Property in dispute - no respite from last 6 years
I bought a property in September 2008 (EMAAR MGF Boulder Hills, Hyderabad) and took a bank loan for 40% of the property value. In 2010 May, the property went into dispute due to a disagreement between government and the builder. I continued to make mortgage payments to the bank until 2012 August and since the status was not coming out of dispute, I indicated to bank I will not make any further payments.
The bank reported my account to CIBIL in 2013 and my loan is showing as "Written Off" on the CIBIL record. Two questions
1. The property went into a legal dispute and the property which is supposed to have been completed by June 2011, is still in limbo
2. The bank issued a letter at the time of granting loan saying that the property has clear title and hence I can avail the loan without hesitation
3. The agreement I signed with a builder is a tri-party agreement between me, the builder and bank
4. The original loan issuing bank has been acquired by another bank in mean time.
My question is, is the bank legal to report that I defaulted when clearly the property is in dispute? What statues if any make me liable for the loan solely, when it is a tri party agreement? Can I sue the bank for maligning my reputation and have them withdraw their inaccurate reporting to CIBIL?
Please advise what my options are here? The property is still in dispute and non one knows, if and when it will be out of the legal limbo. Thanks.