I want solution to my friend's problem
SAI
(Querist) 21 May 2014
This query is : Resolved
Can anybody provide me solution to end the problem that i actually came across..............
There is a individual who invested all his assets in a Rice Mill of worth Rs.8 crores (approx.) in the year 2011.Then the business continued for 1.5 years continuously. Suddenly the business lacks working capital due to abscondance of cash by the person involved in construction, who was the friend of the individual in the 2013. There is no specific evidence to prove the fraud. Thus, the business discontinued. On the other hand, as there is no profits, the bank debts (neither the principle sum nor interest) of Rs.4 crores(approx.)could not cleared as there is no cash availability. As the business organisation is not paying any sum to bank. The bank considered the debt as NPA and is going to conduct auction on or before 06.06.2014.All the assets were struck in the bank as securities for the loan whereas the individual has Rs.4 crores of bank loan and Rs.2 crores of unsecured loan.
Banker valued the mill value for Rs.1.63 crores and other securities for Rs.60 lakhs only whereas the valuation report by the Approved valuer valued the mill for Rs.5.35 crores (approx.). There is a heavy pressure from the creditors as the auction amount does not cover their debts.
Please provide a probable and suitable solution for the above query.................
Raj Kumar Makkad
(Expert) 21 May 2014
In the given facts, some facts are still required to be clarified by you. It shall be better to approach BIFR and got declared the unit as sick which shall save bank interest and also shall provide a rehabilitation programme.
Dr J C Vashista
(Expert) 22 May 2014
I agree with Sh. Raj Kumar Makkad, the remedy to your friend's problem lies with BIFR.
Rajendra K Goyal
(Expert) 22 May 2014
you should have disposed the unit already and should have paid the Bank loan. In Bank auction, market value is never received. Even if you are able to save the unit presently through BIFR or otherwise, it would be practically impossible to run the unit on profit having such heavy loan burden.
You can explore the possibility to have business association with some experienced person, who can save the unit on agreed terms.
ajay sethi
(Expert) 22 May 2014
agree with experts
K.K.Ganguly
(Expert) 22 May 2014
1. You have taken loan from the Bank which you shall have to repay with agreed interest,
2. For temporary relif, you can take the following steps.
a) File an application u/s17 of SARFAESI Act,2002 before DRT praying for a stay order on the said sale on the ground that the the Bank has undervalued the said property for personal gain of individuals,
b) Meantime, submit a settlement proposal to the Bank.
3) In fact, you should have sent representation after getting 13(2) notice & filed the said Application after receiving the Possession Notice duly finding procedural fault of the Bank.
T. Kalaiselvan, Advocate
(Expert) 22 May 2014
In my view expert Mr. Rajendra K Goyal's opinion and advise seems to be practical, thus, apart from other avenues, why dont you give a try for this too, if it is found feasible.
R.V.RAO
(Expert) 22 May 2014
the time for DRT to give any relief is too short,unless you act very fast.it is not
even 15 working days.
if possible pay part amount towards the bank dues and ask bank to postpone auction in view of your proposed case before DRT
