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Loan against property recovery


12-Aug-2025 (In Recovery Law)
We had taken a loan of ₹5.5 Lakh from CAN FIN FINANCE for a tenure of 10 years. We have been paying the EMI regularly for the past 7 years. However, due to a financial crisis, 3 EMIs went overdue last year. Despite this, we have paid the last 6 months’ EMIs regularly. Recently, a bank representative and an auditor came to our home without any prior intimation and informed my father-in-law that if the overdue amount is not cleared, they will take action to sell the property. pls advice
Answers (3)

Answer #1
638 votes
First and foremost if you are paying the EMI regularly the financial institution does not have any authority to take action against you. if it all they are threatening to sell the property you can issue a legal notice to them and take stick action against such threats. there are certain guidelines for the recovery agents also. They cannot miss behave with you in any manner, if they miss behave you can file complaint against them too.
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Advocate Neelkanth Goswami

Adv. Neelkanth Goswami

LawRato Thane | 400+ Answers
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Answer #2
988 votes
Since there is still an overdue of 3 EMIs, the lender has a legal right under the loan agreement to recover the dues and, if unpaid, proceed under the SARFAESI Act to auction the mortgaged property. However, they must first issue a written demand/notice before taking any recovery or sale action. You should immediately: Request a written statement from the bank showing the exact overdue amount and any penalties. Try to pay or negotiate settlement/waiver for the overdue EMIs to avoid further legal action. If they visit without notice or behave in a threatening manner, lodge a written complaint to the bank’s higher authorities and, if needed, to the RBI Banking Ombudsman. Preserve all payment proofs to show regular payments for the last 6 months, which may help in negotiation. If repayment in full is not possible at once, you can request restructuring or partial payment with a written agreement to avoid property sale.
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Advocate Saylee Chaudhari

Adv. Saylee Chaudhari

LawRatoDombivli | 50+ Answers
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Answer #3
814 votes
file a complaint against that financial institution on RBI's banking ombudsman portal. tell every detail regarding your situation and how these guys are harassing you. if some incidents happen again don't forget to record everything via mobile camera. also see for the arbitration clause in your loan agreement. If there is any arbitration clause and if they give you notice regarding arbitration proceedings then just reply to that notice via an advocate that you don't trust the arbitrator the arbitrator is biased and i will only attend arbitration if honourable high court appoints the arbitrator.
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Advocate Vivek Vilas Sable

Adv. Vivek Vilas Sable

LawRatoPune | 25+ Answers
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