Karnataka State Finance Corporation Claiming Gift deeded Property against loan
My grand father availed loan (joint loan with business partner) for business from KSFC and defaulted but no property was collateral except the factory and his business partners house and personal guarantee. My grand father gift deeded 'house & land' in his name to his son name which was not collateral for loan soon after the default and KSFC had no proceedings against house & land until 20 years from the loan default date but now KSFC claiming the house & land against the loan.
Can KSFC claim the gift deeded property which is not collateral for the loan after 20 years from the loan defaulted date?
My grand father has started a business with his business partner in 1992 and availed working capital loan from Karnataka state finance corporation(KSFC) amounting to 4.5 lakhs. Factory current assets and property of his business partner kept as collateral for the loan and personal guarantee. Due to business failure they defaulted the loan. KSFC initiated the recovery process and sold the factory to recover the dues. After this event, my grand father gift deeded house & land to my father name. My father took a loan on the property for personal reasons and cleared it on 2013. In 2013 KSFC claiming the property on my father name to pay the balance due on loan taken by grand father and initiated process to transfer the title from my father name to KSFC name to auction it. KSFC hasn't even claimed the business partner property pledged as collateral. Currently KSFC is claiming that due amount is 8 crores (for the loan amt 4.5 lakhs) when we approached them for one time settlement, which is insane and we can't afford to pay.