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Kumar Singh (     11 August 2011

Sarfesai act - breach of trust by poa holder

I own a Commercial Property along with 4 other Co-Owners. The Commercial Property is leased out and fetches good rent. 

Few Years back, All the Co-owners including me discounted the rent receivables of the property.

Power of Attorney was given to one of the Co-Owners to collect the rent on behalf of all the Co-Owners and dischrge the same to the bank towards repayment of the discounted rent.

The POA holder used to operate our bank accounts for the above purposes.

Few months back, it came to my notice that POA Holder had not been depositing his and other Co-Owners rent to the bank and had been depositing only my share of rent to the bank. He was doing this in collusion with the Bank Manager. The Bank Manager did not even inform me of this development for a good period of 2 years.

After I came to know of this misuse, I withdrew the POA given to one of the Co-Owners and stopped deposting my share of rent to the bank , as i had already discharged more than what was my share.

Today, the bank has issued Sarfesai notice to all the Co-Owners asking them to make good the deafult.

I wanted to Know if I can make a strong case for myself - to challenge the bank and remove sarfesai proceedings from my share of the property. I have paid more than my share of dues, POA Holder has breached my trust and the Bank Manager has colluded with POA Holder. Even the bank statements are in my favour as a proof of my claim.

The Bank can easily attach the POA Holders share of property and recover the entire amount due.

Request Guidance on this matter.


 6 Replies

Alok Tholiya (self employed)     11 August 2011

I think time has come when u can not trust even ur own spouse,childlren leave alone siblings. Always device a method so there is a cross chk on happenings. Also instead of taking honourary service of a brother u all shud have appointed a paid person who will give report every month. In india our mentality is let some one from family, from neighbourhood, from society, or from politics work free for others. 

U all have not paid anything to ur brother working for u all. Now this lead to dishonesty. Call a sr. member of a community and settle the issue amicably in a panchayat format or u all will be dragged in though the culprits will be finally booked.

Also find whether ur brother was genuinely in need of some funds or he spent same on bad habits. If he was in dire need and took a wrong recourse then help him come out by jointly giving him time thru post dated chk to repoay all brothers slowely and u all shud settle the bank.  

1 Like

chakrapani (ca)     11 August 2011

once you have taken loan from bank as joint borrower your are liable for the discharge of loan jointly and severally. if we can peruse your loan documents signed by you with the bank we may find some escape route for your liability. for ex: if you mentioned tha you are only libile for 1/5 th of share than it can be argued that way.

Further we wish to know whether  in joint prperty whether your portion is asertained or marked or seperately numbered with seperate area demarcation.if so we can find a way .

1 Like

YOGESHWAR. (ADVOCATE HIGH COURT-criminal /civil     11 August 2011

If you can fight there are ways out in such legal problems.

1 Like

Triloknath l pandey Adv. (Legal Officer.)     11 August 2011

According to SARFAESI act every bank has the right to proceed agaisnt the wrongdoer therefore if you are a member of one unit then all the terms and conditions of loan agreement will have an ultimate effect on you, there is only one way to opt for a legal remedy is the laibility clause under the said agreement as to what it suggest therefore kindly read out and consult a lawyer of your region and thereafter give your reply not only to bank but also to other co-partners.  GOOD DAY. 

1 Like

saroja (nothing)     11 August 2011

Your POA holder is nothing but your representative and any fraudlent act of your POA holder will not cease your responsibility to pay the amount.

Only the options avilable before you is to file criminal case against your POA holder

1 Like

RAJU O.F., (Advocate)     13 August 2011

As far as SARFAESI proceedings initiated by the bank is concerned, they can take possession of the property and sell it for recovery of the loan dues.  Your inter se arrangements may not help you; you have to settle the matter of mistrust, among you the co-owners. 

If bank has issued Demand Notice u/S13(2) of the Act, you have to raise your objections to the bank within 60 days.  If Possession Notice u/S 13(4) is issued, you may approach jurisdiction DRT by filing appeal under Sec.17 of the Act to stop sale of the property.  Find means to settle the account at the earliest or atleast to regularise the dues. Otherwise bank will proceed for sales.

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