Can bank take over house of borrower if it is unsecured

To my knowledge, it cannot seize personal properties.

After the realization of proceeds by selling the secured assets the Bank has to apply to DRT for recovering shortfall under Security Interest Enforcement Rules, 2002.  Then DRT attaches personal properties of the borrower when it is provided with the list of personal properties of borrowers. 

Thanks both of you. In response to Chandrasekkhar, the bank has indeed gone to DRT and asked permission to attach personal properties. The DRT declined it saying that the bank has not provided details of the recovery done so far.

My question is: If the bank does provide details of the recovery so far, can the DRT give them authority to attach personal properties which have not been pledged to the loan. Also, how will the bank come to know who owns what property ? Suppose one of the partners sells his property before DRT serves notice of attaching personal property, does the sale become void ?

Rgds,

Ram

If the bank does provide details of the recovery so far, can the DRT give them authority to attach personal properties which have not been pledged to the loan. Also, how will the bank come to know who owns what property ?

DRT does not give authority to bank to attach personal properties which have not been mortgaged to bank.  It attaches on its own and appoints a receiver to sell the property and credit the proceeds to the loan account of the borrower.  Borrowers give details of Assets and Liabilities in the form of statement while availing loan facility.  That is one source.  Another is bank can appoint private detective agency and gather details about properties owned by borrowers.

Suppose one of the partners sells his property before DRT serves notice of attaching personal property, does the sale become void ?

Before the property is sold the bank can alert the DRT that such and such property is being planned to be sold off by borrower hence interim orders may be issued avoiding him from selling off those properties.  However after property is sold there is nothing much DRT can do. 

If the amount of loan to be recovered is less than Rs. 10 lacs then Civil court will collect the dues from borrower, instead of DRT. 

1) The creditor can act against secured assets only.

2) You can resist any action to attach unsecured assets even by criminal action.

3) Yes they can file action for claiming the balance and can attach personal properties only after court decree not earlier

4) You can file civil action in local courts for injuction and can also create third party rights on all your personal properties

5) You can also issue  stern properly drafted notices personally to all the responsible staff of the lender that they should desist from illegal actions otherwise they will be responsible for  criminal  action  and  heavy demages.by you and your associates..

However you should take help of expereinced advocate in this matter who have handled such matters.

THESE ARE TRICKS OF DEFENSE.

Bank cannot attach properties which are not secured to them. But through DRT, the Court can attach such personal properties of the borrowers/guarantors for recovery of the dues. You have to contest the case in DRT properly to avoid attachment and sale of such properties.

Mr. chandrasekar  has rightly guided you in this matter. It is clearly evident from your query that you  or your partners have personal assets in your name. Afterall it is public money which has to be used by banks for extending loans to the business class who badly require finance for smooth running of their business.  People with clear conscience never hesitate to return the money which they have borrowed.  Banks have various means to recover the amount if you have substantial amount of assets. They can attach the property and bring it for for sale eventhough the  property is unsecured.  You will be treated as wilful defaulter and they may classify you as a fradulent borrower.

Mr.Raju,I need to talk to you.I even sent a personal message on this website.Please respond to the same.

Regards,

Abhishek