Ajay Gupta 07 July 2018
Hello Experts,
My relative mortgaged his property in 2009 by taking a loan (Rs.10,00000) from me. According to the registered morgage agreement, he suppose to pay 1.5% interest monthly and princpal amount in 3 years. But he didn't pay any interest or principal amount so far. We are planning file a money recovery summary suit. I want to know, how the court calculate the interest rate? Is it going to be simple interest or compound interest monthly/quarterly/yearly?
Thank You.
Dr J C Vashista (Advocate) 07 July 2018
Did you issue a legal notice for redemption of mortgage after expiry of 3 years of the loan amount?
There must be some other term and condition in the mortgage deed regarding recovery of loan and interest. Show the document to a local prudent lawyer for better appreciation of facts.
There is no question of compounding the interest on loan amount.
Dr J C Vashista (Advocate) 07 July 2018
Did you issue a legal notice for redemption of mortgage after expiry of 3 years of the loan amount?
There must be some other term and condition in the mortgage deed regarding recovery of loan and interest. Show the document to a local prudent lawyer for better appreciation of facts.
There is no question of compounding the interest on loan amount.
Ajay Gupta 07 July 2018
Hello Sir,
No, we haven't given any legal notice so far. He is our relative and prayed us to wait. The document says, "if the principal amount and interest is not paid by 01-08-2012, we have a right to extract that amount from the morgage property".
Can you please please tell me what would be our total recovery amount?
Thank you for your time.
SIVARAMAPRASAD KAPPAGANTU (Retired Manager) 07 July 2018
Better consult a local Lawyer with the document. Normally a Mortgage is valid for 12 years. However, the underlying debt is horribly time barred as the last date for payment of the amount was almost 6 years back. When the borrower was not paying, you should have caused to issue a legal notice immediately on due date and proceeded for further legal action, notwithstanding the fact he is your relative. There are no exceptions from Limitation Act for transactions between relatives.
SIVARAMAPRASAD KAPPAGANTU (Retired Manager) 07 July 2018
Without studying the document based on which the loan is given, it is impossible to give opinion. Therefore, please do consult a Lawyer in your area with the relevant documents.
P. Venu (Advocate) 07 July 2018
Why you want to go for a recovery suit when you have the option of seeking foreclosure of the mortgage?
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