Can Bank Auction Collateral Property Before The Main Primary Property


We Have Take A Loan Against Our Factory L & Bldg & M/C & Also Provided The Collateral Of Our Friends & Relatives , But Due To Many Problems We R Unable To Run Our Business, As 1 Of The Main Reason For Shut Down Is A Litigation Which We R Facing From Govt. On Our Factory Premises, As While Borrowing Loan For Bank & Also Purchasing Land We Had Certified From All The Govt. Bodies As A Cleared Title But After 3 Years Govt. Send As A Notice That Our Land Is A Forest Land & We R Illegally Running Our Plant, For This Our Case In Court, But Bank Have Initiated For Recovery For Us & Collateral

Answers (1)


76 votes

I am assuming that the laon was secured by

1) the land on which the factory premises is located and further

2) by the personal guarantees furnished by your friends and family.

If this is the case then the bank will proceed against you under the SARFAESI Act. They will move the Debt Recovery Tribunal to take possession and title over the factory premises.

However, this process may be stalled as the title to the property itself is under litigation with the government. As far as the personal guarantees are concerned, you may challenge the bank proceeding against them under certain grounds. For example, if the loan was taken in the name of the company, foreclosing the assets of your friends and relatives could be deemed to be illegal.

Feel free to get in touch if I could be of any further assistance.


Googling your legal issue online?

The internet is not a lawyer and neither are you.
Talk to a real lawyer about your legal issue.

Popular Recovery Lawyers


Advocate Rajesh Rai
Sector-19, Dwarka, Delhi
20 years Experience
Advocate Sunil Kumar Bakshi
Sector-16, Faridabad
33 years Experience
Advocate J. P. Rinwa
Swej Farm, Sodala, Jaipur
19 years Experience
Advocate Jaspreet Singh Rai
Greater Kailash 1, Delhi
17 years Experience

Disclaimer: The above query and its response is NOT a legal opinion in any way whatsoever as this is based on the information shared by the person posting the query at LawRato.com and has been responded by one of the Recovery Lawyers at LawRato.com to address the specific facts and details. You may post your specific query based on your facts and details to get a response from one of the Lawyers at LawRato.com or contact a Lawyer of your choice to address your query in detail.

Related Questions


"LawRato.com has handpicked some of the best Legal Experts in the country to help you get practical Legal Advice & help."



Related Articles