Notice from bank for property to be auctioned.

Hello All,

Thanks for all the suggestions. I had borrowed time from the bank have been making small amount of payments to the bank to avoid NP of account.
I have received a buyer for my property and want to settle the bank loan first. On aproaching the bank to ask for the total outstanding (over the call) I was informed that it is 39 Lakhs! Which is inclusive of interest and penality they claim.
In the month of March, as per the statement the total outstanding was 32 Lakhs (do have the hard copy). I am shocked at the matter that the borrowed amount was 37 Lakhs 4 years ago and payments have been made.
My question is, when the loan was borrowed, there should be a an insurance provided with the loan for the borrower which can claimed as my father passed away. Where is possible for me check this as the bank claims that there was no such insurance provided.
Note: It is a construction loan taken on the property.
If no such insurance is applicable, I am willing to settle the borrowed loan for 32 lakhs as full and final settlement. Who can I consult requesting a waiver of the obnoxious interest and penalty claimed by the bank? RBI? Head office of the bank? Or through a lawyer? Of course explaining the current dept situation I am in.

Thanking you,
Yash

Confirm from bank if an insurance cover was available.

If you can negotiate yourself do that or seek local help from a very able counsel.

The insurance is Group insurance at the option of borrower and it is your father that has to opt for the insurance.  If it is really insured, the amount should be credited only to housing loan as per Group insurance policy stipulations.  So there is no insurance policy.

You have no where stated as to  the market value of the property  in all your posts, and from the posts, one can understand your reference to the monetization and it is my considered opinion that market value of the property is much more than the real amount outstanding, and you wanted to take the extra money.

Whenever a borrower fails, he forgets all that bank has given to him at appropriate time and help and start blaming the bank for interest, though the interest is very, very nominal when compared with market rate.

Once when the entire banking accounts are streamlined, there is no manual calculation or any type of mistakes by bank officials, as the system is handled as per norms stipulated at the time of sanction.

There should be pressing necessity for the bank to settle the account, and when amount outstanding is more, and the market value is more, and when borrower derived benefit through rent, and escalation of cost, banks can never compromise of their legitimate dues.  It is not proper to blame the bank for charging higher interest or penalty, as every operation in the bank is done through digitalization and data available as per sanction terms, which are several times checked and verified at various levels.

Except negotiating in a polite manner, there is no way you can drive them for a compromise, and only when the dues can not be recovered, then they may go for compromise at those stipulated period once in two years or more.

Mr.G.L.N.Prasad has further illustrated.You can benefit from it. 

Insurance benefit will not come to you so forget it.

It is good you want to settle. If you can prolong the litigation with and expert advocate the settlement may be even below your current offer.

It happens just because while giving loan the banks do not care much for documents so many mistakes creep in.

The options are known to you.

It is your call now and it is upto you.