Bank combining secured & unsecured loan for harassment
Divya
(Querist) 14 March 2014
This query is : Resolved
Respected Experts
we are facing a serious harassment issue by Kotak Mahindra Bank.
Home loan is taken by my father and there are several co-borrowers including my mother and two brothers. Father, mother and one brother are co-owners of a property.
my father/mother intend to foreclose the HOME LOAN on a priority basis, however the bank is not allowing us. My brothers had a credit card default for which bank has resorted to arbitration ex-parte fraudulent awards which are filed as decree before court for execution. These execution proceedings are already pending.
Bank does not co-operate to foreclose the home loan, they use SARFAESI ACT & delay foreclosure intentionally. Parallel, they send an official email stating that bank will not release the FLAT PAPERS till my father clears both home loan & credit card dues OF MY BROTHERS.
Please suggest if experts have any reference of RBI guideline in relation to this query or any other valuable input
Thankyou
Devajyoti Barman
(Expert) 15 March 2014
The bank is doing illegal things to club both loan dispute in single proceeding as SARFAESI applies to secured assets only.
File an application in DRT u/s 17 of the Act highlighting your intention to foreclose the loan. You will get necessary relief.
Biswanath Roy
(Expert) 15 March 2014
i agree with the wise opinion of Learned Mr. Devajyoti Barman.
Rajendra K Goyal
(Expert) 15 March 2014
Bank has right of lien and set off, on the assets of borrower to recover its outstanding loans although that security may not have been charged to that loan.
Bank is justified in not releasing the collateral security held in other loan, till its other loan are repaid.
However, Bank can not exercise this right if the collateral is not in the name of borrower.
Guest
(Expert) 15 March 2014
Although there is nothing wrong in clubbing secured and unsecured loan on the part of the bank for the purpose of recovery, but denial of foreclosure is illegal that can tend to make the agreeement voidable.
In fact, you need to take consultantion from some banking law expert to get rid of the harassment and even the problem of non-foreclosure, as the problem can become quite ticklish to handle by the passage of time and can even result in loss of property. of course instances are there that the said bank uses illegal means and unbelievable harassment to not only the borrowers, but also the witnesses as well as his unconcerned family members and friends to recover its money by hook or crook.
Even in one case my own son was tried to be harassed through undesirable phone calls to him in case of debt of one of his friend when he was not even witness in the case. I had to finally show the way to the recovery agents when they visited my house and appeared in my own presence.
You need to beware of such unethical banking practices.
Biswanath Roy
(Expert) 15 March 2014
As Learned Mr. Dhingra said in the first paragraph of his opinion I do quite agree with that but disagree to his observation as subsequently stated " denial of fore closure is illegal" which is not correct in as much as the author stated " Bank does not co-operate to foreclose the Home loan " which cannot be said as denial. So far I observed from the query that the brother who did not liquidate his dues relating to his Credit Card also acted as co-borrower in the Home loan that is why the Banker adopted the tricks to realize the debts before deciding the proposal for fore closer.
Guest
(Expert) 15 March 2014
Dear Shri Roy,
Adoption of trick does not sound legality in the action of the bank, as bank cannot arbitrarily and forcibly retain lien on the property when the debtors are willing to foreclose the home loan. The question arises, would the bank not charge interest on the outstanding amount of home loan after the date the debtors have shown their intention to foreclose the loan? Definitely not, which would be an unwarranted additional liability enforced on the debtors by the bank. In other words, the bank is forcibly keeping the family as a debtor for longer period with further ill intention to swallow their property by use of SARFAESI ACT, as the author has very clerly pointed out, "they use SARFAESI ACT & delay foreclosure intentionally." In fact, what I think, the bank officials are not willing to get the loan cleared due to their ill intentions.
Default in credit card and foreclosure of home loan are two different things things. Ethically, whichever of the two loans is being cleared by the party should be readily accepted by the bank. To recover the outstanding amount of credit card, the bank is free to obtain a separate attachment decree from the DRT independent of the home loan case, may that be intended to be enforced on same property of the defaulter, but should not unethically adopt coercive and arbitrary methods to withhold foreclosure of home loan.
The author has already stated that for credit card default the bank had resorted to arbitration ex-parte fraudulent awards which are filed as decree before court for execution. May or may not be that a fraudulent award, the bank should adopt legal ways to recover its money, not by coercive and unethical way.
