Npa and deficiency in service by bank
Raj Kumar Chadha
(Querist) 02 November 2011
This query is : Resolved
A loan from a bank disbursed only half of the requirement of the project report which was got prepared by bank itself.The amount mostly was tranfered to clear the interest accrued during the construction period. The project never started. Properties worth hundred times more value than the project are mortgaged with bank as security.Rs 24.77 lakhs was required for the project as per the project report as banks share. They reduced it to Rs 19.20 lakhs and inactuality disbursed only Rs 13.00 lakhs. Went to the court for Rs.56.00lakhs for recovery.their books shows Rs. 13.00 lakhs only.We have offered them to pay Rs13 lakhs but since our properties worth Several crores are mortgaged with them they do not agree.They have inflated the NPA amount also. When asked how Rs 13 lakhs becomes Rs 56 lakhs in just 2.5 years the reply is 19.5 % interest plus 19.5%penal interest plus other charges etc. Originally interest rate was applied at 12.5%. we are a very senior couple and can not have the energy to go on fighting with bank, please advise us how to get our properties released from the bank.The ammount which we invested in this project as our share has gone waste.R.K.CHADHA PARI MAHAL KUNJWANI NH1 JAMMU J&K. MOB 09419198364
Parthasarathi Loganathan
(Expert) 02 November 2011
The facts apprised in this case contravenes to the credit processing and appraisal norms of the bank.
Raj Kumar Chadha
(Querist) 02 November 2011
Can you help us please in this matter,we wnt to pay the ammount to bank and get our properties released.We are an issue less couple and are now afraid of being cheated by the bank to grab our properties. If you do not mind we are ready to pay for the written advice from youfor the court through our advocate in jammu.If you want we can send you the written arguments placed in the court which cllearly explain the under financing by the bank. RAJ KUMAR CHADHA JAMMU
ajay sethi
(Expert) 02 November 2011
bank must have filed statement of account with application before DRT . if amount payable was Rs 13 lakhs 2 and half years back have you paid any maount to bank in meantime .
agreement signed with bank must have mentioned that in event of default in payment of monthly installment interest will be charged at 19.5%? what are the clauses in agrement signed by you ?
Raj Kumar Makkad
(Expert) 02 November 2011
Generally no one reads terms and conditions of bank while seeking loans/advances and banks derive maximum benefit of this situation. In your case, your lawyer can defend your matter in better way. It is advised to come to one time settlement which may reduce penal interest etc. File your objections before DRT.
prabhakar singh
(Expert) 02 November 2011
Yes! i agree,as view expressed by mr.makkad is based on our day to day practical experience.
Surendra Gupta
(Expert) 03 November 2011
If you want detailed advice, please send the relavent papers skguptafbd2@gmail.com
Raj Kumar Chadha
(Querist) 03 November 2011
Stage of default never came.The case is in the local Bank cases court and not in DRT.IN the state of J&K DRT does not apply. In 1981 after getting the project report for a franchise unit of Mohan meakins,got prepared from J&K ITCO for a project cost of Rs 32.00 lakhs bank approved Rs 24.77 lakhs at 12.5 % interest and 20% margin as their share being a registered small scale unit. But they while sanctioning cut it to Rs 19.20.they started releasing the payments but In 1981 sept when a new manager came to this branch he stopped the release of payments. Wanted a MIG Flat to be got purchased for him. Those days the cost of the flat was Rs 80000.only. we refused and the disbursement stopped.Then we have to give in writting topay 19.5% to get the balance payments and also gave more properties as security. But again they they instead releasing the balance appropriated the interest acrued of 4.75 lakhs by transfering the money to other account and the rest of the amount was payed to us by 1983 april. The unit never came into production. No transanction after may/ june 1983. Bank went to the court in December 1986/Jan 1987 for recovery of Rs 56.00lakhs.
Our subsequent request to rehablitate the unit was refused even after the RBI guide lines to rehablitate the unit. On inquiry by the RBI from the Bank for underfinancing Bank put the fault on ITCO report WHich they them selve got prepared and flattely
refused to rehablitate the unit.They recieed Rs 7.5 lakhs insurance money and the result is balance of RS 13.00 lakhs in their account outstandig.
We think there is a contractual obligation by both the parties to complete the project but we do not know the law for this point. Can they under finance the unit get their money and interest by selling our properties. RAJ KUMAR CHADHA
Raj Kumar Chadha
(Querist) 10 November 2011
Mr Raj kumar Makkad please do you have any sugetion for my case . One of the banker friend told me that I can ask the court to release my property by paying Rs 13.00 lakhs in the court. The case for interest portion can continue to be settled on the basis of the merit of the case as being deficient in service. Raj Kumar Chadha Jammu.
