Anand Subramanian (none) 03 November 2019

Need help in understanding this court order

Hi there!

I took an education loan from State Bank of India with our only house as security. Unfortunately, I could not get an high paying job which could allow me to pay the monthly EMI of my education loan. The salary I could get from the job is not enough to pay the monthly EMI and the EMI is at least 2 times more my salary. I have tried negogiating with the bank to put the EMI as per the salary I'm earning, but bank is not willing to do it.

Bank has first sent me a possession notice and subsequently after 60 days, they have put a aution notice.

I went to the court for an appeal and I got an order. Need help in understanding what this order says and if the court has ordered for the Bank to return the property to us.

Court order

1. This is the appeal file by the appellant challenging the issuance of possession notice dated 12.06.2019 issued by the respondent bank for recovery of a sum of Rs. 25,00,000/- from the appellants as due to the respondent bank.

2. It is the case of appellant that there is neither affixture of the subject impugned possession notice nor publication thereof as warranted under law and that respondent bank has not established its actions as required under law. It is the further contention of appellants that first appellants did not get any gainful employment sussequent to availing educaiton loan from the respondent bank owing to which there has been a default and is now making all efforts to augment funds for discharge of the debt which they undertake to discharge within a reasonable time frame after due negogiation with the respondent bank and prays to allow the appeal.

3. Respondent bank despite being put on notice neither had put up appearance nor filed any counter and typed set of documents evidencing its actions while issuing the subject impugned possesion notice.

4. In the circumstances, as respondent bank could not establish its actions while issuing the subject impugned possession notice dated 12.06.2019 issued against appellants for recovery of a sum of 25,00,000/- the appeal stands allowed, however without costs. Consequently, possession is restored with the mortgagor / appellant. Liberty be with appellant to negogiate for an amicable settlement in terms of their representation at the Bench. Interim order, if any granted and subsiting till this day stands vacated. Respondent bank will be at liberty to initate action afresh if the default of the borrower continues.

5. A copy of the order be communicated to the parties concerned as per the exant guidelines.
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Kindly advice what to understand from the judgement and from the statmenet "consequently, possession is restored with the mortgagor / appellant.", does that mean bank is orded to release the property document to us.

Many thanks.

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6 Replies

G.L.N. Prasad (Retired employee.) 03 November 2019

This is only a temporary relief, as the respondent bank has not made it's submissions on the laid down procedure for possession of the property. Banker is always equipped with better team of advocates. Court has restored the possession of property on statement before court by petitioner that - now making all efforts to augment funds for discharge of the debt which they undertake to discharge within a reasonable time frame after due negotiation with the respondent bank and prays to allow the appeal.

This may be a temporary relief and if the loan is not settled within reasonable time frame after negotiation, or in absence of negotiation, the order goes against petitioner and the bank follows the laid down norms and state that reasonable time was given but the borrower is not interested in discharging the debt.

Unless the Banker reacts and provides their stand taken on the account with the help of documentary evidence of statements etc, by reopening the case now or after some months, members can not provide guidance on banker's plan of action.

The problem is postponed and the possession is for present restored whereas all other remedies against borrower by the bank are wide open.

Anand Subramanian (none) 03 November 2019

Originally posted by : G.L.N. Prasad
	This is only a temporary relief, as the respondent bank has not made it's submissions on the laid down procedure for possession of the property. The problem is postponed and the possession is for present restored whereas all other remedies against borrower by the bank are wide open.

Hi G.L.N. Prasad

Many thanks for taking the time in throwing some insight as to how to interpret the order. Really appreicate it.

My monthly EMI is more than 40,000 whereas my salary is only 17,000. I tried to negogiate with Bank, but they said "we could care less because we have your property attached". The loan became NPI and subsequently possession notice and auction notice were issued.

My father is a co-borrower in the education loan. I come from a very middle class family and my father is 100% blind - blind certified by Govt. of India. He cannot work and therefore, I'm the only person who support the family.

My earnings are only enough to pay Rent, food and parents medical expenses.

I work in the night shifts in a very average position in call center BPO. Over the last few months, I have been put into an horrible mental torture by the bank.

Bank has embarassed myself and my parents to the core by pasting possession notice outside the house for everyone to see and by constantly visiting the house and asking to repay, while knowing fully well that I'm not in a situation to repay. I even requested bank to write off only the Interest part, so that my EMI comes down, but it seems that bank is more interested in selling my property, rather.

My father has been put into a deep depression in spite of having no eye sight and my mother is a diabetic patient.

Is there a way to get around this problem? Is there a way I can get my education loan written off?

Many thanks again for taking the time out of your day in replying to my concern.

G.L.N. Prasad (Retired employee.) 03 November 2019

The version of many educational loan defaulters are the same, and bankers hear such stories from every defaulter. The collateral security is only for the purpose of recovery of the loan, and it is their right. A banker is not concerned with personal problems, and they have to follow the procedure, as the money that was lent to you is not of Banks but of public funds. If they fail to take timely action for early recovery, they will be held responsible for negligence. It is in between you and banker and members can not throw any light further on the issue. The borrower ought to have considered all this before availing Rs.25lakhs educational loan.

Anand Subramanian (none) 03 November 2019

Originally posted by : G.L.N. Prasad
	The version of many educational loan defaulters are the same, and bankers hear such stories from every defaulter. The collateral security is only for the purpose of recovery of the loan, and it is their right. A banker is not concerned with personal problems, and they have to follow the procedure, as the money that was lent to you is not of Banks but of public funds. If they fail to take timely action for early recovery, they will be held responsible for negligence. It is in between you and banker and members can not throw any light further on the issue. The borrower ought to have considered all this before availing Rs.25lakhs educational loan.

The fact that there are many education loan defaulters in India does ring some serioius alarm bells. - that says something isn't right about the quality of education in India and the employablity.

The loan I took is of 14 lakhs only - My problem is that the interest that accumulated is just way over what I can afford. Interest plus penalty in 3 years - 9 lakhs.

I have no problem paying my principal amount in equated monthly Installments for the time being. What concering me is that a nationlized bank of India is trying to make profit out of an education loan giving absolutely no room for negogiation. Education - something which is considered as empowerment in a country like India.

I already do not have a well-paying job after so many years of study and if our only property is also taken away because I cannot pay the hefty intrest amount, then we would be put in a huge dent - which is adding more insult to an average family.

Oh well, banks have no probelms in writting off a record Rs 2.54 lakh crore of corporate loans.

G.L.N. Prasad (Retired employee.) 03 November 2019

Please go through replies and avoid discussing other issues not related to your specific problem. At the cost of repetition giving a personal loan is different from investing in Industry to thousands are different, and one must remember that the money that was financed was of the Public for which concerned banker is responsible. Every borrower has his own story, and this forum is not certainly to support or discourage any issue, and the focus on solving individual issue. Judging an issue is not our job. If one wants to retain his property and dictate terms with a lending institution that is running on money borrowed from public, one can not judge it proper or improper. A banker has to follow laid down norms and proceed on securities in case of default is the truth. Banker is not supposed to have sentiments in his duties and he can not function a single minute with sentiments. Bankers are also human beings and when the situation demands a team decides on future course of action and offer such concessions within the framework of powers vested with them and not as per borrower's tunes.