Devajyoti Barman
(Expert) 15 March 2014
EVEN IF THE CO-BORROWER OF THE HOME LOAN HAPPENS TO BE DEFAULTER OF CREDIT CARD LOAN, BANK CAN NOT MERGE BOTH LOANS TOGETHER.
PERSONAL LOAN IS NOT A SECURED LOAN AND HENCE NOT AMENABLE TO SARFAESI Act.
T. Kalaiselvan, Advocate
(Expert) 15 March 2014
Bank's refusal or delaying tactics to foreclose the home loan for the sake of impending credit card loan by other person who may be a co-borrower/guarantor or a third person, is not justified and is illegal. The Banking Ombudsman may be approached for immediate relief, incase no relief, then legal action is the only option.
Divya
(Querist) 17 March 2014
thankyou experts....
K.K.Ganguly
(Expert) 17 March 2014
1. The Bank is within its right to club multiple loan accounts of the Borrowers or Co-Borrowers while initiating SARFAESI Proceeding to realise its outstanding,
2. The Bank can do it even if one account is standard but the other one is a NPA,
3. It is a standard practice followed by the Banks all over to realise its outstanding amounts.
K.K.Ganguly
(Expert) 17 March 2014
1. The Bank is within its right to club multiple loan accounts of the Borrowers or Co-Borrowers while initiating SARFAESI Proceeding to realise its outstanding,
2. The Bank can do it even if one account is standard but the other one is a NPA,
3. It is a standard practice followed by the Banks all over to realise its outstanding amounts.
Biswanath Roy
(Expert) 17 March 2014
MAY I BE PERMITTED BY THE LEARNED EXPERTS TO INVITE THE LEARNED EXPERT MR. JOSEPH WILFRED WHO IS ONE OF THE SENIOR MOST PERSON IN BANKING LAWS AND PRACTICE TO RENDER HIS VALUABLE COMMENT OVER THE QUERY FOR WHICH WE ARE INTERESTED. B. N. ROY.
prabhakar singh
(Expert) 17 March 2014
FOR Sure! Why not?
Waiting till then.
Guest
(Expert) 17 March 2014
Joseph Wilfered will be quite welcome.
Biswanath Roy
(Expert) 17 March 2014
@ Learned Mr. K. K. Ganguli & Learned Mr. Prabhakar Singh ji,
It appears from the query that the author borrower wanted to fore close his Home Loan account which was not entertained by the Banker viz., otherwise refused that cannot made the Borrower a defaulter in liquidating debts to BANKER under such circumstances HOW THE BANKER CAN INVOKE SEC.13 OF SARFAESI ACT?
Biswanath Roy
(Expert) 17 March 2014
AUTHOR DIVYA,
I do not know which state you belongs to, yet I take it a pleasure to assure you protection from SARFAESI ACT if you brief me as Senior Counsel in your case. I shall stand for you without any professional fees to win your case. Immediately you shall have to file a case in the High Court under Article 226 of the Constitution of India in as much as your legal right has been infringed by the inaction of the Bank also natural justice was denied. It will be a very good case for you. For more information you may contact me direct through my E-mail-bnroy.advocate@gmail.com
Divya
(Querist) 18 March 2014
Rspcted Experts,
Bank is not showing the credit card dues in the SARFAESI notices & actions. SARFAESI states only the home loan details & bank has sent a private email to us that till we clear the home loan & credit card dues together, bank will not release the title documents.
there are several points...is one-co-borrower liable to jeopardize the investment of the property holder (true owner).. is that co-borrower a co-owner of property i.e. can be legally be called as a true property owner coz Supreme Court of India is very clear that unless the owner has contributed in purchasing the property on account of IT details, such owner cannot be held as a lawful owner of property...
And wrt Credit Card dues, i am equally making efforts to set aside execution proceedings and also the arbitration award on ground of big FRAUD...HEnce in such event how the bank can claim that credit card amount if its disputed & extremely fraudulent can be recovered by harassing senior citizens with their lifelong property earnings.
Thankyou
Biswanath Roy
(Expert) 18 March 2014
@ Divya
According to my views applicability of SARFEASI ACT in your case is wrong, capricious , vindictive and highly illegal and can be said as atrocity. I have no idea about your credit card dispute as I have no scope to go through the documents in your hand.
