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Bank recovery in SARFASI Act,

(Querist) 06 April 2011 This query is : Resolved 
Hi, friends my qus. is regarding SARFASI act,2002.
If a borrower has taken the loan from the bank of 25 lacks by mortgaging his flat and if he is unable to repay the amt. of EMI for 90 days and 60 days period of notice. in case the value of the mortgaged property comes down due to some reason say recession. and the bank is unable to recover the whole amt. of loan and the borrower became isolvent then wht r the remedies bank has in that situation to recover the amt. of loan.
Is there any remedy provided under the SARFASI Act???
DEFENSE ADVOCATE.-firmaction@g (Expert) 06 April 2011
If you are from the bank the matter will stuck up in legal proceddings .
Advocate. Arunagiri (Expert) 06 April 2011
The bank can recover the balance amount from the person through normal civil proceedings.
M V Gupta (Expert) 07 April 2011
If the borrower is declared insolvent, the bank will have to figure in the Ins. procfedings as an unsecurred creditor for the balance amount. The Bank having already enforced its securtiy it would become undecured creditor for the balance amount. If there are any guarrantors, the bank may enforce the guarantees to recover the bakance amount.
Sreedhar Valiveti (Expert) 07 April 2011
Mr.Manoj, your question is not in complete status. whether bank has auctioned the secured property?
how ever which kind of loan it was? if it is housing loan, bank must have obtained letter of undertaking from respective employer of borrower if he is an employee. If borrower is an entrepreneur then he much possess some other movable/immovable properties which will be disclosed at the time of loan availing. So basing on all track only bank can initiate further, if bank already auctioned that house. So for better clarification, need clear reply.
Rajinder KumarAhuja9990725300 (Expert) 07 April 2011
It is clear that you are hiding important facts.So far my knowledge goes banks have taken over the possession of the property.this means they can sell the property and appropriate the sale proceed towards the recovery of loan amount. If there is any shortfall that has to be recovered from borrower's income. salary or other assets of the borrower.After that if any guarantor was in that deal he will also be liable simultaneously.If there was no guarantor the amount will have to written off by the bank after all the avenues of recovery have failed.If the person has been declared insolvent before the date of sale of property, it will vest with the official assignee/liquidator and bank will claim money from him as a secured creditor.
RAJU O.F., (Expert) 08 April 2011
Bank can file Original Application before DRT or if the balance dues is less than Rs.10 lakhs, in civil court, if the secured property was sold and credited to loan dues.The decree can be enforced within 12 years from the date of decree.
malipeddi jaggarao (Expert) 08 April 2011
I agree with all the experts above. Your question seems to be hypothetical. As commented by Mr.Ahuja, we presume the Bank has served noticed and you sense that even if the Bank sells the property, the sale proceeds might not be sufficient to recover the entire dues. In such Bank has other avenues as listed by Mr.Sreedhar, and Mr.Ahuja. Even if these are not sufficient Bank will proceed as explained by Mr.Arunagiri and Mr.Gupta and Mr.Raju. But I would like to add that Bank will proceed against the guarantors simultaneously. It will not wait till the outcome of all the above actions.
Manoj kumar sahu (Querist) 08 April 2011
Thanks all the experts for your overwhelming response.

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