if account has tuned NPA and you seek to transfer properties bank can take legal proceedings to set aside said transfer if it was done to evade creditors
NPA
In case of a personal guarantee given for a loan is it possible to transfer unsecured properties after the account has turned NPA.I have read somewhere that bank will file a suit that transfer was effected to evade the creditors,That the unsecured property could have been used to satisfy the banks claims.
Asked 6 years ago in Property Law
Religion: Hindu
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17 Answers
Yes unsecured properties can be transferred. The bank cannot attach the unsecured properties.
Property which is not mortgage can be transfer, no hypothecation on unsecured property.
Dear Client
A personal Guarantor Unsecured property cannot be acquired by bank under SARFAESI. but bank can declare you as willful defaulter if you doesn't repay the loan in case the borrower assets are not sufficient to repay the loan.
so bank cannot challenge the sale done by you but you should sell the property before any notice from the bank.
so Bank cannot file a suit on you for making sale to evade creditors. And unsecured assets cannot be used to satisfy bank claims that too of guarantor
1. The guarantor and also the borrowers can sell or deal with their unsecured properties even any time even after the loan has been declaraed as NPA unless the said mproperty has been attached before Judgement by the DRT.
2. The lending Bank shall have to file O.A. before the DRT and immediately file an application for passing an order of attachment before Judgement of the unsecured properties of the huyarantor/borrower casting apprehension that trhe guarantor/borrower is likely to sell of the said unsecured properties and evade payment of the outstanding.
You are advised to clear the bank loan.
The bank may proceed to attach your properties. The bank will take every action to revover under all the provisions under Law.
The recovery procedure by the banks has been backed with the provisions under law.
Unsecured properties can transfer at any point of time. If the loan amount have not fully paid then the bankers can attach the borrower or quarantor's individual property.
1. There is no aw as yet whereby the creditor through SARFAESI Act can attach properties which are not mortgaged with the bank.
2. However after selling the secured assets the ban can file suit for recovery of money to recover balance amount and tacch your other properties to execute the decree.
Generally bank can only have lien on secured property in default. Bank can still prove that it had malafidely transfered for the evadng debt
Hello
yes you have rightly heard.
Bank will show this that to evade the liability the property has been transferred by you and as such such sale be declared invalid.
Regards
unsecured properties can be transferred.
The bank may file suit for recovery and may seek attachment before judgment of the property that is held by the borrower or the guarantor for the purpose of security for the loan availed.
- As per the information mentioned in the present query, makes it clear that the loan was given for the personal guarantee.
- If the loan was on unsecured basis by the borrower then in the bank cannot transfer the unsecured assets of the borrower, but of the guarantor for sure.
- So, in the present situation, it can be done by the bank for sure to avail their amount so given as loan.
- If no personal guarantor is there as third party, but the borrower was himself the guarantor then also his unsecured assets can be transferred by the bank.
The facts are as follows: I acted as a personal guarantor for a loan taken by my brother.For this I had mortgaged one property of mine and my brother also mortgaged his personal properties.Apart from my mortgaged property I had stood as a guarantor for the entire loan amount availed by my brother.The bank valuation for all the mortgaged properties was equal to the loan amount though I doubt that those properties will fetch that amount as of today.I came to know unofficially that the loan account was in stress and can be declared NPA.So in view of this I transferred my unsecured properties to my family members by way of a registered gift deed.Just a couple of days after the transfer I got a sarfaesi notice from the bank with regards to the mortgaged properties.My question whether the bank can file a suit against me regarding the unsecured properties saying that I did it with an intention to avoid the claims of the bank incase the mortgaged properties fail to satisfy the loan.What are my chances?
Asked 6 years ago
Under sarfesi act only secured property can be attached. They can't attach your unsecured ones
No under sarfesi bank cannot attach unsecured properties and bank cannot attach those properties.
in event account is declared NPA bank would seek to auction. The mortgaged properties of principal debtor and guarantor
in event there is shortfall in recovery bank would then sue the principal debtor and guarantor to recover the shortfall. If any and seek to attach your other property to recover its dues
Bank can file a suit against you for recovery of the loan amount is not covered by auction of secured properties.
And court can attach your properties in that suit. And in that bank can file application that you transferred the property to evade the loan liability for which you have to prove that you don't have any knowledge about the NPA of account during the gifting process of properties.