i/kochi
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Bank gave loan without conducting due diligence
My father took 3L business loan from a nearby urban cooperative bank 15 years ago, providing our ancestral home and property as collateral. Unfortunately due to his financial mismanagement his two subsequent business ventures tanked and is in now deep distress. The bank however, maybe because the board members are friends with my father, evergreened the loan ever since. However in 2020 urban cooperative banks came under the ambit of Sarfaesi act and it left no other choice for the banks to take legal action against my father. Now the loan has become 98 Lakhs. Now comes the twist in the tale. Under my grandfathers will, his another son (ie, my father's brother and my uncle) has right to residence in the ancestral house. His property rights were apparently overlooked by the legal advisor of the bank even though it is explicitly mentioned in the document. Now my uncle has filed case against the bank in the court. Now my doubt is whether my Uncle's case is strong enough to get a stay from court. I did some research and found out in Harshgovadhan case, Supreme Court has provided rights to tenants till their tenure ends,provided they started residing in the property way before the loan way taken. I don't know any precedence about my uncle's case as such. In case if stay is granted, would it be possible to sell the mortgaged property to clear the debts at this juncture, provide the bank has given green signal? Ps- I have nothing against the bank, they're just doing their job. It's on my father as he never disclosed any important matter to my mother or his kids. But it's just my parents have become dead mentally over the past few years. I do not wish to see it become physically.1
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