Legal Question in Banking Law in India

Dear Experts,

Can you please clarify the following queries?

1)Can a borrower sell the secured property without the consent of the secured creditor before the loan is not closed?

2)If so, will it affect the rights of the secured creditor in proceeding against the possession of the property on declaration of the account to be an NPA?

3)If the borrower sells the secured property to a third party without the knowledge and consent of the secured creditor, will it amount to a criminal offence?

4) If it attracts criminal offence, under what provision of IPC?


Asked on 1/04/11, 8:34 pm

1 Answer from Attorneys
J. Radhakrishnan independent Practice

If he sells the property without disclosing the prior mortgage in favour of the Bank, the purchaser can take criminal proceedings . Bank will not be affected by any sale of the property mortgaged to it with or without its knowledge. It will enforce the mortgage against the purchaser as well. But it does not amount to a criminal offence to be prosecuted by the Bank.

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Answered on 1/10/11, 7:33 am


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