05 March 2008
Sir, 1)Co Op. Credit society (in maharashtra) has given loan to a borrower against mortgage of house property of Rs. 3.00 Lacs. 2)In due course, the loan became NPA and the borrower went absconding. 3)The property mortgaged was auctioned by the society and Rs.1.88 Lacs were recovered. 4) What to do with the remaining amount? if guaranter's can be prosecuted for recovery? if yes, what is the procedure. 5) Or can the society adjust the bad portion of the debt against the Bad & Doubtful Debts Reserve; if yes; what is the process?
05 March 2008
CERTAINLY WHEN THE BYE LAWS PERMIT,AS PER BYE LAWS OF THE SOCIETY, YOU CAN PROCEED AGAINST GUARANTORS. THE FIRST STEP IS TO ISSUE LEGAL NOTICE TO THEM THROUGH YOUR SOCIETY LEGAL ADVISOR,OR HIRE A LAWYER IF YOU DONT HAVE A LEGAL COUNSEL. AFTER THE EXPIRY OF TIME GIVEN IN THE LEGAL NOTICE IF THE GUARANTOR DOES NOT RESPOND , YOUR LEGAL COUNSEL HAS TO GET COURT ATTACHMENT AND RECOVER DUES BY AUCTION SALE OF GUARANTOR'S PROPERTY. IF THE BYE LAWS DONT PERMIT TO PROCEED AGAINST THE GUARANTOR( NORMALLY THE BYE LAWS PERMIT) OR GUARATOR HAS NO PROPERTY TO BE ATTACHED OR IF HE IS ALSO ABSCONDING, YOU CAN WRITE OFF AS BAD DEBTS NOT RECOVERABLE AND ADJUST AGAINST RESERVES FOR BAD DEBTS ( CONSULT YOUR SOCIETY BYE LAWS AND YOUR AUDITORS FOR PASSING NECESSARY RESOLUTIONS AND PASSING BOOKS OF ACCOUNTS ENTRIES ). THIS IS THE FINAL ACTION WHEN THERE IS NO COURSE OR HOPE OF RECOVERY OF A LOAN BY ANY BANK/FIN. INSTITUTION/SOCIETY R.V.RAO
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