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GOKULDAS KAMATH (EX BANKER)     30 September 2013

Repayment of housing loan after taking action under sarfaesi


At the time of my dismissal in 2009 from the services of a nationalised bank ,outstanding in my loan accounts were under

Housing Loan  : Rs.4.75 lakhs @11%  per annum simple interest half yearly rest

Staff Overdraft : Rs.3.50 lakhs @ 10.75% per annum monthly rest

My terminal benefit was Rs.3.50 lakhs

In December 2012,bank issued a notice under SARFAESI ACT that if I don't repay Rs.5.26 lakhs within 60 days,bank will take possession of my house and auction it to recover bank's dues

Immediately I wrote to the bank as under

1. My WP against illegal dismissal is pending in High Court .till then,Bank should not take  proposed action

2. Bank has converted my staff housing loan into general public loan and interest is being charged at higher rate without bringing it to my notice

3. Bank's claim that I have not responded to Bank's several repayment notices is wrong

4.Bank has to wait till the outcome of WP

bank wrote me back that bank is not going to consider any of my submissions and went ahead

Exactly on the expiry of 60 days,bank has taken symbolic possession of my flat and pasted a notice on the door that property now belongs to the bank

In June,2013,my retirement benefit of Rs.3.50 lakhs was settled and entire amount was credited to my housing loan account

Now,present outstanding is Rs.2.00 lakhs approximately

Bank has not taken any further action on my house property till date after taking symbolic possession

Now,the notice was  issued to me under SARFAESI is only for housing loan

Overdraft account documents are timebarred

Terminal benefits are already settled

I want to settle the housing loan by repaying whatever outstanding with interest

Can I repay the entire Housing loan at this stage(No auction notice is published in the news paper)

House property is not attached to overdraft account 9 Only terminal benefit was attached)

Can the bank proceed with the action under SARFAESI ACT even if the housing loan account is cleared

Kindly clarify this point


 4 Replies

Kolla Gangadhar (Practicing Advocate since 1986)     30 September 2013

You can repay housing loan outstanding to Bank and settle dispute immediately. Your W.P. is pending you should have approached court by filing W.P.M.P. for interim order to stop recovery of housing, other loans. 

VIRAJ KADAM (Advocate Supreme Court of India)     01 October 2013

Dear Friend

Your pending Writ is for termination, it has nothing to do with your loan. Therefore, you don't have any remedy before Writ Court. You are a bank officer you know the procedures. You have to get in touch with you branch meet the concerned officer and pay the money with interest. In return the bank would revoke its notice. If they don't then you have to challenge the notice in the Court of law u/s 17. 



Advocate, Supreme Court of India

binay (advocate)     04 October 2013

in any condition bank can take over the motgaged property, consult an advocate & challenge the 13(2)

RAJU O.F., (Advocate)     05 October 2013

Symbolic possession of property tken in June 2013 and hence 45 days for filing appeal is over. If other loan dues are not attached to the house property and if you have not extended the mortgage to subsequent loans, after closure of your housing loan, bank cannot proceed on the house property through SARFAESI. Still bank can proceed through court to attach the said property for recovery of other dues.

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