Apni Law Staff asked 2 years ago
A partnership firm, ‘RR’ and ‘BB’, faced financial difficulties in 2010. ‘BB’, a borrower and guarantor using his property as collateral, passed away in 2014. The authorities instructed the bank to serve all of ‘BB’s’ heirs with a notice regarding the recovery of the debt, following principles of natural justice. The bank served the notice on ‘SS’ and another heir, ‘MM’. ‘MM’ claimed the property belonged to a Hindu Undivided Family (HUF) and not ‘BB’, securing a court order preventing ‘SS’ from selling or transferring the property. This order was also served on the bank. Despite ‘SS’ presenting a will claiming ownership of the property, the bank, allegedly in collusion with ‘SS’, did not auction the property but instead settled the debt in two parts: one labelled as an “out-of-court settlement” and another as a “private treaty” involving only ‘SS’ and ‘RR’, ‘SS’s’ wife. The private treaty document only mentioned ‘SS’ and ‘RR’ as signatories, leaving out the buyer’s identity. Another document, signed by ‘RR’, purported to sell the property to the buyer. The private treaty agreement is questionable.
Best Answer
Apni Law Staff answered 2 years ago
The bank’s actions raise concerns of impropriety, potentially violating the court order and principles of natural justice. The “private treaty” agreement lacks transparency and the bank’s failure to auction the property raises questions about collusion with ‘SS’ and potentially defrauding ‘MM’ and other heirs.
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