Regarding auction for unpaid loan of a farmers property
keshav
(Querist) 05 April 2014
This query is : Resolved
my cousin brother borrowed loan from sbi for tractor with farm land and home land as collateral. now he is evading the payment of installment. after 8-9 years today 4 lakh rs are still due. my father (a retired teacher)had given a guarantee for the loan. my cousin brother is earning good. he is a contractor with owning another tractor and a 407 vehilcle. He is deliberately evading the bank employees and loan recovery people harassing my father. our farm land is not divided and all patta is given to bank. they served notice for payback else auction. plz tell me what to do.
Guest
(Expert) 05 April 2014
Assist the Bank in taking possession/ceasing the vehicle hypothecated with bank.After adjusting the value of recovered vehicle by bank what ever the Due is claimed by bank Request them for One Time Settlement with maximum reductions and settle the same and safe guard your property.You could make your Claim and Dispute with your cousin later on
ajay sethi
(Expert) 05 April 2014
there must be clause in loan agreement that if loan is not repaid tractor would be auctioned . request bank to auction tractor for recovery of its dues.
“If you are a guarantor, you are liable to pay the debt if the borrower defaults. If you do not pay, under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, banks can attach your property, auction it and recover the money. Banks may make a recovery decree to attach your moveable and immoveable assets.
Isaac Gabriel
(Expert) 06 April 2014
In respect of agricultural loans,tthe sense to repay has almost vanished due to obvious rasons.It has become the subject during election camapaigning which has strength for evaders,unmindful of the financial discipline.If at all the agricultural loans is subjected to coercive actions,it invites the objections by political stalwarts to interefere.This scenario is prevalent everywhere since the state and central Governments take advantage of the situation for survival.Neverthless,the banks are at liberty to enforce action as per rules.As opined by experts,the bank could attach the tractor.But it may not fetch the value now.The guarantor cannot escape responsibility for repaynment,but request the banker to exhaust the procedure of seizure before resorting to proceed against the guarantor.
Dr J C Vashista
(Expert) 06 April 2014
I agree with the expert's opinion and advise.
The bank will take possession of the tractor hypothicated, put it for sale, adjust realisation and recover balance from other assets of principal borrower.
But guarantor cannot escape liability and responsibility for repaynment, help in recovery and request the banker to exhaust the procedure of seizure before resorting to proceed against the guarantor.
Sudhir Kumar, Advocate
(Expert) 06 April 2014
Old repeated story in very forth household
It is a reality that your father will have to pay if not able to secure repayment from him and can later sue your cousine.
In any case the money is gone in Charity as practically your father will pay and will get nothing from your cousine.
Most stupid thing was to pledge undivided land. It will be attached if loan is not refunded to bank.
keshav
(Querist) 06 April 2014
I am quite sure that my father will have to pay back d loan. But is there any way by which that loan can b restructured or reduced citing dat my father is retired. I mean is der any good deal that can b brokered with d bank. N most importantly my cousin can pay back..he has enough resources for dat. Why bank not catching him.
T. Kalaiselvan, Advocate
(Expert) 06 April 2014
I agree with the ideas and views of expert Mr.Isaac Gabriel and his further suggestions on the subject issue. to your further query, you must approach the bankers with the real problems you face and also explain the present financial condition of the borrower as well as your father's, if the bankers are reluctant to initiate legal action against the borrower, you may write to the higher officials of the bank narrating the entire events and seek their intervention.
RAJU O.F.,
(Expert) 07 April 2014
If the bank had filed any suit for recovery of the dues, you contest the case through an advocate. Bank cannot directly sell the property under SARFAESI Act, since the secured property is agricultural (farm) land. Let the bank take steps for selling the tractor, since it must be hypothecated to them. Through Court, bank can attach and sell the other assets including vehicles of the borrower.
keshav
(Querist) 07 April 2014
Can bank attach other assets of borrower which are acquired after takung loans which were not declared while taking loan.
RAJU O.F.,
(Expert) 08 April 2014
Bank can attach unsecured properties also through court for recovery of dues of borrower (including guarantors). You may defend against such action in court and adverse orders if any can be appealed.
