Banking law

Querist : Anonymous (Querist) 10 January 2012 This query is : Resolved
A client of mine had taken loan from nationalised bank in the year 1998,since it was a large piece of land and he had single document bank had drawn a layout marked 50% of the land as secured and rest not coming under banks charge.In the year 2000 he sold to the third party the the remaining land not under banks charge. In the due course his account became NPA in the year 2003 and bank filed a suit and got recovery certificate and brought the entire property for sale in the year 2008. He got stay order In DRT on the contention that when notice was was served on him bank had shown the marked portions as under its charge,but when it brought for sale it gave the entire schedule as under its charge. Bank got the stay vacated using the argument that the loan amount exceeded the secured asset and therefore can proceed with entire land at its disposal. In the meantime it took possession of the remaining property which was bought by third party. As he has been dispossessed of his property the third party filed a criminal suit against the borrower who is client.Now the auction date has been fixed for the entire property. Sir I would like know what are the options left for my client to protect his property from bank and dismiss criminal suit filed by the buyer of the unsecured land . Please help it is very urgent

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ajay sethi (Expert) 10 January 2012
has the thrid party filed intervenor application In DRT ?

since the third party was a bonafide purchaser of value in 2000 he has right to make application for stay of auction of 50%of the property . admitteldy said property was not subject to bank charge in 2000 .

bank must have taken symbolic posession of property lying with third party .actual posession must still be with third party .

Raj Kumar Makkad (Expert) 10 January 2012
It shall be better to go against the order of DRT vacating the stay order and obtain stay order against the proposed auction as bank is violating its terms and conditions and is adamant to take law in its own hands. You shall get justice. You may even can file a writ against the concerned bank.

Deepak Nair (Expert) 11 January 2012
Agree with the experts.

prabhakar singh (Expert) 11 January 2012
The experts are right in their opinion.

Devajyoti Barman (Expert) 11 January 2012
I agree with the views above.

c.p.s. ramachary (Expert) 14 April 2012
Mortgage is transfer of interest in specific immovable property. Mortgagee (the bank) cannot enforce security interest not created to the extent if not created/charged as security. However your query is ambiguous about mortgage created.Whether mortgage property is carved out by demarcation or not. If it is undivided share in the total extent the bank has to notify the same accordingly in the sale notice. Otherwise the sale notice will not stand as valid in eye of law. It is advisable that the action is contested by the third party and obtain stay of the action under the sale notice. Third party should file independent SA and not the intervenor application. Please keep a watch A diary in criminal court and find out if any order is obtained by bank to dispossess the third party under Sec.14 of the Act and move DRT urgently. The third party can take a plea before DRT that the bank has no security interest to enforce. If the version of your client is true he must succeed in his action.

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