Legal Question in Banking Law in India

An auction of property was proposed on 4.5.12. one of the partners/guarantors filed an appeal in DRT on 1.5.12 against sale. on 2.5.12, DRT directed bank to furnish certain documents and also the bank to accept tenders on 4.5.12 and open the same, but sale should not be confirmed. No tender was received on 4.5.12.

Bank is sending mediators to inspect the property even after auction date and despite DRT directions. Mediators mention bank is proposing sale under private treaty. At this stage despite the pending appeal, is it permissible for the bank to do so and that too, without due information to the owner [mortgagor]


Asked on 5/15/12, 7:37 am

2 Answers from Attorneys
Fca Prashant Chavan Expert Edge LLP

15.05.2012

Dear Sir / Madam,

Please elaborate what do you mean by DRT ? Are you referring to an NPA Account ?

If the auction of the property is towards recovery of bank oustanding loans and other dues, on which the bank has a first charge on the said property, it will remain well within the bank's powers to send mediators to continually inspect the property.

The property will be auctioned to the highest bidder - the bank will recover all outstanding dues, and the net thereafter will be credited to the account of the Partnership Firm. Courts are under specific directions, to speed up and dispose all pending recovery cases.

You can mail me for any further on-line advice at [email protected]

Regards,

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Answered on 5/15/12, 9:44 am
ranganathan raghavachari R.Ranganathan & Associates

The Bank has the right as per the orders of the DRT. DRT has stated that the auction should not be confirmed. So other processes can be undertaken. After finalising things the Bank can approach the DRT for confirmation. Contact me at [email protected]

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Answered on 5/16/12, 6:55 pm


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