Possetion - regarding loan
Vinod R Kolkhede
(Querist) 31 January 2014
This query is : Resolved
One of my friend took the home loan from the Nationalised bank. Recently he lost the job and unable to pay the EMI for around one year. Now bank officers are telling that they will take the possetion of flat and auction it and sell it. My freined is ready to pay the money with intrest and he needs some time but bank is not ready to wait. Please provide the advice for below queries.
1)Whether bank has to file the civil case for posseton in court to take the possetion or they can directly do this. Also for auction whether bank needs to approch court.
2)Before take the action by Bank whether my friend can approcah court and take the stay. Is there any chances to get the stay.
3) Whether the same rule is apply for Coperative bank in above case(Co-operative bank in Maharashtra)
Please provide the advice for above queries and also suggest the way out for my friend.
Dr J C Vashista
(Expert) 01 February 2014
The Bank will file suit for recovery in Debt Recovery Tribunal or Court as per valuation.
You can pay outstanding amount any time (even during pendency of case) and applicable to all Banks.
Rajendra K Goyal
(Expert) 01 February 2014
1. The Bank can directly take possession and can auction the house under SARFAESI Act.
2. Stay will be granted without regularizing of the account is doubtful.
3. Yes the law is applicable.
R.K Nanda
(Expert) 01 February 2014
AGREE WITH EXPERTS.
malipeddi jaggarao
(Expert) 01 February 2014
Agreed with the expert Mr.Rajendra Goyal.
What is the loan amount, when it is sanctioned, how many instalments are paid, what is the overdue position and present outstanding.
As the default is genuine, he can have a dialogue with the branch manager, and show the evidence that he is unemployyed presently, prevail over him that the loan was paid properly except after this problem and ask him reschedule the instalments.
As regards your querries, yes bank can take possession by giving notice, courts normally do not interfere and grant stay and rules applicable even to co-op.banks as they are also financial institutions.
Taking possession; auctioning the property is as per the SARFAESI ACT and the banks are given such powers.
K.K.Ganguly
(Expert) 02 February 2014
1. The Bank will first declare the said loan account as NPA (Non Performing Asst),
2. After that the Bank will issue Demand Notice u/s13(2) of SARFAESI Act,2002 asking your friend to pay the outstanding amount with in 60 days thereof,
3. If he does not pay the same, the Bank will issue Possession Notice u/s13(4) of the Act and will take symbolic possession of the mortgaged property if physical possession is resisted by the occupier,
4. The Borrower may file an application u/s17 of the Act finding defects in the SARFAESI Proceedings initiated by the Bank & pray for a stay order with in 45 days from the date of the Possession Notice,
5. After Possession Notice, the Bank may issue Sale Notice giving 30 days time to the borrower,
6. Before or after the sale notice, the bank may apply for taking physical possession of the property with police help u/s14 of the Act, to DM & finally take physical possession thereof to hand it over to the purchaser,
7. It is a specialised subject. Hence, get in touch with an Advocate having expertise in SARFAESI matters & practicing before Debt Recovery Tribunal,
8. Your friend can also submit an One Time Proposal to the Bank to clear the dues,
9. He has to pay the debt at any cost.
T. Kalaiselvan, Advocate
(Expert) 03 February 2014
I agree with the opinion by expert Mr. Ganguly on the subject. To add, this law is applicable to cooperative banks too.
