Legal Question in Banking Law in India

Mortgege of property with HUF as shareholder.

A property jointly held with a HUF and two individual partners was mortgaged with a leading nationalised bank since 2003 to provide cc limit to a firm, in which one of the partners is a coparcner in the HUF, and the other is a individual partner in the property. All partners of the poperty and all coparceners have signed the mortgage. Now, a cc limit enhancement application has been rejected saying, ''HUF property can not be mortgaged for other purposes except for the sole benefit of HUF as per decision of Supreme court of India''.

Kindly Opine


Asked on 1/13/09, 3:32 am

2 Answers from Attorneys
Aniruddha Pawse Aniruddha.P.Pawse Advocates

Re: Mortgege of property with HUF as shareholder.

Yes that is correct.

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Answered on 1/13/09, 5:58 am
Sudershan Goel India Law Offices of Sudershan Goel - Advocate

Re: Mortgege of property with HUF as shareholder.

If that is the law, you need to follow the same. The previous action of the bank may not be binding at the time of renewal of CC Limit when there is a change in legal position.

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Answered on 1/13/09, 8:34 am


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