Legal Question in Credit and Debt Law in India

Hi,

I am an NRI and purchased a residential flat in Sept 2007, taking LIC HFL Loan (up to 85 % of value). I gave GPA to my friend, who also resides in the same complex. But we were unaware of a dispute in court between first owners (W &H) of the property until April 2008, when the husband (of first owners) came with court clerk and police, to take possession of the property based on judgment issued on a 2005 case between W & H for his 50% ownership . We filed cases in city civil courts for taking possession from current occupant on the basis that court has wrongfully delivered possession to him without due consideration of the facts at the time of judgment in March 2008 i.e. despite knowing that the property was sold and in third-party ownership since Feb 2007 as recorded in acknowledgements of cout notices served to defendants. These are pending for disposal as of now. We were making regular payments towards EMIs to LIC HFL until June 2009 and then stopped payment on advice of our attorney, to make LIC HFL initiate action under SARFAESI Act while our cases are pending in the court. In the mean time LIC HFL appointed personnel followed-up with my GPA over phone to make payments, and when he explained our position the LIC HFL officers came to verify the facts at physical location of the property and didn�t pursue it any further, i.e. to either take possession of property or collect EMIs from us. They never served any written notices to either of us (me or my GPA).

But now a new officer who took charge at LIC HFL has sent me a coercive email last week stating that "Inspite of sending notices, reminders there is no response from your end. Still your accont is under default. As a last opportunity we are giving before publishing the photographs in the leading news paper and we are trying to file a cheating case under whitecaller offence in CCS, and sending the same to US EMBASSAY. Try to send all the overdues on or before 28th of this month to avoid the above legal roceedings. Total over Dues from July-09"

My attorney says LIC HFL or the individual officer can�t initiate such coercive actions either on a GPA or owner as original property documents were verified by and mortgaged to LIC HFL at the time of sactioning loan and hence LIC HFL has first right to take possession and dispose of the property to recover the dues, when a loan is at default. Our attorney also says that non-payment of EMIs against a property loan is not white-collar crime or cheating by definition.

When I tried to contact concerned LIC HFL officer over phone, the officer continues to claim that he has every right to do so i.e. as mentioned in the email based on the loan terms and conditions. He advised me to make wise judgment by my self (and not to heed to attorney's advice) on the issue and make all payments including penalities now to avoid societal embracement to myself and my GPA, when our photos are published in News Papers and cases are filed as indicated in his email. My GPA is aware of the email received by me and cooperative so far with me and my lawyers on this matter and ready to fight back.

My question is whether LIC HFL or the officer in his official capacity has the right to do any or all of the above actions indicated in his email, without due process under SARFAESI Act and other applicable regulations?

Thanks in advance for your advice.

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