Legal Question in Banking Law in India

Ours is a Partnership concern with the Partners being Father, Mother, Son and Daughter In Law. We had taken a Term Loan of Rs 53 Lakhs from State Bank Of India in 2002. We had given security documents valued at Rs 2 Crore to them at that time. Along with interest the total amount came to Rs 100 Lakhs. The loan was classified as NPA.

State Bank Of India offered us a one time settlement on 24.12.2005 to pay the outstanding in instalments subject to atleast 25% of the amount of settlement being paid upfront and the balance amount of 75% being paid in instalments over a period of 1 year together with the interest at Bank�s PLR from the date of settlement till the date of final payment. So the interest component would be known only after repayment of the amount agreed between us.

As per the terms of the OTS we have repaid the loan before 30th June 2007 and in the Term Loan Account statement the term loan outstanding has been mentioned as Zero.

We had written a letter to the Assistant General Manager, SBI on 5.7.2007 that we have repaid the loan as per the OTS and since we have paid interest of Rs 53 Lakhs for a loan of 53 Lakhs to waive the interest which will be incurred in the OTS scheme and to return the documents given as security.

But we have not received any reply from them. We have also approached them in person many times but so far they have not intimated the interest that we have to pay or returned the documents. The Father has expired in 2010 so no further follow up action was taken to get back the documents from the Bank.

What should we do now to get back the documents from State Bank Of India and can we claim any compensation from them. Can the Bank now ask for the interest payable by us.


Asked on 10/13/15, 3:47 am

1 Answer from Attorneys
Fca Prashant Chavan Expert Edge LLP

13.10.2015

Dear Sir / Madam,

Please follow up with the Bank for their reply on the status of your loan balance. If the Bank demands additional interest on the OTS, you should negotiate, repay and settle that too, and take back documents pertaining to the property offered as collateral security to the Bank.

Regards,

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Answered on 10/13/15, 4:46 am


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