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Chandan Gupta (Manager)     28 March 2014

Sarfaesi act , 2002

Dear,

Company A has taken working capital limit from bank and Individual B (Guarantor) has mortgaged a property for the same. the property mortgaged is taken on lease form state government and the lease agreement clearly prevents mortgaging the property and gives power to prevent the same.

 

Company A is paying Interest regularly but still the bank plays foul and declares NPA. Sends notice to guarantor to regularize the account. Guarantor pays the interest to regularize the account. Bank sends notice that the mortgaged property will be taken if entire loan not repayed in 60 days. Loan has never been recalled.

 

Company A ask for restructuring of account. Bank agrees and asks to pay small token amount. Company A sends token amount with letter giving 3 restructure options and condition that the cheque is only for token amount for accepting any one of the option in the letter. Bank deposits the cheque without restructuring loan. Then sends sale notice for the mortgaged property.

 

MY QUERY :

a) Can the bank sell the mortgaged property taken on lease from the state government when the lease deed does not allow the same.

b) What is the best remedy for A & B /

c) Please cite some caselaws.



Learning

 3 Replies

c.p.s. ramachary (1500)     28 March 2014

What is the facility you have availed from the bank. Loan consists of several facilities. Each facility has certain norms to be followed by the borrower. Banks will not have any fancy to classify your account as NPA. Banks generally dislike to classify any account as NPA, so quickly. So there must be serious lapses in the operation of your account. It is evident fro the fact that it has considered rescheduling of your account and the bank is cooperating with you. Hence instead of entering into litigation please contact the bank and follow their advise and come out of the clutches of NPA. 

1 Like

c.p.s. ramachary (1500)     28 March 2014

What is the facility you have availed from the bank. Loan consists of several facilities. Each facility has certain norms to be followed by the borrower. Bank's will not have any fancy to classify your account as NPA. Banks generally dislike to classify any account as NPA, so quickly. So there must be serious lapses in the operation of your account. It is evident fro the fact that it has considered rescheduling of your account and the bank is cooperating with you. Hence instead of entering into litigation please contact the bank and follow their advise and come out of the clutches of NPA. 

Rangee (Lawyer)     14 August 2014

Since the property mortgaged is leased with government is legally defective such property cannot be sold in public auction under sarfesi law. It is glaring mistake on the part of Bank having accepted such legally defective property. Hence your property is safe and cannot be auctioned.

R.S.K.Singh


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