Legal Question in Banking Law in India
After a bank has taken collateral of a property, and then there is a civil suit with that property, so the bank shuts down the company and does not let it operate. If the civil suite with that property is solved, can we sue the bank in India for loss of income for 8 years?
3 Answers from Attorneys
What is the Civil suit about? If it relates to the title of the mortgagor company, which the Bank finds as affecting its security interest, even then, the Bank cannot abruptly stop operations. It depends upon the facts of the civil suit as well as the borrower company's conduct of the account. If the operation of the account is otherwise satisfactory and the Bank did not doubt about the title of the mortgagor company, and the suit ends in favour of the borrower company, it can hold the bank liable for shutting out the operations abruptly.
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