Can bank interest be greater than principal....
Vishal Gupta
(Querist) 22 February 2012
This query is : Resolved
15 years ago, a Government bank advanced loan to a co. with 3 directors having equal equity., amount 37 lacs, interest 16%, security kept land whose current worth is around 1.5 crores.,.co. got closed soon after operating 3 years,,., nobody cared about rest of documnetation procudre., now one directors receives an informal offer from loan recovery officer stating pay 92 lacs releasing all the property docs... wat remedy does the director hav nw??
Raj Kumar Makkad
(Expert) 22 February 2012
If the renewal of the debt has not taken place after 3 years of advancement, the right of recovery of banker gets extinguished so the sole director should file a civil suit for release of property from lease in the given facts without paying even a single penny to the banker.
Saibal Guha Roy
(Expert) 23 February 2012
From the very bare information u have provided, it appears that the loan was secured by mortgage of land. Thus limitation in this case would be 12 years from the date of creation of mortgage. However, the question of bank interest being greater than principal, the answer is yes, interest can be greater than principal as Banks are specifically exempt from the rule of damdupat
RAJU O.F.,
(Expert) 10 March 2012
Don't deal anything with bank's recovery agent. If 12 year passed after creation of mortgage, now it is time-barred, unless the mortgaged is renewed. If the loan documents are not renewed and if there was no part payments within last three years, the debt is time-barred.
