Watch: How loan surety of Rs 2 lakh became debt of Rs 2.7 crore for a Kerala family

It all started when the family pledged their house for a bank loan of Rs 2 lakh taken by their relative in 1994.

Delve Society

Two years and a month after she began her fight for the house she lived in, Preetha and her husband Shaji have won back their property in Ernakulam. All because they had, in 1994, stood as surety for a bank loan of Rs 2 lakh taken by their relative by pledging the house that then stood in 22.5 cents of land in Pathadipalam.

The loan had accumulated to Rs 2.7 crore in 24 years and bank officials had by then knocked on their doors to attach the house. The loan was originally taken from Lord Krishna Bank, which was acquired by Centurion Bank and later by HDFC Bank.

Sajan, the relative for whom they stood surety, never paid a single rupee in all these years. It was Shaji who sold four cents of his land and paid off half the amount – Rs 1 lakh. But that didn’t help, for the rest of the amount kept piling up. The couple realised how serious it was only when the bank officials came to attach their house. Activists from the Anti Sarfaesi People’s Movement came to their aid. It was understood that the bank and the Debt Recovery Tribunal got the power to order the attachment of the house using the controversial Recovery of Debts Due to Banks and Financial Institutions (RDDBFI) Act.

A protest began in front of the house that Preetha and family – two grown-up children included – lived in.

At one point, the family came to know that the bank had auctioned off their property without even letting them know. That too, the property worth Rs 2 crore was sold for Rs 38 lakh.

Preetha and Shaji didn’t stop protesting. Preetha fasted. The couple poured kerosene over themselves once when officials came to attach the house. Violence ensued. Activists supporting them were beaten up and arrested. Politicians came to see Preetha. Promises were offered.

But nothing seemed to help till the Kerala High Court intervened and, owing to a technicality, ruled the sale of the house void. It ordered Preetha and Shaji to pay Rs 43.5 lakh – Rs 5.5 lakh more than the auction sale – to the bank, and Rs 1.8 lakh to the man who had bought the house at the sale.

Preetha and Shaji crowd-sourced the money and paid it off. But it didn’t end there. The couple were also ordered by the court to do 100 hours of community service for earlier disrupting bank officials from carrying out the court order of attaching the house. Not that it bothered Preetha or Shaji so much. Not after all that they went through in the past two and a half decades.

How a loan surety of Rs 2 lakh became a debt of Rs 2.7 crore for a hapless family in Kerala How a loan surety of Rs 2 lakh became a debt of Rs 2.7 crore for a hapless family in Kerala Posted by TheNewsMinute on Tuesday, 14 May 2019

Read: Preetha Shaji pays bank Rs 43.5 lakh to reclaim property pledged for another man’s loan