Valuable security
Querist :
Anonymous
(Querist) 10 September 2011
This query is : Resolved
Is the loan letter/loan sanction letter given by bank is VALUABLE Security.Loan is not actually disbursed.
Shailesh Kr. Shah
(Expert) 10 September 2011
In my opinion, Sanction letter is not 'valuable security' but important document.
Guest
(Expert) 10 September 2011
IT CAN BE USED AS VALUABLE SECURITY AS PER SECTION 30 OF I.P.C.
Guest
(Expert) 10 September 2011
I would like to differ with the views of Shri Ganesan, as in accordance with the provisions of sec. 30 of the IPC, no legal right can be created, extended, transferred, or be released on the sanction letter of loan of a bank TO ANY ONE ELSE other than the person in whose favour the loan has been sanctioned. The loan can either be released only to the loanee even if the sanction is mortgaged or pledged in favour of some one else as a matter of security. SO, THE BANK LOAN SANCTION CANNOT BE TREATED AS A VALUABLE SECURITY, LIKE AN FD, BILL OF EXCHANGE, SAVINGS CERTIFICATE, CHEQUE OR DRAFT, ETC..
Extract of Sec.30 of IPC is reproduced below for information about the contents of the section.
EXTRACT of Sec.30
"The words “valuable security” denote a document which is, or purports to be, a document whereby any legal right is created, extended, transferred, restricted, extinguished or released, or where by any person acknowledges that he lies under legal liability, or has not a certain legal right."
Guest
(Expert) 10 September 2011
You are welcome Shri Ganesan.
M/s. Y-not legal services
(Expert) 10 September 2011
Ganesan sir, am also getting doubt.. How the i.p.c provision will be maintainable for this loan transaction.
prabhakar singh
(Expert) 10 September 2011
TRUE THE BANK LOAN SANCTION CANNOT BE TREATED AS A VALUABLE SECURITY @ AT ANY RATE OF MATTER IT CAN BE TREATED AT BEST MEMO OF UNDERSTANDING FROM THE BANK IN FAVOR OF DEBTOR THAT DEBTOR QUALIFY FOR LOAN ADVANCE.
