Ashish (Director) 10 July 2012

Insurance of mortgaged property

Hi,

My Name is Ashish. I want to ask you a question related to general insurance.

I am going to enter a venture with my uncle(not relative) and 2 other persons who are already a director of a Pvt ltd. company. When I enter I would become the 4th director.

They have already planned to set up a cast iron foundry to manufacture some product. For this they have applied for a loan amounting around 4 crores(total project cost including term loan and cash credit). But they are falling short of security money of around 40-50 lacs. Since I have ready property of my own I want to invest in the project since it is a profitable one.

Now my question is that -

1. Can my mortgaged property be insured? so that in case of bankruptcy the insurance company bears everything and I can get my property back from the bank without any issues.

Please also suggest other ways of keeping myself in safe place..

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3 Replies

Adv Rohit Dalmia 9324538481 (Lawyer) 11 July 2012

Dear Ashish,

since it is related to the insurance of a mortgaged Property and the amount on stake is high, it is always advisable to take the opinion of the Senior and experienced Person in the general insurance industry.

i would suggest you to have a word with Mr. Mahesh Dalmia from Mumbai on 9869015722 / 9320015722 about this issue. He shall give you the valuable advice for a very nominal fee.

Regards,

Ashish (Director) 11 July 2012

Dear Mr Rohit Dalmia,

Thanks for your reply. I would consult Mr Mahesh reagrding GI.

Please suggest some other ways to be on a safer side apart from General Insurance.(any laws that can protect me etc.)

Can you let me know what is the liability of the directors/Promoters of a Pvt. ltd. company?

Please suggest me something, as this is the first time I am entering Manufacturing sector, becoming a director of a company and take huge risk.

Thanks In Advance

RAJU O.F., (Advocate) 24 July 2012

If you mortgage the property for bank loan of a company and such loan is defaulted and classified as NPA bank can sell the said property towards their dues. No insurance company will compensate you with the value of the property. Further, when you mortgage your property, bank will add you as a guarantor to the full dues of loan and to the extent of value of property and hence you will be also liable for the whole amount of debt due as a co-borrower.