Legal Question in Credit and Debt Law in India
Hi! I have an unsecured loan on my pvt ltd company. Due to losses incurred in business over last 2 years, the company has not been able to pay bank anything and so the bank has gone to Debt Recovery Tribunal. There is no immovable asset in the name of the company and as a matter of fact there are no assets at all that can be liquidated to recover the amount of loan taken. The company has 3 directors as well as the shareholders, my brother , my father and me. None of us have any personal assets except my brother who has a flat where the entire family resides. In the loan agreement, all the directors have give personal guarantee but no mortgage is involved. Will the court evict us from our only house to recover the loan amount which is 1 Cr. ? Is there a law which says that if we have only one property where we reside, and is not directly mortgaged, then that cant be taken away and families residing there thrown on the roads?
3 Answers from Attorneys
You should immediate to take stay order and search for relief otherwise it can be which you don't think should happen.
01.04.2014
Dear Sir / Madam,
Since all the Directors have given their personal guarantee to repayment of the loan, the DRT can pass an order permitting the bank to stake a claim on the flat in the name of one of the Directors for recovery of their outstanding dues. It is surprising how could you have lost the entire Rs.1 crore without realizing that you were drastically going wrong. There is no such law which says that if you have only one property where you reside, it cannot be taken away, simply because it hasn't been mortgaged.
Regards,
apply for stay and try to negotiate.
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