K.K.Ganguly
(Expert) 18 March 2014
1. Bank will enforce security interest only for the outstanding amount mentioned in its Demand Notice issued u/s13(2) of SARFAESI Act,2002,
2. You can foreclose your account by paying the entire outstanding for which you shall have to deposit the said amount with the Bank. There is no question of co-operating or non-coperating in your foreclosure of the loan account. Court/Tribunal will not listen to such arguments,
3. Whether the property really belongs to the said co-borroer or not has to be decided by the civil court for which you shall have to file a suit for declaration that he is not the real owner of the property since he has not paid for the same. But till that declaration is made, he is the Title holder of the said property which has been mortgaged with the Bank by him,
4. For getting the Title documents, I suggest that you file a SARFAESI Application before the DRT within the stipulated period and submit there that you want to pay off the dues & get the Title Documents before the DRT,
5. If you get order as above, the Bank shall have to handover the said Title Deed to you while collecting the DD from you before the DRT,
6. If the Bank fails to do that, you will not handover the payment & from that day onwards, no interest on your outstanding can be charged by the Bank till they return you your original Title Deed,
7. Handle the matter carefully,
8. Engagae a lawyer having expertise in dealing with SARFAESI matters before DRT & DRAT.
Biswanath Roy
(Expert) 18 March 2014
The question remains if the Bank otherwise refuses foreclosure of Home loan can the Borrower be said as DEFAULTER or in other words can the borrower be said as default in repayment of secured debt? In such a case can the BANK INVOKE SEC.13(2)of the SARFAESI ACT?
K.K.Ganguly
(Expert) 18 March 2014
1. For fore closing the home loan account, the Borrower does not have any need to take any permission or co-operation from any body of the Bank,
2. Neither does he require to wait for an auspicious time to fore close the said account,
3. All he is supposed to do is to make full payment of his entire outstanding amount shown in his said loan account,to the Bank,
4. It can be paid through ECS or by depositing at the counter,
5. If the counter man refuses to accept the said DD, the Borrower can sent it to the Bank by speed post u/copy to the higher ups of the Bank.
Divya
(Querist) 18 March 2014
Rspcted Sir Ganguly,
Just a clarification to ur post....Banks follow different procedures for foreclosure...Eg HFDC BANK home loan section will co-operate & tell u the amount on d spot required for foreclosure & will direct when documents will be handed over to the borrower...Another eg is where im aggrieved i,e, of kotak bank. here strict rules exist where i have to send CS an email & then after 15 working days, they will send a foreclosure letter with calculations of future EMI for bank. w/o this process, nobody can proceed & then later procedures follow...
Please read all my posts carefully to understand that bank only wants to harass by delaying foreclosure and at d same time wants to retain the property documents despite us willing to pay the entire home loan foreclosure amount. And to top it, banks have daily different amounts due to interests, and other components maybe.
K.K.Ganguly
(Expert) 19 March 2014
1. I am aware about the tricks followed by the private bank's particularly the bank you named,
2. But your problem finally cristalised to not knowing your final outstanding amount for fore closing the loan account,
3. You can collect the statement of accounts & pay off the outstanding debt leaving the fore closure charge, if charged by the said Bank,which can be paid after being informed by the bank,
4. Alternatively the outstanding can be foreclosed infront of the DRT & the Title documents can be collected there itself,
5. Never, expect that the bank will handover the Title documents to you, once the loan account is fore closed, untill you clear your credit card dues.They will get the chance to armtwist you by refusung to handover the said documents to you without putting it in black & white.
Biswanath Roy
(Expert) 19 March 2014
Domestic procedure and rules of a Bank if interfere with or encroached upon or infringes the legal,fundamental or constitutional right of a citizen then such rule or procedure is illegal and relief can be obtained by invoking Article 226 of the Constitution of India. DRT procedure cannot be preferred for three reasons. namely,-(a) the relief is not instanteus and adequate; (b)it is lingering, delatery, harassive; and (c) no remedy is available for harassing a borrower who is a citizen of INDIA. The procedure of the Bank OUGHT TO BE TO RETURN BACK THE TITLE DEED TO BORROWER IMMEDIATELY AFTER THE FULL PAYMENT OF DEBTS. Otherwise the Bank will be responsible for preventing the borrower from enjoying his right to possession of the Title Deed without any lawful cause of pecuniary obligations and debarring its entitlement to him as title holderof the property.
RAJU O.F.,
(Expert) 19 March 2014
If bank had taken action under SARFAESI, and issued Demand Noticeu/S13(2) you have raise your objections by writing within 60 days from date of Notice. If Notice for Possession was issued, prefer Securitisation Application before concerned DRT challenging such action through an expert lawyer. If bank did not close your home loan account on remittance of dues, approach Banking Ombudsman.
Sudhir Kumar, Advocate 
(Expert) 16 March 2014
