THE SCENARIO IS AS UNDER:
Company "A" was enjoying working capital limit (Export PCL) with a bank.
Due to recession world over, the PCL became overdue and hence bank classified account as NPA on 31.12.2008.
Above limit was guaranteed by Individual "B".
Individual "B" was also enjoying Term Loan from the same bank. The account was being serviced regularly. The loan was a mortgage loan on a "Land & Building" mortgaged by way of Equitable Mortgage. The said "Land & Building" was also CONTINUING SECURITY to the working capital limits given to Company "A".
The Bank recalled the Loan from the Company "A" on 31.01.2009 and issued notice under SARFAESI on 04.09.2009 to Company "A". However to our suprise without recalling the loan of Individual "B" they have issued notice under SARFASEI on the same date i.e. 04.09.2009.
Company "A" is a registered company under the Companies Act and registered in Delhi. Individual "B" is a resident of Haryana and the "Land & Building" is situated in the State of Haryana.
Under the Haryana Stamp Act, Stamp Duty @ 0.2455% needs to be paid on the extent of charge of the Equitable Mortgage, HOWEVER NO STAMP DUTY HAS BEEN PAID AT THE TIME OF LOAN DOCUMENTATION. THE EQUITABLE MORTGAGE IS NOT REGISTERED WITH ANY REVENUE DEPTT.
1. Can the EM document be taken as evidence since the document has not paid the required stamp duty?
2. Can the bank, on the basis of EM document (which has neither been registered nor the applicable stamp duty paid) issue notice to Individual "B" (Guarantor to NPA accout) whose account was regular.