Please help - bank took gave notice for property as collateral

Hi Gopi, I understand your concern—this is a tough situation. Here's a detailed breakdown and some options you can explore:

What’s Happening Legally?

• You gave your property as collateral (security) to the bank via Power of Attorney (POA) for the loan taken by the food processing factory (in which you were a partner).

• The factory defaulted, the loan became an NPA (Non-Performing Asset).

• The bank is now taking action to recover dues by seizing or auctioning the collateral property.

• The notice pasted on your house is likely a legal step for recovery under the SARFAESI Act or loan agreement.

Can the Bank Take Over the Property?

• Yes, legally they can, if the loan defaults and you have given collateral.

• The bank usually follows a recovery process which includes:

  1. Issuing a demand notice.

  2. Giving an opportunity to repay the dues.

  3. Initiating possession through auction or sale.

• This means the bank can take possession of the property and sell it to recover dues.

Your Concerns About Your Mother Living There:

• The bank can take possession, but possession usually happens after proper legal steps and auction.

• If your mother is living there, the bank might not forcibly evict immediately, but eventually, if dues are not cleared, they may proceed.

Possible Options to Protect Your Property:

1. Repay the Dues:

   • The surest way to protect your property is to clear the outstanding loan.

   • If full payment is not possible, negotiate a restructuring or settlement with the bank.

2. Legal Consultation:

   • Immediately consult a lawyer experienced in recovery and property matters.

   • They can check if all procedures have been followed correctly by the bank (like notices, opportunity to pay, etc.).

   • You can explore filing a legal challenge (like under SARFAESI Act or Debt Recovery Tribunal) if bank did not follow due process.

3. Negotiate with the New Company:

   • Since the factory was handed over, try to get the new company to release your property or pay dues.

   • Sometimes the new management may be willing to negotiate or restructure.

4. Explore Other Financial Support:

   • If you can, arrange funds from family or other sources to pay off at least part of the dues.

   • This may delay or stop the bank's action.

5. Check if the POA was Specific and Limited:

   • Sometimes POA can be challenged if improperly executed or if the bank is overreaching.

Immediate Steps You Should Take:

• Do not ignore the bank’s notice.

• Get in touch with the bank’s recovery officer immediately to understand the dues and repayment options.

• Consult a lawyer without delay.

• Inform family members about the urgency.