Sir, we were running a steel business. business loan taken from bank. but due to various circumstances we incurred loss and stopped the business. till now we are paying interest to the bank by taking loan from private people. but we are unable to pay anymore and submitted a letter to bank for one time settlement. but the bank is not considering it and continuously pressuring us to pay the interest. since it is business loan, the stock is not available due to heavy loss. banks threatening to take criminal action for wrong declaration of stock in stock statement submitted to bank. our intent is to sell the property and make settlement to bank. can we avoid criminal proceedings by any way since we have given false declaration about stock availability. if yes kindly advise. your adivise is very much valuable for us. thanks.
Nothing to worry. It is pure civil dispute and hence no criminal case can be filed on it.
The loan seems to be secured one.
if that is so then the bank can proceed to attach the security as per SARFASI Act.
So wait till the bank takes such steps.
After that you can seek for injunction in DRT.
1) if you have given false declaration bank can file police complaint against you for cheating and criminal breach of trust
2) if you fail to pay bank will issue you notice under section 13(2) of SARFAESI act and proceed with recovery proceedings
1. Bank is within its right to lodge a police complaint and file FIR against you since the stock lying with you as per the stock register is hypothecated property of the lending Bank which have fallen short as per stock register.
2. You can fix a buyer and approach the Bank for entering in to a tripartite agreement between you, the Bank and the buyer by which the buyer will pay directly to the Bank the entire outstanding or the settled amount after which the Bank will handover the original title deed of the mortgaged property to the buyer and also issue a No-Due certificate to you.
If you had obtained loan through false declaration then it amounts to an offence of cheating. It will be wise for you to repay the outstanding loan to the bank as it will be difficult for you to even obtain bail if it decides to file a FIR.
You can inform the bank about your actual stock position and your desire to cancel the loan and are willing to discharge the entire loan amount by one time settlement.
You can send this communication to the head office of the bank stating that the bank manager of the branch is not accepting this proposal and also that you cannot continue to pay the interest amount which is being insisted by th branch manager.
You can endorse a copy to the branch manager also so that he would be in the knowledge of the correspondences.
This is one step which you can adopt before deciding to approach legally to this issue.
