My company had taken loan of Rs. 65 lacs from Bank for business in the year 1994. I was the proprietor; office was mortgaged against the loan. In the year 2003-04 as per Bank’s instruction I compelled to sell my mortgaged office. Property was sold for Rs. 35 lacs which were repaid to Bank. Around 2006 Bank has filed a suit against my company for recovery in DRT for remaining loan amount. I don’t have any property neither any savings as I am not earning for last many years. My uncle has gifted the house owned by him to my Daughter and Son. We are residing now at the same place. Uncle has passed away around 2014. My father-in-law and my wife were guarantor for this loan. My father-in-low has gifted his property to his younger daughter – my sister-in-law who is married. he does not have any property. My wife is homemaker and she does not have any savings. Bank has filled evidence today. Details yet to receive
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Bank cannot attach property gifted by your uncle to your daughter and son
2) bank can attach property standing in your name only
3) the liability of principal debtor is co extensive with that of guarantor
4) bank can sue both to recover balance loan amount
So far as recovering money from defaulters, bank proceed against mortgaged property first, which was also done in your case.
Thereafter if the amount recovered from the sale of the mortgaged property is insufficient, then the bank has the option to proceed against the guarantors of the loan, in this case against your father in law and your wife. If they are owning properties either movable or immovable these can be attached for realization of outstanding amounts.
If your father in law does not own any property then the bank cannot move against the property of his daughter, your sister in law as the property at present vests with her.
Follow the case filed by the bank. Most likely bank will get an order from the court, but eventually this will only be a paper decree, as they cannot recover the monies, and may have to close the loan account as NPA or bad debts, in there books of account.
The bank can attach proeprty only which is mortgaged to it.
However if the sale of mortgaged proeprty does not yield enough money then it can proceed to recover from the proeprty of guarantor.
So property of any other except the guarantor the borrower no other proeprty is touched for recovery of loan.
bank has right to sell mortgage property and all other property of the borrower if loan amount is not satisfied.
property of borrower's relatives even his wife's cannot be subject to sell unless it is proved by the bank that borrower has transferred his property with mala fide intention to cause loss to the creditor.
so gifted property cannot be subject to sell is discharge of loan amount.
The bank if unable to recover loan amount from borrower, it would attach the property of guarantors.
The property on the name of your children cannot be attached.
