ashok kumar (Social Worker) 05 March 2013

Fate of unexecuted decree after passage of 12 years

Decree 12 years Passed

A Bank holds the mortgage of a property of one of the partners of a firm, as a Security for a Loan to the partnership firm. The partner whose property is held as security dies & the remaining partners do not pay the loan & therefore the loan goes bad and the Bank files a suit for recovery. The surviving partners take no interest in defending or paying the loan, because they have nothing to loose as the property which was mortgaged was not theirs. The legal heir of the mortgager have no knowledge about the proceedings and the proceedings take place ex-parte The court decrees in favour of the Bank and provides for the auction of the property held as mortgage for recovery. The Bank does not auction the property and 10 years pass by. The property is still held by the bank. The Property is worth much more than the loan amount but the Bank is neither auctioning the property nor releasing the same

Questions:

1.What is the right of the legal heir in this situation?

2.Can the Bank now auction the property (10 years having passed after the decree)

3.How long can the Bank hold the property like this without auctioning?

4.What should the legal heir do to get Back the property from the Bank

5.What is the legal effect of the order / decree after a passage of 12 years from the order if the Bank does nothing

6.Legally is it wise to wait for the passage of 12 years or the legal heir should take immediate steps to get the Property back

Pl cite relevant case laws

Reply Follow

11 Replies

Rajendra Shrivastava (advocate) 05 March 2013

bank can not have execution of decree after sheduled limitation under limitation act. legal heir can get beck that property by filing suit against bank.

gopal (Faculty) 05 March 2013

bank has time till 12 years from the date of the judgment. Once its cross the limitation period then you can send a lawyers notice that they have to handover to you, if they fails you can file a petition in Consumer Court and pray the relief of returning the property

ashok kumar (Social Worker) 05 March 2013

Thanks Gopalji & Rajendraji

Please cite soem SC Judgements on teh Matter

gopal (Faculty) 05 March 2013

is it your property in the bank, tel the date of judgment on exparte degree. how many years over give in detail

ashok kumar (Social Worker) 05 March 2013

Pl cite any SC Rulings on this subject

Ajit Singh Cheema (practising Advocate) 07 March 2013

1)To pay the liability outstanding in the loan account and getting the title deeds of the property released.

2) Before the limitation period expires ,the Bank has every right to sell the property under execution of the decree, or under Sarfaesi Act.

3) Definitely the bank will sell the property either under execution of decree or Sarfaesi Act.

4) Reply given under question No 1 .

5) The legal right of the bank to get the decree executed shall be lost.

6) The legal heirs can get the property back only after payment of the judgement debt

ashok kumar (Social Worker) 07 March 2013

Thanks Ajit Singh Cheema Sir!

From Your worthy reply I understand that

After a passage of 12 years from the order of decree if the Bank does nothing, The legal right of the bank to get the decree executed shall be lost.

So after a passage of 12 years, when the Bank loses the legal right to get the decree executed, would it be obligatory on the part of the Bank to release the property to the legal heirs or the legal heirs can get the property back only after payment of the judgement debt ?

When 12 years have passed what would be the effect of teh mortgage that was created in favour of the Bank?

Ajit Singh Cheema (practising Advocate) 09 March 2013

Be Briefed as under

1)THE CHANCE OF BANK NOT GETTING THE DECREE EXECUTED ARE REMOTE.

2)iT IS NOT OBLIGATORY AT ALL ON THE PART OF BANK TO RELEASE THE TITLE DEEDS WITHOUT EXECUTING THE DECREE/RECOVERING THE AMOUNT DUE.

3)AFTER EXPIRY OF LIMITATION , THE BANK SHALL LOOSE ITS LEGAL RIGHT TO ENFORCE THE DECREE

4) WHEN YOU WILL APPROACH THE BANK FOR RELEASE OF MORTGAGED PROPERTY THE BANK SHALL ASK FOR RECOERY OF THE AMOUNT DUE AGAINST THE PROPERTY.

5) THE LAW OF LIMITATION ONLY BARS THE REMEDY , BUT DOES NOT EXTINGUISH THE DEBT.

6 A PRONOTE EXECUTED FOR A TIME BARRED DEBT. IT IS STILL A VALID CONSIDERATION.

ashok kumar (Social Worker) 09 March 2013

WONDERFUL WAY OF MAKING a layman like me understand the issue

Profound Thanks Ajit Singh Cheemaji

surjit singh (Assistant) 10 March 2013

Apart from the above we are leaving out one aspect of the matter. Whether the deceased defendant died before the commencement of the proceeding, if so whether the legal heirs of the deceased defendant was made the party.