Legal Question in Banking Law in India

23.12.2014

Dear Sir / Madam,

Please refer to the following standard terms and conditions of a Vehicle Loan Agreement, especially related to "notice" to be given to / by the Bank :

16. Notice on the happening of an event of default:

if any event of default or any event which, after the notice or lapse of time or both would constitute an event of default shall have happened, the Borrower/s shall forthwith give the Bank notice thereof in writing specifying such event of default, or such event. The Borrower/s shall also promptly inform the Bank if and when any statutory notice of winding-up under the provisions of the Companies Act, 1956 or any other law or of any suit or legal process

intended to be filed/initiated against the Borrower/s , is received by the Borrower/s.

17. Further, the Bank shall be entitled to forthwith take physical possession of the assets hypothecated and/or mortgaged to the Bank and alienate sell, transfer the said properties either by itself or though its agents and sell or otherwise deal with the same to enforce the Bank�s security and recover the dues.

18. The Borrower/s agrees and undertakes not to prevent or obstruct the Bank from taking possession of the properties irrespective of whether the loan has been recalled whenever in the opinion of the Bank, there is an apprehension of any money not being paid or the Bank�s security is being jeopardized and that the Bank�s representatives will be entitled to sell, give on rent, or otherwise deal with the properties by public or private auction or private treaty,

without being liable for any loss, and to apply the net proceeds thereof as specified in these presents.

19. The Borrower/s shall pay any deficiency, forthwith to the Bank. The Bank shall also be entitled to adjust and a right of set-off on all monies belonging to the Borrower/s standing to his credit in any account whatsoever with the Bank, towards payment of such deficiency. Nothing contained in this clause shall oblige the Bank to sell, hire or deal with the properties and the Bank shall be entitled to proceed against the Borrower/s independent of such other security.

The Borrower/s agrees to accept the Bank�s accounts in respect of such sale, hire, dealing or otherwise as conclusive proof of the correctness of any sum claimed to be due from the Borrower/s.In case of any deficit, the deficit amount shall be recovered by the Bank from the Borrower/s.

20. The Bank may, at the risk and cost of the Borrower/s , engage one or more person(s) to collect the Borrower/s outstanding and/or to enforce any security and may furnish to such person the right and authority to perform and execute all acts, deeds, matters and things connected therewith or incidental there to as the Bank thinks fit.

As is evident from the above paragraphs, the bank is not liable to give any notice to the Guarantor(s) either before or after repossession of the vehicle, unless specifically mentioned and agreed to by the Bank in the Vehicle Loan Agreement.

Regards,