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Introduction to Debentures

In the event,...

Question

In the event, that person taking the loan is unable to repay the loan on the house on time:

A

Yes, the bank has the right to auction the property for sale

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B

No, the bank has no right to auction the property for sale.

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C

the person has right to auction the property for sale

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D

the person has no right to auction the property for sale

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Solution

The correct option is A
Yes, the bank has the right to auction the property for sale

In the event, that person taking the loan is unable to repay the loan on the house on time, the bank has the right to auction the property for sale and recover their money through the sale

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Q. In case of default in repayment of loan, the bank auction the property for sale and recover their money. This procedure is called .

In case of default, the bank auction the property for sale and recover their money. This procedure is called ___________.

Q. Sharma brothers inherited some ancestoral property. They decided to form a Hindu undivided family consisting of four male members. Mr. Raman Sharma was eldest brother so he became 'Karta'. The business took a loan of Rs. 20 lac from Canara Bank, which was to be returned within 5 years. Due to poor financial position of the business, they were unable to repay the loan. Brothers sold the ancestoral property for Rs. 10 lac and paid the amount to Canara Bank. The bank filed a case for recovery of balance amount. Mr. Raman Sharma pleaded the court that the loan was taken for the purpose of Business; so all members of business are liable to repay. The court said all members are responsible only to the extent of their share in business and business property is already sold, but you being Karta will have to repay whole amount even by selling your personal property.
(a) In this case who has unlimited liability?
(b) Was the decision of court to claim only from Raman is justified?

Q. Statement: Shalini made an application to the bank for a loan of

R s . 1, 80, 000

by mortgaging her house to the bank and promised to repay it within five years.
Assumptions:
I. The bank has a practice of granting loans for

R s . 1, 00, 000

and above.
II. The bank accepts house as a collateral security against such loans.

An auctioneer charges 8% for selling a house. If the house is sold for Rs.2,30,500; Find the charges of the auctioneer.

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