Bank Negligence

Case of the liability of Banks which the imposters used to open an account to syphon off the amounts from the PPF accounts maintained with the SBI – State Bank of India Vs. Pooja Alias Vidhya P. Dhanade and Ors. – DRAT Mumbai

In this case, the impersonators had opened the accounts with the Canara Bank and the Mogaveera Co-operative Bank under the assumed name of the PPF account holders and had submitted the banker’s cheques for collection in those banks. The SBI discounted those banker’s cheques and the amounts came into the fictitious accounts of the PPF account holders fraudulently opened by the imposters with the Canara Bank and Mogaveera Co-operative Bank. The impostors withdrew the amounts and allegedly issued cheques and demand drafts in favour of the other defendants who had in collusion with them fraudulently appropriated the amounts.

Case of the liability of Banks which the imposters used to open an account to syphon off the amounts from the PPF accounts maintained with the SBI – State Bank of India Vs. Pooja Alias Vidhya P. Dhanade and Ors. – DRAT Mumbai Read Post »

Deciding objection raised under Section 13(3A) of SARFAESI Act, 2002 is certainly not an empty formality, but all the grounds raised by Borrowers are required to be considered by Bank – Subhashree Ram Garments Pvt. Ltd. and Ors. v. The Authorized Officer, Union Bank of India and Ors. – Madras High Court

Hon’ble High Court of Madras held that:
(i) The Borrowers have a right to give reply to the notice under Section 13(2) of SARFAESI Act, 2002 and before proceeding further, it is obligatory on the part of the bank to consider the said reply. The same is an obligation cast on the bank under Section 13(3A) of the Act, 2002. Deciding the objection raised under Section 13(3A) of the Act, 2002 is certainly not an empty formality, but all the grounds raised by the petitioners are required to be considered by the bank.
(ii) In case the bank rejects the objection and proceeds further, then the petitioners have a remedy to assail the measures undertaken by the bank and in that event, it is open to the petitioners to raise all the defences and the objections before the appropriate forum in the appropriate proceedings.
(iii) Entertaining challenge to the notice under Section 13(2) at this stage would be premature.

Deciding objection raised under Section 13(3A) of SARFAESI Act, 2002 is certainly not an empty formality, but all the grounds raised by Borrowers are required to be considered by Bank – Subhashree Ram Garments Pvt. Ltd. and Ors. v. The Authorized Officer, Union Bank of India and Ors. – Madras High Court Read Post »

When there is a possibility of collusion between Banks and Borrowers in scrutinisation of loan documents, the Bank cannot claim first holder charge in respect of the property which did not belong to the borrower at all – M/s. SCM Silks Pvt. Ltd. Vs. The State of Tamil Nadu – Madras High Court

Hon’ble High Court observed that the writ petitioner M/s. International Assets Reconstruction Company Pvt Ltd., is concerned, possibly they would have misled by the borrower of loan, who purchased the land from Ramachandra Trust. Therefore, the Bank, who sanctioned the loan also failed to scrutinise the transactions thoroughly and proceed based on the mislead facts by the borrowers. Hence, their claim that they hold first charge in the SARFAESI Act, would not have any direct application, since the Bank has not granted loan in accordance with the Statutes and Rules and in this regard, it is to be investigated whether the Bank Officials had colluded with the borrowers for sanctioning such huge amount of loan. When there is a possibility of collusion between the Banks and the borrowers in the matter of scrutinisation of the documents and other relevant facts, the Bank cannot now claim that they hold first charge in respect of the property which did not belong to the borrower at all.

When there is a possibility of collusion between Banks and Borrowers in scrutinisation of loan documents, the Bank cannot claim first holder charge in respect of the property which did not belong to the borrower at all – M/s. SCM Silks Pvt. Ltd. Vs. The State of Tamil Nadu – Madras High Court Read Post »

In case if sale consideration has not been deposited and the purchaser has been found to be in default, the property shall be sold again as has been referred under Rule 9 of the Security Interest (Enforcement) Rules, 2002 – Raj Kumari Kanoi Vs. Chairman-cum-Managing Director, Allahabad Bank and Ors. – Jharkhand High Court

Hon’ble High Court observed that it is the specific case of the Bank that as yet the physical possession of the property is not with the Bank and at present the total bank dues outstanding in the said NPA account is amounting to Rs.10,68,964/-. This Court has posed a pin pointed question upon the Bank that when there is a law to be followed then why the Bank has not followed the Rule which mandates that in case if the amount has not been deposited and the purchaser has been found to be in default, the property shall be sold again as has been referred under sub-rule (3) of Rule 9 of the Rules, 2002 coupled with the provision made under sub-rule (5) thereof. This Court, therefore, wants some answer from the higher authority at least of the rank of General Manager of the concerned Bank that what action is being taken against the erring officials after conducting an enquiry by casting liability so that said instance may not be repeated in future and the very object and aim of the Act, 2002 be achieved in strict sense.

In case if sale consideration has not been deposited and the purchaser has been found to be in default, the property shall be sold again as has been referred under Rule 9 of the Security Interest (Enforcement) Rules, 2002 – Raj Kumari Kanoi Vs. Chairman-cum-Managing Director, Allahabad Bank and Ors. – Jharkhand High Court Read Post »

The mere fact that the collecting bank has made a payment to its customer who deposited the tampered cheque does not raise an estoppel against the paying bank if later on it is found that the cheque is forged – M/s Adya Global Export Inc. & Anr Vs. Canara Bank – High Court of Delhi

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The mere fact that the collecting bank has made a payment to its customer who deposited the tampered cheque does not raise an estoppel against the paying bank if later on it is found that the cheque is forged – M/s Adya Global Export Inc. & Anr Vs. Canara Bank – High Court of Delhi Read Post »

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