LOAN RECOVERY

By using the loopholes in the system, the banks at times loot several innocent customers. In a case, a nationalised bank through its' brokers granted loan to a govt staff for purchasing a flat. As there was some dispute regarding the violation of agreed terms of building agreement, the borrower instructed the bank that he do not want to continue with the loan agreement and stop the EMIs. But, the bank (probably in collusion with the builders) did not responded and being a class-IV employee of the railways, the borrower did not pursue the matter properly. Now, the bank has dragged him to Court saying that they have auctioned the flat (which was never handed over/occupied by the borrower) and as the sale value is less than the loan amount (can anyone believe?), he and his surety has to pay the difference amount. Interestingly, the borrower and the surety was never served any notice regarding the default or auction (in record it is shown as due notices were sent & returned). If there is an involvement of a Bank with criminal motive, such cases at the priliminary level itself should not be dealt at DRT and should be referred to criminal courts. Amendment or fresh rules regarding fraud activities is very much needed.

Dear Swant and Mr Siva you are right , where there is fraud and intentional harrassment by FI/banks , it should be attended by necessary amendments in the Act . The Sale of Flat as mentioned by Sri Svia , is with out notice is illegal .

I agrre that ammendment is necessary to the act

I agree amandment is necessary for the 2002 act, court fee need to be reduce and strict punishment should be given to bank officials who dont follow procedure.