Legal Question in Banking Law in India

what remedy available for denial of Bank loan

I approached for a loan of Rs.5 crores at State Bank of India for setting up a cold storage project.Initially they gave me a

pre-sanction on the condition that I have to fulfill all terms.

The loan is subject of regional office. I got pre-approval in

the month of may2008. and I performed all formalities costing a sum of Rs. six lakhs and a sum of Rs. two crores towards

infrastruce, all formalities O.K. The project was scheduled to commission on March2009.Last moment Bank denied to offer me loan on the plea that I have pending criminal case which

maximum penalty if found guilty is two months though I am

innocent and victimized,as such I am to suffer huge financial loss and mental agony,what remedy available?


Asked on 3/16/09, 11:02 am

4 Answers from Attorneys
Pranav Desai PD Legal & Associates

Re: what remedy available for denial of Bank loan

I believe you should file a suit for specific performance against the bank.

Read more
Answered on 3/17/09, 1:26 pm
Sudershan Goel India Law Offices of Sudershan Goel - Advocate

Re: what remedy available for denial of Bank loan

The Bank may have to justify their action in refusing you release of loan. As per law laid down by the Supreme Court of India, the banks cannot refuse to release funds in a duly sanctioned loan - reference may be made to Lotus Hotels's (Gujrat Financial Corporation). You may need to engage a counsel for pursuing your remedy.

There may be two options :

(a) claim damages from the Bank for the loss suffered by you in their refusal to release sanctioned amount;

or

(b) release of the loan already sanctioned.

Read more
Answered on 3/16/09, 1:33 pm
J. Radhakrishnan independent Practice

Re: what remedy available for denial of Bank loan

You can refer to the Supreme Court judgment in Lotus case. Give notice through lawyer to the Chairman of the Bank to release the loan. If it does not work, complain to Banking Ombudsman. Better consult a local lawyer having good practice in banking matters and proceed.

Read more
Answered on 3/16/09, 10:09 pm
Ankur Mittal MITAL & MITAL Advocates

Re: what remedy available for denial of Bank loan

you have two options

a. File a civil suit for damages

b. file a consumer complaint

Please consult a local lawyer with all particulars

Read more
Answered on 3/17/09, 2:37 am


Related Questions & Answers

More Banking Law questions and answers in India