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Court slams PSU banks,says you are in money,not property business

PSU bak sold off a man's property worth Rs 18.7 lakh to recover a loan of Rs 19,500!

Written by Agencies | Kochi |
September 25, 2012 10:03:19 pm

Coming down on a bank for meting out ‘unfair deal” to a client by selling his commercial building for Rs 18.7 lakh to recover a loan due of Rs 19,500,Kerala High Court today reminded the nationalised banks that they are only engaged in money lending and should not take up real estate business.

The observation was made by a division bench comprising Justice C N Ramachandran Nair and Justice C K Abdul Rahim directing the State Bank of Travancore (SBT) Chala branch to repay Rs 6.5 lakh to a loanee who had availed Rs 15,000 as loan some years ago.

The bank filed a suit for recovering Rs 19,500 with interest after which the petitioner’s commercial building was taken into possession by it. The building fetched Rs 19,500 as rent within two years after which it was sold for Rs 18.7 lakh by the bank.

The petitioner sought refund of the excess amount which was turned down by the bank. It also said capital gain tax had to be paid on the sale of the building.

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The bench held that the transaction was an ‘unfair deal at the hands of the bank which made a huge profit at the expense of unfortunate people’.

‘While the clever ones get all the benefits and the banks writes off their dues,the sick and weak are exploited,’ it said.

The court directed SBT to repay Rs 6.5 lakh to petitioner Sobhana of Thiruvananthapuram. Her husband,Thamburaj,who was also a petitioner,died during the pendency of the case.

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