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Saturday, September 25, 2021

Banks free to act against loan defaulters, says HC

The Punjab and Haryana High Court made it clear that the HC has not granted any kind of interim stay in respect of the steps to be taken by the banks/financial institutions for recovering the amount on account of car loans and gold loans.

By: Express News Service | Chandigarh |
August 25, 2021 8:34:57 am
The Punjab and Haryana High Court on Tuesday clarified that it had not barred banks and financial institutions from taking steps to recover car loans and gold loans. (File)

The Punjab and Haryana High Court on Tuesday clarified that it had not barred banks and financial institutions from taking steps to recover car loans and gold loans.

The order of division bench of Chief Justice Ravi Shanker Jha and Justice Arun Palli came following the applications filed by the banks/financial institutions, submitting that on account of interim order dated April 28, 2021, passed by this court, they were unable to recover the loan amount and other dues from the debtors, who are deliberately taking advantage of the said clause.

In an order regarding the situation arising from Covid-19, the HC on April 28, 2021, had ordered, “It is further directed that any bank or financial institution shall not take action for auction in respect of any property of any citizen or person or party or any Body corporate till 30th June, 2021”.

The Punjab and Haryana High Court made it clear that the HC has not granted any kind of interim stay in respect of the steps to be taken by the banks/financial institutions for recovering the amount on account of car loans and gold loans.

The HC bench said: “We consider it appropriate and necessary to clarify that this court has not granted any stay on the proceedings to be undertaken by the Banks/Financial Institutions, under Sections 13 and 14 of the SARFAESI Act. It is further clarified that this court has also not granted any kind of interim stay in respect of the steps to be taken by the Banks/Financial Institutions for recovering the amount on account of car loans and gold loans.”

“The object and purpose of passing the interim order was only to stay the auction proceedings in respect of residential accommodations, so that in these difficult times that the citizens and country are faced with, the occupants of the domestic/residential units were not rendered homeless and exposed to further miseries. The interim order, particularly para (x) thereof, has a limited purpose and operations, as indicated above. Further, this court, in the interim order itself, has granted liberty to the concerned authorities to approach this court with particular instances, for any clarifications if some hardship was/is being caused on account of the interim arrangement.”

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