Legal Question in Banking Law in India

26/05/2011

As desired I am placing the facts of the case:

1) Mr.X has taken the loan CC limit against 4/5 properties for Rs.L/rs. (say CC limit loan is Rs/100 and total loan is Rs.200/- inlcusive of term loan)

2) Out of the 5 properties, there are two term loan on the two

properties which are still hold good

and their payment is regular (as adjusted against rent).

Properties pledged with the bank:

a) one company M/sZZZ having building (rent being paid to bank)

(It seems that he has sold the company but gave corporate guarantee

of Rs100 earlier). Mr.X claims to hold 51% share of the company.

b) one property branch/office is being run by the bank.

(already sold to Mr.Y, Sale deed has already been executed)

c) Mr.X's residence

d) One Farm House.

e) Two commercial shops

(total value approx triple/ four fold than the bank loan)

Please note, property no.b was already sold to Mr.Y and Mr.Y informed

the bank in June 2010. This property is in the name of Mr.X's mother.

3) Mr.X become NPA in June, 2010 and took the case to DRT itself and desposited the stay amount of Rs.L/Rs.lacs.

4) DRT ordered Mr.X to deposit L/Rs on or BEFORE 31 MAY and bank should release the b) property and rest properties can also be released in a phase manner on deposit of L/Rs. time to time.

5) Bank being not satisfied with the order and appealed to the DRAT but approached DRAT after the requisite time to appeal. Case is still in DRAT:

6) Mr.X has paid nothing except the rent which is being adjusted and stay amount only.

Questions:

1) Now, in case of matter is in DRAT, and non fully compliance of DRT order, Can DRAT vacate the stay and bank can start the proceedings under SAFAESI Act

2) Is bank free to choose the property to sale?

3) In case procedure for possession started by the bank, how long will take? Should Mr.Y interfere later or now? Needless to mention Mr.Y already informed his vested interest in the property to the bank.

4) What should be Mr.Y's stand to safe his property? or How can he save his property?

(under SAFAESI Act, definition of Mortgage clealy says

Mortage should be without possession)

hope to get the right advice from your end.

1 Answer from Attorneys

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