Legal Question in Banking Law in India
A loan was given by a firm under a hire-purchase agreement for purchase of vehicle. The borrower executed a pronote in favour of the firm advancing the money, which was assigned to the Bank, but the loan covered by hire purchase agreement was not so assigned. Does the bank have a locus standi to bring a suit against the borrower on the basis of collateral security of the pronote? Discuss
Asked on 3/20/13, 8:36 am
1 Answer from Attorneys
Rajneesh Malhotra
Malhotra Advocates
Assignment means transfer of a right. Once the right have been transferred through a negotiable instrument, the bank is well within in rights to file a suit against the borrower. At best, non assignment of hire porchase agreement may be regarded as a technical defect, but substantial justice would be met if bank is allowed to recover money.
Answered on 4/07/13, 6:30 pm
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