Bank NPA loan
8 months ago
I booked house in Noida in 2011 but now I am getting my house after 12 years..I have taken home loan of 32 lakhs in which I paid emi till 2018 is around 20 lakhs. After that because of job loss I didn't paid the emi and its become NPA from 2019 and my situation was same, after that covid came and till now my financial situation is bad.. some how I am survinng. Bank told me to pay 32 lakhs full amount 6 to 8 months back under any OSDL scheme..now anyhow I have managed the money and asked them to do settlement, but now they are saying you have to pay full amount with interest till now around 47 lakhs. I am not able to pay this much and I have not taken the possession of my house till now. But bank did the evaluation of my house and saying its around 1 crore now..so will want full amount. In this case what can I do Sir, please advise as I said my financial situation is still bad..thanks
A.Dear Client,
Once the EMI against a loan is not repaid for consecutive 3 times by the borrower for any reason whatsoever, it is treated as NPA. Accordingly, Bank sends notice to Borrower asking him/her for repayment of the entire dues lying against your loan offering suitable terms. In the absence of any response for the Borrower, they started the routine process of action prescribed under relevant laws for recovery of debt lying outstanding against the Borrower and the Guarantor. You can make a prayer to the Bank for some more time to settle the dues but cannot escape yourself from your liability of repayment of your loan for any reason whatsoever. A suit for recovery of an outstanding loan from the borrower is filed by the Bank before a Debt Recovery Tribunal under the SARFAESI Act, 2002. Section 13(3A) of said Act primarily lays down that any security interest created in favour of a secured creditor is enforceable without the intervention of any court or tribunal. As per sub-section (2) a creditor is required to issue a notice in writing to the borrower to discharge his liability within sixty days of the notice when such borrower has defaulted in repayment of secured debt or any installment thereof, and his account in respect of such debt is classified by the secured creditor as non-performing asset(NPA). If the borrower fails to discharge his liability despite the service of notice, the creditor is free to recover the debt through the modes prescribed in sub-section (4) such as – taking over possession of the secured assets of the borrower, taking over management of the business of the borrower etc. Sub-section (3A) of Section 13 of SARFAESI Act was introduced by way of an amendment in the year 2004 whereby (3A) the borrower is given an opportunity to make representation or raise an objection with respect to the notice issued under subsection (2). A further duty is imposed on the creditor to consider such representation/objection and if the creditor concludes that such representation or objection is meritless, he shall communicate within fifteen days of receipt of such representation or objection the reasons for non-acceptance of the representation or objection to the borrower. The Delhi High Court discussed the facts and ratio of the judgment of the Supreme Court in ITC Limited v. Blue Coast Hotels Ltd. & Ors.: 2018 SCC OnLine SC 237, which was the basis of the entire case of the petitioner. It was held by the Court that undoubtedly, the provisions of Section 13(3A) of the SARFAESI Act are mandatory and it is necessary for the lender to consider the representation/objection made by the borrower in response to the notice issued under Section 13(2) of the SARFAESI Act. The Delhi High Court observed that the intention of the Legislature in introducing sub-section (3A) is to ensure that objection/representation of a borrower against any action for enforcement of security interest is considered before a creditor proceeds to take possession of the secured assets in terms of Section 13(4) of the SARFAESI Act. The Court opined that bearing the aforesaid object in mind, it became at once clear that it is mandatory for the creditor to consider the objection and representation furnished by the borrower before resorting to any action under Section 13(4) of the SARFAESI Act. So in the prevailing situation, you need to negotiate the matter with the Bank failing which you have to face legal consequences. Reach out to an Advocate experienced in DRT matters for clarification, guidance and steps.
Once the EMI against a loan is not repaid for consecutive 3 times by the borrower for any reason whatsoever, it is treated as NPA. Accordingly, Bank sends notice to Borrower asking him/her for repayment of the entire dues lying against your loan offering suitable terms. In the absence of any response for the Borrower, they started the routine process of action prescribed under relevant laws for recovery of debt lying outstanding against the Borrower and the Guarantor. You can make a prayer to the Bank for some more time to settle the dues but cannot escape yourself from your liability of repayment of your loan for any reason whatsoever. A suit for recovery of an outstanding loan from the borrower is filed by the Bank before a Debt Recovery Tribunal under the SARFAESI Act, 2002. Section 13(3A) of said Act primarily lays down that any security interest created in favour of a secured creditor is enforceable without the intervention of any court or tribunal. As per sub-section (2) a creditor is required to issue a notice in writing to the borrower to discharge his liability within sixty days of the notice when such borrower has defaulted in repayment of secured debt or any installment thereof, and his account in respect of such debt is classified by the secured creditor as non-performing asset(NPA). If the borrower fails to discharge his liability despite the service of notice, the creditor is free to recover the debt through the modes prescribed in sub-section (4) such as – taking over possession of the secured assets of the borrower, taking over management of the business of the borrower etc. Sub-section (3A) of Section 13 of SARFAESI Act was introduced by way of an amendment in the year 2004 whereby (3A) the borrower is given an opportunity to make representation or raise an objection with respect to the notice issued under subsection (2). A further duty is imposed on the creditor to consider such representation/objection and if the creditor concludes that such representation or objection is meritless, he shall communicate within fifteen days of receipt of such representation or objection the reasons for non-acceptance of the representation or objection to the borrower. The Delhi High Court discussed the facts and ratio of the judgment of the Supreme Court in ITC Limited v. Blue Coast Hotels Ltd. & Ors.: 2018 SCC OnLine SC 237, which was the basis of the entire case of the petitioner. It was held by the Court that undoubtedly, the provisions of Section 13(3A) of the SARFAESI Act are mandatory and it is necessary for the lender to consider the representation/objection made by the borrower in response to the notice issued under Section 13(2) of the SARFAESI Act. The Delhi High Court observed that the intention of the Legislature in introducing sub-section (3A) is to ensure that objection/representation of a borrower against any action for enforcement of security interest is considered before a creditor proceeds to take possession of the secured assets in terms of Section 13(4) of the SARFAESI Act. The Court opined that bearing the aforesaid object in mind, it became at once clear that it is mandatory for the creditor to consider the objection and representation furnished by the borrower before resorting to any action under Section 13(4) of the SARFAESI Act. So in the prevailing situation, you need to negotiate the matter with the Bank failing which you have to face legal consequences. Reach out to an Advocate experienced in DRT matters for clarification, guidance and steps.
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