Claim on non mortgaged property of guarantor.

Dear Sir ,

My pointwise reply may be as under:

1.If the property is Agricultural land being used for agricultural purposes it shall be exempt from Sarfaesi Action.

2 .Yes ,  the bank may file suit after Sarfaesi action for recovery of the balance outstanding .

3. If the property is sold under Sarfaesi act, the capital gains tax may be irrelevant.

4. Only a decree may be got against the guarantor.

My clarifications are as follows pointwise:

1. Bank can proceed under SERFASI Act against the property mortgaged to them. Since the other property is not mortgaged to them, they may not be able to take over that property, as they can very well take over and sell the Mumbai property as it is under their mortgage.

However, Bank can file a petition before the Court seeking Attachment before Judgement, preventing your mother from selling the other property, if the sale proceeds of the Mumbai property (under mortgage to bank) are not enough to cover the liability with them. Courts normally accede to the request of the Banks, unless you can prove that the value of Mumbai property is enough for satisfying the liability with the Bank.

2.Had your mother merely signed Mortgage papers alone, bank could not have proceeded against here for amounts beyond the value of the property. Since she signed Guarantee/Surety also, Bank can very well proceed against here for full liability beyond the value of Mumbai Property under mortgage to them, in case such amount is not enough to cover the liability.

3.I am doubtful whether Capital Gains Tax shall be applicable for a property sold under SERFASI Act as Bank is selling. However, since property is in the name of your Mother, it is a little bit tricky.  Better obtain proper clarification from a practising and tax matter handling Chartered Accountant in this regard.

4.Standing Guarantee and Mortgaging will only attract civil action only, unless any action is taken to alienate the property by devious methods without the Bank's knowledge etc.