for One time Settlement if the Bank waives part of interest. Generally in such circumstances, Bank may agree for OTS. If for any reason, bank does not agree only two options are available to the legal heirs - either to leave the property if its value is not more than the dues or repay the dues and take re-delivery of documents. Hope this is clear to you.
ajay sethi
(Expert) 23 July 2014
agree with Mr malipeddi
naveenraj jain
(Querist) 23 July 2014
Thanks you very much honourable experts especially mallipedi jaggarao ji for the insights to the problem
malipeddi jaggarao
(Expert) 23 July 2014
You are welcome Mr.Naveenraj.
Thanks to other experts who supported my view.
T. Kalaiselvan, Advocate
(Expert) 25 July 2014
The detailed advise and suggestion by expert Mr. Malipeddi Jagga Rao on the subject query is highly appreciated.
