Mortgage of property issue
Satish Talnikar
(Querist) 20 May 2012
This query is : Resolved
The aggrieved ‘G’, my friend, is an Ex Navy Personnel who has been allotted a residential flat (the property) by the Air Force Naval Housing Board (AFNHB, a regd. Society under Society Act for Navy & Air force personnel only), New Delhi under the Board’s self financing scheme. The G is a guarantor and also mortgagor in a business loan (Cash Credit facility) sanctioned to borrower Mr. ‘B’ who stood to be just in acquaintance with G. The contention of ‘G’ is also that he has been cheated / betrayed by B in connivance with the Bank officers in as much as G was initially dishonestly convinced by them that the original property documents are needed by the bank only for ascertaining the net worth of the guarantor ‘A’. Under the said mistaken belief, G handed over the property papers in original, and also signed the guarantee deed. However, the bank has converted the property documents as equitable mortgage. Nevertheless, the G does not dispute the guarantee given by him. The concerned bank is PSU bank and the guarantee was given in Jan 2003.
Subsequently, the account became NPA (non performing asset) in March 2005, and the bank initiated action under SRFAESI Act (Securitization Act) against both the borrower and the guarantors; and simultaneously the bank also filed law suit in DRT (Debt recovery tribunal), Mumbai in July 2006 for Rs. 69lakh. However, the attempted sale of the mortgaged property under SRFAESI Act could not materialize as both borrower B and guarantor G filed application under the said Act, separately. While admitting the application of ‘G’ the DRT III directed for pre deposit of Rs. 5lakhs which ‘G’ complied with and the amount is still with the bank on DRT III’s order. Meanwhile, the law suit filed by the bank was decided by the DRT-II in July 2009 and decree was granted in respect of all three mortgaged properties ( one property of borrower and one property each of two guarantors) and the case was referred to Recovery Officer of DRT for initiating recovery proceeding.
The guarantor G, immediately after realizing his mistake of giving such guarantee and mortgaging his house in mistaken belief, approached the bank in 2005 and not only offered his willingness to pay his part of liability, but also continued offering enhanced amount in each of his offer. However, the bank did not respond to it. The other guaranter ‘O’ whose property has been physically taken over by the Bank is absconding ever since the case was filed. Hence, by selling O’s mortgaged house, the bank can realize O’s part of liability.
While the guarantor G by way of his offer, and O through the sale of his mortgaged house are willing to settle the said account, the borrower is not cooperating at all in settling the account, which is apparent in the fact that not only he has never paid any amount to the bank, but has also been creating deliberately hurdles by one way or the other in the proceedings with a view to prevent his house from being sold by the bank.
The twist in the matter came only in October 2011 when the borrower B approached bank with a proposal of one time settlement application, which was finally accepted by the bank and the one time payable amount was approved by the bank as Rs. 96 lakh payable in three month’s time. The borrower B approached G and explained that he will dispose his house for about Rs. 50 lakhs, the guaranter O’s house will be sold for nearly Rs. 22 lakhs and the guarantor G was to help with the remaining amount i.e. Rs. 24 lakh. The guarantor G readily agreed to it, as he was earnestly desiring for quick settlement in view of his prolonged suffering that has resulted into health hazards like hypertension and damage to both kidneys, as also the imminent family responsibility like daughter’s marriage etc.
The above said possibilities of settlement diminished soon and the issue came back to square again as the borrower B started showing his disinterest in disposing his house to meet the settlement. Here it may be added that it is only by way of disposing off his house that the B can arrange Rs. 50 lakhs to meet the settlement partly. The borrower B is not responding to the call of guarantor G for the last two months, which makes G apprehensive of non-cooperation from the part of B.
In the aforesaid backdrop where the key to solution is only in the hands of the borrower B who is now reluctant to come forward and settle the account, what are the options available to G, as in this case the other guarantor O is a non entity.
1. Whether guarantor G can arrange potential buyer of borrower B’s property to be sold by the bank, and in that case can the bank compel the unwilling B to evacuate the house and give possession to the buyer. Otherwise, no buyer will come to buy the house.
2. What is the legal provision in regard as to whose mortgaged property shall be disposed first. Is it lawful to dispose the property of guarantor first i.e. before the B’s property is disposed, especially when the G is pro-actively co-operating with the bank unlike the borrower.
3. What remedy for legal action is available with the G to safeguard his financial, social, family, health interest which are at stake.
Can you suggest a good and honest lawyer. My friend stays at Powai, Mumbai.
Nadeem Qureshi
(Expert) 20 May 2012
Dear Querist
You can contact Mr. Ajay Sethi
Shonee Kapoor
(Expert) 20 May 2012
Once you are a guarantor, you are a guarantor.
I also endorse that you can contact Ld. Sethi from the forum in Mumbai.
Regards,
Shonee Kapoor
harassed.by.498a@gmail.com
