Recovery of my house
I had taken a loan for ₹2.10 cr in Sep 13 from The Bharat Co-Operative Bank, Mumbai. I have paid an avg EMI of ₹2.8 lakh/month for 10 months from the time of disbursement. After 10 months I defaulted since my business shut down and the Bank took possession of my house on 29-Dec-15. In the meantime I sold one my asset to raise money and while my case was heard in HC, Mumbai on 4-Feb-16 the HC asked us to deposit ₹50 lakh which we did and later asked the Bank to hand over keys to us in 4 weeks and pay balance of ₹70 lakhs by Sep 16. The Bank in the 4 weeks period approached SC and took a stay order on HC judgement. My case finally came on board in SC in Oct-16 wherein the Bank said we haven\\\'t paid money and hence the SC advised Bank to take appropriate action. The Bank put an auction notice but we approached HC and the HC asked to deposit ₹70 lakh immediately. We deposited the amount with Bank in Nov-16 and again the HC instructed the Bank to hand over keys to us in a week. The Bankers again went to SC and took a stay order. Later when the case was heard in SC, The SC said that unless the case the discharged from HC, none of the parties should come to SC and let the HC decide on this case. Currently I am waiting since Jan-17 for my case to come on board in HC, Mumbai. Please advise the best way out wherein I can get back in my house. Also my Mom is being treated for kidney dialysis since 25-Feb-17 and post operation we do not have a house to stay in Mumbai even after paying the dues. PLEASE HELP AND ADVISE!!!!
You could get an extension of ten days by visiting the bank and explaining problems in your personal and fiscal conditions- i.e. a delay in your salary or some other fiscal problem by visiting the loan counter at the bank and offering documents as proof. After having analysed your financial position, if the bank feels that the quantum of the EMI is what is troubling you, they may be willing to reschedule your debt by extending the loan tenure. If your financial situation is such that there is likely to be a jump in cash flow going forward because of a change in job or any other reason, you may seek temporary relief from the bank for a few months. The bank may permit the same but may charge a penalty for not paying within the time frame agreed upon earlier.
However, in case you do not get the extension, you have the following options-
The SARFAESI act gives the customer the right to appeal against the action of repossession taken by the bank in the Debt Recovery Tribunal u/s 17 within 45 days from the date when the action was taken. If the Debt Recovery Tribunal passes an order against the borrower, then an appeal can be filed before the Appellate Tribunal within 30 days of receiving it. If it is held in appeal that the possession of the asset taken by the secured creditor was wrongful, the Tribunal or the Appellate Tribunal may direct its return to the borrower, along with appropriate compensation and cost.
In case of sale of Immovable Asset (House/property/land) bank has to follow these guidelines-
- A notice will be sent to the borrower u/s 13(2) of the SARFAESI Act. This can be done only after the loan is classified as an NPA as per the guidelines set by the RBI.
- The customer will be allowed 60 days, post issuance of the notice, to regularise the account or come forward to settle the account.
- If the borrower refuses to pay, then the authorised officer will ask for the physical possession of the mortgaged property by handing over the demand possession notice to the borrower.
- The bank shall proceed with the auction of the attached property after 30 days of taking possession of the property. This is in the event, that the customer does not come forward and settle the loan. The bank shall send the customer a letter intimating him about the venue of the sale, indicating date and time of the same.
- The bank will consider handing over the possession of the property to the borrower any time after repossession and before concluding the sale transaction of the property, provided the bank dues are cleared in full.
You can exercise the following rights if you default on a loan:
Right to Notice
When you fail to pay the loan dues, the bank can’t take any immediate action against you. If you haven’t paid EMIs for 90 days, the bank must serve you a notice of 60 days. Once the notice period is over and if the dues are still unsettled, then the bank is allowed to repossess your property. And before the bank can sell off your property, it has to serve yet another notice of one month informing you about the same.
Right to be Heard
Within the one month notice period, before the property is auctioned, a loan defaulter can file a representation to the authorities and raise objections towards selling off the property. The loan officer has to then respond to the representation and give valid reasons for turning down your objections within seven days.
Right to Fair Value
If the bank has repossessed your property due to a loan default, it does not give them the sole right to decide the sale price of the property. Along with the one month notice informing the customer about the auction of the property, the bank has to send a fair value notice that clearly states the sale price of the property as assessed by the bank officials. However, if you feel that the bank is selling it off at an under-priced rate, then you can raise objections and declare a price that you feel is reasonable. The bank has to consider your plea to receive fair value for your property and will have to revaluate the property once again.
Right to Balance
Since the rates of property are steeply rising with each passing day, there is a possibility that there might be a fair amount of balance left after the bank has settled the loan by selling off your property. You are entitled to get that balance amount as the bank has no claim on it once the loan is settled.
Right to be Treated Politely
Banks are registered organisations and can’t act like independent money lenders when it comes to a loan default. In the past there have been reports of harassment and mistreatment of loan defaulters by collection agents but now banks have decided to follow a code of conduct that is polite and respectful. A collection officer has to politely request to meet you and the place and time of the meeting can be as per your convenience. If you don’t respond to the request, the collection officer may meet you at your home or work place. Also, the agent can meet you only between 7 AM and 7 PM and can’t harass you late at night or in the wee hours of morning. The collection agents are supposed to treat the defaulters in a respectful manner without resorting to abusive language and mistreatment.
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