Loan recovery

The bank can adopt the existing remedies for recovery of loan,  if this is feasible then they can proceed. 

The property documents are held by bank as collateral but that will not prevent the lender to initiate action for recovery through the available sources. 

Request the Branch Manager of the bank to give some time to coop up the pending amount and inform the bank authorities that the original document is with KSFE.

Default is for 2 EMIs only, which is not such a serious issue for initiaiion of recovery through collateral security.

Settle the issue with Branch Manager.

Originally posted by : T. Kalaiselvan, Advocate

The bank can adopt the existing remedies for recovery of loan,  if this is feasible then they can proceed. The property documents are held by bank as collateral but that will not prevent the lender to initiate action for recovery through the available sources. 

Are you suggesting that a land tax receipt is considered collateral? What are the legal means available for a bank to possess my land? Do you believe that a bank can recover my land without holding any original documents? Is there any law that supports this?

As per the Notification No. 54415/S3/86/RD dated 13.10.1987 and published in the Kerala Gazette No. 45 dated 17.10.1987 (SRO 1465/87) referred 1st above, Government declared that the provisions of Section 71 of the Kerala Revenue Recovery Act, 1968 shall be applicable to the recovery of all kinds of loans advanced by banks under various development schemes, in the interest of banking development in the State and with a view to removing impediments to the flow of credit from banks. 

However, the Banks need to follow the due process as provided under the Act.

The Kerala High Court has held that banks and financial institutions can initiate proceedings under the Kerala Revenue Recovery Act, 1968 for recovering debts below ₹20 lakh as the provisions of the Recovery of Debts and Bankruptcy Act, 1993 applies only to defaulted loans of ₹20 lakh and above.

You've indicated that the original documents of your property are held by KSFE for a Chitty. This means that KSFE has a lien or mortgage over your drift hunters property as collateral for another transaction. This arrangement complicates the situation because the property's documents are not physically with the lender (Kerala Bank).

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