Unjustified For Bank To Proceed Against Property Based On Prior Settled Mortgage, When No New Mortgage Was Created: Kerala High Court

The Kerala High Court has observed that it was not appropriate to proceed against the property of a guarantor who has not created mortgage over the property as collateral, merely because the guarantor had previously acted as a surety in another mortgage that has already been settled.In the case before the high court, the petitioner company mortgaged its property to avail itself of a credit facility for an LLP, and that mortgage was settled, and dues were cleared, but the bank did not return its...

Banks Ought To Give Notice, Opportunity To Pay Dues Before Recovering Customer's Vehicle: NCDRC Holds Kotak Mahindra Bank Liable

The National Consumer Disputes Redressal Commission, New Delhi (NCDRC) bench of Dr Inder Jit Singh (Presiding Member) held Kotak Mahindra Bank Ltd. liable for deficiency in services for its failure to issue a notice before recovering the vehicle secured under a loan agreement. The Bank also failed to give an opportunity to the borrower to clear the dues and hastily sold the vehicle at an undervalued price. Brief Facts: The Complainant financed his heavy goods vehicle with a loan...

Bank Can't Withhold Superannuation Benefits Explicitly Granted In Removal Order Despite Ongoing Service Dispute:MP High Court

Madhya Pradesh High Court: A Division Bench comprising Justice Sunita Yadav and Justice Milind Ramesh Phadke partially allowed a writ appeal challenging the Single Judge's order that had directed the appellant to raise an industrial dispute regarding his superannuation benefits. The Court held that when a removal order explicitly grants superannuation benefits, these cannot be withheld by directing the employee to approach the Industrial Tribunal, as the tribunal reference was meant only...

Bank Cannot Be Held Liable For Lapse In Coverage Unless Explicitly Agreed: NCDRC

The National Consumer Disputes Redressal Commission, presided by Mr. Subhash Chandra and Dr. Sadhna Shanker, held that the borrower is responsible for insuring their goods, and the bank is not liable for any gaps in coverage unless it had specifically agreed to handle that responsibility. Brief Facts of the Case The complainant, running a business of quilts and foams, took a loan from Canara Bank, which also arranged insurance for the stock and godown. The bank deducted the...

Banks Can Be Held Liable For Dishonouring Directions Issued By Banking Ombudsman For Bank-Related Consumer Grievances: Goa State Commission

The State Consumer Disputes Redressal Commission, Goa bench of Mrs Varsha R. Bale (Officiating President) and Ms Rachna Anna Maria Gonsalves (Member) held that banks could be held liable for dishonouring the order of the Banking Ombudsman for resolution of bank-related issues. The State Commission highlighted the pro-consumer intent of the Consumer Protection Act, 2019 and remanded the matter back to the District Commission for fresh consideration of the issue based on merit, against the...

Disclosure Of Bank Statement To Estranged Husband, Southwest Delhi Commission Holds Vijaya Bank Liable

The District Consumer Disputes Redressal Commission-VII, Southwest Delhi bench of Suresh Kumar Gupta (President), Harshali Kaur (Member) and Ramesh Chand Yadav (Member) held Vijaya Bank liable for deficiency in service and breach of trust for disclosing the Complainant's bank statements to her husband. The bench noted that there was a strained relationship between the Complainant and her husband and even a spouse cannot view the statement without the consent of the account holder. Brief...

Mere Deduction Of Premium Does Not Create Binding Insurance Contract, Uttarakhand State Commission Dismisses Appeal Against New India Assurance Co.

The State Consumer Disputes Redressal Commission, Uttarakhand (“State Commission”) bench of Kumkum Rani (President) and Mr B.S. Manral (Member) held that automatic deduction of the premium amount by the intermediary bank does not make a binding insurance contract between the insurer and the insured. The bench dismissed an appeal filed against the New India Assurance Co. by holding that there existed no renewed insurance contract at the time of the loss and the Insurance Company refunded ...

SARFAESI Act No License For Bank Officers To Act Against Law : Supreme Court

In a recent judgement, the Supreme Court underlined that all litigants, including banks, were duty bound to follow provisions of law and that banks would not be treated on a different footing than other litigants. The Court said that the the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) does not give any "license to the Bank officers to act de hors the scheme of the law or the binding verdicts".The bench comprising CJI DY...

SARFAESI Act | Borrower's Right To Redeem Mortgage Extinguishes Once Bank Publishes Auction Notice For Secured Asset: Supreme Court

The Supreme Court on Thursday (September 21) pronounced a judgement holding that the borrower's right of redemption of mortgage under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) will get extinguished once the bank publishes an auction notice for the sale of the secured asset. The judgement delivered by a bench of Chief Justice of India DY Chandrachud and Justice JB Pardiwala also underlined the need to protect the...

SBI Is State Instrumentality, Writ Petition Maintainable Even In Disputes Pertaining To Contract For Loan Transaction: Karnataka High Court

The Karnataka High Court recently set aside an endorsement issued by the State Bank of India to a partnership firm, stopping the release of loan amount which was sanctioned and partly disbursed.While the bank resisted the writ petition stating the loan transaction was in the nature of a 'private contract', a single judge bench of Justice Krishna S Dixit observed,“The respondent-bank being an instrumentality of the State under Article 12 of the Constitution, even in matters like this, writ remedy...

SARFAESI Act | Bank Can Auction Property With Encumbrances But Bidders Must Be Informed, 'As Is Where Is' Clause Not Sufficient: JKL High Court

The Jammu and Kashmir and Ladakh High Court recently ruled that a Bank can auction the property even with encumbrances attached to property under the SARFAESI Act but it is incumbent upon the Bank to disclose the encumbrances and litigations attached to the property to all the persons who want to participate in the same and to the successful bidder. A bench comprising Justice Sindhu Sharma observed, "By including a clause of" as is where is‟ it would not be sufficient for respondent ...

Writ Jurisdiction Can Be Invoked For Commercial Transactions Between Private Person & Public Body Involving Element Of Public Law: Calcutta HC

The Calcutta High Court has held that writ jurisdiction of High Courts under Article 226 of the Constitution is invocable even for cases involving ordinary commercial transactions between private persons and public bodies as long as some element of public law is involved in the said commercial transactions. Deciding in favour of the petitioner on the maintainability of the writ petition which challenged one such commercial transaction with UCO Bank, a Division Bench of Justices I.P....