Prasad Shetty (Developer) 20 May 2012

Co-operative bank not returning housing loan documents

I had taken a housing loan from Mahanagar Co-operative bank in 2006 and now have closed the loan by making full and final payment to the bank , but now the bank is saying that the original house documents cannot be returned as I had stood guarantor for a personal loan to another person in another branch and that loan has a outstanding amount of 3 lacs.

My question is:

Does the bank have the right to keep the orginal housing loan documents with them even if the loan is completed. ?
Can the housing loan document be held up by the bank if the other person fails to repay his personal loan.
If the other person fails to repay his personal loan for which I am one of the guarantor. how can I be held responsible or what would be my liability.
Can I take a legal help and get my document released from the Bank.

Expecting a favouribel respone from the team

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Anjuru Chandra Sekhar (Advocate ) 20 May 2012

You are guarantor to a personal loan in some other branch. If that personal loan becomes NPA the bank has a right to proceed against guarantor by filing a suit for recovery of dues in a civil court. The bank has right to give information relating the properties of borrower and guarantor to Civil court in case there is no security available for the personal loan taken. On receipt of information relating to properties, the court issues attachment order of the properties. But without a court attachment order bank on its own cannot take law into its own hands and keep your property documents with it, that too when they belong to some other account. It is not legal.

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