Legal Question in Securities Law in India

I request the panel to advise on my issue.

Ours is a Infrastructure construction company borrowed Rs. 13 crores from Bank No -1 and Rs. 7 crores from Bank No- 2.

The collateral security is a agricultural land worth Rs, 80 crores.

The repayment is over due and subsequently has been classified as NPA.

The Bank No 1 ( Consotium leader ) has issued a notice under sarfaesi act.

We have asked for extension of time for repayment but could not repay, later the bank has issued a notice under rule 8 (1) of sarfaesi ie possession notice.

My question is

a) When notice u/s sarfaesi act is issued -should both bankers jointly issue ? with the total outstanding ? In our case only the outstanding of the Bank No-1 is mentioned in the notice.

b) Since the land is agricultural land - proof is patta , tax paid receipt, and the VAO records, can the bank attach the land under Sarfaesi act?

Thanks in advance for your advise.


Asked on 9/02/10, 10:51 pm

1 Answer from Attorneys
RAJIV GUPTA (Cell: +91 9811284735) [email protected]

in case the land is in your name and the same is mortgaged with the bank, the physical possession may be taken by bank no. 1 but as the proceedings not started by bank no. 2, when the agricultural land may be auctioned, you may inform bank no. 2 to realize its funds as well. but as the stakes involved are 80 crore, you may incur a great loss in case the bank takes physical possession of the land and later auctions it.....better hire a good lawyer for safe guarding your interest. did the bank issue you notice u/s 13(2) of sarfaesi act.

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Answered on 9/03/10, 12:37 am


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