RE: Cancellation of Deed of Agreement, A/C. COMPANY 1.
We refer to your letter dated 06.09.2006 on the above subject matter.
We have perused the contents of the letter dated 27.08.2006 of the land owners of the “Baridhara View” project. It appears that the landowners cancelled the Tripartite Agreement dated 28.01.2004 (the “Agreement”). It also appears that the land owners have also revoked the Power of Attorney which was executed in favour of the COMPANY 1 In such situation the question is whether the land owners activities is beyond their jurisdiction or not.
Clause 7.1 of the Agreement reads as follows:
“This Agreement can not be terminated by the COMPANY 1or the LAND OWNERS before repayment of the entire Loan amount with up to date interest to COMPANY 2, provided that COMPANY 2 may at any time terminate this Agreement and recall the entire Loan amount with up to date interest upon serving 15 days notice to that effect.”
As such it is clear that cancellation of the Agreement is beyond jurisdiction of the land owners. However, so far as the Power of Attorney is concerned it is not clear how the land owners revoked the Power of Attorney. As such it is not possible for us to provide our opinion regarding whether or not the land owners acted beyond their jurisdiction. Even if the Power of Attorney was revoked by the land owners this does not effect the mortgage of the land.
In such a situation the best possible course of action of COMPANY 2 is to file Artha Rin Suit against the COMPANY 1 and Mortgagors/Guarantors for recovery of its outstanding loan amount by sale of the mortgaged properties. If any complication is raised by the land owners regarding Power of Attorney in question it will be resolved by the Artha Rin Adalat.
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For: “The Lawyers & Jurists”